Documents on British foreign policy 1919 - 1939 / edited by Woodward E. L. and Rohan Butler

Second series vilume II

Chapter I deals with the British attitude towards the proposals for an Austro-German Customs Union announced by the Austrian and German Governments in March 1931. These proposals, and the mode of their announcement, caused very considerable disquiet in France and in other European countries, since they were interpreted as contrary to the treaty engagements of Austria and as a first step towards the absorption of Austria by the German Reich. His Majesty's Government, while deploring the disturbing effect of the proposals upon the general political and economic situation, suggested that they should be referred to the Council of the League, with a view to obtaining an opinion on the legal aspect from the Permanent Court of International Justice. This suggestion was accepted, but the Austrian and German Governments withdrew their proposals before the Permanent Court pronounced a decision.

The reason for the withdrawal was the increasing seriousness of the financial and economic situation. The earlier period of crisis and the measures taken by His Majesty's Government with other Governments to relieve the German and Austrian financial position and to restore confidence are described in Chapter II. This chapter opens with the plans for the visit of Dr. Brüning and Dr. Curtius to London in the first week of June 1931. The discussions during the visit did not lead to any definite action, but in view of the increasing gravity of the financial situation, especially in Germany and Austria, President Hoover on his own initiative, and after consulting members of Congress, issued on June 20 a proposal for a moratorium of one year on all inter-governmental debts. His Majesty's Government at once accepted this proposal. The French Government, however, felt it necessary to impose certain conditions upon their acceptance. The greater part of Chapter II is concerned with the Franco-American negotiations over these proposed conditions, and with the attitude of His Majesty's Government towards the French proposals. The chapter also contains correspondence dealing with unsuccessful representations by His Majesty's Government to the German Government that the latter, while receiving financial help on a arge scale, should not embark upon further expenditure on the construction of pocket battleships.