800.51 W 89France/64

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

My Dear Mr. Ambassador: I am grateful to you for writing me so fully in relation to the French debt and I have not failed to consider most carefully the suggestion in your telegram of January twenty-third.

There are certain difficulties which must be faced. One is that the funding of the debt is in the hands of a special Commission created by Congress. It is unwise to deal with the matter in a way which will evoke criticism in Congress or to ignore the Commission. For this reason the matter does not lie within the ordinary range of diplomatic conversations. Another difficulty is that any effort to try out questions privately in advance is destined to fail. Such [Page 146] confidences are hard to keep and before they go very far something leaks out in Paris or here and then there is misunderstanding, explanation, and the necessity of informing a public whose curiosity has been piqued. Confidences are of little use unless they are imparted to the Commission and then they are no longer private.

I confess I am greatly troubled and I do not think that any way out will be found short of frank and full interchanges. Opinion hardens on this side largely because of the disposition to believe that there is no intention to pay. On the other side there is a danger of increasing ill will because we are supposed to be harsh and lacking in consideration of difficulties abroad.

The way out, as it seems to me, is to face the facts; on the other side to dissipate the notion that the debt is one that ought not to be paid or that there is no intention to pay it; on this side, to deal with the economic verities. If the French Government makes an offer at long range it is practically certain to be unacceptable in its terms and we have no suitable opportunity for negotiation and efforts to arrive at an understanding.

If the French Government were to send here a delegation who would put all the cards on the table, show the exact economic situation and endeavor to bring about a common agreement as to the underlying facts then perhaps we could make some progress. If this were done with the Commission itself, the best impression would be produced. The point is to have perfectly candid interchanges in the manner that will be most influential in affecting the opinion of Congress. I fear that anything attempted outside the Commission would have small chance of success although of course it is possible a delegation of the right sort sent abroad, if invited by the French Government, might be helpful. This however would need great care in working out as nothing I assume would be more offensive to the French than the idea of an investigating committee while such a Commission would not meet opinion here unless there were included in it those who were believed to represent the insistent demand of this country. I think that before anything is done in that direction there should be opportunity for consultation with the President and definite instructions.

I cannot speak officially in regard to the debt as the Department of State is really only a vehicle of communication, Congress having taken control of the subject. But I am unable, as I have said, to escape the conclusion that the sooner we get down to a direct and comprehensive discussion of the economic situation involved, meeting representatives of the French Government face to face not for the purpose simply of presenting a plan but of exposing a condition with the hope that a plan could be matured, can we be measurably successful in dealing with this problem.

With kind regards [etc.]

Charles E. Hughes