800.51W89 France/763: Telegram
The Ambassador in France (Edge) to the Secretary of State
717. Embassy’s 716, December 14, 6 a.m.85 While a detailed telegraphic summary of the views of the orators in last night’s debate in the Chamber of Deputies would be impracticable the main themes stressed by the opposition were:
- (1)
- The usual threadbare argument that the Hoover moratorium had created a de facto connection between debts and reparation had in fact destroyed the Young Plan and therefore France’s signature to the Mellon-Bérenger Agreement, which was signed by France on account of the existence of the Young Plan, need no longer be strictly adhered to.
- (2)
- The American note to the British of December 1st had made it useless to attempt to pay the December installment with conditions which the American Government had shown in advance it would not accept.
- (3)
- The usual economic argument that restoration of world prosperity could only take place after a revision if not an annullation of the debts. The Socialists, who voted en bloc against the Government and whose desertion of their radical Socialist allies is chiefly responsible for Herriot’s downfall, based their opposition to the December payment upon their traditional policy of having refused to vote for the Versailles Treaty or for the ratification of the Mellon-Bérenger Agreement. Their spokesman vehemently advocated annullation of all intergovernmental debts and held that France’s refusal to pay the December installment would be the first step along this line.
Herriot made a magnificent even though futile defence of the Government’s thesis stating that France’s whole theory of international relations was based upon her insistence upon the sanctity of signatures. He plead with the greatest earnestness that France should not now set an example to the rest of the world of treating her solemn covenants as scraps of paper. He scoffed at the validity of the juridical arguments advanced by the opposition to prove the soundness of France’s case and solemnly warned the Chamber that refusal of France to uphold her treaty engagement at this time would seriously prejudice her case should such case ever be taken before an International Court at some future time. He especially warned the Chamber of the serious effect which a refusal to pay would have upon Franco-British relations, pointing out that 6 months ago France had been isolated diplomatically at Geneva and that he had striven since then in every way with the most complete success to secure British cooperation and amity. He gave unstinted praise to the “perfect loyalty” shown by the British in dealings with France regarding the debts and he urged that France, in order to save $19,000,000 should not run the grave risk of losing a powerful friend the need of which he hinted might not be far off on account of the political developments the other side of the Rhine. As a last desperate effort to save the situation Herriot told the Chamber shortly before the vote was taken that he had information to the effect that the United States would accept the debt payment from the British in spite of the tenor of the American note of December 1286 and that furthermore he had just received word from Ambassador Claudel that the Secretary of State had explained the willingness of the American Government to make a general survey of the debt situation in accordance with the terms of the American note of December 8. Herriot was given the closest attention and he received from time to time the warm applause of the majority of the Deputies but as events of course proved this was a tribute to the man rather than to the thesis he was defending. The spokesman for the Socialists in fact strongly urged Herriot not to place the question of confidence and merely to accept the joint resolution of the Finance and Foreign Affairs Committee of the Chamber as the considered opinion of the French Parliament on this grave international question. This Herriot flatly refused to do.
Shortly after 5 a.m. a vote was taken on the proposal of the Government which consisted of a project of law embodying the text of the note transmitted to the Department in the Embassy’s 714 of December 13, 4 p.m. Immediately after the Government was overthrown [Page 746] and had left the Chamber as a result of the adverse vote on this proposition, the Chamber passed by a vote of 380 to 57 the resolution of the Finance and Foreign Affairs Committee referred to in the Embassy’s 715 of December 13, 5 p.m.87 The text of this resolution reads as follows:
“The Chamber:
Faithful to the common traditions which bind the people of the United States and the people of France.
Desirous of serving the interests of European reconstruction in agreements between Great Britain the principal debtor of the United States and creditor of France.
Anxious to adapt the international treaties and accords to present economic realities but anxious likewise to avoid a unilateral rupture of engagements freely agreed to and submit any differences which may arise to the conciliation of the parties concerned therein when their nature permits recourse to the pacific procedure provided for in international conventions.
Whereas
By virtue of a generally recognized principle of public international law treaties and conventions are governed by the doctrine rebus sic stantibus.
The decisive factor in the settlement of debts between France and the United States was unquestionably the régime of payments which France had a right to expect from Germany by virtue of existing treaties.
That principal was affirmed when the Franco-American accords were signed; it was reaffirmed on April 29, 1929, unanimously by the French Parliament when it was called upon to ratify the accords of 1926; it likewise exists as a determining factor of the Young Plan which establishes a definite liaison between the payments due from Germany to France and from France to its creditors;
Whereas
This decisive factor was radically disturbed by the suspension of all international payments in June 1931 and the Conference of Lausanne which was a consequence of that suspension;
That this change of circumstances was brought about by the initiative of President Hoover on June 20, 1931, and is therefore the work of the American Government;
That moreover the payment of further installments cannot be made by France unless the installments provided for in the Young Plan are renewed; that this renewal would cause the annulment of the Lausanne Agreement and would precipitate a general collapse profoundly prejudicial to the interests of the United States and smash the first attempts on European reconstruction and European rapprochement.
The Chamber declares, considering the fact that the fundamental factors involved have been wholly modified and should remain so changed lest the world crisis be dangerously aggravated, the [Page 747] agreements reached on the subject of debts are no longer executory and should form the subject of new negotiations;
Furthermore the Chamber:
Convinced that these legal and political factors are materially strengthened by economic considerations;
Believing that the transfer of intergovernmental payment without a counterpart undeniably constitutes one of the underlying causes of the depression which is paralyzing the economic activity of the entire world;
Agreeing moreover with the Basle experts that as concerns intergovernmental debts ‘an adjustment of all debts (reparations as well as other war debts) to meet the troubled situation of the world—an adjustment which should take place without delay if further disasters are to be avoided—is the sole means capable of restoring confidence which is the condition sine qua non of economic stability and true peace’.
For these reasons
The Chamber invites the Government to convoke as soon as possible, in agreement with Great Britain and the other debtors, a general conference having as its object the adjustment of all international obligations and to put a stop to all international transfers not having any counterpart, a conference which will have a close connection with the World Economic Conference charged with the restoration of the monetary situation and of credit.
As concerns the problem of payment on December 15, the Chamber in spite of legal and economic considerations would have authorized the payment but on the previous condition that the United States agree to the reunion of the conference for the purpose outlined above.
The reply of the Secretary of State of the United States to the British Government on December 11 excludes the possibility of the Chamber maintaining this viewpoint.
As a consequence the Chamber pending general negotiations invited the Government to defer payment of the installment due on December 15th”.88