462.00R296A/20: Telegram

The Ambassador in Belgium ( Gibson ) to the Secretary of State

[Paraphrase]

122. The following items taken up in the course of a long conversation this morning with the German Legation regarding the Franco-German discussions at Paris were of special interest:

1.
The determined demand of the French that before the convening of a general conference to discuss reparations Germany must execute a separate agreement with France guaranteeing payment of French share of reparations is the principal stumbling block in the present negotiations. Including even the liberal-minded François-Poncet,44 the French negotiators are obdurate for this privileged French position whereby France would be enabled to enter the conference with nothing to lose and everything to gain. This proposal is regarded by the Germans as being unfair to the other conferees and they are holding out against it. They state that it would be as unjust in this instance as it would be in an analogous case of a bankrupt who made a special arrangement with one creditor. In the event such a special agreement were made with the French, the Germans feel that if it were published it would arouse the resentment of the other conferees, perhaps making the conference abortive. On the other hand, if it were kept secret, the chances are that it would eventually come to light. In this event the Germans would be accused of reverting to the secret diplomacy practices of the Hohenzollerns and the fact that France had coerced Germany into this agreement would not count. It is the hope of the German Legation that its Government may be able to hold out against French pressure for a special agreement. It seems somewhat doubtful, however, as that pressure is strong and the need of Germany for consideration of the reparations problem is urgent. Von Hoesch and Flandin are carrying on most of the Franco-German discussions. I have been told by the Germans that Flandin is a hard man to deal with. He apparently has no international point of view.
2.
In these negotiations it would appear that the above point is more important and critical than the question of increasing the Special Advisory [Page 345] Committee’s scope under the Young Plan provisions. In this regard the German proposal is twofold: (1) First-class financiers should compose the Committee—it should be like the recent Wiggin Committee at Basle and not of the ordinary expert type; (2) the terms of reference of the Committee should be enlarged in order that consideration of the entire German financial and economic picture be included.
3.
After the Committee has met and after the stumbling block set forth in paragraph 1 has been removed, the French and the Germans are both apparently convinced of the necessity of holding a reparations conference. Considerable German sentiment seems to exist in favor of holding the conference in Brussels. I understand this is partly based on the desire to meet Francqui’s45 wishes.

I have not felt at liberty to repeat the foregoing information to other missions in view of the peculiarly personal way in which I received it. However, provided the source is not revealed, there is no objection to the Department’s using its substance as it desires.

Gibson
  1. French Under Secretary for the Presidency of the Council and the Ministry of National Economy.
  2. Emile Francqui, Belgian Minister of State.