551.5F1/81

The Secretary of State to the Ambassador in Great Britain (Dawes)

No. 737

Sir: The French Ambassador46 called on me March 5th to discuss the question of silver. He asked me whether I had done anything about the Pittman report. I said no, that I had read the report and was interested in it but was not fully prepared to agree with its recommendations. I told him, however, that I was much interested in the general question of silver and thought that that was an important problem in the world situation. I asked him what he thought of holding a conference on the subject and he said he thought it might have a very important psychological effect. He told me that in Indo-China France had been obliged to sell her silver and go on a gold basis after England had started it in India. He said further that the whole situation of silver in the Far East had a very important economic bearing on China and the whole trade of that country; that he was familiar with it on account of his long residence there. He then pointed out how the rupee in India now had an artificial value. It [Page 613]could purchase over 200 grains of silver, although it contained only 175 grains of silver itself. Consequently, the rupee was being used to purchase bullion silver which in turn was used to buy pounds in gold and the pounds in turn came to France and were piling up in French vaults where they were a menace. He suggested that M. René Leon was an authority who could explain this, and in general he said that he thought that a conference to simply discuss this situation and see what could be done would have an important and beneficial effect. I tried to press him on whether his Government was asking for such a conference or desired such a conference, but he did not answer the question.

Very truly yours,

Henry L. Stimson
  1. Paul Claudel.