462.00R296/4232: Telegram
The Ambassador in France (Edge) to the Acting Secretary of State
390. Reference is made to your telegram No. 313, June 30, 10 p.m., and to our telegram No. 388, July 1, 5 p.m.10 Mr. Mellon and I met the French Ministers in a conference this afternoon as had been arranged. Mr. Mellon informed them that we had received from our Government a comprehensive review of the situation to date and had also communicated to Washington the result of our previous conferences. We handed French translations of a resolution prepared in the form of a memorandum to Briand, Flandin, Laval, François-Poncet, and Piétri. M. Briand remarked, after the memorandum had been read, that the document was an excellent one and that it afforded a good basis for further discussion. Laval’s reaction was that it demonstrated the desire of the Government of the United States to reach an agreement, but that before any answer could be given the Minister of Finance and his Department would have to examine the document. M. Flandin, the Minister of Finance, expressed his disapproval.
[Page 119]There then followed a general discussion of the major questions at issue. Laval remarked that he felt that the matter of the period of repayment could easily be worked out. We pointed out the sections of the note that were conciliatory, in particular the suggestion that when and if the occasion demanded it, some method could probably be found for arranging relief for countries other than Germany. The general response to this phase of the note was friendly, particularly on the part of Laval and Briand.
The problem of the guarantee fund and the differing viewpoints of the two Governments on this question were not discussed in detail, but both sides expressed the hope that some practical banking method might be worked out. There was no dissent from this desire, although no alternative plan was suggested, since this requires the attention of the full Cabinet Council.
Following this Mr. Mellon raised the necessity for publishing in its entirety the text of the note. Laval responded immediately that he felt that this would not embarrass them in the least and that he saw no objection to publication. Briand added that it would help clear up the situation. At this point, however, the Minister of Finance stated vehement disapproval. He indicated that he had no objection to letting the press know the details of the memorandum, but that the very fact that it was an official document put an altogether different light upon it and raised issues that would be certain to agitate the French Parliament and the press. In his opinion an official memorandum would demand a complete answer and would not be of assistance in the negotiations. He emphasized in particular his opinion that the publication of the reference to the fact that half of the $100,000,000 credit advanced to Germany by the Central Banks several days ago had already been exhausted, would serve no useful purpose and would still further disturb German credit. He was advised by the Ambassador that we would advise Washington to delete the passage if the note had not already been given to the press for release after this meeting.11
As to the wisdom of publishing the note, as already indicated, Laval and Briand had no objection; but Flandin, François-Poncet, and Piétri plainly indicated their preference that it be withheld. Flandin clearly stated that in his judgment the publication of the note particularly in the French press would increase the difficulties of adjustment. For our part the position taken was that since the French parliamentary debates attacking the position of the United States had been given wide publicity and were not entirely accurate, the publication of the note would serve as some clarification of the questions involved and so would be helpful rather than otherwise.
[Page 120]It was decided that Laval would present the memorandum to a full meeting of the Cabinet tomorrow morning. Later on, at 3:15 p.m., Mr. Mellon and myself are to meet Flandin for an informal discussion of the Council’s action. Then tomorrow (Thursday) at 9:30 p.m. the conferees will again meet to discuss further the action of the Council of Ministers.
Mr. Mellon has talked to Mr. Mills over the telephone since this telegram was prepared. I hope that the suggestion will be followed that in releasing the note for publication it be given out merely as a memorandum of information to Mr. Mellon and the Ambassador from the Department. At the conference the principal objection to its publication was that it had an official character. I understand of course that the portion making reference to withdrawals from the Reichsbank will be omitted.
After our telephone conversation with Washington, I personally called Flandin and informed him of the method to be used in releasing the note. He expressed much pleasure at the arrangement. We are also arranging here to delete the reference in question from the copies of the memorandum given to the other Ministers.