Memorandum of Telephone Conversation89

The Secretary told Mr. MacDonald that he had been sitting in all these conversations and that he felt and Henderson agreed that the French should have their chance at the Germans first.

The Secretary explained the French Government’s view that it had to have the prestige of a conference in Paris to enable them to float bonds in France and that all implication that the plan had been imposed in London had to be avoided.

The Secretary stated that of course the United States could not guarantee any loan and that therefore some loan had to be devised [Page 272] which would stand on its own legs and he had grave doubts whether it would be feasible. He told Mr. MacDonald that Norman, he understood, had ideas with which neither the British Government nor the Americans agreed and in particular the idea of a general conference going into the whole European financial, economic, and reparations questions, including a revision of the Treaty of Versailles. The Secretary said that if the conference in London was going to take on any such aspect he was going home; that he had told Mr. Henderson that the conference must be strictly limited to measures for the relief of the present emergency and that there should be an announcement to that effect prior to the conference find that Mr. Henderson had agreed.

Mr. MacDonald then said that Norman was opposed to giving Germany any more money at the present time and that he seems to feel that the aid already afforded by the Hoover plan has given her twelve months which she needed most in which to pull herself together. MacDonald pointed out that matters were apparently calm in Germany today.

The Secretary asked if no new loan was to be given what the Ministers were going to talk about at the conference at London. MacDonald seemed to think that the chief purpose of the conference was to prevent the French from putting any unnecessary political obstacles in the way of the accomplishment of the Hoover Plan. He seemed to be afraid in connection with the meeting of the experts on the Hoover Plan that the French might raise some political demands. The Secretary said that he understood that the Hoover proposal had all been agreed upon and accepted with the exception of technical matters as to which the United States had no interest.

Mr. MacDonald intends to preside at the meeting of the Ministers.

MacDonald also told the Secretary, very confidentially, that England had a rather serious financial situation for a day or so after the German crisis on Monday.

The Secretary told Mr. MacDonald that he had been told confidentially that the Directors of the Bank of France were not very warm to the Government’s proposal of a loan to Germany and that this was one of the reasons why the French wanted the meeting in Paris. Mr. MacDonald told the Secretary that in order to insure that the Sunday negotiations would not be prolonged he had summoned Mr. Henderson home for the meeting of the Cabinet on Monday prior to the London conference, which would necessitate Mr. Henderson’s leaving Paris on Sunday night.

  1. Between the Secretary of State in Paris and Prime Minister MacDonald in London, July 17, 1931, 2 p.m.