800.51 Johnson Act/41
Memorandum by the Under Secretary of State (Phillips)
The French Ambassador9 asked whether we could give him any information with regard to the interpretation of the Johnson Act so that he could at least deposit Government drafts and secure salary payments for himself and employees of the French Government.
I called up Mr. Hackworth, who advised me that he had just been in touch with the Department of Justice and had been advised informally that, in the opinion of Justice, the ordinary money transactions involving drafts and money orders would not come within the purview of the Act; the Ambassador said he was relieved to hear this and asked that somehow this word be got to the banks, especially the Chase Bank, as soon as possible.
I spoke again to Mr. Hackworth and asked him to see what could be done, perhaps through the Treasury, with respect to this matter.
The Ambassador then referred to the question of the so-called “token” payments of the war debts and said that he had recently received two or three private letters from Paris indicating that the French Government was now seriously considering the question of some sort of payment; he reminded me that this information was not official and that he has nothing to this effect from the French Government; all that he had was knowledge that his despatches, recommending strongly that the French Government make payment,10 had been reread by Barthou11 and large numbers of copies of them distributed.
I explained to the Ambassador that we had put up to the Department of Justice a series of interpretative questions with reference to [Page 533] the Johnson Act and that the problem arising from “token” payments was among them. Mr. de Laboulaye replied that this was a very important point for him and he then asked me to keep him advised as promptly as possible of the position of the Department of Justice in this matter. We agreed that very possibly Justice could not give a definite answer and would have to rely upon future decisions of the courts. However, I promised to keep the Ambassador as closely as possible in touch with this aspect of the Johnson Act.