462.00R296/2775: Telegram
The Chargé in France (Armour) to the Secretary of State
141. From Kellogg.
Conference with Young and Morgan mentioned in previous telegram (Embassy’s No. 139, April 10, 1 p.m.) took place yesterday afternoon and evening. I went over entire situation and set forth your views, with the substance of which I entirely agree, as strongly as possible. They informed me in effect as follows:
(1) That there was no thought of making provision as an essential part of bank organization for an American director either representing the Federal Reserve Bank or appointed by it, but that this idea was intended simply to give the Government the opportunity of having one if it so desired.
(2) That they did not have in mind that Committee’s report to the Allied Governments would provide for division of the reparation [Page 1042] payments, one corresponding to dollar payments by the Allied Governments to the United States and conditional on ability to transfer, and the other to be paid directly to the Allied Governments to cover reconstruction and to be unconditional. They said that this was simply the suggestion of the Allied Governments in their memorandum forwarded to you by Mr. Young, and was presented as basis for bargaining with Germany over amount of reparations which they would ultimately receive.
At this point I took occasion to say in substance that in every one of the debt-settlement negotiations between the United States and the several Allied Governments, the former had definitely refused to make payments due the American Government from the debtor Governments in any way conditional on German payments or in any way to link them with reparations; that the Government of the United States relied solely on capacity to pay of the debtor Governments, and would not in any manner connect them with the reparation payments. I saw no reason whatever, therefore, to make any separate division of reparations to cover payments to the United States.
Regarding question of the moratorium I said that the moratoriums provided for in the debt settlements between the debtor Governments and the United States were not uniform; that I could see no reason whatever for the Allied Government’s attempting to grant these particular moratoriums to Germany; that if they wished to give her a moratorium on any or all of the reparation payments, that was a question which did not interest the American Government, but that it should not be linked to question of payment of debts to the United States.
I am unable to repeat all the statements I made, but I am quite sure that I presented your views.
(3) I learned from them that there had been no suggestions of any kind by any member of the Committee that payments to the United States on account of mixed claims should be reduced below [the?] 2¼ percent of the Dawes Plan payments. In any event I do not believe that these payments could be reduced without the consent of the Government of the United States in view of the provision of the Paris agreement, January 14, 1925.27 It may be that somebody on the Committee, however, will make suggestion that the United States accept 2¼ percent of the new schedule of payments. That did not seem to be the view of those with whom I talked yesterday and last night.
They told me that an answer to your No. 102, April 8, would be prepared by Mr. Young. What their answer will be I am unable to say, but I have given in brief outline above substance of what they said to me. Kellogg.
- Telegram in three sections.↩
- Foreign Relations, 1925, vol. ii, p. 145.↩