840.48 Refugees/1119½: Telegram
The Acting Secretary of State to the Chargé in the United Kingdom (Johnson)
802. For Taylor and Rublee. Department’s 798, December 19, 8 p.m. The following is an effort to develop the suggestion in point 5 of the telegram under reference:
[Page 878]We estimate, from information which you also have, that the current rate of admission of refugees from Germany into other countries for permanent residence is in excess of 80,000 per year and that this rate is rapidly increasing. This movement is taking place on the financial basis of what the refugees are now allowed to take with them from Germany, plus a small amount of actual financial assistance from relatives, friends, or charitable organizations, plus the system of affidavits of support. We are confident that this rate could be substantially increased by the creation of a fund to be used for two purposes: (1) the financing of specific group settlement projects in new areas, and (2) the making of loans to emigrants having no other means or assurance of support at so much per person up to a fixed moderate maximum per family (for example 500 dollars per person with a maximum of 2500 dollars per family). This financing might be carried out along the following lines:
A central financial organization with headquarters at London and agencies in other countries might be created under the auspices of the Intergovernmental Committee. The officers of this organization would be men of the highest caliber and qualifications to act as trustees and administrators of a very large resettlement fund. The organization would be empowered to negotiate for, to solicit and to receive contributions from any source. It would be the focal point for all efforts to raise funds for resettlement purposes and the repository of all funds so raised. While the manner of raising such funds is a question for consideration by your Committee of financial experts, we are inclined to favor provision whereby the organization, after it should have obtained by gift a specified very considerable amount of unencumbered capital (i. e. capital fully at the disposal of the organization without obligation to repay but with obligation to conserve as far as possible and to use for the purposes of the trust) would have power to issue long-term debentures perhaps bearing a low rate of interest, payable only in case the interest received during the preceding half year on the organization’s loans be sufficient for the purpose. Provision could also be made for retirement of the obligations by lot as principal payments were received. The obligations could be issued in any denomination in any major currency, and should be issued only in connection with special offerings of new “senior” or preferential capital which would have priority as to possible earnings over the original unencumbered capital obtained by gifts and any later additions to such unencumbered capital by gifts specifically indicated as capital gifts.
The financing of group settlement projects might be undertaken through loans by the central financial organization to separate entities, new or existing and governmental or private, which would be [Page 879] responsible to the central organization for the carrying out of the specific projects with which they were entrusted and for repayment of the sums loaned. The terms of loans to individuals would be determined by the central organization and it is assumed that the terms would be extremely liberal and would allow the emigrant ample time to establish himself before any payments would be required.
No definite commitment could be made as to the amount of the fund which might be raised for this purpose, but an initial drive might be made for 50 million dollars of unencumbered capital to be appropriately apportioned between the countries in which the money might most probably be raised. This amount would be sufficient to provide actual, if limited, capital or settlement for at least 100,000 persons who would otherwise leave Germany destitute. The raising of a similar amount by debentures would provide for an additional hundred thousand persons.
Such a system would bear no relation to liquidation of property in Germany and would not impair whatever title the refugee may have to his property there. Furthermore, it would not be dependent for repayment upon increased German exports.
It is noted that the Schacht Plan makes no provision for the maintenance of old persons or others unable to leave Germany. Charitable organizations in this and other countries have been sending large amounts of money to Germany for the relief of such persons. While it is important not to recognize the principle of confiscation by making specific suggestions as to the use of property taken from persons in Germany, emigrants might well be permitted to contribute such portions of their property as they desire to a fund for the maintenance of persons unable to leave Germany. This would appear both more appropriate and more practicable than the use of such funds for payment of interest and amortization on a foreign loan.
The most natural use for the mark funds of individual emigrants is in the purchase of supplies indispensable for their resettlement, including clothing, personal effects, farm implements or other tools, and similar requisites. Permission by the German Government for emigrants to use their funds for the purchase, either before or after departure, of these requisites in reasonable amounts for their own use would naturally involve practically no foreign exchange and would be of great assistance in meeting the problem of resettlement.
We consider that the foregoing conception of the creation outside Germany of a large resettlement fund and of the use of emigrants’ funds in Germany for charitable purposes and for the purchase by them of necessary goods for their own use might be worked out as a counter proposal to that made by Schacht. From the German point of view this scheme would have the primary objection of not assisting [Page 880] German exports other than of goods for the personal use of the emigrants. We feel strongly, however, that no system which made the refugees agents for German goods or which assisted Germany to profit by its campaign of persecution could be accepted. Under the Schacht proposal Germany would not receive any foreign exchange for the additional exports resulting from its operation. A proposal such as that outlined above would not require any additional contribution in foreign exchange beyond the minute amount now allowed to certain refugees (any reduction of which would naturally result in a corresponding deceleration of the emigration rate) and would allow Germany to retain all foreign exchange accruing from a legitimate development of her regular exports. The export of goods for the personal use of emigrants is unobjectionable and, in view of the large numbers of persons leaving Germany, might be substantial.
The boycott being wholly unofficial, obviously no commitment could be made concerning it. Nevertheless the attainment of a just and reasonable solution of the German refugee problem should materially improve sentiment and would thus tend to increase German exports more than any conceivable proposal along the lines of the Schacht plan.
We would like your opinion, and that of the British, French and Dutch experts as to the means of raising such a resettlement fund and as to the feasibility of negotiating further with the Germans along these lines, involving perhaps an expression to the Germans that we considered Schacht’s proposal the basis of discussion. Considerations of strategy might suggest the advisability of making the undertaking to raise such a fund conditional upon cessation of persecution in Germany, assurance of humane maintenance for persons unable to leave Germany, and the cooperation of the German Government in facilitating the mechanics of orderly emigration.