462.00 R 296/14

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

[Extract]

My Dear Mr. Secretary: Referring to my private letter of October 27th, in which I outlined to you the substance of my informal conversation with M. Poincaré on October 22nd, I wish to inform you that I had a second interview with him on October 30th at which time we again spoke about the problem of Reparations. M. Poincaré again asked me to write him the substance of our talks together and in compliance with this request I addressed an informal letter to him on November 7th, a copy of which I enclose. I naturally omitted many points of our conversation as I did not care to put all in writing and have it submitted to M. Poincaré’s cabinet.

. . . . . . . . . . . . . .

Myron T. Herrick
[Enclosure]

The American Ambassador ( Herrick ) to the French President of the Council and Minister for Foreign Affairs ( Poincaré )

Mon cher Monsieur le Président: Referring to that part of our informal conversations of October 22nd and 30th relative to Reparations, the only suggestions of a formal nature which might have been embodied in an Aide Memoire were that the questions of Reparations and Interallied Debts due to the United States could not be considered together for the reason that the United States Congress is the only body competent to deal with debts and this it has already done. The position of my Government has always been that the question of debts is irrelevant to the question of German reparations. Our representatives in International Conferences are therefore limited in their power to commit the Government of the United States [Page 183] as were our delegates at Versailles. This does not necessarily imply that the present position of Congress and the American people is irrevocable. By reason of this situation, they are more likely to accept and follow any plan suggested for the readjustment, reduction or cancellation of debts than to initiate and lead. It is my belief that public opinion is bound to play a great part in future action in this direction and if Congress and the majority of the people undergo a change of opinion, it will be by seeing their best interests served as well as seeing universal benefit also, as they did when the United States entered the Great War.

During my two months vacation in America, I sought every opportunity to obtain the views and reactions of our people on this international problem and it was my conclusion that the general feeling was that this is no time for settlement by exchanging notes unless preliminary soundings had indicated the possibility of acceptance by Governments. There is a distinct drift of opinion of late towards the feasibility of concrete proposals. I have found in this crystallization of opinion the hope that the problem of German Reparations might be taken up by a committee of practical business and financial men of the highest distinction in the various countries who would have the approval of the governments concerned. It would seem to me that an uninfluenced committee which would be not unlike the former committee of bankers, but without hampering restrictions, would be favored by other governments. It is the consensus of opinion that since the vast devastated regions for which Reparations are demanded lie in France, her relation to this subject is such that the first question preceding any move or proposal would be: “What will be the attitude of the French Government?”

As I told you on my first visit, I was pleased to find in Washington, New York and elsewhere the most intense interest in this whole matter and an appreciation of the necessity of immediate action; likewise a general understanding that the evil consequences growing out of the failure of solving this problem would rest heavily on our own country also. This was my reason for coming to you for a straightforward and informal talk with the hope that we might find some way to assist in furthering some plan suggested by you. There are at present in Europe some of our most able and powerful financial men who feel as I do that now is an opportune time for the formulation of some practical plan of reorganization. I need not repeat that we all recognize, even the remotest country, that the delay in settling the question of Reparations is largely responsible for the present economic disorganization and that there is great necessity for prompt action. However, there appears to me to be little prospect of this unless governments [Page 184] can arrange to interpose between themselves and their public the findings of an impartial committee.

You asked me at our last meeting also, to write you what I said with reference to the financial and economic situation in America after the disastrous panic of 1893 being analogous to this situation. At that time, 33 percent of the railroads passed into the hands of receivers and there seemed no prospect for years to come of a revival. Industry and agriculture were at a standstill; business was completely demoralized and no class escaped this paralysis which gripped the nation and filled the people with despair. I detailed to you the manner in which reorganization and reestablishment took place and how hope and confidence came to our people out of despair.

The first important rehabilitation was that of the Union Pacific Railway whose property was in a hopeless tangle. There were countless committees of irresponsible people representing minor securities; predatory lawyers, speculators and people were battening on the corpus of the company. A group of the highest type of disinterested men that could be found in the country were appointed to formulate a plan of reorganization and in good time they brought forth a plan of refinancing which was so comprehensive and so workable that its acceptance was instantly assured by all interests. There followed in rapid succession a reorganization of all the other bankrupt companies, also of other corporations and industries and soon the wheels of commerce were turning once more. I had a close chance to observe this process as I was a member of several of these reorganization committees and I saw order come out of chaos. I feel that in the present instance the elements exist for reorganization, if only a beginning can be made. It is for this reason that I ventured to take your time and to give you for what they are worth my personal beliefs and reactions which reflect those of others.

If I now have the temerity to put in writing what I said in our informal conversations, I do so simply because of my deep desire to do something of value for your country and my own.

I asked you, Monsieur le Président, whether you did not think it feasible to select or inspire the selection of a group of business and financial men of the highest distinction in the various countries concerned to form a committee not unlike those reorganization committees which I have described with the object of studying, in an expert manner, the whole problem of economic reconstruction. I would be glad to receive your impressions of what I have attempted, in a personal and confidential manner, to set before you and should you deem it worthy of your consideration I would be glad to come and see you.

With assurances [etc]

Myron T. Herrick