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

Paris Peace Conf. 180.03401/119

IC–176D

Notes of a Meeting Held at President Wilson’s Residence, Place des Etats-Unis, Paris, on Friday, April 25, 1919, at 4 p.m.

Paris, April 25, 1919, 4 p.m.

• Present
  • United States of America
    • President Wilson.
    • Mr. Lamont.
    • Mr. Baruch.
    • Mr. Taussig.
    • Mr. Anderson.
    • Mr. Palmer.
  • The British Empire
    • The Rt. Hon. D. Lloyd George, M. P.
    • The Rt. Hon. Sir Robert Borden, G. C. M. G., K. C.
    • Sir Hubert Llewellyn Smith, K. C. B.
    • Mr. H. A. Payne, C. B.
  • France
    • M. Clemenceau.
    • M. Clénentel.
    • M. Loucheur.
    • M. de Serruys,
      Director at the Ministry of Commerce and Industry.
    • Sir Maurice Hankey, K. C. B. Secretary
    • Professor P. J. Mantoux. Interpreter.

1. Reparation: Report of Interview With Powers With Special Interests M. Loucheur said that he and Lord Cunliffe¹ and Mr. Lamont, in accordance with the decision taken the previous day, had interviewed the representatives of Belgium, Serbia, Portugal and Brazil, and had explained to them the reparation clauses. The results of the interview had been set forth in a memorandum which M. Loucheur had prepared,² but might be summarised as follows:—

• Belgium had demanded the costs of the war, provisions as regards certain works of art and certain new categories of damage.
• Serbia had demanded to be represented on the Commission and had made some small demand in regard to categories.
• Brazil had claimed the same treatment as the United States of America in regard to captured enemy ships.
• Portugal claimed the costs of the war and reparation for shipping.
• All had asked to be heard by the Supreme Council.

M. Loucheur suggested that, as Belgium was the most important, her representatives should be heard separately.

President Wilson thought this was quite right.

Mr. Lloyd George said he had received a letter from Lord Sumner describing the interview which he and some of his colleagues had had with the representatives of Roumania, Greece and Japan. Roumania had said nothing, but had given the impression of being not very contented. Greece had been satisfied. The Japanese representative had been enigmatic and they had not been able to judge of his attitude.

No complaints nor demands had been made. This was a matter that would have to be dealt with by the Supreme Council. In regard to the ships, he had always felt that Brazil would take this attitude.

President Wilson remarked that the difference between the case of Brazil and that of the United States was very great.

2. The Supreme Council had before them the articles prepared by the Economic Commission.³

Economic Commission: Articles To Be Inserted in the Treaty of Peace With Germany President Wilson said that the differences between the experts were now very few and he proposed that they should only discuss those articles to which his colleagues wished to draw attention.

(a) Part 1, Chapter D, Article I President Wilson said that one of the points in which the United States of America were especially interested was raised in Part I, Chapter D, Article I. Although it was a matter of policy, it did not directly affect the United States of America. The point he wished to raise referred to the limitation to be imposed on the duration of these clauses. What the United States were particularly interested in was a uniform provision as to the length of time for which these articles were to be applicable. They desired an automatic application of a term of 5 years, at the end of which the articles should cease to be operative except under some action by the League of Nations. The alternative proposal was that they should remain operative until they were terminated by some affirmative action by the League of Nations. The United States’ view was that they ought to terminate automatically unless renewed.

Sir Robert Borden said that the discussion at the British Empire Delegation had centered on this point. The general view had been that the articles should be terminated unless renewed by the League of Nations.

President Wilson said this was precisely his view.

Mr. Lloyd George asked how the matter stood in the report.

Mr. Baruch said that the articles would continue until terminated by the League of Nations.

M. Clémentel said that there were two classes of articles to be considered. The first class dealt with customs and the second class dealt with the treatment of nationals of Allied and Associated Powers in ex-enemy countries, etc. and shipping. In regard to customs, it had been generally accepted that the provisions should terminate automatically at the end of 5 years, unless renewed by a decision of the League of Nations, which, he remarked, was rather difficult and uncertain, because a unanimous decision was necessary and any one party was at liberty to refuse assent. He asked that it should be remembered what Germany had done not only during the war but before the war. Countries like France, for example, had suffered very much from Germany’s action before the war, in her attempts to capture the iron trade; to obtain control of such articles as bauxite in order to get the aluminum trade under control; and in regard to dyestuffs, where she had checked competition. To this must be added what had happened during the war, when prodigious damage had been inflicted by Germany, both of a material and personal character. When this was borne in mind, the difficulty would be realised for peoples who had so suffered to forget within so short a term as 5 years. If the provisions came to an end at the end of 5 years, those countries would be obliged to receive the Germans in the same position as before the war. If they refused, they would, of course, be exposed to reciprocal treatment by Germany. It had been suggested that the invaded countries should receive separate treatment, and that the provisions should continue automatically unless stopped.

President Wilson said that M. Clémentel’s argument proved too much. If the League of Nations could not extend the period because it would not be able to reach a unanimous decision, it would equally be unable for the same reason to terminate the operation of the provisions. He, himself, thought that it was a mistake to suppose that the League of Nations would not be able to reach unanimity.

M. Clémentel said that it was realised that the system could not be permanent. What was proposed was a maximum period within which the provisions should operate. The first proposal was for 20 years. Now, however, this had been reduced to 10 years. Five years was, in his opinion, too short a period. The result of fixing only 5 years would be that France would have to shut the Germans out, in which case they would receive reciprocal treatment in Germany.

M. Clemenceau said that he would accept the demand for 10 years as a maximum for countries that had been ravaged.

Mr. Baruch said that the United States Delegates on the Commission had thought five years too long. He hoped, therefore, that five years would be accepted as the maximum unless the League of Nations decided to prolong it. His personal view was that five years was too long.

M. Clemenceau said that it should be taken into account that the different nations had not been affected during the War in the same manner. In France damage had been done which would be perceptible for more than a century. Nations which had taken part in the War and had not been exposed to the same terrible suffering as France naturally had not the same mentality as a country which could not be completely repaired for more than a century. In his view, five years might be adopted for all countries but a special provision should be made for countries like France which were in a different position.

Sir Robert Borden suggested that the five years which had already been fixed should be adopted as a minimum and ten years should be taken as the maximum period. The League of Nations should have power to appoint a Commission which should, by majority, fix a period for which in particular cases an extension should be granted, such extension not to go beyond a maximum of ten years from the original date.

M. Clemenceau said France would accept that proposal.

Mr. Lloyd George also agreed in the proposal.

President Wilson said that one aspect was constantly in his mind in regard to the whole of the Treaty with Germany. When the German plenipotentiaries came to Versailles they would be representatives of a very unstable Government. Consequently, they would have to scrutinize every item, not merely to say that it was equitable, but also as to whether it could be agreed to without their being unseated. If the present Government were unseated, a weaker Government would take its place. Hence the question had to be studied like a problem of dynamics concerning the action of forces in a body in unstable equilibrium. Any special restrictions on their nationals which they could not meet by corresponding restrictions would place them in difficulties. The Treaty would hit them very hard since it would deprive them of their Mercantile Marine; would affect their international machinery for commerce; would deprive them of their property in other countries; would open their country by compulsion to enterprising citizens of other countries without enabling their enterprising citizens to try and recover their position in foreign countries. He did not think that the fact had been sufficiently faced that Germany could not pay in gold unless she had a balance of trade in her favour. This meant that Germany must establish a greater foreign commerce than she had had before the war if she was to be able to pay. Before the war the balance of trade in Germany’s favour had never equalled the amounts which she would now have to pay. If too great a handicap was imposed on Germany’s resources we should not be able to get what Germany owed for reparation. Moreover, if the business world realised that this was the case the securities on which the payment of reparation would depend would have no value. If this reasoning was sound it provided a formidable argument. He only looked towards reaching a peace and in doing so putting Germany in the position to build up a commerce which would enable her to pay what she ought to pay in order to make good the robbery and destruction she had perpetrated. But if the robber was to be in such a position that he could not pay the penalties would be inoperative. These penalties ought to be operative and real. We ought to see that Germany could put herself in a position where she could be punished. At the present time we were sending food to Germany but she would not be able to pay for that for more than about two months.

M. Clémentel said he thought there was some misunderstanding. There was perfect agreement as far as customs clauses were concerned, namely, that they should terminate at the end of five years or that at the end of four years the League of Nations should consider whether there was to be any extension. As regards persons it was not desirable from Germany’s point of view that it should be automatically terminated too soon, as if it were, Germans in countries like France would be exposed to violence. He would be quite satisfied if Sir Robert Borden’s proposal were adopted. The countries concerned would then have a right to state before the Commission set up by the League of Nations whether public opinion would enable them to terminate the provisions at the end of five years or would render it desirable to extend the term of their operation. Nothing would be gained by Germany by unduly shortening the period. In accepting Sir Robert Borden’s proposal France was making a considerable concession when it was remembered that 20 years had been the period originally proposed.

President Wilson said he did not much like Sir Robert Borden’s proposal and he thought it was a mistake. He thought it would be quite safe to decide that the provisions should terminate in five years unless continued by the League of Nations. He would point out that the term used should either be ‘Council of the League’ or ‘Body of Delegates’.

Mr. Lloyd George said that this was the case.

President Wilson said that he wanted in every possible case to yield to the desire of his French colleagues. He realised to the full the position of the French Government and people and the suffering which France had undergone. Although it was a serious matter for the treaty as a whole, therefore, he would accept Sir Robert Borden’s suggestion but he urged that the clauses should be very precisely drawn.

Sir Robert Borden said he would be glad to cooperate with the Drafting Committee.

Sir Robert Borden’s proposal was accepted, namely that the period during which the provisions should apply should be fixed at five years unless extended by the League of Nations. The maximum period to which the extension could be made should be ten years from the original date. The League of Nations should by majority vote set up a Commission which by majority vote should decide the length of any extension within the total period of ten years.

The Drafting Committee of the Commission should formulate the necessary amendments to be forwarded to the Drafting Committee of the Peace Conference.

[3.] Part IV Reparations Y President Wilson asked Dr. Taussig to explain points which arose on these clauses.⁴

Article 4 Dr. Taussig illustrated the point raised by this Article in the following manner:—Supposing a German subject possessed property in Italy, the Article provided that such property could be utilised towards the payment of amounts due to subjects of the Allied or Associated Powers in regard to property which they had in German territory. The question was whether, in the event of there being a surplus on the German property, it could be used to make good debts owed to Allied and Associated subjects in Austria or other enemy territory. The Italian Delegation had taken the view that it could be so used, but the United States Delegation had reserved their adhesion.

Mr. Lloyd George said he agreed with the Italian view. The principle of joint liability by enemy powers had been accepted in regard to reparation, and he thought it would be difficult to avoid applying the principle here also.

Sir Hubert Llewellyn Smith pointed out that compensation to the enemy subjects in such case was provided for, but would have to be paid by the enemy Government concerned.

President Wilson said he did not much like the Article, but he would not press his objections.

Part IV., Article C (a) b. Footnote (The Article was accepted.)

(It was agreed that the foot-note should be deleted.)

Conclusion Sir Maurice Hankey was instructed to forward the Report of the Economic Commission to the Secretary General for Conclusion communication to the Drafting Committee of the Preliminary Peace Conference as soon as the expert Drafting Committee had completed the necessary alterations in the Articles.

Villa Majestic, Paris, 25 April, 1919.

1. Governor of the Bank of England, 1913–18; president of the Subcommission on the Financial Capacity of Enemy States, Their Means of Payment and Reparation (Second Subcommission).
2. See appendix IV to IC–177A, p. 322.
3. The text of these articles does not accompany the minutes.
4. The text of these articles does not accompany the minutes.