462.00R296A/27: Telegram

The Ambassador in Germany (Sackett) to the Secretary of State

[Paraphrase]

221. At 11:30 this morning, the German Chancellor and I discussed privately and in detail the contents of the Department’s telegram [Page 348] No. 198, 17th of November. When we had finished Bruening requested me to convey to you his most sincere thanks for the message which you sent him. He stated that it clarified for him the several differences which had been created by the somewhat cryptic communiqué which was announced at the time of Laval’s trip to Washington.

Two weeks of negotiations had resulted, he informed me, in an agreement between his Government and that of France. The understanding covered the convoking of the Basel Committee. Yesterday had been the date set for the issuance of the text to which both countries had agreed. At the last moment, however, the French Prime Minister was not willing to acknowledge before the Chamber of Deputies that the terms of the memorandum had been agreed upon by France and Germany. Laval was only willing to state that Germany was the author of this purely unilateral proposition to which the French were not bound. Bruening pointed out that during the negotiations of the past 2 weeks he had given way on many matters which, in his opinion, were of vital importance to the German people. Consequently, he was unable to agree that a one-sided statement was the result of the discussions. It is still his belief that the agreement will be accepted by the French Government. He expects, too, that it will be published on Saturday. Coinciding with this application for the Basel Committee, Bruening states that a committee of German bankers will be constituted. This group will request the members of the Standstill Agreement for a meeting in which an extension will be considered.

During this conversation Bruening had a text of the agreement before him. Until publication of the final agreement, however, Bruening told me that the French did not want anyone to view it. Nevertheless, I obtained a fairly good idea of its purport, as he glanced over its terms and commented upon them. It contains nothing, insofar as I could observe, to which you might object by its expansion of the Basel Committee’s range of action.

If publication of the agreement which had been negotiated did not take place on Saturday, the German Government was going to make an independent request that the Basel Committee be appointed under the provisions of the Young Plan. This action would not be predicated upon agreement with any nation or other qualifications. At the same time, the German Government would appoint a bankers’ committee on the Standstill Agreement. All this the Chancellor told me after having considered the Department’s telegram with particular reference to the second paragraph, subdivision 2.

Though he was rather indefinite about it, I gather that Bruening’s impression is as follows: The French believe that their refusal to [Page 349] permit a calling of the Standstill group before appointment of the Basel Committee is in accordance with the views of the Department.

Sackett