862.51/4088
The Ambassador in Germany (Dodd) to the Secretary of State
[Received June 29.]
Sir: I have the honor to enclose a single copy of the text, with translation,57 of the announcement published generally in the press of the explanation of the transfer situation made by the Reichsbank President to the Central Committee of that institution on June 14, 1934, including the resolution of the Reichsbank declaring a six months’ moratorium on cash transfers of the service of Germany’s long and medium term debt and the summary of the notice of the Ministry of Finance to the Bank for International Settlements concerning suspension for the time being of the service on the Dawes and Young Loans. A translation of the Law of June 9, 1933, under Section 3 of which the Reichsbank’s action was taken, was transmitted with despatch No. 2463 of June 13, 1933 (Enclosure 1a, page 3).58
Since the text of the German notification to the Bank for International Settlements may not have reached the Department from other sources, the German text is enclosed with translation.57 It was simultaneously stated in the press that the explanatory notes sent to the interested governments, included the United States Government, and the published text thereof is accordingly not being transmitted.
Following the announcement in the House of Commons of the possibility of a clearing being established against Germany in England, a statement in the form of a Communiqué appeared in the German press saying that reprisals would be resorted to in such an event. A translation of this statement is enclosed.57
Criticism in the French and British press, some of which has been reproduced in the German press, has been bitter. In the meantime the Swiss and Dutch have opened negotiations for separate agreements, which thus far, according to the Foreign Office, have been without result.
According to reports appearing in the German press, concerning American press comment on the recently announced transfer moratorium, the oft repeated claim of Dr. Schacht that Germany’s existing foreign debt is a political and not a commercial debt, has at last found a general echo in the press of the United States. This has not escaped the attention of the German Foreign Office.
It may be of interest to the Department to hear that in some quarters British opinion does not favor the installation of a forced clearing. [Page 368] This attitude has been attributed to some extent also to the “City”. One opinion expressed in confidence to a member of the Embassy is to the effect that in the past British bondholders have been protected to the detriment of British trade and that the proposed clearing, if instituted, would be very damaging to British trade.
Respectfully yours,