462.00 R 296/49a: Telegram

The Secretary of State to the Chargé in France ( Whitehouse )

[Paraphrase]

393. You will hold in strict confidence the following summary of a conversation between the French Chargé and the Secretary of State on Monday, October 22:

The Chargé stated that two days previously the British had approached the French Government with the suggestion that, in view of the press statement attributed to President Coolidge, the time was opportune to have an economic conference; that the Imperial Conference had had the reparation question under consideration and that it was believed that there existed an opportunity for common action; that it was thought that the declaration of President Coolidge that the Government of the United States rested on the proposal of last December should not be ignored; that in order that the attitude of American Government be not misunderstood the British Government had requested the Government of the United States for a statement of its position and had learned that it was willing to cooperate with the Allied Governments, either in a plan for a conference which would consider the reparation question or, were it thought more advisable, in a committee or other body appointed by the Reparation Commission.

The Chargé said that the Secretary was well aware that M. Poincaré had always been very much opposed to the idea which had been suggested by the Secretary for an inquiry by a commission of experts, chiefly for the reason that he believed that France, under the Treaty of Versailles, had certain rights, and it is of great importance that the treaty be maintained. Nevertheless, in spite of this attitude which he had held consistently all these months, M. Poincaré had not definitely rejected the British proposal; he had instead directed a verbal reply to be made that the British proposal would be considered and submitted to the Council of Ministers, which would meet on October 25. The Chargé said that M. Poincaré had instructed him to ascertain the Secretary’s views, and, in particular, to find out if the proposal in question was made on the initiative of the British Government or on that of the United States.

The Secretary asked the Chargé whether the text stating the American position had been given the French Government. The Chargé replied that he did not think that it had, but that the position of the United States had been interpreted by the British Government.

The Secretary said that after President Coolidge at his press conference had made certain informal observations which were published in the newspapers, the British had inquired of the Secretary to ascertain [Page 80] if Mr. Coolidge had been correctly reported and more definitely in regard to the willingness of the United States to participate in an inquiry on reparations along the lines which the Secretary had suggested last autumn and which were stated publicly in December in his New Haven address.

The Secretary said that he had answered the British inquiry in the same manner in which he would have answered an inquiry of similar nature from France or Belgium or Italy or from any other Government entitled to be informed. To avoid any possible misunderstanding, the Secretary had made a statement of the attitude of the Government of the United States that its position was the same as that which had been stated in December last year; that the United States felt a deep interest in the economic situation in Europe and thought that the present time peculiarly opportune to deal with the question, in view of the abandonment of passive resistance in the Ruhr and of the necessity to adopt some financial plan adequate to meet existing exigencies. The Secretary said that he had taken care to lay down certain conditions regarding American participation in an inquiry of the sort suggested. First, he had pointed out that there was no desire to relieve the German Government of its just obligations and that nothing should be done the effect of which would be to stimulate German resistance to the discharge of these obligations, but that there remained the question of Germany’s capacity to pay and the means by which payments could be obtained. Next, the Secretary had pointed out that he believed such an inquiry should be advisory and that the Governments should be asked neither to abrogate their functions nor to accept decisions in advance but that a sincere effort should be made to deal with the serious questions now pending on their own merits and to have the best aid possible that could be obtained in reaching a solution. The Secretary then said that he had also referred to the question of the debts which were owed the United States, as he desired that there be no misapprehensions on that point. It was quite clear that sentiment in the United States did not favor cancellation of these debts and that any attempt to compel the United States to forego its claims in advance of a settlement of the reparation problem would be quite idle. The Secretary said that that was to begin at the wrong end; it was quite obvious that if Belgium and France and Italy were not indebted to the United States the question of what Germany could pay and the way in which the payments could be obtained would still remain. The Secretary laid emphasis on the point that the matter of these debts was not in the President’s control nor were they the subject of agreements by the Secretary of State acting for the President; that they were in the control of Congress and that Congress [Page 81] alone could deal with the question of terms; that whatever action Congress would take would depend on sentiment in the country, and that at this time there was no overpowering sentiment for cancellation. The Secretary said that in his New Haven speech last December he had expressed the views held on this subject and that that statement continued to represent the views held by the American Government. If, instead of attempting the futile task of obtaining the cancellation of the debts, the European Governments were to proceed to settle their financial matters and to adjust the reparation problem and to give reason to believe that there would be European cooperation in the interest of peace and a reduction of expenses which were unnecessary, a different feeling would be likely to exist in this country; although it was unlikely that there would be any willingness to cancel debts, yet terms, conditions and time of payment could be considered in such a way that consideration would be taken of the actual conditions of the European debtors in the light of what settlements were made. For the reason he had stated, the Secretary said, he could give no definite assurance in the matter. The first thing to do, he felt, would be to settle the reparation question in Europe. He had stated to the British Government that the Government of the United States would be willing to take part in an economic conference in which the Allied Governments chiefly concerned in reparations should participate for the purpose of considering the capacity of Germany to pay and the proper financial plan for obtaining payments. The Secretary had also stated that if it seemed advisable that the inquiry be conducted through a committee invited by the Reparation Commission, competent American citizens, he felt sure, could be found to serve on an advisory committee of that sort.

The Chargé said that M. Poincaré was particularly anxious to know whether the proposal was made on the initiative of the British Government or on that of the United States. The Secretary said that it was made on the initiative of the British, but that this should not lead to a misconception, for the British had been led evidently to take up the matter by the report of the President’s interview in which the statement had been made that the Government of the United States was of the same view as expressed by the Secretary last December. It was in the light of this fact, the Secretary repeated, that the British made their request of the American Government and the American Government had thereupon defined its position; and while it might be said that this had been done on the initiative of the British, yet the suggestion had had its origin in the way the Secretary had stated.

[Page 82]

The Chargé asked whether he might say that the United States supported the British proposal, adding that he would like to be able to say that. The Secretary replied that he gave his earnest support to the proposal that there should be an inquiry for the purposes and in the manner he had set forth; that he was not supporting the proposal as a British measure or because it was British; that it was he, last autumn, who had, in effect, made the proposal, and that it was now being taken up; that the Secretary’s answer to the British was, as he had stated, the same that he would have made to the French or the Belgians; that the Government of the United States earnestly supported the proposal on its merits and the Secretary hoped that this would be stated strongly to M. Poincaré.

The Secretary then said that he desired to make use of the opportunity that the Chargé’s inquiry had given him to stress the importance of making some adjustment at the present time. The situation in Germany was grave; what had been taking place in Bavaria was laden with the greatest difficulties;29 if Germany was to pay reparations there must be a Germany to pay them and if the matter were allowed to go much further reparations would go into the discard and there would be none at all. The French would be left with the Ruhr in their hands and from this they might obtain some political security but no reparation payments, and even the matter of political security might be impermanent, for Germany might in time reunite.

The Secretary then said that he wished to take the liberty to make a few observations on the state of opinion in the United States. It was hardly necessary for him again to express his friendship for France and his desire that she should receive that to which she was justly entitled. Even on the controversial questions which had existed during the past few months opinion had been strongly preponderant in favor of France; but the Secretary desired to observe that opinion would change very quickly if the French, after having won their victory and broken down Germany’s resistance, were unwilling to aid in the working out of a financial plan. In view of the conditions existing at present, of which the Secretary hoped M. Poincaré would take immediate advantage, it seemed to him there might soon exist a situation that would prevent absolutely the success of any financial plan.

The Chargé said that he had noted particularly what the Secretary had said about doing nothing to stimulate German resistance. He thought that that would be gratifying to M. Poincaré. The Secretary said he wished that to be understood; but, in view of what [Page 83] had taken place in the last few days, while nothing should be done to promote Germany’s resistance to the payment of her just obligations, still some hope ought to be held out so that her solidarity could be maintained; it was the Secretary’s view that it was quite possible for the French to go too far. The Chargé said that France needed the reparation payments and that a very serious situation would exist in France if conditions should arise under which France would be unable to obtain reparation payments. The Secretary agreed that this was so and that he thought the situation most urgent.

The Chargé said that should M. Poincaré favorably entertain the proposal, he would probably accept the second alternative, that of having the Reparation Commission institute the inquiry through a committee of experts. The Secretary said that he did not see how it was possible to regard that course of action as inconsistent with the treaty, as the commission was permitted under the treaty to be advised in any way it chose. The Chargé said it was his understanding that Germany was going to bring up the whole subject before the commission and that might render it more easy for M. Poincaré to act in the matter.

I have instructed the Embassy in Great Britain to mail you copies of the memoranda exchanged with the British Government. These memoranda are sent to you in strictest confidence.

Repeat to Embassy in Italy as Department’s no. 104 and to Belgium as no. 71.

Hughes
  1. The Secretary was referring to the movement for the restoration of the monarchy in Bavaria.