800.51 W 89France/112a: Telegram
The Secretary of State to the Ambassador in France (Herrick)
184. I desire you to take the earliest suitable occasion to take up with the proper French authorities question of the French debt. You should shape your conversation along following lines:
(1) The Government of the United States believes that negotiations looking to an agreement on a suitable basis for refunding of France’s debt to the United States should be undertaken at earliest practicable moment. In latter part of November 1924, the French Ambassador, Mr. Jusserand, called on Secretary of the Treasury Mellon, chairman of the World War Foreign Debt Commission, and indicated that the French Government was desirous of an endeavor to arrive at some terms of settlement which might prove satisfactory to both Governments. Secretary Mellon discussed the matter with the other members of the Commission and on December 1, 1924, informed Ambassador Jusserand on behalf of the Commission34 that the Commission were prepared to recommend to Congress the British terms with such modifications as would meet the difference in the existing economic situation in France; that it would appear that payments upon the principal of the debt could be begun at once, and that the differences referred to should find expression in an examination of the various questions which relate to payments of interest.
Subsequent to this exchange of communications, certain personal and unofficial suggestions for dealing with French debt to the United States were submitted to you privately. These suggestions did not [Page 151] seem to offer a practical basis, however, upon which negotiations might be begun. In light of present circumstances the Government of the United States believes that discussions should be continued in more official manner and should take form of proposals more likely to prove acceptable to World War Foreign Debt Commission and to Congress. It is believed that the statement communicated to Mr. Jusserand by Secretary Mellon can appropriately be made basis for further discussions of the question. The Government of the United States is not unmindful of financial difficulties of France and appreciates fully that any arrangement made must take actual economic and financial situation into account. It does not follow, however, that no steps toward refunding should be taken, as this Government believes it to be in interest of Governments of both France and the United States that a definite basis of settlement be found as soon as possible.
(2) I fear that if no settlement is made in next few months, or at least if no substantial progress is made, public feeling in United States may grow that France does not have serious intention of paying, and that feeling thus created will make suitable arrangement in light of all the circumstances exceedingly difficult to reach. The Government of the United States would prefer not to send a formal communication in the matter to France at this time, and hopes that it will not be necessary to do so. For this reason you will appreciate importance of putting matter before French Government in such manner that advisability of taking action suggested will be fully understood. It is preferable to elicit overture from France, if possible, in order to avoid appearance of pressure from this Government which might produce unfortunate reaction from French public opinion. M. Clémentel’s second personal and unofficial memorandum to you (as I have already indicated above) would not appear to be any more acceptable as a basis for negotiation than his first, which Secretary Mellon did not find to offer a practical basis upon which negotiations might be begun. It appears instead to be desirable to use the communication made to Mr. Jusserand by Secretary Mellon in December as starting point for the present discussions and to have your representations upon it. While it is confidently believed that at that time the Ambassador did not fail to advise his Government of the statement made to him by Secretary Mellon, it is desired that you hand to the proper French authorities, when you have your conversation with them, a memorandum containing the statement communicated to Mr. Jusserand by Secretary Mellon on December 1, 1924.
(3) Please repeat foregoing to Embassy in Great Britain, with report of action you take, for Ambassador Houghton’s information.
- See Minutes of the World War Foreign Debt Commission, 1922–1926, pp. 60–61.↩