800.8810/1119: Telegram

The Chargé in Germany (Gordon) to the Secretary of State

87. Your 58, May 26, 6 p.m. It would seem that Reichsbank could not take desired action unilaterally even if it were disposed to do so as a result of representations through the Foreign Office. Regulations issued by the Reichsbank pursuant to paragraph 7a, clause 10 (page 40) of Standstill Agreement10 provide that “travellers may also use Reichsmarks, which may be provided in excess of the monthly limit of Reichsmarks 3,000 mentioned above, for payments in respect of steamship accommodations on German vessels to or from Germany, as well as for charges incidental thereto, which payments shall be effective by the transfer of registered marks from the bank or designated travel bureau’s account to be free mark account of the steamship company in Germany.”

Consequently it would seem that the Standstill creditors have during the life of the Standstill Agreement the absolute right to liquidate their frozen registered marks in this fashion.

I am informed that at Brussels Conference North German Lloyd, in order to create a good atmosphere, brought the matter up itself and suggested such action on the part of the Reichsbank. (I do not of course know how really spontaneous North German Lloyd’s move may or may not have been). The Reichsbank, however, desirous of not taking action directly contrary to the interests of their respective national shipping companies have, I am further informed, shown themselves sympathetically disposed to a curtailment pro tanto of their right to liquidate their frozen registered marks. Finally I am informed that it was felt that rather than discuss the matter separately until a definite decision was reached the matter should be brought up at the bankers’ conference beginning here next Monday when it will be possible through the assent of the Standstill creditors’ representatives to secure the desired action.

Adverting to the last paragraph of the Department’s telegram under reference, I therefore venture to suggest that it would be preferable to let the matter work itself out in this way and for the Embassy to take no action unless snags are encountered.

I shall, however, in any event communicate with Mr. Wiggin11 as soon as possible after his arrival to see if the above information as to the Standstill creditors’ attitude is correct.

  1. The German Credit Agreement of 1933 (Druckerei der Reichsbank, Berlin).
  2. Albert Henry Wiggin, chairman of the Foreign Creditors Standstill Committer; chairman of the governing board of the Chase National Bank, New York.