500.A15A4/1252: Telegram
The Acting Chairman of the American Delegation to the General Disarmament Conference (Gibson) to the Secretary of State
[Received July 6—8:52 p.m.]
307. After concluding the talk on disarmament, reported in our 306,20 MacDonald told us that when the reparations meeting broke up last night at 12:30 it looked rather hopeless but that after his talk with Herriot this morning for over an hour preceding his meeting with us the situation was looking much brighter. The Italians he said were refusing to agree upon the proposed settlement of reparations unless the British agree now to wipe out the Italian debt to them irrespective of what subsequent arrangements are made with the United States. He said that while he was attempting to keep the question of Allied debts to us out of the picture here he did not dare face the House of Commons with an agreement unconditionally to cancel the debts of the Allied countries to England. He also said it was going to be difficult for him to get an agreement at Lausanne without some attempt probably to make that conditional upon a subsequent settlement on debts.
Davis told him that since they could not make any statement whatever or impose any conditions which could in the slightest way bind the United States and since any attempt to do so would merely have an irritating and adverse effect upon opinion in the United States he could not see what possible advantage the proponents of such strategy expected to get from it; and that furthermore any reference to the debt would most probably inject the question into the political campaign at home. MacDonald and Simon said that they both realized that perfectly and that in fact MacDonald had made exactly the same arguments last night but that their difficulty was that they were dealing with people who could not have the Anglo-Saxon point of view. They hoped, however, that the hurdles could be gotten over satisfactorily today but suggested that it would be helpful if we could [Page 686] indicate to Grandi that he should not put himself in the position of blocking settlement at Lausanne.
Later we saw Grandi in order to discuss disarmament procedure at the Conference. After explaining contemplated program he indicated his concurrence. He said it had been difficult for Italy to accept the President’s Plan with regard to effectives but that they did so because they assumed they would not be expected to concur in this unless the other features of the Plan were adopted. We told him that the Plan was interdependent.
He then brought up the situation at Lausanne and seemed rather hopeful of reaching an agreement today. We told him that since Italy had gotten such a good strategic advantage at Geneva by indorsing unqualifiedly the President’s Plan we hoped she would not be put in the position of blocking a settlement at Lausanne. He told us he did not intend to block it; that he had advocated a wiping clean of the slate in Europe without any reference to the debts to the United States but England demurred. We told him we hoped there would be a settlement because of the good effect it would have towards world recovery.
We then thought it would be good policy for us to call on Herriot, who was in the same hotel, primarily for the purpose of inviting him to the dinner being given to Mr. Kellogg tonight. He seemed hopeful about reaching a settlement at Lausanne but was quite concerned about his own situation at home. He said it was possible that he would be overthrown next week as a result of the discussion in the Chamber over his economy program upon which he intends to stand firm. He said there was opposition to the proposed reduction of a billion and a half francs in military expenditures and over a provision in the budget for the payment of debt to us. He said, however, that the discussion in the Chamber would last perhaps 3 or 4 days and that if he were not then overthrown he would come immediately to Geneva and do everything he could to help wind up this Conference in a satisfactory and successful way.