862.51/4115: Telegram
The Ambassador in Germany (Dodd) to the Secretary of State
[Received 6 p.m.]
141. Your 74, June 16, 3 p.m. and subsequent telegrams. Having made representations on different occasions to Neurath, Schacht and Billow, I saw the last mentioned again today by previous appointment before decoding of telegram 90, July 12, 10 p.m. As he expressed great good will which it seemed desirable to reduce to precise terms I invited him to put on paper what the German Government had in mind. I am now in receipt of a note, the tenor of which is as follows:
The German Government has no intention of discriminating against the United States in its treatment of the transfer question but will try to regulate it on the same basis as with other creditor countries.
1. Dawes–Young loans. Since Reichsbank gold and foreign exchange reserves have diminished to 75,000,000 reichsmarks and deficit of aggregate German trade balance for first half of 1934 amounts to 211,000,000 reichsmarks Germany at present is not in a position to transfer any amounts whatsoever for the service of these loans.
British agreement provides that Dawes coupons due October 15 and Young coupons due December 1st are to be redeemed on the date of maturity. German Government is prepared to negotiate with American Government up to the above-mentioned dates of maturity for creating conditions precedent for rendering possible for Germany to effect service on those dates. Said negotiations could be conducted either within the scope of general economic negotiations such as German [Page 380] Government has been urging since February or with the specific object of supplying Germany with the necessary means for transfer of coupons due October 15 and December 1st.
2. Non-Reich loans. No discrimination against American creditors intended. Reference is made to Reichsbank Transfer Conference Communiqué of May 29 offering 3 percent funding bonds. The German Government should it reach special agreement in regard to handling these obligations with another creditor country is ready to make to the Government of the United States the same statement (erklearung) as in recent German-English transfer agreement, article 3.
3. The Foreign Office proposes to issue a press Communiqué calculated to make clear Germany’s good intentions to public opinion in America. Do you wish to make modifications in aide-mémoire contained in your 90, July 12, 10 p.m. in view of foregoing German statements?