Memorandum by the Under Secretary of State (Castle) of a Conversation With the German Ambassador (Von Prittwitz)

The Ambassador said that he had received from his Government a summary of the conversation between Papen and Herriot in Lausanne. He said that Herriot had told Papen that even if it were possible to cancel German reparations he was estopped from doing this by the declaration of the American Government that, whatever was agreed to at Lausanne, there could be no rearrangement as to the Allied Debts owing to this country. I told him that I could not see anything on which Herriot could have based this statement, unless he quoted a reservation made by the Congress on the subject at the time the moratorium was passed. The Ambassador said he had no instructions from his Government to pass on this conversation, but that he had taken it on himself to do so since it was perfectly possible that the French might publicly make assertions of this kind after Lausanne was over. I told him we were glad to have the information. The Ambassador said that he felt this idea might have come from the statements made by the Secretary that the United States was, in general, not in favor of total cancellation of reparations since this would almost certainly envisage an attempt at cancellation of the debt. I told him that the statement would hardly be authority for Herriot to make the remark he was alleged to have made, but that it certainly stood as the truth in this country that it would never be possible to persuade the American people that they ought to assume the full burden of the war. The Ambassador said that it would hardly be fair to say that we would be assuming the full burden, since Germany had already made very extensive payments and that the Allies, out of those payments, had made payments to us. I told him I did not think the matter was one now of reparations or, as the Germans called it, “tribute”, but that Germany certainly ought to be willing to put into a common pool its share of the liquidation of the cost of the war; that it seemed to me in the conversations at Lausanne Germany was probably taking an attitude quite as uncompromising as the attitude of the French in that the Germans appeared to be [Page 683]refusing to consider anything except total cancellation. Prittwitz said that it would be political suicide for any German to do anything else. I countered with the statement that it would equally be political suicide for a Frenchman to agree to such cancellation. The Ambassador said he knew this, but that perhaps one reason why America was not willing to make some arrangement on the debt was that it would be considered political suicide here. I told him that what we wanted was to see first whether Europe had the courage to come to some reasonable arrangement on these questions; that he knew as well as I did that America would not be ungenerous when it came to a general liquidation, but that the grim fact remained that America was not willing, and presumably never would be willing, to assume the entire burden. The Ambassador said that he had not given up hope at all of some kind of successful outcome in Lausanne, and that even if the conference was adjourned temporarily, he felt that the conversations so far had been useful and that they would eventually lead to some result.

William R. Castle, Jr.