Office of the Historian

800.51W89 France/1063: Telegram

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

Paris, December 10, 1936—3 p.m.
[Received 3:24 p.m.]

1225. I lunched today with Blum and Auriol. The latter explained his ideas with respect to the French debt to the United States. He said that he had examined the figures carefully and had decided that the amounts already in default as well as those due under the Mellon-Berenger agreement were so great that they could not be paid at the present time without gravely upsetting the balance of payments and that he was certain that if he and Blum should attempt to pay the defaulted amounts and the installment due on December 15 the Chamber of Deputies and Senate would vote against them.

Auriol said, however, that he and Blum (the latter nodding assent) were extremely anxious to work out a settlement of debts and had decided to make formal announcement on December 15 which would indicate this desire.

He went on to say that he saw no basis of settlement unless the European debtors of the United States should lump their obligations together and make a joint offer to the United States. He hoped to get the money for payments to the United States by several different methods, the first to be a tax on exports to the United States, the second to be an extra interest charge on any loans had [made] to European countries. He added that many more methods could be devised which would not upset the balance of payments.

I expressed no opinion as to his general project beyond the statement that we did not relish the idea of putting all our debtors in one boat. I then asked him please to keep in mind that any new debt settlement would be controlled entirely by the Congress of the United States and that the Congress at the present time was opposed to any alteration of the Mellon-Berenger agreement. Auriol said that he intends shortly to consult Van Zeeland41 with regard to the ideas he has in mind as he has been informed from Brussels that Van Zeeland is working on a project similar to his project.

Bullitt
  1. Paul van Zeeland, Belgian Prime Minister, June 1936–October 1937.↩