800.51 Johnson Act/73

Memorandum by the Under Secretary of State (Phillips)

The French Ambassador called this afternoon, under instructions, and said that “the French Government would like an official interpretation [Page 534] of the Attorney General’s opinion,13a in order to know if in the future debtor countries which make some partial payments will fall or not in the category of those declared in default” under the application of the Johnson Act.

In the Ambassador’s opinion, this inquiry from the French Government showed, beyond a doubt, that the French were considering some action along the lines of the recommendations which de Laboulaye had already made over a period of some months; de Laboulaye said also that this substantiated the information which he had been receiving from friends near the Government.

The Ambassador then outlined the recommendations which he had made as follows: That the French Government should take note of the fact that President Roosevelt had on many occasions expressed the opinion that the debtor government was always at liberty to approach the creditor government with any proposition which it desired to make; that France should accordingly give a statement showing its inability to pay its full indebtedness at the present time owing to the general economic depression; his Government might then follow the language of the announcement made at the time of the British partial payment with regard to inability to pay in full, which statement had already been approved by President Roosevelt his Government would thereupon make a substantial payment of perhaps “20 or 25 million dollars” on the theory that it would be relieved from immediate future payments until the economic situation of France was improved. The Ambassador asked me whether or not, in my opinion, this was not the right course to take. I replied that the Johnson Act presented new difficulties and I had considerable doubt whether the Act, as it stood now, would permit the President to receive any payment on account, no matter how substantial that amount might be. Furthermore, the Ambassador said that he would like very much to have an answer as quickly as possible; he emphasized again his conviction that his Government was now seriously considering this situation.

William Phillips
  1. See letter of May 5, 1934, from the Attorney General to the Secretary of State, 37 Op. Atty. Gen. 506, or Department of State, Press Releases, May 5, 1934, p. 259.