800.51W89 Great Britain/337

The British Ambassador (Lindsay) to the Secretary of State 92

No. 354

Sir: It will be remembered that on June 22nd, 1931,93 His Majesty’s Government in the United Kingdom subscribed wholeheartedly to the principle of the proposal made by the President of the United States on the preceding day for the postponement during one year of all payments on inter-governmental debts. The object of this proposal, as stated at the time, was to relieve the pressure of the difficulties resulting from the fall in prices and lack of confidence in economic and political stability, and to assist in the re-establishment of confidence.

The hopes which were early raised by the President’s initiative have unfortunately not been realised, and the economic troubles which it was designed to alleviate have not come to an end. Indeed in October of last year, the communiqué published at Washington on the occasion of Monsieur Laval’s visit already recognized that [Page 755] “prior to the expiration of the Hoover year some agreement on inter-governmental obligations may be necessary covering the period of the business depression. The initiative in this matter should be taken early by the European Powers principally concerned within the framework of the agreements existing prior to July 15th [1st], 1931”.94 To-day many thoughtful men throughout the world are convinced that if the depression is to be overcome, further remedial measures must be sought.
It was in accordance with the recommendation quoted above that in June last the European Creditor Powers met at Lausanne to agree on a lasting settlement of the problem created by inter-governmental payments in respect of reparations. The series of agreements reached on July 9th aims at the ultimate termination of all reparation payments. It represents the maximum contribution in the field of inter-governmental finance which the governments concerned have so far been able to make towards that early restoration of world prosperity in which the people of the United States, no less than those of the British Commonwealth of Nations, have so deep an interest, and for the achievement of which the co-operation of the United States is essential.
On the nature of the remedial measures that may have to be adopted it is not proposed now to say more than that, in the recent past, His Majesty’s Government in the United Kingdom have frequently expressed their view, and that neither in the realm of theory nor in that of fact are they able to find any reason for amending it. They believe that the régime of inter-governmental financial obligations as now existing must be reviewed. They are profoundly impressed with the importance of acting quickly; and they earnestly hope that the United States Government will see its way to enter into an exchange of views at the earliest possible moment.
The immediate objective of the present note, however, is of a more limited nature. On December 15th the next instalment of the British war debt is due to be paid. It is not possible to hope that agreement can be achieved in five weeks on matters of such vast scope. Confronted last summer with a similar difficulty the Conference of Lausanne found it necessary, in order to allow its work to proceed undisturbed, to reserve, during the period of the Conference, the execution of the payments due to the participating Powers. His Majesty’s Government in the United Kingdom hope that a similar procedure may now be followed, and ask for a suspension of the payments due from them for the period of the discussions now suggested, or for any other period that may be agreed upon.
His Majesty’s Government in the United Kingdom believe that the proposed discussions could best begin in Washington and if this suggestion meets with concurrence, they are prepared to provide me with the necessary instructions. On this point, however, as well as on the other points touched upon in the present note, they await an expression of the views of the United States Government.

I have [etc.]

R. C. Lindsay
  1. Copy transmitted to President-elect Franklin D. Roosevelt.
  2. See note from the British Ambassador, June 24, 1931, Foreign Relations, 1931, vol. i, p. 204.
  3. Foreign Relations, 1931, vol. ii, p. 252.