Messersmith, G.S., Berlin. Despatch No. 1232 to Secretary of State [Cordell Hull], Washington.
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University of Delaware Library, Museums and Press
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Reports on probable policy of Reichsbank; Dr. [Hjalmar] Schacht re-emphasizes his intention of maintaining mark at parity; 70 million dollar rediscount credit of Reichsbank being repaid for ostensible reason that relieving bank of interest charge also relieves its foreign exchange situation; Schacht insists Germany must pay all her private obligations, but implies he doesn't consider loans under Dawes and Young Plan as private loans; probably first step will be to secure reduction of interest charges on short and long term foreign loans and credits and eventually a reduction in the capital sum of the loans and credits; basic attitude of German government unfavorable to foreign capital and business; moratorium will probably be declared on payment of interest on foreign debt; gold cover of mark only 11 percent; real gold cover has been Germany's export surplus, but export surplus steadily decreasing; [Hans] Luther chosen Ambassador to U.S. as best person to negotiate for interest and loan reduction; Luther respected in U.S. and known to be a man of high principles; German government income decreasing while expenditures increase; long promised measures involving large expenditures cannot be much longer delayed; Schacht hopes by decreasing foreign payments, by accumulating marks in Germany, and expanding credit structure to provide necessary money without issuing currency which might endanger the Mark.