462.11W892/1952: Telegram
The Ambassador in France (Edge) to the Acting Secretary of State
[Received 8:11 p.m.]
558. I saw the Prime Minister this afternoon. Flandin was not present having already conferred with him.
Monsieur Laval elaborated the French proposal contained in my 555 of September 2, noon,16 as follows:
“Germany shall request the authorization of France as one of the signatories of the Hague agreements to deposit the payments, made in accordance with the agreement between the United States and Germany, in the Bank of International Settlements to be held there for redistribution in accordance with the indications of the United States Treasury after 2 years in 10 equal installments in accordance with the arrangement contained in the Franco-American agreement of July 6.”
The Prime Minister assumed that this would not necessarily affect the payments by the United States to Germany and added that it would merely involve the question of the interpretation of the American law and that it would accord with the obligations of Germany in the Hague agreements and the subsequent exchange of notes.
The Prime Minister insisted this would afford the American creditors absolute security since the sums would be on deposit in the Bank of International Settlements and would merely delay their distribution on the same basis as other creditors were treated under the Hoover plan.
[Page 291]I told him that I feared it would be impossible to work out such a plan in view of the provisions of the American law and I emphasized the points contained in your 429, September 1, 4 p.m.17 I even hinted that perhaps it would be possible for France in view of the mutual efforts to aid Germany merely to overlook the question and allow the payments to continue. To this he strenuously objected saying that it was a matter of principle for France with respect to the inviolability of the German commitments at The Hague and only a matter of arrangement and interpretation of law to America.
Flandin leaves for Geneva tonight and in view of the position of the Council and Laval[’s] unqualified agreement with his Finance Minister I do not believe further representations beyond clarification of details if the French proposal is at all practical would change their position.
Notwithstanding every assurance that the subject matter of our conversations with French officials would not be publicly divulged I have been informed during the course of the preparation of this telegram by representatives of the press that they have received from French sources the subject [of] our discussion upon which I of course refused to comment.