The German Chargé (Leitner) to the Secretary of State
Mr. Secretary of State: On behalf of the German Government, I have the honor to make the following statements to Your Excellency, referring to the communication of September 12, 1932 (No. 907) addressed by the American Ambassador in Berlin to the German Foreign Minister,60 on the postponement of Germany’s payment obligations to the United States which come due on September 30, 1932, in accordance with the German-American Debt Agreement of June 23, 1930:
1. In the first place, the German Government would like to complete the statements made in the communication of the American Ambassador of September 12, 1932, concerning the transmission of the German reservation of May 26, 1932.
On March 31, 1932, the German Ambassador in Washington informed the Under Secretary in the United States Department of State of the readiness of the German Government to conclude the agreement proposed by the Government of the United States and stated at the same time that the German Government in so doing would make the same reservation as was made with respect to the [Page 331] London Experts’ Report of August 11, 1931.61 Mr. Castle declared himself ready to inform the Secretary of the Treasury of the United States thereof at once, and actually Mr. Mills did call attention to the fact that such a reservation could not be inserted in the text of the agreement. According to the report of the German Embassy at that time Mr. Mills did not, however, reject the German reservation outright, but only as a portion of the agreement itself, and proposed that it should be presented in a separate accompanying note. In accordance with this, the German Ambassador addressed to Your Excellency on May 26, 1932, the note a copy of which is attached as Enclosure 1.62 When this note was transmitted, Mr. Castle contemplated the written acknowledgment of the receipt of this note. This formal acknowledgment was actually made by note of June 4, 1932, a copy of which is attached as Enclosure 2.63
2. Since the receipt of this note of acknowledgment of June 4, 1932, the German Government did not receive, until the transmission of the communication from the American Ambassador of September 12, 1932 (No. 907), any indication that the German reservation of May 26, 1932 had not been accepted by the United States Government or had encountered objections. On the contrary, the German Government was bound to be of the opinion, after the receipt of German Embassy’s note of May 26, 1932 had been formally acknowledged, that complete agreement existed between the two Governments concerning the reservation then made. The German Government therefore acted completely in good faith when it made the same reservation in declaring the postponement of the payments due on September 30, 1932, on the basis of the German-American Debt Agreement of June 23, 1930, as on May 26, 1932. It had no reason to assume that the reservation would this time meet with difficulties.
When it was informed that the reservation was at this time undesirable to the Secretary of the Treasury, Mr. Mills, it authorized me without delay to drop the reservation. The German Government believes it hereby sufficiently showed that nothing is further from its intentions than to cause the Government of the United States any difficulties whatsoever because of the German declaration of postponement.
Since the proposed reservation was immediately dropped, the German Government is of the opinion that for the mutual consideration of the present situation both the withdrawn present reservation [Page 332] as well as the reservation of May 26, 1932, must be completely disregarded.
3) In Section 5 of the German-American Debt Agreement of June 23, 1930, the following is agreed upon:
“Germany, at its option, upon not less than ninety days’ advance notice in writing to the U. S., may postpone any payment on account at [of] principal falling due as hereinabove provided, to any subsequent Sept. 30 and [or] March 31 not more than two and one-half years distant from its due date.”64
As regards the 90 days delay, the Secretary of the Treasury declared in a conversation with the German Ambassador in Washington on June 29, 1932 that he had thoroughly investigated the question from a legal point of view and that he would also accept the German declaration of postponement later without regard to the fact that the delay of 90 days which had been provided for had not been observed. After this binding declaration by the Secretary of the Treasury the German Government is also of the legal opinion that it can make the declaration of postponement provided for in Section 5 of the German-American Debt Agreement of June 23, 1930 at any time before September 30, 1932 at its discretion, without any condition or supplementary declaration. The German Government has therefore again instructed me to formally declare the postponement in accordance with Section 5 of the German-American Debt Agreement.
The German Government also desires on this occasion to state that both parties must be fully aware of the fact that the German-American Debt Agreement of June 23, 1930, as well as the later agreement of May 26, 1932, is a bilateral agreement. Agreement exists and has always existed, that the note of May 26, 1932, addressed to Your Excellency by the German Ambassador, is a unilateral declaration of the German Government and in no wise represents a bilateral agreement. The German Government has, therefore, as it has already declared in the past, not the intention unilaterally to alter anything in this legal situation.
- See telegram No. 104, September 10, 2 p.m., to the Ambassador in Germany, p. 323.↩
- For text of Report, see Great Britain, Cmd. 3947, Misc. No. 19 (1931).↩
- Vol. i, p. 623.↩
- Not printed.↩
- Annual Report of the Secretary of the Treasury for the fiscal year ended June 30, 1930 (Washington, Government Printing Office, 1931), p. 343.↩