462.00R296/3983b: Telegram

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


250. The Department has been following the increasing withdrawal of gold from Germany and the banking crisis in Austria closely and with anxiety. Many false rumors have appeared and much speculation has taken place about a change in the debt policy of this Government. A total postponement of all intergovernmental debts, claims, and payments for one or more years is one of the suggestions made to us by bankers. Although in case any action were possible by this Government this plan would seem to be the least objectionable, we believe that this plan would not receive the support of public opinion here unless it could be clearly shown that it was urgent and would be effective. One of the elements of such proof would be the willingness of the European nations, France in particular, to take similar action. There is not the slightest chance of acceptance here of any proposal for the American people to give up their debt payments to be turned over to Germany in the form of a forgiveness of reparations while the European nations continued to receive their margin of either conditional or unconditional payments from Germany. Although we are glad to note from the reports in the press certain evidence that France is critically interested in this situation it would be a serious mistake for France to get the notion that we might come forward with a proposition such as outlined above if she held back.

In case you are questioned by Mr. Briand or other members of the French Government I want you to be prepared to make clear the situation as it exists here. However, I do not want you to initiate any discussions.