462.00R296a/2: Telegram

The Secretary of State to the Ambassador in Great Britain (Dawes)

[Paraphrase]

312. The joint statement of President Hoover and Prime Minister Laval has doubtless come to your attention. Before his departure, Laval told the German Ambassador in Washington that upon his (Laval’s) arrival in France, he would call in the German Ambassador to France. The Premier would suggest to the official that the German Government should request a commission of inquiry under the Young Plan. The President has the idea that when a report has been rendered by such a commission, and when the Allied Governments have [Page 255]come to a decision upon what they are able to do in respect to the German Government, the United States can then consider what its course should be in respect to the debts.

President Hoover is unalterably opposed to the calling of a conference for the purpose of dealing with debts and reparations. He expressed this opinion to Laval. During the period of its sessions, such a conference would greatly disturb the entire economic and political world. It could only resolve itself into disagreements at the finish. In so far as the American Government is concerned, the only way in which to manage this problem is by direct negotiation between the United States and its individual debtors. This, the President proposes, should be the course pursued by the American Government.

While the conversations with the French Prime Minister were under way and prior to the development of the above method of handling debt and reparations, the British suggestion for a monetary conference came up for discussion. The President learned from Laval that Lord Beading had proposed such a conference upon his visit to Paris. Laval was not clear as to what the British proposed or whether they proposed to take up debts and reparations at such a conference or not. Our belief, based upon other evidence, is that the British were proposing to introduce this on the premise that it was a weighty factor in international exchange. From the point of view that such a conference would include reparations and debt, President Hoover stressed his opposition to such a conference.

With the formula for dealing with debts and reparations now established, however, on the basis for which we have argued, and not by a monetary or international conference, more consideration can now be given to the British suggestion of such a monetary conference. Since the departure of Laval, we have given it such consideration. Nevertheless, before we come to any conclusion, the Department desires to learn what sort of program or proposal they have in mind. We would be pleased to have you explore this issue and to let us know your impression.

We will need this information before we again take it up with the French Premier.

Stimson