462.00 R 296/2a: Telegram

The Secretary of State to the Ambassador in France (Herrick)

[Paraphrase]

321. For Ambassador and Boyden. Your 400 of October 14, B–774.

This is not an opportune time for formal statement by identic notes or otherwise to Powers as suggested. Such a course would not be advisable unless acceptance by Governments indicated by preliminary soundings. Question is not now of formulation of general propositions but of definite proposal. Essence of matter is that the question of German reparations should be considered immediately [Page 169] by a committee of business men with approval of the Governments, in order to have practical businesslike solution proposed by financiers of highest distinction in the various countries which would be accepted by Governments.

It is idle to propose any course leading to the discussion of Interallied debts, and especially of debts due United States. The Administration manifestly cannot favor such a discussion as the matter is for Congress and Congress has taken action. Any suggestion looking to a discussion of debts would cause violent opposition here and render a conference futile. To begin with the debt question is to start at the wrong end. If it should at any time appear advisable or necessary to take different action from that which Congress now contemplates in regard to French debt, it would only be after France’s financial condition had been considered fully and its present undefined reparation asset reduced to certainty. To talk now about reduction or cancellation is merely a waste of time. This Government’s position has always been that the question of debts is irrelevant to question of German reparations. Germany cannot pay one mark more or less because of what France may owe, and France cannot collect what Germany is unable to pay. Moreover, further delay in determining actual capacity of Germany to pay results merely in reducing the amount ultimately obtainable.

The question is, What can Germany pay? It should be resolved through financial men with approval of the Governments. I emphasize this in order to impress the futility of sending notes or issuing statements which will encourage retorts and attempts to start useless discussion.

I assume that Governments, except that of France, would favor the proposal for a committee which might virtually be continuance of former Committee of Bankers but without hampering restrictions. The first question, therefore, is as to the French attitude.

I have desired that every effort possible should be made, short of formal representations to induce favorable attitude by French Government. I suppose that you could have confidential and straightforward conversations with Poincaré and perhaps Barthou, and that powerful assistance could be given by Morgan. I assume that there is no prospect of French Government yielding in presence of public opinion to what savored of a public demand made by the Government of the United States, since at the same time French Government is refusing to discuss French debt. But I have hoped that actual facts of situation could be presented to Poincaré in a way that would induce favorable consideration of the suggestion for appointment immediately of a committee of businessmen. If there is favorable outlook at Paris we can readily arrange for similar [Page 170] discussions at other capitals. But it is important that United States should not submit a proposal on this question only to have it rejected.

I understand that Morgan is going to Rome on the 19th. I shall cable Child fully in anticipation of his visit after hearing again from you as to the situation in Paris.21

Present uncertainty respecting reparation settlement promotes economic disorganization in Germany where situation is becoming extremely critical and affects directly all nations having relations with Germany. French Government must recognize this. There is gravest necessity for prompt action, but I can see no prospect of an agreement unless Governments can arrange to interpose between themselves and their public the findings of impartial committee.

Hughes
  1. The Department’s instruction, Oct. 18, to Ambassador Child, which is similar in substance to this instruction to Ambassador Herrick, is not printed.