The Ambassador in France (Edge) to the Secretary of State
[Received 6:30 p.m.82]
41. Laval telephoned the Embassy at noon today requesting that I call upon him at the Ministry of the Interior. Accompanied by the Counsellor of Embassy I met Laval at 12:30 remaining in conference with him for an hour. During the course of the conference Flandin joined us.
Laval opened the conversation by stating that he had been in conference with the British and German Ambassadors on the question of Germany’s financial difficulties and wanted to present to me the situation as he saw it. He stated that he was expected to go before Parliament Tuesday next83 at which time he wanted to be in a position to suggest that France agree to an extension of the Hoover moratorium for a year from July 1, 1932, convinced that because of intervening elections and general political and financial unrest at the end of another year the nations involved would be much better able to reach final determinations but he could not do so unless assured that the United States would agree and wished to know whether I could obtain such assurances.
I immediately responded to this opening suggestion by asking him if he was familiar with the aide-mémoire dated December 29 (Department’s telegram 1, January 1 , 193284) which has been handed Claudel in Washington. He responded that he knew of it but that he was not entirely familiar with its contents at the same time making a memorandum to send for it. I then briefly reviewed its contents asserting that his question was practically answered by the terms of the aide-mémoire, that the United States had made it perfectly clear that until France and the other countries interested in German reparations had reached an arrangement among themselves there was really nothing that the United States could do about it. Laval said that the matter had come up in the following manner:
Tyrrell had come to him with this proposal: (1), that Germany should be given a further moratorium of 1 year, and (2), that during this period an international conference should be called at which a definite and final arrangement should be reached regarding reparations. Laval had replied that the French Government could [Page 648]not agree to point (1) unless the idea were to prolong the present Hoover moratorium for a period of 1 year from date of expiration because of its treatment of the unconditional reparations, et cetera, and that the French could not finally agree to the prolongation of this moratorium unless it had the previous approval of the United States. With regard to point (2) Laval had said that France could not agree to such a conference along the lines indicated by the British which undoubtedly meant the scrapping of the Young Plan until such a proposal had been presented for approval to the French people which could be done at the coming French elections.
While again emphasizing our position I asked him for information whether the British Government had indicated that they were willing to join France in such a moratorium with the condition as stated therein by Laval, namely, that France should not be committed to such a general conference as suggested by Great Britain. He said that he would have to see Tyrrell again on this point but in the meantime wished to ascertain our Government’s view on the moratorium.
I then suggested that even if the United States were in a position to extend the moratorium which he must understand they were not, especially after the recent action of Congress in ratifying the existing moratorium, he could give no assurance that Great Britain would join without this qualification. He admitted this to be correct.
He never during the conversation indicated the position of German[y] on the proposal further than to intimate that he felt because of the German elections and conditions there that they would be quite agreeable to having the Lausanne Conference recessed until perhaps June.
I assured the Prime Minister that I would at once transmit his message to my Government but in concluding the conversation again emphasized that in view of the aide-mémoire and the recent action of Congress his proposal was to say the least very difficult. During the interview he referred to his conversations with President Hoover and in answer to questions admitted that there was nothing in those conversations that gave him any positive assurance as to the future action of the United States but that he was hopeful that in view of the original moratorium having been the suggestion of the President and in view of the present unrest and especially of approaching elections, that an extension of the moratorium might be brought about.[Page 649]
He, however, expressed the view that the President had indicated his further interest if he, Laval, on his return could make headway with his negotiations and Laval felt the extension of the moratorium necessary to try to bring this about. I drew attention to the clear evidence of the President’s interest as demonstrated by his proposal to Congress that the War Debt Commission be revived which, however, had been denied by Congress. Both Laval and Flandin expressed their appreciation of this action.
It was plainly evident that the Franco-British conversations have been inconclusive. Laval admitted that he had not wished to turn down completely the British proposal if there were any chance of our agreeing to the moratorium as he did feel that it would give them all a breathing spell and enable them to get to the real question of settlement at a more auspicious time than offered at present. He facetiously remarked, joined by Flandin, that he was sorry that the moratorium had not been for 5 years. I replied that we had had difficulty enough to get France to agree to 1 year.
It is evident that Laval feels that he cannot suggest a moratorium to Parliament unless contingent on its acceptance by the United States, that to bind himself to such an agreement as proposed without some assurance of our approval would mean the immediate overturn of his government.
In view of the fact that Laval has announced that he will discuss this question before Parliament on Tuesday when he presents his new government for approval, it might be advisable for the Department in preparing its reply to consider the possibility of couching it in such a form that if necessary it could later be made public. However, no publicity should be given to it until I have conveyed it to Laval and discussed that phase with him.