The Ambassador in Italy (Garrett) to the Secretary of State
[Received January 20—10:25 a.m.]
13. I saw Grandi last evening. He is leaving for Geneva Friday night to attend the Council meeting and the Armament Conference88 but will not go to Lausanne though he will be available if it should later seem wise to go there. Mosconi will be at Lausanne but Beneduce will really be Italy’s representative there.
The German Ambassador89 came to see Grandi a few days ago and told him by instruction of his Government that the critical situation in Germany precluded any possibility of paying anything more this year and he added that Germany would never be able to pay any more reparations. No partial postponement would now be enough he said; the German crisis could only be met by complete and final abandonment of all reparations payments. Grandi said that Italy and Great Britain were about in accord in regard to German payments and that they were both trying to get France [Page 652]to be more generous, so far without avail. He could hardly expect an answer from France until Laval had presented the program of the new government yesterday and today. He seems to think that a satisfactory or even any sort of accord on reparations is impossible at this time and things would be much worse in his opinion, even than they are, if at Lausanne Bruening should say that Germany would never pay and Laval should reply that the Young Plan must stand. Unless some preliminary understanding were reached the Lausanne Conference had better be postponed. He was not at all in accord with the French thesis that America should first be approached for a cancellation of the debts before Germany is let off. He had learned in America and he quite agreed that the first sacrifices must be made by Europe and that only then could America be approached. America, he said, could not be called upon to make all the sacrifices and a “united front” demanding cancellation of the debts was certainly not the right way to go about it.
I should be very glad to have a statement of the Department’s views of these matters as well as a résumé of the conversations with Grandi in America as I am to see him again before he leaves and am not very well able to talk as frankly with him and he with me as I should like unless I know your wishes.
A statement in the press which may be cabled to America that I said in an interview at Naples on my arrival there Sunday that I was in accord with the views expressed in the two Popolo d’Italia articles of the 12th and 14th is without foundation. What I stated was that I had not yet seen the articles and could therefore certainly not say that I agreed with them. I said this to Grandi and his comment was “No, neither you nor I could agree with them”. He said that they had not been notified before publication. Although he did not admit that they were the work of Mussolini, it is evident from quite reliable sources that they were his own work and represent his personal views which of course must be taken as those of the Italian Government at least for the time being.
Cipher text mailed Paris.