851.5151/1053: Telegram

The Ambassador in France (Bullitt) to the Secretary of State


971. For the Secretary of the Treasury from Cochran. At 10 o’clock this morning I saw Minister of Finance Auriol. This was my [Page 564] first visit since the issuance of the simultaneous declarations of monetary policy. He reiterated his appreciation of American cooperation in this move and insisted that passage of the French monetary law would have been absolutely impossible if it had not been accompanied by the three-power agreement.

The Minister of Finance had been especially pleased with the privilege of direct communication with Mr. Morgenthau and hoped that this method could be utilized in the future.…

The Minister said that there was nothing that France could do now on war debts.43 After internal order may be restored and some degree of prosperity achieved Auriol hopes that it may be his pleasure and opportunity, say in another year or year and a half, to make spontaneously to the United States an offer of final settlement of the war debt. Such an offer would be arrived at after studying all phases of the question including the Hoover moratorium,44 the Lausanne agreement45 and the character of the constituent parts of the indebtedness.

Auriol said that we had taken a big step forward in the three-power declaration. He was greatly pleased at the reception given this declaration by most of the European countries, Germany being the principal exception. Italy’s action yesterday46 was particularly gratifying to him. He asked me what I thought Schacht47 would do. I told him that I might have occasion to see Schacht this weekend. Auriol said that he had not wanted Schacht in the original negotiations principally because he and Norman48 were so close that there might have been Anglo-German collusion in the negotiations which would have made arrangements difficult. He said that he was sending word to Schacht by Labeyrie that whenever Germany may see fit to follow the precedent set by France the latter will be ready to cooperate with Germany toward achieving stabilization and toward reduction of barriers. Auriol will insist, however, that the financial burden which the policies of armament now being followed in Europe entail will prove to be unbearable by the various treasuries.

. . . . . . . . . . . . . .

  • [Cochran]
  • Bullitt
  1. Telegram in three sections.
  2. For correspondence regarding debts owed the United States by France as a result of the First World War, see pp. 579 ff.
  3. See telegram dated February 26, 1932, 11 a.m., to the Ambassador in France, Foreign Relations, 1932, vol. i, p. 584.
  4. See telegram dated July 12, 1932, 4 p.m., from the Consul at Basel, ibid., p. 687.
  5. Issuance of a royal decree-law, October 5, 1936, adjusting the intrinsic value of Italian currency “to the value of the most important and widely used currencies in circulation on the principal world markets”; see Federal Reserve Bulletin, November 1936, p. 881.
  6. Hjalmar Schacht, German Minister of Finance, and President of the Reichsbank.
  7. Montagu Norman, Governor of the Bank of England.