600.0031 World Program/104
Memorandum by the Vice Consul at Geneva (Thompson)19
In the course of a recent conversation with Mr. Charron20 of the Financial Section, he told me he had just had a telephone conversation with Mr. Maurice Frère who was in Paris. It will be recalled that Mr. Frère has been appointed by Mr. van Zeeland to assist him in carrying out his mission to investigate the possibilities of securing a reduction of the barriers to international trade.21 According to Mr. Charron, Mr. Frère was not present at the conversation between Mr. van Zeeland and Dr. Schacht but had examined the minutes of the meeting. He informed Mr. Charron that Dr. Schacht had stated unequivocally that Germany was anxious to abandon her policy of economic isolation and to restore normal financial and economic relationships with the rest of the world.22 He said, furthermore, that the whole tenor of the conversation was that Dr. Schacht was sincere and that Germany was prepared fully to contribute her part in any international effort. The implication was that this would include political concessions although this question was not specifically raised and there is, of course, the question as to what extent Dr. Schacht represents German policy.
Mr. Frère said that Dr. Schacht had warmly urged him to come to Berlin and to remain as long as possible, and that he had promised him every facility for his work. Moreover, he was told that he would be given complete information on any subject he desired. Mr. Frère said he was, in fact, soon leaving Paris for Berlin and that after his visit there he intended to go to Rome.
Both Mr. Frère and Mr. Charron were inclined to believe that Germany was sincere in her wish to join in international economic cooperation. Mr. Charron mentioned some of the factors which he personally believed had caused this development. The German rearmament program would soon have to be slowed down and unless foreign trade could be revived other industries could not absorb the great number of workers who would be thrown out of employment. The rise in world prices, particularly of raw materials, was having a serious effect on German economy. Furthermore, he pointed out that it was becoming increasingly difficult for her to obtain supplies from central and southern Europe. This was true not only because of [Page 837] the fact that with the rise in prices these countries were finding other markets, but also because they had very large stocks of industrial goods which they had taken from Germany through clearing arrangements and they were not in a position to absorb much more. Another very important factor in Mr. Charron’s opinion was that these countries had recently found that many of the German munitions and other goods which they had purchased were inferior or faulty due in some cases to the widespread use of substitute raw materials in Germany.
Mr. Charron said that in spite of the favorable attitude of Germany and France, Mr. Frère was inclined to be pessimistic respecting the outcome of the van Zeeland mission largely because of the attitude of London. His visit to London had not been encouraging and he thought the British were unlikely to be helpful. Mr. Charron said he was of the same opinion and he pointed out that the main economic problems of the world today arose from the economic autarchy of Germany and from what might be called the imperial autarchy of the British Empire. Although he did not believe that Germany should be given assistance in the absence of political guarantees, he thought that both Germany and France were prepared to go a long way in making concessions. The British, in his opinion, were making a mistake, for although the present French Government desired to follow a liberal economic policy, it needed international action as an excuse for doing so. If such international action were not forthcoming the movement in France for a protective policy, which was already very strong, might become predominant.