462.00R294/869

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

No. 1166

Sir: With reference to the Department’s cable No. 102 of August 9, 12 noon, I have the honor to enclose a copy of the plan of transfer in the form of a memorandum submitted to the Reichsbank Directorate by Messrs. J. Henry Schroder and the National City Bank.88

Following the receipt of the cable under reference, the Embassy conferred with Messrs. Bogdan and Mylie of the Schroder Berlin office, and on their suggestion the Counselor called at the Foreign Office and stated the attitude of the United States Government as set forth in the portion of the Department’s cable relative to receiving a transfer of the amount due. On that occasion Mr. White left with Ministerialdirektor Dr. Dieckhoff an informal résumé of his remarks, and asked that the competent authorities of the German Government be informed of what he had said. Dr. Dieckhoff promised to inform the interested competent authorities accordingly. The conversation did not at any time touch the subject of Germany’s present or future status under the Johnson Act, nor was any mention made of the commercial transaction to which the suggested transfer proposal is a corollary.

Almost simultaneously with the Embassy’s action above described, Messrs. Schroder informed the Embassy that they had been told by a Reichsbank official by telephone that the Minister of Finance had expressed the opinion that Germany could not at this time allow an [Page 484]export transaction which produced so little foreign exchange, and that the Reichsbank therefore thought that the suggested plan could not be accepted. Conversations are now going on between Schroder and the Reichsbank on this subject.

Respectfully yours,

William E. Dodd
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