462.00R296/4023: Telegram
The Ambassador in France ( Edge ) to the Secretary of State
[Received June 22—7:24 a.m.]
332. Telegrams 257, June 19, 6 p.m., from London,46 261 of June 20, 7 p.m.,47 and 262, June 20, 8 p.m.,48 were decoded this morning. At a reception to President Doumer this afternoon which I attended I informally discussed the situation with M. Berthelot, second in the Foreign Office to M. Briand, with M. Flandin, the Minister of Finance, and later with Count Manzoni, the Italian Ambassador to France. I made an engagement to call at the Foreign Office at 10 a.m. Monday and told M. Berthelot I had received official advices from the State Department. I will present the contents of your 262 to M. Berthelot, [Page 44] as M. Briand is in the country, and will not return until late Monday afternoon.
Ambassador Claudel, M. Berthelot informed me, had advised the Foreign Office of the contents of President Hoover’s announcement. M. Berthelot had replied in effect that the proposal was very interesting but that there were financial considerations involved which would require careful study. As soon as possible a further reply would be made.
M. Flandin, with whom I then informally discussed the proposal, indicated considerable concern as to the effect of postponement of the unconditional payments of German reparations under the Young Plan.49 I suggested as clearly set forth in the President’s statement that the moratorium did not change the ultimate status but simply postponed payments all around for 1 year, and that by providing a necessary financial breathing spell it would give an international opportunity to reestablish confidence.
It was, M. Flandin stated, “a matter of figures” that some of the smaller countries, Yugoslavia being specifically mentioned, were depending on current incomes from Germany to assist in their budgets and while he had not reached any conclusion the entire debt credit condition must nevertheless be studied.
He then inquired if there was any chance that Mr. Mellon would come to Paris soon.50 As to this I told him I was not informed. M. Flandin was inclined to feel that this might be helpful.
He then suggested vaguely that it was important to consider the political effect in France, that this announcement following so soon after Mr. Mellon’s presence in London and after the Chequers meeting51 excited in Parliamentary circles some suspicion. He implied that while he did not so construe the decision, still some groups in Parliament would feel that this announcement was the result of conferences with France outside the “pilot works.” I was positive, I tried to assure him, that this suspicion was no doubt erroneous and that the proposal was a frank and open effort to help stabilize world confidence and economics; that under the proposal the United States was principally affected and that we were facing a large deficit. While he indicated his own clear understanding he demonstrated plainly his fear of domestic political difficulties.
Count Manzoni, with whom I later informally discussed the question, expressed the view that Italy would agree to the proposal.
[Page 45]According to Count Manzoni’s recollection, Italy would receive for the year from July 1931 to 1932, 260,000,000 lira more than she was compelled to pay on war debts. He seemed quite positive, nevertheless, that the good brought about by such an armistice would outweigh the advantage of such a surplus. I have been approached voluntarily by several Ministers, particularly the Ministers of Holland, Canada, and Switzerland, who expressed to me their pleasure over the President’s announcement which appeared in full here Sunday morning in both English and some French newspapers.