Papers Relating to the Foreign Relations of the United States, The Paris Peace Conference, 1919, Volume II

Paris Peace Conf. 871.51/2a: Telegram

The Commission to Negotiate Peace to the Acting Secretary of State

Paris , 2 January, 1919 [4 p.m.(?)]

132. For Rathbone Assistant Secretary of Treasury from Davis.

1. Reports from Roumania indicate necessity of immediate relief to prevent starvation and anarchy. See various cables to State Department and Hoover’s cables to Food Administration. While it is difficult to proceed in situation apparently requiring action before full information is had and adequate arrangements are made for meeting same, it was decided advisable, in conference with Colonel House, General Bliss, Hoover and others to take some temporary action to meet emergency before more definite plans and arrangements can be obtained.

2. Hoover states immediate situation could be relieved by an advance of $5,000,000 for expenditure through Food Administration or Grain Corporation to pay for cost of supplies now enroute to Mediterranean which could be diverted to Roumania. This would only meet situation temporarily, but in meantime, other arrangements can probably be made including participation by England and France. In addition to food, Roumanian reports indicate need of clothes and shoes which they can probably get from England.

3. I explained the limitations of Secretary’s power to establish credits, but Secretary Lansing is of the opinion that Roumania’s present state of hostilities brings her within those limitations and is so cabling to Secretary through State Department, recommending importance of giving her financial assistance.

4. Hoover’s information is that other sections of Europe will become desperate this winter unless assistance is furnished and if United States is to undertake this task, we should, it seems, obtain special legislation and be prepared to assist wherever situation demands, or, as an alternative, get England and France to participate at least to the extent of making advances through Hoover’s organization to those countries which we cannot finance by giving their currencies or obligations in payment of the supplies obtained in the United States. With or without legislation, it seems that in view of present limitation of advances to England and special situation as to France, there should be less objection to their assuming a fixed share in European relief and of meeting same with their own resources and currencies. Italy desires to participate in relief of contiguous peoples, but we could only use Italian currency for expenses in certain localities.

5. According to latest reports considered reliable, situation in Vienna is desperate, Austria’s total gold stock being below $50,000,000, or less than 1 percent of outstanding bank notes, and even this gold is claimed by Czechs and Jugo-Slavs to cover the notes held by them. Vienna has endeavored but failed to negotiate a credit in Switzerland and Holland, although offering the electric plant and waterworks as security. It is not considered advisable to mortgage the city to furnish relief, and in order to meet the immediate situation, Hoover has decided to send in 10,000 tons of flour paying for same out of funds supplied him by the President and to take obligations of the Vienna banks, payable 6 months after peace, with a claim against assets in hands of Enemy Custodian or such commercial security as they can give. Once the financial blockade is lifted, the Viennese bankers think they can obtain enough from Austrian emigrants and otherwise to tide them over and they have now about arranged to obtain 10,000 tons of wheat from an Austrian merchant in Argentina. Arrangements can probably be made also for them to obtain some food from Hungary.

6. Present chaotic situation has dislocated distribution, but once the emergencies are met, this can be no doubt assisted and most of the countries can begin to make commercial arrangements to obtain their food requirements without government loans.

7. Understand the President sent a message to the Secretary of the Treasury today to request Congress to place funds at his disposal for relief purposes,⁵³ and while I believe this cable is in accordance with his views and policy, it was impossible to submit it to him for approval before he left for Italy tonight. If however you can and are disposed to establish a credit of $5,000,000 for Roumania, I shall be glad, if you wish, to ask for the President’s formal approval, and to assist in securing Roumania’s obligation.

Am[erican] Mission

53. Telegram dated Jan. 1, supra.