462.00R296A1/158: Telegram

The Ambassador in Great Britain (Mellon) to the Secretary of State

196. By my direction Atherton saw Sir Warren Fisher who [and?] prepared the following memorandum of conversation which he asks may be regarded as strictly confidential and not to be mentioned in particular to any member of British Embassy.

[“]In strictest confidence I discussed Department’s 163, June 1, 7 p.m., with Fisher this morning who, after consulting a telegram from Sir Ronald Lindsay reporting his conversation with the Secretary of State at Woodley, advised me that the British Ambassador had clearly understood and reported Colonel Stimson’s arguments. Fisher stated he knew of no basis in fact on which the French Finance Minister might write such a note as quoted in the Department’s telegram 163, June 1, 7 p.m., but that Sir William Tyrrell would be in London next week and he would take occasion to talk with him. Fisher then outlined certain aspects of Franco-British conversations as of interest.

Last year [when the?] Anglo-French experts began discussing the scope of the then proposed Lausanne Conference, the French stated their difficulty in considering readjustment of reparations unless the attitude of the American Government on debt payments was first determined. The British experts pointed out the French were beginning at the wrong end, in that the American Government had already taken its position and insisted that ‘Europe must set its [Page 676]own house in order’ before any approach was made to the United States for debt consideration. Fisher stated that British experts had pointed out to the French that the British Treasury had been consistent in advocating the abolition of reparation payments since Lloyd George wrote a note to President Wilson in 1920 setting forth the British opinion that the enforced payment of political debts ‘would lead to damnation’. At the time of that note Fisher said, however ‘astronomical the figures’, what England was prepared to forego was not incomparable with the United States figures.

Fisher stated in his opinion, Germany at Lausanne would refuse categorically to resume reparation payments and added that Germany had been led to make promises in the past regarding future payments which she was unable to fulfill; that consequently while Germany might admit the possibility of being able to resume limited reparation payments at some future date she would in all probability be unwilling today to give any assurances as to dates or figures. In Fisher’s opinion, any attempt now to force Germany to pay would have a most disastrous psychological effect the world over, as would likewise the ensuing state of world uncertainty if nothing were concluded at Lausanne. However, if Germany did refuse to pay, France would follow suit and if England adopted any different course it must certainly lead to Anglo-French discord. Fisher felt certain the United States would agree that accord between France and England, above all today, was essential for the restoration of confidence in Europe. The British taxpayer individually, according to Fisher, would not continue to pay taxes for debt payments to the United States if he were receiving no reparation payments on account from Europe. On the other hand, Fisher argued, provided Germany were willing to agree to pay a small sum at Lausanne, the distribution of this sum among the nations of Europe and the subsequent readjustment of debt payments to the United States, would, in Fisher’s personal opinion, possibly cause more discord and upset further the psychology of Europe, thereby delaying a return to confidence than such a sum was worth in itself. Accordingly, Fisher argued, the British Treasury was not as yet convinced of any reason for departing from its position taken in 1920, that the payment of political debts was undermining Europe, and for a restoration of confidence had best be completely canceled. In Fisher’s opinion, there was an increasingly important official element in France arriving at this point of view. Since America’s injunction that ‘Europe must set its own house in order’ before any approach was made to the United States on debt questions, Fisher argued that Inter-European deliberations must take such form as seemed leading to a constructive European solution which the United States as well as Europe desired. Fisher understands the American point of view vis-à-vis Congress but did not have in his mind the full liberality of America’s debt settlement with France with [which?] I pointed out to him at some length.

My personal deduction after talking with Fisher is that he is convinced Germany will refuse any further payments at Lausanne, but that after all if he is wrong in this forecast, England’s position [Page 677]for cancellation would probably persuade France to agree to some general compromise which Germany might likewise be willing to accept.”

  1. Telegram in four sections.