550.S1 Monetary Stabilization/32: Telegram
The Chairman of the American Delegation (Hull) to the Acting Secretary of State 67
[Received June 22—10:30 a.m.]
56. For the President from Warburg. After full discussion in delegation it was decided in view of your cables that we must remove present doubt as to American position concerning temporary stabilization. We therefore carefully drew up statement to be given to press and told Sprague to inform French and British treasuries this morning. Simultaneously Cox and I informed MacDonald, Bonnet and Jung68 before meeting of Executive Bureau at 10:30. MacDonald expressed grave apprehension as to what our statement would do to Conference. Jung likewise felt sure that it would cause withdrawal of French and Bonnet exploded. After a morning of very difficult discussions between us and the British, the British and the French, and the French and ourselves we finally succeeded in calming all fears and obtained French acquiescence to our releasing following statement at 3 o’clock this afternoon:
“Undue emphasis has been placed upon consideration of the plan proposed for temporary de facto stabilization of currencies. The fact is that this was never an affair of the delegation. It was considered by representatives of the treasuries, and central banks of the United States, Great Britain and France, Dr. Sprague having been specially sent to represent the United States Treasury for this purpose. The American Government at Washington finds that measures of temporary stabilization now would be untimely. The reason why it is considered untimely is because the American Government feels that its efforts to raise prices are the most important contribution it can make and that anything that would interfere with those efforts and possibly cause a violent price recession would harm the Conference more than the lack of an immediate agreement for temporary stabilization. As to the ultimate objective the American delegation has already introduced a resolution designed for the ultimate world-wide stabilization of unstable currencies and is devoting itself to the support of measures for the establishment of a coordinated monetary and fiscal policy to be pursued by the various nations in cooperation with each other for the purpose of stimulating economic activity and improving prices.”
After agreement reached with French, MacDonald and Chamberlain expressed to Cox and me their extreme gratification at our having been able to overcome a most delicate and precarious situation. Have just seen Jung who is giving us his support through thick and thin [Page 653] and is delighted with the outcome. While there will doubtless be repercussions believe we have safely overcome the worst of our anticipated trouble in meeting this particular emergency and should not be surprised if this morning’s conversation restored much of our lost prestige. [Warburg.]