800.51W89 Great Britain/476

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

Excellency: In reply to the note handed to me by Your Excellency on the 13th instant, I am directed by the President to make the following reply:

The President understands that His Majesty’s Government have concluded that payment of the June fifteenth installment “could not be made at this juncture without gravely imperilling the success of the Conference and involving widespread political consequences of a most serious character.” He notes also that accompanying this communication is a payment of ten million dollars “as an acknowledgement of the debt pending a final settlement,” and notes the characterization of the circumstances with which the British Government accompanies this payment, although he, by no means, concedes some of the statements concerning the world wide economic cause and effect contained in His Majesty’s Government’s communication, especially in so far as they affect the Economic Conference.

The President points out to His Majesty’s Government the well known fact that it is not within his discretion to reduce or cancel the existing debt owed to the United States, nor is it within his power as President to alter the schedule of debt payments contained in the existing settlement. Such power rests with the Congress.

He notes likewise the suggestion of His Majesty’s Government that they desire to make further representations concerning the entire question of the debt, and that His Majesty’s Government requests that a time and place be indicated where such representations can be made to the President or the appropriate representative of the Executive. The President suggests that His Majesty’s Government provide for such representations to be made in Washington as soon as convenient.

Any results of such a discussion of the debt question can be submitted for the information or the consideration of the Congress when it next meets.

Accept [etc.]

William Phillips