462.00 R 29/2173½
Memorandum by the Secretary of State of a Conversation with the French Ambassador (Jusserand), December 14, 1922
2. Reparations.—Occupation of the Ruhr. The Ambassador said that it had been reported in the press that at the last Cabinet Meeting [Page 188] (December 12) the Cabinet had discussed the reparations situation for two hours, and that there was opposition to the occupation of the Ruhr, and that some move on the part of the Government of the United States was in contemplation. The Ambassador said his Government would like to be advised as to what basis, if any, there was to these reports. The Secretary said that the Ambassador would realize that matters discussed at the Cabinet meeting were not appropriate subjects for diplomatic inquiry; that no statements had been made officially or informally which formed a basis for any of the press reports; that the Government was not in control of the press and could not be called upon to discuss statements made by correspondents to which the Government had no relation.
The Ambassador said that he understood this, but the matters were of deep interest to his Government as they involved questions relating to reparations in which the French had vital concern.
The Secretary said that, of course, he would not disclaim the intense interest that the American Government felt in the settlement of the matter of reparations; that this lay at the foundation of the economic recuperation of Europe which was of concern to the whole world and in a very important degree to the United States. The Secretary said that the Ambassador had inquired as to the press reports relating to our attitude with respect to the occupation of the Ruhr. The Secretary felt that there was a preliminary question which, in view of the Ambassador’s inquiry, might be presented by the Secretary and that was whether the French Government intended to occupy the Ruhr. The Ambassador said that the question was, What could the French do? There was one moratorium after another; the Germans were not paying and were not intending to pay. The Ambassador referred to the situation a year or so ago when the French Government had to enforce compliance with their demand by the occupation of Frankfort. Germans had large resources in Argentine and other foreign countries. How were these to be reached? Perhaps if the French threatened the occupation of the Ruhr they might be able to obtain results.
The Secretary said that if all they intended was to threaten the occupation of the Ruhr that was one matter but the actual occupation was quite a different matter. The Secretary said he had doubted the reports that such a plan was in contemplation because apparently such a course would not secure the reparations which the French desired. Suppose the French would seize coal. What was to be done with it? If it was not sold no money could be obtained from it. If it was sold, how was it to be sold? Were new lines of distribution to be opened? If so, how, with greater return? If not, then in what manner would the French succeed in obtaining a greater profit than the coal syndicate made? Did they intend to decrease [Page 189] wages, or to increase prices? The Secretary understood that the profits actually realized were quite inconsiderable as compared to the reparations demanded, and there was to be considered on the other hand the outlays to which the French would be put in taking such a course, and the likelihood of diminished production and efficiency because of the attitude of the population.
The Secretary pointed out, however, that of far more vital concern was the future peace of the world, and that the French occupation of territories inhabited by Germans would create a situation which would seem to make war at some time inevitable if it were not otherwise redressed. The Secretary said that, of course, he assumed that the French did not contemplate a policy which would dismember Germany and lay her prostrate as that would defeat an economic revival and would injure France as well as the United States and other countries.
The Ambassador, while he did not expressly admit it, by his gestures and nods seemed to indicate acquiescence in what the Secretary had said. He at once, however, reiterated the woes of France, the sentiment of the people, the attitude of the Germans and the hopelessness of the situation unless something was done. The Ambassador referred to the manner in which the French treasury was maintaining itself by the issue of the obligations of the Government and the amounts that in this way were being paid by the French people. The question was what could be done?
The Secretary said that it seemed to him that a point had been reached where it was necessary to put sentiment aside so far as statesmanlike preparation of plans was concerned and to deal with the economic question upon its merits. The Secretary said he would recur to what he had already broadly suggested to the Ambassador some weeks ago. No one desired to see Germany escape her just obligations. No one desired to see France sacrifice a sou of what she was entitled to obtain. But the question always was what could she obtain? There was no sacrifice in giving up what you could never get. No matter what might be said, or how justly it might be said, with regard to the German attitude, the fact remained that France could not get any more than Germany could pay. To ask France to make a settlement based on what Germany could pay was not to ask her to sacrifice anything, but to make a settlement upon a basis which would aid France greatly because of the hope that would be engendered and the new economic life in Europe which would result.
The Secretary said that he did not profess to say what Germany could pay. He was satisfied, however, that this would not be settled in discussions between the statesmen of the different nations concerned. [Page 190] The statesmen were responsible to whom? To their Parliaments and to political sentiment. They were compelled to hold the positions that they had severally taken. They constantly had to consider the conditions of their political life. That was not a subject for criticism. The Secretary had no desire at this difficult time to suggest a word which could convey the faintest notion of a desire to be critical. The Secretary said that it was simply a statement of fact which must be considered in determining what should be done. The Secretary said he felt that we had got to a point where if the matter were to be considered on its merits there should be called in those who would faithfully advise the Governments in a dispassionate and authoritative manner with respect to an economic solution. The Secretary said that the Ambassador knew very well that if a professional man, or a man of highest authority in finance or business, were approached for his opinion upon a question relating to his profession or to the sphere in which he was an authority his answer would be as clear as crystal. He could not in virtue of his own integrity and prestige give any answer except that which corresponded to his intellectual conviction based upon his experience and knowledge. Therefore, if men friendly to France, appreciative of her needs, and financial authorities, were brought together,—a man or men of the highest authority in the United States, Great Britain, France, and Belgium, for example,—and they were asked to suggest a financial plan, they would do so, and then the statesmen could tell those who supported them that the best possible thing had been done. At least they could ask their opponents what alternative they had to suggest. The Secretary said that nothing of that sort would be helpful unless Foreign Offices kept their hands off. The trouble with the Bankers’ Committee was that the French representative took his instructions from Paris and was not allowed to speak his own mind. The Secretary said that, of course, Governments must acquiesce in the constitution of such a body. They must give it full opportunity. They must contemplate acquiescence in its recommendations. They must give an opportunity for such a body to work not as official delegates but as the representatives of their own conscience, knowledge and experience in order to give an authoritative economic answer.
The Ambassador seemed to be much impressed with the suggestion, and said that he felt the force of what the Secretary said and he would not fail to communicate these views to his Government. He must say, however, that the situation was made a great deal more difficult for his Government than it otherwise would be because of the tendency in Great Britain and in the United States, as shown by the press, rather to favor Germany and to excuse Germany and [Page 191] to put France in the wrong. The Secretary said that no solution would ever be found if consideration were given to matters of that sort which were entirely beside the merits of the problem. The Secretary said that things were going from bad to worse. Would this situation, of which the Ambassador complained, be remedied by doing nothing or by forcible measures as against Germany? Exactly the opposite effect would be produced. What could make a change in such opinion? Suppose M. Poincaré were to say that conditions had reached a crisis; that France desired only what was possible and consistent with the economic recuperation in Europe and were to ask leading financial men of his own country and of Great Britain, the United States and Belgium to gather together as an informal body to tell the Governments what could be done and to propose a plan. Would there not at once be created throughout the entire world a feeling of satisfaction? Would not France be highly praised for such a reasonable suggestion and for such a fair attitude? The opinion of the world would change, so far as it was disposed to be critical of France by reason of what it believed to be contemplated in the direction of extreme measures.
The Secretary said, moreover, what would France lose by such a course? Suppose that something resulted which would not bear examination, which was unreasonable, which France on fair ground could not accept. She would not have sacrificed any of her power and certainly none of her rights.
The important question was, What was the alternative? What were they to do? If it was to be a satisfactory financial plan the investing public must be considered. If it was desired to raise money through some flotation, nobody could develop a plan except those who knew what the financial markets of the world would be able to absorb. Therefore it was of vital necessity to have men in touch with these markets to give their advice as to what was practicable. The Secretary said that the case was not one where there was a pot of gold in the Ruhr that the French could go and pick up and we were desirous that she should not have it. The only pot of gold there was a net balance that would remain after expenses as a result of production and trade. The Ambassador said “Yes”, but there were pots of gold in Argentine and other places which France might be able to get at. The Secretary said that if they actually proceeded to forcible and extreme measures the chances would be that whatever resources there were outside would be the more tenaciously held. The Secretary pointed out, however, that if financial men of high authority were brought into consultation to devise a plan they would of course take into consideration all available resources and they would be as well advised as the French Government [Page 192] or anybody else with respect to what these resources were.
The Ambassador said that he could not hold out much hope because of the difficulties in which France found herself, the state of sentiment, the condition of her people, the attitude of Germany, et cetera. He would however bring the Secretary’s suggestion at once to the attention of his Government.
3. London conversations. The Ambassador said that the reports about a deadlock in London were not accurate; that the London conversations had been of a pleasant character, and that they had merely suspended until January 2; that no ill feeling had been created.