Memorandum by the Secretary of State 99
I called the President this afternoon. I told him that I had arrived here last night and had received his Nos. 218 and 2191 containing his views of the stabilization program and that they were exactly what I wanted and were a very great help. I told him that I had been to see the Prime Minister and that he had shown me his opening speech and had talked over their plans; that he had had a conference yesterday with Norman and Leith-Ross2 and that their program was to stabilize existing credits exactly like the President’s plan. I told him that we were going to meet this afternoon and hear Laval and Bruening report on what had happened in Paris and we were then tomorrow [Page 300] going to meet and cross-examine Bruening with a view to finding out the exact situation in Germany and that the situation would then develop as to what could be done. He asked me whether I was going to put out his plan tonight. I said no, there would be no opportunity for it, but I told him I had put out the necessity for stabilization in my speech in Paris yesterday and I told him how I had used the illustration of pouring water into a bath tub with a hole in it and the necessity of stopping up the hole.
I told him that there had been an outbreak of hostility against Great Britain and America in the French press that was evidently inspired by the Government and I could not understand what it meant unless it meant France was trying to excite German hostility against us for the purpose of winning Germany to herself. I told him that we were trying to keep our temper and not allow personal attacks to avert [divert?] us from the main policy. He said that he did not think that France could get very far with that policy and I said I agreed with him. He then said that his information indicated that France had already drawn her credit out of Germany, so that the stabilization plan could be put into effect without the need of any concurrence or help from France. I told him that I had reached that conclusion myself from what I had heard, that her present short-term credits were so low if we could get the other countries to unite she could not stop the program. I told him of the telegram No. 249, July 20, 1 a.m.,3 that I sent last night and that Mellon and I had been considering means of avoiding a flight of credit as soon as the announcement of a plan for stabilization was made and we thought that probably an embargo against all withdrawals of money from Germany might be necessary temporarily while the plan was being organized. He said he thought so too. I told him that Gordon4 had arrived and that his information rather confirmed my statement in my telegram No. 249 that Germany would need more loans even if her present loans were stabilized. I told him that what I wanted him principally to know was that I had found the British in accord with ourselves and that we were working together like two old shoes.