The Acting Secretary of State to the Ambassador in Germany ( Dodd )
153. The British Government informs us that its Ambassador in Berlin has been instructed to make a communication to the German Government in the following sense:
[Here follows the text of the second paragraph of the British note of December 23, printed supra.]
British Ambassador in communicating the foregoing to us adds:
[Here follows the text of the third and fourth paragraphs of the British note of December 23.]
Please present a written statement to the German Government identical mutatis mutandis with that of the British.
You may add orally in your discretion that the successive curtailments of service on the German debts held here have created a distinctly unfavorable impression, and that American investors are unconvinced that the necessities of the German situation compel the increasingly drastic losses to which they are imposed. American opinion is all the more keenly alive to these losses because of its [Page 333] sense that its capital contribution played so vital a part in rebuilding Germany in the post-War period.
In addition when presenting this communication please ask the German Government if it could furnish you adequate and detailed information as to the amount of funds made available during the past 2 years for the repurchase of German securities issued in the United States. The American press of December 26 carries the announcement, for example, that the Housing and Realty Improvement Company of Berlin will, through an American investment house, invite tenders for the repurchase of their 7 per cent bonds at a price of $450 per $1,000 bond, subject to the condition that at least $500,000 principal amount of the bonds be tendered for sale on or before January 20, 1934. The use of German funds for the repurchase of securities, above the legal amortization schedule or before the regular call date, at prices depreciated mainly because of the action of the German Government in halting or reducing service, seems to the Department a diversion of funds properly due the American bondholder.