462.00R294/867: Telegram

The Secretary of State to the Ambassador in Germany (Dodd)

102. Your 165, August 4, 10 a.m. Representative of J. Henry Schroder Banking Corporation, relying on cable advices, has described proposed transfer transaction to Treasury Department but of course latter is not sure it has information identic with “copy of plan” which Embassy has seen. The Treasury has no objection to a transfer proposal which will result in its receiving the amount in dollars which it should have received on September 30, 1933, under the terms of the German-American Debt Agreement together with any interest which it may be determined shall have accrued on said instalment since September 30, 1933, provided that this can be accomplished without prejudice to the rights of the United States with respect to any other payments which the United States is entitled at any time to receive under said agreement. To that end you are authorized to indicate to the German Finance Ministry and other appropriate German authorities that the United States will agree that the receipt in New York of an amount in dollars determined as aforementioned, against the release of the reichsmarks will constitute a full payment of the instalment due from Germany on September 30, 1933.

For your confidential information, in addition to avoiding any action which might be construed as a waiver of the right of this Government to receive future payments in dollars in New York and any commitments with respect to the position of Germany under the Johnson Resolution87 or the joint resolution with respect to payments [Page 483]to German nationals, you should avoid any action which might be construed as an approval of any terms of the proposed transaction other than release of the reichsmark deposit and acceptance of the dollar credit in New York so that this Government will not be embarrassed in any position it may wish to take at any time with respect to German foreign exchange restrictions and the encouragement of exports through foreign exchange control. Within these limitations the Embassy may actively support the endeavors of Schroder to bring about an early arrangement resulting in the aforementioned dollar payments to the Treasury Department and indicate to the appropriate German authorities this Government’s desire that they will issue whatever permission is necessary to enable the United States to receive the aforementioned amount in dollars.

Hull