800.51W89 Prance/678: Telegram
The Ambassador in France (Edge) to the Secretary of State
[Received May 26—3:10 p.m.]
333. My 329, May 24, 1 p.m. M. Flandin has informed me that he will this afternoon tell M. Tardieu as Minister for Foreign Affairs that since the question of the interest rate on deferred payments has been settled the Ministry of Finance now approves the signing of the agreement between the United States and France but he will point out to M. Tardieu that it is his opinion that paragraph 3 of the draft of agreement as received by the Minister for Foreign Affairs from M. Claudel is unnecessary and that it would be unwise under existing circumstances for the retiring French Cabinet to accept responsibility for it. This paragraph reads as follows:
“Paragraph 3. The agreement of April 29, 1926 between France and the United States above mentioned shall remain in all respects in full force and effect except so far as expressly modified by this agreement”.
Great pains were taken to explain to M. Flandin that the clause under reference implied no new obligation; that such a provision was customary in any such contract of extension of payment; that the French Government’s failure to approve such a provision might easily be misconstrued in the United States regarding future French debt payments. It is further pointed out to Flandin that he had personally promised me that as soon as the interest rate on deferred payments was adjusted he would recommend signature without further delay; that he well knew that it was urgent that the agreement [Page 611] be signed immediately; that the text of the agreement as drafted by the United States Treasury Department had been in the hands of the French authorities since March 29th if not earlier; and that the introduction of this objection at such a late date was most difficult to understand. Flandin said that the text of the agreement had not been drawn to his attention until a day or so ago and gave the elections as the excuse for the point not having previously received his Government’s attention.
The questions regarding the method of calculation of the suspended war debt payments and the necessity of the German Railway Company’s approval of the 4 percent interest rate threatened to delay the matter for another 10 days but Flandin has agreed to waive these two points and to communicate his decision today to the Foreign Office.