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PSF FRANCE: Wm. C. Bullitt 1939 - July- Dec.
file
publitt
Paris, July 13, 1939.
Personal and
Dear Mr. President:
Van Zeeland came from Brussels yesterday and
spent the night with me at Chantilly. He said that
the Spanish Government had refused to permit him to
make the economic investigation of Spain which he
considered an essential prerequisite to loans or
credits. In the past few days, however, Spanish
bankers had told him that the Spanish Government
might soon invite him to make the preliminary
investigation.
The chief thing about which he wanted to talk
to me, however, was a very hush-hush scheme which
he said he had discussed with Daladier and Mannheimer
in Paris, and with Chamberlain and one banker in
London. He wanted you, and you alone, to be informed
with
The Honorable
Franklin D. Roosevelt,
President of the United States of America,
Washington, D. C.
- 2 -
with regard to the idea.
It is a revival of the scheme which was discussed
in various quarters last year for the formation of
international companies modeled on the Suez Canal
Company to undertake enormous public works throughout
the world. As examples Van Zeeland gave the establish-
ment of a great port at the mouth of the Congo, and the
building of a trans-Sahara railroad.
His idea is that an international company should
be organized with the utmost secrecy by Americans,
British, French, Belgians, Swiss, and Dutch; that when
this company had decided definitely on which project
should be carried through and had the funds necessary
to carry it through, the Germans should then be invited
to participate but only on condition that even if the
Germans should refuse, the project would be carried
through.
Van Zeeland considered this scheme most desirable;
first, because it would tend to revive world trade and
produce an increased collaboration between the so-called
"free-economy" countries; second, because it would take
the sting out of the German argument of encirclement and
would encourage the resistance within Germany to Hitler's
system of closed economy.
My
- 3 -
My guess is that nothing will come of the idea;
but Van Zeeland takes it very seriously.
Good luck.
Yours affectionately,
William C. Bullitt.
PSF: France
Bullittfolder
Paris, July 13, 1939.
Dear Mr. President:
A couple of weeks ago Tom Lamont called on me at
Chantilly and said that Morgan and Company would like
to give $50,000,000 six-months' credits to French
purchasers for the purchase of copper in the United
States. He asked me whether I thought this would be
forbidden by the Johnson Act. I replied that I be-
lieved that commercial credits of not longer than six
months were regarded as not being forbidden by the
Johnson Act.
This morning Bernard Carter, a partner in Morgan
and Company in Paris, called on me to say that (on the
advice of Davis, Polk & Wardell) Morgan and Company
and the Guaranty Trust Company of New York had refused
to give these credits because they feared prosecution
under the Johnson Act. He added a detail which Lamont
had not called to my attention.
When Monsieur de Tristan, the French representative
for
The Honorable
Franklin D. Roosevelt,
President of the United States of America,
Washington, D. C.
- 2 -
for this copper purchase, informed me that he was going
to the United States he said that the whole transaction
would be carried out as an ordinary commercial trans-
action. Carter, however, told me that instead of having
the copper purchased for the French commercial consumers
of copper, the copper had been purchased by and consigned
to the French Government.
The final proposal was that Morgan and Company in
Paris should extend credits to French banks which would
use those credits for the purpose of extending credits
to the French Government for the purpose of obtaining
this copper. Carter said that while Morgan and Company
in Paris was in favor of carrying through this deal,
Morgan and Company in New York had refused to permit it
to be carried through. He asked me for my opinion as
to the position under the Johnson Act.
I replied that I was not the Attorney General. I
could say only that it seemed to me that the transaction
had been badly handled since the copper had been ordered
in the name of the French Government. I added as a
personal impression that I believed that the purchase of
copper for French commercial consumers of copper could
be financed by American bankers on six-months' credits
without conflicting with the Johnson Act.
It
- 3 -
It is obvious that this question will become one
of great importance during the next few months, and I
suggest that you might have a talk with Frank Murphy
and see whether or not a fair interpretation of the
Johnson Act would permit the financing on six-months'
credits by American bankers of purchases by French
manufacturers of raw materials in the United States.
Tom Lamont said to me that he was afraid of going
to jail since he had been unable to obtain any inter-
pretation of the Johnson Act from Homer Cummings which
could reassure him with regard to such transactions.
Would you let me have a line as soon as you have
talked with Frank Murphy?
Incidentally, Winthrop Aldrich telephoned me from
London and is coming to talk to me about the same
subject next Tuesday.
Yours affectionately,
Bill
William C. Bullitt.
COPY
DEPARTMENT OF STATE
The Legal Adviser
CONF IDENTIAL
July 29, 1939
The Secretary:
I have talked further with Mr. Bell, Assistant
Solicitor General, regarding the establishment of a credit
for the French Government for use in the purchase of copper.
He is definitely of the opinion that the establishment of
a six months credit by an American bank in favor of the
French Government or the establishment of such a credit
in favor of a French bank which in turn would make funds
available to the French Government, would be in contraven-
tion of the Johnson Act.
He calls attention to the opinion of the Attorney
General dated May 5, 1934 (37 Opinions, 505) wherein the
view was expressed that the act was designed primarily
to prevent further sales in the United States of foreign
bonds, securities and other obligations such as those
which had been sold to the American public to raise money
for the use of foreign governments issuing them, and was
not intended to apply to an exchange of "foreign currency,
postal money orders, drafts, checks and other ordinary
aids to banking and commercial transactions, which are
'obligations' in a broad sense but not in the sense
intended." (Ibid. 512.) The Attorney General stated
in his opinion that it was obviously not the purpose of
Congress
-2-
Congress "to discontinue all commercial relations with
the defaulting countries".
One of the specific questions placed before the
Attorney General was whether the act was intended to apply
to acceptance or time drafts. This, the Attorney General
stated, had been answered in the statement just quoted.
He went further and said that "such transactions must be
conducted in good faith, in order to be within the law,
and not as mere subterfuges to circumvent its purpose."
(Ibid. 513.)
Mr. Bell called attention to this last statement and
was of the opinion that a credit of the character indicated
above would hardly be regarded as an ordinary commercial
transaction but would more likely be considered as a sub-
terfuge in contravention of the act prohibiting "any loan".
He thought that astute lawyers should be able to find
means for accomplishing the purposes here in question in a
manner which would be entirely within the scope of the
Attorney General's opinion. He felt that the better pro-
cedure would be to call attention to the opinion and sug-
gest that an endeavor be made to keep within its purview.
Green H. Hackworth.
Le GHH: HHW
fillermal
Paris, July 20, 1939.
PERSONAL AND
STRICTLY CONFIDENTIAL:
Dear Mr. President:
I am sending you this letter by the CLIPPER
so that you may receive it before Winthrop Aldrich
reaches New York on the MAURETANIA next Tuesday.
I think it would be thoroughly worth while for
you to see him at once, and I hope that you will
get him to come quietly to the White House for a
conversation with you.
He called on me this morning and said that the
Chase Bank had been approached by the four largest
banks in Paris and asked for a loan of four million
dollars from the Chase to those banks. Since the
Chase Bank was in the habit of lending money cur-
rently to those banks and since there had never been
the
The Honorable
Franklin D. Roosevelt,
The White House,
Washington, D. C.
- 2 -
the faintest suggestion that the Johnson Act was
intended to prevent loans from American banks to
French banks that were sound and credit-worthy in
their own right, he and his associates felt that
no possible objection could be made to this transac-
tion even though such a loan might release other
money of these French banks to help the French Gov-
ernment to purchase copper in the United States.
He went on to say that he had come to Europe
because the Belgian Ambassador in Washington had
communicated to him a request from the Belgian Gov-
ernment to visit Brussels in order to discuss the
entire problem of supplies to Belgium in case war
should break out and Belgium should remain neutral.
He added that he had been to Brussels and that
the Belgian Government had expressed to him the
greatest apprehension with regard to the problem
of feeding Belgium in time of war. The chief dif-
ficulty would be to obtain sufficient shipping,
but there would be many other difficulties. The
Belgian Government finally had proposed to him that
the Chase Bank should consider becoming purchasing
agent
- 3 -
agent for the Belgian Government in the United States
and agent for the obtaining of shipping.
Before he had left America, Sir William Wiseman
had told him that the British Government had requested
him, Wiseman, again to become Chief of the British
Secret Service in the United States. Wiseman said
that he had refused and had then gone on to say that
Morgan & Company's standing in the United States had
been so injured by investigations, the Richard Whitney
scandal, and the diminution of the capital available,
that the British Government would be very ill-advised
again to employ Morgan & Company as purchasing agent
and that the British Government should employ the
Chase Bank.
After leaving Belgium he had visited England.
Nothing definite had been said to him but he had been
led to believe that the British Government was consi-
dering asking the Chase Bank to act in this capacity.
He had come to Paris on receipt of an invitation
from Paul Reynaud and was to see Reynaud this after-
noon. He felt that it might be possible that the
French Government would approach him in the same sense.
He personally believed that the Chase Bank should
facilitate
- 4 -
facilitate purchases in the United States by the
granting of credits for commercial supplies to France
and England, even if those supplies after reaching
France and England should be used ultimately for
government purposes.
He was most anxious to have a talk with you in
regard to the entire problem. He said that he feared
his personal relations with you were no longer so
good as they had been. I replied that I was certain
that you had the highest esteem for him, which seemed
to please him greatly.
You will receive probably at about the same mo-
ment as this letter a related letter which I wrote
to you on July 13th and sent by pouch, which recounts
conversations I had with Tom Lamont and Bernard Carter
of Morgan & Company of Paris.
The question of what credits are legal under the
Johnson Act and what credits are illegal will soon be-
come most important--indeed it is already--and I hope
that after seeing Aldrich you will get Frank Murphy
interested constructively in the problem.
Good luck and every good wish.
Yours affectionately,
Bill
1
Bullitt
Memo to Hon. William W. Howes-Post Office
From the President
July 26, 1939
Encloses letter from Bill Bullitt of July 13, 1939
requesting Trippe, Pres. of Pan American Airways to
arrange for the Captains of the Clippers to take
Letters in their pockets from the Amb to the Pres
and vice versa.
Mrs. Brennan's letter attached saying arrangements
have been completed.
Schedule of the Atlantic Clipper is in Post Office
folder-Drawer 1-1939
THE WHITE HOUSE
WASHINGTON
PRIVATE & CONFIDENTIAL
July 26, 1939.
MEMORANDUM FOR
THE SECRETARY OF STATE
Please read enclosed con-
fidential letter from Bullitt.
I would suggest that this be not
sent down the line in the State
Department, but I wish you would
give me your personal slant on it.
F. D. R.
Letter from Ambassador Bullitt,
dated July 13, 1939, in re Morgan
and Company's desire to give
$50,000,000 six-months' credits to
French purchasers for the purchase
of copper in the United States, and
whether this would be forbidden by
the Johnson Act.
Carbon copy of this memo
in Kennedy folder-
PSF Chance
THE WHITE HOUSE
WASHINGTON
not
GONF IDENT TAL
July 28, 1939.
MEMORANDUM FOR
AMBASSADOR BULLITT
AMBASSADOR KENNEDY
I have been asked if there is
any objection to private purchasing
agencies being set up in this country
by certain European powers, in order
to centralize purchases of various
kinds which they may wish to make
over here. It seems to me that we
should remember that these nations
and the United States are at peace
with the world, and that there can
be no objection to the setting up
of such purchasing agencies pro-
vided (a) their operations do not
violate the Johnson Act, and (b)
that in the event they become in-
volved in war, their operations
will not violate Section #1 of
the Neutrality Law, commonly re-
ferred to as the Embargo Clause.
F. D. R.
fith
THE WHITE HOUSE
CONFIDENTIAL
Honorable Wil
Am
BY POUCH
PSF: Bullitt
THE WHITE HOUSE
WASHINGTON
August 3, 1939.
MEMORANDUM FOR
AMBASSADOR BULLITT
Dear Bill:-
Here is the latest from
the State Department in regard to
your letter of July thirteenth.
As ever,
(Enclosure)
lbs OFFICIAL COMMUNICATIONS TO
PSF:France
THE SECRETARY OF STATE
WASHINGTON, D.C.
fill mal
mal
Bullitt
DEPARTMENT OF STATE
WASHINGTON
July 31, 1939
My dear Mr. President:
Before he left on his vacation the Secretary handed
me the private and confidential memorandum dated July 26
which you had sent him enclosing & letter written to you
on July 13 by Bill Bullitt.
The Secretary also gave me a confidential memoran-
dum addressed to him by the Legal Adviser of this Depart-
ment covering the points raised in Bullitt's letter. I
am enclosing herewith a copy of that opinion for your
information.
Believe me
A Mulls
Enclosures:
From Ambassador Bullitt,
July 13, 1939;
Memorandum, July 29, 1939.
The President,
The White House.
COPY
DEPARTMENT OF STATE
The Legal Adviser
CONFIDENTIN
July 29, 1939
The Secretary:
I have talked further with Mr. Bell, Assistant
Solicitor General, regarding the establishment of a credit
for the French Government for use in the purchase of copper.
He is definitely of the opinion that the establishment of
& six months credit by an American bank in favor of the
French Government or the establisiment of such & credit
in favor of a French bank which in turn would make funds
available to the French Government, would be in contraven-
tion of the Johnson Act.
He calls attention to the opinion of the Attorney
General dated May 5, 1934 (37 Opinions, 505) wherein the
view was expressed that the act was designed primarily
to prevent further sales in the United States of foreign
bonds, securities and other obligations such as those
which had been sold to the American public to raise money
for the use of foreign governments issuing them, and was
not intended to apply to an exchange of "foreign currency,
postal money orders, drafts, checks and other ordinary
aids to banking and connercial transactions, which are
'obligations' in a broad sense but not in the sense
intended." (Ibid. 512.) The Attorney General stated
in his opinion that it was obviously not the purpose of
Congress
-2-
Congress "to discontinue all commercial relations with
the defaulting countries".
One of the specific questions placed before the
Attorney General was whether the act was intended to apply
to acceptance or time drafts. This, the Attorney General
stated, had been answered in the statement just quoted.
He went further and said that "such transactions must be
conducted in good faith, in order to be within the law,
and not as mere subterfuges to circumvent its purpose."
(Ib1d. 513.)
Mr. Bell called attention to this last statement and
was of the opinion that a credit of the character indicated
above would hardly be regarded as an ordinary commercial
transaction but would more likely be considered as a sub-
terfuge in contravention of the act prohibiting "any loan".
He thought that astute lawyers should be able to find
means for accomplishing the purposes here in question in a
manner which would be entirely within the scope of the
Attorney General's opinion. He felt that the better pro-
cedure would be to call attention to the opinion and sug-
gest that an endeavor be made to keep within its purview.
Green H. Hackworth.
Bullitt
THE WHITE HOUSE
WASHINGTON
August 4, 1939.
MEMORANDUM FOR
AMBASSADOR BULLITT
FOR YOUR INFORMATION AND
RETURN.
F. D. R.
Enclosure - Letter, dated May 9,
1939, addressed to the President
from Ambassador Bullitt, enclosing
a memorandum prepared by a French
banker friend of Daladier. This
was sent to Feis for comment,
also Henry Morgenthau and Lauchlin
Currie. The entire file is sent
today to Mr. Bullitt.
THE WHITE HOUSE
WASHINGTON
file
August 4, 1939.
MEMORANDUM FOR
AMBASSADOR BULLITT
FOR YOUR INFORMATION AND
RETURN.
F. D. R.
Dear Miss Lettans:
may thanks
C.O.
[Carmel offie, Secy]
towe
THE WHITE HOUSE
WASHINGTON
August 3, 1939.
MEMORANDUM FOR THE PRESIDENT:
Re: file on memoranda submitted by Mr. Bullitt.
I concur with Secretary Morgenthau that "the
idea incorporated in the memorandum has little merit
under present circumstances and is not worthy of
further consideration at this time", and with Mr.
Feis that "it would not seem warrented to have a
special foreign mission visit this country to discuss
the suggestions."
Two fatal objections are suggested:
(1) If we prevented gold inflows by accumu-
lating balances of francs or sterling we would
be in a position of financing a flight of capital
from Europe. The political dangers are obvious.
(2) Large foreign loans appear to be politi-
cally impractical at this time and, in any case,
if made to finance additional exports, would not
redistribute any gold.
Mr. Bullitt's own suggestion, to the effect that
in accumulating reserves of war material, we lay
special emphasis on rare rew materials which the Germans,
Italians and Japanese need desperately for war purposes,
should, I think, be carefully explored.
Mr. Bullitt requests & reply in the near future.
Laucht am
Lauchlin Currie
THE WHITE HOUSE
WASHINGTON
August 1, 1939.
MEMORANDUM FOR
HON. LAUCHLIN CURRIE
ADMINISTRATIVE ASSISTANT TO THE PRESIDENT
Will you read the enclosed
and let me have your comment?
F. D. R.
Bullitt
THE SECRETARY OF THE TREASURY
WASHINGTON
July 28, 1939
MEMORANDUM TO THE PRESIDENT
Subject: Comment on Plan Submitted to You by Mr. Bullitt, Entitled
"A New Defensive and Offensive Method for Liberal Nations"
The greater part of the memorandum is identical with a memo-
randum handed to you last March by Monick, which I discussed with
you at that time. This memorandum differs from the earlier one only
in emphasis, but the change of emphasis is significant. Whereas the
former memorandum had some specific recommendations with respect to
the nature of international cooperation the present memorandum is
much vaguer and asks questions rather than gives specific recommenda-
tions.
The proposals contained in this memorandum are in essence varia-
tions of the Van Zeeland proposals which caused so much international
comment a year ago. Though apparently reciprocal in nature, the pro-
posals are under present circumstances actually a plan under which
the United States would be called on to give most if not all of finan-
cial aid to foreign countries.
Most of the report is taken up with a discussion of the gold
problem in order to prove that gold is superabundant and that it is
in the interests of the United States to employ that gold for eco-
nomic assistance abroad. Specific details are absent in the report
and it appears to be designed as a trial balloon for the purpose of
ascertaining your attitude towards a program of economic assistance
to foreign countries.
In our opinion the idea incorporated in the memorandum has little
merit under present circumstances and is not worthy of further con-
sideration at this time.
The memorandum is the same as the earlier one in its advocacy
of the following:
(1) An extension of the Tripartite Accord arrangement
to prevent the loss of gold by the capital losing countries
and the weakening of their currencies. Capital gaining
countries should invest in the currencies of the capital
losing countries to an amount necessary to maintain stability
- 2 -
of the currency; the capital losing country to set aside a
gold reserve of 25 percent of the amount of its currency ac-
quired by the capital gaining country as reserve against ex-
change loss.
(2) The employment of gold for the purpose of building
up stocks of war materials. It appears that the plan envisages
the accumulation of war stocks to be purchased chiefly with
United States money such war stocks to be sold to France
and England if, when, and as they wanted them.
(3) Economic assistance to foreign countries in the form
of "gold loans" and cooperation with foreign countries in the
establishment and management of international corporations for
the economic development of backward regions of the world.
The latter proposal is only vaguely suggested in this memorandum,
although given in some detail in the memorandum of last March.
(4) Gold is superabundant and should be employed for
the purpose of international economic cooperation instead of
being permitted to pile up as an unnecessary reserve.
Comment
(1) The proposal for an extension of monetary cooperation to
support currencies is not in accordance with our monetary policy.
The chief result of the plan would be to permit capital outflows
to take place without the restraining effect of loss of gold and
weakening of its currencies of the capital losing countries. We do
not consider it advisable to promote any policy which would facili-
tate the outflow of capital from foreign countries that need their
capital and gold at home to the United States which has a plethora
of both. Were the United States to be committed to invest in the
currencies of foreign countries in order to prevent them from weak-
ening while no effective steps were taken to prevent capital outflows
from those countries, we might easily find ourselves in the position
of financing a flight of capital from Europe.
(2) The proposal for accumulating strategic raw materials has
some merit but we have nothing to gain from international action of
the type indicated. Congress has just passed a bill appropriating
$100 million for the purpose. The international cooperation proposed
would entail additional investment and risk without compensatory
benefits other than those that may flow indirectly from assisting
France and England.
- 3 -
The chief merit of this part of the plan is presumed to be the
redistribution of our gold for the benefit of raw material producing
countries. Actually the extent of the redistribution of gold would
be slight relative to our total gold holdings. Furthermore, it is
doubtful if the gold that would be exported from the United States
would go to those countries which are in the greatest need of addi-
tional gold. The bulk of the raw materials would be purchased from
countries in the British, French or Dutch Empires which do not hold
gold but keep their foreign exchange assets in the form of sterling
or in francs. If gold were to be redistributed it would finally go
to the other countries which have relatively large gold reserves,
i.e., England, France and the Netherlands.
(3) Any economic assistance which the United States may wish
to render to foreign countries can be done by us in the manner in
which we wish and for the countries we select without sharing the
control with other foreign countries and without involving ourselves
in the entanglements of international joint economic action.
(4) The discussion of the superabundance of gold and the pro-
posals for redistribution of gold are based upon a misunderstanding
of the role of gold in our monetary system. Although the total gold
stock in the United States is $16 billion, the only "free" gold in
the Treasury is the gold in the Stabilization Fund and about $500 mil-
lion in the General Fund. The remainder of the gold represents specie
backing of our monetary system.
The proponents of the plan appear to be under the illusion that
there are no dollar liabilities outstanding against the $131 billion
of the $16 billion gold stock of the Treasury. The gold certificate
liabilities outstanding against the gold could be withdrawn from the
Federal Reserve banks but only if we substituted other cash. To ob-
tain this cash Congress would have to appropriate funds which would,
of course, increase the outstanding debt of the government unless
Congress provided for the issuance of fiat currency as the medium with
which to release the gold certificates.
Moreover, even were Congress to make a large appropriation to
be used for loans to or investments in foreign countries it would be
very doubtful whether such loans would be made without the require-
ment that the funds be spent in the United States. To the extent
that this was required no gold would leave the country. Therefore,
if the objective of the loan were the redistribution of gold it
would fail in achieving its objective. We would be left with almost
as much gold and in the long run possibly more.
DEPARTMENT OF STATE
WASHINGTON
May 24, 1939.
My dear Mr. President:
In accordance with your instruction, I transmit
a memorandum giving the main elements in the docu-
ments transmitted by Ambassador Bullitt, an expression
of judgment upon the most important of the sugges-
tions made.
Faithfully yours,
Herbert Feio
Enclosures:
Memoranda.
The President,
The White House.
Department of State
BUREAU
EA
DIVISION
ENCLOSURE
TO
Letter drafted
ADDRESSED TO
THE PRESIDENT.
1. a. - PRINTING -
1-1083
DEPARTMENT OF STATE
ADVISER ON
INTERNATIONAL ECONOMIC AFFAIRS
May 23, 1939.
Mr. Secretary:
Some days ago the President
transmitted to me the attached
memorandum requesting me to
digest certain material and give
comment upon it.
I have prepared the attached
memorandum in response. Would
you authorize its transmission?
Herbert reis
EA:HF:EB
ok
CH
STRICTLY CONFIDENTIAL
DEPARTMENT OF STATE
ADVISER ON
INTERNATIONAL ECONOMIC AFFAIRS
May 22, 1939.
The two memoranda forwarded by Ambassador Bullitt,
though somewhat cloudy and impracticable, contain sugges-
tions of possible genuine importance.
Summary of Proposals
Briefly summarized, the general memorandum argues:
(1) The quantity of gold already in existence is
superabundant.
(2) A very large part of it is in the possession
or under the control of the American, British and French
Governments.
(3) Gold no longer serves some of the purposes
which it used to in the past, and there is some, even
though only slight, danger that it may lose its future
value as a medium of payments between nations.
[These estimations are correct.]
(4) It is to the interest of all three countries,
and might produce great benefits, to defend the place
and uses of gold, and put it to work.
(5)
- 2 -
(5) Monetary authorities should perform their
regulatory functions by joining in a concerted credit
policy, a new coordinating policy for utilization of
gold, having three principal features;
(a) there should be a coordinated policy
for using gold in relation to raw materials, and
some of the gold should be used for the acquisi-
tion of reserve stocks of raw materials having
the permanent character of a war treasury;
(b) there should be a coordinated policy
for the equalization of capital movements by a
mechanism for stimulating rather than restricting
economic action;
(c) there should be coordinated policy in
utilizing gold for great international financial
operations by loans or guarantees.
The second memorandum is a first-draft sketch of
an organism for technical coordination between the three
countries by a Coordinating Committee, having essentially
an advisory role, working with which each country could
have a "National Company for raw materials". The
Coordinating
- 3 -
Coordinating Committee would also concern itself with
points (b) and (c) above.
Comment
A.
Use of gold for the acquisition of reserve stocks
of materials would serve many uses, including the stim-
ulation of economic activity in raw material producing
areas. I definitely am of the opinion that the carry-
ing out of some such policy by the United States within
modest limits would be sound policy. The suggested
machinery for cooperation among three National Companies,
with provision for coordinated action among them, ear-
marking stocks, et cetera, may be rather visionary.
In connection with this point A, Mr. Bullitt in
his covering memorandum wrote out an additional sugges-
tion, namely, that some of the raw material purchases
might be of commodities of limited supply of which the
German, Italian and Japanese Governments might have
critical need (this idea of course could be considered
independently of international cooperation).
B.
I doubt whether anything of immediate utility is
contained
- 4 -
contained in the suggestion for machinery for further
close coordination of the monetary policies to offset
capital movements when such action seemed desirable.
The most specific suggestion made (and one that might
in some future circumstances well deserve consideration)
is as follows:
Under the gold practices of the members of the Tri-
partite Agreement they do not hold each other's currencies
but immediately convert their purchases of each other's
currencies into gold. This means gold movement to the
full extent of capital movements even though such capital
movements are of an exceptional nature, and the results
of the gold movement might be undesirable. The mem-
orandum suggests that the members of the Agreement might
be willing to hold each other's currencies if given
the security of a gold deposit of 25 or 50 percent.
It is probable that the Treasury has already given
consideration to some such idea.
C.
The possible extension of gold loans.
Such loans could undoubtedly serve many useful
purposes and in my opinion there are various possible
loan
- 5 -
loan undertakings of this type that might be considered.
The prospective transaction with the Brazilian Government
is a good illustration. However, it is highly advisable
that careful thought be given to each such transaction
because of
(a) The importance of not losing the
investment, or in other words, the importance
of the United States not repeating its experience
during the decades of the twenties; and
(b) The importance of ensuring a good
prospect that the loan would lead to the actual
development of new economic capacity on the part
of the borrower and increased power to make payment
over the foreign exchanges. Loan transactions
that did not meet these tests would in the end
only create new difficulties.
In that connection particular attention
might be given to the possibility of loans for
the development of resources that we might need
in the future as reserve stocks - payment arrange-
ments being made in terms of deliveries of
materials.
General
- 6 -
General Comment
My judgment is that it would not seem warranted to
have a special French mission visit this country to dis-
cuss the preceding suggestions. The use of some gold
to purchase raw materials could presumably be decided
independently by each Government. The same is true of
operations; there may be situations in which joint action
is feasible and desirable. The possibilities in the
monetary field could be explored by the Treasury through
its usual channels; for the purposes of continued ex-
ploration, copies of this and similar memoranda might
be sent to the Ambassador as a basis for further
discussion.
Paris, May 9, 1939.
PERSONAL AND
Dear Mr. President:
I enclose herewith a memorandum prepared by a
French banker who is a close friend of Daladier's.
Some weeks ago Daladier was on the point of sending
this gentleman immediately to America to discuss
verbally the subject of the memorandum. I expressed
the opinion to Daladier that nothing could be sillier
than to send a man to America to discuss this subject,
until it was at least known that the American Govern-
ment might be interested in hearing his views, and
suggested that they should be submitted to me in
written form. The enclosed is the result.
Please understand that this is not an official
communication from the French Government and is not
submitted as even a semi-official communication.
Daladier was taken by the idea, and I merely pre-
vented a useless voyage to America.
I
The Honorable
Franklin D. Roosevelt,
President of the United States of America,
Washington, D. C.
- 2 -
I fear you may not have time to read the memo-
randum. If you should have time to read it, you would
be interested. You would also, I am sure, immediately
make the same objections to the specific proposals
that I have already made in commenting on them.
Nevertheless, I believe that there is a large
germ of yeast in the dough. It may well be worth
while for us to exchange some of our gold for vital
raw materials. It may be even more worth while for
us to exchange some of our gold for rare raw materials,
the annual production of which is small, which the
Germans and Italians and Japanese need desperately
for war purposes.
To embargo exports is provocative, but no one
can object to purchases in the open market.
If you have time, read the memorandum yourself.
If you haven't enough time, turn it over to whatever
member of the Administration has been studying this
matter and ask him to report to you personally. I
happen to know that Herbert Feis in the Department
of State has done considerable thinking along these
lines.
In any event, please let me have a word in the
near future to pass along to Daladier and the author
of the memorandum, who insists on remaining
Mr. Anonymous. Between ourselves, his name is
Monsieur
- 3 -
Monsieur André Istel and Daladier has the greatest
possible confidence in him.
If you should feel that the proposals in the
memorandum are worth discussing and should so inform
me, Daladier would at once ask Paul Reynaud to send
someone to discuss the matter with you or anyone you
might designate.
Yours affectionately,
Bill
Enclosure:
Memorandum.
Memorandum No. 1
April 26, 1939
A NEW DEFENSIVE AND OFFENSIVE
METHOD FOR
LIBERAL NATIONS
Project for the extension of the Tripartite Agreement.
Summary
PREAMBLE
THE GOLD PROBLEM
I - Functions of gold.
II - Gold is not, as is believed, security
for currency.
III - Gold as war treasure.
IV - Gold is superabundant.
V - The dangerous paradoxes of gold.
VI - The mechanism of the bad distribution of gold.
VII - The Midas danger.
VIII - Should it have been said?
IX - Gold ought to be defended.
THE NEW STATUS OF GOLD.
THE NEW GOLD MINE AND THE NEW USES OF GOLD.
A) Gold and raw materials.
B) Gold and the exchange equalization funds.
C) Utilization of gold for the solution of
great economic problems.
CONCLUSION.
- 2 -
PREAMBLE
The countries of the Tripartite Agreement have
a monopoly of gold, a monopoly of credit, and a mono-
poly of financial power. Shall they have achieved
this monopoly of riches only to sterilize it? Shall
they leave to coming generations the stupefaction of
comparing the immensity of their resources with the
extensiveness of their defeat?
o
The economic system of liberal nations rests
upon confidence and the spirit of enterprise; inter-
national tension, sustained by the totalitarian coun-
tries, consequently impairs directly the very function-
ing of this system. It saps confidence, destroys the
spirit of enterprise, restricts credit, threatens cur-
rency, and ruins finances.
The autarchies themselves have adopted their
economic régime to the menace of war. The problem is
to ascertain whether the liberal nations must remain
economically at the mercy of the dictatorships, pro-
viding them in some way with a premium on threatening
war through the enfeeblement which this threat alone
suffices
- 3 -
suffices to provoke, - or whether they possess the
means, by putting into action their economic power,
for increasing their capacity for general resistance
and at the same time reestablishing their menaced
prosperity.
o
For the common problems of liberal nations there
is no separate solution. The so-called success of a
rearmament policy, pursued within a closed economy,
has sufficiently revealed today its secret: it is
nothing else than the progressive lowering of the stan-
dard of living of the nation.
o
Are the liberal nations really faced with this
dilemma: either to accept their decadence or adopt
the methods of autarchy, that is to say, renounce their
liberties in order to defend them? Are they incapable
of replying to the dictatorships' régime of misery with
an offensive of prosperity? If certain nations persist,
in order to pursue other ends, in denying themselves
prosperity, the great nations ought to take the initiative
of reestablishing it without them. For prosperity is
contagious
- 4 -
contagious; it could draw in first the hesitating nations
and perhaps afterwards the recalcitrant nations.
The weapon for this offensive of prosperity exists;
but it has remained hooked on to a panoply: which is
gold.
o
o
O
THE PROBLEM OF GOLD
I
FUNCTIONS OF GOLD
Before the War, besides its industrial uses, gold
filled a quadruple rôle:
a) an instrument for settling the balance of
payments between nations,
b) circulation directly in coins,
c) security for monetary circulation,
d) war treasure.
o
Today:
The first function remains.
The second has disappeared.
The
- 5 -
The third belongs to an erroneous conception.
The fourth is in danger.
O
o
o
II
GOLD IS NOT, AS IS BELIEVED, THE SECURITY OF CURRENCY
It is not the prerogative of the heads of the
III Reich to have exposed the inaccuracy of concep-
tions relating to the gold coverage of currency.
Since before the War certain economists have
understood that the value of a currency derives from
its limitation, its legal tender, and the equilibrium
of the balance of payments, the metallic "security"
being superfluous. Thus it is that they had observed
that the Hindu rupee had constantly on the money markets
a value much greater than its metallic parity from the
fact that India had a favorable balance of payments and
the free coinage of silver was forbidden.
In a contrary sense, the fact that the German
mark had several times after the War during the period
of inflation a gold coverage of 100% did not prevent
its
- 6 -
its fall.
o
Moreover, - to make use of a reductio ad absurdum, -
it is sufficient to imagine a country where there existed
only a thousand bank notes which were legal tender; these
bank notes would be fought over and thus acquire, re-
gardless of any metallic "security", considerable value.
o
The reason why it has been possible to establish
the belief that gold was the true "security" of currency
is that during certain periods of bad financial adminis-
tration gold exports were able to maintain foreign ex-
change until a return to a more prudent financial policy.
But indeed it was only a question in those cases of the
maintenance of convertibility, a function which gold
deservedly retains as an instrument for the settlement
of the balance of payments.
It is precisely when this convertibility is main-
tained at artificial rates, as has been done at times,
that the error of the conception of gold as security for
currency is clearly apparent, because experience has
shown that the largest gold reserves cannot prevent
monetary adjustment.
o
If
- 7 -
If gold is not a security of currency, how does it
happen, it will be said, that every time that a country
has abandoned gold, its currency has depreciated? The
reason is quite simple: the currency did not depreciate
because gold was abandoned, but gold was abandoned because
the currency depreciated.
o
It will be said that, even if you are right in
theory you are wrong in practice because account must
be taken of the psychology of the masses, and of their
need to know that currency is "secured" by gold in
order to have confidence in it. Is this well established?
When the pound sterling was attacked in January 1939,
British monetary authorities did not hesitate to trans-
fer about fifty billion gold francs from the bank of
England, where it served as "security" for the currency,
to the exchange equalization fund where it fulfilled its
true rôle of an instrument of external convertibility.
Far from sapping confidence this action reestablished
it at that time.
o
The true security of currency, is the limitation
of its issue, a skillful financial policy, that is to
say
- 8 -
say, in the last resort, the competence and the character
of those who are charged by the country to watch over it.
Certain countries have at times been less well stocked
in these assets than in gold.
o
o
o
III
GOLD AS WAR TREASURE
In case of war gold loses a part of its value;
experience has shown that war generally raises the price
of commodities in relation to gold. At present gold
buys many commodities; in the event of war it would buy
less.
o
Gold is nevertheless a war treasure because it is
a means of obtaining at will the commodities necessary
to the country, particularly imported raw materials.
But who can be sure that at the outbreak of a conflict
lines of communication will be free enough for it to be
possible to exchange gold against necessary products?
In any case it is not with gold, but with the required
supplies
- 9 -
supplies accumulated in advance, that a peace economy
can be instantly transformed into a war economy.
The danger is even more serious.
Who can predict, now when certain countries are
already gorged with gold, - the attitude in case of
war of revictualling countries inundated with gold
under the double effect of an afflux of capital and the
massive purchases of belligerents? Shouldn't it be
recalled as a warning that Sweden and Spain ceased to
accept gold at the end of the Great War?
O
o
o
IV
GOLD IS SUPERABUNDANT
Gold, which formerly circulated in coins, is today
concentrated in the banks of issue: 95% of its annual
production is devoted to monetary uses, and 5% only to
industrial uses.
o
While
- 10 -
While international commerce today is inferior in
terms of dollars to international commerce before the
War, world gold stocks are double in weight and more
than triple in dollar value than stocks of gold before
the War, even including in the latter the gold coins
circulating at that time.
o
Gold is thus superabundant, since:
1) There is three times as much, in dollar value,
as before the War.
2) It has lost two of its four functions.
o
o
V
THE DANGEROUS PARADOXES OF GOLD
Strange paradox:- in spite of its superabundance
gold possess today a purchasing power superior to that
which it had before the War. The reasons for this
anomaly, viz.- incidence of economic crises, devalua-
tions, fears of war, etc., can be contradicted. But
the fact remains that a certain weight of gold buys
today
- 11 -
today a much larger quantity of commodities than
the same weight did in 1914.
May this unstable equilibrium not collapse one
day and perhaps violently?
o
In spite of its superabundance never has such an
effort been made to produce gold. Production of gold
mines considerably exceeds a billion dollars a year.
Producing a metal which is transferred from a hole dug
in South Africa to another hole dug in North America
is a heavy annual burden. At present humanity has a
predilection for two methods of wasting its efforts.
One is the armaments race: it is tragic. The other
is the gold race: it is comic.
o
o
VI
THE MECHANISM OF THE BAD DISTRIBUTION OF GOLD
Gold in the world as a whole is a superabundant
metal. Nevertheless in most nations it is totally
lacking.
More
- 12 -
More than one half of the world's stock of gold
is concentrated in a single country (United States);
more than three-fourths in three countries (United States,
Great Britain, France); nearly seven-eighths in the six
countries of the Tripartite Agreement (United States,
Great Britain, France, Switzerland, Holland, Belgium).
O
This concentration of gold has recently been again
accentuated.
Before the War the well known reactions of the
international financial mechanism tended to reestablish
the distribution of gold when a fortuitous cause dis-
turbed it. It was a phenomenon analogous to "stable
equilibrium" in mechanics.
Today, on the contrary, when 8 country loses gold
this loss instead of releasing offsetting forces,
causes psychological reactions which accelerate the
flight of gold. The mere fact that gold moves toward
a country augments the forces that draw it in that
direction. It is a phenomenon analogous to "unstable
equilibrium" in mechanics.
o
The
- 13 -
The concentration of gold in the countries of the
Tripartite Agreement, and particularly in the United
States, is an anomaly for an international currency.
More than that it is a danger to the countries holding
gold.
o
o
o
VII
THE MIDAS DANGER
The holders of gold, whether states or individuals,
believe that in possessing gold they are hoarding an in-
tangible value, independent of monetary fluctuations.
That is an error. The United States is now the only
large country buying gold at a fixed price. Gold today
is scarcely more than 8 means of obtaining dollars.
Moreover, it is perhaps not as sure a means as
is thought, because the United States is attached to gold
only on the basis of a decision revocable in twenty-four
hours.
Who can predict, if the flow of gold toward the
United States continues, that the United States will not
modify
- 14 -
modify its monetary policy, or that it will always be
agreeable to surrendering freely its commodities against
this metal of which it no longer has any use; or that
it will always accord the same treatment to the gold of
hoarders as to that of banks of issue?
Some countries are learning to do without gold. If
this movement were to grow, - and why should it not grow,
since the concentration of gold is increasing, - gold
would become more and more abundant elsewhere. It would
not escape the law common to every commodity, which is
ultimately to debase itself in these circumstances.
For intangible value does not exist. It is a wide-
spread, but none the less certain, error to think that
value may be put away in cold storage like food. All
value is subjective; it depends on needs, the times,
customs, available resources, traditions, in a word,
on all kinds of psychological elements. The value which
men attach to gold does not escape this rule, which
governs all human affinities.
o
Gold, it will be said, has perhaps lost certain of
its traditional rôles; but has it not acquired a new
rôle? Has it not become a refuge for which all the
world
- 15 -
world is seeking in the troubled times through which we
are passing? If there is any paradox, is it not rather
to insist upon the dangers which gold runs at a moment
when it is more in demand than ever?
However, this particular rôle of gold as a refuge
renders it perhaps even more fragile. Could not this
immense demand of hoarders transform itself someday into
supply?
What are the hoarders really seeking? An insurance
policy. And what would this policy be worth if the
United States did not consider itself bound to pay the
holder the amount inscribed on the policy?
o
o
o
VIII
SHOULD IT HAVE BEEN SAID?
Will it be said that it were better not to call
attention to the danger which threatens gold, that
gold has a mystical quality which must not be impaired,
that while perhaps only a superstition, it is a super-
stition which prevails and which must not be touched?
Will
- 16 -
Will it be said that good citizens of countries
holding gold ought to refrain from proclaiming the
precarious value of the metal which their countries
possess? Will it be said that it is rendering a bad
service to those countries, even to mention the possibility
of gold being refused in certain circumstances?
Will it be said that impairing the "mystic" of the
precious metal is playing the game of autarchic nations,
deprived of gold, against the liberal nations gorged with
gold?
o
Whether or not deplorable, the "mystic" of gold is
in evolution under our eyes. In less than one genera-
tion gold has disappeared from circulation. It has been
sterilized by the great nations as a cumbersome metal.
The bond which united it with currencies has been con-
sidered as enslaving, and has been repudiated by all
the large countries with a single exception. Finally,
gold has been publicly denounced by Germany as super-
fluous even. In such conditions how can it be held that
public opinion has not begun to revise its notions of
gold?
The dogma of gold has lost its character of in-
tangibility
- 17 -
tangibility. The metal is always being hoarded; in the
most remote corners of Europe and Asia the peasant re-
tains hidden gold, but in many other quarters there is
not the profound and traditional affinity for it as
formerly. It is a fever which pushes the public from
gold rushes into gold scares.
The prosperity of liberal nations depends directly
on the push of buyers toward commodities, that is to
say, on a lesser attraction of gold. Hoarding means
for liberal economies slackening of production, diminu-
tion of national revenue, a heavier tax burden, crises.
On the contrary, "de-hoarding" means for liberal econo-
mies acceleration of production, increase of national
revenue, alleviation of the tax burden, prosperity.
In the case of a decline of the purchasing power of
gold, the loss suffered by liberal nations upon the
transformation of their gold into commodities is
negligible compared with the increase of power and
well-being which the resultant recovery of economic
activity and increase of markets signify for these
countries.
o
o
IX
- 18 -
IX
GOLD OUGHT TO BE DEFENDED
The gold question has presented itself. The error
would be to treat gold like those sacred temples which
it is forbidden to touch, even to repair them. Thus do
they surely fall to pieces. Gold will preserve its mone-
tary functions only through a conscious and voluntary
adhesion of the nations determined to defend it.
o
Gold is worth defending. If it has lost some of
its functions, those which it has retained have taken
on an importance unsuspected until our time. Gold
predominates in the pacific settlement of commercial
relations between nations. It is the bond between
liberal economies, the antidote against exaggerated
nationalisms. That which has long been considered as
the symbol of materialism has today become one of the
symbols of liberty.
o
Gold can be defended. The nations adhering to
the Tripartite Agreement have now the control of gold.
They
- 19 -
They can, if they finally decide upon a policy of con-
certed initiative, maintain its use and restore to it
a rôle in the world more prolific than before.
At the moment when silver was in peril, the Latin
Union was created. At the moment when the yellow
metal is in danger, the Gold Union must be created.
o
The new position which gold ought to occupy in the
world is already indicated.
Gold is no longer the security of currencies. It
is a currency, the dollar, which has become the security
of gold. As gold now only serves for the settlement of
the balance of payments between nations, it has become
superabundant. Henceforth all the immense surplus of
unutilized gold is available for a fruitful work. The
world is vainly seeking an international fiduciary
currency to recreate prosperity. This currency exists.
We have the good fortune of finding it all ready and
already universally accepted in the form of yellow
metal. The international currency of tomorrow is gold.
o
The
- 20 -
THE NEW STATUS OF GOLD
Gold should have a new status. It is not 8. ques-
tion of reverting purely and simply to the former gold
standard, and particularly of trying to compel the economy
of large countries to suffer variations in interest rates
solely intended to correct international movements of
capital. The United States and Great Britain gave that
up definitely several years ago.
o
The burden of maintaining the value of gold can
not be left entirely to one country. The nations which
profit from the present functions of gold ought to as-
sume their part of the corresponding burdens.
o
Gold has become in fact an international fiduciary
currency. Banks of issue thus posses a power greater
than they dare to admit if they wish to coordinate their
action. They have then a duty to perform their regula-
tory functions by joining to a concerted credit policy,
a new coordinating policy for utilization of gold.
In these conditions, every new variation of the
great major currencies in relation to gold becomes
useless
- 21 -
useless, inasmuch as it is as efficacious and less dan-
gerous to cause gold to vary in relation to commodities
than to cause currencies to vary in relation to gold.
On the other hand, the sentiment, so deeply rooted in
Great Britain, of the danger of a legal tie between
sterling and gold no longer has the same justification
from the moment that the purchasing power of gold, like
that of sterling today, depends upon the policy of banks
of issue.
o
O
o
THE NEW GOLD MINE AND THE NEW USES OF GOLD
As gold is no longer the security of currencies
it becomes available for other uses. The world has in
fact discovered a new gold mine. It is a question of
ascertaining to what new uses this surplus of gold can
be put.
Without pretending to enumerate them all, we will
indicate those which can immediately have an objective
which is practical and easily attained.
O
A)
- 22 -
A) GOLD AND RAW MATERIALS.
War treasure constituted exclusively of gold re-
veals some difficulties and insufficiencies. It is al-
most inconceivable, especially after the experiences of
the last war, to fail still to comprehend the danger of
keeping this vital reserve in a single substance, without
any division of risks.
What is indeed the purpose of this reserve, whether
in peace or in war? It is the possibility of transferring
it at will into commodities necessary to the country, es-
pecially imported raw materials. The least risk is then
run in having this reserve from now on constituted partly
in raw materials which are not produced within the coun-
try; especially as experience has shown that these mate-
rials always become more expensive in relation to gold
in times of war.
o
Contrary to the case of stocks temporarily consti-
tuted for purposes of controlling prices, these stocks
of the state would not subsequently affect the market
since they would have the permanent character of a war
treasure.
o
The
- 23 -
The perishable character of some raw materials
creates of course a practical difficulty; but their
stock could be constantly renewed, the materials in
storage being gradually utilized for consumption, and
replaced correspondingly by new purchases.
o
Such a coordinated policy would provide a power-
ful economic starter by reason of the supplementary
activity which would result during the period of crea-
tion of these stocks.
o
Such a policy would at the same time favor the
redistribution of gold in the world, would increase
the purchasing power of regions producing raw materials,
and would improve the markets of industrial regions.
o
The creation of these stocks of raw materials can
contribute to trensfer the problem of raw materials from
the plane of considerations of territory and prestige,
which can only lead to war, to the plane of economics
and finance, which is that conducive to organizing peace.
O
Remark
- 24 -
Remark on the tie between gold and raw materials.
Although the price of each raw material depends
upon particular conditions, the problem of the general
price level of raw materials is intimately connected with
the problem of gold for the following reason:
While every variation in the value of an article,
such as copper for example, is normally expressed by a
variation of its price in dollars, a variation in the
value of gold, from the fact that it is tied to the
dollar, can only be expressed by a movement of the price
of commodities in the opposite direction. But this pro-
position is valid only to the degree to which the prices
of these commodities are actually governed by the law
of supply and demand: now, a large number of prices
are thus governed only partially, since they are fixed
either by tradition or contract. Only the prices of
raw materials quoted for delayed payment on the great
international markets can fluctuate freely and lead to
a fluctuation of the value of gold in an opposite direc-
tion. These fluctuations of raw materials have reper-
cussions, with delaying and weakening modifications,
successively on wholesale prices, retail prices, and
the cost of living.
It is from the inequality of these several reper-
cussions, and the resulting modification of the
purchasing
- 25 -
purchasing power of the several countries as well as
of the several (social) classes in each country that
there derives the redoubtable character of every im-
portant fluctuation of the value of gold and the con-
comitant fluctuation in a contrary direction of raw
materials.
It is from this that there derives the profound
necessity for economic regulation, and that is why
this regulation is presented under the double aspect
of monetary regulation and regulation of the prices
of raw materials.
o
o
o
B) GOLD AND THE EXCHANGE EQUALIZATION FUNDS
The new Tripartite Agreement should, in the
interest of all its adhering countries, provide for
the equalization of capital movements.
This equalization is generally conceived of under
the form, both harmful and inefficient, of national
monetary restrictions; it could, on the contrary, be
both beneficial and efficient under the form of inter-
national monetary cooperation.
The
- 26 -
The mechanism of this equalization should be in-
spired with the great principle of economic action
"stimulate rather than restrict"; the authors of the
present memorandum have established a project therefor,
the aim of which is to assure:
a) offsets for certain capital movements;
b) neutralization of unfavorable effects of these
mo vements;
c) adoption of a coordinated policy of credit
expansion;
d) release of considerable amounts of gold which
should become available for active employment.
o
o
o
c) UTILIZATION OF GOLD FOR THE SOLUTION OF GREAT
ECONOMIC PROBLEMS.
The two uses of gold which we have just suggested, -
constitution of stocks of raw materials, and equaliza-
tion of capital movements, - do not solve the problem
of the utilization of the enormous stock of gold of the
United States.
With respect to the constitution of stocks of raw
materials, it indeed happens that the United States can
obtain
- 27 -
obtain on its domestic market, that is to say, without
gold, all the raw materials that it needs with the ex-
ception of rubber, tin, manganese and a few rare metals.
With respect to the equalization of capital move-
ments, public knowledge of a more efficient cooperation
between the exchange equalization funds would probably
of itself suffice to make the quantity of gold actually
utilized very slight.
o
It is therefore necessary to find another use for
American gold in the interest of the United States it-
self, because the risk of loss which the United States
runs is not at all imaginary. Of the approximately
fifteen billion dollars of gold possessed by the United
States, probably more than six billions come from the
acquisition by foreigners of American securities or
dollar accounts; in other words, foreigners have the
right to dispose of American commodities up to this
amount. What have they ven in exchange? Gold, for
which the United States now runs the risk of never
finding any utilization.
o
On
- 28 -
On the other hand, the entire world awaits the
fertilization which the gold now sterilized would bring
to it. At the moment when industrial Europe ought to
widen its access to raw materials, when the regions pro-
ducing raw materials ought to widen their access to
manufactured products, when Spain should be rehabilita-
ted, when the economies of Eastern Europe should find
a new base, when migrating peoples must receive shelter,
food and work, when all nations without exception ought
to be brought back little by little into the interna-
tional economic circle, we perceive the fundamental
rôle of great international financial operations which
are rendered possible by the new uses of gold. To
cite only one example; the problem of refugees, which
is at present an element of economic difficulty, could
thus become an element of economic recovery in the same
way that the emigrations of the beginning of the nine-
teenth century contributed to prosperity.
What form can this financing take? A guarantee
of the obligations issued by large private companies of
international investment? A guarantee of the great
international loans for equipment and plant construction -
with the security, if necessary, of raw materials fur-
nished by the borrowing countries? Operations intended to
help
- 29 -
help certain countries in the way of liberation of
exchange? A guarantee of obligations issued by the
great companies developing colonial territories and
by large companies for the settlement of the refugees?
It is upon the responsible authorities, when they shall
be deeply impregnated with the new monetary doctrine,
that the task will fall of determining the employment
of the gold extracted from the great mine which they
will have discovered.
o
o
o
CONCLUSION
It is the duty of the liberal nations to defend
their economic power menaced by the dictatorships and
to reconquer their compromised prosperity. They have
the ability to do it. Methods of production of wealth
have arrived at a stage where the achievement of general
prosperity presents only a problem of the technique of
distribution. It is a problem which modern civilization
has not yet succeeded in solving; on the contrary, the
efforts of governments seem rather to have been directed
toward
- 30 -
toward creating obstacles to the exchange of goods and
services. The triple utilization of the excess of gold
suggested in the present memorandum is a step toward the
solution of this great problem.
Memorandum No. 2
As a corollary to the exposition of doctrine of
Memorandum No. 1, the present first draft is submitted
in an entirely suggestive manner, as an example of a
supplement to the Tripartite Agreement.
In case of adhesion in principle to the doctrines
set forth in Memorandum No. 1, only an exchange of views
by competent negotiators designated by the governments
concerned would permit establishing the bases of a real
draft.
FIRST DRAFT OF A
SUPPLEMENT TO THE
TRIPARTITE AGREEMENT
CHAPTER I
Establishment of an Organism for Technical Co-
ordination between the Countries of the Tripartite
Agreement.
Article I
There is established between the countries party
to the present agreement an organism of coordination,
designated hereunder.
Article 2
The Coordinating Committee is composed of a
certain number of trustees, chosen by the governments
represented. The role of the trustees is essentially
an advisory role. They are empowered to make recommen-
dations to the several governments concerned. They are
-2-
empowered themselves to administer the assets which
may be entrusted to them.
CHAPTER II
Creation and Organization of National Companies
for Raw Materials in each country of the Tripartite
Agreement.
Argument:
The war treasure of a nation, which consists ex-
clusively of gold, reveals - as has been shown in Memo-
randum No. 1 - certain dangers and insufficiencies.
It would be to the interest of most of the
countries of the Tripartite Agreement to replace a
part of their gold stocks with stocks of raw materials.
Inasmuch as the acquisition and handling of these stocks
concern at the same time the bank of issue, the treasury,
and the consumer industries in each country, it would be
necessary to conciliate the multiple interests involved.
Article 1
A "National Company for raw materials" may be
created on the recommendation of the Coordinating Com-
mittee in each country of the Tripartite Agreement. This
creation is in no way intended to embrace a new regulation
of raw materials markets; the function of each National
Company would simply be to proceed to the purchase of raw
materials
-3-
materials relating to national or economic defense,
and to supervise the conservation and replenishing of
stocks thus constituted.
Article 2.
The National Company of a country could constitute
earmarked stocks in the name of companies of other
countries. In case of transfer of raw materials from
one company to another, payment for these stocks could
be effected either in cash or by installments. In the
case of payment by installments, the purchasing company
would, of course, have the disposal of the stocks thus
purchased only as and when payments were made, with a
margin of guarantee in favor of the company releasing
these stocks.
The organization of these companies would result
in:
a) A partial improvement in the distribution of
gold in the world.
b) A partial equalization of prices of raw
materials on the great international markets.
To give full scope to this equalization of prices,
it would be desirable for the Coordinating Committee to
intervene in order to coordinate, whenever necessary,
the action of the National Companies and to promote
their understanding with producer cartels.
CHAPTER III
-4-
CHAPTER III
Equalization of Movements of Capital and Coordi-
nation of Credit Policy between Participating Countries
Argument
Economic equilibrium has today been to a large
extent achieved by the currencies of the Tripartite
Agreement. The countries adhering to the Agreement
have renounced among one another all dumping economy,
all voluntary manipulation of their currencies, and all
monetary adjustments without prior consultation with the
other parties.
In consequence the profound causes for decline of
exchange between these countries appear today eliminated.
The monetary disturbances caused by violent movements of
capital can, however, still affect the equilibrium of
exchanges.
These movements of capital could be discouraged,
and moreover neutralized thanks to a new formula of co-
operation which would increase the means of action at
the disposal of the monetary authorities of the several
countries.
Article I. It is provided that:
a) When movements of capital are normal, or when,
even in the case of considerable amounts, they occur
between
-5-
between a country which is ready to lose gold and
countries interested in receiving it, the national
exchange equalization funds operate, as today, without
the intervention of the Coordinating Committee.
b) But there are the other cases in which capital
departs from countries which cannot be deprived of
their gold without serious difficulties. On the one
hand there is then produced in the country which is
losing gold either a decline in the value of the cur-
rency or a deflation phenomenon, both of which, in
consequence of the resultant pressure on prices, impair
the internal equilibrium of all countries with a liberal
economy. On the other hand there is produced a loss of
confidence which risks giving wider range to capital
movements and accelerating losses of gold.
In that case if the Coordinating Committee con-
siders that it is to the interest of the participating
countries to neutralize the departures of capital from
certain countries and to check the general phenomenon
of deflation which is thereby launched, it takes the
initiative of recommending an intervention which could
assume, for example, the following form:
In the case of an abnormal movement of capital
from Great Britain toward the United States, capable of
lowering sterling exchange appreciably, and consequently
causing ....
-6-
causing a decline of prices on the international
markets, the American exchange equalization fund
could, on the recommendation of the Coordinating Com-
mittee, proceed to purchase pounds sterling on the
money market without converting the pounds into gold.
The American equalization fund would be covered against
loss in exchange by a guarantee from the English equa-
lization fund, and would receive as security a deposit
of gold representing, for example, 20% to 50%, accord-
ing to the circumstances, of the purchases of pounds
effected. This margin of guarantee could be main-
tained by new deposits of gold in case of a decline
of English exchange. (The advantage of the principle
envisaged, the form of which could assume varying
technical aspects, would be to enable the English
equalization fund to avoid the loss of 20% to 50% of
its gold, which it would lose under the present system.)
The trustees of the Coordinating Committee would
have the fullest liberty of action to decide the moment
on and after which it would be best to recommend an
intervention of this kind. They would take into ac-
count in this connection the causes which determine
movements of capital, the weakening in gold of certain
exchange equalization funds, the situation of the
countries toward which capital was moving, et cetera.
Article 2
...
-7-
Article 2 - Offset of Movements of Capital
To explain the mechanism of the offset of
movements of capital we will continue the example
adopted above of the entry and departure of capital
between Great Britain and the United States.
When there is produced a reflux of capital from
the United States toward Great Britain, dollar offer-
ings are absorbed by the American equalization fund,
which re-sells the pounds sterling acquired.
If, - to continue the above example however in-
conceivable such a hypothesis may at present appear, -
the reflux of capital from the United States toward
Great Britain exceeded the amount of pounds sterling
held by the American equalization fund and subsequently
produced excessive departures of gold from the United
States toward Europe, - like those of 1932, for ex-
ample, - the Coordinating Committee could recommend
that the English equalization fund keep in its turn
the dollars offered by means of a guarantee of the
American equalization fund and a gold deposit.
Article 3 - Administration of Foreign Exchange held
by the Equalization Funds
The equalization funds will administer the
foreign exchange which they will have acquired. On
the recommendation of the Coordinating Committee they
may use this foreign exchange to the benefit of the
money ...
-8-
money market of the country of origin to the degree
that the Committee considers useful.
The administration of this foreign exchange
could give rise to all desirable measures of sterili-
zation and activity with a view to a coordinated credit
policy under the direction of the Coordinating Com-
mittee.
Article 4 - Necessary Adjustments
It is the province of the Coordinating Committee
to recommend from time to time the adjustments neces-
sary to facilitate the rectification of capital move-
ments, considered from the long-time point of view.
These adjustments could be, for example, the
following:
a) Accommodations in the credit policy of the
several countries, and particularly modifi-
cation of the policy of sterilization or of
the activity of foreign exchange administered
by the equalization funds;
b) dispositions of a nature to influence the
commercial balance;
c) slight modifications, - in cases where they
were unavoidable, - in the exchange parities;
d) in the case where the adjustments favored by
the trustees did not lead to a sufficiently
appreciable
-9-
appreciable modification in the direction
of capital movements and where the Coordi-
nating Committee considered that an equali-
zation fund held too large a quantity of
foreign exchange of a particular country,
it would be the province of the trustees to
propose appropriate measures for wiping out
debit accounts, bearing in mind the con-
ditions of the moment and of credit, and
utilizing, if there were occasion, the gold
deposit as guarantee.
There is reason to believe, moreover, that the
mere announcement of the cooperation introduced by the
new Tripartite Agreement and the powerful means of
action thus placed at the disposal of the monetary
authorities, would discourage in advance a renewal of
speculation. In this connection, there would only be
advantages, in preparing, negotiating and announcing
the putting into operation of this new technique during
a period of calm on the money market.
It should be noted that the whole system thus
suggested would be somewhat analogous to the mechanism
of the old gold standard. But while under that regime
the variations of interest rates occurred only through
deflation in the country exporting gold and thereafter
through
-10-
through expansion of credit in the country importing
gold, the several countries utilizing this new method
would have at their disposal, on the recommendation
of the trustees, a more supple instrument of inter-
national monetary coordination.
o
The mechanism described above would free the
participating countries from the practical necessity
of immobilizing a large part of their gold stocks as
an unavailable reserve intended for the defense of
their currency. It will then appear evident to all
that in consequence of recent deflations, and increase
of gold production in recent decades, gold, - the role
and functions of which have been limited, - has become
incontestably a superabundant metal.
Without doubt that which still hinders the
clear perception of this phenomenon, new yet decisive
for the prosperity of the world, is the fact that the
defense of currencies, by reason of international dis-
trust and increased displacements of capital, necessi-
tates considerable stocks of gold today. It will no
longer be thus from the moment that a new technique
will permit the equalization of movements of capital.
The
-11-
The superabundance of gold will become apparent to
all.
The real problem will then become that of new
uses to be given to the surplus of gold. It is
there that the International Committee could still
play a valuable rôle, in recommending and coordinating
a broad program of economic expansion with a view to
the reestablishment of prosperity.
CHAPTER IV
THE UTILIZATION OF GOLD
FOR THE SOLUTION OF LARGE ECONOMIC PROBLEMS
Until now all the plans for great international
works of equipment and plant construction, of exploi-
tation of new territories, and of charter companies
providing for settlement of refugees, have been shown
to be inapplicable because they were not matched with
a plan of financing which would have allowed them to
attain realization.
From the moment that important
surpluses of gold are freed, the execution of certain
plans of this kind, - if they are recognized as sound
after study by the Coordinating Committee, - no longer
presents any impossibility.
To the extent that the countries concerned would
desire
-12-
desire to leave autarchy by giving the necessary
political appeasements, particularly with regard to
disarmament, the Committee could, as a counterpart,
facilitate the evolution of their economy toward
peaceful activities in recommending the employment of
the gold released by the countries of the Tripartite
Accord for such financing.
This is not the place to search in advance for
the financial modalities of these operations. Memo-
randum No. 1 contains a few suggestions, and the very
recent Treaty of the United States with Brazil furnishes
an excellent model of action which could be undertaken
in this direction.
In order to succeed along this channel, the
countries of the Tripartite Agreement must still reach
an understanding for releasing by a concerted and more
rational utilization of their stocks of gold the newly
available means which will permit them to undertake
this fundamental work.
Bullitt
August 7, 1939
Memo for Norman H. Littel
From Rudolph Forster
Enclosures-in re-deed and relinquishing title to
F.D.R. from his mother and witnessed by Carmel Offie,
Secretary to Amb. Bullitt. Bullitts letter of Aug-3-1939
accompanying papers from S.D.R. attached.
See-F.D.R. Library folder-Drawer 2-1939
July 28, 1939
Memo for President's mother
From the President sent via Bullitt
turning over deed to Government and releasing her life interest
in the property. Attaches dedd for her to sign--letter to Bullitt attached.
See:FDR Library folder-Drawer 2-1939 for memo
tie
PSF Fusnce
Ballitt
Personal and
Paris, August 9, 1939.
ent
Dear Mr. President:
The Department can always say to you that men
who have been definitely bad officers have reformed.
Since most chiefs of mission will not report adversely
on their subordinates, in order not to make enemies,
it is difficult to prove what everyone knows but re-
fuses to set down on paper.
I don't think the issue is sufficiently important
to warrant your having a scrap with the Department.
Moreover, now that you have made it clear that you
scrutinize promotions, you can be sure that in the future
the Department will think several times before sending
you doubtful ones. I'd let it go.
Love.
Bill
1
The Honorable
Franklin Delano Roosevelt,
President of the United States of America,
Washington.
THE WHITE HOUSE
WASHINGTON
July 28, 1939.
MEMORANDUM FOR
AMBASSADOR BULLITT
I am sending the enclosed
to you in the utmost confidence.
These are the people you did not
approve of, but the State Depart-
ment now insists on their appoint-
ment. Will you let me know what
you think?
F. D. R.
Excerpt from the Act of February 23, 1931.
DUTIES OF THE DIVISION OF FOREIGN SERVICE PERSONNEL
"Sec. 32. The Division of Foreign Service Personnel shall
assemble, record, and be the custodian of all available informa-
tion in regard to the character, ability, conduct, quality of
work, industry, experience, dependability and general availability
of Foreign Service officers, including reports of inspecting of-
ficers and efficiency reports of supervising officers. All such
information shall be appraised at least once in two years and the
result of such appraisal expressed in terms of excellent, very
good, satisfactory, or unsatisfactory, accompanied by a concise
statement of the considerations upon which they are based, shall
be entered upon records to be known as the efficiency records of
the officers, and shall constitute their efficiency ratings for
the period. No charges against an officer that would adversely
affect his efficiency rating or his value to the service, If true,
shall be taken into consideration in determining his efficiency
rating except after the officer shall have had opportunity to
reply thereto. The Assistant Secretary of State supervising the
Division of Foreign Service Personnel shall be responsible for
the keeping of accurate and impartial efficiency records of For-
eign Service officers and shall take all measures necessary to
ensure their accuracy and impartiality. Not later than November 1
at least every two years, the Division of Foreign Service Per-
sonnel shall, under the supervision of the Assistant Secretary of
State, prepare a list in which all Foreign Service officers shall
be graded in accordance with their relative efficiency and value
to
- 2 -
to the service. In this list officers shall be graded as excel-
lent, very good, satisfactory, or unsatisfactory with such further
subclassification as may be found necessary. All officers rated
satisfactory or above shall be eligible for promotion in the order
of merit to the minimum salary of the next higher class. This
list shall not become effective in so far as it affects promotion
until it has been considered by the Board of Foreign Service Per-
sonnel hereinbefore provided for and approved by the Secretary of
State: Provided, That this list shall not be changed before the
next succeeding list of ratings 1a approved except in case of
extraordinary or conspicuously meritorious service or serious mis-
conduct and any change for such reasons shall be made ohly after
consideration by the Board of Foreign Service Personnel and ap-
proval by the Secretary of State, and the reasons for such change
when mae shall be inscribed upon the efficiency records of the
officers affected. From this list of all Foreign Service officers
recommendations for promotion shall be made in the order of their
ascertained merit within classes. Recommendations shall also be
made, in order of merit, as shown by ratings in the examinations
for appointment to the unclassified grade, with commissions also
as diplomatic secretaries and vice consuls, of those who have suc-
cessfully passed the examinations. All such recommendations shall
be submitted to the Secretary of State for his consideration and
if he shall approve, for transmission to the President.
"The correspondence and records of the Division of Foreign
Service Personnel shall be confidential except to the President,
the Secretary of State, the members of the Board of Foreign
Service
- 3 -
Service Personnel, the Assistant Secretary of State supervising
the division, and such of its employees as may be assigned to
work on such correspondence and records."
Excerpt from the rules adopted by the Board of Foreign Service
Personnel on May 1, 1936.
"4. Unless there is well grounded reason for action to
the contrary only the material received since the preparation
of the former rating list will govern when a new rating list
is prepared. If
no
11)
THE WHITE HOUSE
WASHINGTON
July 28, 1939.
MEMORANDUM FOR
AMBASSADOR BULLITT
I am sending the enclosed
to you in the utmost confidence.
These are the people you did not
approve of, but the State Depart-
ment now insists on their appoint-
ment. will you let me know what
you think?
F. D. R.
State Department reports on the
following:
Willard Galbraith
Gerald A. Drew
A. Dana Hodgdon
J. Rives Childs
filence
Bullite
Paris, August 16, 1939.
Dear Mr. President:
John Hamilton brought his red head into my
office yesterday and made one remark which I thought
might interest you. He said that he personally
thought that Dewey's qualifications for the Pre-
sidency consisted of "beautiful eyes and two racke-
teer convictions--and then what?"
He said that the entire Republican organiza-
tion was opposed to Dewey. The Gallup poll showing
Dewey as leading Republican candidate with the vo-
ters might change the feelings of the leaders through-
out the country, but at the present time Dewey had
no support except in New York.
He
The Honorable
Franklin D. Roosevelt,
The White House,
Washington, D. C.
- 2 -
He referred to Dewey as "our blessing or pest."
I don't know what this means; but I have & sus-
picion from other things he said that the Republican
organization is for Taft.
I saw your mother this morning and she is to
dine with me tonight. I have never known her to be
in such superb form. It may be the air in Paris; but
her charm and wit have never been, to my knowledge,
at such a pitch.
The infection in your Aunt Dora's leg seems to
have diseppeared. I saw her this morning and she
seemed well.
This letter ought to reach you on your return
from the high seas. The storm warnings are out in
Europe and I hope that you will enjoy better weather
on the Atlantic than we are likely to have here.
Love and good luck.
Yours affectionately,
Bill
August 17, 1939
Sent 4 letters from Paris to MAL
as she requested.
TELEGRAM
PSF: Trance Bulitt)
The White House
1
Mashington
lpoh 12:30 a. m. 7 NL
Halifex, Nova Scotia, Aug. 16, 1939
Mrs. Larribee,
The White House.
Will be St. RegistFriday. Please forward mail. -
Missy.
PSF: Jance
Bullitt folder
D
Rallitt
CJ
This telegram must bE
PARIS
closely paraphrased bE-
fore being communicated
Dated August 24, 1939
to anyone. (br)
Rec'd 6:11 a.m.
Secretary of State,
Washington.
1563, August 24, 9 a.m.
PERSONAL FOR THE PRESIDENT.
I told your mother this morning that I thought she
should return to America today by the S. S. WASHINGTON
with Johnny. She agreed and will leave Havre at two
o'clock this afternoon. She is in superb form.
Your Aunt Dora has agreed to leave on the next
sailing of the ROOSEVELT. LOVE
BULLITT
CFW:CA
PSF: France Pres
Bullittfolder
CJ
This telegram must bE
PARIS
closely paraphrased bE-
fore being communicated
Dated August 25, 1939
to anyone. (D)
REC'd 1:35 p.m.
Secretary of State,
Washington.
1588, August 25, 5 p.m.
SECRET FOR THE PRESIDENT.
Daladier lunched with ME alone today and asked me to
Express to you his deep gratitude for your messages to the
King of Italy, Hitler and Mosciski,
Tony Biddle has just telephoned me to say that Mosciski
has already replied to you in the most favorable manner
and that Warsaw has information that the German Government
either will not reply at all or will reply by & flat re-
fusal.
In either case it SEEMS to me that after a short de-
lay to permit a German reply if any you will have a great
opportunity to pin the onus of future Events on Hitler by
a second message to him pointing out that you have received
a favorable reply from the President of the Republic of
Poland and asking him to remember the war blind, the mothers
at the tombs of their sons and his responsibility before
God. HE who taketh the sword, et cetera. Good luck.
BULLITT
HPD
PSF: Trance
REB
This telegram must bE
full pus
Bullitt folder
closely paraphrased bE-
PARIS
fore being communicated
to anyone. (D)
Dated August 24, 1939
Rec'd 2:08 p. m.
Secretary of State,
Washington.
1575, August 24, 6 p. m.
PERSONAL AND STRICTLY CONFIDENTIAL FOR THE PRESIDENT.
Your mother sailed from Havre this afternoon on the
Stamship WASHINGTON comfortably installed in Johnny's
drawing room.
I think the action you have taken is EXCELLENT; but
feel it will prove to bE ineffectual.
I hope that the moment war breaks out you will issue
an appeal to all nations to refrain from bombing open
and civilian.
cities/ Civilian populations citing the numerous Hague
accords and others, by which nations have pledged them-
SELVES not to resort to this barbarous practice. I
believe that such an appeal probably would not stop the
Germans; but EVEN if it should not it would bE worth
making in the interest of the moral CASE. LOVE to you all.
BULLITT
KLP
filmate
PSF: rance
Bullitt
NC
This telegram must bE
PARIS
closely paraphrased
before being communicated
Dated August 25, 1939
to anyone. (D-1)
Rec'd 5:25 p.m.
Secretary of State
Washington
1593, August 25, 6 p.m. (SECTION ONE)
SECRET FOR THE PRESIDENT AND THE SECRETARY.
Daladier lunches alone with ME today and discussed
every aspect of the present situation.
HE said that he was profoundly grateful for the message
of the President to the King of Italy and also for the
President's messages to Moscicki and Hitler. HE felt that
the President had done more than any other man had done
or could have done to avert war.
If Germany should attack Poland there was no question
whatsoever about the result. Both France and England would
march at once to the assistance of Poland. HE had now
mobilized 1,900,000 men. HE did not wish to introduce
general mobilization yet because this reasure would stop
the normal Economic life of the country and would put the
country virtually under the rule of the army.
(END SECTION ONE)
BULLITT
DDM
NC
This telegram must bE
PARIS
closely paraphrased
before being communicated
Dated August E3, 1939
to anyone. (D)
Rec'd 5:14 p.m.
SECRETARY of State
Washington
1593, August 25, 6 p.m. (SECTION TWO).
HE was certain, however, that the German Government now
realized that France was in sarnest. The Germen Military
Attache had called at the French Ministry of War today to
say that if the French should continue to mobilize men on the
German frontier the German Government would have to order
general mobilization. The reply had been that the French
would continue to mobilize.
Daladier said that he WC.S fully aware that there were
Elements in Germany and Italy strongly opposed to war and
that hE would order all French radio stations to KEEP
pounding the President's message to Hitler into German sars.
HE had no indication whatsoever that there was any weaken-
ing in Hitler's determination to attack Poland.
BUILITT
HPD
HRE
This telegram must bE
PARIS
closely paraphrased be-
fore being communicated
Dated August 25, 1939
to anyone (D)
Rec'd 11:20 p.m.
Secretary of State
Washington
1593, August 25, 6 p.m. (SECTION THREE)
Two most satisfactory pieces of news had reached
him today. The Spanish Military Attache in Paris had
called on General Gamelin to state that General Franco
would like to conclude at once with France a treaty of
COMMERCE and amity. HE had dictated, himself, a reply
which hE had ordered sent at once to Spain accepting
at once this proposal.
All his information from Marshal Petain indicated
that the Spaniards were deeply relieved that the
conclusion of the German pact with the Soviet Union
had relieved Spain of any obligations to take a hostile
attitude toward France.
The second piece of good news was that the Turkish
Government had informed the French Ambassador officially
that it would stand by its alliance with France and
England and would fight by their side if necessary. HE
had ordered General Weigand today to leave at once for
Syria with an additional division of French troops which
would act with Rumanian in case of war.
With
HRE
2-#1593 From Paris Aug 25, 6 p.m. (See 3)
With regard to internal politics Daladier said
that if he should bE obliged to decree general mobiliza-
tion hE would reform his cabinet immediately. HE would
reduce the Size of the cabinet from sixteen to twelve and
would certainly Eliminate Mansy and take Leon Blum and
Louis Marin into the cabinet.
(END SECTION THREE)
BULLITT
NPL
CJ
This telegram must bE
PARIS
closely paraphrased bE-
fore being communicated
Dated August 25, 1939
to anyone. (D)
Rec'd 7:15 p.m.
Secretary of State,
Washington.
1593, August 25, 6 p.m. (SECTION FOUR).
HE had not yet decided whether or not to include
Flandin or (?)g but was inclined to Exclude both of them.
Daladier said that he had 150 officers in important
points observing the mobilization. Theiv reports almost
brought tears to his EYES. HE stated thit the stoicism and
quiet courage of the men called from their homes was beyond
praise.
I desire to add my own observations to this statement.
NEVER has any nation confronted C. war of the most terrible
sort with greater calm or courage.
Deladier said that hE was so incensed by the attitude
of the communist papers in Paris which subsidized from
Moscow are now saying that France should not fight in
support of Poland that he intended to DEIZE the Soviet
subsidized HUMANITE tonight. HE said that hE would rather
have his struggle with the communists now than later. It
was
-2- #1593, August 25, 6 p.m. (SEC. FOUR), from Paris
was obvious the French com unists with certain rare EX-
captions owed t Eir allegiance to the Soviet Union and not
to France and it was better to have Enemies in the open
than hidden in corners.
(END OF MESSAGE).
BULLITT
NPL
PSFiZiance(Bullitt)
THE WHITE HOUSE
WASHINGTON
August 25, 1939.
MEMORANDUM OF PRESIDENT'S TELEPHONE
CONVERSATION WITH AMBASSADOR BULLITT
Thanks you profoundly and accepts
direct negotiation or conciliation
by any power which is an honorable
neutral. He passes over in silence
the question of arbitration. He
expresses the hope that the note
will produce the results desired.
Poland is demanding nothing of
Germany anywhere. They might be
thinking of negotiations.
This is the gist of the message
sent by the President of Poland to
the President of the United States
in answer to his proposal sent the
day before.
filmate
PSF: France
Bullitt
EMC
PARIS
This telegram must bE
closely paraphrased bE-
Dated August 25, 1939
fore being communicated
to anyone (BR)
Rec'd 7:51 p. m.
Secretary of State
Washington
RUSH
1599 August 25, midnight. (SECTION ONE.)
CONFT DENTIAL.
As I told the President over the telephone this
evening Bonnet has just informed ME that Hitler said to
the French Ambassador in Berlin this afternoon that while
he did not intend to attack France he could no longer
tolerate the manner in which the Poles were treating the
German minority in Poland and must act.
Bonnet said that the whole tEnor of the telegram
was such that hE was obliged to consider Hitler's state-
ment a warning before action. HE believed that Hitler
would attack Poland almost immediately.
(END SECTION ONE.)
BULLITT
WWC
CA
This telegram must bE
closely paraphrased be-
PARIS
fore being communicated
to anyone (Br)
Dated August 25, 1939
Rec'd 11:20 p.m.
SECRETARY of State
Washington
RUSH
1599, August 25, midnight (SECTION TWO)
Bonnet telephoned to me while the above was bEing typed
to say that after studying the report of the French Ambassador
in Berlin with his advisers in the Quai d'Orsay hE felt that
he would like to say to mE that while the interpretation
given above of Hitler's intentions was the most p. obable it
was also possible to put another interpretation on Hitler's
words since hE had said that hE did not desire general
European war HE vas not quite sure that Hitler's words
did not indicate a desire to settle the question of
Danzig by negotiation.
(END MESSAGE)
BULLITT
CFW CA
PSF:France
Bullitt
CJ
GRAY
PARIS
Dated August 25, 1939
Rec'd 1:28 p.m.
Secretary of State,
Washington.
1587, August 25, 4 p.m.
The Counselor of the German Embassy Brauer, in
conversation with a member of the staff today, Expressed
his personal opinion to the Effect that "Even though it
is very late" a conflict could bE avoided.
In reply to our question how this happy result might
bE achieved he said that hE thought the President's message
to the King of Italy was most useful and might conceivably
blaze the trail. HE added that unfortunately the Poles
had waited too long and if the complicated question re-
lating to minorities and other matters were to bE settled
by negotiation the Poles would bE called on to make far
greater "sacrifices". than would have been the case a year
ago. HE feared that if they continued "to attack us" and
receive the support of Great Britain in their unreasonable
conduct the resultswaild bE disastrous for them. In con-
clusion, hE intimated that our conversation might bE the
last for some time to COME.
BULLITT
ALC
purate
PSF:France Pres
Bullitt
CJ
This telegram must bE
PARIS
closely paraphrased bE-
fore being communicated
Dated August 26, 1939
to anyone. (D)
REC'd 8:10 a.m.
Secretary of State,
Washington.
TRIPLE PRIORITY. RUSH.
1606, August 26, noon (SECTION ONE).
SECRET FOR THE PRESIDENT AND THE SECRETARY.
I now have the full explanation of Bonnet's statement
to me that Hitler's talk with Coulondrs was a warning
before action and his subsequent telephone call saying that
there were signs that Hitler might desire to Enter into nego-
tiations. SEE my rush 1599, August 25, midnight.
I have just had read to me at the Quai d'Orsay the
telegrams of Coulondre, French Ambassador in Berlin, on his
conversation with Hitler and Henderson's conversation with
Hitler.
Hitler said to Coulondre that hE had summoned him to
say that hE had no desire to have war with France. HE had
no claims against France. Personally hE renounced all
claims to AlsacE-Lorraine.
BULLITT
KLP
CJ
This telegram must bE
PARIS
closely paraphrased bE-
fore being communicated
Dated August 26, 1939
to anyone. (D)
REC'd 8:30 a.m.
Secretary of State,
Washington.
TRIPLE PRIORITY. RUSH.
1606.
August 26, noon (SECTION TWO).
The French had, however, given carte blanche to the
Poles and the Poles were acting in 2. manner that no self-
respecting state could endure. If such actions should con-
tinue hE on his side would have to act with force.
Hitler's VOICE then rose and hE screamed out a series
of imaginary Polish atrocities against the German minority
in Poland. After this hE said that hE would regret war
with France; but that hE was ready for it. HE knew that
the French were a brave nation like the Germans and that
they would EXPECT to win. He also would EXPECT to win
Especially since his agreement with the Soviet Union was
a positive one. If France chose to make a general European
war out of the action which hE would bE obliged ) take if
the Poles should continue their present behavior, there
would bE war.
BULLITT
KLP
AC
This telegram must bE
Paris
closely paraphrased bE-
fore being communicated
Dated August 26, 1939
to anyone. (D)
Rec'd 9:23 a.m.
Secretary of State
Washington
TRIPLE PRIORITY RUSH
1606, August 26, noon. (SECTION THREE)
HE thensaid something vague which indicated that
hE seemed to have in his head SOME sort of an idea
about an Exchange of minority populations between
Poland and Germany. HE then r eturned to the alleged
Polish atrocities against the German minority and Ended
his talking with the French Ambassador on a highly
belligerent note.
It was immediately after receipt of the French
Ambassador's telegram that Bonnet gave me the informa-
tion that hE considered Hitler's statements to Coulondre
a warning before action.
A fEW minutes later Bonnet received a telegram
from Coulondre giving the report that his British
colleague, Henderson, had made to him with regard
to his conversation with Hitler.
BULLITT
GW
NC
This telegram must bE
PARIS
closely paraphrased
before being communicated
Dated August 26, 1939
to anyone. (D)
Rec'd 9 a.m.
Secretary of State
Washington
TRIPLE PRIORITY.
RUSH
1606, August 26, noon. (SECTION FOUR)
Hitler said to the British Ambassador that hE did not
desire to have war with Great Britain. The cruelties which
the Poles were inflicting on Germans in Poland, if continued,
would oblige him to take military action against the Poles.
HE desired HENDERSON to convey a message to his
Government positively not by telegraph or tElEphonE but only
by word of mouth.
The message was that hE, Hitler, was prepared to con-
sider a certain measure of disarmament and hE desired to
assure Great Britain that although hE needed colonies and
would continue to demand them, this demand need not bE ful-
filled for four or five years and Germany need not require
the same colonies which she had lost after the War of 1914.
BULLITT
HPD
PAP
PARIS
This telegram must bE
closely paraphrased be-
Dated August 26, 1939
fore being communicated
to anyone. (D)
Rec'd 8:50 a.m.
Secretary of State
Washington
TRIPLE PRIORITY. RUSH.
1606, August 26, noon (SECTION FIVE)
HE said that he was in desperate need of timber and
oilstuffs of all sorts.
His demands against Poland still remained the attach-
ment to the Reich of Danzig and the Establishment of a
strip of territory across the Corridor to Danzig and from
Danzig to East Prussia 30 that East Prussin would bE
connected directly through German territory with the Reich.
It might also bE necessary to agree with the Polish
Government to Exchange the German minority in Poland against
the Polish minority in Germany.
HE requested Henderson to leave for London at the ear-
liest possible moment and to return with the reply of the
British Government to the statements that hE had made.
BULLITT
GW :WWC
CJ
This telegram must bE
PARIS
closely paraphrased be-
fore being communicated
Dated August 26, 1939
to anyone. (D)
REC'd 8:50 a.m.
Secretary of State,
Washingto n.
TRIPLE PRIORITY. RUSH.
1606, August 26, noon (SECTION SIX).
Henderson Expressed the opinion to Coulondre hat
Hitler would not make war during the 48 hours RECESSARY to
receive the reply.
It was after the recd pt of this message from Coulondre
that Bonnet telephoned to me and said that it appeared
that Hitler did not desire a general European war and might
bE ready for negotiation.
I was informed by Leger and Rochat this morning that
the French imbassador in Berlin had informed the Polish
Ambassador in Berlin about Hitler's remarks about the EX-
change of populations and that the Polish Ambassador had
informed BECK.
BULLITT
PEG
NC
This telegram must bE
PARIS
closely paraphrased
before being communicated
Dated August 26, 1939.
to anyone. (D)
Rec'd 8:55 a.m.
SECRETARY of State
Washington
TRIPLE PRIORITY. RUSH.
1606, August 26, noon. (SECTION SEVEN)
As you know both LEGER and Rochat are intensely
opposed to a policy of another Munich and absolutely
determined that France and England shall support Poland.
I asked them both if they did not fear that Henderson's
conversation with Hitler was the prelude to British action
designed to disintegrate Polish resistance. They both
replied that there was not the slightest indication of any
such weakening on the part of Great Britain and oth
assured me that France would oppose any such betrayal of
Poland to the End.
END MESSAGE.
BULLITT
KLP
fill ate
PSF: France
Bullitt
CA
GRAY
PARIS
Dated August 26, 1939
Rec'd 10:41 p.m. 25th
SECRETARY of State
Washington
RUSH
1600, August 26, 2 a.m. (SECTION TWO)
I talked with Bonnet again about Coulondra's conversation
with Hitler. HE said that after a careful study of the con-
versation of the French Ambassador with Hitler hE felt that
hE had been too pessimistic when he had first talked with
ME, His first interpretation was probably correct but
Hitler seemed to bE genuinely afraid to provoke general
European war and it might bE that in the End Hitler would
prove to bE ready for negotiations.
I have telephoned the substance of the above to the
President.
(END MESSAGE)
BULLITT
JRL NPL
PSF: France
Bullitt
3
Personal and
Paris, August 27, 1939.
Strictly Confidential.
Dear Mr. President:
Daladier imparted to me a fact so horrifying
yesterday that I did not dare to put it in a cable.
The counter-espionage service of the French Army
recently arrested nearly two hundred military spies.
Of these spies, more than one-half proved to be genuine
Jewish refugees from Germany -- men and women who had
been persecuted and expelled by Hitler -- who for gain
had entered his employ while enjoying French hospitality.
Daladier personally was utterly horrified. He
said that he did not dare to publish the list of spy
arrests because it would unleash such a fury against
the Jews in France that the development of anti-Semitism
might go to dreadful limits, and he believed that anti-
Semitism was the vehicle for fascism.
He finally said sadly, "It really appears that on
earth some races are maudite."
I
The Honorable
Franklin Delano Roosevelt,
President of the United States of America,
The White House.
- 2 -
I pass this information along to you for your
most personal eye since I believe that you should
instruct our counter-espionage services of all sorts
to keep an especially vigilant eye on the Jewish re-
fugees from Germany.
Sad, isn't it?
Love.
Bill
PSF: France
Bullitt
Personal and Strictly
Paris, August 29, 1939.
Confidential.
Dear Mr. President:
Throughout the past few weeks, I have done a
great many things that I have not put in the cables.
I haven't time to report, and you would not have
time to read, a full list of performances; but there
is one about which I want to inform you.
As you know, I have kept in touch with Otto of
Hapsburg, who has been in the habit of coming to see
me every time he visits Paris.
Sometime ago, I told Daladier that I thought Otto
could be most useful in breaking up the internal morale
of Germany. Since Daladier believes passionately in an
independent Austria, the rest was easy. Last Saturday,
Daladier lunched privately with Otto and myself at
Chantilly. As a result of our conversation, Daladier
at my suggestion appointed Rochat, who is a close friend
of mine and Director of European Affairs at the Quai
d'Orsay,
The Honorable
Franklin D. Roosevelt,
President of the United States of America,
The White House.
- 2 -
d'Orsay, to put into effect immediately certain measures
that we had discussed with Otto.
In consequence, there are already two clandestine
radio stations sending into Austria each day a most
carefully prepared and excellent propaganda program.
Information has been communicated to all those Austrians
discontented with the Nazi regime through the subterranean
channels which Otto has organized at what times and on
what wave lengths they should listen to these stations.
There has been formed an Austrian Independence
Committee in Paris with representatives of every Austrian
party from the Socialists at one end to the Legitimists
at the other -- but excluding the Communists. If war
breaks out this Committee will be recognized by the French
Government as the representative of independent Austria.
The Austrian Legation in Paris, now in the hands of
the German Government, will be turned over immediately
to this Committee.
An Austrian Army to fight as a part of the French
Army will be created at once, and the independence of
Austria will be recognized as a war aim of France.
I
- 3 -
I plead guilty without apologies for getting this
started and I know you will approve. Obviously nothing
whatsoever should be said about these arrangements since
war may not break out now -- but the organization will
continue. Will you therefore please put this letter in
your most private safe in a sealed envelope and not show
it to anyone.
I have seen Daladier constantly and intimately
throughout this crisis. I do not telegraph half what he
says to me for the simple reason that there is nothing he
doesn't say and some of his remarks would raise hell if
they should be known. He is & fine fellow and I am very
fond of him and he has an altogether too-exalted idea of
my own value. In consequence, he asks my judgment about
nearly everything of great importance not only in the field
of foreign affairs but also in the field of domestic policy,
and what's more, he is apt to do what I advise.
Last Friday when he lunched with me alone at the house
in town, he told me with tears in his eyes that he had
said to General Gamelin that morning that the recovery of
France was not due to him, but to me, and added that he
didn't know whether there was a God or not, but if there
was
- 4 -
was, and I ever faced Him, I need only say: "I
stand on what I did for decency in the world when I
was Ambassador in Paris. "!!!!
The truth is that he doesn't completely trust any
French politician and he needs someone to talk to that
will not repeat what he says and can give him disinterested
advice. He is trying now to get the house next to mine
at Chantilly.
If you have any advice to give Daladier, please write
me. He will take it seriously.
Love and good luck.
Bill.
Pres
PSF: France
Bullitt
NC
This telegram must bE closely
PARIS
paraphrased before being
communicated to anyone. (D)
Dated August 30, 1939
Rec'd 2:02 p.m.
Secretary of State
Washington
RUSH
1669, August 30, 6 p.m.
STRICTLY CONFIDENTIAL.
I have just read the full written text of the Carman
reply to the British proposals which was handed to
Henderson by Hitler in Berlin last night.
This document repeats all the demands which Hitler
blurted out (reported in my 1660 of August 30, 11 a.m.)
EXCEPT the demand with regard to Silesia but VEils them in
such Extremely clever diplomatic language that the public
or anyone ignorant of the duplicities of diplomacy might
consider it a comparatively reasonable document.
Under the circumstances the French Foreign Office is
Extremely glad that Hitler threw a verbal limelight on the
demands which his diplomats had carefully veiled in their note.
(END SECTION ONE).
BULLITT
PEG
RFP
This telegram must bE
Paris
closely paraphrased bE-
fore bEing communicated
Dated August 30, 1939
to anyone. (D)
Rec'd 2:05 p.m.
Secretary of State
Washington
RUSH
1669, August 30, 6 p.m. (SECTION TWO)
The note begins by stating that the German Go: enment is
glad that the British Government agrees on the desirability of
good relations between Great Britain and Germany. It states that
the present dispute with Poland could have been solved at a
time when there were good relations between Poland and Germany
if the Poles had been willing to accept the offer which
Chancellor Hitler made to Poland last April.
It goes on to say that Poland replied to this Entirely
reasonable proposal by mobilization of military forces and a
persecution of the German population in Poland and a political
harassment and Economic blockade of Danzig designed to drive
Danzig to political despair and Economic destruction. These
activities of the Poles had become so terrible during the
past WEEKS that the question of Ending them was no longer one
of months or VEEKS but of hours.
(END SECTION TWO)
BULLITT
PEG
NC
PARIS
This telegram must bE closely
paraphrased before being
Dated August 30, 1939
communicated to anyone. (D)
Rec'd 2:05 p.m.
SECRETARY of State
Washington
RUSH.
1669, August 30, 6 p.m. (SECTION THEEE)
The revision of the Treaty of VErsailles must bE con-
tinued and Danzig and the Corridor must bE returned to the
Reich. The question of the protection of German minorities
and Economic interests in Poland must bE solved.
The Reich had no intention of extinguishing the inde-
pendence of Poland; but the question of guaranteeing those
portions of the Polish state which should remain after
Germany's claims had bEEn satisfied could not bE answered by
the Reich before consultation with and the agreement of
Germany's associate, the Soviet Union.
(END SECTION THREE )
BULLITT
PEG
CJ
This telegram must bE
PARIS
closely paraphrased bE-
fore being communicated
Dated August 30, 1939
to anyone. (D)
Rec'd 2:10 p.m.
Secretary of State,
Washington.
RUSH.
1669, August 30, 6 p.m. (SECTION FOUR).
The German Government had no confidence that direct
conversations between Germany and Poland would lead to any
result; but to accomplish its acquired love of peace and
in order to put an End to reports of the British Government
that there should bE direct conversations the German Govern-
ment would bE glad to receive a planipotentiary negotiator
in Brrlin, if one should arrive from Warsaw today Wednesday
the 30th.
I have really rarely read a clearer piece of casuistry
than this note which in fact makes all the demands that
Hitler made verbally; but produces a surface appearance of
SWEET reasonableness,
The French and British Governments are now in consulta-
tion as to the reply which should bE made to this note.
The French Government has received from a number of sources
information that Germany may start war with Poland tonight.
(END SECTION FOUR).
BULLITT
PEG
RFP
This telegram must bE
Paris
closely paraphrased be-
fore bEing communicated
Dated August 30, 1939
to anyone. (D)
Rec'd 2:15 p.m.
SECRETARY of State
Washington
RUSH
1669, August 30, 6 p.m. (SECTION FIVE)
The French Government has also received information from
a number of sources that if war should begin in the immediate
future Italy would not at first enter the war but would try to
remain neutral until Poland had been crushed by Germany and until
the German forces concentrated against Poland could bE returned
to the French Prontier for an attack on France. At that moment
Italy and Germany together would attack Francs.
The single astounding feature of the note is the phrase
about the Soviet Union which seems to indicate that Germany has
promised to give the Soviet Union Eastern Poland an may mean
that the Soviet Union will attack Poland. (END OF MESSAGE)
BULLITT
PEG
fillered
PSF: France Pres
Bullitt
Buttill
CJ
This telegram must bE
PARIS
closely paraphrased bE-
fore being communicated to
Dated September 2, 1939
anyone. (D)
Rec'd 1:15 p.m.
SECRETARY of State,
Washington.
RUSH.
1734, September 2, 5 p.m.
STRICTLY CONFIDENTIAL FOR THE SECRETARY.
The Polish Ambassador has just informed ME that hE
received a few minutes ago a telegram from Back informing
him that the Entire German bombing force today was turned
loose not only on Warsaw but also on EVEry other large
town and village in Poland and that the destruction had been
terrible.
The Polish Ambassador will SEE Daladier as soon as the
latter concludes his speech at the Senate and will ask
Daladier to send an immediate ultimatum to Germany to EX-
pire in the course of an hour.
BULLITT
PEG
file
EMC
GRAY
Paris
Dated September 4,1939
Rec'd 1 p. me
Secretary of State
Washington
RUSH
1769,September 4, 4 p. n.
Goorge Gordon telophoned mo from The Hague today at
about 1:30 to say that ho had just received a telephone call
from Kirk asking him to transmit to mo, and through me, by
telophone to the President the following message:
"Weizsaecker called Kirk to the Foreign Office at
12:15 and showed him a report from London to the effoct that
the Donaldson liner ATHENIA carrying passengers, many of whom
were Amoricans, had been sunk 200 miles north of the Hebrides.
Ho asked Kirk to inform his Government immodiately that the
German naval authorities have declared that thore are no
German war ships in that aroa and that furthermore German
naval vessels have received strict instruction to treat
merchant vossels in accordance with international rulos." "
(END SECTION ONE.)
BULLITT
RR
CSB
REB
This telegram must bE
clossly paraphrased be-
PARIS
fore being communicated
to anyone. (br)
Dated September 4, 1939
Rec'd 11:15 a. m.
Secretary of State,
Washington.
RUSH
1769, September 4, 3 P. m. (SECTION TWO)
I have telephoned this message of Kirk's to the
President.
You will note that the denial of the German Foreign
Office alludes to the area 200 miles north of the
Hebrides whereas according to a message from Ambassador
Kennedy to me, the ATHENIA was sunk 200 miles WEST of
Irsland.
Thus in the classic manner of the war of 1914-1918,
the lie follows the murder.
(END MESSAGE)
BULLITT
HPD
Bullitt
fillsone
Paris, September 5, 1939.
Dear Mr. President:
With reference to my letter of August 29th,
Otto of Hapsburg asked to see me urgently this
afternoon. He said that when today he had asked
the French Government to recognize the Austrian
National Committee as the representative of inde-
pendent Austria, the French had replied that they
must consult the British Government before doing
this. Otto said that he feared greatly that this
would mean a long delay and possibly British re-
fusal, since, in the propaganda material which
Chamberlain had had dropped in Germany, he had
seemed to promise that England had no interest in
detaching Austria from Germany.
Otto
The Honorable
Franklin D. Roosevelt,
The White House,
Washington, D. C.
- 2 -
Otto said to me that since I had started this
entire political manoeuver, he hoped that I would
intervene.
I telephoned to Rochat who said to me that
since the question really involved a definition
of a war aim, the French Government must consult
the British Government.
Rochat promised me that the French Govern-
ment would state to the British Government that
the French Government desired to take this action
unless the British Government should have posi-
tive objection. I indicated this to Otto at once.
Yours affectionately,
William C. Bullitt.
PSF: Bullitt
1
3
Personal and
Paris, September 8, 1939.
Dear Mr. President:
Daladier said to me this afternoon, "If we
are to win this war, we shall have to win it on
supplies of every kind from the United States. We
can hold for a time without such supplies; but
England and ourselves can not possibly build up
sufficient production of munitions and planes to
make a successful offensive possible." That statement
is true.
Our military men in Paris are apt to go a step
further and say that they are not sure that the British
and French can hold out until trans-Atlantic production
can be brought into the struggle. There is a chance
that Hitler may defeat France and England quickly. The
German planes have completely disorganized the Polish
defense, and they may do as much when they are turned
loose on France and England this autumn. By next
Spring
The Honorable
Franklin Delano Roosevelt,
President of the United States of America,
The White House.
- 2 -
Spring the French and British aviation and anti-aircraft
guns will be able to hold the balance.
Thus far, in France, there is a curious unreality
about the war. The whole mobilization was carried out
in absolute quiet. The men left in silence. There
were no bands, no songs. There were no shouts of,
"On to Berlin!", and "Down with Hitler!"; to match the
shouts of "On to Berlin!", and "Down with the Kaiser!",
in 1914. There was no hysterical weeping of mothers,
and sisters and children. The self-control and quiet
courage has been so far beyond the usual standard of the
human race that it has had a dream quality.
I expect the Germans to complete soon their de-
struction of Poland; then to offer peace to France and
England. The French and British will reject this proposal
and go on fighting. Then the Germans will turn loose
on France and England their full air force with every-
thing, including gas and bacteria.
I do not exclude altogether the possibility that
Germany may be able to break the French line, but I
do not believe that this will happen.
It is, of course, obvious that if the Neutrality
Act remains in its present form, France and England will
be
- 3 -
be defeated rapidly.
My work here has nearly ended. Even the problem
of Americans stranded in France has been handled
insofar as it can be handled on this shore. Very few
Americans are coming now to the Embassy, because we
have them all planted at safe places in western France
waiting for boats. The usual diplomatic work has stopped
since the Generals and their cannons have now taken the place
of the politicians and their notes. I pick up the cus-
tomary quantities of information, military and political,
but I don't dare to send it by cable for fear that it
may be of use to the Germans. As a result, I'm feeling
rather useless.
I should like to stay in Paris through the period
when the Germans turn loose their air bombardment of the
city. We shall get the worst of that during the latter
part of this month and in the month of October.
By November, the war will, in the customary manner,
hibernate. If I'm still alive, that will be about the
time for you to set me to work in the United States of
America. Tony Biddle won't have a country any more, and
you can make him Ambassador in Paris.
You
- 4 -
You can put me in the Cabinet.
Otherwise, everything is all right.
Love and good luck.
Yours affectionately,
Bill
PSF: France
Bullitt
7:00
fill
Paris, September 13, 1939.
PERSONAL AND STRICTLY CONFIDENTIAL
Dear Mr. President:
As I have stopped cabling the lowdown be-
cause I do not wish to risk communicating anything
to the Boches, I am supplementing my cable of
today by this brief word.
Daladier said to me today that when he talked
to Chamberlain yesterday, he found himself in the
presence of a man who seemed to him broken. He
said that Chamberlain had aged terribly since last
he had seen him, and had made the impression of a
man who had passed from middle age into decrepitude.
He added that he felt that Chamberlain had a
virtue
The Honorable
Franklin D. Roosevelt,
The White House,
Washington, D. C.
- 2 -
virtue for Great Britain at the moment. He was
as typical an Englishman as anyone in the pages
of Dickens and he might be, therefore, very useful
for a while; but before the war should be won
he would have to be replaced by a more vigorous
man.
Daladier was really shocked by the cynical
selfishness of Chamberlain's attitude toward the
bombardment of Poland and his refusal to use the
modern, excellent and numerous English bombing
planes for the bombardment of military objectives
in Germany.
On the other hand, he was pleased by certain
aspects of their conversation. He proposed to
Chamberlain the setting up of a complete organisa-
tion for purchases of France and England in the
United States during the war, and Chamberlain
accepted this proposal.
As you may remember, it was Jean Monnet who,
during the last war, set up the interallied pur-
chasing agency and also the interallied shipping
pool. Daladier intends to try to have Monnet ap-
pointed as the representative of both the French
and
- 3 -
and British Governments for purchases in the
United States.
I do not consider that it is impossible that
the British will accept this proposal. So many
Britishers know what Monnet did during the last
war for the common cause, and so many others know
how superbly efficient he was as the first Under
Secretary of the League of Nations, that he may
be accepted even by our British brethren.
Daladier said that if the British should re-
ject Monnet to head this agency, he would like to
appoint Monnet French Ambassador in Washington.
I expressed the opinion that while Monnet
would do excellently in Washington, he could be
much more useful if he were relieved from the po-
lite duties of an Ambassador and charged with no-
thing but the serious business of supply.
You will have had from my telegram the news
of the change that Daladier is contemplating making
in his Cabinet long before this letter reaches you.
I did not say in the telegram that Daladier had
remarked that at all costs he must get rid of
Bonnet, who would otherwise continue to conspire
with
- 4 -
with Flandin, Pietri and other defeatists.
Daladier is in fine form, immensely burdened,
of course, by the terrible responsibility that is
on his shoulders; but carrying it like a man and
by no means broken by it.
Most important! Daladier and I discussed the
general question of the blockade. You will recall
that from 1914 until the entry of the United States
into the war in 1917, the Government of the United
States hampered greatly the British and French
blockade of Germany by maintaining a series of
positions which were abandoned the moment the United
States entered the war.
I believe that there is no way that we can
help more at the present time than by taking at
once the position vis-à-vis the blockade which we
finally took after the entry into war of the
United States in 1917. I believe that we should
accept in toto the rules which we ourselves accepted
then--some of which we invented. You will not need
to take any affirmative action, but you will need
to instruct the Department of State not to protest
in
- 5 -
in any way when the French and British begin to
turn the screws.
So far as I am concerned, I hope the screws
will be turned quickly and completely. This, I
hope, in our own national interest as well as in
the interest of decency in Europe. It is absolute-
ly certain that if France and England should be
unable to defeat Hitler in Europe, we shall have
to fight him some day in the Americas. Please
instruct the Department to get out our own blockade
rules of 1918 and let the French and British apply
them. You have probably done this already, so I
apologize for an unnecessary reminder.
Love and good luck.
Bill
William C. Bullitt.
-
Bullitt
file
Paris, September 14, 1939.
Personal
Dear Mr. President:
I append herewith a typewritten copy of a letter
which I received this morning from Mrs. John R.
Drexel, whom you unquestionably must have known as a
contemporary of your mother's. It is just one more
proof of the infinite superiority of that generation
to our own.
The Neilson referred to in her letter is
her lover! Vive l'amour!
Yours affectionately,
Bill
William C. Bullitt.
)
Enclosure.
The Honorable
Franklin D. Roosevelt,
President of the United States of America,
Washington, D. C.
OPY
September 13th, 1939.
34, Rue Francois Ier.
Dear Mr. Ambassador:
This is information which I think the Embassy
should have. The Red Cross at 21 rue Francois Ier is
shortly to close and has asked me if I would object to
having & very large number of packages of papers, books,
etc., stored in my cellars as it was desirable to have
them in a reputable and dry place. The head man inves-
tigated and yesterday they were all deposited for safe
keeping - what that may mean under the circumstances.
My cellars are curiously constructed, being di-
vided into large separate rooms with strong masonry
walls. I still have most of my domestics who have been
in my service since I moved into this house nine years
ago. They have arranged two of the largest rooms into
"abris" and we are most comfortable and actually luxurious -
beds, linen, quilts, many rugs and cushions, chaises
longues, carpet on floors, every necessary and essential
medicines, lotions, bottled waters, champagne and liquors,
biscuits, electric lights, oil lamps and hand torches for
all. Neilson is still a great invalid and we have a
charming trained nurse from the American Hospital and my
marvelous maid who has been with me for thirty three
years
- 2 -
years. No one is nervous, nor "jittery" and our four
descents to the abris have been calm and quickly made.
This house is so comfortable and everyone is so far
relieved that we did not leave Paris. Barring the Red
Cross business I hope I have not bored you with my do-
mestic situation, as you were kind enough to advise me
when I last saw you. It has been a great regret that
I have never had the privilege and pleasure of your
accepting my many invitations, and you have always been
so thoughtful and kind to me.
Very sincerely,
(Signed): ALICE TROTH DREXEL.
PSF
Bullett
THE WHITE HOUSE
WASHINGTON
France
September 28, 1939.
MEMORANDUM FOR
W. C. B.
Tell the delightful gentleman
who signed that label with you that
if any similar bottle survives to
keep it until he, you and I can
partake of it together as soon as
the survival of democracies is
again assured.
F. D. R.
PROPRIETA!RE
FRANCE
this en boid silleau Chatean
Hommage an Président Roosevalt
13 7620 1839
es. Delasion
Williams Bullott.
thease
PROPRIETAIRE
FRANCE)
this en bend Ailless Chateau
Hommage an Président Roosevals
13 7620 1839
es. Delasion
Williams Ballett.
Bullity
Paris, September 13, 1939.
PERSONAL AND CONFIDENTIAL.
Dear Mr. President:
I enclose herewith a document for your
stamp book, or, if you prefer, a double-sided
picture frame.
On one side you will see the label of a
bottle of wine such as does not exist any longer
in the world, because the label came from the
last bottle in existence which Daladier and I
drank at lunch at my house today.
On the back of the label you will find two
unimportant signatures which convey at any rate
a
The Honorable
Franklin D. Roosevelt,
The White House,
Washington, D. C.
- 2 -
a lot of admiration and, from the nether, a lot
of affection.
Good luck!
Bill
William C. Bullitt.
Enclosure.
Brith
THE WHITE HOUSE
WASHINGTON
October 5, 1939.
MEMORANDUM FOR
THE STATE DEPARTMENT
will you please prepare
a reply for my signature thanking
stamp
this gentleman for the album of
recent French issues and proofs?
F. D. R.
Card "Jules Julien, Ministre des Postes,
Telegraphes et Telephones, 20, Avenue de Segur,
Paris".
Bullitt
felernal
Paris, September 14, 1939.
Dear Mr. President:
I am sending you under separate cover, by
pouch, a package of French stamps which Mr. Jules
Julien, French Minister of Posts, Telegraphs and
Telephones, has asked me to send you.
He would be delighted to receive a personal
note of thanks from you. I enclose a French draft
of a letter which you may care to have typed out
on your letterhead and sent to him. This does not
imply any lack of confidence in your French; but
merely a desire to save you bother.
Yours affectionately,
Bill
William C. Bullitt.
The Honorable
Franklin D. Roosevelt,
The White House,
Washington, D. C.
DRAFT
Cher Monsieur le Ministre:
La magnifique collection de timbres que vous
m'avez envoyée par l'intermédiaire de l'Ambassadeur
Bullitt me parvient à l'instant.
Je m'empresse de vous dire combien je suis
touché de votre amabilité, et combien je vous suis
reconnaissant d'avoir pris la peine, en ces temps
difficiles, de réunir pour moi une aussi intéres-
sante collection.
Avec mes vifs remerciements, et mes meilleurs
voeux pour tout ce qui vous touche, je reste,
Bien sincèrement vôtre,
(Signed) : FRANKLIN D. ROOSEVELT.
Monsieur Jules Julien,
Ministre des Postes, Télégraphes et Téléphones,
Paris, France.
Built
October 9, 1939
My dear M. le Ministre:
I want you to know how grateful I am
for that gift of the album of stamps containing
recent French issues and proofs which you were
good enough to send me. I an delighted to have
this album, not only because of its intrinsic
value but because of my appreciation of the kindly
thought which prompted you to remember ay interest
in stamps. Those which the album containsare a
welcome addition to my collection.
Very sincerely yours,
The Honorable
Jules Julien,
Minister of Posts, Telegraphs
and Telephones,
Paris, France.
wdh-mw
JORESS OFFICIAL COMMUNICATIONS TO
THE SECRETARY OF STATE
WASHINGTON, D.C.
DEPARTMENT OF STATE
WASHINGTON
In reply refer to
October 7, 1939
PR 811,001 Roosevelt - Stamps - Julien,
Jules
My dear Miss LeHand:
In compliance with the President's memorandum
of October 5, 1939, I am transmitting herewith a draft
of a suggested letter of thanks addressed to the
Honorable Jules Julien, Minister of Posts, Telegraphs
and Telephones of France, who recently sent the Presi-
dent an album of stamps.
If you will return the letter to me when signed,
I shall be glad to forward it to the American Ambassador
at Paris for appropriate delivery.
Sincerely yours,
Starley Wasdward
Acting Chief of Protocol.
Enclosure:
Draft letter.
Miss Marguerite A. LeHand,
Private Secretary to the President,
The White House.
THE WHITE HOUSE
WASHINGTON
October 7, 1939.
In. / Ministry
My dear Mr. Julies:
Thank you very much for the recent French
issues and proofs which you were good enough
to send to me. This fine album is a welcome
addition to my stamp collection.
Very sincerely yours,
***
The Honorable
Jules Julien,
Minister of Posts, Telegraphs and
Telephones,
Paris.
file
October 11, 1939
Dear Mr. woodward:
Enclosed herewith is the letter which
the President has addressed to the Honorable
Jules Julien, Minister of Posts, Telegraphs and
Telephones of France, and it will be greatly ap-
preciated if you will see to its transmittal to
M. Julien through the proper channels.
Very sincerely yours,
WILLIAM D. HASSETT
Stanley Woodward, Esq.,
Acting Chief of Protocol,
Department of State,
Washington, D. C.
wdh-mw
THE WHITE HOUSE
WASHINGTON
October 12, 1939
MEMORANDUM FOR GENERAL WATSON:
In connection with report credited to Mr.
Baruch concerning extraordinary light armor for
protecting tanks and other vital parts of airplanes,
there is no special armor known to me although
experiments have been made and are being made to
develop such armor.
It is believed that the best protection for
tanks is a synthetic rubber or & synthetic rubber
tank (self-healing) which has been used by the
Martin Company in airplanes built for the Chinese
Government. Martin Company knows that on one in-
stance one of these tanks was penetrated by several
bullets and it was able to return --- 70 or 80 miles --
to its base with gasolene from its own tank.
Martin Company can give information concerning
these tanks.
AAP
October 13, 1939.
Dear Bill:-
Your cable of October eleventh has
just arrived and I have talked the matter
over with the experts. The following memo-
randum gives the answer. Enuf said!
"In connection with report credited
to Mr. Baruch concerning extraordinary
light armor for protecting tanks and
other vital parts of airplanes, there
is no special armor known to me al-
though experiments have been made and
are being made to develop such armor.
It is believed that the best pro-
tection for tanks is a synthetic rubber
or a synthetic rubber tank (self-healing)
which has been used by the Martin Company
in airplanes built for the Chinese
Government. Martin Company knows that
in one instance one of these tanks was
penetrated by several bullets and it
was able to return -- 70 or 80 miles --
to its base with gasolene from its own
tank.
Martin Company can give information
concerning these tanks." #
Many thanks for those delicious apples.
I have to admit that they are just as good as
the Dutchess County apples.
My best to you,
As ever,
Honorable William C. Bullitt,
American Embassy,
Paris,
France.
JR
This telegram must bE
clossly paraphrased bE-
Paris
fore bEing communicated
to anyone. (D)
Dated October 11, 1939
Rec'd 9:45 peide
Secretary of State,
Washington.
2424, October 11, 7 p.m.
SECRET FOR THE PRESIDENT.
The Minister for Air Guy la Chambre said to me
today that fighting at the front during the past month
had proved that planes with a speed of less than 450 450/288)
kilometers an hour were almost invariably shot down.
Only the latest types of observation plants and bombers
were therefore useful.
In the course of highly complimentary remarks with
regard to the Curtiss P 36 plants the Minister for Air
said that they had one serious defect, there was no
armor on the gasoline tanks. (END SECTION ONE)
RR:KLP
BULLITT
Pursent 320 n better
Brut -
T - 340 or better
m 300 w betth
N. 275 n better.
Elbar. hared more upon
visibility for observed than
speed - wax speed alone 211 me be
JR
This telegram must bE
closely paraphrased be-
Paris
fore being communicated
to anyone. (D)
Dated October 11, 1939
Rec'd 9:30 p.m.
SECRETARY of State,
Washington.
2424, October 11, 7 p.m. (SECTION TWO).
The Germans were now using incendiary bullets in the
machine guns of their air force. It was therefore
Essential to cover the gasolina tanks of these and all
other planes with some sort of armor.
I recall that last year when Bernard Baruch was in
Paris hE stated to ME that hE was aware of the Existence
in America of some Extraordinary sort of Extremely light
armor for the protection of the tanks and other vital
parts of plants.
If such armor Exists will you please let me know
so that the French Government may look into this question.
(END MESSAGE).
RR
BULLITT
THE WHITE HOUSE
WASHINGTON
October 23, 1939.
MEMORANDUM FOR
THE SECRETARY OF STATE
TO READ AND RETURN
F. D. R.
Strictly Confidential
Lukasiewicz, Polish Ambassador in
Paris, has informed me in strictest
confidence that he is about to be
dismissed from his post and that
Ambassador Potocki in Washington will
be replaced by Ajachanowski, former
Polish Minister in Washington.
I talked with Zaleski last night
and derived the impression that the
present Polish Government is in-
clined to get rid of all friends of
Beck.
BULLITT
THE WHITE HOUSE
file enfedential
WASHINGTON
October 23, 1939.
MEMORANDUM FOR
THE SECRETARY OF STATE
TO READ AND RETURN
F. D. R.
SECRETARY if STATE
OCT 23 1939
NOTED
LEGRAM
publit
The White House
Mashington
The White House
October 21 1939
FOR CONFIDENTIAL INFORMATION OF THE PRESIDENT
Paris, October 21, received 10:34 a.m.
2540 October 21, Noon.
STRICTLY CONFIDENTIAL
Lukasiewicz, Polish ambassador in Paris, has informed
me in strictest confidence that he is about to be dis-
missed from his post and that Ambassador Potocki in
Washington will be replaced by Ajachanowski, former
Polish minister in Washington.
I talked with Zaleski last night and derived the
impression that the present Polish government is in-
clined to get rid of all friends of Beck.
Bullitt
530pm/d
PSF: France
Bullitt
it
A
Personal and
Paris, November 1, 1939.
Secret.
Dear Mr. President:
I hope you gathered from one of the discreet
and dull cables to which I confine myself now-a-days,
that I had been at Field Headquarters with the Chief
of the General Staff and his officers. The Chief
of the General Staff, knowing that General Requin
was an intimate friend of mine, had brought him from
his command at the front. Since Requin has conducted
all the operations against Germany in the region from
Nancy to the Saar, it was possible, therefore, to get
& view of the war from the front as well as from behind
the lines. I have never talked with a lot of men who
were more intelligent, confident or calm.
Requin reported that the rains had been so heavy
that all the trenches at the front were completely
flooded and unuseable. Moreover, it was impossible to
construct new concrete works because the concrete was
washed away by the rain at once. Furthermore, all boat
bridges
The Honorable
Franklin Delano Roosevelt,
President of the United States of America.
- 2 -
bridges across streams had been swept away. In his
opinion, it would be totally impossible for the
Germans to launch a major offensive for at least 8.
week. Their airplanes could not get off the ground
and their tanks could not cross the fields, and even
infantrymen became bogged down in the mud. All the
officers were of the opinion that November 15th was
the last date on which the Germans could launch an
offensive before the onset of winter. They, therefore,
thought that even slight rains the end of this week
or next week would compel the Germans to postpone
any major offensive until next March.
There is one peculiar element in the situation
which no one can quite understand. The German
Messerschmidts, though fast, are so stiff and clumsy
in maneuvering compared to the Curtisses and French
Moranes that the Messerschmidts now -- apparently
acting on orders -- run away instantly from individual
combats with the French pursuit planes.
(The British have almost nothing in the way of
pursuit planes in France and there is not sufficient
data for a comparison between British and German planes.
Incidentally,
- 3 -
Incidentally, the first two planes shot down over
Paris by the French anti-aircraft were British planes
that had lost their way and wandered at great height
over the city! When the French General Staff expressed
regrets about this incident, the British General Staff
had the admirable courtesy to reply by a letter to the
French General Staff expressing congratulations on the
accuracy of the French D. C. A.!! You can tell Missy
that the piece of anti-aircraft shell that Offie sent
to her was from one of the shells that produced this
incident!)
The morale of the French Army is superb but the
soldiers are suffering somewhat from the cold weather
because the army stock of blankets and warm clothing was
used to care for the five hundred thousand Spanish re-
fugees that poured into France after the defeat of the
Republican Government in Spain, and there is & genuine
shortage of blankets and warm clothing of all kinds.
The French are working hard on second, third and
fourth lines of defense to back up the Maginot Line.
For example, a whole series of concrete pill-boxes to
shelter anti-tank guns and machine guns is being built
in my garden at Chantilly and all along the course of
the
- 4 -
the little river, "La Nonette", which runs through it.
It is the opinion of the French General Staff
that whichever army attacks first the lines of forti-
fications that now divide France and Germany will be
defeated. Requin, for example, sincerely regrets that
the Germans have not launched an attack on the front which
he commands since he is absolutely certain that he can
defeat any such attack end that the German losses will be
terrible.
As a result, - on the old principle of strategy that
you have to have e solid base and a quick moving mobile
arm to swing around your enemy to smash his communications -
the French Staff believes that the only way the war can
be won in the field will be by a combination of air attack
supplemented by tanks. That requires a sufficient number
of planes to destroy the communications of an enemy army
and & sufficient number of tanks to smash through the
army whose communications have been cut. The French heavy
tanks, as you know, are the best in Europe at the moment,
and at the front have shown that their armor is not pierced
but only dented by the German anti-tank guns.
The General Staff therefore feels that the missing
element
- 5 -
element is an overwhelming superiority in the air. In
consequence, the Staff, as well as Daladier and Guy La
Chambre, have arrived at the conclusion that while France
and England must produce every plane possible, the decisive
weapon must be obtained by colossal purchases of planes
in the United States.
Monnet is to leave for London tomorrow to have
himself appointed head of the Joint French-British organ-
ization to handle all war supplies, shipping, etc.; and
later to visit the United States, accompanied by some
Englishman who will head the Joint Purchasing organization
in the United States.
Meanwhile, as you know, the French have ordered
everything that can be found in the way of Curtisses,
Douglases and Martins, to say nothing of Pratt-Whitney
and Curtiss-Wright engines. The total to be found is
altogether insufficient.
The French and British figure roughly that by January
or February, they will be producing together as many
planes as the Germans. To catch up with the number of
planes that the Germans already have, to say nothing of
establishing dominance in the air, they must count on
new
- 6 -
new production from fresh sources in the United States.
Guy La Chambre is skeptical with regard to the
ability of Pratt-Whitney, Curtiss-Wright, and fuselage
makers in the United States, to enlarge their plants
rapidly enough to produce the production needed; but
believes that this production can be achieved, provided
parts of motors, etc. can be turned out by our large
automobile plants working in full cooperation with the
plane manufacturers. It is obvious that the job of
organizing the plane production in the United States of
America will be a colossal one, which can be handled only
with the full cooperation of our own Government indeed
with direction by our Government.
I am enclosing herewith as a separate letter, a
document on 8 vital problem of plane construction, which
is just one example of the sort of thing that will now
come up almost daily. I hope you will have this question
gone into completely and immediately as French plane
production will be wrecked if this essential raw material
can not be obtained in the United States.
Guy Le Chambre and Daladier have again asked me if
it might not be possible to obtain some additional P-36s.
My
- 7 -
My Army Air Attaché, unprovoked by me, said to me a
few days ago that our Army now considered the P-36s
obsolescent. It seemed to me, therefore, that the
suggestion I made to you in my letter of October 4th,
1939, that our Army might declare the P-36s obsolete
and that at least part of the production of them which
is now flowing to our Army, might be released to the
French was not such a wild piece of imagination.
Will you let me know whether or not it may be
possible to do anything in this respect? The French
Government will buy immediately any P-36s which it can
buy and wants them desperately -- at least that is what
Daladier and Guy La Chambre have said to me in the past
twenty-four hours.
Ultra-confidentially, Guy La Chambre stated to me
that the French General Staff for Air is working on 8.
stratosphere bomber: that is to say, a machine which can
fly and bomb from a height of twelve thousand METERS, out
of reach of anti-aircraft artillery. The French experiments
are progressing satisfactorily but it will be a very long
time before such planes can be produced. Guy La Chambre
asked
- 8 -
asked me to inform you personally and secretly about
these experiments and requested me to find out if our
Army had devised yet & stratosphere bomber that could
operate at this height. If so, he stated that the French
Government would be most eager to purchase two hundred
of them as soon as possible.
My guess is that the French and British together
will desire to purchase in the United States in the
immediate future at least ten thousand planes and fifteen
thousand engines none of which exist. If there should
be any delay about setting up the Franco-British organiz-
ation, the French probably would go right ahead and try to
place orders which would mean creating the means of
production for this colossal force. Then a portion
of this force, which would be agreed upon later, would be
handed over to the British.
Daladier and Guy La Chambre and Monnet and all the
Generals have implored me to go to the United States to
help put through this program. Since the job will be one
which will take months rather than weeks, and since we
ought to have an Ambassador continuously in Paris while
this war is on, if only for show purposes, and since I
don't
- 9 -
don't quite see how I can be on both sides of the Atlantic
at the same time; the question naturally arises of where
I can be most useful. I believe that Ambassadors should
not go home on vacation in war time.
I hope that there is no longer any question in
your mind as to what you have to do. Whether you like it
or not, you must remain President of the United States
throughout this war.
I think you know from experience that one of the
few principles that I live up to is Montesquieu's statement:
"A flatterer is a dangerous servant for any master." I
am not flattering when I say that there is no other man
in the United States who can conduct the affairs of the
country with one-half as much intelligence as yourself
during this war, and there is no other man who can begin
to handle the colossal problems which will arise at the
end of the war.
Even though we should be able to remain neutral, as
I hope we can, our influence at the end of the war would
be enormous.
Our policy will be decisive in determining the kind
of peace which will be made and the kind of reconstruction
of the world which will be begun. I should despair of
bringing
- 10 -
bringing any constructive results out of this war
if you should leave the White House. I believe, therefore,
that it is vital not only for the United States of America,
but also for the rest of the world that you should run
again and that you should be elected.
I should like to do anything I can to help in a
pre-Convention campaign for your nomination and then in
the campaign for your election. That also would mean
many months at home.
As you know, I have no objection whatsoever to staying
in France. I am treated here by everyone from the top to
the bottom with the greatest possible kindness and, indeed,
with affection; and you may be certain that I have no
intention of running out of this job. But I honestly be-
lieve that I may be able to be of much more use in America
during the next two years.
If you agree, the job in which I think I would be
useful would be that of Secretary of War. If you do not
intend to change the present set-up in the War Department,
which incidentally is giving all the Army officers the
jitters, you might put me in as midship-mite, otherwise
known as Secretary of the Navy.
Incidentally,
- 11 -
Incidentally, I believe that Tony and Margaret
Biddle could handle the present job in France perfectly.
They have been living in my house now for six weeks and
I have introduced them to everyone from Daladier down,
and they have made the most excellent impression.
I had a fine talk with your Aunt Dora this morning.
She looks wonderfully well. She says she intends to
sail on November 7th on the MANHATTAN. I will believe
her when she is on the boat. She is superb.
Love to you all.
Yours always,
Bill.
PS
THE WHITE HOUSE
WASHINGTON
file
November 3, 1939
CONFIDENTIAL MEMORANDUM FOR
H. M. Jr.,
Please read and return. What
do you think I should say to Bullitt?
F. D. R.
Enclosures
Paris, October 18, 1939.
Personal and
Strictly Confidential
Dear Mr. President:
I enclose herewith the agreement drawn up by the
British Government and Jean Monnet covering economic
cooperation. Personally, I think Monnet should head
the Committee in London, and I should like to see
Bob Brand at the head of the Joint Purchasing Com-
mission in the United States.
In any event, I hope that Monnet will go to
Washington to put through the business of enlarging
the productive capacity of our airplane industry.
The experience he had last winter has given him a
knowledge of the possibilities of our industry that
no one else in either France or England possesses -
and every day will count.
I don't like to say so in a telegram, but I
really believe that there is an enormous danger that
the German Air Force will be able to win this war
for
The Honorable
Franklin D. Roosevelt,
President of the United States of America,
Washington, D. C.
- 2 -
for Germany before the planes can begin to come out of
our plants in quantity. I think we should encourage
the French and British in every way possible to place
the largest conceivable orders. If, before those orders
are completed, the French and British shall have been
defeated, we shall need the planes for our own defense.
You may still be interested in that island; but
our Navy doesn't seem to be so much interested. I had
my Naval Attaché telegraph to the Navy Department the
text of the contract that the French Government is
prepared to sign, more than ten days ago; and in spite
of another telegram from the Naval Attaché asking whe-
ther the Navy Department wants to sign this contract,
we have had no reply!
There has never been any question about the readi-
ness of the French Government to let us have the island;
but it was very difficult to find a legal adviser of the
French Government who had not been mobilized or was not
snowed under with war work to go over the contract. I
had to push hard. Before you get this letter, the matter
probably will be settled. If not, I shall probably send
you a telegram couched in diplomatic language expressing
the thought - What the Hell!
Everyone in Paris is expecting a major German attack
to break the moment the present rains stop. Our prepara-
tions are superb. I have converted a wine cellar in the
basement
- 3 -
basement of the Embassy Residence, under the front steps,
into an abri. It is not in the least bombproof; but I
have hung in it the Turkish and Bokharan embroideries
that I used to have in my house on the Bosphorus, and
it is the last word in Oriental style and comfort, so
that when the bombs begin to drop you may imagine Offie
and myself tucked away in a Selamlik!
Our motto is: "We don't mind being killed, but we
won't be annoyed."
Love and good luck.
Yours always,
Bill
-
(COPY)
****
MACHINERY FOR COORDINATION OF ANGLO-FRENCH
ECONOMIC WAR EFFORT
I.
PERMANENT EXECUTIVE COMMITTEES.
(a) Composition.
Permanent Executive Committees will be formed to
provide for Joint Anglo-French action in the various
departmental fields, e.g., food, armaments, etc. These
Committees will consist of a few British and French
members appointed by their respective Ministers. It
is essential that both French and British members
should be selected in such a manner as to carry the
required authority with their national Departments,
and that they should be given by their Ministers wide
enough powers to permit prompt decisions by the Exe-
cutive Committees. This point is of the utmost im-
portance to the efficient working of the Executive
Committees which are to be permanent organs carrying
out joint action and administrative tasks.
Ministerial consultations will take place at
meetings to be held either in Paris or London as and
when necessary between the Ministerial Heads of the
Departments concerned in order to take whatever de-
cisions are required in connection with the activities
of the Executive Committees, and to give them the
necessary
- 2 -
necessary directions. These meetings will be known as
"Councils".
(b) Functions.
The functions of the Executive Committees will be:
(1) To lay down a programme of the requirements of
the two countries in the particular field covered
by each executive committee and, where possible,
to establish an ad hoc inventory of the resources
of each country in that field.
(2) To secure the best utilization in the common
interest of the resources of the two countries
in raw materials, means of production etc., and,
so far as may be possible, to provide for a fair
allocation of cuts arising out of the necessity
for the restriction of programmes.
(3) Having regard to the above considerations, to
formulate Joint Allied programmes of imports.
(4) To organize purchases under such agreed programmes
of imports in such a way as to prevent all compe-
tition between French and British purchases. This
will in most cases entail the making of purchases
through a single purchasing organization, the form
of which should be adapted to suit the particular
conditions prevailing in different countries.
(5) To ensure that such programmes are effectively
carried out.
(c) Sphere of Activities.
In the first instance Permanent Executive Committees
should be formed to deal with:
(1) Food.
(2) Shipping.
(3) Munitions and Raw Materials.
(4) 011.
(5) Air Production and Supply.
The Permanent Executive Committee for Shipping will
be entrusted with the important responsibility of providing
for the allocation of tonnage at the disposal of the Allies
(including
- 3 -
(including neutral tonnage) which is required for carrying
out the agreed programmes of imports of the other Executive
Committees.
It may subsequently be desirable to add to the number
of Permanent Executive Committees; moreover Sub-Committees
can, if necessary, be formed to deal with particular pro-
ducts such as wheat, sugar, chemical products, ores, etc.
Coal is a separate subject which will require special
treatment.
II. ANGLO-FRENCH COORDINATING COMMITTEE.
(a) Composition.
The Committee should consist of six to eight members
and should be drawn from a panel comprising, on the British
side, the members of the existing Interdepartmental Committee
for Anglo-French Supply and Purchase of War Material etc.,
on the French side, the Heads of the French Executive Com-
mittees in London. The personnel could be varied according
to the subjects on the agendum. The committee should have
a fulltime Chairman who should be appointed jointly by the
two Governments as an Allied Official. Although in no
sense an arbitrator, he would do his best from an allied
as opposed to a national point of view, to adjust differences
and obtain decisions. Although the Committee would sit in
London the Chairman must be able to visit Paris frequently
to consult with French Ministers.
The Committee should normally include representatives
of
- 4 -
of the Treasury and the Ministry of Economic Warfare on
the one hand, and the French Ministries of Finance and
Blockade on the other, in order to ensure that the Com-
mittee's decisions take into full account the require-
ments and the policy of those Departments.
(b) Functions:
(1) To coordinate the work of the Permanent
Executive Committees.
(2) To deal with differences of opinion arising
out of the supply and purchase of munitions,
food, coal and other commodities which af-
fect more than one Executive Committee or
which raise important questions of principle
or priority.
(3) To coordinate the work of Allied Purchasing
Missions abroad.
III. SUPREME WAR COUNCIL.
It is contemplated that there should be in due
course an Economic Section of the Supreme War Council
which will settle broad issues of policy.
12th October, 1939.
14
PSF
THE WHITE HOUSE
WASHINGTON
November 3, 1939.
MEMORANDUM FOR
THE STATE DEPARTMENT
The President would appreciate
1$ if you would have this photograph
forwarded to Ambassador Bullitt with
a note asking him to have it delivered
to the Maharajah.
M. A. Le Hand
PRIVATE SECRETARY
Dolder Hotel
Zunch
26-8-39.
Inydea hers Roosevelt
ant
I Isee in
that Joe are stellon Jena
I suppose I
Joing back to amone
+ I wish you a very
pleasant boyag homi
(will you
your destingushed son
the not to forget
signal
the fromisal Care of
this Crok Son Londord
thope pay that
effortsonade by the Reside t
Ilsong Safe the soold
from the terrible catastrophe
I a soold
Ishall be staying here tell
the and of august
with hind "yardst all
food wishes.
maharaja I Rapurthala
ADDRESS OFFICIAL COMMUNICATIONS TO
THE SECRETARY OF STATE
WASHINGTON, D.C.
3
filesmal
DEPARTMENT OF STATE
Miss
July sullitt
WASHINGTON
In reply refer to
PR 811.001 Roosevelt, F.D./6514
November 8, 1939
My dear Miss LeHand:
Acknowledgment is made of the receipt of your
memorandum of November 3, 1939, transmitting a framed
and autographed photograph of the President, which he
desires to have forwarded to the Maharajah of Kapurthala.
Your attention is called to Miss Tully's memorandum
of August 5, 1939, transmitting an autographed photo-
graph of the President which was sent to the American
Ambassador at Paris on August 15 for presentation to
the Maharajah. A copy is enclosed of the Embassy's
despatch of September 4, together with its enclosure,
reporting the delivery of the photograph.
In view of the above, I should appreciate being
advised whether the President wishes to have a second
photograph sent to the Maharajah at this time.
Sincerely yours,
Enclosure:
From Embassy,
Chief of Protocol.
September 4, 1939,
with enclosure.
Miss Marguerite A. LeHand,
Private Secretary to the President,
The White House.
Department of State
PR
BUREAU
DIVISION
ENCLOSURE
TO
Letter drafted
ADDRESSED TO
Miss LeHand
1. a. - PRIVEIR -
1-1083
COPY:LAW:PR
EMBASSY OF THE
UNITED STATES OF AMERICA
Paris, September 4, 1939.
No. 4934
SUBJECT: Delivery of President Roosevelt's
autographed photograph to the Maharajah
of Kapurthala.
The Honorable
The Secretary of State,
Washington, D. 0.
Sir:
I have the honor to refer to the Department's
Instruction No. 1683 of August 15, 1939, enclosing an
autographed photograph of the President which I was
requested to have delivered to the Maharajah of Kapurthala.
I am enclosing a copy of a note dated August 29,
1939, in which the Maharajah acknowledges the receipt
of the photograph, and requests that I convey to the
President his most sincere thanks.
Respectfully yours,
For the Ambassador:
ROBERT D. MURPHY
Counselor of Embassy.
Enclosure:
Copy of a letter dated August 29,
1939, from the Maharaja of Kapurthala.
DM/jhg
800.1
COPY:LAW:PR
COPY
Enclosure to Despatch No. 4934
dated September 4, 1939, from the
Embassy at Paris.
Hotel Dolder,
Zurich, Switzerland.
29th August 1939.
Your Excellency:
I have just received the autographed photo of
President Roosevelt which you have sent me. I shall
be much obliged if you would kindly communicate to
the President my sincere thanks.
I will keep this photograph a.s a very pleasant
souvenir of my meeting him at Hyde Park when I was
in New York in June last.
With kindest regards,
Yours very sincerely,
(Signed):
JAGATJIT SINGH
MAHARAJA OF KAPURTHALA.
His Excellency
The American Ambassador,
Embassy of the United States of America,
PARIS.
PSF: Bullitt
THE WHITE HOUSE
WASHINGTON
November 15, 1939.
MEMORANDUM FOR
THE UNDERSECRETARY OF STATE
What is our answer to this
(Bullitt #2742 - November 13th,
7 P.M.)?
F. D. R.
PSF: France
0
Bullitt
P
Y
DEPARTMENT OF STATE
WASHINGTON
November 15, 1939
My dear Mr. President:
In accordance with our conversation today, I
am submitting to you herewith for your approval a
suggested telegram to Bill Bullitt. If this is
satisfactory to you, please return it to me and
I will have it sent from the Department.
Believe me
Faithfully yours,
(Signed) SUMNER WELLES
Enc.
Suggested
telegram
President's notation:
"S.W.
O.K.
F.D.R."
The President,
The White House.
November 15, 1939
AMERICAN EMBASSY
PARIS.
STRICTLY CONFIDENTIAL AND PERSONAL FOR THE AMBAS-
SADOR FROM THE PRESIDENT.
QUOTE With reference to your telegram 2739, Novem-
ber 13, 6 p.m. and previous telegrams on the same sub-
ject, I believe that because of the changes in the gen-
eral situation since you first took up this question
with the French Government, it would be wiser to aban-
don any idea of a lease or contract. Please suggest
consequently to Daladier that the matter be handled by
a mere exchange of confidential letters between him and
yourself. The first letter wight be from you inquiring
whether the French Government would agree that the
United States, for training purposes and in connection
with peace time manuevers, might be enabled to utilize
the atoll and lagoon for naval vessels and for planes.
Daladier's reply might state that the French Government
is willing to give the permission requested, with the
understanding that such permission in no way affected
French sovereignty over the island and its territorial
waters. The third and final letter would be your con-
firmation of this understanding that French sovereignty
would not be affected. Telegraph me what the result of
your suggestion in this sense may be. UNQUOTE.
U:SW: DKK
"
THE WHITE HOUSE
WASHINGTON
November 20, 1939
MEMORANDUM FOR THE PRESIDENT:
This has to do with a conference
called in compliance with your suggestion
to consider Bullitt's cable re: aluminum.
Bullitt
TREASURY DEPARTMENT
PROCUREMENT DIVISION
OFFICE OF THE DIRECTOR
WASHINGTON
November 20, 1939
MEMORANDUM FOR GENERAL WATSON
A conference with the Quartermaster General of the Army and the Paymaster
General of the Navy this morning developed the fact that their require-
ments, plus the possible commercial requirements, for sheet aluminum
through December, 1940, are approximately 15,600,000 pounds.
Information received from the War Department indicated that the capacity
of the Aluminum Company of America during the same period is approximately
202,000,000 pounds.
I contacted Secretary Welles and suggested that I promptly confer with
Mr. Wilber, Washington representative of the Aluminum Company of America,
in an effort to have speeded up and increased deliveries we have discussed.
Secretary Welles suggested that I ask you to present this matter to the
President to obtain his views as to whether such action might be considered
compromising in any way to our Government.
Director of Procurement
H.E.Collins
file
Personal and
Paris, November 1, 1939.
Secret
Dear Mr. President:
I enclose herewith the memorandum which was given
to me last night by the Minister for Air, Guy La Chambre,
to which I refer in my long letter of today.
La Chambre said that he had asked to see me ur-
gently at the request of Daladier since they were
both horrified by the development of this piece of
business in the United States. If, indeed, it should
be impossible to obtain more than fifty tons of Dura-
lumin from the United States each month, the entire
French airplane production program would break down.
The French production program requires one thousand
tons of Duralumin a month starting with November, that
is today.
It was his understanding that the production of
Duralumin in the United States was very large and that
there
The Honorable
Franklin Delano Roosevelt,
President of the United States of America,
The White House.
- 2 -
there should be no difficulty whatsoever in obtaining
supplies of one thousand tons per month. It was,
however, he bel ieved controlled by a trust.
He asked me to communicate with you immediately
and to request you to have an investigation made most
urgently to discover why the French Government could
not purchase EL sufficient quantity of this product in
the United States. He wondered if the German Government
or the Soviet Government might have cornered the market
for Duralumin in order to prevent the French and British
Governments from carrying out their airplane production
programs. He wondered if some individual American might
have cornered the market for speculative purposes. He
wondered if the Aluminum Trust of America might have
private reasons for its refusal to sell.
In any event, he and Daladier felt that it was so
vital to obtain this material that they hoped that you
personally would interest yourself in the matter.
Will you please have this looked into as quickly
as possible and let me have a word as to the result?
In order that you may telegraph me, I suggest that
we
- 3 -
we refer to this letter of mine as letter Zed. In that
case, we can discuss the matter by telegraph without
anyone being the wiser.
Good luck.
Yours always,
Bill
-
Enclosure:
Translation of memorandum.
PSF:
Copy
November 28, 1939.
My dear Mr. President:
In compliance with your memorandum of November
25th I have repeated to Bill Bullitt your message suggesting
that he come home for Christmas, or, alternatively, go to
Algiers and Tunis for a couple of weeks.
Faithfully yours,
Cordell Hull
The President,
The White House
THE WHITE HOUSE
WASHINGTON
Warm Springs, Ga.,
November 25, 1939.
MEMORANDUM FOR
THE SECRETARY OF STATE
I hear from an outside source
that Bullitt is very tired and
needs a couple of weeks holiday.
What would you think of sending
him the following telegram:
If the situation does
not greatly change in the
next two weeks, why not come
home for Christmas? If
while you are here something
breaks loose you can always
get back in three or four
days. If you decide not to
come, why not go to Algiers
and Tunis for a couple of
weeks and make report on
general situation North
Africa?
F. D. R.
Bullitt
Warm Springs, Ga.,
November 25, 1939.
Dear Bill:-
It is a long time since I have written
you but don't think you have been entirely
abandoned to fate. All that you have done has
been excellent and explicit and the only trouble
is that the dear British and French Governments
are failing, as usual, to be definite between
themselves and to be definite to me. They
shifted back and forth a dozen times on their
relationship with the Federal Reserve Bank in
New York; on their purchase methods and finally
got everyone 80 disgusted that we had to tell
them what to do. I hope they will understand
it now as it is a perfectly practical thing.
While dictating the above yours of
November twenty-third, No. 2813, has come in
and I have talked with the Secretary on the
telephone. We both feel certain that it would
be a mistake for you to come over here on any
such mission because it would be sure to leak
out and it is not the duty of an Ambassador --
even though I see no reason why, if things are
really settling down to 8 Winter calm, you
should not come over for a week or ten days
and let us have a chance to see you. Incidentally,
it would do you lots of good.
In regard to purchasing, I am ready to
handle the whole matter over here if we only
knew whom we were talking to. Our objective 18
the practical one of not interfering with our
own military and naval program and, secondly,
to prevent prices from rising in this country.
-2-
What is really needed is one Frenchman
and one Britisher in Washington who will have
complete and final say for their Governments.
They would have to meet once a day, put all the
cards on the table, stop crossing their own
wires, and give us a chance to know just what
they want and when they want it.
The French Government should realize
that the present situation is not satisfactory
either from their point of view or from ours.
What we want is that perfectly possible combi-
nation of two head men - one French and one
British -- who will sleep in the same bed and
lay all their cards on the table to prevent
crossing wires.
You can tell the Prime Minister that
the Government here will give every facility
to the export of all types of American products,
agricultural and industrial, and that the
Interdepartmental Committee is ready to give
all proper assistance just 80 long as no wires
are crossed.
I hope you will follow my practice of
getting away for a few weeks for a short
holiday. It saves my life. If you cannot fly
over here, I do hope you will go down to the
south of France, or even to North Africa for
a really good place away from the telephone.
I am absolutely certain that you are hounded
to death on a million little things.
I am wiring you today what we used to
call in the old days a "tickler".
As ever yours,
Hon. William C. Bullitt,
American Embassy,
Paris,
France.
PSF: France
Bullitt
Paris, December 11, 1939.
Personal and fur
Dear Mr. President:
At lunch today at my house Daladier asked
Guy La Chambre if he had been able to get the exact
figures of British airplane production. La Chambre
said that, thanks to Monnet, he had at last gotten the
true figures. They showed a startling difference from
the figures that had been given him previously.
La Chambre said that, at the present moment, the
British per month are producing two hundred bombing
planes and one hundred eighty-five pursuit planes.
In addition to these war planes for use on land, the
British are producing approximately five hundred planes
for naval use, training, and use in the colonies.
The actual figures, therefore, for the British
production of land battle planes per month are 385.
The French production per month of the same sort of
planes is 350.
Daladier
The Honorable
Franklin Delano Roosevelt,
President of the United States of America.
- 2 -
Daladier at great length described a diplomatic
maneuver which gave him great personal satisfaction.
It appears that until about a week ago the German
Government had been sending him regularly emissaries
with peace proposals. All the proposals involved
absolute German domination of Poland and Czechoslovakia.
He had been absolutely determined not to accept any of
these proposals but, in order to stave off a German
attack this autumn, he had wished to make the Germans
continue to believe that he might accept one or another
of these proposals. He, therefore, had taken all the
proposals under consideration and considered each one
for as many days or weeks as possible, and then invariably
had replied by some question which enabled him to string
out the conversations.
The German proposals had all come from Goering.
A little more than a week ago, Daladier had put the
question to the gentleman who had been running back and
forth between Paris and Berlin: "What proof have I that
Goering is prepared to throw out Hitler?" This question
apparently had been a difficult one to answer and he now
felt that he could no longer string the Germans.
He
- 3 -
He was convinced that his pretense of readiness
to consider German proposals had been the main factor
in keeping the Germans from attacking this autumn.
He was thoroughly pleased with himself since he felt that
France and Great Britain would be in a much better position
to receive a German attack next Spring.
He said that he was absolutely convinced that such
an attack would be made next Spring by way of Holland
and Belgium. He thought that the attack would be made
in the month of March. He went on to say that he had
kept Bonnet, whom he described as a coward, and several
worse things connected with rear ends, in his Government
in order to encourage the Germans to believe that there
was a possibility of a French surrender. He did not
know now how long he would keep either Bonnet or de
Monzie in his Government.
Good luck.
Yours affectionately,
Bill
Personal and
Paris, December 11, 1939.
file
Dear Mr. President:
At my house today from one until four, Daladier,
Guy La Chambre, Jean Monnet and René Pleven discussed
the problem of winning the war.
Pleven is leaving Paris tonight to take the
CLIPPER that will bring you this letter by the hand
of my Counselor of Embassy, Robert Murphy. I have
not time to give you the three hours of conversation
which was as interesting as any three hours that I
have ever spent. I must, however, give you before
the train leaves Paris as much as I can.
Pleven is Jean Monnet's right hand man, and at
the moment, enjoys the title of Assistant to the
President of the French-British Committee of Coordination,
in London.
He is an old and close friend of mine. I consider
him
The Honorable
Franklin Delano Roosevelt,
President of the United States of America,
The White House.
- 2 -
him one of the most subtly intelligent and reliable
human beings that I have ever known. You can talk
to him with absolute certainty that what you say will
not be repeated. If you would enjoy a quiet evening
with a French gentleman who has a profound knowledge
of what is happening in Europe and speaks English
perfectly, you might invite Pleven to have & quiet
evening meal with you at the White House. This is not
at all necessary, however, since although he would
enjoy deeply a talk with you, and I am equally certain
that you would enjoy him, he is not a person who cares
per se about being invited by the great.
It is, however, vitally important that you should
help him to carry out the mission on which Daladier is
sending him to Washington.
Daladier, today at luncheon, repeated what I have
communicated to you before: He believes that the war
can not be won unless France and England can obtain in
the United States ten thousand airplanes with engines
during the year 1940. He is sending Pleven to Washington
to see if it may be possible to organize such a production.
Personally,
- 3 -
Personally, I agree with Daladier that the war
can not be won unless France and England can obtain
absolute domination in the air. Approximately ten
thousand planes from the United States during the year
1940 will be necessary to obtain such domination.
I believe that this question at the moment sur-
passes all others in importance. I believe that if the
United States can produce these planes for sale to
France and England, the French and British will win the
war; and I believe that our Government should do every-
thing that it can reasonably to facilitate the production
of this number of planes.
Daladier once more, in the strongest conceivable
terms, pleaded with me to leave for the United States
at the earliest possible moment. I said that for various
reasons it seemed undesirable for me to leave before
Christmas and argued that Pleven would have to get in
touch with the Procurement Division of our Treasury
Department in order to discover exactly what would be
the difficulties in the production of such a number of
planes, and that I could do nothing to be of assistance
until Pleven had studied the problem for at least two
weeks
- 4 -
weeks with Captain Collins and the other experts of
the Procurement Division of the Treasury.
Daladier said that he wished to Heaven that I
would leave for the United States immediately but implored
me to be in the United States by the first of January
at the latest.
I do not consider that the problem of obtaining
ten thousand planes in the United States in the year 1940,
in addition to those already contracted for, is unsolvable.
It will require an immense amount of organization, and
also quiet assistance on the part of our Government.
Pleven will reach Washington at the same time as
this letter. I am giving him a little personal note
to Miss Le Hand. I am also giving him a brief personal
note to Henry Morgenthau. Will you please, as soon as
you have read this letter, pick up your telephone and tell
Henry Morgenthau to put Pleven into touch with Captain
Collins of the Procurement Division immediately? If
Henry wants the order in writing, please give it to him
in writing. I should like to stress again that Pleven
wishes to see Captain Collins not to ask him at this time
to assist in making any purchases for the French Government,
but purely in order to make use of the knowledge of the
Procurement
- 5 -
Procurement Division for his preliminary inquiry as to
the possibility of producing ten thousand additional
planes and engines in the United States in 1940.
Since various telegrams from the Department of
State have authorized me to say that the cooperation of
our Government and the Procurement Division would be given
to the French Government, I assume that there will be no
difficulty about putting Pleven in touch with Captain
Collins immediately. If there should be any difficulty,
I hope that you will steam-roller it at once.
I can not exaggerate the importance that Daladier
attaches to this mission of Pleven's. His entire attitude
toward the war will be influenced profoundly, or even
decided, thereby.
Daladier said to me at lunch today: "At this moment,
it is of no importance for you to be Ambassador in Paris.
Our relations are such that any Secretary of Embassy can
carry out the daily business satisfactorily. The one
vital problem today is the production of planes in the
United States. I implore you to leave for the United
States as soon as possible to work out this problem."
Your
- 6 -
Your nice cable of November 28 sent from Warm
Springs gives me a free hand to come home for a brief
holiday if I consider it wise; but I foresee on this
plane business tasks which will require pertinacious
and constant attention over a large number of weeks --
if not months. We shall run up against the same dif-
ficulties that we ran up against last December and January
when Monnet was purchasing the planes which are now
proving to be so useful at the front. There will be
all sorts of personal fears and hesitancies to be over-
come. I want, therefore, to know that I can stay at
home until the job is done.
If you have any intention of doing what I suggested
in my letter of November 1st, I wish you would inform me
of the intention in order to give me time to take the
CLIPPER which would put me in Washington by the first of
January. If you haven't any such intention, I wish you
would order me to be at home for consultation on the first
of January.
I have spent the past few days down by the Italian
front trying to get some perspective on this war. The
more I think about it, the more convinced I am that the
only road to salvation lies through a quadrupled production
of
- 7 -
of planes in the United States.
I want very much to talk with you about all the
things that I do not dare to put in black and white, and
I want to work on the problems that seem to me the real
problems.
Now please pick up your telephone and tell Henry
Morgenthau to put Pleven in touch with Captain Collins
immediately!
Merry Christmas and a Happy New Year.
Yours affectionately,
Bill
PSF: France
Bullitt
file 71
Personal and
Confidential
Paris, December 19, 1939.
Dear Mr. President:
This letter should probably be addressed to the
Secretary of Commerce since it concerns oysters - parti-
cularly huftres de pleine mer, the saltiest of the tribe.
But as a sea-going man, you ought to be interested in
oysters that are fished up in the open by the Bretons.
So here is the story.
On November 22nd, Royall Tyler, who is an old
friend of mine, as he doubtless is of yours, called
on me and said that Avenol, Secretary General of the
League of Nations, was most anxious to see me since
he felt that I did not like him and he wished me to
like him. I replied that he could tell Avenol that
I had never liked him. He was a Maréchal de Pompes
Funèbres, and there was no reason why I should see
him. Royall Tyler persisted, however, and asked me
to have luncheon with him and Avenol. I accepted on
condition
The Honorable
Franklin D. Roosevelt,
President of the United States of America,
Washington, D..C.
- 2 -
condition that we should eat at the Fontaine Gaillon
and should start with huitres de pêche. At least the
food would be good even though the conversation might
be bad.
We had the luncheon on the 29th of November and
Avenol was just as dead a dog as usual. I began to
make fun of him about the League and especially the
pleasure of working with his Soviet associates. He
seemed to have plenty of hatred for his Russian col-
leagues, so I asked him why he didn't get rid of them
by having the Soviet Union expelled from the League be-
cause of its aggression against Finland. He replied
that the League was so dead that it would certainly be
impossible to get any action by the League on the Soviet
aggression against Finland.
Thereupon, I delivered an oration on morality in
the world which was very nearly as good as yours when
you shook your finger at Litvinov and announced: "You
will believe in God".
Avenol, in self-defense, said that 80 far as he
was concerned, he would be delighted to see the Soviet
Union expelled from the League and regretted that it
would be impossible to obtain such action. Whereupon,
I told him that if he would carry through the matter,
I would undertake to get into motion within two hours
the energies necessary to throw the Soviet Union out
of
- 3 -
of the League.
I emphasized that I had no instructions from my
Government; that anything which I did get started would
be the result of William C. Bullitt and not American
Government action; that I happened to have appointments
after luncheon with Rochat and the Finnish Minister;
and one the next morning with Champetier de Ribes. I
thought that would suffice.
Avenol was gloomily skeptical, but at least seemed
interested in the idea that he might not have to work
with a Bolshevik any longer in his Secretariat.
After lunch I saw Rochat at the Quai d'Orsay. He
was even more negative than Avenol. He said that he
was certain that any action by the League was out of
the question; no nation would have the courage to take
up the matter; that Finland would not appeal to the
League, etc., etc. Whereupon, I gave him a lecture
also on human morality and left to receive the Finnish
Minister at my house.
He is a nice, timid, little fellow and when I
asked him why Finland did not appeal to the League,
he replied that he felt certain that the League would
not dare to take up the aggression against Finland
any more than it had dared to take up the aggression
against Poland. He thought an appeal to the League
by
- 4 -
by Finland might embarrass France and England. I told
him that I felt there could be no disadvantage to
Finland in making the attempt to get the support of
the League, there might be a great advantage to Finland.
If France and England should be embarrassed by being
asked to fulfill their most solemn pledges, I thought
it was time that they should be embarrassed.
The Finnish Minister asked me if he could tele-
graph his Government what I had said, and I told him
that, provided he made it entirely clear that I was
speaking as an individual and not in any way as the
representative of the Government of the United States,
he could telegraph anything he liked to his Government.
I then said to the Finnish Minister that he ought
to discuss the matter with Avenol at once. He was
frightened to talk to Avenol without instructions from
his Government. I then told him that I would pick up
my telephone immediately, call Avenol, and say that I
personally was insisting that they should discuss the
matter immediately. After thinking hard for about
three minutes, the poor Finnish Minister said that he
would be glad to see Avenol if I made it clear that I
was forcing him to see Avenol, and if I would not mind
his telling his Government that he had seen Avenol only
because I had compelled him to! I told him he could
make
- 5 -
make me as an individual responsible for anything, so
long as he made it clear that I was advising him as a
personal friend and not as American Ambassador.
I picked up my telephone and told Avenol that the
Finnish Minister was with me; that I was insisting with
force majeure that they should have an immediate conver-
sation; that I was sending the Finnish Minister to his
office in my car; and that he would arrive in two minutes.
Avenol asked me while I was talking to him on the
phone if I had had any positive reaction from the French
Government. I replied that, on the contrary, I had had
a totally negative reaction from Rochat, but I was en-
tirely convinced that this reaction of the Quai d'Orsay
would not be Daladier's reaction. Avenol said that he
thought I was wrong but hoped I was right because the
more he thought about the idea, the better he liked it
and if the French Government would really support a
move to exclude the Soviet Union from the League, he
felt that such action would be not only in the interest
of France and England but also of the League and human
decency.
I had too many other engagements that day to bother
about the Finnish business any more. But the next morning
I had an appointment with Champetier de Ribes. I told
Champetier exactly what I had said to Avenol, the Finnish
Minister,
- 6 -
Minister, and Rochat, again stressing the fact that my
remarks were entirely personal and had nothing whatso-
ever to do with the views of the Government of the
United States. Immediately after our conversation,
Champetier de Ribes had his regular morning conference
with Daladier. He repeated to Daladier what I had said
and to everyone's astonishment - except my own Daladier
said that I was entirely right; that Finland should be
supported to the limit and every effort should be made
to throw the Soviet Union out of the League.
Daladier went so far as to give immediate orders
that the French Government should get in touch with the
British Government and say to the British Government
that this was going to be the French line of policy
whether the British Government liked it or not. The
British objected; but Daladier went right ahead and
called a Cabinet meeting the same afternoon and had
the policy approved.
The moment that I had set this business in motion,
I left town and refused to take telephone calls, since
everyone from the Chinese Ambassador and members of the
French Government down was trying to get hold of me for
advice as to what should be done at Geneva. I refused
all conversations. The only person, who was I am afraid
miffed, was Henry Morgenthau. But I couldn't very well
talk to him by transatlantic phone when I was refusing
to
- 7 -
to talk to Daladier.
Avenol went back to Geneva knowing that he had
the full support of the French Government. The Finnish
Government replied to the Finnish Minister in Paris that
it thought the idea of an appeal to the League a good
one. Avenol, on returning to Geneva for the first time
in all the years that he has been Secretary General of
the League, began to dash around like a young colt.
The Finns made their appeal and the Soviet Union got
the boot.
You will remember that in the year 1934, after
the Bolsheviks had broken all the promises which
Litvinov gave us, you instructed me to do what I could
to make it clear that it was better for any nation to
have really friendly relations with the United States
rather than unfriendly relations. Since you put no
time limit on this instruction, I consider that my
activities on the afternoon of November 29th and the
morning of November 30th fall within the scope of your
instruction. Whether they do or not, I know that you
will like them anyhow.
The moral is: Eat oysters!
Love
- 8 -
Love and good luck.
Yours affectionately,
P.S. I enclose a document which I have just received
from the League of Nations. I wish you would
keep it for me as it will be the only record of
the connection between a peaceable luncheon at
the Fontaine Gaillon and the exit of the Bolshies.
W.C.B.
S.P.B.
SOCIÉTÉ DES NATIONS
LEAGUE OF NATIONS
TO SEE THE VACANT CHAIR, AND THINK
HOW GOOD, HOW KIND, AND HE IS GONE
IN MEMORIAM
XX st.5
TENNYSON.
Fontaine Gaillon, November 29th.
Geneva, December 14th.
NDARD FORM No. 14A
ROVED BY THE PRESIDENT
FROM
MARCH 10, 1926
The White House
Mashington
TELEGRAM
Ballett
OFFICIAL BUSINESS-GOVERNMENT RATES
CABLEGRAM
...
16-6481
December 21, 1939.
BULLITT (Via State Department)
AMEMBASSY
PARIS
YOUR LETTERS OF EMEVENTH RECEIVED
AM TAKING CARE OF
MATTER HERE AS YOU SUGGEST HOPE FOR QUICK ACTION
FRANKLIN D. ROOSEVELT