The Secretary of State to the Ambassador in Germany ( Dodd )
33. Please assemble and cable any financial and economic facts and figures disproving or mitigating recent contention of Dr. Sehacht and other German officials for cancellation or great scaling of outstanding external German indebtedness public and private. In brief I want the other side as fully as convenient. How do they trace individual external loans, for example to German individuals of 10,300,000,000 marks straight to the German government and then straight back to allied governments as reparation payments. Sehacht agrees that these were commercial loans, but that they cannot be repaid because they went into reparations. Please distinguish and indicate commercial loans as compared with Sehacht plea or pretense that they were political loans. Give approximation as to extent that Germany’s extreme trade barriers have obstructed exchange of commodities among others that would be mutually profitable. Is this not a factor in the present reduction of German exports as well as imports? Please telegraph these and any other facts pertaining to the financial and economic situation and Germany’s ability to pay her present debt service or at least her legal and moral obligation to maintain the integrity of her indebtedness instead of attempting to repudiate.