462.00R296/2890½: Telegram
The Secretary of State to the Chargé in France (Armour)
164. Your 216, May 17, 3 p.m., Reparation 244. You may inform Young authoritatively that this Government does not object to the creation of the proposed International Bank nor to the participation therein of private American banks and bankers. Our objection is to the participation of any American official in the organization or management of the Bank whose primary function at least in the beginning will be the collection and distribution of reparations payments and the protection of the interests of the creditor nations. You might suggest to Young by way of explanation of our position that it is in no sense dictated by a lack of sympathy with the economic plan of which the Bank is so essential a part but due entirely to the fact that the United States Government has never presented a claim for reparations of the character which the Bank is to handle and does not feel that it should under these circumstances assume the moral [Page 1073] and legal responsibility of either collecting them or of assuring their distribution. On the contrary my statement on May 16th was made because the press despatches from Paris which had indicated that Federal Reserve officers would officially participate had excited such an adverse reaction here that we feared unless that error was corrected it would be impossible for us to secure congressional approval of any revised annuities which might be proposed by the Experts Committee. For that reason I felt it essential to make public our position, of which we had already informed Young.48