462.00R296/4524
The Ambassador in France (Edge) to the Acting Secretary of
State
Paris, July 7, 1931.
[Received July
15.]
No. 1634
Sir: With reference to my telegram No. 415
of July 6th,43 I
have the honor to enclose one of the two texts of the basis of
agreement arrived at between the French and American negotiators on
July 6th and initialed by, on the part of the United States: Andrew
W. Mellon, Secretary of the Treasury of the United States, and
Walter E. Edge, Ambassador of the United States to France, and on
the part of France: Pierre Laval, President of the Council and
Minister of the Interior; Aristide Briand, Minister for Foreign
Affairs; Pierre Etienne Flandin, Minister of Finance; François
Piétri, Minister of Budget and André François-Poncet, Undersecretary
for the Presidency of the Council and National Economy.
The other initialed copy of the French text has been retained by the
French Minister for Foreign Affairs.
I am likewise enclosing the text of the official English translation
which has been furnished to the Ministry for Foreign Affairs.
Respectfully yours,
[Page 162]
[Enclosure—Translation]
Basis of Agreement
After exchange of views, the French Government states that it is
in agreement with the United States on the essential principle
of President Hoover’s proposal and on the following propositions
which may be expressed thus:
- 1.
- The payment of intergovernmental debts is postponed
from July 1, 1931, to June 30, 1932.
- 2.
- However, the Reich will pay the amount of the
unconditional annuity. The French Government agrees
insofar as it is concerned, that the payments thus made
by the Reich shall be placed by the Bank for
International Settlements in guaranteed bonds of the
German railroads.
- 3.
- All suspended payments shall be subject to interest in
accordance with the conditions suggested by the American
Government, payable in 10 annual instalments beginning
with July 1, 1933.
- 4.
- The same conditions shall apply to the bonds to be
issued by the German railroads.
On the three points which it is recognized do not directly
concern the American Government, the French Government makes the
following observations:
- (a)
- A common action by the principal Central Banks acting
through the medium of the Bank for International
Settlements shall be organized to assist the countries
of Europe which would be particularly affected by the
postponement of the payment as proposed.
- (b)
- A preliminary understanding should take place between
France and the Bank for International Settlements in
order that France shall not supply the guarantee fund
provided for in the Young Plan in the event of a
moratorium except by monthly payments in accordance with
the needs of the Bank for International Settlements
after the actual transfer of payments by Germany.
- (c)
- The question of deliveries in kind and the various
modifications which will become necessary as a result of
the application of the American proposal and the present
agreement, shall be studied by a committee of experts
named by the interested Powers which shall reconcile the
material necessities with the spirit of President
Hoover’s proposal.
France reserves the right to request of the German Government
indispensable assurances concerning the utilization for
exclusively economic purposes of the sums freed to the Reich
budget.
- A[ndrew] W. M[ellon]
- W[alter] E. E[dge]
- P[ierre] L[aval]
- A[ristide] B[riand]
- P[ierre] E[tienne] F[landin]
- F[rançois] P[iétri]
- A[ndré] F[rançois]-P[oncet]
