462.00R296/5929
The Ambassador in Germany (Dodd) to the Secretary of
State
No. 1969
Berlin, May 8, 1935.
[Received May
17.]
Sir: I have the honor to refer to the
Department’s telegram No. 31 of April 17, 7 p.m., in which the
Embassy was instructed to submit a protest to the Foreign Office in
the form of an Aide Mémoire against the
discriminatory method of payment of interest to American holders of
bonds against the Dawes Loan, which interest was due on April 15,
1935, and to my telegrams No. 83 and No. 96 dated April 18, 6 p.m.
and May 8, 4 p.m.,84 respectively, and now to
transmit a copy of the written reply from the Foreign Office dated
May 7th, together with a translation.
There would appear to be no necessity for explaining the viewpoint of
the German Government. The points brought out are, in the main,
reiterations of previous statements and special reference has been
made to the note of August 1, 1934,85 forwarded to the Department with
despatch No. 1117 dated August 3, 1934.86
The substance of the present note and the oral statement made by Dr.
Ritter87 at the time
of the presentation of the protest, is that although a
discrimination is apparent as regards the American interests, this
discrimination operates by virtue of forces beyond the control of
Germany and there is no remedial action except through the
conclusion of an agreement between the United States and Germany
similar to those between Germany and other countries wherein the
bondholders benefit thereby, which agreement Germany is prepared to
discuss.
There has been no important press devoted to the matter, most papers
having simply mentioned the protest and outlined the arguments set
forth in the reply from the Foreign Office.
Respectfully yours,
[Enclosure—Translation]
The German Foreign
Office to the American
Embassy
W 4517
Note Verbale
The Foreign Office has the honor to make the following remarks in
connection with the Aide-Mémoire of the
Embassy of the United States of America of April 18, 1935:
The German Government cannot admit that, from the present
arrangement for the redeeming of the interest coupons of the
Dawes
[Page 430]
Loan, an
intention on the part of the German Government be assumed to
discriminate against individual creditors. The German Government
has no such intention. The arrangement published in the recent
announcement is—as far as the intention of the German Government
is concerned—to represent the generally applicable arrangement
for the redeeming of the interest coupons of the Dawes Loan. If,
deviating from this generally applicable arrangement, transfer
takes place in foreign currency in a number of countries, with
respect to holders of Dawes Loan bonds, this is not attributable
to the intention of the German Government but to the fact that
the Governments of these countries have cited the fact of the
favorable German balance of trade and payments vis-à-vis these
countries and have demanded that this favorable balance be
employed for the transfer for the Dawes Loan. The Governments of
these countries have declared at the same time that they would
otherwise seize this favorable balance for the purpose of the
transfer for the Dawes Loan. Had the German Government refused
to yield to this compulsion, it might thereby indeed have
protected itself against the allegation of intentional
discrimination. The resulting unilateral measures of compulsion,
however, would doubtless have caused greater damage to the
German foreign creditors as a whole and to international goods
and capital traffic.
If the Government of the United States, in the Aide-Mémoire of April 18, 1935, points out that the
Dawes Loan was issued under unusual auspices of international
cooperation, and that the equal treatment of all creditors was
promised, it is seen from the above statement that it was not
the German Government, as debtor, that took the initiative
toward the present situation but it was the Governments of
certain creditor countries that forced Germany into the present
situation.
The German Government, moreover, refers to its earlier statements
on this question, in particular the note of the Foreign Office
of August 1, 1934, (W 6338) and on this occasion as well would
not like to refrain from declaring that the German Government is
prepared to conclude, with the United States as well, a like or
similar arrangement as with those countries with which a
transfer for the Dawes Loan is being carried out.
