Papers Relating to the Foreign Relations of the United States, The Paris Peace Conference, 1919, Volume VI
Paris Peace Conf. 180.03401/66
Notes of a Meeting Held at President Wilson’s House in the Place des Etats-Unis, Paris, on Saturday, June 14, 1919, at 11 a.m.
- United States of America
- President Wilson.
- British Empire
- The Rt. Hon. D. Lloyd George, M. P.
- M. Clemenceau.
- M. Sonnino.
- Baron Makino.
- United States of America
|Sir Maurice Hankey, K. C. B.||}||Secretaries.|
|M. di Martino.|
|Professor P. J. Mantoux.—Interpreter.|
|M. Tardieu was present during the early part of the meeting.|
1. M. Clemenceau produced a Report by the Military Representatives at Versailles on the situation in Bulgaria.
(Sir Maurice Hankey was instructed to raise the question on Monday, and to circulate the Report before then.) Bulgaria
2. President Wilson read a re-draft of Article 438 of the Treaty of Peace with Germany, which had been agreed to by a representative of the Vatican, who had seen a representative of the American Delegation. Missionary Property
Mr. Lloyd George objected to one portion of the draft, in which it was suggested that the names of the trustees for missionary property in former German colonies should be submitted to the Vatican. He said that the British Government had always refused any claims of this character on the part of the Vatican.
(The alteration to Article 438 in Appendix I was approved.)
3. (In view of the short time available before communicating the reply to the German Note to the German Delegation, it was agreed that no Plenary Conference should be held, but that, coherence instead, the representatives of the States principally affected by the changes proposed, should be invited to meet the Council that afternoon. Proposed Plenary Conference
Sir Maurice Hankey was instructed to summon at 3.30 the representatives of Belgium, Poland and the Czecho-Slovak State.)[Page 418]
4. With reference to C. F. 65, Minute 8,1 the Council had before them re-drafts of certain passages in the Report of the Committee on the Eastern Frontiers of Germany on the answer to be Frontier of given to the German reply, prepared in accordance with the decisions taken on the previous day. Eastern Frontier of Germany
(Subject to certain verbal modifications, these were approved, and are attached (Appendix II). Sir Maurice Hankey was instructed to report to the Secretary General for the information of the Editing Committee.)
Note. Sir Maurice Hankey handed M. Tardieu a corrected copy.
5. M. Tardieu reported that there were a number of outstanding points arising out of the German comments, to which, as yet, the Editing Committee believed no reply had been prepared. These included Luxemburg, Austria, Russia and Guarantees of Execution.
Sir Maurice Hankey added to this list Reparation in Kind and Dyestuffs. Outstanding Points in the Reply to the German Proposals
M. Tardieu then mentioned several questions which were to be dealt with by the Council on the same afternoon.
(It was agreed that the Editing Committee should have authority to insert a paragraph in the reply, to the effect that there were certain points of detail raised in the German Note, to which it was not considered necessary to make a detailed reply, but that the points had been considered and the Allied and Associated Powers were unable to accept the arguments or to alter the Treaty.
6. M. Tardieu said that the Editing Committee had discovered a certain number of contradictions between the general covering letter to the Germans, and the special replies.
(It was agreed that the Editing Committee should have authority to make the necessary changes either in the covering letter or in the special replies, to ensure uniformity.)
7. M. Tardieu said that the Editing Committee had discovered that the English and French texts of the German Note, as published by the German Government, had been varied from the German text, in order to create a false impression among the British or French publics. He asked permission to mention this fact at the end of the Note on Responsibilities.
(This proposal was approved.)
8. M. Clemenceau asked whether Mr. Philip Kerr’s draft on the subject of Responsibilities had been approved.
President Wilson said the arrangement had been that it should be approved unless M. Clemenceau wished to change it. Responsibilities[Page 419]
M. Clemenceau said that he did not like the Note, but he did not press his objection.
(M. Tardieu withdrew.)
9. The Council had before them a memorandum prepared by the Economic Commission regarding the Economic remarks of the German Delegation on the Economic Clauses of the Conditions of Peace. (Appendix III.) The Reply to the German Note on Economic Clauses
President Wilson read the memorandum together with the supplementary [note], aloud.
(The Report was approved, subject to the following small changes.
Page 6, under the heading “German Appendix on Special Legal Questions.”2 Line 4. Before the word “activities” insert “political”
Page 7. 3rd Paragraph.3 For the word “likewise” insert “what she has forced her opponents to do.”
Page 13. Line 2.4 Instead of “English, French or Italian” put “English, French, Italian or Japanese.”
Page 13. Article 306. Paragraph 3.5 Delete the following words: “as we do not feel able to place any reliance on the character or fairness of the corresponding German measures. On the other hand,”
As a certain number of alterations in the Treaty of Peace with Germany were provided for by this Report and as these were summarized at the end, the Supplementary Note was initialled by the representatives of the Five Principal Allied and Associated Powers as an indication to the Drafting Committee that the necessary alterations were to be made in the Treaty.
Sir Maurice Hankey was instructed to notify the Secretary-General of these decisions, for the information of the Drafting Committee and the Editing Committee.)
10. The Council had before them a reply to the German Counterproposals in so far as these affected questions of Air craft and aerial navigation, prepared by the Aerial Commission.6
(The reply did not commend itself to the Council, and it was decided that this subject should be included among the questions to which no detailed reply is to be sent, and which will be covered by a general paragraph in the Reply, stating that the German proposals have been considered; that their arguments are not accepted; and that no modification can be made in the Treaty. Reply to the German Note on the Subject of Air Clauses
Sir Maurice Hankey was instructed to notify the Secretary General, for the information of the Editing Committee.)
Villa Majestic, Paris, 14 June, 1919.[Page 420]
Appendix I to CF–66
Article 438 of the Treaty of Peace With Germany
The Council of the Principal Allied and Associated Powers has, on June 14th, 1919, approved the following alterations to be substituted for that part of the first paragraph beginning at the end of line six and for the second paragraph, leaving the third paragraph untouched.
“In order to ensure the due execution of this undertaking, the Allied and Associated Governments will hand over such property to boards of trustees appointed by or approved by the Governments and composed of persons belonging to the same or the corresponding religious denomination as the Mission whose property is involved.”
“The Allied and Associated Governments, while continuing to maintain full control as to the individuals by whom the Missions are conducted, will safeguard the interests of such Missions.”
- W. W.
- G. C.
- D. L. G.
- N. M.
- J[S]. S.
Appendix II to CF–66
Draft Reply to the German Note
Eastern Frontiers of Germany
Modifications in the Draft Submitted by the Committee
Substitute for the first paragraph.
In dealing with the problem of the Eastern frontiers of Germany, it is desirable to place on record two cardinal principles. First there is imposed upon the Allies a special obligation to use the victory which they have won in order to re-establish the Polish nation in the independence of which it was unjustly deprived more than one hundred years ago. This act was one of the greatest wrongs of which history has record, a crime, the memory and the result of which has for long poisoned the political life of a large portion of the Continent of Europe. The seizure of the Western Provinces of Poland was one of the essential steps by which the military power of Prussia was built up, the necessity of holding fast these provinces has perverted the whole political life, first of Prussia and then of Germany. To undo this wrong is the first duty of the Allies, which has been proclaimed by them throughout the war, even when to some it might have appeared that the prospect of ultimate success was most remote; now that the victory has been won, the aim can be achieved. The restoration has already been spontaneously agreed [Page 421] to by the Russian Government; its achievement is insured by the collapse of the Central Powers.
Page 2. East Prussia.
At the end of the first paragraph add the following words:—
The larger part of the trade of East Prussia with the rest of Germany is sea-borne; for the commercial life of the province it will matter little that West Prussia is restored to Poland, but for Poland the immediate and unbroken communication with Danzig and the remainder of the coast by railways which are entirely under the control of the Polish State is essential.
The inconvenience caused to East Prussia by the new frontiers is negligible compared to that which would be caused to Poland by any other arrangement.
But in addition the occupation of the Railway connecting East Prussia and Germany has been fully recognised in the Treaty, and Articles dealing with this have been inserted. They have now been carefully revised, and they provide the fullest security that there be no impediment placed in the way of communication across the intervening Polish Territory.
A considerable portion of the German answer is devoted to the question of Upper Silesia. It is recognised that the problem here differs from that in Posen and West Prussia for the reason that Upper Silesia was not a part of the Kingdom of Poland when dismembered by the Partition. It may be said that Poland has no legal claim to the cession of Upper Silesia: It is emphatically not true that she has no claim which could be supported on the principles of President Wilson. The overwhelming majority of the population is indisputably Polish. Every German book of reference, every school-book teaches the German child that the large majority of the inhabitants are Polish in origin and in speech. The Allies would have been acting in complete violation of the principles which the German Government itself professes to accept had they left unregarded the Polish claims to this district.
However the German Government now contests these conclusions. They deny the Polish aspirations of the people. They insist that separation from Germany is not in accordance with the wishes or the interests of the population. Under these circumstances the Allied and Associated Powers are willing to allow the question to be determined by those particularly concerned. They have therefore decided that this territory shall not be immediately ceded to Poland, but that arrangements shall be made to hold a plebiscite there.
They would gladly have avoided this, for the appeal must be postponed for some considerable time; it will involve the temporary occupation [Page 422] of the district by foreign troops. In order to secure the full impartiality of the vote, it will involve the establishment of a separate Commission to administer the territory during the intervening period.
Appendix III to CF–66
remarks of the german delegation on the economic clauses of the treaty of peace
Letter From the Chairman of the Economic Commission to the President of the Peace Conference
In transmitting to you, in French and English, the Memorandum which, in accordance with the decision of the Council of the Principal Allied and Associated Powers, the Commission appointed by the Council for the purpose has prepared in reply to the “Remarks of the German Delegation on the Conditions of Peace,”6a I have the honour to submit to you certain explanations regarding its substance and some observations which may be employed in the introductory letter covering the memorandum of the Allied and Associated Powers.
The memorandum prepared by the Commission corresponds to the under-mentioned parts of the German Remarks:—
- Section V (Politico-Commercial Provisions) except the important part of that section which concerns the Commission on the International Régime of Ports, Waterways and Railways;
- Section VII (Treaties);
- Annex, Section A (Resumption of Diplomatic and Consular Relations), except paragraph 1, which belongs to the political sphere;
- Annex, Section B (Treatment of Private Property). In the reply to this Section the Commission have embodied the replies to the German Notes of the 22nd7 and 29th May8 in accordance with the decision of the Council of the Principal Allied and Associated Powers at their meeting on the 3rd June,9 together with certain observations regarding some passages of Section III of the “Remarks” respecting the same subject.
The Commission have confined their reply to the Sections which are directly within their sphere, and have not dealt with the economic questions treated in other Sections which, having regard to their object, chiefly concern other Commissions. Likewise, they have refrained from replying to the arguments of a territorial, maritime, financial or other description, which the German Delegation has mingled with its economic discussions. Among these arguments and statements, however, there is one to which the Commission, without [Page 423] suggesting an answer to it any more than to the others, think it right to call the attention of the Council of the Principal Allied and Associated Powers, namely, that which represents as being contrary to international law the Blockade which for four and a-half years prevented Germany from supplying itself with raw materials. The Commission consider that this accusation cannot be left without reply, but do not regard themselves as authorised to deal with it.
The method by which the Commission have limited their reply obliges them to submit to the Council of the Principal Allied and Associated Powers certain remarks which may be employed by them in the letter dealing with principles which is to serve as an introduction to the Memorandum.
- The absence of a reply to any particular point in the Remarks should not be invoked by the German Delegation as a tacit acquiescence on the part of the Allied and Associated Powers. This method of argument, already suggested by the German representative at Treves and Spa, must be ruled out.
- The provisions regarding which observations have been exchanged are to be maintained as they stand unless the Commission explicitly propose an amendment.
- The replies submitted render unnecessary any oral discussion.
The basis on which the accompanying memorandum has been drawn up by the Commission is in harmony with the principles previously adopted by the Reparation Commission and the Financial Commission. If these principles were the subject of important modifications, the reply of the present Commission would have to be modified likewise.
The Commission deem it well to point out that in preparing their memorandum they have departed on one point from a decision taken on provisions ratified by the Council of the Principal Allied and Associated Powers.
As concerns Article 75 (Alsace-Lorraine), the Council of the Principal Allied and Associated Powers decided at its sitting of the 24th May10 that, if the Germans so desired, a concession should be offered to them similar to that which is included in Article 51 of the economic clauses of the Treaty with Austria, in which it is stipulated that “if the annulment [of contracts] would cause one of the parties substantial prejudice, the Mixed Arbitral Tribunal shall be empowered to grant to the prejudiced party compensation calculated solely on the capital employed, without taking account of the loss of profits.” The German Delegation, while it has not formally expressed a desire for this amendment, has raised objection to the article, and, basing themselves on [Page 424] the decision of the 24th May, the British and American Delegations proposed to grant the concession above referred to.
On consideration, however, it has been unanimously recognised that, while the refusal of compensation in case of prejudice might be a measure of injustice, the possibility of constant recourse to the Mixed Arbitral Tribunal would tend to increase the number of cases and prolong the period of litigation between Alsace-Lorrainers and Germans, while it is desirable, on the contrary, for purposes of pacification, to restrict such litigation and settle it as rapidly as possible.
The Commission therefore propose to insert in the text of Article 75 the following provision:—
“If the annulment provided for in the second paragraph of the present article would cause one of the parties substantial prejudice, equitable compensation, calculated on the capital employed, without taking account of the loss of profits, shall be granted to the prejudiced party.”
By means of this addition, the principle of compensation is introduced, but the decision of cases is recognised as within the competence of the French courts.
At the same time as the memorandum in reply to their “Remarks” is sent to the German Delegation it will doubtless be expedient to present to them the errata in the text of the Treaty. These errata include up to the present:—
- Four amendments already approved by the Council of the Principal Allied and Associated Powers at their meeting of the 24th May (see Minutes of that meeting11).
- Insertion in Article 296 (paragraph 3) of the italicised words. “Interest which has accrued due before and during the war”; (paragraph 4) “Capital sums which have become payable before and during the war.” This amendment, regarding which there is unanimous agreement, is necessary to bring the text of the German Treaty in agreement with the text of the Austrian Treaty.
- Insert at the end of Article 297 the following paragraph:—
“(j.) The amount of all taxes and imposts upon capital levied or to be levied by Germany [Austria]12 on the property, rights and interests of the nationals of the Allied or Associated Powers from the 11th [1st]12 November, 1918, until three months from the coming into force of the present Treaty, or, in the case of property, rights or interests which have been subjected to exceptional measures of war, until restitution in accordance with the present Treaty shall be restored to the owners.”
This provision, proposed by the United States Delegation and unanimously accepted by the Delegations of the Principal Powers, [Page 425] should be inserted at the end of Article 297 of the Treaty with Germany, and also substituted for paragraph (j) of Article 32 of the Economic Clauses in the Treaty with Austria.
Memorandum Regarding the Remarks of the German Delegation on the Economic Clauses of the Conditions of Peace
Section V of German Note.—Commercial Policy
The principles which the Allied and Associated Powers desire to bring into application when the world return[s] to normal conditions are those which President Wilson has enunciated on various occasions in his speeches and which are embodied in Article 23 (c) [(e)?] of the Covenant of the League of Nations.
But it is clear that the pronouncements of President Wilson must be interpreted as relating to the permanent settlement of the world, and can only be regarded as applicable to a condition of things in which the League of Nations is fully constituted, and the relations between States firmly established on this basis. In the meantime the establishment of a purely transitory régime necessarily differing from that contemplated in a final settlement is in no way in conflict with such ideas. During this period “the equitable treatment for the commerce of all members of the League” requires that Germany should temporarily be deprived of the right she claims to be treated on a footing of complete equality with other nations.
The illegal acts of the enemy have placed many of the Allied States in a position of economic inferiority to Germany, whose territory has not been ravaged, and whose plant is in a condition enabling manufactures and trade to be at once resumed after the war. For such countries, a certain freedom of action during the period of transition is vitally necessary, but it is also necessary that the Allied and Associated Powers should in the meantime be safeguarded from the effects of special preferences of discrimination granted by Germany to an Allied or Associated country or to any other country. Hence during the transitory period formal reciprocity is not practicable; and it is only equitable that the Allied and Associated Powers should have for such period greater freedom to regulate their commercial exchanges than is accorded to the authors of the aggression. If it were otherwise, Germany would reap the benefit of the criminal acts which she committed in the territories she occupied with the object of placing her adversaries in a condition of economic inferiority.
It is, therefore, a consideration for justice which has led the Allied and Associated Powers to impose on Germany, for a minimum period [Page 426] of five years, non-reciprocal conditions in the matter of commercial exchanges. Articles 264 to 267, 323 and 327, drawn up on this basis, are measures of reparation, the duration of which will be determined by the League of Nations.
After the necessary period of transition is over, and when a reformed Germany is admitted to membership of the League of Nations, the Allied and Associated Powers will be able to co-operate with her in arriving at a more permanent arrangement for the removal as far as possible of economic barriers and the establishment of an equitable treatment for the commerce of all nations.
No exception is taken by the German Delegation to the general principle that during a transition period special arrangements are necessary for the products of territories detached from Germany. In the absence of detailed criticism, it must be assumed that no serious objection is entertained to the provisions on this subject which are contained in the Treaty of Peace.
The necessity of meeting the special conditions of the period of transition has similarly inspired the provision ensuring the application during a period of three years to imports of certain products from Allied and Associated countries of the most favourable rates of the German tariff which were in force in 1914. In this matter certain products, the output of which, in countries bordering on Germany, was specially adjusted with reference to German needs, are temporarily assured of their former market. In order to enable Germany to establish such customs tariffs as she may consider necessary, the Allied and Associated Powers have limited to six months the period for which she is obliged to maintain generally the most favourable rates of customs duty which were in force for imports into Germany on the 31st July, 1914. Such a period is absolutely necessary in order to avoid the economic disturbance which an immediate change of tariff conditions would cause.
Section VII of German Note.—Treaties
The general principles which underlie Section II of Part X of the Conditions of Peace explain the terms thereof.
The Allied and Associated Powers are certainly of the opinion that multilateral and bilateral treaties between peoples must exist, in times of peace, so that the principles of international law may be enforced and normal international relations maintained. They have therefore aimed at reapplying all multilateral treaties which seemed to them to be compatible with the new conditions arising out of the war.
As regards bilateral treaties, they have reserved for each of the Allied and Associated Powers the right to decide the matter in conformity with the principles of the Treaty of Peace. But they [Page 427] could not permit the continuance of all the treaties which Germany imposed on her allies, on her temporarily defeated adversaries, and even in certain cases on neutral countries, with a view to securing particularly favourable conditions and special advantages of all kinds the maintenance of which is incompatible with the re-establishment of the spirit of justice.
This principle necessarily involves the rejection of the theory put forward by Germany in Section VII (Treaties) of the Remarks on the Conditions of Peace, and obviates the necessity for any negotiations on the matter. A general indiscriminate reapplication after the conclusion of Peace of all multilateral and bilateral treaties, even for a short time, cannot be accepted, and it is only just that the Allied and Associated Powers should have reserved and should reserve in the future the right to indicate which of these treaties with Germany they intend to revive or to allow to be revived.
The above applies to the whole of the German remarks on Section II of Part X of the Conditions of Peace, but these remarks call for the following observations:—
1. The German Delegation seem to consider:—
- That, as a result of errors or omissions, the list of multilateral treaties embodied in Article 282 is incomplete.
- That the contents and meaning of Nos. 7, 17, 19, 20, and 21 of this Article are doubtful.
- Further, that difficulties may arise as the result of the individual reserves of States, which may limit the application of certain revived multilateral treaties.
- The German Government may, after the resumption of diplomatic relations with the Allied and Associated Powers, notify to them any subjects covered by non-revived conventions with regard to which they desire new treaties to be concluded or former agreements to be adapted.
- The contents and meaning of the treaties numbered 7, 17, 19, 20 and 21 in Article 282 are not open to any doubt. As regards No. 19 the list of Sanitary Conventions may be completed as follows:
- Subject to any provisions to the contrary inserted in the Conditions of Peace, reserves which may have been made by the Powers signatory to the Treaty of Peace when they signed or adhered to the [Page 428] multilateral treaties revived by Section II of Part X of the Conditions of Peace, retain their value, such treaties reassuming their operation in the same conditions as before the war. If the conditions of their application are modified, a revision will automatically follow.
2. The German Delegation states that the acceptance by Germany of Articles 283 and 284 is incompatible with the dignity of an independent people.
This opinion is based on a misunderstanding of the meaning and terms of Articles 283 and 284. Germany merely undertakes by Article 283 not to refuse her consent to the conclusion by the new States of the special arrangements referred to in the Postal and Telegraphic Unions. It is not stipulated that the text of these arrangements shall be dictated to her and that she must accept such text without being able to vary it. This Article merely prevents a systematic refusal to the conclusion of such arrangements or insistence on requirements which make their conclusion impossible.
Article 284 leaves to Germany the option of participating in the drawing-up of the proposed new Radiotelegraphic Convention. There is nothing to prevent her exercising this option if she so desires.
It is impossible to regard it as an extreme hardship that in matters of this description affecting the peaceful intercourse of European nations Germany should be required to abstain from adopting an attitude which would obstruct international communications. We are, however, prepared to limit Germany’s obligation to be bound by a new Radiotelegraphic Convention to the case in which such a Convention is concluded within five years.
3. The German objections to Article 289 appear to arise out of a misunderstanding of its intention. Whilst we could not agree to the revival of bilateral treaties or of any clauses in bilateral treaties which are not in accordance with the terms of the Peace Treaty itself, we are quite prepared to give an assurance that this provision will not be arbitrarily used for the purpose of splitting up bilateral treaties in such a way that only the obligation should remain on one side and on the other side only the rights. The Allied and Associated Powers will themselves, through the League of Nations, exercise a surveillance to ensure that the provisions of Article 289 are loyally carried out. With this end in view, the Article might be modified to read as follows:—
“Each of the Allied or Associated Powers, being guided by the general principles or special provisions of the present Treaty, shall notify to Germany the bilateral treaties or conventions which such Allied or Associated Power wishes to revive with Germany.
“The notification referred to in the present Article shall be made either directly or through the intermediary of another Power. Receipt [Page 429] thereof shall be acknowledged in writing by Germany. The date of the revival shall be that of the notification.
“The Allied and Associated Powers undertake among themselves not to revive with Germany any conventions or treaties which are not in accordance with the terms of the present Treaty.
“The notification shall mention any provisions of the said Conventions and Treaties which, not being in accordance with the terms of the present Treaty, shall not be considered as revived.
“In case of any difference of opinion, the League of Nations will be called on to decide.
“A period of six months. . . . .”
Bilateral treaties between Germany and States which broke off diplomatic relations with her but did not declare war are expressly included in Article 289 on the same basis as treaties with those States which did declare war. There is no universally recognised rule of international law on the subject, so it is open to the Allied and Associated Powers to deal with the matter in the most convenient manner in the Peace Treaty.
4. The treaties referred to in Articles 290 and 292 are essentially among those which Germany concluded by abusing the circumstances she created herself, the pressure she exercised, or her temporary military preponderance. Whatever the consequences to Germany of their abrogation, it is impossible to maintain them in force after the conclusion of a Treaty of Peace based upon the principles of justice.
We cannot admit that the abrogation by Germany of all treaties concluded with her former allies since the 1st August, 1914. and of all treaties concluded before or since that date with Russia and Roumania, which is required by Articles 290 and 292 must necessarily “grievously jeopardise” her relations with these States. This abrogation is rendered necessary by the vast political changes which have been brought about by the war and by the fact that all treaties with Russia and Roumania concluded since the outbreak of war must necessarily be regarded as having been imposed by Germany on unwilling States. The abrogation does not affect Germany’s freedom to enter into fresh negotiations with these States for the conclusion of new arrangements suitable to the altered conditions. By this means any serious jeopardy to the resumption of friendly economic relations can easily be avoided.
5. Any special negotiation regarding Articles 291 and 294 is superfluous. The object of these Articles is clear and plain; the Allied and Associated Powers establish equality as between themselves and Germany by obtaining ipso facto the benefit of the treatment accorded by her before the 1st August, 1914, to her former allies and of the treatment which for interested motives or for ends inimical to the interests of the Allied and Associated Powers, she may have granted during the war to Powers which have remained neutral.[Page 430]
German Appendix on Special Legal Questions
Section A, Paragraph 2.—Resumption of Consular Relations
The German Delegation requests reciprocity in respect of the right reserved to the Allied and Associated Powers, under Article 279 of the Peace Treaty, to place consuls in German ports and towns. The unilateral character of this stipulation of Article 279 results from the activities of the Germans in the territories of certain Allied and Associated Powers.
It should be added, however, that there is nothing in the Article to prevent either the renewal under Article 289 of pre-war Consular Conventions between individual Allied and Associated Powers and Germany, or the conclusion of new arrangements between Germany and such Powers for the admission of German Consular Officers into their territory.
Section B.—Treatment of Private Property*
The question of the treatment of private rights is dealt with in the German Delegation’s Notes of the 22nd18 and 29th May19 and in the Annex to their Remarks on the Conditions of Peace. In addition, the general objections set out in these documents are reproduced under different forms in various parts of the Remarks.
I.—Questions of Principle
The objections of principle to the Conditions of Peace on this subject may be summed up as follows:—
- It is not legitimate to use the private property of German nationals to meet the obligations of Germany.
- The settlement of private rights is not made on the principle of reciprocity.
- German property should not be used as a guarantee for the liabilities of the States applied to Germany.
- The liquidations to be made by the Allied and Associated Powers in depriving the owner of the free disposition of his property are of a confiscatory character.
(a.) As regards the first objection, we would call attention to the clear acknowledgment by Germany of a pecuniary obligation to the Allied and Associated Powers, and to the further circumstance that the immediate resources of Germany are not adequate to meet her liabilities. It is the clear duty of Germany to meet the admitted obligation as fully and as promptly as possible and to that end to [Page 431] make use of all available means. The foreign investments of German nationals constitute a class of assets which are readily available. To these investments the Treaty simply requires Germany to make prompt resort.
It is true that, as a general principle, a country should endeavour to avoid making use of the property of a part of its nationals to meet State obligations; but conditions may arise when such a course becomes necessary. In the present war Allied Powers themselves have found it necessary to take over foreign investments of their nationals to meet foreign obligations and have given their own domestic obligations to the nationals who have been thus called upon to take a share, by this use of their private property, in meeting the obligations of the State.
The time has arrived when Germany must do likewise. The necessity for the adoption of this course by Germany is clearly understood by the German Peace Delegates, and is accepted by them in the following language, which we quote textually from their note of the 22nd May:
“The German Peace Delegation is conscious of the fact that under the pressure of the burden arising from the Peace Treaty on the whole future of German economic life, German property in foreign countries cannot be maintained to its previous extent. On the contrary, Germany, in order to meet her pecuniary obligations, will have to sacrifice this property abroad in wide measure. She is prepared to do so.”
The fundamental objection mentioned above is completely answered by the note itself.
(b.) The German Delegation maintains in its note of the 22nd May that there is only the appearance of reciprocity in regard to the settlement of enemy property, and this objection is developed in the Annex to the Remarks. The objection, however, arises from a confusion between two entirely different matters. As regards exceptional war measures taken in the different countries in respect of enemy property there is a reciprocal provision, these exceptional war measures being confirmed on both sides. Quite a different matter is that of the mode in which enemy property shall be dealt with thereafter. German property, as is admitted in the German note, must serve towards meeting Germany’s obligations to the Allies. The compensation to the German property-owner must be made by Germany itself. In this respect there can be no question of reciprocity.
(c.) On the question whether German property should serve as a guarantee for the liabilities of the States allied with Germany, it is to be observed, on the one hand, that the actions of Germany and her allies during the war have given rise to complete solidarity between [Page 432] these Powers from the economic standpoint. For instance, negotiations undertaken without scruple between Germany and her allies have resulted in the division between these countries of the proceeds of the Allied and Associated property liquidated contrary to all right in the territories occupied by the German troops. Further, the German authorities have in several ways treated the Allied and Associated Powers as being jointly concerned. For instance, they have seized French credit balances in Belgian banks as a measure of reprisal against acts done in other Allied States. They have similarly justified the liquidation of French property in Germany on the ground that similar measures have been taken against German property in other Allied countries. Thus, the principle of joint liability to which Germany now objects has been initiated by herself, and she has created a situation which does not permit us in practice to separate the obligations of her allies from her own.
(d.) The method of using this property laid down by the Treaty cannot be considered either in principle, or in the method of its application, as a measure of confiscation. Private German interests will only be injured by the measures contemplated, so far as Germany may decide that they shall be, since all the proceeds of German property will be carried to the credit of Germany, who is required to compensate her own nationals, and will go to reduce her debt to the Allied and Associated States.
section iii of peace treaty.—debts
While reciprocity cannot be accorded in all respects, the Allied and Associated Powers have nevertheless applied this principle wherever it has been possible. Such is the case with regard to the Clearing Office system provided in the Conditions of Peace. This reciprocity is complete in so far as regards individuals. The system departs from this principle only in so far as regards the non-payment to Germany of balances which may become due by the Allied and Associated Powers, and this provision is merely the application of the principle of the retention of enemy property for payment of claims.
1. The provision of Article 296 (e), under which each of the Allied and Associated Powers, but not Germany, is able to decide whether the scheme is to be applied between Germany and any Allied Power or not.[Page 433]
It is not possible to give both the Allied and Associated Powers and Germany an option whether to adopt the scheme or not, for the result might be that one Power would decide to adopt it and the other not to adopt it.
2. The provision of Article 298 (d) that debts shall be paid in the currency of the Allied or Associated Power concerned at the pre-war rate of exchange.
Owing to the great depreciation in the value of the mark, some hardship will necessarily result in the settlement of pre-war debts whatever basis of settlement may be adopted. The method provided for is as fair to both sides as could be devised. While under this scheme an Allied creditor who is owed a sum in marks by a German debtor will receive an equivalent amount in Allied currency at the pre-war rate of exchange, a German creditor of an Allied debtor who owes a sum in marks will also be credited with the amount of Allied currency calculated at the pre-war rate of exchange, so that reciprocity is accorded in this respect.
3. The prohibition of direct arrangements between debtors and creditors.
It appears that one of the objections to the prohibition of direct agreements between debtors and creditors is that such prohibition will prevent modification of the amount of the debts. An essential part of the scheme is that debts shall be guaranteed by the Governments concerned and paid in full, and no provision which would enable debtors and creditors to agree to be satisfied with some smaller amount than the full claim can be admitted.
4. The reserve contained in Article 296, paragraphs 3 and 4, provides for a case in which the payment of interest on Government securities shall have been suspended with regard to all the holders of these Government securities whatever their nationality. The clearing office system ought not to have the effect of allowing a former enemy to receive interest when holders who are nationals of the State by which the loan was issued or neutrals have not been paid. This provision is reciprocal. Ex-enemy holders of similar securities will receive interest which has not been paid in the same conditions as other holders.
Article 296 (b).
5. The German Delegation objects to the guarantee of the State for the debts of its citizens only if reciprocity is not given. Full reciprocity is given with regard to this guarantee. The necessity for retaining any balance in favour of Germany arises, as explained above, from the fact that the immediate resources of Germany are not adequate to meet her liabilities.[Page 434]
An explanation is desired of the terms “bankruptcy,” “failure,” and “formal indication of insolvency.” These terms indicate conditions in which it has been recognised, in accordance with the laws of the State where a debtor resides, that he is not in a position to meet his liabilities in full.
Article 296 (d) [(c)?].
6. As explained above, there is nothing inequitable in the provision with regard to the currency and rate of exchange to be adopted for payment of debts. It is further suggested in the German Note that the method of settlement adopted will create a great demand for bills of exchange in the currency of the Allied and Associated Powers, and that this will necessarily lead to a further depreciation of German currency. There is no reason to anticipate such a result, for the balance due by Germany will in practice be settled by crediting Germany with the proceeds of German property liquidated in Allied or Associated States.
Article 296 (d), last paragraph.
7. As regards the rate of exchange in the case of new States, due regard will no doubt be paid by the Reparation Commission, in fixing the rate of exchange, to the provisions in force in the new States as to the relations between its currency and the currency previously existing in its territory.
Article 296 (e).
8. The German Delegation points out that a period of six months is allowed within which any Allied or Associated State may decide to adopt the clearing office scheme, and suggests that if it is to be put into operation a speedy decision should be required. In this respect satisfaction can be given to the German Delegation, and for this purpose the period of six months can be reduced to one month from the date of ratification of the Treaty of Peace by the interested Power.
Article 296 (f).
9. This Article provides for the possibility of two Allied and Associated States, which have adopted as regards Germany the clearing office system agreeing that nationals of one in the territory of the other shall be treated as nationals of the latter with regard to the payment of their pre-war debts to Germans and the recovery of debts owing to them by Germans.
Article 72 (Special Provisions with Regard to Alsace-Lorraine).
In fact and in law economic relations between Alsace-Lorrainers and Germany have been suspended by the occupation and by the Armistice. They will only be resumed at a later date.[Page 435]
It is therefore necessary that the debts of which the payment has been suspended should be regulated by a special clearing office at a fixed and reciprocal rate of exchange.
It concerns exclusively debts between Alsace-Lorrainers who acquire French nationality on the one hand, and the German Empire, German States, and their nationals on the other hand.
section iv of peace treaty.—property, rights and interests
Articles 297 and 298.
The German Delegation refers in the first place to the observations in their note of the 22nd May with regard to private property, rights and interests. We have examined above the principles involved in that note.
The Remarks of the German Delegation repeat the objection as to the right reserved to the Allied and Associated Powers to liquidate German property after the coming into force of the Treaty; to apply measures of liquidation in territory detached from Germany; and to avail themselves prematurely of the advantages of the settlement with which the Conditions of Peace deal.
It is sufficient for us to refer on this subject to the explanations already given, pointing out that the use of property in the manner provided is an essential means for the Allied and Associated States to recover a part of their claim. It is necessary, therefore, for this principle to be applied as widely as possible, and there can be no question of limiting it to property in Allied territory as that territory existed before the war or to property which has already been liquidated during the war.
Certain provisions of Article 297 of the Conditions of Peace are further made the subject of observations by the German Delegation with regard to special matters.
1. The Note of the 22nd May refers to paragraph 10 of the Annex to Section IV relating to the handing over of securities, certificates and like documents of title with regard to property situated in Allied or Associated countries. With regard to such delivery we have simply adopted a different method from that which Germany herself has adopted in like matters, but with no variation of principle. Germany, in case of similar liquidations of Allied property, gave new securities or certificates to German or neutral nationals, excluding Allied or Associated nationals from the companies or associations concerned. The Allies have considered it preferable for the purpose of liquidating German interests in Allied enterprises to require from Germany the direct delivery of the securities and documents of title held by Germans. This difference in method gives no reasonable ground for complaint.[Page 436]
Article 297 (f) and (g).
2. The German Delegation asks for an explanation with regard to the conditions in which nationals of Allied and Associated States who are owners of property which has been subject to a measure of transfer in German territory can require the restoration of such property. This power is given to nationals of Allied and Associated States in the territory of which legislative measures requiring the general liquidation of enemy property were not in application before the signature of the Armistice. It does not appear that this provision can be misunderstood. Legislative measures requiring general liquidation clearly mean those which, as in Germany, have been passed by the legislative authority and were applicable to all the property or classes of property of nationals of an enemy State.
The restoration in specie has the effect of assisting in the settlement of the compensation provided for nationals of Allied and Associated Powers, and limiting the inconveniences falling upon Germany from the depreciation of the Mark.
3. The German Delegation also asks for explanations as to the disposal of the proceeds of liquidations of German property.
Such disposal is clearly dealt with by Article 297 (h) and paragraph 4 of the Annex to that Article, giving the Allied and Associated Powers the right to employ the proceeds of these liquidations as there specified.
Annex, paragraph 1.
4. The proviso at the end of the first part of the paragraph that the provisions of the paragraph shall not be held to prejudice the titles to property heretofore acquired in good faith and for value and in accordance with the laws of the country in which the property is situate by nationals of the Allied and Associated Powers, is inserted in order to prevent the rights of Allied nationals being prejudiced by the confirmation of action taken by the Allied and Associated States. This proviso will not affect the rights of German nationals.
Annex, paragraph 5.
5. The object of this paragraph is to require the restoration to the virtual owner of trade-marks outside Germany, which, through liquidation proceedings taken in Germany, have been transferred to other persons. It may be pointed out that the operation of the paragraph is limited to cases in which before the war the company incorporated in an Allied or Associated State had rights to the use of the trademarks or methods of reproduction referred to in the paragraph, and that the German company will be allowed to continue the use of the trade-marks in Germany and will also be able to manufacture in Germany.[Page 437]
6. The German claim that the property of German institutions for research and education shall be wholly exempt from liability to liquidation cannot be conceded in view of the past activities of some of the institutions which nominally exist for the above purposes. Nevertheless, in the exercise of their rights under Article 297 with regard to any particular institution, the Allied and Associated Powers will have full regard to the interests of the advancement of science and knowledge and of organisations bona fide limited to these objects.
The following explanations should be added on certain points referred to in the German Note of the 22nd May:—
It is suggested in the German Note that the Allied and Associated Governments reserve for themselves the right of extending the process of liquidation to German property which may come within their territory in the future. In explanation it may be said at once that paragraph (b) of Article 297 will be applied only to property as it exists on the coming into force of the Treaty of Peace.
The German Delegation suggest that there may have been corrupt or fraudulent machinations by persons in the Allied or Associated States dealing with the liquidation of German property. The Allied and Associated States are ready to give full assurance that proceedings will be taken against persons who have committed punishable offences in the liquidation of German property, and that they will welcome any information and evidence which the German Government can furnish in this respect.
Finally, the German Note states that it appears to be reserved to the Allied and Associated Governments to reach arbitrary decisions as regards the amount of the claims of their nationals in respect of acts committed by the German Government between the 31st July, 1914, and the date at which the respective Allied or Associated States entered the war. The Allied and Associated Governments agree that, so far as such claims are concerned, their amounts may be assessed by an arbitrator appointed by M. Gustav Ador,20 or if M. Ador cannot make the appointment, by an arbitrator appointed by the Mixed Arbitral Tribunal.
section v of peace treaty.—contracts, prescriptions and judgments
In the provisions of the Treaty the determination of the question of the maintenance or dissolution of contracts depends on the fact of trading between the parties being unlawful, because if such trading was not unlawful the contract could have been completed.[Page 438]
The provisions with regard to contracts do not apply to contracts between German nationals and the nationals of the United States of America, of Brazil and of Japan, because the constitution and law of those countries create difficulties in applying these provisions to their nationals.
It is suggested by the German Delegation that the continuance of contracts between enemies is made dependent on the inclination of the Allied and Associated States or of their nationals alone, but in the first place the exception contained in paragraph (b) of Article 299 is limited to cases in which the execution of a contract is required in the general interest, and in the second place, the execution can only be required by the Allied or Associated Government concerned and not by a national of that State. The same paragraph also provides for equitable compensation being granted where the maintenance of the contract would, owing to the alteration of trade conditions, cause one of the parties substantial prejudice.
It is suggested further that this provision would make German contractual interests in the future a prey to the arbitrary will of aliens, but in accordance with the terms of paragraph (b) the execution of a contract thus maintained must be required within six months from the coming into force of the Treaty.
The German Delegation suggests that the future treatment of prewar contracts cannot be solved in one and the same way for all classes of contracts, and it may be pointed out that certain classes of contracts, which are specified in paragraph 2 of the Annex, are excepted by that paragraph from the general rule of dissolution laid down by Article 299.
Article 299 (d).
It is suggested that some particular favour is shown to inhabitants of transferred territory who acquire the nationality of an Allied Power, by excluding contracts between Allied nationals and such persons from the general rule of dissolution of contracts. The Treaty, which settles the relations between Allied nationals and German nationals, has not to settle the question of the relations between Allied nationals; this question is entirely a domestic matter.
Annex, paragraph 12.
The rule laid down in this paragraph with regard to the cancellation of groups of contracts with German life insurance companies is perfectly equitable, for the German insurance company will get rid of its liability on the policies by handing over the proportion of its assets attributable to those policies.[Page 439]
The reasons of an economic character which require the cancellation of contracts concluded before the war between nationals of enemy Powers do not apply to contracts concluded during the war between Alsace-Lorrainers, who regain French nationality, and Germans. The maintenance of these contracts is accordingly provided for by the Treaty. At the same time, reasons of a political character may require the cancellation by the French Government in the general interest of certain contracts which were or may have been imposed on Alsatian manufacturers with a view to subjecting their interests to German economic interests.
In order to avoid perpetuating the disturbance which cancellations of this character might introduce into commercial relations, the exercise of the right of cancellation has been limited to six months. Nevertheless, we agree to add to Article 75 the following provision:—
“If the dissolution would cause one of the parties substantial prejudice, equitable compensation, calculated solely on the capital employed without taking account of loss of profits, shall be accorded to the prejudiced party.”
Article 300 (b).
This provision applies to judicial or administrative measures of execution which may have been taken in consequence of the non-performance of any act or formality during the war.
Article 300 (d).
This provision applies to cases in which a contract has been dissolved without resorting to any judicial or similar procedure. We agree to the addition of the words “between enemies” after the word “contract” in the first line of the paragraph in order to limit definitely the application of the paragraph to a contract between enemies.
It is suggested by the German Delegation that paragraph (d) is unnecessary, because of the provisions of paragraph (c); but it is pointed out that paragraph (c) only deals with cases in which rights have been prejudiced by measures referred to in paragraph (b), Paragraph (d) is accordingly necessary.
The Treaty provides that in certain cases Allied or Associated Courts are competent to decide certain disputes, but this power is not given to the German Courts. Reciprocity is not therefore possible with regard to the execution of judgments or the application to the Mixed Arbitral Tribunal for compensation.[Page 440]
section vi of peace treaty.—mixed arbitral tribunal
The suggestion that the jurisdiction of the Mixed Arbitral Tribunal be extended may be answered as follows. The purpose of the Tribunal is not only to decide new rights arising under the Treaty, but also to provide a new forum to which may be referred certain disputes concerning private rights already in existence. As to these, the Courts of the Allied and Associated Powers already have jurisdiction, and some of these Powers find insuperable difficulties in attempting to deprive them of it. Under their systems of jurisprudence, and in existing circumstances, they find no sufficient reason for excluding their citizens from the access to their own courts, which their laws now afford. No new jurisdiction is conferred upon any such courts, and German litigants are not prejudiced through the retention by such courts of the jurisdiction which they now have.
Article 304 (f).
The German proposal to bring into accord the wording of Article 304 (f) and of paragraph 24 of the Annex to Article 296, Section III may be accepted. For this purpose, the more precise of the two versions should be selected, viz., “The High Contracting Parties agree to regard the decisions of the Mixed Arbitral Tribunal as final and conclusive, and to render them binding upon their nationals.”
Annex, paragraphs 8 and 9.
Objection is raised by the German Delegation to the provision in paragraphs 8 and 9 of the Annex to Article 304 providing that the language of the Mixed Arbitral Tribunal and the place and time of its sessions are determined by the Allied or Associated Power concerned; in order to meet this objection we agree that the language of the proceedings shall be English, French or Italian as may be determined by the Allied or Associated Power concerned, and that the time and place of meeting shall be determined by the President of the Tribunal.
Article 304 (g).
It may further be agreed to accept the suggestion of the German Delegation according to which the tribunals and authorities of the High Contracting Parties will furnish to the mixed Arbitral Tribunals direct all the assistance in their power, particularly by transmitting notices and collecting evidence.
With regard to the German Note of the 29th May asking for information as to the property of German nationals in Allied and Associated countries, it is not possible to furnish a reliable estimate of the value of such property, but the German Delegation no doubt has [Page 441] information in its possession from the returns made to the German Government.
section vii of peace treaty.—industrial property
1. The term “ayants droits” in the French text and “legal representatives” in the English text, used in Article 306 as having an identical meaning, ought to be understood: the first as denoting the persons who legally represent the beneficiaries whose rights they have acquired, whether by succession or any other regular transfer, the second as signifying “heirs, executors and assigns.”
2. The last paragraph of Article 306 relates only to cases where German-owned companies and businesses have been, or will be hereafter, liquidated under Article 297 of Section IV of the Treaty (Property, Rights, and Interests). The provision, which, moreover, corresponds to the measures taken by Germany in respect of property belonging to nationals of the Allied or Associated States is, therefore, limited to the businesses or companies which are, or will be, in existence at the moment of the coming into force of the Treaty.
3. We are not prepared to grant the request of the German Delegation for reciprocity in regard to the maintenance of the legal and administrative acts taken by the Governments during the war in respect of industrial, literary, and artistic property, as we do not feel able to place any reliance on the character or fairness of the corresponding German measures. On the other hand, certain Allied and Associated States have not taken any measures of this kind, so that if reciprocity were accorded it would be to the detriment of the rights of the nationals of such States without any compensation.
4. The clause providing that no action shall be brought by Germany or her nationals in respect of the use during the war of her industrial, literary or artistic property by the Government of any Allied or Associated Power, or by any person acting on behalf or with the assent of such Government, is clearly a proper and necessary clause providing for amnesty for all acts done by a Government or its agents. The Allied and Associated Powers are not, however, prepared to make the clause reciprocal, especially as they have no knowledge as to the action which may have been taken by the German Government with respect to the industrial, literary and artistic property owned by their citizens.
As regards the disposition of funds arising from the use of industrial property during the war, it should be pointed out that the procedure in this matter must necessarily be the same as that followed in regard to other debts.[Page 442]
5. The words “Unless the legislation of any one of the Allied or Associated Powers otherwise directs” in the fourth paragraph of Article 306 apply only to the legislation existing at the moment of the signature of the Treaty of Peace. There is no objection, in order to make this clear, to inserting the words “in force at the moment of the signature of the present Treaty” to qualify the word “legislation” in the first phrase of the fourth paragraph of Article 306.
6. The difference between the expression “sums due or paid” on the one hand and “sums produced” on the other, in the fourth paragraph of Article 306 is explained by the fact that the effect of the Allied emergency measures will continue and that sums will be paid in the future, whereas the measures taken by Germany will cease to have effect.
7. The fifth paragraph of Article 306, which provides that the Allied or Associated Powers shall have the right to impose limitations, conditions or restrictions on rights of industrial property owned by Germans, has by no means for its object the outlawing of such property or the confiscation of these rights.
It is intended, on the one hand, to reserve to the Allied and Associated Powers the right to impose restrictions on industrial, literary, and artistic property when considered necessary for national defence or public interest. This right, secured to Germany by its domestic legislation, is a general and continuing right, which would be exercised as occasion arises in respect of industrial, literary, and artistic property acquired before or after the coming into force of the Treaty of Peace.
It is intended, on the other hand, to retain the power to use industrial, literary, and artistic property as a pledge for the accomplishment of the obligations of Germany and for the reparation of damages, in the same manner as it is proposed to retain power to deal with other German property. But it is not the intention of the Allied and Associated Powers to utilise for this purpose the industrial, literary, and artistic property which may arise after the coming into force of the present Treaty. Only the industrial, literary, and artistic property arising before or during the war will be subjected by the Allied and Associated Powers to limitations, conditions or restrictions for assuring the fair treatment by Germany of the rights of industrial, literary, and artistic property held in German territory by their nationals or for securing the due fulfilment of all the obligations undertaken by Germany in the present Treaty.
To make clear the different treatment which they intend to accord to property acquired before the coming into force of this Treaty and that acquired thereafter, the Allied and Associated Powers are prepared to add to the fifth paragraph of Article 306 the following provision:— [Page 443]
“As regards the rights of industrial, literary, and artistic property acquired after the coming into force of the present Treaty, the above-mentioned right reserved by the Allied and Associated Powers shall only be exercised in the case where these limitations, conditions, or restrictions may be considered necessary for national defence or in the public interest.”
The Allied and Associated Powers see no objection to making it clear that the measures which can be taken under the fifth paragraph of Article 306 will not be exercised without compensation to the German beneficiaries of the rights, and with this object are prepared to insert after the above-mentioned addition to the paragraph in question the following new paragraph:—
“In the event of the application of the provisions of the preceding paragraph by any Allied or Associated Power, there shall be paid reasonable indemnities or royalties, which shall be dealt with in the same way as other sums due to German nationals are directed to be dealt with by the present Treaty.”
8. The German objection to our reserving power to apply our war legislation to patents which may be revived under Articles 307 and 308 is based on an exaggerated view of the effect of this provision, which would probably affect only a small number of patents revived. All such patents would, if they had been kept up, have been subject to similar provisions during the war. We should be prepared to limit the rights of the Allies in this matter to the grant of licences, and for this purpose to insert the words “as to the grant of licences” after the word “provisions” in the penultimate line of the second paragraph of Article 307.
9. Since contracts for licences in respect of rights in industrial, literary and artistic property should receive the same treatment as other pre-war contracts, the same procedure should be applied to them as is applied to contracts generally, as provided in Articles 299 to 305.
10. As regards the recognition and the protection of rights in industrial property belonging to Germans in the territories separated from Germany, it is agreed that the following addition should be made to Article 311:—
“The rights of industrial, literary and artistic property which are in force in the territories separated from Germany in accordance with the present Treaty, at the moment of the separation of these territories from Germany, or which will be re-established or restored in accordance with the provisions of Article 306 of the present Treaty, shall be recognized by the State to which the said territory is transferred [Page 444] and shall remain in force in that territory for the same period of time given them under the German law.”
Supplementary Note Regarding the Remarks of the German Delegation on the Economic Clauses of the Treaty of Peace
The special Committee of the Economic Commission has considered proposals for limiting the right of newly created States and States which do not participate in reparation to liquidate enemy property.
The Committee considers that in principle the proceeds of these liquidations should be paid to the German owner, but it has appeared necessary to the Committee to reserve the power given to the Reparation Commission by the Treaty, notably by Articles 235 and 260.
The Committee accordingly proposes to insert the following text in the answer to Germany, but it thinks it right to call the attention of the Council of the Principal Allied and Associated Powers to the fact that this important modification of the Treaty is proposed without the Powers principally interested having been consulted.
Right of Liquidation. (Article 297 (b)).
To be inserted after the third paragraph (Articles 297 and 298) of the answer with respect to Section IV of the Treaty. (Page 9 of the English text.)21
Nevertheless it appears possible to provide a special régime in this respect so far as regards the newly created Allied and Associated Powers and those which are not entitled to reparation in accordance with the Conditions of Peace.
So far as regards these Powers we are prepared to provide that without prejudice to the rights given to the Reparation Commission by the present Treaty the proceeds of liquidation shall be paid direct to the owner. If on the application of the owner the Mixed Arbitral Tribunal provided for by Section VI. or an Arbitrator appointed by that Tribunal, is satisfied that the conditions of the sale or measures taken by the Government of the Allied and Associated Power concerned outside their general laws were unfairly prejudicial to the price obtained, they shall have discretion to award equitable compensation to be paid by the Allied and Associated Government concerned to the owner.
Nevertheless we are prepared to omit the liability to satisfy the unpaid debts of nationals of Powers allied with Germany from the charge on the property of German nationals.
This alteration will be effected by striking out from Paragraph 4 of the Annex to Section IV the words—“or debts owing to them by nationals of such Powers” and the words “or debts” in the last two lines of the Paragraph.
- Ante, p. 397.↩
- Post, p. 430.↩
- Post, p. 431, paragraph beginning “The time has arrived …”↩
- Post, p. 440, paragraph beginning “Objection is raised …”↩
- Post, p. 441.↩
- This draft does not accompany the minutes of this meeting.↩
- Of May 29, 1919, p. 795.↩
- Appendix I to CF–26, vol. v, p. 865.↩
- Post, p. 795.↩
- CF–44, p. 159.↩
- CF–30, p. 1.↩
- Ante, p. 4.↩
- Brackets appear in the original.↩
- Brackets appear in the original.↩
- Malloy, Treaties, 1779–1909, vol. ii, p. 2066.↩
- British and Foreign State Papers, vol. lxxxiv, p. 12.↩
- Ibid., vol. lxxxv, p. 7.↩
- Ibid., vol. lxxxvii, p. 78.↩
- Ibid., vol. lxxxix, p. 159.↩
- Not part of draft reply. This section of the draft reply will require reconsideration and modification in the event of any substantial alteration being made in the Reparation provisions of the treaty. [Footnote in the original.]↩
- Appendix I to CF–26, vol. v, p. 865.↩
- Post, p. 795.↩
- President of the Confederation of Switzerland.↩
- Ante, p. 435.↩
- Ante, p. 431.↩