863.51 Relief Credits/508: Telegram (part air)
The Chargé in Germany (Gilbert) to the Secretary of State
[Received December 10—8:50 a.m.]
706. Wiehl, Director of the Commercial Policy Section of the Foreign Office, asked me to call on him today and discussed the matter of Austrian loans in the following terms. He said that at the time of the despatch of the German note of November 17 he had intended to make certain oral observations to the Embassy which could not well be included in the note itself but he had been prevented from doing this at the time on account of absence from Berlin. He stated that the unexpectedly prompt American reply had perhaps lessened the usefulness of what he had intended to say but that in any event he would now tell me what had been on his mind.
[Page 500]Respecting the guaranteed Austrian loans of 1933 and 1934 he said that although each was guaranteed in a different way Germany had made agreements for interest and amortization with Great Britain, France and the Netherlands and also had come to certain arrangements with Sweden and Denmark.
These arrangements included adjustments both of a financial and a commercial nature which he would not discuss in detail as they have for the most part now been published. The arrangement which is being negotiated with Switzerland was taking a somewhat different form and was related to the question of Rhine navigation expenditures. While Germany could not recognize any legal responsibility for Austrian loans it was, as its negotiations concerning various loans with other states had indicated, ready to enter upon negotiations to effect if possible a mutually satisfactory settlement with any state.
He said that the purpose of the German note of November 17 was to indicate this attitude to the American Government and to say in effect that Germany while it had been giving the matter careful consideration had arrived as yet at no definite proposals which it felt might be acceptable to the United States and was also in effect intending to invite suggestions or proposals from the American Government. He added that such proposals might be of a commercial or financial character. As to financial he made reference to the Dawes and Young loans for which a precedent with Great Britain for example existed.
He then said that in view of the attitude of the German Government as expressed in the note of November 17 and as he had just presented it he was somewhat dismayed that the United States without notifying the German Government had published the note in question as well as the reply thereto. He continued by saying that this publication which popularly brought these notes into association with other difficulties between the two countries had evoked popular feeling in the United States against the German position in the matter of Austrian loans. He stated that this occurrence might render more difficult continued negotiations on this subject which he had intended to keep alive. He said that he had hoped to keep the Austrian loan question on a technical basis entirely separated from political issues and thus to work quietly toward its possible solution.
He said that the results of publication of the notes seemed to shut the door on further negotiations [for] which if such were the case he could only express his deepest regret.
I said to Wiehl that the American position respecting Austrian loans had been so fully and so frequently placed before the Foreign Office that I would not at this time repeat to him our point of view but that I had listened with interest to what he had said and would convey his views to Washington.