Memorandum by the Secretary of State of a Conversation With the French Ambassador (Claudel)

The French Ambassador came to present the new French Financial Attaché, M. Emmanuel Monick. We talked over the financial situation of Germany. M. Monick said he thought that it was a question of credits, and that the difficulty came from Germany having so many short term credits. He said that until recently he thought Germany was going to pull through without asking for a moratorium, but that since this manifesto on Saturday he had come to the conclusion that she was going to ask for a moratorium and he thought it would come within a month; that he had said the same thing previously to Ogden Mills22 this morning, and I had heard from Ogden Mills before he came here, so I was able to check up. I told him a little of what our diagnosis of the situation was and he said he was very much interested to hear that ours was so similar to his. I told him, however, that I did not think the crisis would come quite as quickly as he thought; that in my opinion it would be more likely to come next fall.

The Ambassador said that there was this encouraging feature about the situation—that it had been discounted, whereas the crisis last autumn of the election came as a surprise, and therefore he did not think it would be as bad or as violent as that crisis. Both he and the Attaché said they thought the Germans had guarded against it as far as possible.

The Ambassador said that at the Chequers Conference he thought that the British had behaved very well and protected the rest of us. They discussed somewhat whether the German action would be by way of moratorium or by way of calling a conference of the advisers, as they had a right to do. M. Monick thought that it would be by the latter method as it would permit a wider investigation.

H[enry] L. S[timson]
  1. Under Secretary of the Treasury.