§ (Translation.)
§ No. A. 1454.
§ Gentian Embassy.
§ 14th July. 1922.
§ "MY LORD.
§ On the instructions of my Government I have the honour to transmit to Your Lordship. herewith, the following Note;
§ The extraordinary drop in the rate of exchange of the mark which has taken place during the last few weeks and the deterioration of the financial situation of Germany connected with this fact compel the German Government to approach the interested parties with proposals which have for their purpose a reduction of the cash payments at present to be made in accordance with the Treaty of Versailles. With this object the German Government have transmitted to the Reparation Commission a Note in which, after a detailed statement of the circumstances necessitating such proceeding, a respite was requested in respect of the cash payments falling due in the course of this year in accordance with the decision of 21st March, 1922. The German Government pointed out at the same time that they considered it essential for the rehabilitation of the mark rate of exchange that Germany should also be released from cash payments for the years 1923 and 1924 arising out of the scheme of payments of the 5th May, 1921. Attention is further drawn to the necessity to come to new arrangements with respect to the German obligations arising out of the Clearing Office proceedings and out of Section TV of Part X of the Treaty of Versailles as far as they involve a claim on the German Government for cash payments.
§ By order of my Government I have to request the British Government to effect the necessary arrangements with respect to the last-named obligations at once. In this connection the German Government beg to make the following proposals.
§ In a convention dated the 10th June. 1921, it was agreed between the Governments concerned that two million pounds should be paid by Germany every month to the Allied Clearing Offices in order to cover the German obligations arising out of the Clearing Office proceedings. The German Government is of opinion that in future the monthly payments should not exceed half a million pounds. Payments 2299W to this a mount would he rendered regularly without considering the state of the accounts at the time.
§ It is still impossible to calculate the payments to he made by the German Government in virtue of Section IV of Part X of the Treaty of Versailles and particularly in pursuance of Article 297 (E). Claims to an extraordinary high amount against the German Government are pending before the Mixed Arbitral Tribunals: new actions are still continuing to come in. The result of these suits is uncertain. Claims which have been decided are to be paid for in the first instance from the proceeds realised from the sale of German property in the Allied countries concerned. Special agreements have been reached with the individual Powers with respect to this matter. If the proceeds of liquidation do not suffice, cash payments are demanded. The German Government is of opinion that care must be taken not to impose further burdens on Germany in the form of cash payments during the time of respite which she asks for.
§ I have, etc.,
§ (Signed) STHAMER."