The French Debt to the United States

Report Outline
History of French Debt to the United States
“Political” and “Commercial” Debt
French War Expenditures in the United States
Proposals for Pooling War Debts
Discussions of Funding and Repudiation
The French Debt and the Dawes Plan
American Revolutionary Debt to France

Definite negotiations for the funding of the French debt to the United States are expected by the Treasury Department to follow the balancing of the French budget. The progress thus far made by M. Caillaux, the new Finance Minister, and the evident desire of the French government to float additional loans as soon as possible in the American money market, have led to a belief that a French mission will be sent to the United States to meet with the World War Debt Funding Commission soon after its negotiations with the Belgian representatives in July are concluded.

While clearly stating the intention of his government to open direct negotiations with the United States at an early date, M. Caillaux has made no announcement of the principles upon which he believes a settlement should be based. All other French finance ministers since the war, down to and including M. Clémentel, took the position that the debts contracted among the nations engaged against Germany constituted an international problem, the solution of which could not be found in separate negotiations with individual creditors. They have been joined by other French statesmen in asserting that the amount of the debts should be readjusted in accordance with the sacrifices of each nation, and that payments should be made to hinge upon the amounts received as reparation receipts from Germany.

In the presence of France's present need for additional foreign loans the theory that war debts should be pooled for payment appears to have been abandoned by M. Caillaux. To what extent he is prepared to insist upon the various claims for reductions in France's debt put forward by his predecessors probably will not be made known until the actual negotiations are opened at Washington.