800.51W89 Great Britain/521

The British Ambassador (Lindsay) to the Secretary of State

No. 391

Sir: 1. His Majesty’s Government in the United Kingdom made clear their general views on the war debts question in the correspondence which took place in November and December of last year, and in the personal discussions undertaken during the visit of the Prime Minister last April and by the present Mission, and it will be unnecessary to repeat the reasons for which they feel that a radical revision of the present funding agreement is imperative.

2. His Majesty’s Government had hoped that it would prove possible for such a revision to take place without any lapse of time, and they are greatly disappointed that it has not been possible during the recent negotiations to reach an agreement for a final settlement of the war debt question.

3. They recognize however the difficulties in the way of reaching a final agreement at the present time by reason of the unsettled economic and financial situations, and they are accordingly prepared, without prejudice to their position in the future, to make a further payment on December 15th next, as in June last, in acknowledgment of the debt pending a final settlement. His Majesty’s Government understand that it is no longer in the power of the President to accept payment in silver at a price of 50 cents an ounce and they accordingly propose to make a payment of seven and a half million dollars in United States currency on December 15th next.

4. Finally His Majesty’s Government will be ready to resume negotiations on the general question whenever after consultation with the President it may appear that this can usefully be done.

I have [etc.]

R. C. Lindsay