551.Al/40a: Telegram

The Secretary of State to the Ambassador in France (Wallace)

1480. For Boyden70 from Houston.71 Treasury B-117.

  • First: Have not been able to obtain satisfactory unofficial delegation from here for Brussels Conference.
  • Second: I have, therefore, with consent of Department of State, designated you an unofficial representative to attend the Conference and to report concerning the same. You are authorized to take such part as you may deem advisable in the discussions of the Conference for the purpose of giving information as to the financial and economic conditions in this country and for the purpose of obtaining similar information in respect to other countries, but you are not authorized to bind or commit this Government in any way.
  • Third: Replies to a questionnaire and supplementary memorandum issued by the League of Nations have been sent to the Secretariat of the League of Nations through Department of State and Embassy in London.72 Suggest you communicate with Embassy for purpose of obtaining this material.
  • Fourth: Understand Committee in charge of Conference desires head of each delegation to make brief statement of financial and economic conditions in his country. You are authorized to make such statement on behalf of the United States in case you consider it advisable to do so.
  • Fifth: Understand Advisory Committee, on matters relating to the Conference, has proposed that questions of reparations and cancellation of war debts be not dealt with at the Conference except in form of statement from Chairman, and that such statement would not be open to discussion. We understand Germans and Austrians are now expected to attend Conference, and assume, in view of their presence, above-mentioned questions will not be brought up. It is view of United States Treasury that such matters as further governmental loans by United States, cancellation of some or all of obligations of European governments held by United States Government, and deferring of obligations of foreign governments held by the United States to liens created in favor of loans subsequently made for reconstruction purposes, are clearly not appropriate for [Page 96] consideration of Conference. You are, therefore, not authorized to enter into discussions regarding the obligations of foreign governments held by the United States, or further advances by this Government to other governments. These matters, together with the exchange of the demand obligations held by the United States Government for long-time obligations, and the deferring of the collection by the United States of interest during the reconstruction period are, in my opinion, matters resting exclusively between the Treasury of the United States and the treasuries of the respective governments whose obligations we hold.
  • Sixth: Referring to proposed agenda, you will note that information contained in replies to questionnaire covers many of the matters referred to. This Government has no external debt. Information concerning currency and external loans is set forth in replies to questionnaire. Federal taxes imposed by existing legislation are calculated to yield an annual revenue of about $4,000,000,000. It is the policy of the Treasury that taxes in this amount should continue to be raised, but that incidence of taxation should be somewhat changed with view to acceleration of production and accumulation of capital. With exception of tariff of duties upon imports and restrictions upon importation of certain dyestuffs, and with exception also of certain restrictions upon exchange transactions with territory under control of so-called bolshevik government of Russia, foreign trade and the exchanges are unrestricted, and it is present policy of this Government that they should continue unrestricted. It is policy of Treasury and of existing legislation that Federal Government begin forthwith paying off its war debts; measures are being taken to halt increase of inflation of credit and to encourage production and saving. In opinion of Treasury these ends can best be attained in this country by avoiding so far as possible governmental restriction and control and by leaving private enterprise free to produce surplus necessary for reducing our national debt, and for supplying Europe with materials requisite for its reconstruction. Attention should be called to fact that in addition to taxes imposed by Federal Government, State and local taxation is estimated to amount to not less than $2,000,000,000 annually. It should be remembered also that although European governments are indebted to this Government in amount approaching $10,000,000,000 there remains in hands of European holders investment in property in United States amounting to several billion dollars.
  1. Roland W. Boyden assumed duties, Apr. 1, 1920, as American unofficial representative on the Reparation Commission, succeeding Albert Rathbone.
  2. David F. Houston, Secretary of the Treasury, Feb. 1920–Mar. 1921.
  3. Not printed.