9 januari 1917: Sengier vernoemd in brief Hoover aan Van de Vyvere

DOCUMENT NO. 159

Letter,

HOOVER TO VAN DE VYVERE, describing the status of relief loan negotiations and requesting him to intervene with the French and British Governments to advance the matter

LONDON, 9 January 1917

His Excellency, Monsieur A. Van de Vyvere

Minister of Finance, Havre

DEAR MR. VAN DE VYVERE:

Some two months ago we were asked by the French officials to undertake negotiations for a loan in America for the support of the relief in Northern France, to be assured upon municipal obligations from that territory, with the guarantee of the French Government. A great deal of negotiation has taken place between myself and the American bankers, as represented by a committee in New York which embraces practically the whole of the banking strength of the United States. Finally, on the 24th December I was advised by them that they considered that to make a successful loan for relief purposes it would have to be issued on behalf of the Belgian, French, and British Governments jointly. They considered that such a loan could be made without security and probably for $150,000,000 and as a contribution toward the relief; and as a compliment personal to myself, they offered to undertake the issue of the loan without any charge whatever. It was understood that the loan would be for a short time, but neither the rate of interest nor the period has yet been suggested.

I laid the position immediately before the French Government, suggesting that they should take the matter up with yourselves and the British Government, and I asked Mr. Francqui and Mr. Sengier to inform you fully of the position, and they inform me that you are fully agreeable in principle. I had so confidently expected that the matter would have been brought officially to your attention that I had taken passage on the steamer leaving last Saturday, with the anticipation that matters would be so advanced that I could proceed to New York, it being the unanimous desire of the American bankers that I should be there to formulate the propaganda in the matter.

It appears that the French Government has taken the matter up with the British Government, but some difference of opinion apparently at the same time exists between them as to the relation of this loan to other arrangements between the French and British governments, and so the matter is dragging very badly.

I am rather anxious at the present moment, as the opportunity has been created and the high level of sentiment which exists at the present moment toward Belgium in the United States should be taken advantage of without further delay; and furthermore as Mr. Sengier informs me you are despaired of further increasing our subsidies beyond £1,500,000 a month. You know the cost of the present program is close on £2,100,000 and unless we can see some daylight I see no alternative but to reduce the food supply by the end of this month.

This loan would be a solution to the situation, and I am wondering whether or not you could not intervene to advance the matter.

The American groups ask that they should be formally requested by the Allied Governments to undertake this loan, and they have appointed Messrs. Morgan, Grenfell & Co. to negotiate on behalf of all of them, and these formalities are necessary to get the matter in motion. The loan is to be issued with the endorsement of the Commission for Relief, to be undertaken by the American bankers without charge, and to appeal to that section of the American public which will not subscribe for war loans. It is therefore necessary to agree on a formula as to the purpose and method of spending the money; and I propose the following, which meets the acceptance of our New York colleagues:

"The object of the loan is to provide continued financial support to the Commission for Relief in Belgium, for the relief of the civil population in the occupied territories of Belgium and Northern France. The proceeds of the loan are to be deposited with the bankers of the Governments and retained by them solely for the purposes set out below, and are to be drawn upon by the Commission in monthly sums sufficient to cover the monthly food imports authorized by the Allied Governments. The proceeds of the loan are in the first instance to be expended for the ravitaillement of the civil population and the support of the destitute in the occupied territories by and under the direction of the Commission for Relief in Belgium, and the Commission shall continue as heretofore to be administered by a neutral Chairman appointed with the approval of the American Ambassadors and Ministers in Europe and by Directors appointed by the Chairman. If peace should intervene leaving an unexpended balance, such balance shall be released to the French and Belgian Governments to be expended upon the economic rehabilitations of the civil population. The loan shall be called the Relief Commission Loan."

The interrelations between the three Governments are of course not a matter which concerns the bankers or myself. I would suggest to you, however, that the actual cost of the relief as between the two countries is 40 per cent to the French and 60 per cent to the Belgians. This may form for you an idea as to the relative basis of repayment. The formula which I have set out above, you will see, provides for the expenditure of the loan on the basis of the commodities authorized, which would enable us to take whatever is necessary with rising and falling prices.

There appear to me to be many advantages in doing this operation, and doing it quickly, for, aside from the above objects, it is an effective guarantee of the continuity of the Relief, as it would be difficult to terminate such a relation set up between the American people and the Belgian people. It also would appear to me to be an advantage to the credit of the Belgian Government to be a party to a successful loan. Furthermore, the loan, if successful, will enable us to stop public appeals for charity and substitute the dignity of a well credited borrower therefor.

I am very anxious to get off for America on Saturday the 13th, at least, leaving the position such that it may be signed up and ordered by telegraph by the time I should arrive in New York, as my colleagues are very insistent that we must strike the iron while it is hot.

Yours faithfully

(Signed) HERBERT HOOVER

http://www.lib.byu.edu/~rdh/wwi/comment/CRB/CRB1-4b.htm