550.S1/473: Telegram
The Consul at Geneva (Gilbert) to the Secretary of State
[Received January 20—9:30 a.m.]
10. From Sackett.4 Because Sir John Simon5 had to leave Wednesday for a London Cabinet meeting the Organizing Committee of the Monetary and Economic Conference will meet the 25th so I remain here. In conversation with Simon last Tuesday he discussed the British representative’s view of the date to be selected for the Conference in London about as follows:
“The experts now meeting here have agreed that the settlement of intergovernmental debts6 is a necessary preliminary to the consideration by the London Conference of the agenda and should be accomplished either through negotiations taking place in advance or at least contemporaneously. Therefore, we can now determine our idea of the date of the London Conference at this Cabinet session.” While saying that he could not now give me any official opinion because he had not talked with the Treasury officials, he believed MacDonald7 was definitely in favor of calling the Conference the latter part of April because he felt that the settlement of intergovernmental debts would at least be contemporaneous with the Economic Conference, anticipating the former would be concluded before the latter. Sir John said that the Treasury might look at the sequence differently and place more emphasis on the point that debts should be definitely settled before the Economic Conference, especially as the experts had agreed that, quoting Simon, “The Conference could only operate successfully within an economic framework from which intergovernmental debts had been eliminated.”
The work of the experts is completed. It consists of introductory sections defining problems to be overcome with subsequent sections setting out the measures to relieve the depression in both the financial and economic fields. It seems significant that the section of the introduction, covering questions (debts being the first of four points) described in the British opening statement as if they were almost tantamount to conditions precedent to the functioning of the London Conference, was assigned to the British and French experts to draft. Their draft seemed to me considerably at variance with our [Page 455] policy that debts were to be excluded, first by acknowledging that the settlement of intergovernmental debts was a necessary preliminary to a successful conference, and second, because the draft could be interpreted to envisage a composite settlement of debts as opposed to our thesis of separate negotiations with debtors. This first draft furnished the basis of Simon’s remarks to me. When attention was called to this draft our experts by very clever work secured material changes and revisions of the British, French formulation of this particular section and it is now in much milder form. Though it still links up debts with the Economic Conference quite intimately you may consider it now harmless. The final text of this section is:
“(b) General program of the Conference.
The program of reconstruction which we deem is necessary for governments to undertake is set out below. In this program the problem of intergovernmental indebtedness has not been included because it lies outside our terms of reference. In our opinion, however, it is essential that this question shall be settled and that the settlement shall relieve the world of further anxiety concerning the disturbing effects of such payments upon financial, economic and currency stability. Until there is such a settlement, or the definite prospect of such a settlement, these debts will remain an insuperable barrier to economic and financial reconstruction. We therefore attach the greatest importance to the early resumption and successful conclusion of negotiations upon this problem”.
I gathered the impression that Simon may have in mind for later use a cagey argument that, as the experts have agreed that debt settlement is a necessary preliminary, an agreement by us, made a few days later, fixing a conference date could impliedly be interpreted as an approval by our Government that not only must debts be settled but settled in a general conference with debtors. Therefore, I query whether a reservation should be attached to our formal agreement as to a date for the Conference.
I request you cable views regarding the date to be set for the London Conference. Our experts believe it should take place between late April and early May. My own experience of the rapid changes in the European economic conditions indicates a materially delayed date would render the experts’ agenda less applicable to the then existing situation.
I would appreciate your consultation with Norman Davis, my committee associate. [Sackett.]