462.00R296/4046: Telegram
The Ambassador in France (Edge) to the Secretary of State
[Received 10:27 p.m.]
335. Referring to my telegram No. 334, June 22, 4 p.m., the plan for a refinancing of the unconditional portion of the German reparations [Page 49] settlement referred to in vague terms this morning by Berthelot is said to be an idea originated by Quesnay of the Bank of International Settlements at Basel for a loan to Germany by a consortium of French banks of an account [amount?] of money equivalent to the total of the unconditional reparations payments. This information seems to have been generally disseminated to the press and may be discussed in tomorrow morning’s papers and would seem to accord with the desire of the French bankers as there is a large amount of money at present in possession of the banks drawing only one-half of one percent.
[Paraphrase.] Since the last German loan issued at approximately 98 has sold in Paris as low as 65 and thus the German credit is bad with the buying public here, American bankers here do not agree that a purely French loan without some international character could be readily disposed of in this country.
This afternoon in a telephone conversation with Mr. Mellon I discussed with him the advisability of his spending a day or two in Paris en route to Cape Ferrat, which he expects to visit shortly. Some curiosity here on account of French sensitiveness has naturally been created by his various conferences at London with bankers and officials. It was intimated by Mellon that he would telephone Washington tonight on this subject. [End paraphrase.]