462.00R296/5360: Telegram
The Ambassador in France (Edge) to the Secretary of State
897. Press reaction to the opposition in Congress to President Hoover’s moratorium proposal reflects surprise and some bitterness. This opposition in itself appears to cause no marked uneasiness as to eventual ratification but it has had the effect of materially lessening hopes of a reduction in interallied war debts.
A particularly aggressive editorial in the Temps of December 14 reflects the position taken by majority of press and is to the following effect:
In view of the conditions under which the Hoover moratorium was agreed to the resistance of the Senate and Congress is a shock. The abrupt initiative of President Hoover placed the other interested powers under a monumental obligation to accept his proposal. If objections of Congress prevail, the result would be to oblige debtors of the United States to pay, whereas these debtors would be deprived of German payments because of the initiative taken by President Hoover. Failure to ratify would entail the loss of the political authority of the United States in world affairs.
[Page 247]If reparations are not paid it will be impossible to meet debts contracted during the war for the common cause. As a matter of fact it is between Germany and the United States that the problem arises and if the Germans desire to be relieved of their reparation charges they must apply to the United States where they have so often found support and credits.
With respect to recent reported statements made by Bruening at Berlin and by Von Krosigk43 at Basel that no further reparations can be made, attention is being directed by the press to the possibility of France recovering “full liberty of action” under the provisions of annex 1 of the Hague agreement with Germany44 in the event of actions revealing determination to destroy the Young Plan. Stephane Lausanne significantly states in the Matin that if Germany pays anything to the bankers and refuses to pay reparation creditors measures of coercion might result.
The reported intention of the United States Government to possibly consider an adjustment of interallied debts based on capacity to pay has considerably disturbed the French Government according to Marco Pays writing in Excelsior of December 15. This decision, writes Pays, is the result of superficial appreciation of the French and British situations.
“The tendency evident in the United States to recover from France, prudent, well ordered, and saving the loss of American credits on Great Britain, is more than disturbing,” and the American theory of capacity to pay is considered in French official circles as “unjust and dangerous”. The Nationalist Figaro repeats this contention and adds that if the United States follows such a theory “it would commit the greatest injustice in history”.
The financial press understands that Great Britain might renounce the stipulations of the Balfour note45 (namely, that Great Britain would only expect Germany to pay reparations and other countries to pay war debts to the extent to which Great Britain is obligated to pay war debts) and that in the event that the United States reduces the war debts of Great Britain the latter would withhold any corresponding benefit from her debtors. Should no reduction be made it is reported that Great Britain intends to request her debtors and particularly France to revise upwards schedule of payments laid down in previous agreements.
- Telegram in three sections.↩
- Count von Krosigk, Director of the Budget Department of the German Ministry of Finance.↩
- Great Britain, Cmd. 3484, Misc. No. 4 (1930): Agreements Concluded at the Hague Conference, January 1930, p. 28.↩
- Foreign Relations, 1922, vol. i, p. 406.↩