Papers relating to the foreign relations of the United States, 1931, Volume I

462.00R296/4821

Declaration of the London Conference, 1931¹²

London, July 23, 1931

The recent excessive withdrawals of capital from Germany have created an acute financial crisis. These withdrawals have been caused by a lack of confidence, which is not justified by the economic and budgetary situation of the country.

In order to ensure the maintenance of the financial stability of Germany, which is essential in the interests of the whole world, the Governments represented at the Conference are ready to co-operate so far as lies within their power, to restore confidence.

The Governments represented at the Conference are ready to recommend for the consideration of the financial institutions in their respective countries the following proposals for relieving the immediate situation:—

(1) that the Central Bank credit of $100 million recently granted to the Reichsbank under the auspices of the Bank for International Settlements, be renewed at maturity for a period of three months:

(2) that concerted measures should be taken by the financial institutions in the different countries with a view to maintaining the volume of the credits they have already extended to Germany.

The Conference recommend that the Bank for International Settlements should be invited to set up without delay a Committee of representatives nominated by the Governors of the Central Banks interested to inquire into the immediate further credit needs of Germany and to study the possibilities of converting a portion of the short-term credits into long-term credits.

The Conference noted with interest a communication from Dr. Brüning relative to the joint guarantee recently placed by German Industry at the disposal of the Gold Discount Bank. The Conference are of the opinion that a guarantee of this description should make it possible to provide a sound basis for the resumption of the normal operations of international credit.

The Conference consider that, if these measures are carried through, they will form a basis for more permanent action to follow.

J. Ramsay MacDonald

,
President of the Conference.

M. P. A. Hankey

,
Secretary-General.

July 23, 1931.

12. Approved at the final session, July 23; copy transmitted to the Department by the Chargé in Great Britain as an enclosure to his despatch No. 2141, July 28; received August 5.