033.5111 Laval, Pierre/115: Telegram

The Ambassador in France (Edge) to the Secretary of State

670. Le Matin publishes today an alleged summary of the conclusions of memoranda prepared by Laval’s experts for his use in Washington but not as rigid solutions from which no departure can be made; the principal points are:

1.
All inter-governmental debts to be reduced 50 percent. No moratorium but some payments might be left in marks at the B. I. S.25
2.
Progressive disarmament by budget reductions, not by equalization of armaments, subject to the completion of the Kellogg Pact by article stipulating that the United States should concert with other [Page 249]powers without delay in ease of existing or threatening conflict and that the aggressor once recognized and denounced should receive no help of any kind.
3.
France’s unconditional share of reparations cannot be given up but will be taken in services or deliveries in kind.
4.
Bimetallism and redistribution of gold are rejected. On a sound gold policy moneys should be based on a stock of gold instead of notes being considered as gold and likewise the basis of an inflation. France will not take over any of the credits frozen in Germany or South America but would open the Paris market to an issue of a government, especially the United States Government, wishing to obtain thereby liquid capital to aid its banks.

[Paraphrase.] Since Le Matin is considered to have access to governmental information, and since the aforementioned points are so similar to the suggestions made to me by the Minister of Finance, Flandin (see the Embassy’s number 622, 3 p.m., October 1) I lean toward the belief that the above is very close to the program of the French. The Finance Minister has asked me for an engagement for another confidential conference before I sail on Wednesday. I assume naturally that this is for further development of the French point of view. My appointment with Flandin is scheduled for Tuesday afternoon at the Embassy. [End paraphrase.]

Edge
  1. Bank for International Settlements.