The Ambassador in Italy (Child) to the Secretary of State
[Received May 8—6:35 a.m.]
35. Department’s telegram to Genoa May 4, 7 p.m., and later telegram which probably was dated May 2, 8 p.m., by mistake.22 I have sent text of the seventh clause separately.
I have plainly stated our position to the Italian, French and British delegates with respect to any such agreement as that which has been reported concerning Dutch-Shell and any such agreement with Soviet Russia as clause 7 implies. Belgium and France have now refused to subscribe to clause 7. Indirectly I have conveyed our attitude to the Soviet delegates.
I had a long conversation with Lloyd George, who called upon me today. He again assured me that the report of an agreement by the Dutch-Shell is incorrect but he indicated that should the negotiations with Soviet Russia here fall through, it will be difficult to control private interests even when the British private participation is large. Lloyd George confirms my own opinion that if the Genoa Conference fails completely to reach an agreement with the Soviet authorities, there is serious danger of a vicious rush by various countries for separate private or national agreements. There is some evidence pointing to mature separate negotiations made here already by the Dutch. I think that careful consideration must be given by the Department to its policy should these separate secret negotiations take place, especially as at present there is scarcely any likelihood of the successful termination of the Conference negotiations.
I repeat my advice that our Government and American private interests must do nothing which will prevent our being in a position to make a protest with clean hands. Informally, however, we must keep in the closest possible touch so as to prevent Soviet Russia from entering into any agreement by which our rights would be impaired. Lloyd George and I are in agreement that the Soviet [Page 790] reply which is due tomorrow will bring a qualified eventual Soviet refusal. Joffe23 has temporarily left Genoa and is at Berlin where he is in confidential conference with Moscow regarding the Soviet reply. I have evidence in the meanwhile, which the British admit, that even if the Soviet delegation here signs, Trotsky or the Red Army or left party in Russia is preparing to repudiate any agreement. In spite of possible embarrassment, the Belgians, French, and others here will refuse to sign. Barthou has come back to Genoa much stiffened, and if we gave the word the participation of several countries in the Conference would be terminated. This I consider most unnecessary. Without giving any opinion, I have asked Lloyd George whether he has thought at this juncture of having the Conference refer to a committee which it should appoint the work of making a report on what is needed for the reconstruction of Russia, finding the means of making advances or extending credits, and of making a judicial study and report on the protection of foreign interests in the Soviet territory. I also inquired of Lloyd George as to the effect of delay so as to prevent a crisis here from causing a new political crisis in Soviet Russia, to get away from the atmosphere of a thousand press representatives making appeals to national prejudices by sensational news, to turn over the Soviet problem to persons not in the vicious circle of cabinets trying to keep in office, and to have the several states agree not to enter into separate deals with the Soviet authorities while the commission was at work. He replied that the most important purpose was the one named last, but that the success of the plan would depend as much on whether the United States would take part in such a commission, even though it be in only an advisory capacity. I told him I was in no position to inform him regarding that. He referred to the difficulty of not being in informal touch with the American Government and said that after a reply was received from the Moscow government he would like to have a further discussion with me and could do it then with more propriety. I made inquiries but did not give any commitment. I however suggest to the Department that American interests would be best protected and the cause of European peace best served if this plan were substituted, with or without the partial or full participation of the United States, for the ruptures, isolations, and recriminations which now threaten as an aftermath to the Genoa Conference.