462.00R296/4187c: Telegram
The Acting Secretary of State to the Ambassador in France (Edge)
300. For Mr. Mellon and the Ambassador. There are reports in the press that Bruening and Curtius will go to Paris Tuesday morning. The implication is that the French will use this opportunity to force Germany to make political concessions in return for French agreement to President Hoover’s proposal. In our opinion it is wholly wrong to use a purely economic proposal which was advanced for the benefit of the whole world as a means of forcing political concessions. We strongly feel that you should make this clear to the French and also inform them that any such move would be regarded in the United [Page 94] States as indefensible, and in addition might well bring about such adverse sentiment here that the plan would be altogether refused by Congress.
We should like to point out that with regard to the final proposal which you will present to the French tomorrow the only point of difference at the present moment is the time element, namely, the question of whether the funding period should be 5 years or 25. The amount involved is small so far as France is concerned. The French viewpoint as to the unconditional annuities has already been recognized, and we cannot believe that the French are willing to permit the negotiations to fail on such a minor issue. The reloaning of these sums to Germany is, however, the major question. Article 25 of the statutes of the Bank for International Settlements specifically provides that no money shall be loaned to governments.88 Consequently the French proposal that reloaning should take place under article 25 of the Bank’s statutes cannot be accepted. The plan of the American Government was to have the money immediately reloaned to the German Government. No other solution can be accepted.
The question of deliveries in kind must be worked out by later discussion. It cannot be disposed of by negotiations between the United States and France alone since the question involves the interests of too many other countries whose rights are affected under the provisions of the Hague Protocol. The treatment given to deliveries in kind must fully accord with the spirit of the President’s proposal. This is the only thing to be kept clearly in mind in this regard.
The suspension of payments of course affects the interests of some smaller countries. Some of these questions must necessarily be settled by later and general discussions.
- See Great Britain, Cmd. 3484, Misc. No. 4 (1930), p. 119.↩