. . . . . . . . . . . . . .
[Enclosure]
The American Ambassador (Herrick) to the French President of the Council and
Minister for Foreign Affairs (Poincaré)
Mon cher Monsieur le Président: Referring
to that part of our informal conversations of October 22nd and 30th
relative to Reparations, the only suggestions of a formal nature
which might have been embodied in an Aide
Memoire were that the questions of Reparations and
Interallied Debts due to the United States could not be considered
together for the reason that the United States Congress is the only
body competent to deal with debts and this it has already done. The
position of my Government has always been that the question of debts
is irrelevant to the question of German reparations. Our
representatives in International Conferences are therefore limited
in their power to commit the Government of the United States
[Page 183]
as were our delegates at
Versailles. This does not necessarily imply that the present
position of Congress and the American people is irrevocable. By
reason of this situation, they are more likely to accept and follow
any plan suggested for the readjustment, reduction or cancellation
of debts than to initiate and lead. It is my belief that public
opinion is bound to play a great part in future action in this
direction and if Congress and the majority of the people undergo a
change of opinion, it will be by seeing their best interests served
as well as seeing universal benefit also, as they did when the
United States entered the Great War.
During my two months vacation in America, I sought every opportunity
to obtain the views and reactions of our people on this
international problem and it was my conclusion that the general
feeling was that this is no time for settlement by exchanging notes
unless preliminary soundings had indicated the possibility of
acceptance by Governments. There is a distinct drift of opinion of
late towards the feasibility of concrete proposals. I have found in
this crystallization of opinion the hope that the problem of German
Reparations might be taken up by a committee of practical business
and financial men of the highest distinction in the various
countries who would have the approval of the governments concerned.
It would seem to me that an uninfluenced committee which would be
not unlike the former committee of bankers, but without hampering
restrictions, would be favored by other governments. It is the
consensus of opinion that since the vast devastated regions for
which Reparations are demanded lie in France, her relation to this
subject is such that the first question preceding any move or
proposal would be: “What will be the attitude of the French
Government?”
As I told you on my first visit, I was pleased to find in Washington,
New York and elsewhere the most intense interest in this whole
matter and an appreciation of the necessity of immediate action;
likewise a general understanding that the evil consequences growing
out of the failure of solving this problem would rest heavily on our
own country also. This was my reason for coming to you for a
straightforward and informal talk with the hope that we might find
some way to assist in furthering some plan suggested by you. There
are at present in Europe some of our most able and powerful
financial men who feel as I do that now is an opportune time for the
formulation of some practical plan of reorganization. I need not
repeat that we all recognize, even the remotest country, that the
delay in settling the question of Reparations is largely responsible
for the present economic disorganization and that there is great
necessity for prompt action. However, there appears to me to be
little prospect of this unless governments
[Page 184]
can arrange to interpose between themselves
and their public the findings of an impartial committee.
You asked me at our last meeting also, to write you what I said with
reference to the financial and economic situation in America after
the disastrous panic of 1893 being analogous to this situation. At
that time, 33 percent of the railroads passed into the hands of
receivers and there seemed no prospect for years to come of a
revival. Industry and agriculture were at a standstill; business was
completely demoralized and no class escaped this paralysis which
gripped the nation and filled the people with despair. I detailed to
you the manner in which reorganization and reestablishment took
place and how hope and confidence came to our people out of
despair.
The first important rehabilitation was that of the Union Pacific
Railway whose property was in a hopeless tangle. There were
countless committees of irresponsible people representing minor
securities; predatory lawyers, speculators and people were battening
on the corpus of the company. A group of the highest type of
disinterested men that could be found in the country were appointed
to formulate a plan of reorganization and in good time they brought
forth a plan of refinancing which was so comprehensive and so
workable that its acceptance was instantly assured by all interests.
There followed in rapid succession a reorganization of all the other
bankrupt companies, also of other corporations and industries and
soon the wheels of commerce were turning once more. I had a close
chance to observe this process as I was a member of several of these
reorganization committees and I saw order come out of chaos. I feel
that in the present instance the elements exist for reorganization,
if only a beginning can be made. It is for this reason that I
ventured to take your time and to give you for what they are worth
my personal beliefs and reactions which reflect those of others.
If I now have the temerity to put in writing what I said in our
informal conversations, I do so simply because of my deep desire to
do something of value for your country and my own.
I asked you, Monsieur le Président, whether you did not think it
feasible to select or inspire the selection of a group of business
and financial men of the highest distinction in the various
countries concerned to form a committee not unlike those
reorganization committees which I have described with the object of
studying, in an expert manner, the whole problem of economic
reconstruction. I would be glad to receive your impressions of what
I have attempted, in a personal and confidential manner, to set
before you and should you deem it worthy of your consideration I
would be glad to come and see you.
With assurances [etc]
