800.51/431: Telegram

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

[Paraphrase]

145. I have very carefully considered proposal made in your letter of October 23 and have talked it over with President Harding. He says that it would not be at all possible to authorize you to make such a statement as you suggest. He is, however, willing to have you say, if you consider it wise to do so, that the American Government would wish to be helpful should the countries of Europe make the necessary adjustments to curtail excessive armaments and to transform the present conditions of enmity and chaos into those of peace and order.

Of course you understand that Congress alone has the authority to remit debts. By deliberate action Congress has given the World War Foreign Debt Commission definite instructions. There is no prospect that the restrictions imposed will be changed in the immediate future, and no one representing the President could be permitted [Page 182] to in any way make a statement which would involve a commitment to the cancellation of the debts even with conditions, where Congress has not approved such conditions. The question is one of reparations primarily and must be settled on a business basis. The key to this situation is held by France. Our Government is at present engaged in informal exchanges with the French Government with a desire to assist in the settlement of this problem.

Hughes