[Enclosure—Translation]
The Belgian
Embassy to the Department
of State
The application of President Hoover’s proposal would be
particularly onerous for Belgium because complete suspension
would involve for us, on the one hand, a loss of receipts
amounting to a total of 1,000,000,000 francs, including
reparations and the agreement relating
[Page 180]
to marks65 and, on the other hand, would relieve us
from payments amounting to 400,000,000 francs as a result of
the debts to the United States and Great Britain, thus
bringing about a net sacrifice of 600,000,000 or a sum per
capita greater than the sacrifices which the United States
would bear.
The 1930 budget contains a deficit of 1,200,000,000 out of a
total of 12,000,000,000 francs, and the estimates for 1931
show an even more considerable deficit. A vote for new taxes
amounting to 1,300,000,000 is imminent, the repercussion of
which on the national economy will be very noticeable, and
the loan of 1,000,000,000 as a result of the occupation of
Belgium during the war, the Belgian foreign debt for
reconstruction, is almost wholly a commercial debt which
does not come under the President’s proposal. The
Government’s situation in the face of the President’s
proposal is excessively difficult. Opinion regards a
rigorous application as inadmissible. Mr. Vandervelde
himself declared before the Chamber of Deputies on Wednesday
that the various parties are unanimous in insisting on the
“sacred rights” to reparations and to a special situation.
He recalls the declaration of Brockdorff-Rantzau at
Versailles that Germany recognizes the wrong done to Belgium
and will make it good.
Important political figures state that Belgium should reject
the proposal. None the less, the Government in drafting and
delaying its reply, has made a supreme effort to avoid
endangering the success of President Hoover’s proposal. Out
of regard for his personality, we have voluntarily
eliminated from the text expressions which are susceptible
of producing a harmful effect on American opinion, with the
intention of asking you verbally to set forth that
acceptance by the Belgian Parliament is impossible unless
special arrangements are foreseen for Belgium:
- First. It should be stated first that the proposal
is obviously not applicable to the 1929 agreement
relating to marks; this agreement deals with
restitutions for which the State is responsible to
the National Bank of Belgium, and which have always
been excluded from the peace settlement. The
agreement stipulates the continuance of payments in
case of a moratorium excepting that Germany may make
payments in kind. The annuity amounts to 184,000,000
francs.
- Second. The balance of about 400,000,000 francs
(600,000,000 minus 184,000,000) should be covered by
German payments which might be effected partially
through deliveries in kind advantageous to German
economy. The diverse symptoms lead us to believe
that the German Government would be disposed to
negotiate with Belgium if the American Government
would inform it that such a solution would be
desirable. These negotiations could be confidential
in order to avoid similar demands from other
countries. Their success would have a
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happy effect
on the relations of Belgium and Germany. Ask the
American Government to make such a démarche and to give us their support in the
negotiations; insist on the importance of the
results as regards acceptance of the Hoover plan by
Parliament.
