863.51 Relief Credits/412: Telegram (part air)
The Ambassador in Germany ( Wilson ) to the Secretary of State
[Received May 30—9:50 a.m.]
278. Department’s 69, May 14, 2 p.m.; Embassy’s despatch 157 of May 19, 1938.58 Although the British delegation to discuss the modification [Page 488] of British trade, debt and payments arrangements with Germany to include Austrian trade and debts has been here several days, discussions on the Austrian debts have not yet occurred. It is learned that Leith-Ross in his double capacity of Chairman of the British Trade Delegation and Chairman of the Committee of Control of the Guarantor States of the Austrian Loans repeated on his arrival here the British position that the Austrian guaranteed loans should be the subject of joint international negotiations with the Guarantor States. The Germans expressed surprise at repetition of this request in view of the German Government’s previous statement to the British that it did not consider the Austrian loans an obligation of Germany, would not consent to their being the subject of joint international discussions, but would discuss the matter of the British tranche of these loans in the present bilateral negotiations with the British delegation. The Germans did not definitely refuse again however to consider joint negotiations but said that they would give an answer on the point shortly which is expected will be forthcoming on May 30. The British delegation believes it will be a second refusal to accept joint negotiations coupled with an offer to discuss the British tranche of these loans in connection with the present trade negotiations.
The Financial Attaché of the British Embassy said that Morgan Grenfell59 had communicated to the Belgian [German?] Government its understanding of the ranking of the various loans on the pledged revenues of Austria. He said that the Germans in conversations although not in an official note still maintained that the Reich had no responsibility for the Austrian loans citing the precedent that the mandate powers did not accept the debts of the former German colonies and asserting that the guaranteed loans to Austria were political in nature designed to “bolster up” Austria and prevent its union with Germany.