Text Version

The Proposed German Commission
About the 20th of February, Dr. Schacht of the German 
, dictator of German finance, came to see me and bared the situation
of his country in a way which American bond representatives had not
learned, though they learned much.
                        Schacht said there was then (and a cabinet crisis about the
subject was narrowly avert) a tremendous pressure for going off the gold 
standard for trade purposes; but that he would never assent because of 
the different situation there from that in the United States. I inferred 
that he would resign if the policy were changed. But in the hope of 
carrying on successfully through the spring, he proposed a scheme for 
temporary staying of bond situation while Germany would greatly increase 
cotton purchases from us and make deals (thought to be probable) to sell 
industrial output in Latin America. I submitted his scheme to State 
Department. His fear then, and even greater when I left Berlin, was 
that German balances would get worse before the middle of April when 
another bond conference is to meet. The hope of improving the situation 
was promised in the passage of the President's mandate for tariff re-
adjustments--daily watched in Germary. Schacht simply wished such 
improving prospects with us as would enable him to avoid further defaults
at the ConFerence in April.
                      About March l, the German Foreign Office asked me to talk over
possibility of a Commission to Washington for the purpose of readjusting
trade agreements. I was told that the Commission was about to be appointed 
and I was asked what I thought of the individuals suggested. It looked 
to be a good committee, no party or personal chiefs, simply first class 
men, who I thought would make good impression in Washington. But I at 
once advised delay in sending them. They were to have sailed March 9. 
My advice was to wait till Congress acted and a cable be sent from the 
State Department or from their Ambassador. This was agreed to and I 
reported to Washington. There were further Conversations and I set 
Agricultural Attache Steere(?) to making acquaintance with proposed 
commission members and also to study various commercial interests and 
difficulties so that, in case of need, he might be called to Washington 
to assist in negotiations when they begin.
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