462.00 R 29/708½

Memorandum by the Secretary of State of a Conversation with the Counselor of the French Embassy (De Béarn), April 28, 1921

German Reparations. The Counselor stated that the Ambassador had directed him to inform the Secretary of State of the purport of any message received from the French Government in respect to the matter of the German note on reparations; that the Embassy had received a message from the French Government this morning directing the expression of the thanks of the French Government for our action in the matter and particularly for the assurance that the note [Page 52] would not be transmitted to the French Government if the terms were unacceptable to that Government and were deemed to impair the rights of that Government under the Treaty of Versailles; that a preliminary review of the matter had impressed the French Government that the proposals were unacceptable but that the matter of reparations was one in which all the Allies were interested and they did not wish to make a final reply until they had had opportunity for consultation with the other Allies.

The Counselor said that he would add unofficially that an examination of the proposals had created the impression that they could not be accepted; that they were much less than what the Allies had proposed at London and that they were not at all consistent with the demands under the Treaty of Versailles; that twenty billion gold marks would be due on May 1st, in lieu of which the Germans offered only one billion gold marks, which added to the eight billion already given, in equivalent, reached only the sum of nine billions in all, and that the rest they seemed to be disposed to ignore altogether; that the Treaty of Versailles gave what was virtually a first mortgage to secure the reparations payments and that the Germans by these last proposals desired to be free of all lien. The Prince de Béarn went on in a further criticism of the proposals and the Secretary said that he understood that this was a preliminary statement. The Prince said that they were simply his personal and unofficial observations; that all he had been instructed to say was to give the thanks of his Government for the action taken, and to express their appreciation at the assurance that the German proposals would not be transmitted if they were unacceptable to the French Government, and deemed to be inconsistent with the Treaty of Versailles and that the matter was under consideration by the Allies and later a further statement would be made. The Secretary said that he must correct the statement with regard to the nature of the assurance given; that it was that the note would not be transmitted if the Allied Governments did not regard the proposals as furnishing a basis for discussion; that the question was not whether the proposals as made would be acceptable to the French Government, or whether they were consistent with the Treaty of Versailles, but simply whether they were deemed to furnish a basis for the resumption of negotiations. The Counselor said that he would inform the Secretary immediately upon the receipt of any further word from Paris.