Papers relating to the foreign relations of the United States, 1931, Volume I

462.00R296/4099

The Ambassador in France (Edge) to President Hoover

Paris, June 9, 1931.

My Dear Mr. President: I thought you would be interested in a general review of the situation here, as I see it, with particular emphasis on the psychological and political background, covering the period from the delivery of your economic disarmament speech before the International Chamber of Commerce in Washington¹¹ up to the repercussions following the German-English conferences at Chequers this past weekend.¹²

Assuming the Chequers meeting has been correctly analyzed as an advance notice from Germany for world consumption, particularly in the United States, of more or less concrete demands for reparations revision, it occurs to me that the situation, as it is now developing, furnishes the United States with a splendid opportunity for effective trading.

Of course, as could be expected, France is resisting and undoubtedly will continue to resist any encouragement towards reparation revision whether disarmament is coupled with it or otherwise. In fact, the latter phase will strengthen opposition here. Practically every newspaper and every official in commenting on the situation concludes with a very definite statement or threat that if the United States agrees to any revision, just so much as France loses in the operation must be deducted from payments to us. This, of course, is in no way new and, notwithstanding the terms of the debt settlement and our adherence to the principle of divorcing reparations from debts, no government in France could stand twenty-four hours that encouraged any other position. It will be recalled that even Poincaré, in his impassioned and successful appeal for ratification of the debt settlement,¹³ agreed that in case of reductions in payments from Germany, settlement with the United States would have to be altered accordingly.

Following your speech already referred to, the feeling over here is rapidly gaining force that the United States would demand real disarmament as the price of any German reparation revision, and the French realize that they will be asked to give up their so-called security. The word Security is the first and last chapter of the constitution of France. It is trotted out to meet every contingency. As you well know, the same security excuse is advanced by the French for the present indefensible inability to reach an agreement of the London naval negotiations.

However, it seems to me that all these circumstances may probably furnish us an opportunity to bring the force of united public opinion to bear on France in such a way that she would have great difficulty in longer withstanding and resisting most of the rest of the world. Is it not worthy of consideration, at the proper time, for the President of the United States, combining all these situations, to say to the world, as we did successfully at the opening of the Washington conference in 1921,¹⁴ that the only way to disarm is to disarm? That if Germany’s financial situation warrants a revision, (which, I repeat, we might as well take for granted means an ultimate reduction in the receipts to the United States), our country is prepared to consider it only on the basis, as you so well put it, of international disarmament: this as a frank warning in advance of the League meeting in February, 1932.

It would seem to be essential for the United States ultimately to take some active initiative unless it is to be forced into a purely defensive position, with all of Europe awaiting an opportunity to postpone, if not adjourn indefinitely, the disarmament conference, on the ground that the United States, by refusing to cooperate in the financial and economic readjustment (of Europe), has opened the floodgates to social and political chaos, and thus rendered the consideration of disarmament at this time inopportune, if not impossible.

Moderate commentators here point out that there is on one hand the nationalist campaign for the postponement of the General Disarmament Conference (which is becoming day by day more noisy and bellicose), and on the other what might be called Governmental laconicism, which inclines to the view that the parley is a necessary evil which must be gone through with unless some convenient excuse can be discovered in time to obviate it. The pretext that the United States, by refusing to cooperate in the general economic rehabilitation of Europe, had given a deathblow to disarmament, might conceivably be resorted to; to head off any such development, it may be essential for the United States to come forward with some material proposal. At least the burden of proof would then be shifted to Europe, away from the United States.

The nationalist campaign looking to the postponement of the disarmament parley has not as yet got into its full stride. The move to shift the responsibility for the solution of the debt-reparations riddle has not as yet been made. Europe is trembling on the brink of a financial precipice. The various schemes for the generalization of economic cooperation have failed miserably. There is a lamentable lack of leadership. Any positive word which would offer a clue to the solution of the present imbroglio would be immediately seized upon and eagerly devoured by opinion everywhere. Refractory obstructionists would to an extent be left floundering.

Practical disarmament must be analyzed in advance to consist of several definite objectives and understandings. First, a year or more of complete holiday from naval construction, we of course joining with all other nations; second, a 25% or greater reduction in the budgets for army and national defense from every country; third, a moratorium, as well as a possible revision of German reparations. Of course, it should be made clear that the United States would have great difficulty in having its people or Congress accept any debt reduction. In fact, Europe knows that and realizes the United States is at present determined to collect these debts. Therefore, it could be well said, and without successful challenge, that the United States Government could not sell this reduction to the people of the United States unless there were substantial and unusual concessions in return.

It seems to me that such a pronouncement from the United States carefully worked out—and you will of course understand that I am only generalizing—would place the rest of the nations of the world for once on the defensive. It would be their next move. They would be faced with the alternative of meeting the United States half way, or admitting their insincerity on the question of limitation of armaments. It would reveal to the world America’s willingness to sacrifice and charge off legitimate credits only if other nations would join in this mutual effort toward economic recovery. France would be in an untenable position if she still shouted security, because it is obvious that under such an arrangement her relative proportion of defenses, both land and sea, would be precisely the same as now and, in the meantime, her taxation burden greatly reduced.

Opinion here seems to be hesitating whether to embark upon another “Uncle Shylock” campaign on the ground that American policy is exclusively negative and consists largely in saying “No” to every request for cooperation. If we can show that we value disarmament as a productive factor in international relations, we will have done much to forestall the outbreak. Without aligning ourselves with any one of the European combinations, we will have contributed a positive proposal which will have to be acted upon, or the recalcitrant powers will be exposed to the charge of obstructionism which they now hurl so glibly at us.

I thought it might be helpful to give you this general review at this time as I assume it will reach you before Mr. Stimson leaves for Europe. It is my conviction that France will continue to throw monkey wrenches in the gear box until she is forced by some such colossal and general pressure that even she would find difficulty in resisting. My year and a half here, while most interesting and agreeable, has convinced me that the average French statesman, while full of compliments and platitudes, is never prepared to sign on the dotted line. As this is demonstrated by the present London conference negotiations which have extended over a year, so it has been with double taxation, commercial and other issues which I have personally had up from time to time. Whenever we reach the point of believing that we are near agreement, France finds something new to introduce into the negotiations. I think history records that it has always been so and, I repeat, we can only do business with them either by giving them much more than they give in return or by rushing them off their feet as Secretary Hughes did with his opening speech at the Washington disarmament conference to which I have already referred.

A splendid illustration of France’s bargaining policy is their attitude at this very moment with Austria. It is generally understood that France has refused and is refusing to participate in the financial rehabilitation of Austria, accentuated by the crash of the Kreditanstalt in Vienna, unless Austria flatly renounces the economic protocol with Germany. It might be helpful to give France a little of her own medicine: in other words, when we are among the Romans we must do as the Romans do, and it appeals to me that the type of pressure generally reviewed herein is in every way warranted and, if successfully developed, would be in the end the best thing that could ever happen to France. Nevertheless, I am convinced they must be forced even to help themselves.

Of course, you know much better than I whether it would be possible, under any circumstances, to develop a debt reduction sentiment at home. This may all be too bold but I am at least submitting it for what it is worth.

With kindest personal regards,

Sincerely,

Walter E. Edge

11. Ante, p. 493.
12. The German Chancellor, Heinrich Bruening and the German Minister for Foreign Affairs, Julius Curtius, were in Great Britain June 5–10 and spent the week end with the British Prime Minister at Chequers; see pp. 5–8 and 11–14.
13. For text of agreement of April 29, 1926, see Combined Annual Reports of the World War Foreign Debt Commission, 1922–1926 (Washington, Government Printing Office, 1927), p. 257. France ratified the agreement on July 27, 1929.
14. For correspondence concerning the Conference on the Limitation of Armament, Washington, November 12, 1921–February 6, 1922, see Foreign Relations, 1922, vol. i, pp. 1 ff.