The British Ambassador (Lindsay) to the Secretary of State

No. 441

Sir: I have to inform you, under instructions from His Majesty’s Principal Secretary of State for Foreign Affairs, that His Majesty’s Ambassador in Berlin has been instructed to make a communication to the German Government in the following sense.

His Majesty’s Government have learned with surprise and regret of the unilateral decision taken by the Reichsbank on December 18th to reduce during the next six months transfers in respect of the service of German loans other than the Dawes loan and the Young loan.29 [Page 332] His Majesty’s Government regard it as an essential principle that if any temporary modifications in loan contracts to the detriment of the creditor are required under present circumstances they should be discussed and agreed upon between debtors and creditors. Failure to observe this principle must tend further to undermine the credit of Germany as a whole and will make it increasingly difficult to maintain international credit operations on which the financing of commerce largely depends. In particular the recent decision ignores (1) the protest of the representatives of the creditors against the principle that payment in Reichsmarks satisfies a debt in foreign currency and (2) their considered view that no sufficient case had been made out for making any change in existing arrangements to the detriment of creditors during the next six months.

I am desired to express the hope of His Majesty’s Government that the United States Government will instruct their representative in Berlin to make similar representations to the German Government.

I am to add that His Majesty’s Government have taken this opportunity of reiterating to the German Government a protest they had already made regarding differentiation to which British creditors have been subjected in the administration of the present system by reason of special arrangements concluded by the German Government with the Netherlands and Swiss Governments.

I have [etc.]

R. C. Lindsay
  1. For the Dawes Plan, see Great Britain, Cmd. 2105 (1924): Reports of the Expert Committees Appointed by the Reparation Commission; for the Young Plan, see Great Britain, Cmd. 3343 (1929): Report of the Committee of Experts on Reparations.