840.48 Refugees/1119: Telegram
The Acting Secretary of State to the Chargé in the United Kingdom (Johnson)
Washington, December 19, 1938—8
p.m.
798. For Rublee and Taylor. Your 1440 and 144296 of December 15th and 16th. We have been in close touch with both the Treasury and the President’s Advisory Committee with relation to Schacht’s plan.
- (1)
- No one who has been consulted believes that it would be possible to raise the sum mentioned, or even an appreciable part of it, under the terms outlined. The plan is generally considered as asking the world to pay a ransom for the release of hostages in Germany and to barter human misery for increased exports.
- (2)
- An analysis of the plan would indicate that Germany would be making no present contribution whatsoever, and even her ultimate contribution would never be more than allocating some foreign exchange resulting from extra exports to meet interest and amortization on vast sums raised abroad. Even this is not a clear cut contribution as in return Germany would be converting refugees and subscribers to the bonds into potential sales agents for German goods in foreign markets.
- (3)
- From a more technical point of view it is difficult to see how Germany can give the subscribers to the bonds a direct lien on the portion of the Jewish property held in trust. At best the bonds would seem to be issued on a contingent basis, namely that interest and amortization would only be paid if, as and when the necessary sum was raised by extra German exports. Further, the question arises whether acceptance of this scheme would involve relinquishment by the individual emigrant of title to his property and sanction of the principle of confiscation by all concerned.
- (4)
- Neither Advisory Committee, Treasury nor the State Department feels that the plan holds out any hope of acceptability. On the other hand, we realize that we must proceed with care lest by summary rejection, the plight of the Jews in Germany be made even more serious. It is accordingly suggested that you merely emphasize the feeling of all groups that subscriptions to these bonds would not be forthcoming on the basis of Schacht’s plan.
- (5)
- Not by way of instructions but to show you the way in which our minds are running, we should add that the general feeling is that if once a concrete plan for settling refugees were worked out far more money would be subscribed as a straight loan to some central committee, not bearing interest and to be repaid ultimately by the individual refugees when they are in a position to do so, this loan to have no connection with Germany, German exports or the liquidation of refugee property in Germany. We shall develop this thought in a later telegram.97
Welles