862.51/4301
The Ambassador in Germany (Dodd) to the Secretary of State
[Received June 28.]
Sir: I have the honor to enclose for the Department’s information a single copy with translation of a communication with its enclosure, dated May 29, 1935,90 addressed by the Reichsbank Directorate to Mr. Joseph A. Grazier, who as the Department is aware represents the Foreign Bondholders Council in the United States in the discussions concerning the amortization of German foreign bonds which have not yet been concluded. The text of the communication was made available to the Embassy through the courtesy of Mr. Grazier.
The communication, which is understood to have been addressed simultaneously to all foreign creditors’ representatives announces that owing to the unfavorable developments in Germany’s foreign trade balance and in the gold and foreign exchange position of the Reichsbank, the transfer regulation applicable to long and medium term German non-Reich foreign indebtedness during the past year must be applied also in the coming year during the period from July 1, 1935, to June 30, 1936. Although the Transfer Conference communiqué of May 29, 1934,90 foresaw a partial cash transfer last year after a lag of six months, this cash transfer offer was withdrawn by the Reichsbank in the autumn of 1934, as previously reported and no cash transfers were made except where special agreements existed with foreign countries for the application of a part of Germany’s export proceeds to meet such service. The previously existing transfer regulation has been recapitulated in the annex to the letter from the Reichsbank Directorate enclosed herewith in single copy and translation.
Respectfully yours,