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

Paris Peace Conf. 180.03501/107

HD–107

Notes of a Meeting of the Heads of Delegations of the Five Great Powers Held in M. Pichon’s Room, Quai d’Orsay, Paris, on Friday, December 5, 1919, at 10:30 a m.

Paris, December 5, 1919, 10:30 a.m.

• Present
  • America, United States of
    • Hon. F. L. Polk
  • Secretary
    • Mr. L. Harrison
  • British Empire
    • Sir Eyre Crowe
  • Secretary
    • Mr. H. Norman
  • France
    • M. Clemenceau
  • Secretaries
    • M. Dutasta
    • M. Berthelot
    • M. de Saint Quentin
  • Italy
    • M. Scialoja
  • Secretary
    • M. Trombetti
  • Japan
    • M. Matsui
  • Secretary
    • M. Kawai

Joint Secretariat
America, United States of	Capt. G. A. Gordon
British Empire	Capt. Hinchley-Cooke
France	M. Massigli
Italy	M. Zanchi
Interpreter—M. Camerlynck

The following were also present for items in which they were concerned:

• America, United States of
  • Mr. E. L. Dresel
  • Rear-Admiral McCully, U. S. N.
  • Dr. James Brown Scott
  • Lieut. Commander Koehler
  • Mr. A. W. Dulles
  • Mr. F. Neilsen
  • Mr. Hodge
• British Empire
  • Mr. A. Leeper
  • Mr. H. W. Malkin
  • Captain Fuller, R. N.
• France
  • M. Mauclere
  • M. Serruys
  • M. Laroche
  • General Le Rond
  • M. Fromageot
• Italy
  • Admiral Grassi
  • M. Ricci-Busatti
  • M. Dell’Abbadessa
  • M. Stranieri
  • Commandant Fea
  • M. Pilotti
• Japan
  • M. Shigemitsu
  • M. Nagaoka

1. M. Mauclere said that as far back as the 1st and 4th of July the Serb-Croat-Slovene Delegation protested against the terms of the Financial Arrangements¹ proposed as a result from the Austrian Treaty. In a letter dated December 2nd, to the President of the Peace Conference the Delegation had renewed that protest. Serbia agreed without objection to the first three articles of the Financial Arrangement concerning the States containing territories which were part of the former Austro-Hungarian Monarchy, with the exception of Italy. She protested against the last two articles of that Arrangement, or to be more accurate, against Article 5. Article 4 of the Financial Arrangement of September 10th defined the situation of States which, by reason of sums due from them as a result of acquiring property and possessions of the former Austro-Hungarian Monarchy, or by way of contribution to expenses of liberation, owed a greater sum than that to which they were entitled by way of reparation. That article provided that the States in that situation, for instance the Czecho-Slovak State, should issue bonds for an amount equal to that excess; those bonds were to bear interest at five percent from January 1926 only, and were repayable on and after January 1st, 1931; amortization to be effected within a period of twenty-five years from the latter date. Article 5, on the other hand, defined the situation of States which by way of reparation had a credit greater than the debt due from them on account of the property and possessions transferred to them or of the expenses of liberation for which they were responsible. It provided that the amount to be carried to the debit of those States should be accepted on account of the payment of reparations, and that those States should receive no immediate payment, by way of reparation, as long as the other States to which reparation was due had not received payments on account of a like proportion of their approved claims for reparation. Serbia protested against that provision. She asked to be treated as well as the States which had not been laid waste and to whom, nevertheless, important concessions had been made, since the debt which they had contracted on account of their liberation only bore interest after a considerable delay. In conformity with the task which it had received from the Supreme Council,^1a the Reparation Commission on the preceding day, had met the Serbian representatives and they had agreed on a solution. Articles 4 and 5 of the Financial Arrangement were to be eliminated and replaced by a new article reading as follows: (M. Mauclere then read the text of the new Article 4 proposed by the Reparation Commission (See Appendix “A”). That article in no way changed the situation of the States affected by the former Article 4. Its only effect was to place in the same situation as the latter, the States affected by the former Article 5. The debt due by these latter States would likewise be represented by bonds issued under the same conditions as those provided for by former Article 4. As those bonds matured the Reparation Commission would withhold from the sums due to the States in question by way of reparation such sums as became necessary for interest payments and amortization. Serbia, therefore, preserved all its rights to immediate reparation. The Italian Delegation adhered to that condition on the condition that the Special Arrangement concluded with respect to Italy should be modified in a similar manner. At the last minute and after the meeting ended the Serbian Delegate presented a new demand with a view to securing for his country treatment similar to that accorded to Belgium and to have granted to it a priority of 2,000,000,000 francs on the reparation account. He, (M. Mauclere) had replied that the Commission was not competent to pass upon that demand. He pointed out moreover that that was the first time that the Serbs had raised the question and they in no wise made it a condition precedent to their signing the Financial arrangement. Signature of the Financial Arrangements at Saint Germain by the Serb-Croat-Slovene Government

Sir Eyre Crowe said the Arrangement reached was perfectly satisfactory to him but its application raised certain difficulties; he did not at the moment see how a Financial Arrangement which had already been signed could be changed.

M. Berthelot added that the question was all the more delicate as the Serbs had to sign the Bulgarian Treaty before noon of that very day. There had been some thought of asking them to sign a promise to sign the Financial Arrangement which now had to be changed. They could, on that day, only sign the other diplomatic instruments.

M. Fromageot said it was difficult to find a suitable procedure. The Powers might draw up a declaration modifying Articles 4 and 5 of the Financial Arrangement. The Serbs, while adhering to the Arrangement, would adhere at the same time to the declaration modifying the latter; that solution raised practical difficulties in view of the short time remaining in which Serbia might sign. Perhaps that delay might be extended with respect to the Financial Arrangements.

Sir Eyre Crowe thought that the Council should leave the legal experts to find a suitable procedure.

M. Scialoja took it to be understood that the Financial Arrangement relative to Italy was to be similarly modified.

Mr. Polk agreed with the proposed solution. He was favorable to the granting of the final Serbian demand mentioned by M. Mauclere and he hoped that it would be put upon the agenda of an early meeting.

M. Clemenceau agreed.

M. Mauclere wished to point out to the Council that M. Loucheur desired to know the exact meaning of the words: “property and possessions transferred” which were to be found both in Article 207 [208?] of the Treaty with Austria and in the Financial Arrangements. He said that M. Loucheur interpreted them as meaning real property and possessions.

Sir Eyre Crowe said that that was a question of interpretation of the Treaty which was not within the competence of the Council.

It was decided:

(1) to accept the modifications proposed by the Reparation Commission to the Arrangement between the Allied and Associated Powers relative to contribution to the expenses of the liberation of the territories of the former Austro-Hungarian Monarchy with a view to replacing Articles 4 and 5 of that Arrangement by a new Article 4. (See Appendix “A”.)

(2) that the Drafting Committee be charged with modifying in the same manner the Arrangement between the Allied and Associated Powers relative to the reparation account with regard to Italy.

(3) that the Drafting Committee be charged with determining the procedure to be followed so that the modification of the said Financial Arrangements thus rendered necessary should not prevent the Serb-Croat-Slovene Government from adhering to the Treaty with Austria and the Minorities Treaty, and from signing the Bulgarian Treaty, within the time limit provided.

2. M. Clemenceau thought that it would be well to adjourn until the following day the examination of that draft reply² as well as of the general note which was to be sent to Germany.³ The draft of that latter note did not fully Satisfy him. Draft Reply to the German Note Concerning Scapa Flow

Eyre Crowe agreed, but wished to make a remark on the subject of the note relative to Scapa Flow. The British Admiralty had just published some documents which showed in an incontrovertible manner that the German Government gave instructions to sink the fleet. He thought that these documents had been communicated to the Drafting Committee. In his opinion the answer should take them into account.

M. Fromageot replied that his Committee had in fact regretted having had no other knowledge of these documents than through the press; however, his Committee would receive them that afternoon.

Sir Eyre Crowe wished to make another observation concerning the passage in the draft of the general note relating to Scapa Flow and to the compensation which was being demanded. He proposed that the Council’s answer on this point should read as follows: “A reply, annexed hereto, to the German note of November 24th [27th] on Scapa Flow establishes the legal point of view. The Allied and Associated Powers examined the question before making their demands, and they do not share the fears expressed by the German Government regarding the disastrous effect on the economic life of German ports. The term of the protocol must stand. On receipt of a complete list of all the floating docks, floating cranes, tugs and dredgers, which is demanded by the protocol, the Allied and Associated Powers will make known their selection, keeping in view the general economic situation of the German ports. Should thereafter the German Government think that it is able to prove that some particular demand is of a kind gravely to affect Germany’s legitimate requirements in respect to the maintenance of her fluvial navigation or similar vital economic interests, the German Government may present its claim to the Principal Allied and Associated Powers who will be prepared to consider them in a spirit of equity after consultation with their naval advisors and after hearing the Reparation Commission.”

M. Clemenceau said that that text satisfied him fully.

Mr. Polk asked who would examine the German claims. There would no longer be a Supreme Council and the Ambassadorial Council^3a would not be competent to pass upon them.

Sir Eyre Crowe replied that there had not been any decision as to what body would succeed the Supreme Council, but it was certain that some competent authority would exist.

Mr. Polk doubted it. He pointed out that there already existed a Reparation Commission which was competent to determine that matter.

Sir Eyre Crowe replied that the question could not be determined by the Reparation Commission alone. It also affected the naval authorities.

M. Clemenceau observed that the Reparation Commission was not competent to reach a decision which had to be taken by the Allied and Associated Powers.

Mr. Polk said that the real question, however, was whether the Germans could fulfil their obligations if they were deprived of the material essential to the existence of their ports and their fluvial navigation. He was afraid that the only idea of the naval experts was to seize that material.

Sir Eyre Crowe replied that the naval experts would be heard and also the Reparation Commission. After that the Governments would decide.

M. Clemenceau thought that that reply would satisfy Mr. Polk.

Mr. Polk said that he was sorry that essentially commercial material was being taken by way of compensation for war material. He reiterated that the only question was whether Germany needed that material in order to furnish the reparation owed by her. The Reparation Commission was the body which could answer that question.

Sir Eyre Crowe inquired whether Mr. Polk would be willing to refer to the Reparation Commission the question of the German ships held in American ports. It should not be forgotten that the Scapa Flow affair came under the Armistice.

Mr. Polk replied that he would not object if the Reparation Commission would decide to give back the Imperateur. Aside from that, in the case under consideration, he wished to know who would have power to pass judgment if it were not the Reparation Commission.

Sir Eyre Crowe replied that it would be the Five Governments; they had settled all the questions concerning the Armistice.

M. Berthelot wished to make two observations: first of all, he did not think that the documents published by the British Admiralty, which Sir Eyre Crowe had just referred to, were as convincing as the latter seemed to think. He, M. Berthelot, had informed M. Fromageot of their substance and the latter had thought that it would not be advisable to engage in a long discussion with the German Government on that subject, but that it would be better to utilize the avowals made by the Germans in their notes.

M. Clemenceau thought that it would be well, nevertheless, to take into account the Admiralty’s documents.

M. Berthelot added that, on the other hand, it seemed to him desirable that the Drafting Committee should point out in the note that military action did not necessarily imply a resumption of a state of war. There were many precedents for that view.

(The discussion of that subject was then adjourned).

3. (The Council had before it a draft Treaty prepared by the Drafting Committee (Appendix “B”) and a modification of the last part of Article 2of that draft (See Appendix “C”).) Treaty Between the Principal Allied and Associated Powers, Poland and the Czecho-Slovak State

M. Fromageot read and commented upon these two documents.

After a short discussion,

It was decided:

(1) to accept the draft Treaty between the Principal Allied and Associated Powers, Poland and the Czechoslovak State, prepared by the Drafting Committee;

(2) that the last part of Article II of that Treaty be drafted as indicated in Appendix “C”.

4. (The Council had before it a note dated December 3rd, 1919, (Appendix “D”).)

General Le Rond read and commented upon that note. It seemed that the best solution would be to have the joint expenses common to the whole Commission which, moreover, would certainly not exceed 50,000 francs per month, provisionally covered by advances of equal sums by the various Powers represented on the Commission. The Presidency of the Commission in fact belonged to the United States and it was only provisionally being held by France. Expenses of the International Teschen Commission

M. Scialoja asked if the same principle applied to the expenses of military occupation.

General Le Rond replied that on that point it had already been decided that the various interested States should determine the amount of the allowances that they deemed suitable and should make the necessary advances.

It was decided:

that the joint expenses common to the whole International Teschen Commission be defrayed by equal sums to be advanced by the various Powers represented on that Commission.

5. Sir Eyre Crowe informed the Council that according to a telegram which he had received from Bucharest the representatives of the Principal Allied and Associated Powers had agreed with the Rumanian Government on a formula which the latter would accept and which would be satisfactory to the Principal Allied and Associated Powers. That formula was reported to have been already telegraphed to Paris. Romanian Affairs

M. Clemenceau observed that on the preceding day he had seen General Coanda who had spoken in a most satisfactory manner. He knew nothing, however, of the formula that Sir Eyre Crowe mentioned.

M. Berthelot said that a telegram had indeed arrived but it was still in an incomplete condition; the part which had been deciphered seemed satisfactory. As soon as complete text was available it would be sent to the various Delegations.

6. (The Council had before it a draft of the Financial Clauses dated December 1st, 1919. (See Appendix “E” and the Economic and Reparation Clauses, (Appendix F). Financial Economic and Reparation Clauses of the Treaty of Peace With Hungary

M. Serruys read and commented upon the proposed measures relative to the economic and reparation clauses. He pointed out that all members of the Economic Commission were in agreement and that that Commission was likewise in agreement with the Reparation Commission. The principal provisions concerned the supply of coal from the mines at Pecs by Hungary to the Serb-Croat-Slovene State. That supply would be controlled by the Reparation Commission. In a like manner the Economic Commission had thought that the Treaty should provide for the supply by Austria to Hungary of food stuffs within limits to be fixed by the Reparation Commission if a direct agreement were not reached between the interested parties. Finally the Commission had decided on the proposal of the Czecho-Slovak Delegation, to add two paragraphs to the article corresponding to article 264 of the Treaty of Saint Germain in such a manner as to adapt it to Hungarian special legislation. On the other hand it had rejected a Serbian demand which sought a revision of the principle, already many times affirmed, which prohibited liquidation of enemy property in transferred territories.

Sir Eyre Crowe said that all that remained to be done was to refer these texts to the Drafting Committee for insertion in the Treaty.

Mr. Polk said he would have to make a reservation with respect to the solution given to the question of the Pecs Mines.

It was decided:

to accept the Financial, Economic and Reparations clauses of the Treaty with Hungary and to refer the same to the Drafting Committee for final drafting; with the reservation that Mr. Polk should inform the Secretary General of the Conference whether he accepted the provisions relative to the coal of the Pecs Mines.

7. M. Clemenceau informed the Council that the President of the Austrian Delegation had just handed him a request of Chancellor Renner that he be permitted to come to Paris to consult with the Council on the economic situation of Austria. He (M. Clemenceau) felt that both from a political point of view and for humanitarian reasons it would be well to accede to that request and to reply that the Council would be glad to have M. Renner come to Paris. Communication from the Austrian Delegation

M. Dutasta remarked that it was only that morning at 10 o’clock that he had seen M. Eichoff. The latter would certainly appreciate the promptness with which the Council had given an answer.

It was decided:

that the Secretary General of the Conference should immediately inform the Austrian Delegation that, far from being opposed to Chancellor Renner’s coming to Paris, the Council would be glad to have him come.

8. Mr. Polk said that the decision reached at the meeting of the Council on the preceding day⁴ relative to the former Austro-Hungarian warships at Cattaro under guard of the French navy Former had not covered the case of the warships at Spalato under guard of the American navy. The Council, however, had recognized that the American navy had a right to convoy these warships to another port. Former Austro-Hungarian Warships at Spalato

It was decided:

that the two former Austrian warships now at Spalato under guard of the American Navy might, if the American Naval authorities so desire, be convoyed from Spalato to a port to be designated by the American Naval authorities, in accordance with the principle decided upon by the Council at its last meeting with respect to former Austro-Hungarian warships under guard of the French Navy at Cattaro (See H. D. 106, Minute 1).

(The meeting then adjourned).

Hotel de Crillon, Paris , December 5, 1919.

Appendix A to HD–107

[Text of the New Article 4 of the Financial Arrangement of September 10, 1919,⁵ Proposed by the Reparation Commission]

Article 4

Each of the said States shall, within three months after the request will have been made by the Reparations Commission, issue bonds for a sum equal to the sum due by that state, on account of its liberation, increased by the value of the goods and properties transferred; and shall deliver them to any person or to any organization which the governments of the U. S. of America, of the British Empire, France and Italy may designate.

These bonds shall be payable to bearer, and the principal and interest payable by the issuing state, without deduction of any tax or charge imposed by it, or under its authority. These bonds shall bear interest at 5%, payable semi-annually, beginning from the 1st of January, nineteen-hundred and twenty-six. They will be paid off in twenty-five annual installments, in equal amounts, beginning January 1st, 1931. The issuing state can nevertheless, if it so desires, pay off at any period all or part of these bonds at par and with all corresponding interest, provided it advises the governments of the United States, British Empire, France and Italy of its intention, ninety days in advance.

In proportion to these maturities, the Reparations’ Commission shall retain, from the sums due to each of the interested states, under the designation “Reparations” the necessary sums for the payment of the interest, and the redemption of the bonds mentioned above.

Appendix B to HD–107

Poland and Czechoslovakia

The United States of America, the British Empire, France, Italy, and Japan, the Principal Allied and Associated Powers, Poland, and the Czecho-Slovak State.

Desiring to assure the sovereignty of Poland and the Czecho-Slovak State over the territories recognized as belonging to them respectively.

The undersigned, after exchanging their full powers, found in good and due form, have agreed as follows:

Article 1

Subject to the special provisions of the Treaties and Decisions concluded for the purpose of completing the present settlement, the High Contracting Parties recognize the sovereignty of Poland over the territories of the former Austro-Hungarian Monarchy lying to the north of the frontier line hereafter described:

From a point on the coarse of the Oder immediately south of the Ratibor-Oderberg railway—south-eastwards to the point of meeting of the three old boundaries between Galicia, Hungary and the Duchy of Teschen,

a line to be defined subsequently in accordance with the Decision of September 27, 1919;⁶

thence to the point where it is met by the western boundary of the political district of Nameszto,

the old boundary between Galicia and Hungary;

thence eastwards to the point where this old boundary is met by the southern boundary of the political district of Trsztena,

a line to be defined subsequently iii accordance with the Decision of September 27, 1919,

thence to point 2508 of the Magas Tatra,

the old boundary between Galicia and Hungary;

thence to point 1052 about 13 kilometres north-west of Olublo,

a line to be defined subsequently in accordance with the Decision of September 27, 1919,

thence eastwards, then east-south-eastwards to a point about 2 kilometres south of point 1335 (Halicz) where it meets the administrative boundary between the districts of Lisko on the west and of Turka on the East,

the old boundary between Galicia and Hungary.

This is the point common to the three frontiers of Poland, Czechoslovakia, and Eastern Galicia.

The Boundary Commission provided for in the seventh paragraph of Article 83 of the Treaty of Peace with Germany concluded on June 28, 1919, will have to trace on the spot the frontier line described above.

Article 2

Subject to the special provisions of the Treaties and Decisions concluded for the purpose of completing the present settlement, the High Contracting Parties recognize the sovereignty of the Czecho-Slovak State over the territories defined by the frontiers laid down: with Germany, by Article 27, 6., and Article 83 of the Treaty of Peace concluded with Germany on June 28, 1919; with Austria, by Article 27, 6. of the Treaty of Peace concluded with Austria on September 10, 1919; with Hungary, by Article 27, 4. of the Treaty of Peace concluded with Hungary on . . . . . . . 1919; with Poland and Eastern Galicia by Article 1 of the present Treaty and by Article 1, B and C of the Treaty relating to Eastern Galicia concluded on . . . . . . .; and with Roumania by the following line:

From point 123 which is the point common to the three frontiers of Czecho-Slovakia (Ruthenian territory) Roumania and Hungary, north-eastwards to the course of the Batar,

a line to be fixed on the ground;

thence eastwards to the point where it is left by the administrative boundary between the comitats of Ugocsa and Szatmar.

the course of the Batar upstream;

thence in a general easterly direction to point 652 situated on the Avas range about 6 kilometres south-west of Velete,

a line to be fixed on the ground parallel to the road Halmi-Tiszaujlak at a minimum distance of one kilometre from it, cutting the railway about 500 metres to the south of the station of Nevetlenfalva, then following generally the watershed between the basins of the Batar on the north and the Tur on the south and passing through points 238 and 582;

thence south-eastwards to point 943, south of Remete,

the watershed between the basins of the Tisza on the north and the Tur on the south;

thence northwards to a point to be chosen in the course of the Tisza about 1 kilometer upstream from Remete,

a line to be fixed on the ground;

thence eastwards to a point to be chosen above its confluence with the Visso, so as to leave the Maramarossziget–Borsa railway entirely in Roumanian territory while giving to the Ruthenes the maximum facilities for linking up the line Huszt, Also-Aspa, Korösmezo north of the river and entirely in Ruthenian territory,

the course of the Tisza upstream;

thence eastwards to point 1655 which is the point on the Carpathians common to the basins of the three rivers Tisza, Visso and Czeremosz,

the watershed between the basins of the Tisza and the Visso.

Point 1655 is the point common to the three frontiers of Czechoslovakia, Eastern Galicia and Roumania.

The present Treaty, in French, in English and in Italian, of which the French text shall prevail in case of divergence, shall be ratified. It will come into force at the same time as the Treaties of Peace with Austria and with Hungary.

The deposit of ratifications will be effected at Paris at the same time as the deposit of ratifications of the said Treaties.

Powers of which the seat of the Government is outside Europe will be entitled merely to inform the Government of the French Republic through their diplomatic representative at Paris that their ratification has been given; in that case, they must transmit the instrument of ratification as soon as possible.

A procès-verbal of the deposit of ratifications will be drawn up.

The French Government will transmit to all the signatory Powers a certified copy of the procès-verbal of the deposit of ratifications.

In faith whereof the above named Plenipotentiaries have signed the present Treaty.

Done at Paris . . . . . . . one thousand nine hundred and nineteen, in a single copy which will remain deposited in the archives of the Government of the French Republic, and of which authenticated copies will be transmitted to each of the Powers who sign the Treaty.

Appendix C to HD–107

[A Modification of the Last Part of Article 2 of the Draft Treaty Between the Principal Allied and Associated Powers Poland and the Czechoslovak State]

The present Treaty, in French, in English and in Italian, of which the French text shall prevail in case of divergence, shall be ratified. The deposit of ratifications will be effected at Paris.

Powers of which the seat of the Government is outside Europe will be entitled merely to inform the Government of the French Republic through their diplomatic representative at Paris that their ratification has been given; in that case they must transmit the instrument of ratification as soon as possible.

A first procès-verbal of the deposit of ratifications will be drawn up as soon as the Treaty has been ratified by three of the Principal Allied and Associated Powers, Poland and Czecho-Slovakia.

The present Treaty will come into force between the High Contracting Parties who have ratified it when the Treaties of Peace with Austria and Hungary have come into force for the said High Contracting Parties.

The French Government will transmit to all the signatory Powers a certified copy of the procès-verbal of the deposit of ratifications.

Appendix D to HD–107

international commission
at teschen

3 December, 1919.

[Note to the Supreme Council]

The International Commission at Teschen, on account of the short duration of its mandate, should assume no part of the administration of the country; consequently, it shall have no local revenue to collect, and the totality of its expenses shall be advanced by the Allied Governments.

It seems advisable that each Power advance the amount of the expenses for its Delegation. As to the common expenses of the entire Commission (Secretariat, interpreters, rents, heating, light, etc,) they may be either advanced by that of the Powers to which the President belongs, or covered by equal advances made by the various Powers, represented in the Commission. A decision should be taken to that effect.

Appendix E to HD–107

[Treaty of Peace With Hungary]

Part IX.—Financial Clauses

Article 180

Subject to such exceptions as the Reparation Commission may make, the first charge upon all the assets and revenues of Hungary shall be the cost of reparation and all other costs arising under the present Treaty or any treaties or agreements supplementary thereto, or under arrangements concluded between Hungary and the Allied and Associated Powers during the Armistice signed on November 3, 1918.⁷

Up to May 1, 1921, the Hungarian Government shall not export or dispose of, and shall forbid the export or disposal of, gold without the previous approval of the Allied and Associated Powers acting through the Reparation Commission.

Article 181

There shall be paid by the Government of Hungary the total cost of all armies of the Allied and Associated Governments occupying territory within the boundaries of Hungary as defined by the present Treaty from the date of the signature of the Armistice of November 3, 1918, including the keep of men and beasts, lodging and billeting, pay and allowances, salaries and wages, bedding, heating, lighting, clothing, equipment, harness and saddlery, armament and rolling-stock, air services, treatment of sick and wounded, veterinary and remount services, transport services of all sorts (such as by rail, sea, or river, motor-lorries), communications and correspondence, and, in general, the cost of all administrative or technical services the working of which is necessary for the training of troops and for keeping their numbers up to strength and preserving their military efficiency.

The cost of such liabilities under the above heads, so far as they relate to purchases or requisitions by the Allied and Associated Governments in the occupied territory, shall be paid by the Hungarian Government to the Allied and Associated Governments in crowns or any legal currency of Hungary which may be substituted for crowns at the current or agreed rate of exchange. In cases where an Allied Government, in order to make such purchases or requisitions in the occupied territory, has incurred expenditure in a currency other than crowns, such expenditure shall be reimbursed in any legal Hungarian currency at the rate of exchange current at the date of reimbursement or at an agreed rate.

All other of the above costs shall be paid in the currency of the country to which the payment is due.

The above stipulations will not apply to military operations carried out after November 3, 1918, without the assent of the Principal Allied and Associated Powers, and not provided for by the Armistice Agreements of November 3, and 13, 1918,⁸ except to such extent as the Reparation Commission shall decide, and the Reparation Commission shall have, so far as these operations are concerned, full power to decide all questions, especially those relating to:

(a) the costs of the armies engaged in such operations, particularly the determination of their nature and amount, the portion of such costs to be charged to Hungary, the manner and currency in which such portion is to be paid, and any possible arrangements as regards preference or priority in connection with such payment;

(b) the requisitioning in the course of the operations of property and securities of every description, particularly the possible classification of any portion of such property or securities as war booty, the valuation of such property or securities, the extent to which restitution should be made, debiting on the reparation account of the sum representing the property or securities not restored against the Power in possession thereof, the method of payment (in cash or as a set-off on the reparation account) of the sums so debited, and the dates on which such payment or set-off is to be made.

Article 182

Hungary confirms the surrender of all material handed over or to be handed over to the Allied and Associated Powers in accordance with the Armistice of November 3, 1918, or any supplementary arrangements, and recognizes the title of the Allied and Associated Powers to such material.

There shall be credited to Hungary, against the sums due from her to the Allied and Associated Powers for reparation, the value, as assessed by the Reparation Commission, of such of the above material for which, as having nonmilitary value, credit should, in the judgment of the Reparation Commission, be allowed to Hungary.

Property belonging to the Allied and Associated Governments or their nationals restored or surrendered under the Armistice Agreements in specie shall not be credited to Hungary.

Article 183

The priority of the charges established by Article 180, shall, subject to the qualifications made below, be as follows:

(a) the cost of the armies of occupation, as defined under Article 181, during the Armistice.

(b) the cost of any armies of occupation, as defined under Article 181, after the coming into force of the present Treaty;

(c) the cost of reparation arising out of the present Treaty or any treaties or conventions supplementary thereto;

(d) the cost of all other obligations incumbent on Hungary under the Armistice Agreement or its extensions, or under this Treaty or any treaties or conventions supplementary thereto.

The payment for such supplies of food and raw material for Hungary and such other payments as may be judged by the Principal Allied and Associated Powers to be essential to enable Hungary to meet her obligations in respect of reparation shall have priority to the extent and upon the conditions which have been or may be determined by the Governments of the Said Powers.

The payment of the costs of the armies employed in the operations effected after November 3, 1918, without the assent of the Principal Allied and Associated Powers, and not provided for in the Armistice Agreements of November 3 and 13, 1918, shall have priority to the extent and upon the conditions fixed by the Reparation Commission in accordance with the provisions of Article 181.

Article 184

The right of each of the Allied and Associated Powers to dispose of enemy assets and property within its jurisdiction at the date of the coming into force of the present Treaty is not affected by the foregoing provisions.

Article 185

Nothing in the foregoing provisions shall prejudice in any manner charges or mortgages lawfully effected in favour of the Allied and Associated Powers or their nationals respectively before the date at which a state of war existed between Austria-Hungary and the Allied or Associated Power concerned by the government of the former Kingdom of Hungary or by Hungarian nationals on assets in their ownership at that date, except in so far as variations of such charges or mortgages are specifically provided for under the terms of the present Treaty or conventions supplementary thereto.

Article 186

1. Each of the States to which territory of the former Austro-Hungarian Monarchy is transferred, and each of the States arising from the dismemberment of that Monarchy, including Hungary shall, in so far as territory is assigned to it in accordance with the present Treaty, assume responsibility for a portion of the debt of the Hungarian Government which is specifically secured on railways or other property, and which was in existence on July 28, 1914. The portion to be so assumed by each State shall be such portion as in the opinion of the Reparation Commission represents the secured debt in respect of the railways and other properties transferred to that State under the terms of the present Treaty or any treaties or ageements supplementary thereto.

The amount of the liability in respect of secured debt so assumed by each State other than Hungary shall be valued by the Reparation Commission, on such basis as the Commission may consider equitable, and the value so ascertained shall be deducted from the amount payable by the State in question to Hungary in respect of property of the former or existing Hungarian Government which the State acquires with the territory. Each State shall be solely responsible in respect to that portion of the secured debt for which it assumes responsibility under the terms of this Article, and holders of the debt for which responsibility is assumed by States other than Hungary shall have no recourse against the Government of any other State.

Any property which was specifically pledged to secure any debt referred to in this Article shall remain specifically pledged to secure the new debt. But in case the property so pledged is situated as the result of the present Treaty in more than one State, that portion of the property which is situated in a particular State shall constitute the security only for that part of the debt which is apportioned to that State, and not for any other part of the debt.

For the purposes of the present Article there shall be regarded as secured debt payments due by the former Hungarian Government in connection with the purchase of railways or similar property; the distribution of the liability for such payments will be determined by the Reparation Commission in the same manner as in the case of secured debt.

Debts for which the responsibility is transferred under the terms of this Article shall be expressed in terms of the currency of the State assuming the responsibility, if the original debt was expressed in terms of Austro-Hungarian paper currency. For the purposes of this conversion the currency of the assuming State shall be valued in terms of Austro-Hungarian paper kronen at the rate at which those kronen were exchanged into the currency of the assuming State by that State when it first substituted its own currency for Austro-Hungarian kronen. The basis of this conversion of the currency unit in which the bonds are expressed shall be subject to the approval of the Reparation Commission, which shall, if it thinks fit, require the State effecting the conversion to modify the terms thereof. Such modification shall only be required if, in the opinion of the Commission, the foreign exchange value of the currency unit or units substituted for the currency unit in which the old bonds are expressed is substantially less at the date of the conversion than the foreign exchange value of the original currency unit.

If the original Hungarian debt was expressed in terms of a foreign currency or foreign currencies, the new debt shall be expressed in terms of the same currency or currencies.

If the original Hungarian debt was expressed in terms of Austro-Hungarian gold coin, the new debt shall be expressed in terms of equivalent amounts of pounds sterling or gold dollars of the United States of America, the equivalents being calculated on the basis of the weight and the fineness of gold of the three coins as enacted by law on January 1, 1914.

Any foreign exchange options, whether at fixed rates or otherwise, embodied explicitly or implicitly in the old bonds shall be embodied in the new bonds also.

2. Each of the States to which territory of the former Austro-Hungarian Monarchy is transferred, and each of the States arising from the dismemberment of that Monarchy, including Hungary, shall assume responsibility for a portion of the unsecured bonded debt of the former Hungarian Government [as?] it stood on July 28, 1914, calculated on the basis of the ratio between the average for the three financial years 1911, 1912, 1913, of such revenues of the territory distributed in accordance with the present Treaty and the average for the same years of such revenues of the whole of the former Hungarian territories as in the judgment of the Reparation Commission are best calculated to represent the financial capacity of the respective territories. In making the above calculation, the revenues of Bosnia and Herzegovina shall not be included.

The responsibilities in respect of bonded debt to be assumed under the terms of this Article shall be discharged in the manner laid down in the Annex hereto.

The Hungarian Government shall be solely responsible for all the liabilities of the former Hungarian Government incurred by it prior to July 28, 1914, other than those evidenced by the bonds, bills, securities, and currency notes which are specifically provided for under the terms of the present Treaty.

Neither the provisions of this Article nor the provisions of the Annex hereto shall apply to securities of the former or existing Hungarian Government deposited with the Austro-Hungarian Bank as security for the currency notes issued by that bank.

annex

Financial Clauses

The amount of the former unsecured Hungarian Government bonded debt, the responsibility for which is to be distributed under the provisions of Article 186, shall be the amount of that debt as it stood on July 28, 1914.

Each State assuming responsibility for the unsecured debt of the former Hungarian Government shall, within three months of the coming into force of the present Treaty, if it has not already done so, stamp with the stamp of its own Government all the bonds of that debt existing in its own territory. The distinguishing numbers of the bonds so stamped shall be recorded and shall be furnished, together with the other records of the stamping, to the Reparation Commission.

Holders of bonds within the territory of a State which is required to stamp old Hungarian bonds under the terms of this Annex shall, from the date of the coming into force of the present Treaty, be creditors in respect of these bonds of that State only, and they shall have no recourse against the Government of any other State.

Each State which, under the terms of Article 186, is required to assume responsibility for a portion of the old unsecured Hungarian Government debt, and which has ascertained by means of stamping the old Hungarian bonds that the bonds of any particular issue of such old Hungarian bonds held within its territory were smaller in amount than the amount of that issue for which, in accordance with the assessment of the Reparation Commission, it is held responsible, shall deliver to the Reparation Commission new bonds equal in amount to the difference between the amount of the issue for which it is responsible and the amount of the same issue recorded as held within its own territory. Such new bonds shall be of such denominations as the Reparation Commission may require. They shall carry the same rights as regards interest and amortisation as the old bonds for which they are substituted, and in all other respects the conditions of the new bonds shall be fixed subject to the approval of the Reparation Commission.

If the original bond was expressed in terms of Austro-Hungarian paper currency, the new bond by which it is replaced shall be expressed in terms of the currency of the State issuing the new bond, and for the purpose of this currency conversion, the currency of the new State shall be valued in terms of Austro-Hungarian paper kronen at the rate at which those kronen were exchanged for the currency of the new State by that State when it first substituted its own currency for Austro-Hungarian paper kronen. The basis of this conversion of the currency unit in which the bonds are expressed shall be subject to the approval of the Reparation Commission, which shall, if it thinks fit, require the State effecting the conversion to modify the terms thereof. Such modification shall only be required if, in the opinion of the Commission, the foreign exchange value of the currency unit or units substituted for the currency unit in which the old bonds are expressed is substantially less at the date of the conversion than the foreign exchange value of the original currency unit.

If the original bond was expressed in terms of a foreign currency or foreign currencies, the new bond shall be expressed in terms of the same currency or currencies. If the original bond was expressed in terms of Austro-Hungarian gold coin, the new bond shall be expressed in terms of equivalent amounts of pounds sterling and gold dollars of the United States of America, the equivalents being calculated on the basis of the weight and fineness of gold of the three coins as enacted by law on January 1, 1914.

Any foreign exchange options, whether at fixed rates or otherwise, embodied explicitly or implicitly in the old bonds shall be embodied in the new bonds also.

Each State which under the terms of Article 186 is required to assume responsibility for a portion of the old unsecured Hungarian Government debt, which has ascertained by means of stamping the old Hungarian bonds that the bonds of any particular issue of such old Hungarian bonds held within its territory were larger in amount than the amount of that issue for which it is held responsible in accordance with the assessment of the Reparation Commission, shall receive from the Reparation Commission its due proportionate share of each of the new issues of bonds issued in accordance with the provisions of this Annex.

Holders of unsecured bonds of the old Hungarian Government debt held outside the boundaries of the States to which territory of the former Austro-Hungarian Monarchy is transferred, or States arising out of the dismemberment of that Monarchy, including Hungary, shall deliver through the agency of their respective Governments to the Reparation Commission the bonds which they hold, and in exchange therefor the Reparation Commission shall deliver to them certificates entitling them to their due proportionate share of each of the new issues of bonds corresponding to and issued in exchange for their surrendered bonds under the provisions of this Annex.

The share of each State or private holder entitled to a share in any new issue of bonds issued in accordance with the provisions of this Annex shall bear such proportion of the total amount of bonds of that new issue as the holding of the State or private owner in question of the old issue of bonds bears to the total amount of the old issue presented to the Reparation Commission for exchange into new bonds in accordance with the provisions of this Annex.

The Reparation Commission shall, if it think fit, arrange with the holders of the new bonds provided for by this Annex a consolidation loan of each debtor State, the bonds of which loan shall be substituted for the various different issues of new bonds on such terms as may be agreed upon by the Commission and the bondholders.

The State assuming liability for any bond of the former Hungarian Government shall assume any liability attaching to the bond in respect of unpaid coupons or sinking fund instalments accrued since the date of the coming into force of the present Treaty.

In addition to the former unsecured Hungarian Government bonded debt to be divided as above, there shall also be divided among the several States, in the same proportion, the amount of the former unsecured Austrian Government bonded debt which represents the liability of the former Hungarian Government for that debt, as provided by the additional convention relating to the contributions of the countries of the Sacred Hungarian Crown to the charges of the general debt of the Austro-Hungarian State approved by the Austro-Hungarian Law of December 30, 1907, B. L. I. No. 278.

Each State which, in virtue of the present Treaty, assumes responsibility for a part of this Austrian debt shall deliver to the Reparation Commission new securities for an amount equal to the part of the above-mentioned Austrian debt which is attributed to them.

The terms of these securities shall be fixed by the Reparation Commission. They shall be such as to represent as exactly as possible the conditions of the former Austrian securities prior to 1867, for which these securities are to be substituted. The new securities will be delivered to the States or holders of Austrian securities, who will have the right to a portion of each of the new issues made in accordance with the provisions of the Annex to Article 203 of the Treaty with Austria.

Article 187

1. In case the new boundaries of any State, as laid down by the present Treaty, shall divide any local area which was a single unit for borrowing purposes and which had a legally constituted public debt, such debt shall be divided between the new divisions of the area in a proportion to be determined by the Reparation Commission in accordance with the principles laid down for the re-apportionment of Government Debts under Article 186, and the responsibility so assumed shall be discharged in such a manner as the Reparation Commission shall determine.

2. The public debt of Bosnia and Herzegovina shall be regarded as the debt of a local area and not as part of the public debt of the former Austro-Hungarian Monarchy.

Article 188

Within two months of the coming into force of the present Treaty, each one of the States to which territory of the former Austro-Hungarian Monarchy is transferred, and each one of the States arising from the dismemberment of that Monarchy, including Hungary, shall, if it has not already done so, stamp with the stamp of its own Government the securities of various kinds which are separately provided for, representing the bonded war debt of the former Hungarian Government as legally constituted prior to October 31, 1918, and existing in their respective territories.

The securities thus stamped shall be withdrawn and replaced by certificates, their distinguishing numbers shall be recorded, and any securities withdrawn, together with the documents recording the transaction, shall be sent to the Reparation Commission.

The stamping and replacement of a security by a certificate under the provisions of this Article shall not imply that the State so stamping and replacing a security thereby assumes or recognizes any obligation in respect of it, unless the State in question desires that the stamping and replacement should have this implication.

The aforementioned States, with the exception of Hungary, shall be free from any obligation in respect of the war debt of the former Hungarian Government, wherever that debt may be held, but neither the Governments of those States nor their nationals shall have recourse under any circumstances whatever against any other States, including Hungary, in respect of the war debt bonds of which they or their nationals are the beneficial owners.

The war debt of the former Hungarian Government which was prior to the signature of the present Treaty in the beneficial ownership of nationals or Governments of States other than those to which territory of the former Austro-Hungarian Monarchy is assigned shall be a charge upon the Hungarian Government only, and no one of the other States aforementioned shall be held responsible for any part thereof.

The provisions of this Article shall not apply to the securities of the former Hungarian Government deposited by that Government with the Austro-Hungarian Bank as security for the currency notes of the said bank.

The existing Hungarian Government shall be solely responsible for all liabilities of the former Hungarian Government incurred during the war, other than those evidenced by the bonds, bills, securities and currency notes which are specifically provided for under the terms of the present Treaty.

Article 189

1. Within two months of the coming into force of the Treaty with Austria, each one of the States to which territory of the former Austro-Hungarian Monarchy is transferred, and each one of the States arising from the dismemberment of that Monarchy, including Austria and Hungary, shall, if it has not already done so, stamp with the stamp of its own Government the currency notes of the Austro-Hungarian Bank existing in its territory.

2. Within twelve months of the coming into force of the Treaty with Austria, each one of the States to which territory of the former Austro-Hungarian Monarchy is transferred, and each one of the States arising from the dismemberment of that Monarchy, including Austria and Hungary, shall replace, as it may think fit, the stamped notes referred to above by its own or a new currency.

3. The Governments of such States as have already converted the currency notes of the Austro-Hungarian Bank by stamping or by the issue of their own or a new currency, and in carrying out this operation have withdrawn, without stamping them, a portion or all of the currency notes circulating in their territory, shall either stamp the notes so withdrawn or hold them at the disposal of the Reparation Commission.

4. Within fourteen months of the coming into force of the Treaty with Austria, those Governments which have replaced notes of the bank by their own or new currency, in accordance with the provisions of this Article, shall transfer to the Reparation Commission all the notes, stamped or unstamped, of the bank which have been withdrawn in the course of this replacement.

5. All notes transferred to the Reparation Commission under the provisions of this Article shall be dealt with by that Commission in accordance with the provisions of the Annex hereto.

6. The Austro-Hungarian Bank shall be liquidated as from the day succeeding the day of the signature of the Treaty with Austria.

7. The liquidation shall be conducted by receivers specially appointed for that purpose by the Reparation Commission. In conducting the liquidation of the bank, the receivers shall follow the rules laid down in the Statutes or other valid instruments regulating the constitution of the bank, subject, however, to the special provisions of this Article. In the case of any doubt arising as to the interpretation of the rules concerning the liquidation of the bank, whether laid down in these Articles and Annexes or in the Statutes of the bank, the decision of the Reparation Commission or any arbitrator appointed by it for that purpose shall be final.

8. The currency notes issued by the bank subsequent to October 27, 1918, shall have a claim on the securities issued by the former or existing Austrian and Hungarian Governments and deposited with the bank by those Governments as security for these notes, but they shall not have a claim on any other assets of the bank.

9. The currency notes issued by the bank on or prior to October 27, 1918 (in so far as they are entitled to rank at all in conformity with this Article), shall all rank equally as claims against all the assets of the bank, other than the Austrian and Hungarian Government securities deposited as security for the various note issues.

10. The securities deposited by the former or existing Austrian and Hungarian Governments with the bank as security for the currency notes issued on or prior to October 27, 1918, shall be cancelled in so far as they represent the notes converted in the territory of the former Austro-Hungarian Monarchy as it existed on July 28, 1914, by States to which territory of that Monarchy is transferred or by States arising from the dismemberment of that Monarchy, including Austria and Hungary.

11. The remainder of the securities deposited by the former or existing Austrian and Hungarian Governments with the bank as security for the currency notes issued on or prior to October 27, 1918, shall be retained in force as security for, and in so far as they represent, the notes issued on or prior to October 27, 1918, which on June 15, 1919, were outside the limits of the former Austro-Hungarian Monarchy, that is to say, all notes of this description which are presented to the Reparation Commission in accordance with paragraph 4 of this Article, and also all notes of this description which may be held elsewhere and are presented to the receivers of the bank in accordance with the Annex hereto.

12. No claims on account of any other currency notes issued on or prior to October 27, 1918, shall rank either against the general assets of the bank or against the securities deposited by the former or existing Austrian and Hungarian Governments as security for the notes, and any balance of such securities remaining after the amount of securities mentioned in the two preceding clauses has been calculated and deducted shall be cancelled.

13. All securities deposited by the former or existing Austrian and Hungarian Governments with the bank as security for currency note issues and which are maintained in force shall be the obligations respectively of the Governments of Austria and Hungary only and not of any other States.

14. The holders of currency notes of the Austro-Hungarian Bank shall have no recourse against the Governments of Austria or Hungary or any other Government in respect of any loss which they may suffer as the result of the liquidation of the bank.

15. Nevertheless, if any difficulties shall arise owing to the date of the signature of the present Treaty, the dates at which any of the operations laid down by this Article are to be carried out may be altered by the Reparation Commission.

annex

–1–

The respective Governments, when transmitting to the Reparation Commission all the currency notes of the Austro-Hungarian Bank withdrawn by them from circulation in accordance with the terms of Article 189, shall also deliver to the Commission all the records showing the nature and amounts of the conversions which they have effected.

–2–

The Reparation Commission, after examining the records, shall deliver to the said Governments separate certificates stating the total amount of currency notes which the Governments have converted,

(a) within the boundaries of the former Austro-Hungarian Monarchy as they existed on July 28, 1914,

(b) elsewhere.

These certificates will entitle the bearer to lodge a claim with the receivers of the bank for currency notes thus converted which are entitled to share in the assets of the bank.

–3–

After the liquidation of the bank is completed, the Reparation Commission shall destroy the notes thus withdrawn.

–4–

No notes issued on or prior to October 27, 1918, wherever they may be held, will rank as claims against the bank unless they are presented through the agency of the Government of the country in which they are held.

Article 190

Each one of the States to which territory of the former Austro-Hungarian Monarchy is transferred, and each one of the States arising from the dismemberment of the Monarchy, including Austria and Hungary, shall deal as it thinks fit with the petty or token coinage of the former Austro-Hungarian Monarchy existing in its territory.

No such State shall have any recourse under any circumstances, on behalf of either itself or of its nationals, against any other State with regard to such petty or token coinage.

Article 191

States to which territory of the former Austro-Hungarian Monarchy is transferred and States arising from the dismemberment of that Monarchy shall acquire all property and possessions situated within their territories belonging to the former or existing Hungarian Government.

For the purposes of this Article, the property and possessions of the former or existing Hungarian Government shall be deemed to include the property of the former Kingdom of Hungary and the interests of that Kingdom in the joint property of the Austro-Hungarian Monarchy, as well as all the property of the Crown and the private property of members of the former Royal Family of Austria-Hungary.

These States shall, however, have no claim to any property of the former or existing Government of Hungary situated outside their own respective territories.

The value of such property and possessions acquired by States other than Hungary shall be fixed by the Reparation Commission and placed by that Commission to the credit of Hungary and to the debit of the State acquiring such property on account of the sums due for reparation. The Reparation Commission shall deduct from the value of the public property, thus acquired an amount proportionate to the contribution in money, land, or material made directly by any province or commune or other autonomous local authority towards the cost of such property.

Without prejudice to Article 186 relating to secured debt, in the case of each State acquiring property under the provisions of this Article, the amount placed to the credit of Hungary and to the debit of the said State in accordance with the preceding paragraph shall be reduced by the value of the amount of the liability in respect of the unsecured debt of the former Hungarian Government assumed by the State under the provisions of Article 186 which, in the opinion of the Reparation Commission, represents expenditure upon the property so acquired. The value shall be fixed by the Reparation Commission on such basis as the Commission may consider equitable.

Property of the former and existing Hungarian Government shall be deemed to include a share of the real property in Bosnia-Herzegovina of all descriptions for which, under Article 5 of the Convention of February 26, 1909,⁹ the Government of the former Austro-Hungarian Monarchy paid £.T.2,500,000 to the Ottoman Government. Such share shall be proportionate to the share which the former Kingdom of Hungary contributed to the above payment, and the value of this share, as assessed by the Reparation Commission, shall be credited to Hungary on account of reparation.

As exception to the above there shall be transferred without payment:

(1) the property and possessions of provinces, communes and other local autonomous institutions of the former Austro-Hungarian Monarchy, including those in Bosnia-Herzegovina which did not belong to the former Austro-Hungarian Monarchy;

(2) schools and hospitals the property of the former Austro-Hungarian Monarchy.

Further, any building or other property situated in the respective territories transferred to the States referred to in the first paragraph whose principal value lies in its historic interest and associations, and which formerly belonged to the Kingdom of Bohemia, the Kingdom of Croatia-Slavonia-Dalmatia, Bosnia-Herzegovina, the Republic of Ragusa, the Venetian Republic, or the Episcopal Principalities of Trient and Bressanone, may, subject to the approval of the Reparation Commission, be transferred to the Government entitled thereto without payment.

Article 192

Hungary renounces, so far as she is concerned, all rights accorded to her or her nationals by treaties, conventions or agreements, of whatsoever kind, to representation upon or participation in the control or administration of commissions, state banks, agencies, or other financial or economic organizations of an international character exercising powers of control or administration and operating in any of the Allied or Associated States, or in Germany, Austria, Bulgaria or Turkey, or in the dependencies of these States, or in the former Russian Empire.

Article 193

1. The Hungarian Government engages to recognize the transfer provided for in Article 210 of the Treaty with Austria relative to the delivery of the sum in gold deposited in the Austro-Hungarian Bank in the name of the Council of the Administration of the Ottoman Public Debt as security for the first issue of Turkish Government currency notes.

2. Without prejudice to Article 227, Part X (Economic Clauses) of the present Treaty, Hungary renounces any benefit disclosed by the Treaties of Bucharest¹⁰ and Brest-Litovsk¹¹ and by the Treaties supplementary thereto.

Hungary undertakes to transfer either to Roumania or to the Principal Allied and Associated Powers, as the case may be, all monetary instruments, specie, securities and negotiable instruments or goods which she has received under the aforesaid Treaties.

3. The sums of money and all securities, instruments and goods, of whatsoever nature, to be delivered, paid or transferred under the provisions of this Article, shall be disposed of by the Principal Allied and Associated Powers in a manner hereafter to be determined by those Powers.

4. Hungary recognizes any transfer of gold provided for by Article 259 (5) of the Treaty of Peace concluded at Versailles on June 28, 1919 between the Allied and Associated Powers and Germany, and any transfer of claims provided for by Article 261 of that Treaty.

Article 194

Without prejudice to the renunciation of any rights by Hungary on behalf of herself or of her nationals in the other provisions of the present Treaty, the Reparation Commission may, within one year from the coming into force of the present Treaty, demand that Hungary become possessed of any rights and interests of her nationals in any public utility undertaking or in any concession operating in Russia, Turkey, Germany, Austria or Bulgaria, or in the possessions or dependencies of these States, or in any territory formerly belonging to Hungary or her allies to be transferred by Hungary or her allies to any State, or to be administered by a mandatory under any Treaty entered into with the Allied and Associated Powers, and may require that the Hungarian Government transfer, within six months of the date of demand, to the Reparation Commission all such rights and interests and any similar rights and interests owned by the former or existing Hungarian Government.

Hungary shall be responsible for indemnifying her nationals so dispossessed, and the Reparation Commission shall credit Hungary on account of sums due for reparation with such sums in respect of the value of the transferred rights and interests as may be assessed by the Reparation Commission, and Hungary shall, within six months from the coming into force of the present Treaty, communicate to the Reparation Commission all such rights and interests, whether already granted, contingent or not yet exercised, and shall renounce on behalf of herself and her nationals in favour of the Allied and Associated Powers all such rights and interests which have not been so communicated.

Article 195

Hungary undertakes to refrain from preventing or impeding such acquisition by the German, Austrian, Bulgarian or Turkish Governments of any rights and interests of German, Austrian, Bulgarian, and Turkish nationals in public utility undertakings or concessions operating in Hungary as may be required by the Reparation Commission under the terms of the Treaties of Peace or supplementary treaties or conventions concluded between the Allied and Associated Powers and the German, Austrian, Bulgarian and Turkish Governments respectively.

Article 196

Hungary undertakes to transfer to the Allied and Associated Powers any claims to payment or reparation by Germany, Austria, Bulgaria or Turkey in favour of the former or existing Hungarian Governments, and in particular any claims which may arise now or hereafter in the fulfillment of undertakings made from July 28, 1914, to the coming into force of the present Treaty.

The value of such claims shall be assessed by the Reparation Commission, and shall be transferred to the Reparation Commission for the credit of Hungary on account of the sums due for reparation.

Article 197

Any monetary obligation arising out of the present Treaty and expressed in terms of gold kronen shall, unless some other arrangement is specifically provided for in any particular case under the terms of the present Treaty or of treaties or conventions supplementary thereto, be payable at the option of the creditors in pounds sterling payable in London, gold dollars of the United States of America payable in New York, gold francs payable in Paris, or gold lire payable in Rome.

For the purposes of this Article, the gold coins mentioned above shall be defined as being of the weight and fineness of gold as enacted by law on January 1, 1914.

Article 198

Any financial adjustments, such as those relating to any banking and insurance companies, savings banks, postal savings banks, land banks, mortgage companies or other similar institutions, operating within the territory of the former Austro-Hungarian Monarchy, necessitated by the partition of that Monarchy and the resettlement of public debts and currency provided for by these Articles, shall be regulated by agreement between the various Governments concerned in such a manner as shall best secure equitable treatment to all the parties interested. In case the Governments concerned are unable to come to an agreement on any question arising out of this financial adjustment, or in case any Government is of opinion that its nationals have not received equitable treatment, the Reparation Commission shall, on the application of any one of the Governments concerned, appoint an arbitrator or arbitrators, whose decision shall be final.

Article 199

The Hungarian Government shall be under no liability in respect of civil or military pensions granted to nationals of the former Kingdom of Hungary who have been recognized as nationals of other States or who become so under the provisions of the present Treaty.

Appendix F to HD–107

ministry
of commerce, of the industry
of posts and telegraphs

French Republic, Paris, December 5, 1919.

From: Economic Commission.

To: Peace Conference.

I have the honor to communicate:

1st) The text of an article to be inserted in Part VIII of the Treaty with Hungary, relative to the furnishing of traction coal from the Pecs Mines by Hungary to Serbia.

2nd.) The text of an article to be inserted in Part X (economic clauses) relative to the furnishing of coal to Hungary by the Czechoslovak State and Poland.

This text is equivalent to Article 224 of the Treaty with Austria.

3d) An article to be annexed to the preceding, relative to the furnishing of food products to Austria by Hungary.

4th) The text of an article to replace alinea 6, Article 266, in the Treaty with Hungary.

These texts in the adoption of which the special committee of the Economic Commission was unanimous, were presented during the session this day, to the Supreme Council of the Allied and Associated Powers, and were adopted, subject to an examination by the Drafting Committee.

You were kind enough to communicate Note 4668, from the Delegation of the Serb-Croat-Slovene Kingdom, containing various remarks relative to the economic clauses.

The Special Committee of the Economic Commission examined the Serbian counter-proposals and did not believe they could be accepted:

In fact, the first of these proposals becomes invalid on account of the text adopted in Article 232 of the Treaty with Hungary.

The fifth of these proposals becomes invalid through the application of an article in the Treaty with Hungary analogous to Article 273 in the Treaty with Austria.

The second and fourth appeared in opposition with the principles already adopted, both concerning the Treaty with Austria and the Treaty with Bulgaria.

As to the third Serbian proposal, relative to the article in the Treaty with Hungary, analogous to Article 271 in the Treaty with Austria, the Special Committee of the Economic Commission was unfavorable to its acceptance but decided to request further information from the Financial Commission.

Serruys

[Enclosure 1]

treaty with hungary

Pecs Mines

It is proposed that Annex V below be completed by the underlined alinea:

Annex V, Paragraph I.

“Hungary accords to each of the Allied and Associated Governments, as partial reparation, an option for the annual delivery for a period of five years to follow the entry into force of the present Treaty, of the raw materials enumerated below to an extent which will accord with their annual pre-war importations from Austria-Hungary to a proportion which the resources of Hungary considered in connection with her frontiers, such as they are defined by the present Treaty, and with pre-war resources of the former Austro-Hungarian Empire.

Construction timber and wood products.

Iron and iron alloys.

Hungary further accords to the Allied and Associated Powers, as partial reparations, an option for the annual delivery for a period of five years to follow the entry into force of the present Treaty, a quantity of traction coal to be taken from the Pecs Mines and which shall be periodically determined by the Reparations Commission, and which will be disposed of in favor of the Serb-Croat-Slovene State under conditions which shall be fixed by the Reparations Commission.[”]

Paragraph II.

The price of the products referred to in the preceding paragraphs will be the same as the price paid by the Hungarian nationals, as the packing and shipping conditions, as far as the Hungarian frontier are more advantageous, agreed upon for the delivery of the same products to Hungarian nationals.¹²

Paragraph II [III?].

The options of the present annex will be exercised through the intermediary of the Reparations Commission. The latter will have power, for the execution of the above provisions, to statute on all questions relative to the procedure, qualities and quantities of the supplies, the delays, methods of delivery and payment. The orders, with all necessary specifications, should be notified to Hungary 120 days before the date set for the commencement of their execution, concerning deliveries to be made after January 1, 1920, and 30 days before that date concerning deliveries to be made between the date of the entry into force of the present Treaty and January 1, 1920. If the Commission esteems the complete fulfillment of the orders is of a nature to weigh heavily upon Hungarian industrial needs, it may extend or cancel them and thus fix all priority orders.

[Enclosure 2]

Article 224

• Par. 1.—Special arrangements are concluded between Poland, the Czecho-Slovak State and Hungary concerning the reciprocal furnishing of coal, foodstuffs and raw materials.
• Par. 2.—Until the conclusion of these arrangements, but in no case for a period of more than five years after the entry into force of the Treaty, the Czecho-Slovak State and Poland agree to impose no export duty or restriction of any kind relative to the exportation of coal or lignite to Hungary to an amount which will be determined, failing an agreement between the States concerned, by the Reparations Commission. In determining this amount, the Reparations Commission will consider all the elements, including the amount of coal and lignite furnished to the territories of Hungary as they now exist by Silesia before the war, and the territories of the former Austrian Empire transferred to the Czecho-Slovak State and Poland, by virtue of the Peace Treaty, as well as the amount now available for exportation to these countries, and the amount of traction coal which Hungary is to furnish the Allied and Associated Powers as partial reparation, by virtue of the option accorded them by Article — of Part VIII (Reparations). Reciprocally, Hungary should furnish the Czecho-Slovak State and Poland the amount of foodstuffs and raw materials cited in Par. 1, in conformity with whatever decision may be made by the Reparations Commission.
• Par. 3.—The Czecho-Slovak State and Poland agree further to take all measures necessary during the same period to assure that all these products are accessible to purchasers living in Hungary under conditions as favorable as those which govern the sale of products of the same nature in a similar situation concerning the purchasers living in the Czecho-Slovak State or in Poland, in their respective countries or in any other country.
• Par. 4.—In cases of difference relative to the execution of interpretation of any one of the preceding provisions, the Reparations Commission will render decision.

[Enclosure 3]

Article 224 bis

1) Special arrangements shall be concluded between Hungary and Austria concerning the reciprocal exchange of foodstuffs, raw materials and manufactured goods.

2) Until the conclusion of these arrangements, but in no case for a period of more than five years after the entry into force of the Treaty, Hungary agrees to impose no export duty or restriction of any kind relative to the exportation into Austria of foodstuffs of every kind, produced upon Hungarian territory, to an amount which will be determined by the Reparations Commission, failing an agreement between the States concerned. In determining this amount, the Reparations Commission will consider all the elements, and in particular, the production and consumption needs in the two countries interested. Reciprocally, Austria should furnish Hungary the amount of raw materials and manufactured goods cited in paragraph 1, in conformity with whatever decision may be made by the Reparations Commission.

3) Hungary agrees further to take all necessary measures, during the same period, to assure the accessibility of all these products to purchasers living in Austria under conditions as favorable as those which cover the sale of products of the same nature in an analogous situation to the purchasers living in Hungary, in their country, or in any other country.

4) In cases of difference relative to the execution or interpretation of any one of the preceding provisions, the Reparations Commission will render decision.

[Enclosure 4]

peace congress
czecho-slovak delegation

Annex

Addition to the Text Proposed by the Czecho-Slovak Delegation

Legacies, donations, funds, institutions of all kinds founded or created in the former Kingdom of Hungary and destined for the use of nationals of the former Hungarian State will be placed by Hungary, in all cases where these foundations are located on her territory, at the disposal of the Allied or Associated Powers, of which the said persons are now or will become, by virtue of the provisions of the said Treaty, nationals, in these States in which these institutions were located on July 28, 1914, taking into account the payment effected regularly for the purpose of the foundation.

In cases where the statutes of the protection foundations which shall continue to be administered by the Hungarian State, make their advantages subject to Hungarian nationality, the presumptive beneficiaries will retain their right to the pensions, education indemnities, dowries, etc. …, even if they have acquired or will later acquire, by the terms of the present Treaty, the nationality of one of the States issues of Hungary, i. e., Czecho-Slovak State, Rumania, Serb-Croat-Slovene State and Austria.

In the case where, on account of the extinction of a family in favor of which any foundation has been made, the funds should revert to the Hungarian State or to an institution of the Hungarian State, all rights of succession will revolve to the State to which the last beneficiary belonged.

1. Appendices I and J to HD–37, vol. vii, pp. 830 and 832.
2. HD–105, minute 5, p. 458.
2. For text of German note of November 27, see appendix G to HD–103, p. 414; for draft reply, see appendix C to HD–104, p. 439.
3. General note was sent December 8; text not found in Department files.
4. For the establishment of the Council of Ambassadors in Paris, see Resolution B, p. 858.
4. HD–106, minute 1, p. 468.
5. Appendix I to HD–37, vol. vii, p. 830.
6. HD–58, minute 2, and HD–62, minute 8, vol. viii, pp. 300 and 412.
7. Vol. ii, p. 175.
8. Vol. ii, pp. 175 and 183.
9. British and Foreign State Papers, vol. cii, p. 180.
10. Foreign Relations, 1918, supp. 1, vol. i, p. 771.
11. Ibid., 1918 Russia, vol. i, p. 442.

12. In the final text of the treaty with Hungary, this paragraph reads as follows:

    “The price paid for the products referred to in the preceding paragraph shall be the same as the price paid by Hungarian nationals under the same conditions of shipment to the Hungarian frontier and shall be subject to any advantages which may be accorded similar products furnished to Hungarian nationals.”