800.51W89 France/749
The Secretary of State to the French Ambassador (Claudel)
Excellency: My Government has considered with the greatest care the note of December 1, 1932, from the French Government, in which it has set forth at length the reasons it advances for a reconsideration of the whole question of intergovernmental war debts, and for the postponement of the payment due by the French Government to the Government of the United States on December 15, next.
Whatever part debt payments may have played in the economic history of the post-war years, it is clear that in the present conditions of world-wide depression, accompanied by a sweeping fall of prices, their weight has greatly increased, and that they have a very [Page 740] definite relationship to the problem of recovery in which both the French and the American people have so vital an interest.
The President of the United States is prepared, through whatever agency may seem appropriate, to cooperate with the French Government in surveying the entire situation and in considering what means may be taken to bring about the restoration of stable currencies and exchange, the revival of trade, and the recovery of prices.
I believe that there are important avenues of mutual advantage which should be thoroughly explored. Such an examination does not imply cancellation. In such an examination there would necessarily be consideration of other forms of tangible compensation available for the expansion of markets for products of American agriculture and labor. And you will understand that the problem of foreign debts has in the American mind very definite relationship with the problem of disarmament and the continued burden which competitive armament places upon the entire world.
My Government, however, has not been able to reach the conclusion that a postponement of the December 15 payment from the French Government to the United States is necessary because of its effect on the problem of recovery. Although we recognize the serious budgetary difficulties which the French Government, in common with all other governments, is now facing, the sum involved in this case and the transfer thereof would hardly seem to my Government to be of disturbing weight or difficulty in respect to world economy or the reestablishment of prosperity. The maintenance of these agreements in their operation pending due opportunity for analysis of all matters bearing upon your request for revision and its consideration by the American Congress and people still appears to us to outweigh any reasons presented for a delay.
I appreciate the significance of your explanation with respect to the gold inflowing into France. The existence of these French gold holdings, however, does appear relevant to the present problem of meeting the immediate difficulties of transfer with special reference to the December 15 payment.
In view of the position which I feel my Government must take, I trust that the French Government will appreciate the importance of making the December 15 payment in accordance with its terms and thereby, in my judgment, bringing about a more favorable situation for any subsequent examination of the problem between our two Governments.
Accept [etc.]