File No. 763.72112/5000
The British Ambassador ( Spring Rice) to the Secretary of State
[Received October 6.]
Sir: I have the honour to recall to your attention my notes of August 18 and September 6, 1917,1 to which you replied temporarily by your note No. 1782, dated September 17, 1917.2
I attach, for your convenience, two further copies of the proposed notice, and beg to call your particular attention to an alteration which has been made in it, by the insertion of two new clauses, numbered 3 and 4, and the renumbering of those which were originally designated by those two numbers and are now numbered 5 and 6.3
For your information, I may say, that an identical proposal was simultaneously submitted to the French, Italian and Russian Governments and that up to the present time it has been accepted in its entirety by the Russian Government and that the French Government has accepted it except Nos. 1 and 2. No reply has yet been received from the Italian Government.
His Majesty’s Government has information which makes them confident that the application of the proposed restrictions would be both practicable and of the highest value; they believe that these restrictions on financial transactions will re-inforce the blockade by their effect in making it difficult for the enemy to obtain new credits or utilise existing resources in neutral countries and will have the immediate result of a further serious depreciation of the exchange value of the mark.
Any further depreciation of the mark (which already stands at a discount of approximately 50 per cent in each of the neutral countries) could not fail to have pronounced effect upon mercantile opinion in Germany where it is recognised how serious is the present exchange position, and how disastrous any further depreciation must be and how long and difficult the recovery after the war.
May I suggest that the adoption of the present proposal by the Government of the United States will be directly useful to the United States as tending to simplify the administration of the Trading with the Enemy Act, inasmuch as it will inhibit at their source, financial transactions of neutrals with the United States on behalf of the enemy.
His Majesty’s Government therefore regard the present proposal as of the greatest importance and urgency, both as a preventive of enemy financial transactions and as strongly tending towards the financial [Page 960] exhaustion of the enemy and they earnestly hope that the Government of the United States will express their adherence to the proposal at the earliest possible moment in order that the announcement in the neutral European press may be made without delay.
I have [etc.]