Memorandum by the Secretary of State

The French Ambassador called and asked about the exchange last Saturday91 at Paris between Laval and Edge as it had appeared in the paper. The Ambassador said that he had not been informed by his Government about it. I told him briefly that Laval had approached Edge with reference to an extension of the Hoover moratorium for one year but that he was unable to make any definite offer on behalf of France as it was dependent on the House of Deputies. The Ambassador interrupted to say that that would not have been a very satisfactory offer to us. I said that we had replied along the lines of my memorandum of December twenty-ninth, only very much more briefly; in effect, that our attitude was unchanged. The Ambassador said that he had communicated the aide-mémoire of December twenty-ninth to his Government and that it seemed to him perfectly clear,—perhaps not very hopeful but clear. I told the Ambassador that it was not intended to be unfriendly but to state frankly an unquestioned situation which existed in this country and on the Hill.

The Ambassador went on to say that the present situation was not hopeful; that the different countries were crystallizing into intransigency and that it was sad to watch the situation get worse. The Ambassador said he thought that the Hoover moratorium had killed the Young Plan and that Germany would not now pay. I said that, in my opinion, the Hoover moratorium had saved Europe from a much earlier crash and gave Europe just that much leeway.

The Ambassador asked me whether I had heard of the proposal of the railway bonds which were said to have been put out by Germany as a form of settlement. I said that, privately, I have long thought that some form of commercialization would be the best solution but that I had supposed France was a stumbling block to such a plan. The Ambassador said no, that he agreed that that was the best way but agreed that it would involve necessarily a great loss to compromise. As he explained it, an army in retirement cannot retreat all at once; it must retreat gradually. France’s acceptance of the moratorium last summer was the first move.

H[enry] L. S[timson]
  1. January 15.