The Belgian Ambassador (May) to the Acting Secretary of State
No. 1819

Dear Mr. Castle: I hasten to forward the text of the considerations which the Belgian Government instructed me to transmit to you verbally in handing you the official text of its reply to President Hoover’s proposition.

Believe me [etc.]

Paul May
The Belgian Embassy to the Department of State

The application of President Hoover’s proposal would be particularly onerous for Belgium because complete suspension would involve for us, on the one hand, a loss of receipts amounting to a total of 1,000,000,000 francs, including reparations and the agreement relating [Page 180] to marks65 and, on the other hand, would relieve us from payments amounting to 400,000,000 francs as a result of the debts to the United States and Great Britain, thus bringing about a net sacrifice of 600,000,000 or a sum per capita greater than the sacrifices which the United States would bear.

The 1930 budget contains a deficit of 1,200,000,000 out of a total of 12,000,000,000 francs, and the estimates for 1931 show an even more considerable deficit. A vote for new taxes amounting to 1,300,000,000 is imminent, the repercussion of which on the national economy will be very noticeable, and the loan of 1,000,000,000 as a result of the occupation of Belgium during the war, the Belgian foreign debt for reconstruction, is almost wholly a commercial debt which does not come under the President’s proposal. The Government’s situation in the face of the President’s proposal is excessively difficult. Opinion regards a rigorous application as inadmissible. Mr. Vandervelde himself declared before the Chamber of Deputies on Wednesday that the various parties are unanimous in insisting on the “sacred rights” to reparations and to a special situation. He recalls the declaration of Brockdorff-Rantzau at Versailles that Germany recognizes the wrong done to Belgium and will make it good.

Important political figures state that Belgium should reject the proposal. None the less, the Government in drafting and delaying its reply, has made a supreme effort to avoid endangering the success of President Hoover’s proposal. Out of regard for his personality, we have voluntarily eliminated from the text expressions which are susceptible of producing a harmful effect on American opinion, with the intention of asking you verbally to set forth that acceptance by the Belgian Parliament is impossible unless special arrangements are foreseen for Belgium:

  • First. It should be stated first that the proposal is obviously not applicable to the 1929 agreement relating to marks; this agreement deals with restitutions for which the State is responsible to the National Bank of Belgium, and which have always been excluded from the peace settlement. The agreement stipulates the continuance of payments in case of a moratorium excepting that Germany may make payments in kind. The annuity amounts to 184,000,000 francs.
  • Second. The balance of about 400,000,000 francs (600,000,000 minus 184,000,000) should be covered by German payments which might be effected partially through deliveries in kind advantageous to German economy. The diverse symptoms lead us to believe that the German Government would be disposed to negotiate with Belgium if the American Government would inform it that such a solution would be desirable. These negotiations could be confidential in order to avoid similar demands from other countries. Their success would have a [Page 181] happy effect on the relations of Belgium and Germany. Ask the American Government to make such a démarche and to give us their support in the negotiations; insist on the importance of the results as regards acceptance of the Hoover plan by Parliament.

  1. Agreement between Germany and Belgium signed at Brussels, July 13, 1929, League of Nations Treaty Series, vol. civ, p. 201.