462.00R296/4124
Memorandum by the Secretary of State of a Conversation With the French Ambassador (Claudel)
The French Ambassador called and asked me if I had received the French note and had any objections to it. I told him I had two very serious objections—one was the proposal to have the suspended payment paid the following year, and the other was the proposal that the payment when deposited in the B. I. S. by Germany should be paid out for the benefit of other nations than Germany herself. I sent for the note and pointed out the provisions. He asked if those were not minor objections. I said no, they were serious and would not be acceptable; that the purpose of Mr. Hoover was to give complete relief to Germany for one year and that it would not be such relief if she had a double payment overhanging her at the end of that year, nor would it be relief if her money went to other nations. He assured me that while he was speaking for himself, he was certain that those two points were minor and incidental and would not be insisted upon by his Government. He said the central point of the French note was the payment to the B. I. S. He asked whether I had any objection to that. I asked him if the purpose of that payment was not merely to preserve the integrity of the Young Plan, and he assured me that it was. I said, well if that was so the purpose of the French note did not differ from Mr. Hoover’s purpose, for we were just as anxious to preserve the integrity of our debt settlements, but that there might be objection to this method of achieving that purpose.
[Page 69]I then sent for Mr. Mills, who was in the next room, and asked him to explain our objections to the Ambassador, and he pointed out that this method of the depositing of suspended payments in the B. I. S. and crediting it back to Germany, while perfectly simple and feasible if only France and Germany were concerned, became very complicated and unworkable in view of the large number of other debt arrangements to which it would have to be applied in the actual case. I said, for instance, that we had no less than ten debt settlements of various kinds ourselves and an attempt to provide a harmonious system of deposit in all of them would be practically impossible.
Mr. Claudel repeated his assertion that the only purpose of the French was “to secure the integrity of the Young Plan and guarantee German good faith.” Mr. Mills said that if that was the only purpose, he felt sure that we could work out a method of securing that purpose which would be workable, although he was not prepared now to state it.
We told Mr. Claudel that Mr. Mellon was to meet M. Laval in France tonight and they would discuss the whole matter. He asked whether Mr. Mellon was authorized to settle it and we told him no; that he was authorized to discuss it and report it to us. He took this down very precisely and said he would convey it to his Government.
In the course of our conversation, before Mr. Mills came in, I read the Ambassador a telegram which Senator Borah65 had sent to the President saying that he would not support the President’s proposal if it was modified so that Germany did not get the full benefit of the suspension.
- William B. Borah, Chairman of the Senate Foreign Relations Committee.↩