811.506/107
The Secretary of State to the Governor of Montana
Sir: The receipt is acknowledged of a letter dated December 29, 1934, from Mr. John J. Holmes, State Auditor and Ex-officio Insurance Commissioner, regarding the proposal of the Insurance Department of the State of Montana to refuse a license to the French Union [Page 256] and Universal Insurance Company of Paris, France, to do business in Montana on the grounds that it is a corporation of a country which has failed to wholly meet its war debt to the United States.
I am writing to you in regard to this matter inasmuch as it is the long-established practice of this Department to communicate with the state officials through the Chief Executive of the State.
It is apparent to me that it is the desire of the Insurance Department to cooperate with the Federal Government and with this Department in particular in an endeavor to bring about a satisfactory adjustment of the debt owed by the Government of France to the Government of the United States.58 I sincerely appreciate this attitude, but I am constrained to say that I am apprehensive regarding the potential consequences of the proposed action.
The French insurance company in question is doubtless not responsible in any way for the present attitude of the French Government regarding war debts.
It will be appreciated that American companies and capital operate on an extensive scale in French territories. Retaliatory measures which might be adopted might lead to substantial disadvantages to American foreign commerce and enterprise. I consequently entertain the view, from the standpoint of the conduct of international relations, that whatever steps are taken by the Insurance Department of Montana, with regard to issuing a license to this French insurance company, should be without regard to the position the French Government may take from time to time in the course of the negotiations for the settlement of its public debt to the United States. The two questions are quite distinct, and it would, in my opinion, be of assistance to this Government in future negotiations to have them so remain.
I have not endeavored to enter into a legal discussion of the treaties between the United States and France, because only the Federal courts of this country could render an authoritative opinion, but principally because I deem this question one of such delicacy that I trust the matter may be disposed of on other grounds, i. e., on the basis of a considered public policy which takes all of the possibilities into consideration.
I have [etc.]
- See vol. i, pp. 374 ff.↩