462.00 R 296/28½
Memorandum by the Secretary of State of a Conversation with the French Chargé (Laboulaye), October 31, 1923
Reparations.—M. de Laboulaye said that he had informed M. Poincaré of his last interview with the Secretary and M. Poincaré seemed to feel that there might be some misunderstanding and that the Secretary might have changed his position to some extent. When M. de Labolulaye first came in (October 26) he had said that M. Poincaré desired to act under the provisions of the Treaty of Versailles, and that the Secretary had acquiesced in that position, but M. Poincaré had some misgivings as a result of what the Secretary had said in his last interview.
The Secretary said that he did not see that there was any basis for misunderstanding. He reminded M. de Laboulaye that he did not yet have the text of the French reply to the communication of the British Government; that M. de Laboulaye had given orally to the Secretary what was understood to be the substance of that reply; that the Secretary understood that M. Poincaré desired to have the committee of experts constituted through the Reparation Commission under paragraph 7 of Annex II, of Part VIII, of the Treaty of Versailles. The Secretary had not objected to this as this would give opportunity for a full inquiry. The Secretary said that it had been well understood from the start that the rights of France under [Page 88] the Treaty could not be changed without her consent; that this was an obvious fact which it seemed hardly necessary to emphasize. On October 29 M. de Laboulaye had given the Secretary an aide-mémoire in which there were references to Article 234 and Article 233 of the Treaty. The Secretary understood perfectly that the Reparation Commission under Article 234 could not cancel any part of the obligations of the German Government except with the specific authority of the Governments represented on the Commission, that is, without the consent of France. It was hardly necessary to go into this as it was apparent that any financial plan that might be recommended by the committee of experts could not affect any rights of France without her consent, but the last sentence of the French aide-mémoire of October 29 had given rise to a question because it was stated that France would not accept a revision of the amount of the German obligations. If M. Poincaré meant by this that the inquiry of the experts should be limited so that they could not consider comprehensively Germany’s capacity to make reparation payments, the inquiry would be abortive. If, for example, when the experts met together and took up the question of the total amount that Germany could pay and the manner in which the payments of that amount could be secured, the French expert were to take the position that the committee of experts had no power to consider what was the total capacity of Germany to pay the inquiry would be ended and we should all be made a laughing stock. It was one thing for France to have the right to accept or reject recommendations that might be made by the experts; it would be a far different matter, however, if France restricted the inquiry so that it could not have the scope which the Secretary had proposed. This was what the Secretary meant when he said in his last interview with M. de Laboulaye that he hoped that M. Poincaré would put no unnecessary obstacle in the way of obtaining reparation payments; that no reparation payments were now being made and if matters went on as at present there would not be any reparations; and that while France, of course, had her treaty rights and even if they took a position which involved the ruin of all Europe they would still have their treaty rights; it would be a different thing to block an inquiry by which a proper financial plan could be developed.
M. de Laboulaye said that he did not think that M. Poincaré intended to limit the inquiry, but he had desired to proceed under the Treaty and he feared that the Secretary might have changed his mind upon that matter. The Secretary said that he had not changed his mind; that the Reparation Commission had full authority [Page 89] to deal with the question of the total amount of Germany’s obligations and to recommend a reduction if they thought it advisable; that this appeared clear from paragraph 13, of Annex II, of Chapter [Part] VIII, which provided the rules as to voting in the Commission. It was stated that unanimity in voting was necessary on “the cancellation of the whole or any part of the debt or obligations of Germany.” Of course, this inquiry as to unanimous vote would be unnecessary if the Reparation Commission could not vote at all; this clearly showed that the matter could be brought to a vote in the Commission, although no cancellation of the whole or part of the obligations of Germany could be made without a unanimous vote. As the question could be brought to vote, of course the Reparation Commission could consider recommendations; there would be nothing to vote on if there was not a proposal; and if the matter could be brought up in the Reparation Commission by a proposal, of course the Reparation Commission could inform itself fully through a committee of experts, so that a financial plan which could be properly passed upon by the Commission could be formulated.
M. de Laboulaye said that he thought M. Poincaré had the same idea, and that he did not intend to restrict the inquiry of the experts. M. de Laboulaye said that he had understood that what the Secretary desired was to have the experts consider the capacity of Germany to make reparation payments and a financial plan for the purpose of securing such payments as the Secretary had said in his communication, and that he did not understand that M. Poincaré intended to limit the inquiry.
The Secretary said he was glad to be assured of this, as a limitation upon the inquiry would be disastrous and it should be understood that when the French expert took part in the inquiry he would not block the consideration of all the questions that were involved in determining Germany’s capacity to make reparation payments. The Secretary said that he supposed if a financial plan were developed by the experts and presented for consideratiton it would be considered on its merits; that M. Poincaré, as a reasonable man, would consider what was brought up fairly and, while the French Government had the right to give or withhold its consent, it would act in a reasonable manner upon the proposition that might be submitted. The Secretary had understood, of course, that the French Government would not bind itself in advance, but if we were ever to get out of the present serious situation some financial plan must be developed.