800.51W89 France/1004
The Ambassador in France ( Straus ) to the Secretary of State
[Received September 11.]
Sir: I have the honor to set forth the substance of a conversation which I had on August 31st at the Foreign Office with Foreign Minister Barthou. You will readily see from its content that it must be treated quite confidentially. The conversation was informal and M. Barthou was very voluble and outspoken.
I told him that I had called to pay my respects on my return from vacation.
M. Barthou, after saying how glad he was to see me back again and in good health, expressed his great pleasure at having had the opportunity of meeting the President’s mother,35 and said how much he had enjoyed talking to her at the lunch which Mr. Marriner gave her at the Hotel Crillon.
[Page 571]I told him that I had heard from Mrs. Roosevelt on her return what a pleasant impression she had received during her whole visit in France, and in particular of her conversation with the Foreign Minister.
M. Barthou then said how sorry he had been at the failure to ratify the Double Taxation Treaty36 and how much it disturbed him that they had been unable to carry out their promises, due to the legislative jam at the last moment. He wished to know whether I had seen the note with reference to the favorable régime with respect to taxes up to a time when a decision could be taken. He also said that both he and M. Germain Martin would do all in their power to obtain ratification as soon as Parliament met, and as it was the same Parliament there would be no further steps necessary, the same Rapporteur continuing (M. Baréty), who, being a man of substance and influence would be very useful in getting favorable action.
He then said that he was very sorry that the debt question still hampered relationships between France and America, and that the French still felt that the moratorium had interrupted payments and prevented their resumption. I said that it would certainly do so in case France should ever need to borrow in America again. I said that I had given considerable thought to the problem, and that quite personally, and in no way officially, would like to make a suggestion for the debt payments spread over a still longer period, which would avoid the difficulties of transfer.
M. Barthou said that he would be glad to hear of any informal suggestions and hoped I would take the matter up with M. Germain Martin at the earliest possible moment. He said he would talk to M. Germain Martin about the matter.
I then proceeded to outline my ideas as follows:
The French Government should deliver to the American Treasury serial bonds in an amount to represent the whole French debt to the United States, approximately $4,000,000,000, which bonds should carry interest at a low rate, between one and two per cent. Such bonds should run for a period that would enable France to meet them as they matured. Any American purchaser of French goods should go to the American Treasury, deposit dollars and withdraw French bonds, and forward those bonds to the French vendor or manufacturer in payment, who would, in turn, go to the French Government fiscal agent and receive his francs for them. This would conceivably increase the purchases by America of French merchandise and would, in any case, in large degree, avoid the necessity of considering the exchange and transfer problem. This same method might be used for [Page 572] the financing of American letters of credit for tourists in France, for immigrant remittances, and for all other payments such as travelers’ checks.
The length of the period that I tentatively mentioned to M. Barthou as worthy of consideration might be one hundred or one hundred and twenty-five, or even more years. The result would be that the debt question would be removed from the field of controversy. The American public is in no frame of mind to consider cancellation, and conceivably France might in the future, with the possibility of a war with Germany always present, be faced with the necessity of borrowing in the United States, and under present conditions it would be impossible to sell French bonds or any other foreign bonds in any quantity in the United States.
M. Barthou said that this scheme certainly was ingenious and might offer a possibility of solution.
The Foreign Minister then said that he was busy at the moment with preparations for Geneva where he was going to attend the Council meeting and subsequently the Assembly of the League of Nations, at which without much doubt Russia would be admitted. He said that of course France and practically all other countries were opposed to any spread of Bolshevism, but felt that membership in the League would be more apt to keep Russia within bounds and to make her accept her responsibilities than to remain out of it. Switzerland, however, was quite opposed to Russia’s entry into the League and was taking a vote on the matter on September 1st.
He then turned to the Austrian situation, which, he said, was definitely calmer and in better state than previous to the Dollfuss assassination.38 It had taken this human sacrifice to bring about a real understanding between France, Italy and England, and there was no question that these three nations now saw eye to eye. It was Barthou’s intention to see Mussolini very shortly and he was glad that he had not done so before the Dollfuss murder had clarified the situation and had made France, England and Italy realize that their interests were the same in Central Europe.
He was very pleased with the Statement made by Baldwin in the House of Commons with respect to the British frontier being the Rhine and had taken great pains not to overemphasize this in the French press in order not to scare off the English and not to ask for clarifications or precisions that would have further alarmed them.
M. Barthou said that since I had left, the situation in Germany had grown definitely worse, but on the other hand was clearer, the assumption of supreme power by Hitler making it certain to the world that [Page 573] no one could count on Germany’s peaceful intentions or honest purpose. He said that no one as yet knew the number of executions that had taken place there at the end of June; that the French Ambassador to Germany had stated that there must at least have been four hundred and probably more. Mr. von Papen had estimated them at six hundred. M. Barthou did not state the source of this information about the von Papen family but added that Mr. von Papen and all his household had been kept prisoners for four days under threat of death if they left the house and that Mr. von Papen himself had had two teeth knocked out. He said that the rule of such brutality was manifestly a danger to the whole of Europe.
With respect to the Eastern Locarno,39 he said that the replies of Poland and Germany were still lacking, but that from the Polish point of view things were slightly better and that perhaps an understanding could be arrived at. Yugoslavia had likewise raised certain difficult questions.
As concerns the possibility of war between Russia and Japan, he said that before the Japanese Ambassador left here for a trip to Tokyo, he told him that France would not concern herself with conflicts in the Far East, but would do everything in her power to maintain peace in Europe, which is her principal concern.
Respectfully yours,
- Mrs. Sara Delano Roosevelt, mother of President Franklin D. Roosevelt, who was in Paris from July 18 to August 10, 1934.↩
- For correspondence on this subject, see Foreign Relations, 1932, vol.ii, pp. 262 ff.; ibid., 1934, vol. ii, pp. 167 ff.↩
- See vol. ii, pp. 1 ff.↩
- For correspondence relative to negotiation of an “Eastern Locarno” Pact of Mutual Guarantee, see pp. 489 ff.↩