File No. 861.51/272
The Ambassador in Great Britain (Page) to the Secretary of State
[Received 10.11 p.m.]
8656. No. 68. For McAdoo from Crosby:1
At meeting of Finance Section of Inter-Allied Council on Friday, Bonar Law and Klotz2 both being present, Klotz proposed following resolution which was adopted:
The Finance Section of the Inter-Allied Council on War Purchases and Finance, referring to the statement put forward by the Diplomatic Conference of London on February 19, 1831, regarding Belgian affairs, “it is a principle of commanding nature that treaties do not lose their value, whatever be the changes that intervene in the interior organization of peoples,” recommends for the consideration of the governments represented the following statement:
- Whereas, The Imperial Russian Government when it contracted liabilities undoubtedly represented Russia and definitely obligated it;
- Whereas, This obligation cannot be repudiated by any authority whatever governing or which should eventually govern in Russia without shaking the very foundations of the law of nations;
- Whereas, There would be in that case no more security in the relations [of] states and it would be impossible to enter into a contract over any long period of time on account of the risk of such a contract being eventually ignored;
- Whereas, Such a policy would mean the destruction of the credit of states as much from a political as from a financial viewpoint;
- Whereas, A state could not borrow money under normal conditions if the lender’s only guarantee was the maintenance of the constitution under which the borrowing government as representing the country puts out a call for credit;
- Whereas, No principle is more clearly settled than the one according to which a nation bears the responsibility of the acts of its Government and the liabilities incurred are not affected by any change in authority;
- Whereas, The obligations of Russia bind and will bind the new state or the group of new states that represent or will represent Russia:
- Now, therefore, The Allied powers will take into consideration the principles above mentioned in every negotiation relating to the recognition of the new state or new states that are eventually to be constituted in Russia.
In voting for the resolution, Chancellor of the Exchequer and myself were moved by consideration that being only a recommendation of the general principle to our respective Governments we were not in any way compromising their action and at the same time, according to Klotz’s representations, might, if the Governments accept the recommendation, aid him in some of his great difficulties. Due to the vast amount of Russian obligations held in France my own opinion is that the paragraphs denning the general principle of responsibility of succeeding governments for debts of predecessors [Page 35] have been already so often stated that repetition scarcely necessary. Most important part has to do with suggestion that no recognition of new states carved out of original Russian territory should be made without provision for adoption of part of general debt.