462.00 R 29/650: Telegram

The Commissioner at Berlin ( Dresel ) to the Secretary of State


424. When Simons handed me the memorandum contained in my 423 he said he would today send me a memorandum of the German proposals. He had already discussed these informally with British and French Ambassadors, but they would not be published and there would be no further action regarding them until answer was received to appeal to President Harding. He did not commit himself positively, in answering a question, as to whether they would be advanced if a negative answer were received. In that case he felt that it would be useless to proceed with them and he could see nothing ahead but political chaos. In his opinion no government could stand which accepted Paris proposals.

When I pointed out obvious difficulties involved in United States as mediator he said he realized that but considered the situation without precedent. Simons added that whatever the result of Germany’s appeal he believed that in justice to German people he ought to advance it so as not to leave unturned the last stone. The President had approved fully his course in presenting it.

I was requested by Simons to state that it was wholly unjust to claim that German Government was maneuvering for delay. He realized fully necessity of immediately making reparations payments within limit of capacity of Germany, and final determination of amounts would not be awaited if role of mediator was accepted by United States. In the morning he had been talking with director of the Reichsbank about making to France some immediate cash payments.

Simons said the Government must stand on its refusal to permit Government gold reserves to leave the country, as this would cause immediate collapse in value of mark which would prejudice seriously the neutral holders. The German Government would, on the other hand, make every effort to turn over foreign securities so far as they were not necessary for purchasing food.

On Tuesday of next week Simons expects to make a statement before the Reichstag. I mentioned that in the case of former exchange of memoranda some newspapers had stated that the steps had been taken at America’s initiative, and he volunteered specifically to deny this in his statement to Reichstag.

He spoke with considerable feeling and evident sincerity. His attitude was one of depression with little hope for future.