462.11W892/2535½
The German Ambassador (Luther) to the Secretary of State
Mr. Secretary of State: In conformity with instructions from my Government, I have the honor to inform Your Excellency, in connection with the German obligations under the German-American Debt Agreement of June 23, 1930, regarding the amounts due under awards of the German-American Mixed Commission:
In several notes from the German Government,6 the German transfer problem has been thoroughly discussed. The German Government has requested, in the last note of August 1, 1934,7 transmitted to the American Embassy at Berlin, that negotiations be entered into at the earliest time in order that this difficult question may, by joint efforts, be brought to a solution. The German Government has not received a reply to this request up to this time.
Since the last maturity, of March 31, 1934, the German exchange situation has grown worse to an alarming degree. The German Government has therefore been compelled to resort to far-reaching measures for the protection of the German economic system and for maintaining the scanty German stocks of gold and foreign exchange.
The German Government has repeatedly shown its willingness to pay to the utmost, the latest instance being its action at the time of the last maturity, on March 31st of this year, when (despite the unexampled depletion of gold and foreign exchange of the Keichsbank) it paid the interest due in foreign currency. If it can not again raise the foreign exchange to meet the present maturity, the fact that the satisfaction of German claims under the War Claims Settlement Act was first hindered by administrative measures and then by the Joint Resolution of the Congress of June 16 [18], 1934,8 also contributed to this.
[Page 498]In view of the present German foreign exchange situation, the German Government, to its keen regret, is not in a position to make payment on the war damages obligations due at the end of this month. The German Government desires, however, to reiterate in this connection that it respects the obligations under the German-American Debt Agreement and that it is ready at any time when the United States Government believes that negotiations on the whole problem would be likely to produce practical results, to consider likewise during the course of such negotiations how the satisfaction of injured American citizens may be insured, in face of the obvious transfer difficulties.
Accept [etc.]