The Ambassador in Germany (Dodd) to the Secretary of State
[Received October 3—12:35 p.m.]
155. Department’s 120, October 2, 5 p.m.92 Embassy and Commercial Attaché will, of course, continue their current reports on developments of the German policy to encourage exports by use of blocked marks. The latest development is an apparently blatant discrimination in favor of Swiss holders of scrip who are to be paid 100% of its face value. Schacht himself has admitted this and gives explanations which are not convincing. A mail report on this was prepared yesterday and goes forward by next pouch. Incidentally Sullivan and Cromwell are fully informed.
A decree that blocked security marks must have originated before April 15, 1932, to be utilizable for payment of debts due in Germany has in effect ended such Russian use thereof as Embassy has been informed that this class of blocked marks has now dried up. Registered credit balances may be used for payment of Russian bills (see page 22 of enclosure to my despatch 128 of September 792). More specific investigation of this subject is under way and further detailed reports will be rendered as soon as possible.