500.A15A4/1201

Memorandum by the Under Secretary of State

The Italian Ambassador74 came largely to ask me whether this Government, through Mr. Gibson, had definitely offered reduction or cancellation of debts in case the European debtor nations would undertake some real measure of reduction in armaments. I told the Ambassador that on this matter the papers were, as usual, merely guessing; I told him that we were not linking debts with disarmament any more now than we had in the past; he said he had always understood that the United States would be more likely to reduce debts if the European nations were spending less on armament; I told him that this, of course, was correct only in that the American people would never be brought to see that the debts could not be paid when they at the same time saw European Governments spending annually infinitely more on useless armament than they had to pay to this country; I reminded him also that this had not been made the position of the American Government and that there never had been [Page 211]or could be any agreement that reduction of armament would lead to reduction of the debts. The Ambassador said that he understood the matter, but that he would be very grateful if he could be told exactly what Mr. Gibson had said on the subject. I told him with some vigor that Mr. Gibson had not made any such proposition and that he would make a great mistake if he passed on to his Government as facts the gossip of the newspapers. The Ambassador said that he thought that, if Mr. Gibson had said nothing, it might well be French propaganda, that the French were always trying to make trouble all along the line, that France, of course, was against anything in the way of real settlement of the reparation question and was, of course, against disarmament. I made no comment on this.

W. R. Castle, Jr.
  1. Nobile Giacomo de Martino.