Proposal For United States Loan to French Government, August 2, 1922


The cry of "Wolf" has been raised so often that it has lost much of its effect and now when the wolf appears to be near -- in other words when the situation of Europe is infinitely critical -- it is hard to rally the effort needed to do something effectual.

It is in fact America alone that is able to do something effective. I submit that a plan which would seem to have the most to recommend it and the fewest obstacles, political and psychological, to prevent its [realization] would be the following:

The U.S. Government to make a loan to the French Government

1) this loan to be for the sole purpose of financing a scheme of reparations enterprises to be agreed on beforehand by the two Governments and to be made available in proportion as the work was actually carried on and against vouchers showing expenditure for objects falling within the scheme;

2) this loan to be on condition of the withdrawal of troops of occupation and commissions in Germany and the Rhineland;

3) the loan to be covered by the French claims against Germany, and France to be bound to pay over such receipts to the U.S. Government as they came in. 

It is to be noted that for the nine month period April 1, -- December 31, 1921, the latest period for which official figures are available, Germany paid in gold marks for troops and commissioners of the Allies in the Rhineland 4,777,244,360 gold marks.*)

Now the demand of the London Ultimatum of May 1921 being for 2,000,000,000 plus 26% of the value of its exports it is obvious how the paying capacity of Germany would be released by the stopping of the leakage of the Rhineland costs, to say nothing of the increased stability of the moderate government elements as against the Communists elements seeking to make a red bloc with Russia on the one hand and the monarchist elements who want a coup d'├ętat and ultimately their "revanche" on the other.

This plan would appeal to the American people as every dollar would go to our immediate relief of the plain French people who suffered for the war and it would appeal to the business men because it would set business going.

*) From a modificial translation of the second memorandum issued by the German government on the costs of the occupation of the Rhine.

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