462.00R296/5016
Memorandum by the Acting Secretary of State of a Conversation With the German Ambassador (Von Prittwitz)
The German Ambassador came in to report to me about his recent trip to Germany. He said that conditions were very bad, as we all know, but that if the President’s proposal had been promptly accepted, he felt the upward trend would have come before now. He arrived in Berlin just about the time the proposal was announced and he said he never saw such happiness among the people as he saw at that time.
The Ambassador then said that it was, of course, obvious that something must be done before the end of the year of postponement because, even though Germany was able to carry on and make good with the load removed, it would not be able suddenly to begin on July 1932 the heavy reparation payments, plus the 10% of the payments postponed this year. He admitted that this extra 10% did not begin immediately. He said there were two methods, in the opinion of his Government, by which this situation might be met. One was the calling of an international conference to discuss the whole question of reparations and debts, including possibly political questions, as has been suggested by the Wiggin Committee. The other is an appeal by Germany to the committee authorized by the Young Plan to re-examine capacity to pay.24 He said that his Government did not want to propose either of these methods until it could have the advice of the American Government. I told the Ambassador [Page 325] that we knew that some discussion would have to occur before the end of the year of postponement, but that we could hardly give advice as to the best method. I said, however, that it was hardly probable that the United States would be involved in either method; it was clear that we would not take part in any conference which was going to discuss political matters and it was quite clear that any international conference called to work out the problem of debts and reparations, it being understood that we did not admit any relation between the two, would be the kind of thing that this Government would keep out of. I told him that I was willing to say personally, without in any way speaking for the American Government, that for me the simplest way out was almost always the best way. In other words, that where machinery was already provided it was best to make use of that machinery. I told him that I had really always taken for granted that the German Government would appeal before the committee provided for under the Young Plan. The Ambassador said that he felt himself this was very much the best method and that he should urge his Government to adopt this method.
He then asked me whether I should be willing to advise him as to the time when this appeal should be made. I told him that again he was asking something which he really had no right to ask. He said the reason he did so was that he felt that, if the German Government should move now, it might have a bad effect on Congress when it comes to consideration next December of the President’s postponement proposal. I told him that I was not worrying about this angle of it, although it was possible that a German appeal at this time might have a bad effect politically. I said what appealed to me was the effect it would have on popular opinion as regards Germany in this country. I told him that the American people wanted to see that the German people had the courage to work out their own problems, at least for the time being, without making any more appeals to the world. I reminded him that, if a request was made after the first of next year for a re-examination of German capacity, there would still be six months before the completion of the term of postponement, which obviously gave plenty of time, that I felt the whole world would have far more sympathy with Germany if, during the next three or four months, the Germans would courageously try to work out their salvation, that this would be of greater use to Germany in building up popular morale and that it would be of greater use in encouragement in the world economic situation which, after all, was, to some extent, a result of bad psychology and was depressed every time any nation made an appeal for help. Again the Ambassador said he agreed and that he would so communicate with his Government.