462.00R296/4714: Telegram
The Chargé in Great Britain (Atherton) to the Acting Secretary of State
[Received July 25—9:19 a.m.]
268. From Gibson. In two long meetings of the Committee of Experts the British representative, Leith-Ross, with support from the Italians, pressed firmly for the most rigorous execution of President Hoover’s proposal by excluding any payment by Germany or any discrimination between different classes of claims or between the various creditor powers. The Italians and the British, after examining the Franco-American Agreement, specifically reserved the right to return to the plan of postponing for 1 year all the payments due [Page 170] during the moratorium year and of postponing in similar fashion all subsequent payments. The obligations and the rights of the various powers would be resumed without modification at the end of the year of postponement.
In a detailed examination it was stated that the word “guaranteed” in paragraph 2 of the Franco-American Agreement meant that the railway bonds should be guaranteed by the German Government. As for paragraphs 3 and 4 it was provisionally agreed that no interest should be charged or paid on the postponed payments until July 1, 1933, and that the interest rate in all cases should be 3%. This conclusion will be referred to the various Governments represented at the Conference and is subject to possible reconsideration in connection with the position of the smaller Powers. This constitutes an amendment of the Franco-American Agreement. The rate of 3% is taken as an approximation of the average charge on the American debt, which is the lowest in the Franco-American Agreement.
After a long discussion of deliveries in kind at the afternoon session, in which the British and Italians tried to obtain a complete suspension of contracts, the question was referred to a committee of technicians which may include members of countries not represented in the Committee of Experts.
It was agreed that the representatives of the minor countries should be invited to be available in London early next week to discuss their positions with the Committee or with the subcommittee which may be appointed later. Gibson.