The Chargé in Germany ( White ) to the Secretary of State
[Received May 12—9:30 a.m.]
87. Conference having reached point where Reichsbank was prepared to make 1–year commitment at 50 percent cash transfer after a 6–month lag the British, who have been advancing plan for a refunding bond, took singular position opposed to all delegations except French that commitment for cash undesirable for Germany, Sehacht making the most of this situation. American delegates are convinced this British move represents attempt to sacrifice long-term debts in favor of short-term interests. Standstill constitutes a commitment at better than 4 percent while British position discourages a commitment of less than 4 percent for long terms.[Page 355]
The British holdings are understood to be approximately 24 percent of Dawes Young, 12 percent of long terms inclusive of Dawes Young and 21 percent of short terms. Delegations favoring definite commitment represent more than 75 percent of long term.
The Bondholders Council representative suggests appropriate representations be made to the German authorities against manifest favoring of one type of debt as against others particularly in view of widespread American holdings of long term. Conference next meets Tuesday so it would be desirable to learn Department’s attitude before then.