800.51W89 Great Britain/406
Memorandum by the Secretary of State
The British Ambassador came in and said that he wanted some time to have a long talk with me about the present situation respecting debts. I suggested that we begin with it now, although I told him at the very start that I should perhaps be in a better situation to discuss it twenty-four hours from now (by that referring to the coming meeting between Mr. Hoover and Mr. Roosevelt.) We then reviewed the steps which had already been taken. I reminded him that the last time we discussed this I had told him that this administration was ready to keep its promise to appoint a commission to discuss debts if the British desired, although we would not be at all surprised if that offer were not accepted owing to the then deadlock between Mr. Hoover and Mr. Roosevelt as to machinery for bridging over the gap between the two administrations. I said I had taken the Ambassador’s failure to bring up the subject again on any later occasion as an answer to my suggestion and an evidence that the British saw no reason for opening the subject with an administration which was going out of existence so soon. He said yes, that was so. I told him that since that time we had been trying to begin again with efforts at cooperation between the two administrations and we had been making some progress, as he could see from the newspapers. I pointed out that Mr. Hoover’s original proposal for bridging the transition period was to create a commission, which should represent Mr. Roosevelt’s selections, which could take up the matter and actually negotiate even before March 4th, but that Mr. Roosevelt, for reasons which we could properly understand, had declined to accept that suggestion or to take any responsibility in negotiations before he actually became President.2 I said [Page 827]there remained then only the possibility of having the Hoover Administration confine itself to preparatory work with the idea that everything should be in as much readiness as possible by March 4th so that Mr. Roosevelt could begin the work of negotiation as quickly as possible. I told the Ambassador we were making some progress with this idea but nothing yet was settled. I asked him as a try-out whether it would be possible, in case we were successful with this new bridge between the two administrations, for the British to send over someone prepared and ready to begin negotiations by March 4th, and he replied that he did not think it would be out of the question. I said I would let him know if anything came of this effort.
During the course of our talk, he said that his Government faced the great difficulty of not knowing whether they could go ahead with any steps at all without offending France. He told me he said this not as a matter of legal possibility, for of course his Government could do it,—but as a political possibility as to whether they could do it without offending France, which they did not want to do. I replied that on our side he must realize that we could not in the light of our own public sentiment treat a nation which had defaulted on its debt in exactly the same way and in the same priority as we treated a nation which at great sacrifice had paid its installment. He answered yes, that he could also see that we could not, having refused to grant a moratorium to France for the December installment,3 without any further excuse or action by France reverse ourselves and discuss debts. I said of course that was so.