462.00R296/4185: Telegram
The Ambassador in Germany (Sackett) to the Acting Secretary of State
[Received 11:20 p.m.]
99. Reference is made to your telegram No. 95 of June 27th.85 Your proposal has been placed before Foreign Minister Curtius. He has stated that no official answer could be given as to the German attitude until he had conferred with Chancellor Bruening and probably also with the Finance Minister. Since today is Sunday neither of them could be reached, but Curtius will consult them early tomorrow and expects to send us an official answer sometime around noon. However, [Page 92] he said that perhaps I would like to hear his unofficial and personal reactions. They were as follows:
The value of the President’s plan would be seriously impaired by the French proposal. The original plan was recognized by the German people as a boon and was gratefully accepted as such. Curtius felt that the Germans in his own words ought not to “look a gift horse in the mouth”. Nonetheless he would not like to see this gift diminished in such a way. The Hoover plan was intended not only to restore confidence but also to alleviate the tension in Germany. This proposal, he felt, would have not at all a quieting effect in Germany. In fact, if it should happen that the unconditional annuities paid by Germany were loaned say to Poland or to Czechoslovakia a terrible uproar would result in Germany. Curtius tried in addition to stress somewhat the argument that under the original proposal of the President Germany thought she would have to pay no unconditional annuities, but that under this French proposal Germany would have to pay about 500,000,000 marks to France. As I see it he overlooks the fact that the only real loss to the German budget would be the one-fifth which would be loaned to other Central European countries and the interest of the amount of the German loan plus any possible payments in excess which Germany might have to make to its own commercial people on deliveries in kind above the price which would be credited to Germany by France.
The Foreign Minister then said that the official answer which would be given tomorrow might take the form of a statement that Germany hoped that no final agreement would be based upon this proposal, but that if such agreement were contemplated the Government of Germany wished to raise further questions. Chief among these questions, according to my impression, would be the effect of the proposal as it relates to deliveries in kind on the English Reparations Recovery Act and also whether the credit to be given Germany on deliveries in kind would apply to deliveries to countries other than France. Curtius said in another part of the conversation that the German Government really should express no reaction at all to this proposal for he believed that these negotiations should be between the United States and France. He expounded at some length the feeling on the part of the German Government that it was necessary to abide by the policy of taking no position on the various suggestions now under consideration for reconciling the American and French points of view. He recalled that following Chancellor Bruening’s radio speech of last Wednesday the French Foreign Minister had asked him and Bruening to come to Paris immediately but that the German Government believed that if Germany began negotiations with France before the moratorium scheme was finally decided upon the French would bring to bear all [Page 93] sorts of political pressure. Apparently Chancellor Bruening had succeeded in making it clear to the French that conversations such as he had suggested in his radio speech could best deal generally with Franco-German relations and could best be begun after the plan had been settled in its final form. The French had given their assent to this point of view, but after the debate in the Chamber of Deputies yesterday Laval had again asked Bruening and Curtius to come to Paris immediately and when they declined had asked that Von Hoesch86 be made a party to the conversations taking place in Paris with our representatives. However, for the reasons already given the German Government was obliged to decline even this suggestion. It is my own opinion that owing to the critical internal political situation here which the acute crisis of June 16 evidences, the German Government fears taking any step which might be interpreted by its political opposition as whittling away President Hoover’s original plan. Accordingly the German Government is reluctant to state to us even unofficially how far it might be willing to agree to various compromise proposals. By the same reasoning I feel that if we reach agreement with France and place before the German Government a fait accompli, Germany would then go much further than if it merely followed its own wishes in the matter. It is obvious, however, that suggestions such as Plan C (to which you refer in the final portion of your telegram No. 93, June 26, 9 p.m.87) need definite answers. In conferences with the German Government in the future I shall endeavor to elicit a less negative attitude on their part.
- Not printed; it conveyed the substance of the French proposal which was forwarded to the Department in telegram No. 365, June 27, 9 p.m., from the Ambassador in France, p. 85.↩
- German Ambassador in France.↩
- Not printed; the final portion of the telegram described Plan C as given in the parargaph beginning “A deposit by Germany…”, p. 80.↩