840.48 Refugees/853: Telegram
The Secretary of State to the Ambassador in the United Kingdom (Kennedy)
688. For Rublee. Your 1253, October 27, 7 p.m., and Department’s 667, October 29, 3 p.m.
Section 1.
Before putting before you certain suggestions of a constructive character, the Department wishes first to make certain general observations connected with the plan outlined in your 1253 and other more or less similar suggestions.
1. The problem of getting the assets of involuntary emigrants out of Germany is, as we see it, secondary to the problem of getting the involuntary emigrants out and established elsewhere. In other words it is more important to make arrangements for the emigration and settlement of the largest possible number of refugees than it is to arrange for the transfer from Germany of large amounts of individual capital.
Nevertheless, the number of refugees certain countries will take apparently depends on the financial resources available to such refugees. It should be possible to find out from such countries the amount and form of financial resources required for or guaranteed by affidavit to each refugee, and, assuming such resources are made [Page 817] available, how many refugees will then be taken. In such case there will be known the amount of money needed in respect of each such group of refugees. Naturally it is hoped that the German Government will provide these resources, and this is what we understand the Committee is endeavoring to put through. Whatever the German Government may be willing to do to put at the disposal of the refugees funds arising from their possessions in Germany will of course assist in meeting this requirement. It is also true that the emigration and settlement of large numbers of refugees can be arranged through the system either of financial assistance from sources outside of Germany or of guaranteed support. This has been particularly true in regard to immigration into the United States, and it is believed that a similar system might be developed for immigration to other countries.
2. Responsibility for making available to the refugees sufficient funds or financial help to facilitate emigration should properly be met by three groups: (a) by the German Government, (b) by private individuals and private sympathetic groups outside of Germany, and (c) by the Governments of other countries if they are willing to give financial assistance as a matter of humanity or ultimate national interest. The two latter approaches might contemplate an obligation by refugees to repay financial assistance extended to them.
The Department believes that in any plan that is worked out it will be necessary to draw upon the responsibilities of all of these three groups to the greatest practical extent. The plans hitherto suggested, however, would appear—except to the extent that Germany made some immediate cash contribution in free exchange—to impose the whole obligation on the world’s commercial markets. Funds would become available only as extra German exports were sold, and the responsibility for facilitating such extra exports would appear to be primarily placed either upon foreign merchants who might secure a profit therefrom or upon the refugees who might receive payment therefrom. This would mean in many markets newly created competition of German products and thus producers in other countries of the products sold competitively by Germany would be called upon to bear the brunt of the financial facilitation of refugee movements. Only in some places and to a limited extent could this be avoided.
3. Such plans in operation might well augment anti-Semitic feeling in other countries. Enlargement of the market for German products as an instrument providing funds for facilitating refugee emigration might well create the impression—even though not based on fair reasoning or controlled feeling—that Jews were responsible for bringing into existence new and unfair competition. These effects are all the more possible because of the likelihood that Germany would limit the utilization of the refugee marks to promote the sale of products that did not have an easy sale by ordinary methods.
[Page 818]4. The Treasury Department believes that the contraction by any government of obligations in a foreign currency is likely to give rise to serious difficulties in meeting service on the obligation. It is, therefore, desired to avoid, if possible, the issuance by the German Government of dollar obligations.
5. If a plan of this type on a large scale is made the primary instrument whereby the Intergovernmental Committee is enabled successfully to carry out its task it would improve the ability of the German Government to insist upon the acceptance of its general trading arrangements. Foreign governments might find it difficult to create effective protection against German trade based on such arrangements when unconnected with the refugee situation; for example, other groups, such as holders of German bonds or of blocked funds, might press for payment by means of so-called extra exports from Germany.
6. The Department does not understand that your suggestion is intended to involve the promotion of the additional exports, from which payments would be made, by means of special low-priced marks. Your statement that “under the plan the German Government will be asked to agree not to use any of the mark profit which it realizes by the sale of bonds to the emigrant to subsidize exports” would not, however, preclude this possibility. Previous to June 1936, for example, German exports to the United States were subsidized both by profits derived from bond and scrip procedures and by the use of special marks which sold at rates substantially below the rate for the reichsmark. Underpriced marks as a means of facilitating additional exports would contravene American legislation.
Section 2.
Fully realizing the difficulties, and after the most careful consideration of the whole problem, we suggest the following approach:
- (1)
- The countries of settlement should be asked to state the number of immigrants they are prepared to accept, on assumed bases of financial resources or guaranteed support, as, for instance, how many families each having $1,000, et cetera, they will accept. (The figure is illustrative only).
- (2)
- Arrangements should be sought with the German Government whereby each emigrant will be permitted to take with him a guaranteed minimum amount of his property in foreign exchange. That minimum will inevitably be small but should be set as high as possible.
- (3)
- Arrangements should be sought with the German Government, under which, with the consent of the emigrant, his remaining assets in Germany would be converted into marks or some sort of mark obligations for deposit with the Bank of International Settlements or other suitable long-term repository, and under which the German Government would undertake to permit the conversion of these marks into foreign currencies over a period of time through a mechanism announced in advance which might involve the use of registered marks or such other devices as may be developed.
- (4)
- Taking into account whatever amount the German Government may permit individual emigrants to take with them, private charitable and financial organizations, and perhaps outside governments, would then be asked through appropriate channels to furnish sufficient funds to meet the requirements of the countries of settlement for the largest possible number of involuntary emigrants. Such financing might include: (a) outright donations; (b) settlement loans to individuals or groups; (c) purchase of mark deposits, and, (d) loans upon the mark deposits.
The Department has been impressed with the extent to which the use of registered and travel marks has enabled the German Government to make payments on debts and for other purposes. It is believed now that owing to the reduction of the Standstill credits and other obligations this type of mark might afford a very substantial amount that could be used for facilitating emigration without most of the attendant difficulties that have been dwelt on above.