Paris Peace Conf. 180.0501/11

Supreme Economic Council: Eleventh Meeting Held at the Ministry of Commerce [on 7th April and 9th April, 1919, at 10 a.m.]

The Supreme Economic Council held its Eleventh Meeting on Monday, 7th. April, & Wednesday 9th April 1919, at 10 a.m. under the Chairmanship of Lord Robert Cecil.

The Associated Governments were represented as follows:—

Great Britain Lord Robert Cecil.
Sir W. Mitchell Thomson.
Mr. Keynes.
Mr. E. F Wise.
U. S. A. Mr. McCormick,
Mr. Hoover,
Mr. Norman Davis,
Mr. Robinson.
France M. Clémentel,
M. Boret,
Italy Signor Crespi.
Signor Paratore,
Prof. Attolico.
Count di Cellere,
Signor Pirelli.


With reference to Minute 49 (Ninth Meeting) a declaration by the French Delegates appearing in the attached memorandum (50) was submitted, and it was agreed that Minute 49 should be amended to include it.

With reference to Minute 55 (Tenth Meeting) it was stated that the Finance Section were of the opinion that the points raised by the French Delegates had not been agreed by the Council. The French Delegates stated it was their distinct understanding that the first and third points had been agreed and observed that they had only agreed to the despatch of the telegram on this understanding.

It was agreed that the matter should be referred to the Finance Section for report within the next twenty-four hours regarding the questions involved.

With reference to Minute 58, it was noted that no report had been received regarding the financial responsibilities involved in meeting the requirements of allied, liberated and enemy territories.

It was agreed that in view of the importance of the matter the Finance Section should be instructed to report at the next Meeting.

[Page 103]

With the exceptions noted, the Minutes of the 9th and 10th Meetings were approved.

67. The General Economic Position.

Following discussion of the note submitted by Lord Robert Cecil (51), the following resolution was adopted:—

“This Council regards the present economic position of Europe as one of the utmost gravity and ventures to draw the attention of the Associated Governments to the extreme urgency of the situation.”

68. Communications From Supreme War Council.

A memorandum on the decisions reached by the Supreme War Council on 28th. March, 1919 (52) was considered.

Raising of Blockade on German Austria (Minute 44). It was noted that the necessary action had been taken.
Hungary (Minute 44). The Chairman reported that General Smuts had enquired whether in the event of his finding it desirable to offer a relaxation of the blockade of Hungary the Supreme Economic Council would agree. The Chairman mentioned that he had informed General Smuts that he personally would support such a proposal.
Re-opening of Trade with Esthonia (Minute 61.ii). It was noted that the necessary action had been taken.
Re-opening of Trade with Latvia and Lithuania. The resolution of the Blockade Section adopted at its special meeting of 20th. [29th?] March (53) was accepted subject to confirmation by the Naval and Military Authorities which should be obtained, if possible, within 24 hours.
Removal of Restriction on Trade with Poland (Minute 61.i.). It was noted that the necessary action had been taken.
Re-opening of Rhine Traffic. It was stated that the Military Authorities had no objection to the proposal and that the necessary action had been taken.

69. Foodstuffs for Bavaria.

The following reference from the Supreme War Council was considered:—

“Whether, having regard to the terms of the Brussels Agreement, it is economically possible to send food independently to Bavaria apart altogether from the political expediency of doing so.”

It was, agreed that the following reply should be made:—

“Without expressing any opinion on the political aspects of this question, the Supreme Economic Council is of opinion that the course proposed would not, from the point of view of food and finance, be desirable nor so far as they can see possible. If, however, any definite proposal for carrying it out is placed before them, they will be ready to give it their consideration.”

[Page 104]

70. Transport of Polish Troops to Dantzig.

A report from the Shipping Section (54) regarding the transport of Polish troops to Dantzig was considered.

It was agreed that, having heard the message from General Weigand [Weygand] to the effect that the land routes would be used for the time being, it was unnecessary to take any action.

It was reported that the boats originally designated by the British Ministry of Shipping for this service, had been released.

71. Tonnage Requirements for Allied, Liberated and Enemy Territories.

A report from members of the Statistical Section of the Allied Maritime Transport Council dated 28th March (55) and an analysis of this report dated 3rd April (56) submitted by the American Delegates were considered.

It was stated that the Shipping Section had agreed not to consider the observations on the 1st and 2nd pages of the report first mentioned. The American Delegates expressed the view that the function of the statisticians was only to provide statistical data from which the Section itself might draw conclusions.
The Director-General of Relief reported that no reply had been received from the Shipping Section to the requests for the provision of tonnage for the several programmes. He stated that the critical necessity was to procure tonnage for May delivery; that he had obtained 400,000 tons of relief loading from the United States Shipping Board, but that even a part of the German programme could not be maintained in May unless arrangements were made for diverting 100,000 tons for relief purposes out of the 900,000 tons now designated by the Wheat Executive to load in the United States.

The following resolution was adopted:—

“The Council is of opinion that the ordinary demands of the countries represented on the Wheat Executive should be reduced to the lowest possible point for arrival before the end of May and that any balance of cargoes so made available should be diverted to general relief, including Germany, subject to replacement as early as possible by German vessels later in the year.”

72. German Coastal Traffic.

A Resolution of the Blockade Section respecting the limitation of cargoes to be carried in German vessels to and from Northern Neutrals (57) was noted and approved.
A communication from the Allied Maritime Transport Council regarding Black List of Neutral Ships (58) was submitted.

The British Delegates suggested that, in view of the additional information now available, this matter should be referred back to the Shipping Section for further consideration.


[Page 105]

It was further agreed:—

That the Section should take into consideration the desirability of securing the use of small ships now available in the Baltic.
That the Section should be authorised to take the necessary action and report to the Council at the next meeting.

73. Ships in the Adriatic Claimed by Jugo-Slavs.

A memorandum dated 26th March 1919 (59) reporting a request from the Serbian representatives in Paris for the appointment of a Commission to act with reference to Paragraph V of the Naval Clauses of the Armistice with Austria-Hungary,1 and a letter from Mr. Pashitch to the Peace Conference, dated 25th March (60), were considered.

It was agreed that the question should be considered by a special committee to be established composed of representatives of the four Governments under the Chairmanship of a Representative of the Department of State of the United States.

The Italian Delegates expressed the view that the question was purely technical in character.

74. Organisation.

(a) A report of the Committee on organisation and procedure of the Council and its Sections (61) was adopted and it was agreed that a Committee composed of Lord Robert Cecil, Mr. Hoover, M. Clémentel, and Signor Crespi should consider the question of personnel.

(b) A report dated 24th March (62) upon the organisation of allied shipping work under the Supreme Economic Council was adopted, it being noted that the Associated Governments concurred in the proposal that the Allied Maritime Transport Council should terminate its existence.

It was agreed, that the Shipping Section should immediately appoint a Chairman and a Secretary.

(c) The recommendations regarding press arrangements were adopted (63) and the following appointments were made:—

United Kingdom Mr. Mair
United States Mr. R. S. Baker
France M. Comert
Italy Count Zucchini

75. Nitrates to Countries Contiguous to Germany.

A communication from the Finance Section dated 31st March 1919 (64) was considered.

It was agreed that the Nitrate Executive should be left to deal with the matter.

[Page 106]

76. Private Remittances to Germany.

A communication from the Finance Section dated 26th March (65) respecting the collection of private remittances to Germany which might be utilised in payment of German Food supplies, was considered and referred back to the Finance Section for further consideration.

77. Report of Communications Section.

A report from the Communications Section dated 5th April (66) was submitted.

Need of Boiling Stock for Liberated Countries. The Chairman of the Section reported that the liberated countries were in need of rolling stock, the requirements for Poland being 250 locomotives and 3000 wagons, of which 100 locomotives and 2000 wagons were urgently required; that the Military Authorities had agreed to supply 30 locomotives for the transport of General Haller’s divisions to Poland and 50 locomotives for Roumania, and that the present problem was that of meeting the balance of the general needs.

In view of information received to the effect that a large surplus of rolling stock was held by the Armies, the following resolution was adopted:—

“The Council, being of opinion that the question of rolling stock in Poland, Czecno-Slovakia and Roumania is of extreme urgency, not only for relief and reconstruction, but for political and military reasons, refers it to the Communications Section to investigate with the Military Authorities what locomotives and wagons are available in the different armies and elsewhere. The Section shall report as soon as possible what are the exact wants of the above countries and what steps can be taken to supply them and the Section shall have power to take any action they think desirable and possible.

The Council is further of opinion that if 300 locomotives and 3000 wagons, or any less number, are available for the economic needs of these countries, they should be placed at the disposal of the governments concerned in accordance with the distribution recommended by the Communications Section and with the assent of the Finance Section if any credits are required.”

With reference to the concluding portion of the above resolution, it was noted that under the present agreement between the Associated Powers credits furnished for relief and reconstruction purposes shall be a first charge upon reparation payments which may be received from enemy countries.

Reference was made to the fact that the Roumanian Government is purchasing railway equipment from different countries and private companies, and it was agreed that, in order fully to co-ordinate the work, the Communications Section should be informed in advance of all such purchases, and they should notify the Finance Section of their approval in all cases where credits are involved.

[Page 107]

The American Delegates submitted that it was very desirable to stimulate private enterprise in the purchase of reconstruction material and also to facilitate to the utmost mail and telegraphic communications to and from the liberated countries.


78. German Exports.

1. Following a discussion on a draft reply to a German Note dated 2nd April (67) regarding the conditions under which German commodities might be exported—

It was agreed:—

I. That the following reply should be made:—

  • [“] (i) The Allied and Associated Governments have noted the Note presented by the members of the German Financial Delegation at the Château de la Villette on April 2nd 1919.
  • (ii) They point out that the arguments set forth therein may have reference to peace conditions, but not to the execution of the stipulations of the Armistice.
  • (iii) The conditions which were set out in the Agreement of Brussels,2 and which were notified to the German Government in supplementary notes, have for their aim the revictualling of Germany with foodstuffs. The Allied and Associated Governments give the following answer to the verbal questions put by Dr. Melchior on April 2nd:—
    The exports dealt with in Section 1 of the telegram of 24th March,3 of which 2/3rds are to be offered to the Allies under Section 4b & c are the balance available after deducting the exports permitted under Section 2.
    Section 4a of the telegram of 24th March should be interpreted as follows:—
    Prices in their opinion fair and equitable will be proposed by the Allies and if these prices are not accepted by the German Government for any article, the conditional relaxation of prohibition of export of that article cannot come into effect.”

II. That a Committee composed of representatives of the Blockade and Raw Materials Sections should meet immediately to fix the prices for exports to be purchased by the Allies.

The correct interpretation of p. 4(c) of the telegram dated March 24th. sent to the Germans (as to whether Germany might export 1/3 of her surplus if she refused the prices established by the Allies for their purchases) was discussed and as no agreement could be reached the point was reserved for further consideration if necessary.

III. A report of the negotiations between the Interallied and German Delegates at Cologne regarding the export of coal from Germany in payment for food (68) was submitted.

[Page 108]

It was agreed:—

That the materials mentioned in Clause 2 as required for the purpose of increasing the German coal output and exportable surplus should be sold to the Germans notwithstanding the interruptions of the negotiations at Compiègne upon the general question of German exports.
That there was no objection to payment for such materials being made out of German funds available for the payment of food.

79. Communications From the Blockade Section.

Resolutions and reports from the Blockade Section regarding:—

Transport of coals by the sea route from the Ruhr to East Prussia (69)
Raising of blockade on the Adriatic (70)
Suspension of restrictions on import into Germany of fish caught in European waters (71)
German correspondence in connection with the Brussels Agreement (72 & 73)

were noted and approved.

In conjunction with the report regarding German Correspondence (72) a note submitted by Sir H. Llewellyn Smith (74) was considered, and it was agreed that, subject to the approval of the Military Authorities, the negotiations regarding the German exports should be held at Compiègne.

It was agreed, however, that this decision should not prejudice any administrative arrangements already made or subsequently to be made.

80. Import of Vegetables From Neutral Countries Into Germany.

The Director General of Relief reported that he had been advised that imports of vegetables from Neutral Countries into Germany had been delayed because of the failure of the Foreign Offices to notify the Neutral Governments that the previously existing restrictions had been removed.

It was agreed that the members of the Council should endeavour to arrange that such action should be taken by their respective Governments as would remedy the existing situation.

It was noted in this connection that the restrictions on the export of vegetables from the Northern Neutrals should now apply only in the case of Holland.

81. Suspension of Enemy Trade and Black Lists.

A resolution dated 31st. March respecting suspension of all enemy trade and black lists of the Associated Governments (75) was submitted by the American Delegates on the Blockade Section.

[Page 109]

While the British and French Delegates were unable to accept the resolution finally it was agreed that it should be adopted in the following form, for submission to the respective Governments:—

[“] Resolved, That on and after April 1 on which date publication shall be made to this effect, all Enemy Trade and Black Lists of the Associated Governments, whether Official, Confidential or Cloak, shall be suspended until further notice, it being understood that in case of need the Associated Governments are prepared to put in force again these Black Lists.”

82. Abolition of Telegraphic and Cable Censorship.

A resolution regarding abolition of telegraphic and cable censorship (76) was submitted by the American Delegates on the Blockade Section.

It was agreed that the memorandum should be deferred for further consideration at a subsequent meeting to enable the Delegates to endeavour to obtain the assent of their respective Governments.

The American Delegates stated that while concerted action was preferable, the Government of the United States might find it necessary to take independent action.

83. Relations With Germany.

The recommendations in the Memorandum by Mr. Wise on the Commission[s] set up under the Armistice with Germany and their relations to the Supreme Economic Council (77) were agreed and referred to a Committee of four:—

U. K. Mr. E. F. Wise.
Italy. Prof. Attolico.
U. S. Mr. Legge.

and a French Member to be appointed, with power to put the recommendations into immediate action.

It was further agreed that the Memorandum should be presented to the Council of 10, it being stated that the scheme so far as it concerned economic matters has received the approval of the Supreme Economic Council and was being put into immediate operation.

The American Delegates reserved the right to refer the scheme back to the Supreme Economic Council at its next meeting if, after further examination, they find themselves unable to come to an agreement with the Committee on any detailed proposals.

84. Relief of Odessa.

Correspondence between Mr. Gorvin and Mr. Hoover (78 and 79) was submitted and it was noted that under the present conditions the Council was not required to take any action.

[Page 110]

85. Italian Coal Supply.

The French Delegates reported that it is at present impossible to supply Italy with 150,000 tons of coal monthly from the Saar Basin, that at present 1,500 tons are being shipped daily and it is expected that in a short time this may be increased to 3,000 tons.

Appendix 504

Statements Made by the French Delegates Regarding German Exports

The French Delegates stated:—

That, in agreement with the entire Council, they consider it essential to supply Germany within the limits and conditions fixed by the Supreme War Council.
That, when putting this work of supply into operation, it is necessary:—
To preserve German reserves of gold, silver and securities;
To urge the German population to restart work;
To ensure to the devastated areas priority in the supply of the necessary materials and machinery;
To in no way prejudice the conditions of the Preliminaries of Peace.

Consequently, they asked that it should be placed on record that, although they had no intention of hindering the progress of economic life in Germany, nor of weakening the engagements entered into by the Associated Governments, they were obliged to insist on priority being given to them by one means or another in the supply of the various essential materials necessary for the reconstruction of the devastated areas.

Appendix 51

Note Submitted by the British Delegates on the General Economic Position in Europe

1. By far the most important task before the Allied Governments is to get production and internal and external “exchange economy” working again on something like normal lines. Before the war some 400,000,000 Europeans, by working their hardest just managed to feed, clothe, and house themselves and perhaps amass six months capital on which to live. That capital has vanished; the complicated machinery of internal and external production is more or less smashed; production [Page 111] has to a great extent ceased. The largely increasing population of Europe has only been maintained by the increasing development and inter-connection of world industry and finance. If this is not only checked, but for the time being destroyed, it is difficult to see how the population can be maintained at any rate during the very painful period of drastic readjustment. If free movement were possible and other countries could absorb it, there would inevitably be a vast immigration from Europe, until an equilibrium were established between the numbers of the population and the means of livelihood. As that is not possible this equilibrium must be reached in some other way. In Russia it is being reached, it appears—

By reduction of population by starvation;
By drastic change of occupation, e. g., by the town population being forced out on to the land as labourers.

To what extent the same conditions spread over the rest of Europe must depend largely on whether or not the obstacles to the resumption of production can be overcome and overcome rapidly. Certainly a population increasing as the German did by nearly 1,000,000 every year could not permanently be supported without an intensive industrial system at full blast.

2. The obstacles to the resumption of production are numerous. The main ones are the following:—

Destruction or disrepair of fixed plant and means of transportation, i. e., railways, canals, factories.
Lack of raw materials, i. e., destruction by war of all working capital.
Consequent loss of external purchasing power, i. e., lack of exports.
Depreciation of currency; often chaos of currency system.
Huge rise in prices, consequent loss of equilibrium between internal prices and world prices rendering export difficult.
Huge floating indebtedness to other countries.
Reduction of agricultural production owing to currency troubles and lack of purchasing power on the part of the industrial population.
Enormous taxation, acting as almost complete deterrent to new enterprise.

(N.B.—System of double income-tax very great handicap to investment of American capital in England.)

Political obstacles such as tariffs and blockade between different parts of old Austria-Hungary.
Government restrictions due to blockade and other causes.
Labour difficulties.
General lack of confidence and uncertainty arising from above conditions.

[Page 112]

All the difficulties are not present in all countries. But in general they exist in all belligerent European countries. It is a question of degree, shading down from England to France, France to Italy, Italy to Germany, Germany to the Austro-Hungarian countries, and the latter to Russia. The difference between the position in England and the complete economic prostration of these latter countries is enormous. Therefore our difficulties on getting the wheels of industry really going may be some index to the problem in these other countries.

3. It is obvious that there is no one remedy for existing evils. If we are to help the prostrate countries of Europe, it is no good in my opinion taking up the problem piecemeal, or acting on the lines of poor relief. We are ourselves so exhausted that we cannot afford to waste a single penny unnecessarily. We should either recognise the problem is too big for us and abandon it or take it up comprehensively.

It is useless merely to pour in food. That may be necessary as an emergency measure. By itself it will never solve the problem. We must induce these countries, as they no doubt can, to produce enough food for themselves. We cannot be sure they will do this without geting their industry going too. The difficulty is that their economic balance is upset. In the main, a country’s agricultural produce is exchanged against manufactured articles. If industry is not producing, the farmer cannot exchange his produce against these articles, and, on the other hand, the industrial community has no purchasing power. It can only offer a currency which is, probably, rapidly depreciating, and which the farmer will therefore refuse. These evils are at their height in Russia. They are exerting more or less force in the rest of Central Europe. Therefore, unless we are to run the risk of having to supply these countries next year with food, we must get their industry going.

That can only be done if—

Each country has a more or less stable currency;
The transportation system is working;
A sufficiency of working capital and raw materials is at hand to commence work;
Fixed plant and machinery are restored as quickly as possible.

In other words, a comprehensive policy covering the conditions of each country is required. Since, owing to the size of the problem, outside assistance must inevitably be reduced to a minimum, it is important that the help given should go as far as possible, and that therefore all the measures required should, as far as possible, be taken simultaneously.

We may be too late, and the financial and political difficulties may be too great. But if the task is to be attempted, it should be under such conditions as to give us the best chance of success.

[Page 113]

4. By far the greatest difficulty is the financial one. The problem is unparalleled. Europe is without working capital. Who is to provide her with it? In the first place, can it be left to private enterprise and private credit?

Every step in the direction of feeding private enterprise from restriction and control is right. So far as possible, therefore, Government borrowing inter se, and consequently Government control should be abandoned. To whatever extent private enterprise can meet the problem, it should be left to do so. Every measure should have as its aim the restoration as soon as possible of private enterprise. It is absolutely essential to return to the condition where the normal play of economic forces determines the conduct of the individual, where, in fact, it becomes expensive for the individual to do wrong, and profitable to do right. Where a country still has its head above water, like England, the greatest possible freedom should be allowed. Until it is clearly insufficient the same policy should be applied elsewhere.

5. Nevertheless, the problem of restoring Europe is almost certainly too great for private enterprise alone, and everybody’s delay puts this solution further out of court.

There are two main obstacles:—

The risks are too great.
The amounts are too big, and the credit required too long.

The more prostrate a country is and the nearer to Bolshevism the more, presumably, it requires assistance. But the less likely is private enterprise to give it. Every day’s delay makes tha risks greater. To a small extent and with a great margin some trade will be done and some barter. But not enough to meet the situation.

The Government concerned might perhaps meet the question of risk by some scheme of guarantee and insurance. If only short term credit were required, the problem might then be met. But the great bulk of credit will, in my opinion, be required for at least eighteen months or two years. In other words, bankers and merchants would have to face a lock-up for that period. Since they cannot trade at all with most of Europe, except on these terms, they would do so to some extent, but their resources in long terms credit must be limited.

April 5, 1919.

Appendix 52

Communication of Supreme War Council

The following decisions have been reached by the Supreme War Council on March 28th 1919.5

[Page 114]

(a) Raising of Blockade on German-Austria.—(re min. 44). It was further resolved that all blockade and trade restrictions with German-Austria should be abolished and that commerce should be free with all parts thereof, as soon as the necessary machinery of control against re-exportation to Germany had been set up, with the exceptions and other provisions set out in detail in Annexure “A” (doc. 30).6

(The Italian representative made reservation pending settlement of certain pending matter with Yugo-slavs).

(b) Hungary.—In view of the present situation, the question of Hungary should be referred back to the Supreme Economic Council.

(c) Reopening of Trade with Esthonia.—(re minute 61 (2) S. E. C.)

Reopening of Trade with Latvia and Lithuania.—With the above recommendation to extend the same principle to Latvia and Lithuania when the political and military situation became favourable, the resolution of the Supreme Economic Council regarding the resumption of trade with Esthonia, as set forth in Annexure “C” (doc. 47),7 was adopted.

As regards Latvia and Lithuania the Supreme Economic Council should be requested to report on the advisability of the above mentioned provision after obtaining evidence of military witnesses.

(d) Removal of Restrictions on Trade with Poland.—Resolved that all blockade and trade restrictions with Poland shall be abolished, and all commerce shall be free with all parts thereof from April 1st, 1919, provided satisfactory machinery is set up before that date for the proper control at Dantzig.

Moreover, it was decided that the Polish National Committee should not be invited to arrange for Commissioners to proceed to Dantzig, but that the distribution of food within Poland should, as far as possible, be performed by the Poles themselves.

(e) Reopening of Rhine Traffic.—It was then resolved that there was no objection from a blockade point of view to the re-opening of the Rhine to traffic for the purpose of permitting the resumption of Swiss trade with Holland, Scandinavia, and the Entente countries, subject to the existing blockade agreements, and that the recommendation of the Supreme Economic Council to this end was approved, subject to their obtaining the consent of the military authorities.

[Page 115]

Appendix 53

Resolution of the Blockade Section at the Special Meeting of March 29th, 1919 [Regarding] Re-establishment of Trade Relations With Latvia and Lithuania

Whereas, it is desirable that reasonable quantities of commodities should be permitted to reach Latvia and Lithuania, if and when the military and naval authorities should find that the military situation would permit such action.

Resolved That subject to guarantees being given that no imported commodities and no articles manufactured therefrom will be exported to Germany, Hungary, and Bolshevik Russia:

Applications for permission to ship commodities to Latvia and Lithuania shall be made to, and decided by, the Allied Blockade Council in London, except in so far as such shipments are made from Norway, Sweden, Denmark and Holland.
The I. A. T. C.s8 in Norway, Sweden, Denmark and Holland shall be authorized to endorse licences for the export of commodities from these countries respectively to Latvia or Lithuania, and shall notify the A. B. C. of the exports effected under this arrangement in order that the rations of the exporting countries may be credited to the extent of the exports made.
The A. B. C. shall be requested to prepare at once an estimate of the quarterly requirements of Latvia and Lithuania in the matter of foodstuffs and most important raw materials, based in the case of foodstuffs on the instructions of the Food Section and in the case of other commodities upon the best material available. Imports shall not be authorized in excess of the estimated quarterly requirements.
The I. A. T. C.s in the Northern Neutral Countries shall be requested to authorize exports to their respective countries from Latvia or Lithuania.
The A. B. C. shall be empowered if they consider it necessary to set up an I. A. T. C. at Libau for both Latvia and Lithuania.
The announcement of these arrangements to be made on the 7th of April, 1919.

Further resolved, That the preceding resolution be submitted to the Supreme Economic Council for appropriate action.”

[Page 116]

Appendix 54

Extract From Minutes of Meeting of the Shipping Section Held on 26th March, 1919 [Regarding] Transport of Polish Troops to Dantzig

Mr. Robinson stated that the United States had no enemy ships under their control of suitable draft. He suggested that the ships which the Germans claimed as exceptions which were to be used for maintaining the German forces in the East against Bolchevism, might be available for this purpose.

It was decided that M. de Lubersac would obtain from the Supreme Economic Council a decision on the point raised by the Germans as to whether the Germans were to be allowed to retain these ships.

Appendix 55

Report From Statistical Section, Allied Maritime Transport Council

Subject: Tonnage for Food Supplies.

We have examined at your request Mr. Hoover’s memorandum of March 20 on Food Supplies for Europe.9

The tonnage figures appear to have been prepared from data not altogether of the same date. With allowance for this fact, and for differences in interpretation and methods of compilation, we are not disposed to offer any essential criticism of the figures presented, with a few exceptions which may be briefly mentioned.

The cargo tonnage required for French and American food imports, in comparison with these imports, appears somewhat overestimated in view of the nearness of certain important sources of supply.
Not all of the British cereal tonnage unallocated (739,000 tons) should be deducted under the method adopted, since part of it will discharge in U. K. and India. Furthermore, such part of this tonnage as will be allocated to France and Italy should go to increase the figures of total tonnage available for French and Italian uses other than food.
The accepted requirements for French and Italian coal imports would involve a materially larger tonnage than the figures show.
The figures for American tonnage appear to be considerably larger than the American national seagoing tonnage, but may be correct if foreign tonnage chartered to the U. S. shipping board be included.
It is perhaps misleading to class Austro-Hungarian tonnage under French and Italian management as under French and Italian [Page 117] control, since this tonnage is explicitly subject to Allied control as expressed by the General Economic Council, apart from exchange arrangements.

Aside from these considerations, however, it is to be pointed out that surpluses and deficiencies calculated by the method adopted are somewhat distorted. The tonnage required for food imports has been calculated on an assumption that such tonnage is confined to this particular service. In fact, this tonnage is likely in the course of its round voyage to carry food [and] other imports for other Allied and neutral nations. This same is true of tonnage required for other imports. This position can be clearly demonstrated if the tonnage required for Allied imports is calculated separately for each group of imports; and it will appear that the total tonnage required, as ascertained by the addition of the tonnage estimates for each group of imports, will largely exceed the tonnage actually found necessary for the work.

Even if adjustments necessitated by this objection are made, it may be questioned whether the tonnage balance shown as “available for domestic use” affords any indication of the further contributions to European Relief which may reasonably be expected from the respective nations. This balance must be counted upon to provide for imports and coasting services of varying degrees of magnitude and necessity, and for bunker supplies as well, both for the home countries and for other overseas dominions, aside from the margin available for other ocean-carrying trade. Thus a large “balance” of the sort shown may not indicate greater or less ability to contribute to the general deficiency in relief tonnage. It would require a thorough and somewhat prolonged investigation to ascertain fairly the relative ability of the various nations to contribute further of their reasonable shares in whatever tonnage burden exists.

While we have been unable to make any such thorough investigation, such evidence as we have been able to consider points to the conclusion that America’s considerable contributions to European Supply and Relief have not imposed as heavy a strain upon American and American controlled tonnage as the British support of France and Italy has imposed upon British tonnage. It is important to add that the question of fairness necessitates facing the fact that British tonnage is not yet in a position to regain its pre-war position, while American tonnage is necessarily seeking to establish a position.

  • L. A. Bullwinkle
  • C. C. Wardlow
  • Jos. S. Davis
[Page 118]

Employment of American Chartered Tonnage Chartered to U. S. Shipping Board or Citizens, Oct. 31, 1918, and Feb. 28, 1919

[Figures in deadweight tons.]

Service Oct. 31, 1918 Feb. 28, 1919
I. Unavailable for Merchant Service.
Repairing,etc. 93,000 59,000
In U. S. military service 276,000 86,500
Total 369,000 145,500
II. Employed for European Supply and Relief.
Italian Service 61,000 11,500
French Service 7,000 9,000
Swiss Service 29,500 65,000
Belgian Relief 156,000 287,500
General European Relief 59,000
Total 264,000[sic] 432,000
III. U. S. Import and Export Trades, etc
North American Trades 258,500 134,500
South American Trades 367,000 189,500
Trans-Pacific Trades 67,500 61,000
Other 12,000 44,500
705,000 429,500
Grand Total 1,338,000 1,007,000

Note: Included in the above are the following vessels chartered to U. S. citizens:—

I. Regarding and unassigned 14,000
II. Belgian Relief 9,000
U. K. Services 11,000
III. North American Trades 102,000 61,000
South American Trades 125,000 34,000
Trans-Pacific 18,000
Other U. S. Import and Export Trades 9,000
Total 288,000 95,000
Total chartered to U. S. S. B 1,050,000 912,000
Grand Total 1,338,000 1,007,000

Note.—Data for February probably incomplete with respect to tonnage chartered to American Citizens.

Comparative Summary of Employment of British and American Tonnage, Oct. 31, 1918, and Feb. 28th, 1919

Seagoing Merchant Steamers (Exclusive of Tankers) 500 Gross Tons and Over

[In thousands of tons.]

[Page 119]
British (D.W.) American (D.W.) Percentage Feb. 28
Oct. 31 Feb. 28 Oct. 31 Feb. 28 British American
Total tonnage 19,159 19,679 5,993 6,846 100% 100%
I.Unavailable for Merchant Service.
Repairing,etc 1,385 2,278 536 871 11.6% 12.7%
In Military Service 2,347 1,741 2,641 2,085 8.9% 30.4%
“ Naval “ 1,985 1,595 200 361 8.1% 5.3%
“ Military or Naval Service of Allies 884 265 24 1.3%
“ Non-Merchant Service 22 26 12 .1% .2%
Total 6,623 5,905 3,401 3,329 30.0% 48.6%
II.Employed for National Commercial Requirements.
Importing 6,762 7,600* 782 608 38.6% 8.9%
Coasting 238 310 896 803 1.6% 11.8%
Colonial Importing or Coasting 1,610 2,012* 83 133 10.3% 1.9%
[Total] 8,610 9,922 1,761 1,544 50.5% 22.6%
III.Employed for European Allies and Relief, etc.
Italy 1,556 1,302* 128 162 6.6% 2.4%
France 1,546 1,216* 124 179 6.2% 2.6%
Greece 57 21 7 .1% .1%
Switzerland 60 39 .6%
General European relief 43* 544 .2% 7.9%
Total 3,159 2,582 312 931 13.1% 13.6%
IV.Employed in other Merchant Service 767 1,270 519 1,042 6.4% 15.2%

*Including approximate allocation of tonnage unallocated on February 28.

Appendix 5610

Analysis of Report Regarding Tonnage for European Food Requirements by United States Shipping Board Statistical Section

Comparison of figures in statement presented by Mr. Hoover setting forth the employment of the Shipping of the United States, Great Britain, France, and Italy, with figures in a statement circulated to the Members of the Supreme Economic Council, signed by certain clerks in the Statistical Section of the Allied Maritime Transport Council. The comparison is limited to the tonnage of the United States and Great Britain, because the second statement only treats of those figures.

[All figures are in deadweight tons]

[Page 120]
Mr. Hoover’s Figures. Clerks’ Figures.
1.British Tonnage (1,600 Tons and over.) (500 Tons and over.)
Total merchant tonnage 18,531,523 19,697,000*
Repairs 2,147,812 2,278,000†
Total workable tonnage 16,383,711 17,401,000
Non-merchant tonnage—
Military and naval 3,090,130 3,336,000
Other 281,918 291,000
Total 3,372,048 3,627,000 3,372,048 3,627,000
Net available merchant tonnage. 13,011,663 13,774,000
In European service—
Italy 932,059 1,302,000‡
France 904,570 1,216,0001‡
Other (including cereal import service) 823,360 64,000‡
Total 2,659,989 2,582,000
Remaining British merchant tonnage—
Net British merchant tonnage 13,011,663 13,774,000
Less tonnage in supply and relief 2,659,989 2,582,000
Total 10,351,674 11,192,000§
2.United States Tonnage
Total merchant tonnage 7,631,856 7,853,000
503,115 930,000
Total 7,128,741 6,923,000
Non-merchant tonnage
Military and naval 2,744,413 2,532,500
Other 103,645 12,000
Total 2,847,858 2,544,500
Net available merchant tonnage. 4,280,883 4,378,500
In European service—
Italy 182,407 173,500
France 176,136 188,000
Other (including food administration) 870,344 1,001,500
Total 1,228,887 1,363,000
Remaining United States merchant tonnage 3,061,996 3,015,500
Percentage of net available tonnage in European supply and relief— Percent Percent
British 20.4 18.7
United States 28.7 31.1

*Includes 1,147,130 deadweight tons, vessels 500 to 1,599.

†Includes repairs 130,393 deadweight tons, vessels 500 to 1,599.

‡Contains allocation since 28th February.

§Contains 456,822 deadweight tons, vessels 500 to 1,599.

Appendix 57

[Resolution of the Blockade Section Regarding] Administration of Resolutions on German Coastal and Fishing Trades (Minute 56)

In connection with the Resolution of the Supreme Economic Council (contained in Minute No. 56 of the Tenth Meeting held March 24th), [Page 121] to the effect that there is no objection to German exempted vessels engaging in coastal traffic and traffic to the Northern Neutrals, the following Resolution was passed:

Resolved, that cargoes carried in German vessels from Northern Neutrals to Germany should be limited for the present to:

Articles whose export to Germany is permitted by agreement with the Northern Neutrals within the limits of such agreements, and that this arrangement can be altered when a decision is come to as to what raw materials or other goods Germany is to be allowed to import, and that any regulations for the time being in force as to I. A. T. C. licenses must be observed; and”

Further resolved, that this resolution be communicated to the A. B. C., London, for their information and necessary action.”

Appendix 5811

Communication of the Allied Maritime Transport Council [Regarding] Black List on Neutral Ships

At a meeting of the Allied Maritime Transport Council, held Wednesday morning the 26th March, 1919, it was determined to recommend to the Supreme Economic Council the suspension of the black list on neutral ships on the following grounds:—

The black list was part of the blockade measures, and is therefore no longer necessary.
While it has forced tonnage into Allied service, an examination discloses the fact that only a small amount of this tonnage now in Allied service will be released in the next few months.
The balance under the black list is quite small.

It is thought best merely to suspend, because there is a possibility that it might be necessary at some later date to employ this method in the assistance of blockade; but no present reason exists for maintaining the black list.

Appendix 59

[Memorandum From the Shipping Section Regarding] Yugo-Slam Ships in the Adriatic

Paragraph 5 of the Naval Clauses of the Armistice with Austria Hungary provided that Austro-Hungarian ships found at sea should be made subject to capture unless exceptions are made by a Commission [Page 122] to be appointed by the Allies and the U. S. A. It appears that this qualification was intended to apply specially to ships owned by Yugoslavs and that such ships, nominated by the Commission, would be released from the provisions of the Armistice applying to enemy ships.

An appeal has been received from the Serbian representative in Paris12 pointing out that no action has been taken by the Commission of the four Admirals in the Adriatic to except any Yugo-Slav ships, and requesting that a Commission should be appointed to act in the spirit of Clause 5 of the Armistice conditions.

Appendix 6013

delegation of the kingdom
of the serbs, croates and slovenes
to the peace conference

To the Inter-Allied Supreme Economic Council,
Ministry of Commerce, Paris.

Our Naval Section, under date of the 8th March, addressed a memorandum to Mr. Henry Robinson, delegate of the United States of America, to the Inter-Allied Supreme Economic Council, calling his attention to the fact that paragraph 5 of the naval clauses of the Armistice with Austria-Hungary had not yet been put into execution. That is to say, the Special Commission, whose duty it is to lift the blockade from the coast and vessels of the Yugo-Slavs, had not begun these operations. On the contrary, a Commission of Four Admirals authorised Italy to requisition all the fleet formerly belonging to the merchant service of Austria-Hungary, and the blockade is still rigorously enforced, causing great losses to the Yugo-Slovakian countries, including Serbia. The latter, in fact, since the destruction of the Salonika line, can only communicate with the world by the port of Fiume and the Dalmatian ports.

In this memorandum, our Naval Section called Mr. Robinson’s attention to the fact that Italy, profiting by the peculiar situation that has been created by the occupation of Trieste and other Yugo-Slovakian ports, brought pressure to bear on the owners of the former Austria-Hungary merchant service to make them sell their boats to their Italian interests.

[Page 123]

Our Naval Section, under date of the 14th March, communicated to M. Clémentel, Minister of French Commerce, the contents of a telegram from Trieste, appearing in the Times of the 13th March, 1919, according to which the “Lloyd Autrichien” would be transformed into a new company called “Lloyd Triestino.”

Still graver news, confirmed elsewhere by the Neue Freie Presse of Vienna of the 22nd February, 1919, reached us from a reliable source. According to this information, a syndicate of owners from Trieste and Venice, under the auspices of the Commercial Bank of Milan, would have bought, at 1,000 lire each, 37,000 shares of the 72,000 which compose the capital of the “Lloyd Autrichien.” Besides that, towards the end of the said month, it would have bought the greater part of the shares of the Austrian-American and of the “Navigazione Libera Triestina.” In this manner, 111 ships, for the most part ocean going, and the rest cargo vessels representing approximately a total of 465,000 tons, as well as the twelve large cargo vessels of the “Navigazione Libera Triestina,” which were under construction, and which form together more than six-tenths of the merchant service of Austria-Hungary, have become the property of the Italians, although in the above-mentioned societies (especially in that of Austria-America and the “Navigazione Libera Triestina”) there was a great minority of Yugo-Slovakian shareholders.

These transfers of property took place under the auspices of the Union Bank of Vienna and the Austrian-German Government.

In fact, the article in the Neue Freie Presse, before mentioned, expressly states that the said Government has received formal guarantees on the subject of the safeguarding of the Austrian-German interests on the part of the new society “Lloyd Triestino.”

We beg to draw your attention to these circumstances which affect adversely our rights and our interests, and constitute besides an obvious violation of the clauses established by the Armistice and the Naval Inter-Allied Conference held at Paris on the 21st December, 1919, in which it was decided not to admit, during the duration of the Inter-Allied control, any change of ownership of the old Austrian-Hungary tonnage.

N. P. Pachitch

Chief Delegate

Appendix 61

Report of Committee on Organisation

The Committee appointed by the Council, March 21st, desire to call the attention of the Council to certain intrinsic difficulties which [Page 124] it is necessary to overcome in order to produce a satisfactory and efficient Secretariat.

The Council meets at least once, often thrice, a week, and it is composed of seven Allied sections, as follows:

Raw materials

These sections meet once, often twice a week, and develop questions requiring a circulation [of] papers to, and decisions by the Council.

The personnels of the sections are large and often overlapping.

The Minutes of both the Council and the Sections have to be agreed to by four countries, and the character of the discussions—particularly at the Council, is often such as to render difficult an indisputable record.

The Committee regard the following arrangement as essential in order to secure a full and prompt circulation of papers.

(1) A fixed time-table: not to be varied except in real emergency. This Time Table approved in principle, is:

  • Monday, 10 a.m. Council notes [meets?]: later minutes written, agreed, and circulated.
  • Tuesday, Wednesday, Thursday (and in case of necessity Friday morning). Sections meet.
  • Friday. All papers for next Council meeting to be sent to Agenda Officer.
  • Saturday. Preparations and agreement of Agenda and circulation of all papers for Monday’s meeting.
  • Council Meeting. It is of great importance that the Council should meet, except in real emergencies on Monday mornings only; that wherever possible all business on the Agenda should be concluded at that meeting; that if adjournment is inevitable it should be to the earliest possible hour (preferably the same day), no new business being admitted.

(2) Resolutions at Council. It would be of very great assistance if the Chairman at the Council would conclude the discussion on each subject by summarizing the result by a brief statement as to the exact stage the discussion has reached.

If there is real identity of view as to the position reached this will only take a moment; if not, the absence of such an agreed resolution or statement leaves the officers responsible for drafting the minutes with an impossible task.

(3) Council Officers: and Organisation. Council officers should be appointed by the four countries for the duties of [Page 125]

Preparing and agreeing the Minutes and issuing the consequent notices.
Preparing the Agenda and circulating the relevant documents.

Of these Officers one should be made responsible for drafting the minutes.

The Minutes when drafted should be agreed with the other Council officers, and when agreed circulated to the Sections (or extracts, with notices as the case may be) and to other persons requiring them.

In case of final inability to agree the drafting officer must be empowered to circulate with a note against the disputed passage that it is not agreed.

Similarly, another of the Council officers should have a similar primary responsibility for preparing the Agenda and collecting and circulating the relevant papers, subject to the same duty of agreeing with the other Council officers.

It is important that the four countries should give their officers authority to agree on Minutes and Agenda for circulation without prior reference to members of the Council (which should only be necessary in very rare and exceptional cases) before circulation. It will be remembered that the minutes are circulated as draft minutes. They can in case of necessity be corrected at the next meeting of the Council for permanent record.

Any question on which a Section requires decision by the Council must be sent by the Section Secretary to the Council Agenda Officer not later than Friday evening.

Items for Agenda not received by 10 a.m. on Saturday morning will be omitted from the Agenda, and can only then be raised as a matter of special urgency by arrangement with the Chairman and by consent.

References of the Council to the Supreme War Council or to Sections shall be remitted by Minute Council officer to the Supreme War Council or to Allied Section Secretary for the body concerned not later than Tuesday morning.

(4) Sections, Chairman and Secretary and Organisation. Each Section should have a permanent Chairman and a permanent Allied Secretary responsible for both Minutes and Agenda. The Secretary would be responsible for calling the attention of the Section to all decisions of the Council requiring action by the Section.

Each country might appoint its own Section officer if it is desired to agree Section Minutes with the Allied Secretary, doubtless this will not be considered necessary in all cases, but it is important; where the Secretary is English speaking there should also be a French officer and where he is French speaking there should also be an American or an English officer in addition.

[Page 126]

The officers would be responsible for translating documents so that they are available (and sent to the Agenda officer of the Council) in both French and English.

(5) Miscellaneous recommendations, (a) Each country should appoint one officer in its own organisation who will be responsible for informing the Secretaries and Council officers of all the persons in his country’s organisation (whether members or officials) who require papers, and which papers, and of their addresses. This officer would be responsible to his own people for seeing that they did in fact get their papers and all complaints would be made to him.

(b) It should be an absolute rule that all minutes shall be prepared copies and circulated as draft minutes (with extract and explanatory notes where necessary) within 24 hours of the conclusion of the meeting; and that wherever possible they should go out the same day.

The Sections which have not yet appointed Chairman and Secretaries should at once do so.

Appendix 62

Memorandum as to Conference on March 24th on Organisation of Allied Shipping Work Under the Supreme Economic Council

The Supreme Economic Council had under consideration at its meeting on March 24th the question of the Allied organisation for dealing with the shipping problems with which the Council is concerned. They referred the question to a special conference to be convened by Lord Robert Cecil. This conference took place on the afternoon of the same day.

2. There were present:

Lord Robert Cecil. Chair[man].
Mr. H. M. Robinson. } America.
Mr. E. E. Palen.
M. Monnet. } France.
M. de Lubersac.
Professor Attolico. Italy.
Mr. T. Lodge. } Great Britain.
Mr. J. A. Salter.

3. The following scheme of organization was after discussion agreed by the Conference.

The Allied Maritime Transport Council, i. e. the actual Council of Ministers should terminate its existence, the Supreme Economic Council itself assuming the responsibility for such decisions of major policy on shipping matters as were formerly given by the Allied Maritime Transport Council.
The Allied Maritime Transport Executive to be reconstituted and to sit in London.
An Allied Shipping Committee to be formed and to sit in Paris to advise the Supreme Economic Council on matters of general policy requiring decision by that Council. This Committee to have a permanent Chairman and Secretary and to be the medium of communication for all shipping questions to the Council. This Committee would not give directions under its own authority to the Transport Executive in London, such directions coming only from and with the authority of the Supreme Economic Council.
The Transport Executive in London would thus be responsible to the Supreme Economic Council, communications being made through some person appointed by that Executive.

4. It was recognised that the duties falling upon the Transport Executive in London and upon the Allied Shipping Committee in Paris would be primarily and mainly those of dealing with the administration of enemy tonnage on the one hand and provision of tonnage for the relief of liberated countries and the supply of enemy countries on the other and that the provision of tonnage to supplement the national tonnage of France and Italy for the requirements of those countries would become (in view of the two tonnage agreements concluded between Great Britain and (a) France and (b) Italy) more and more a matter of direct dealing between the Governments of the above countries and less a matter for an Allied organisation. It was recognised however, that particularly during the next few months occasions would arise on which either France or Italy might legitimately raise questions of policy with regard to the tonnage required by them at the Supreme Economic Council.

5. M. Monnet expressed the view that it would be a better arrangement for the Ministry of Shipping to be asked by the Supreme Economic Council to undertake the administrative responsibilities of dealing with enemy tonnage with the assistance of an Allied Committee working under a superior body, the Allied Maritime Transport Executive, sitting in Paris, and responsible to the Supreme Economic Council. He deferred, however, to the general preference of the representatives and the other members of the Conference the scheme described above.

6. It was decided to submit the above scheme for approval to the Supreme Economic Council at its next meeting, subject to prior communications to the members of the Allied Maritime Transport Council.

[Page 128]

Appendix 63

Note on Allied Press Arrangements

The following recommendations are submitted for the formation and functions of a Press Committee.

It is desirable that the Press Committee already decided upon in principle by the Council should now be at once appointed, and that it should consist of one representative of each of the four countries.
This Committee should meet on Monday after the Meeting of the Supreme Economic Council and should discuss mainly what part of the Council’s Work or what facts affecting the Council’s work it should be desirable to give special prominence to in the ensuing week. This would be the main work of the Committee. Any matter for which secrecy was desirable would also be discussed and each of the representatives would do his best to secure that secrecy is observed. It is recognized, however, that it will probably not be practicable to make the members of the Press Committee the only medium of communication, and secrecy could not be ensured by this method.
Within any general understanding arrived at by the above meeting, each representative would at his own discretion and on his own responsibility provide to the Press of his own country.
It is desirable that an official communique in the name of the Supreme Economic Council should be issued after each meeting of the Council. For this purpose the Council officer responsible for drafting the minutes should first draft a short official communique and agree it with the other Council Officers before proceeding to the drafting of the minutes. This communique would at once be given to the meeting of the Press Committee and subject to their concurrence would be given to the Press the same evening.

Appendix 6414

Resolutions From the Finance Section [Regarding] Nitrates for Countries Contiguous to Germany

It was agreed that there is no objection to the proposals of the Superior Blockade Council:


“That there is no objection from a blockade point of view to the rations of the countries contiguous to Germany being raised to at least 200,000 tons of nitrate, and to authorising the Nitrate Executive to state that the Associated Governments will place no difficulties [Page 129] in the way of nitrate purchased for immediate delivery being re-exported to Germany:


  • “(a) the use of the nitrate in Germany is properly safeguarded and supervised; and
  • “(b) there is no objection from the Financial or Shipping Sections of the Supreme Economic Council,”

seeing that any nitrates re-exported from contiguous neutrals to Germany, though financed out of sums which might have been made available for the payment of food, would in the long run tend to an economy by reducing the necessity for food imports into Germany.

The Italian Representative doubted whether the Germans would in fact be able to raise the necessary credits for the importation of nitrates from neutrals.

Appendix 65

Note From the Finance Section Respecting the Collection of Private Remittances to Germany

Mr. Norman Davis said that if the Supreme Economic Council would suggest to the American Relief Association that they solicit remittances in the United States, Great Britain, France and Italy to parties in Germany, it was believed that a large sum of money could in this way be accumulated in the currencies of the respective countries and made available for the purchase of food in these countries.

It would be necessary to secure in each country an enemy trade licence in order [for?] such remittances to be made, and in advertising that such remittances may be made, the American Relief Administration would have to make it perfectly clear that the step is taken at the request of the Supreme Economic Council.

It was agreed that the Supreme Economic Council should be asked to approve the suggestion made by Mr. Davis, on the understanding that it would be referred to each individual Government for consideration.

Appendix 66

Report on the Work of the Communications Section of the Supreme Economic Council


The work of the Communications Section consists in—

The organisation and co-ordination of the necessary urgent assistance for the maintenance and improvement of the existing port, railway, inland waterway and telegraphic facilities in Eastern Europe, with a view to the earliest possible return to normal conditions.
The apportioning of the necessary action between the Allies, with a view to the most effective solution of the above problem.
The organisation of the immediate despatch of the necessary technical missions.
The expediting of supply of essential materials.
Arranging through the naval and military authorities for the organisation of additional lines of communication required for economic purposes.
Reporting on any technical communications question referred to the Communications Section by the Supreme Economic Council.

Note.—The Communications Section is not responsible for the forwarding, custody or handling of any consignments.

The Communications Section was formed as a result of the report, dated the 22nd February, 1919, of a special Sub-Committee appointed by the Supreme Economic Council,15 and which met on the 20th and 22nd February.

In this report, which outlines the proposed functions of the Communications Section, a credit of 20,000,000l. was recommended to enable the minimum assistance necessary to be rendered until essential requirements could be met through the ordinary trade channels, which it would be the object of the Communications Section to encourage.

Although the functions of the Communications Section are economic rather than military, it was agreed that the existing military organisation alone possess the facilities for prompt and effective action.

The Communications Section has since held ten meetings, making twelve in all.

The Supreme Economic Council adopted the report of the Special Sub-Committee on the 25th February, 1919, and authorised the Communications Section to proceed as far as possible prior to the allotment of funds. In this connection the British Treasury representatives on the Supreme Economic Council arranged that the Treasury should favourably consider proposals for British missions submitted by the War Office.

The relations between any separate mission sent out by the Supreme Economic Council and an existing Military Mission under the High Command have been defined as follows:—

“When a Military Mission exists under the High Command its relations with the Technical Mission of the Supreme Economic Council will be the same as its relations with the civil organisation concerned, to assist, which is the duty of the proposed Mission.”

The Technical Mission will report to and receive instructions from the Communications Section of the Supreme Economic Council through the channel laid down by the Power responsible for executive action.

[Page 131]

The Communications Section propose that Allied Missions should be sent to every country assisted, but that in each case one Ally should be charged with the necessary local action. The only Inter-Allied Mission hitherto authorised is a Mission to control the through railway service from the South for the relief of the States of the old Austro-Hungarian Empire. The responsibility for executive action on this question has been allotted to the Americans, and the head of the Mission is Colonel Causey, United States of America, the instructions to whom were adopted on the 11th March. The powers of the Mission were defined by a special decision of the Supreme War Council.

Between the 7th and 20th March inclusive, 9,848 tons, or an average of 703 tons per day, were evacuated from Trieste.

From the 21st to the 31st inclusive, there were evacuated 16,745 tons, or an average of 1,522 tons per day. During this latter period occurred the strike of railroad operatives in Austria, which very materially reduced the output for two days. The rate of evacuation has practically doubled in the last ten days over that of the two weeks preceding.

It will be noticed that the improvement in the situation, which began before the arrival of the above Mission, is marked and continuous.

Besides the Mission working with the Relief Mission at Trieste, there are also:—

An Italian Railway Commission at Vienna, which forms part of the Italian Armistice Mission situated in the same place.
An Italian Directorate of Railway Movements at Trieste, and one at Vienna for operating the lines in the new territories included within the Armistice line.
A Technical Mission (now being formed) for Studies and Works on the Reconstruction of Railways in Austria-Hungary.

Pending decision as to the allocation of executive local action between the Powers represented on the Supreme Economic Council, the Council on the 17th March, 1919, authorised Technical Missions to be sent by the following Powers to investigate and report on immediate requirements:—

United States Tchecho-Slovakia,
Great Britain Poland,
Don and Caucasus,
Baltic Provinces.
France Greece,
Turkey in Europe,
Ukraine and Donetz.
Italy Austria,

[Page 132]

The present situation is as follows:—


The British Railway Mission under Lieut.-Colonel Billinton left England on the 26th November, 1918. On the 22nd March, 1919, Treasury sanction was obtained for the allocation of 500,000l. for the purchase of urgent railway material for Roumania, and a Roumanian representative was at once sent to London with authority to submit indents on behalf of his Government, and the first consignments should leave very shortly. Owing to delay in sanctioning the necessary credits the railway situation has now gone from bad to worse, and it has now become necessary to dispatch at least 100 locomotives and 1,000 waggons in good running order to tide over the time till materials for repairing existing stock become available. The French Government are sending 35 “Armistice” locomotives to meet the military requirements of the High Command, and 15 American locomotives towards reconstruction.

It is recommended that the special sanction of the Supreme War Council should be obtained for the despatch of 50 additional locomotives and 1,000 waggons to meet the above immediate economic needs of Roumania out of the 5,000 locomotives and 150,000 waggons surrendered under the conditions of the Armistice. It is submitted that this demand is a legitimate one, as the likelihood of military operations having to be undertaken to restore order will be reduced by this supply to Roumania.


Colonel Hammond, British Expert Adviser to the Peace Conference Polish Mission, was instructed to report on the Polish situation with the assistance of a Railway Officer attached to a temporary British Economic Mission. A full report has been received with lists of material of primary urgency, consisting chiefly of material and tools for repairs to locomotives, of which about 50 per cent, are under or awaiting repair. In spite of great difficulties the Poles are showing a disposition to organise their railways, and Colonel Hammond is of opinion that timely assistance in material would lead to a substantial improvement in the situation. The list is now being valued, but there is no doubt that it is very moderate and will have to be supplemented later. This material should be despatched at once. A British allotment of 500,000l. out of the funds available for relief has been asked for. Arrangements are being made to send out a Technical Mission as soon as the above funds have been made available, to ensure the effective utilisation of our assistance and to act as advisers as far as necessary to the Polish and Baltic Provinces railways while encouraging them to stand on their own legs. Meanwhile the despatch of 250 locomotives and 3,000 waggons is reported to be an urgent necessity, of which 100 loco [Page 133] motives and 2,000 waggons should be sent at once. These locomotives and waggons should preferably be of German types as handed over at the Armistice, to facilitate upkeep, as a first measure. Marshal Foch has been asked to despatch sufficient locomotives and waggons to provide for prospective military requirements and to prevent any further drain on the existing civil resources, and a reply is awaited as to the numbers he is willing to send. The arrangements for the despatch of these locomotives and waggons will require carefully working out.

Don and Caucasus.

A British Railway Expert has for some weeks been attached to the British Military Mission with General Denikin and has telegraphed recommendations with reference to a detailed list in the possession of General Durnovo, who is now in London drawing up a revised list of requirements based on the British report. The situation in the Don and Caucasus needs immediate action. The railways have only 20 per cent, of their pre-war capacity; they have only stores for another four months. The lines now under General Denikin’s control serve areas which are rich in products. In addition to materials and tools for locomotive repair, there are certain more general requirements including clothing and boots for railway employees. Enquiries are being made as to whether these latter requirements can be met by an issue of part-worn uniforms from British military stocks. The cost of the railway materials of immediate urgency is roughly estimated at 500,000l., and the equipment, clothing and medical stores for the railway staff, and certain mechanical transport for railway deliveries are estimated to cost a further 800,000l., the bulk of which is for boots, clothing, &c. No further action can be taken without credits, and an immediate grant of 1,000,000l. from British relief funds has been asked for.

Major-General Cowie, Railway Adviser to the British Commander in-chief at Constantinople, has been ordered to proceed to the Don area to make a personal report on the situation.


Railways are being controlled by a British Technical Mission under General Brough. He is endeavouring to organise an efficient service between the Black Sea and the Caspian Sea, in spite of the difference between the various local Governments concerned, and the corruption and inefficiency of the local managements. No specific demand for stores has yet been received.

Tchecho-Slovakia and Serbia.

Certain reports have been received from previous American Missions. These are being examined, and the necessary American personnel for [Page 134] special railway missions is being collected. A British railway officer now attached to an Economic Mission in Serbia will ultimately be attached to the American Mission.

There is at present a special French Mission at Semlin under Lieut.-Colonel Gérard.

The Mission have arranged for the utilisation of the Elbe as a means of communication for the supply of relief to Tchecho-Slovakia. It is hoped that the service will commence in the course of a few days, and that it will be developed to a considerable capacity.

The possibility of utilising a line of communication via the Rhine to Mannheim and thence by rail to Prague is also under consideration, both from the point of view of a postal service and for the running of relief trains. The principal difficulty is the provision of the necessary locomotives and rolling stock and the reported difficulty of securing an unimpeded passage of supplies.

Arrangements are in hand for the re-establishment of postal communication with Tchecho-Slovakia and Poland by the existing train services through Switzerland.

Special Clause.

The Communications Section has further arranged for the insertion in the Railways and Waterways Clauses of the Preliminary Peace Terms of an article securing the powers requisite for the functions of the Supreme Economic Council after the signature of peace:—

“The enemy States will carry out the instructions which may be given them as regards transportation by an authority designated by the Allied and Associated Powers.

  • “1. … (concerns military movements.)
  • “2. As a transitory measure for the transport of the relief traffic to various localities, and as regards the re-establishment as quickly as possible of the normal conditions of traffic and the organisation of the postal and telegraphic services.”

April 5, 1919.

Appendix 67

Draft Reply to German Note of April 2, With Reference to the Prohibited List of Exports

The Allied and Associated Governments have noted the note presented by the members of the German Financial Delegation at the Chateau de la Villette, on 2nd April, 1919.
They point out that the arguments set forth therein may have reference to peace conditions, but not to the execution of the stipulations of the Armistice.
The conditions which were set out in the Agreement of Brussels, and which were notified to the German Government in supplementary notes, have for their aim the revictualling of Germany with foodstuffs. The Allied and Associated Governments give the following answer to the verbal questions put by Dr. Melchior on the 2nd April:—
As regards the permission given to Germany “to export to neutrals without restriction a third of her available exportable surplus” (telegram of the 24th March, Clause 4 (c)), the word “exportable” should be understood to refer to total German export, that is to say, the export of Germany by land frontiers as well as export by sea.
Clause 4 (a) of the telegram of the 24th March, according to which “each of the Allied and Associated Governments will have the right during the Armistice to buy at fair and equitable prices quantities of all the articles on the prohibited list which Germany may have available for export,” should be understood as follows: “Fair and equitable prices will be fixed by the Allies ‘unilaterally,’ and not ‘established by a mutual agreement’ as the note of the delegates demands.”

Appendix 68

Negotiations Between Inter-Allied and German Delegates at Cologne With Regard to the Export of Coal From Germany in Payment for Food

Summary of Proceedings

1. The German Delegates announced at the outset that the German Government reserved its agreement with the principles laid down in the telegram drawn up by the Sub-Committee of the Raw Materials Committee on the 23rd March with regard to the prohibited list.16

2. They next referred to the note from the German Government dated the 24th March, in which are set out certain requirements in the way of supply of raw materials and the granting of transport facilities necessary for the purpose of increasing German coal output and exportable surplus. The full list of materials required for the next two months is:—

  • 1,500 tons cylinder oil.
  • 2,000 tons tin.
  • 30,000 tons petroleum.
  • 500 tons cotton.
  • 250 tons wool.
  • 2 tons fish glue.
  • 2 tons gelatine for industrial purposes.

[Page 136]

The cotton, wool, and fish glue are for the purpose of making belting, and the German Delegates desire the materials rather than the supply of manufactured belting, but there seems no reason why, if her requirement is to be satisfied, the manufactured article rather than the materials should not be furnished.

It will be seen below that Germany has been unable to offer any additional coal for export, but the British Delegates desire to recommend for the consideration of the Supreme Economic Council that the materials should be furnished with a view to increasing German output so that a substantial quantity of coal may be available for export in the near future. The Germans stated that these quantities would only suffice for two months’ consumption. It is difficult to check this, but it is suggested that the Germans might be warned that no undertaking can be given to renew the supplies at the end of two months.

The facilities for which the German Delegates asked in the note of the 24th March with regard to freedom of transport across the Rhine, and transport by sea from North Sea harbours to German harbours in the Baltic for consumption in Germany, might also be granted so far as possible.

As Germany is unable to provide additional coal for export the question of permission for export by sea to Sweden, Norway, and Denmark does not arise.

3. The German Delegates stated explicitly that if they were required to carry out in full the obligations imposed on them in the matter of the supply of coal and coke to France under the Luxemburg Protocol of the 25th December,16a it would be impossible for them to provide further coal for export from the right bank of the Rhine.

4. The German Delegates handed in a note on the Luxemburg Protocol, in which complaint is made—

(a) That their economic position is being seriously prejudiced by the fact that France is demanding the full quantities of coal and coke specified in the agreement, although she is not carrying out a promise alleged to have been made by her in an annex to the Protocol that she would do her best in the way of supplying certain coal from the left to the right bank of the Rhine, and also of supplying minette (iron ore) against the coke which the Germans undertook to forward from the Ruhr to Lorraine.

It is understood that the Germans have been forwarding about 7,000 tons of coke daily (against the quantity of 13,700 tons daily mentioned in the Protocol), whereas the French have not sent a ton of minette. It may be added that their failure to supply minette is causing a serious danger of unemployment at certain steelworks in British occupied [Page 137] territory, which are dependent on their supplies of raw steel from works in unoccupied territory.

It should be added that there is a difference of opinion between the French and Germans as to the precise nature of the promise made by the French in consideration of the signature of the Protocol by the Germans.

(b) That the French are bound by provisions affecting the prohibited list in the matter of payment for supplies under the Luxemburg Protocol.

5. The German Delegates made a general claim that all exports of coal from Germany included within the 1914 frontier should be paid for in a form which would enable them to procure food. They made strong complaint to the effect that coal was being exported by the French from mines in the Saar valley to France, Italy, and Switzerland, and that the French had fixed a price of 40 M. per ton for payment to the mines, but were receiving a price as high as 120 fr. a ton from the Swiss and, taking into account the exchange of the mark, were thus making a profit of 100 fr. per ton. In the case of exports to France the sale price was stated to be 60 fr. per ton. It was added that no payment had actually been made to the Saar mines, and that the French Government at present owed them 36 million M.

Appendix 69

[Report of the Blockade Section Regarding] Application for Authorization To Convey Coals Over the Sea Route From the Ruhr to Eastern Prussia

The Blockade Section considered a letter from Marshal Foch (annexure A) and the following resolution was carried:

Resolved. That there is no objection, from the blockade point of view to the free navigation, from Leer on the Ems to Elbing and Dantzig, of the colliers Elbing II and Elbing III, now loaded with coal for the firm of Schichau, provided these vessels come within the category of “exempted vessels” mentioned in Minute No. 56 of the Tenth Meeting of the Supreme Economic Council, held March 24th and

Further resolved, That it is the opinion of this Council that this question had been covered by the resolution contained in Minute No. 56 of the Tenth Meeting of the Supreme Economic Council held March 24th, respecting German coastal trade on German coasts, and

Further resolved, That the Supreme Economic Council be notified of this Resolution.

[Page 138]
[Annexure A]

Marshal Foch, Commander-in-Chief of the Allied Armies (D. G. C. R. A.), to Minister of Commerce, Supreme Economic Council

I beg to enclose herewith copy of correspondence relative to the request made by the German Commission for coal repartition in view of authorizing the transport by colliers of coal necessary for Eastern Prussia, and coming from the Ruhr Mines.

This request raises two questions:

  • The first, concerning maintaining at the disposal of German authorities of certain colliers. This question seems to be one of those taken under consideration at the Brussels Conference of March 14th, and does not seem to raise any particular difficulties.
  • The second necessitates certain relaxations to the blockade policy as concern the coast navigation of the colliers.

I am of the opinion that, owing to the reasons stated by the General Controller Gaillard, Allied Commissioner at Berlin, and particularly in the interest of good and quick delivery of coal necessary for the Left Bank of the Rhine, the above mentioned request of the German Commission shall be taken in due consideration and I beg you to submit it with favorable mention of [to?] the Supreme Economic Council (Blockade Section).

P. O.
[Enclosure to Annexure A]

Army Controller Gaillard, Allied Commissioner at Berlin, to Marshal Foch, Commander-in-Chief of the Allied Armies, Economic Section, Luxemburg

I have the honor to send you herewith translation of a letter of February 13th, and a note of February 15th, which have been handed to me by the German National Commissioner of Coal.

In these documents, the German Government insists that certain relaxation of the blockade be made concerning the coastwise navigation of the colliers.

It seems evident:

—that the exploitation of the Silesian Mines produces small quantity of coal.
—that the Ruhr Mines must furnish coal to Eastern Prussia.
—that the transport by railway of this coal will necessitate an important rolling stock.
—that, at least for the present, the deliveries of coal to the Right and Left Banks of the Rhine are limited on account of the shortage of transport material.
—that, consequently, the transport by colliers of the necessary coal to Eastern Prussia would facilitate and increase the delivery 01 coal, especially on the Left Bank of the Rhine.

This last consideration is of real interest for us.

The Controller
[Subenclosure 1]

[Letter From the German National Commissioner of Coal] to the Controller Gaillard

A request addressed to Admiral Browning, in view of obtaining authorization for German colliers to sail to Dantzig and Konigsberg has not been granted.

As I have already explained in Note II of this month, the direct railway traffic from Upper-Silesia to North-Eastern Germany are hindered by Polish attacks.

On account of this, quantities of coal have to pass across the whole of Germany towards Eastern and Western Prussia, and the consequence of that is a very considerable increase in the want of means of transport.

I again request that the question of raising of blockade be presented and backed by the Allied High-Command. This will also eliminate one of the impediments we encounter in increasing shipments of coal from the Ruhr to Lorraine, the Sarre and Luxemburg.

[Subenclosure 2]

[Note From the German National Commissioner for Coal Containing] Proposition for the Free Navigation of Colliers “Elbing II” and “Elbing III” From Leer on the Ems to Elbing and Dantzig

The firm of F. Schichau at Elbing and Dantzig, can no longer receive sufficient coal, on account of the difficulties of transport and troubles in Upper-Silesia. There is danger that its factories be stopped in a very short time. The particular interest of the Allies is to avoid this, as the firm of Schichau especially deals with the manufacture and repairs of locomotives.

In consequence thereof, it is requested that the two colliers Elbing II and Elbing III, which are at Leer on the Ems, loaded with coal for the firm Schichau, be authorized to sail for Elbing and Dantzig.

On February 4th, 1919, a similar request was presented under No. VI 3037/17 by the Demobilmachungsamt to the Armistice Commission at Spa, to be handed to the Allies and no decision has yet reached us on this point as far as we know.

[Page 140]

Appendix 70

[Report of the Blockade Section Regarding the Raising of the Blockade on the Adriatic]

At their meeting on the 26th March, the Blockade Section had before them a letter from Prof. Attolico regarding the raising of the blockade in the Adriatic:

[“]Delegazione Italiana al Congresso della Pace,
Hôtel Edouard VII. Parigi, 24 March, 1919.

Dear Mr. McCormick,

I am directed to answer your letter to Signor Crespi regarding the blockade in the Adriatic.

The slight misunderstanding to which you refer originates from the ambiguous form in which the decision of the Supreme War Council was framed.

In the circumstances, the Royal Decree of which you have copy, and which was duly communicated to the Italian Naval Authorities, instructing them to allow free passage to all goods except those included in the prohibited list, was sufficient to ensure the execution of the War Council’s resolution while at the same time fully securing what was really aimed at: that is to say liberty of trade in the Adriatic.

Since receiving your letter, however, and in view of the ‘technical’ concern expressed as to the sufficiency of the measures adopted, I have spoken to my Prime Minister, who authorizes me to state that the naval blockade of the Adriatic will forthwith be raised, without prejudice, however, to the right of search, and to the exigencies of the policing of the seas consequent on the state of war which still exists.

I am, Sir,

Yours very truly

(Signed) B. Attolico.”

In connection with the foregoing the following resolution was adopted:

Resolved.—That acknowledgment should be made of this letter and that its contents should be transmitted to the Supreme Economic Council for its information, and

Further resolved.—That it should be pointed out to the Supreme. Economic Council that the essential step to be taken by the Italian Authorities was the rescission of the two Italian Decrees by virtue of which the blockade was first imposed.”

[Page 141]

Appendix 7117

[Report From the Blockade Section Regarding] Suspension of Restrictions on the Import Into Germany of Fish Caught in European Waters

At the twelfth meeting of the Superior Blockade Council held at the Ministry of Commerce on the 26th March, 1919, the following resolution was adopted:—


“That, in accordance with the decision of the Supreme Economic Council, the A. B. C. be instructed to inform the I. A. T. C. in Christiania, Stockholm, and Copenhagen that all quantitative restrictions imposed by existing agreements upon the export of fish from Norway, Sweden, and Denmark to Germany are temporarily suspended, and that the respective Governments of Norway, Sweden, and Denmark be so informed forthwith”; and

Further resolved

“That it was not necessary for this Council to pass a special resolution authorising the removal of all restrictions of the import, into the liberated territories, of fish caught in European waters, as requested in Minute 244 of the fifth meeting of the Food Section of the Supreme Economic Council held on the 18th March, 1919, for the reason that all blockade and trade restrictions with the liberated territories, with exception of Lithuania and Latvia, had been recommended for removal by this Council, and that trade in consequence with said regions would be free.”

Appendix 72

Report of Special Sub-Committee [Regarding Correspondence With Germany in Connection With the Brussels Agreement]

The Special Sub-Committee in charge of detail arrangements in connection with the Council’s instructions regarding the administration of the Brussels Agreement report that in accordance with said instructions:

a telegram (annexure I) has been despatched whereby the German Government has been made aware of the new regulations regarding black list (with reference to minute 57).
a further telegram (annexure II) has been sent whereby Germany has been informed that Allied experts are being sent to Cologne to arrange for purchase of principal raw materials.
instructions (annexure III) have been laid out to the said delegates.

The above documents are hereto annexed.

Jean Monnet

Annex I

Telegram Despatched on March 26th to Germans Through the International Armistice Commission, Spa, From the Supreme Economic Council

With reference to communications already addressed to the German Government regarding the import of foodstuffs and the export of commodities in pursuance of the Brussels Agreement, the following supplementary announcement is made:

That with a view to assisting Germany to obtain credits in Neutral Countries for the purchase of food supplies in accordance with the promise of consideration given by the Delegates at Brussels, the Associated Governments state that no firm in any Neutral Country will in the future incur the penalty of blacklisting because it has:

exported foodstuffs to Germany within the limits approved by and in accordance with the regulations of the Associated Governments;
afforded credits to Germany for the purchase of such foodstuffs;
imported goods permitted by the Associated Governments to be exported from Germany.

Negotiations and trading by Germany with firms in Neutral Countries, even though on the Black Lists, will be permitted, subject to the approval of the Superior Blockade Council.

Annex II

Telegram From the Supreme Economic Council to General Nudant at Spa, for the German Government, Berlin

Arising out of Clause 4 b. of the telegram of 24th March, 1919,17a the Associated Governments inform the German Government that the technical delegates for coal, for wood, for paper and for sugar are leaving to-day for Cologne where they will be on Friday morning, March 28th. The German Government is requested to nominate urgently with all necessary powers its technical delegates who will come [Page 143] into contact with the Allied delegates at the Economic Section of the British Military Governor at Cologne.

Annex III

Instructions for the Heads of the Technical Delegations at Cologne

The Brussels Agreement.
Copy of a telegram addressed by the Supreme Economic Council to the German Government on 24th March.
Copy of the telegram addressed by the Supreme Economic Council to the German Government on 26th March.
Copy of the telegram addressed on the 26th March to the German Government for the appointment of its technical delegate.


By application of Clause 4 b. of the telegram addressed on the 24th March, 1919, by the Supreme Economic Council to the German Government, the Supreme Economic Council has decided that each country should send to Cologne technical delegates and should nominate a head of the Delegation. The four heads of Delegations shall have full powers to give their particular instructions to their own delegates. The four heads of Delegations will conduct negotiations by common agreement. In case a disagreement should arise between the various Allied Missions, the four Heads of Delegations shall have full powers to adjust it without having to refer it back to the Supreme Economic Council at Paris. They should keep strictly within the limits laid down by the above telegrams and by the Brussels agreement of the 14th March, 1919, particularly in so far as concerns the financial arrangements.

The heads of the Delegations will be:—

America Mr. Legge
England Mr. Ronga
France M. Gaillard
Italy M. Dante Ferraris

The meeting with the German Delegates is appointed at the Economic Section of the British Military Governor at Cologne on Friday, March 28th. The technical Delegations who are already at Mayence or other German towns engaged in negotiations for purchases of German products in accordance with the Brussels agreement and the telegram of the 24th March should put themselves in communication with the head of their respective delegation at Cologne and receive from him the necessary general instructions.

[Page 144]

Appendix 73

[Report From the Blockade Section Regarding Regulations for Correspondence Between Germany and Firms in Neutral Countries]

The following report of the Sub Committee to consider Rules for Correspondence between Germany and firms in neutral countries, was considered and approved by the superior blockade council at their meeting of the 25th [29th] March.

The committee considered what rules might be laid down for correspondence whether on the black list or not. The Committee assumed that it was only intended to permit communications on the subject of trade of the character authorised by the Associated Governments.

The committee recommend unanimously that the Germans be allowed to communicate by all available routes, subject to the following rules:—

—Communications regarding German exports must refer only to commodities other than gold, silver, securities or other negotiable instruments, and material of war.
—Communications regarding German Imports must for the present refer only to foodstuffs.
—Speculative transactions will not be permitted.
—Telegrams must be en clair, and must be readily intelligible and contain no hidden meaning. They must be in French or English, or in Italian in the case of messages exchanged via Italy or Italian colonies. They must be signed with the name of the sender, and addressed in full, in the case of telegrams sent via Italy or Italian colonies, Christian names must also be given. Registered addresses, either in signature or address, will not be permitted. The word “telegram” is understood to include wireless messages.
—Postal correspondence will likewise be permitted with regard to transactions of the character approved by the Associated Governments. It must be expressed in clear and unequivocal terms with the name and address of the writer shown clearly on the envelope.
—Parcel post will not be permitted in either direction but samples of the permitted commodities may be sent in postal packets.
—The Associated Governments reserve power to detain any communication whatever without reason being given. No claim with regard to such detained correspondence will be considered.

Until the interested interallied boards shall be established in Rotterdam the associated consulships shall provide these boards with copies of, or the substance of, all such relevant communications as the boards shall require. When the interallied boards are established at Rotterdam, the question of settling for the routing of correspondence through Rotterdam will require careful consideration in view of the practical difficulties.

If it is decided that correspondence shall be allowed to the Germans not only with neutral countries but also with all foreign countries the [Page 145] same rules shall apply, but it should be noted that in this event existing legislation will have to be modified.

C. Bigham

Lt. Col., General Staff Chairman

Appendix 7418

Note From the British Delegates [Concerning] Arrangements for Meetings With German Delegates To Arrange Purchases of German Products

1. In accordance with the terms of the telegram sent to the Germans on the 24th March by the desire of the Supreme Economic Council, representatives of the United Kingdom, France, Italy, United States of America, and Belgium are to meet representatives of the German Government at Cologne at monthly intervals:—

To receive statements of the German goods of the classes specified in the telegram which are available for export during the thirty days next following.
To notify within four days what amounts of the goods thus declared for export the Allies, or any of them, desire to purchase, within the limit of two-thirds of the amounts declared.
To arrange prices and other terms of purchase.

These arrangements having been completed, the Germans will be free to export, of the goods declared, the balance which the Allies have not selected for purchase.

2. The place fixed for these discussions, namely Cologne, is much more conveniently situated for the German sellers than for the Allied purchasers. For the latter, a journey of some length, involving a certain degree of discomfort and a considerable expenditure of time is required. Communication with headquarters, whether in Paris or in other Allied capitals, though quite good, cannot be effected without delays which may be of vital importance. If any of the Allies find on meeting the Germans that, through failure to anticipate correctly the nature of all the matters to be discussed, the Delegates need to be reinforced by adding someone having special knowledge on some point under consideration, the short time available renders such reinforcement impossible in practice while the meetings are held at a place so distant as Cologne is from Paris and London.

3. A place of meeting which could be reached from Paris within an hour or two would present great advantages over Cologne for the conduct of those purchasing negotiations. Instead of the Germans [Page 146] being among their own friends and having the readier means of communication with those on whose behalf they act, while the Allies are among an alien population and cut off effectively from communication with their principals, the situation would be reversed.

4. The plan of appointing a representative for each of the Allies, who should superintend all the purchase negotiations, presents the difficulty that such a person could not be expert in all the matters under negotiation, and would nevertheless have to decide matters of difficulty without the opportunity of consulting anyone not actually present if the meetings take place at Cologne. The resolution of difficulties by conference between the four heads of Delegations does not provide a solution for all cases, as has been already illustrated by one misunderstanding referred from Cologne to Paris.

5. The application of the same arrangement for Delegates dealing with German exports as has been applied to the financial negotiations, namely, to make Compiègne the place of meeting, if that were possible, would solve most of the difficulties arising out of the meetings. The representatives who dealt with different commodities need not, if that course were more convenient, all meet at the same time. A series of meetings spread conveniently over thirty days would furnish a continuous occupation for the officials in whose charge the general arrangements were placed, and would reduce to a minimum the difficulties of housing the expert negotiators.

Appendix 75

[Resolution Dated March 31, 1919, Submitted by the American Delegation on the Blockade Section Regarding] Suspension of Enemy Trade and Black Lists

The question raised by the following resolution is submitted by the American Delegation on the Blockade Section to the Supreme Economic Council for determination:—

Whereas, the Supreme Economic Council at its Tenth Meeting held March 24th, in Minute 57, in accordance with the Brussels agreement of March 13/14th, 1919, passed the resolution that:

Immediate announcement should be made to the German Government that no firm in any neutral country would, in the future, incur the penalty of blacklisting because it had dealings with Germany in relief or permitted transactions and
Negotiations and trading with firms in neutral countries even though upon the Black Lists will be permitted subject to the approval of the Blockade Section of the Supreme Economic Council

Resolved That on and after April 9th, on which date publication shall be made to this effect, all Enemy Trade and Black Lists of the [Page 147] Associated Governments, whether Official, Confidential or Cloak, shall be suspended until further notice.”

Appendix 7619

Resolutions Regarding the Abolition of Telegraphic Censorship Submitted by the American Delegation of the Blockade Section

All telegraphic and cable censorship of messages passing between the four Associated countries: United States, Great Britain, France, and Italy, be abolished as from the 15th April.
All telegraphic and cable censorship of messages passing between any of the above-mentioned Associated countries and Central and South America and Cuba be abolished as from the 15th April.
All telegraphic and cable censorship of messages passing between any of the above-mentioned Associated countries and the Orient via the Pacific, except messages to and from Vladivostock, shall cease as from the 15th April.
All cables to or from Greece, Spain, Portugal, Norway, Sweden, Denmark, Holland, Switzerland, and Belgium shall be censored by the Associated Governments in whose jurisdiction the message shall originate or terminate. These messages shall be free of any other censorship; that is to say, they shall be permitted to pass without diversion to censorship except only by the Government under whose jurisdiction the message originates or terminates.
All cables to or from Tchecho-Slovakia, Jugo-Slavia, Roumania, Bulgaria, Turkey, Finland, Esthonia, and Poland shall be censored by the Associated Governments in whose jurisdiction the message shall originate or terminate. These messages shall be free of any other censorship; that is to say, they shall be permitted to pass without diversion to censorship except only by the Government under whose jurisdiction the message originates or terminates.

Appendix 7720

Memorandum on the Commissions Set Up Under the Armistice With Germany and Their Relations to the Supreme Economic Council

1. There exist various commissions and bodies set up directly or indirectly under the armistice to handle relations with the Germans. Clearly, so long as the state of war continues, and perhaps for some time afterwards, these bodies must operate through and under the [Page 148] authority of the High Command and they must look to the High Command for instructions and policy on all matters of a military nature or concerned with the maintenance of public order.

2. But many of the affairs with which they deal affect directly the industrial and economic situation or are merely questions of civil administration. It is clearly desirable that the policy followed by them should be closely co-related with the general policy which the Allies are pursuing with regard to Germany generally. For example, the policy adopted in carrying out the armistice conditions, as to the withdrawal of machinery stolen by the enemy from Northern France, should be considered in its bearing on the problem of making Germany work for her living, which is one of the most serious which the Economic Council has now to face. It is similarly desirable that the provision of food and the control of food distribution in the occupied territories should be considered in its relation to the problem of food supplies and administration in the rest of Germany.

3. A list of the more important bodies and Commissions now in existence is attached (see Appendix 1). Considerable difficulty has been experiencd in ascertaining the functions of some of them and it is possible that the list is not complete.

4. The Supreme Economic Council is not specially concerned with the Commissions supervising road, rail, and water transport, save for special problems, e. g. transport of supplies across Germany, Poland and Austria. But the Communications Section should be furnished with periodical reports by all such Commissions.

5. The other bodies fall into three groups:—

Those dealing with the actual execution of the Armistice and with communications concerning the Armistice.
Those concerned with the administration of the occupied territories.
Those set up directly under the responsibility of the Supreme Economic Council and concerned with the whole of Germany.

The International Armistice Commission

6. The International Armistice Commission at Spa fulfils a double function. It is a channel of communication with the Germans performing in this respect the sort of duties which would in peace be performed by the Embassies at Berlin, and it also supervises the actual execution of provisions as to the return of machinery, securities, etc.

7. The Armistice Commission is responsible to Marshal Foch, who is charged with the execution of the Armistice. So far as economic questions arise in respect of the Armistice they should be referred by the Armistice Commission to the Supreme Economic Council. The Council of Ten decided some time ago that economic delegates should be attached to the staff of the Armistice Commission to deal with such [Page 149] questions. The arrival of German delegates at Port Saint Maxenceaura will probably result in this being now unnecessary.

The Supreme Economic Council and the Administration of the Occupied Areas

8. The administration of the occupied territories inevitably presents difficulties on account of the mingling of military and civil responsibilities. There can be no question that in matters of military importance the authority of the Army Commander acting under directions of the High Command must be supreme. But many of the problems to be dealt with are of a civil, economic or industrial rather than of a military nature and they must be considered in their bearing on the general problem of economic relations with Germany as a whole. The political, civil and economic questions should be treated by an Inter-Allied Civil High Commission, whose powers should, so far as necessary, be authorised by the Council of Ten.

9. The importance of the occupied territories in restarting trade with Germany must not be overlooked. The sooner the practical difficulties and the inevitable prejudice which have blocked the resumption of ordinary trade relations with Germany, are removed, the better it will be not only for Germany, but for the whole world, and especially for the United Kingdom. Four months have elapsed and trade even with the occupied territories has not yet restarted. In the meantime the paralysis of the whole commerce of the world—a by no means unimportant cause of the prevailing industrial unrest—gets more serious. The financial difficulties of trade with the occupied territories are less and the prejudices against the trading with them are less than with the rest of Germany. It is clearly then of great importance that every effort should be made to re-open trade with the occupied territories.

10. Whatever may be the decisions ultimately taken on the delicate political issues involved, it is not possible to deal with the administrative and the economic problems of the occupied territories as other than part of the whole German problem. Under the terms of the Armistice, the Germans claim in any case that the local administration should continue. It would indeed be impossible at present to administer the country through any other means. But of course, the local civil administration is connected by many ties, formal and otherwise, with the Government at Berlin and with the administration of the rest of Germany.

11. It may be possible to break many of the formal relations between the local administration and the rest of Germany. The fact that the boundary of the occupied areas is quite arbitrary and corresponds to no administrative division, renders this in some cases difficult. The question of the economic relations between the occupied territories [Page 150] and the rest of Germany must obviously depend from time to time on decisions taken with regard to the political status of the Left Bank. It is clearly necessary, however, that problems of industry in the occupied area as well as the problems of food control should be considered with a close appreciation of their relations to the general problem of Germany and to the policy to be adopted by the Allies in respect of them.

12. The functions of the Inter-Allied Economic Committee of Luxembourg should be more closely defined. At present it does not concern itself with food questions, but it is mainly occupied with giving licenses for commercial dealings with the enemy and regulating the trade in raw materials and manufactured products between the occupied territories and with the rest of Germany, with neutrals and the Allies.

13. The Supreme Economic Council has agreed to the formation of an Inter-Allied Military Committee independent of the Luxembourg organisation to deal with the food problem in the occupied territories. So far as the determination of the supplies is necessary, having regard to the military situation, the transport of these supplies and the enforcement of regulations and Orders and policy, this Committee will be able to perform a very valuable function. It has at present held only a preliminary meeting and save for asking for information on many points it has not yet commenced work.

14. But the food problem is so interlocked with the financial, the administrative and the industrial problems with which the Luxembourg Committee to a greater or less extent already deals, that the co-ordination of food policy and administration should clearly be handled at Luxembourg in close consultation with or by the same persons as those who are responsible for the other economic problems.

Further the whole elaborate machinery of maximum prices controlled distribution through trade channels and centralised buying and marketing set up during the war requires examination and perhaps modification by experts familiar with the difficult agricultural and economic problems involved.

At present the Luxembourg Committee has no direct relations with the Supreme Economic Council. Monsieur Tirard, who has been appointed Controller-General by Marshal Foch, is responsible only to the High Command. The Committee does refer a certain number of questions to a Paris Committee set up by the Ministers of Blockade, but the relation of this Paris Committee to the Supreme Economic Council and the various Sections of it has not been defined. It is clear that the Luxembourg Committee should, on all matters not of a military nature affecting the industry or economic life of the occupied provinces, receive its directions from the Supreme Economic Council.

[Page 151]

15. Subject, therefore, at all times to military necessity it is suggested that the following arrangements should be adopted:—


(1) That the full responsibility for taking all necessary executive action in accordance with any policy decided upon for the occupied areas should rest on the Army Command in each Area, who will on civil, political and economic affairs follow the instructions of the Inter Allied Commissioners referred to below.

(2) That the Army Commands should so far as is considered necessary, be assisted by the best available expert advisers on the particular branches of administration or industry with which as the ultimate executive authority in the occupied areas they have to deal, e. g. finance, food, industry, fuel, labour, etc. These expert advisers will receive directions direct from the Inter Allied Commissioners.

(3) That the Committee Economique at Luxembourg should be formally constituted under the joint responsibility of the High Command and of the Supreme Economic Council with full authority as an Inter-Allied Commission to co-ordinate the administration of the four Army Commands on all economic, industrial and food questions in accordance with the policy laid down from time to time by the Supreme Economic Council. The decisions on Economic matters of the Inter-Allied Commission of Luxembourg should have executive force and should be observed by the Armies in the different zones.

(There appears to be no special reason why this Committee should continue to have its headquarters at Luxembourg. Cologne, which is the industrial and financial centre of the Rhineland, or Coblenz or Mayence would appear to be the more accessible and convenient. For convenience, however, it is referred to in this memorandum as the Luxembourg Inter Allied Commission)

(4) The Luxembourg Inter Allied Commission should be composed of 4 High Commissioners, one from each Ally, who should be men of wide administrative and official experience. They will have to be trusted with wide discretionary powers. Monsieur Tirard, the French Commissioner, should act as Chairman.

(5) The Luxembourg Inter Allied Commission should constitute expert Sub-Committees on finance, food, raw materials, import and export arrangements, labour, coal, etc., of each of which the Commissioners should be ex-officio members, but which should be attended by the senior officers actually responsible for each subject in each Army area. These Committees should sit at frequent intervals.

(6) That any question directly involving military considerations or affecting the military situation should be referred by the Luxembourg [Page 152] Commission to the High Command for directions. The Inter-Allied Military Food Committee should from time to time consider the military aspect of the food situation in the occupied territories, should co-ordinate transport and other arrangements for handling food supplies and should consider questions of discipline and public order arising under the food control regulations.

(7) That the administrative policy to be followed by the Luxembourg Commission in connection with economic industrial or food matters should be laid down from time to time by the Supreme Economic Council, and its constituent sections to which also questions of difficulty as they arise would be referred. The Commissioner[s] will refer to their Governments on general political questions.

(8) That in framing this policy the Supreme Economic Council whilst paying proper attention to the special circumstances of the occupied territories and to any political or other decisions of the Council of 10, should endeavour to assure the necessary co-ordination in Inter-Allied policy as regards the occupied and unoccupied territories. The Supreme Economic Council should ascertain the views of the Foreign Ministers in respect of any matters involving political as well as economic considerations.

(9) That with a view to expediting decisions on questions concerning occupied or unoccupied Germany, involving more than one section of the Supreme Economic Council, there should be constituted in Paris a Sub-Committee of the Supreme Economic Council of one Delegate only of each Ally whose duty it would be to consider current and pending economic negotiations with Germany as a whole to ascertain the views of the various Sections and so far as possible to embody proposed decisions in draft resolutions for the Council. One or more of the Commissioners or a representative of the Commissioners will attend all meetings of the Sub-Committee on Germany at which questions affecting the Left Bank of the Rhine are considered. A Belgian delegate will also be invited to attend on all matters affecting Belgium.

(10) The Delegate of each country on this Sub-Committee should be responsible for securing that any decisions or any action necessary before a joint policy can be formulated should be taken with the least delay by the appropriate department and that all necessary steps are taken to bring into effect the decisions of the Council.

(11) This Sub-Committee should also be responsible for securing proper co-ordination and liaison between the various Commissions and Missions brought into existence by the various Sections of the Supreme Economic Council and for centralising and rendering available all reports, statistics, or memoranda bearing on the economic negotiations with Germany.

(12) All questions submitted by the Luxembourg Commission or by the International Armistice Commission at Spa should first be [Page 153] considered by this Sub-Committee and referred by it when necessary to the proper section or to the Council itself for decision.

The proposals set out above of course only concern the economic problems of the occupied territories. The scope of the Luxembourg Commission will include not only matters of economic importance but also matters purely of civil and political importance. So far as the civil and political side of the work of the Commission is concerned, it will clearly be necessary to secure covering approval from the Council of 10.

E. F. Wise

Appendix I

List of Commissions, etc.

Name Functions
Inter-Allied Permanent Armistice Commission (Spa). General supervision of execution of Armistice conditions, formal communications with German Government.
Sub-Commission dealing with Clause 9 of Armistice (Entretien). Recovery from Germany of costs of maintaining troops in occupied areas.
Sub-Commission dealing with Clauses 2 & 4 of Trèves Financial Agreement. Restitution of stolen and sequestrated securities.
Sub-Commission dealing with Clause 6 of the January Armistice renewal (Wiesbaden). Restitution of stolen French and Belgian Industrial Machinery.
Sub-Commission dealing with the handing over of agricultural machinery. Receiving from Germany Agricultural machinery instead of rolling stock.
Commissions de Réception (Brussels and Metz). Receiving from Germany rolling stock and raw materials handed over under the Armistice.
Calais Railway Commission Control of Belgian railway system.
Field Railway Commission Control of Luxembourg and German Rhineland Railways.
Calais Navigable Waterways Commission. Control of Belgian Navigable waterways.
Field Navigation Commission Control of the Rhine, Moselle, and Sarre Navigation.
Commission for postal control (Luxembourg). Control of correspondence, telegraphs and telephones in occupied areas.
Commission économique (Luxembourg) Supervises distribution of raw materials to factories in the occupied area and output of goods and regulates economic relations in occupied territories and the rest of Germany.
Paris Left Bank Committee To deal with blockade trade and other questions referred to it by the Army Command or by Luxembourg.
Shipping Commission (Rotterdam?) not yet appointed. To provide channel of communication for settling practical details in handing over German ships.
Rotterdam Food Commission To settle the commercial and other details arising out of the sale of foodstuffs to Germany by the Allies.
Compiègne Finance Commission To settle details of the financial arrangements between the Allies and Germany.
[Page 154]
[Page 155]

Appendix 7821

Dear Mr. Hoover: The Admiralty here has just received the following urgent telegram with regard to the position in Odessa:—

“Unless flour is sent at once Odessa must be evacuated as food situation is critical, local supplies are enough till April 9th. Until at least one month’s supply of 15,000 tons is on its way British vessels with goods for Odessa should be detained in England or elsewhere.”

As I write this the following further message has been received from Mr. Picton Bagge, British Consul at Odessa:—

“Food situation is most critical and if flour is not sent in by Allies immediately Odessa will have to be evacuated. In consequence I am of opinion now that British vessels with goods for Odessa should be detained unless for political reasons H. M. G. assume risks of goods until you know at least one month’s supply of 15,000 tons is on the way here. Local supplies are sufficient until April 9th.”

I am to ask whether there is any possibility of America being able to put supplies into this port. In the meantime, I am enquiring of London as to the possibility of our putting in any supplies.

Yours sincerely,

(For British Director of Relief Mission)
J. H. Gorvin

The Hon. Herbert Hoover,
Hotel Crillon, Paris.

Appendix 7922

[Letter From Mr. Hoover to Mr. Gorvin Regarding Relief of Odessa]

My Dear Mr. Gorvin: I am in receipt of your note this morning with regard to Odessa. I also have a telegram from the American Consul much to the same effect. The only cargoes that could be got into Odessa anything like in time are those of the Wheat Executive at Port Said, and it would seem to me, therefore, critically necessary that these cargoes should be diverted. Not only are they nearer to Odessa but for us to divert cargoes that are passing Gibraltar en route to Trieste and Roumania simply means that Vienna, Tchecho-Slovakia and Roumania will absolutely starve.

[Page 156]

Would it not also be desirable to use the U. K. tonnage that is apparently available for merchandise for Odessa for the transportation of food supplies. It must be evident that food is the first necessity in these situations. I have taken similar action with regard to American mercantile shipments intended for the Near East in order that we may maintain Roumanian supplies—and greatly to the prejudice of our merchants.

Faithfully yours,

Herbert Hoover

J. H. Gorvin, Esq.,
26, Rue de Bassano, Paris.

  1. For the terms of the armistice with Austria-Hungary, see vol. ii, p. 175.
  2. See Miller, Diary, vol. xvii, pp. 197–214.
  3. See appendix 37, p. 89.
  4. Appendixes 50 and 51 are filed separately under Paris Peace Conf. 180.0501/34.
  5. See FM–2, vol. iv, p. 522.
  6. Appendix 30, p. 68.
  7. Appendix 47, p. 99.
  8. Inter-Allied Trade Committees.
  9. Appendix 41, p. 91.
  10. Appendix 56 is filed separately under Paris Peace Conf. 180.0501/34.
  11. See appendix 41. [Footnote in the original.]
  12. See appendix 55. [Footnote in the original.]
  13. Appendix 58 is filed separately under Paris Peace Conf. 180.0501/34.
  14. Appendix 60, infra.
  15. Appendix 60 is filed separately under Paris Peace Conf. 180.0501/34.
  16. Appendixes 64 to 68 are filed separately under Paris Peace Conf. 180.0501/34.
  17. Appendix 11, p. 28.
  18. Appendix 37, p. 89.
  19. For texts of protocol and notes exchanged December 24 and 25, 1918, see Der Waffenstillstand 1918–1919, band 2, pp. 239–260.
  20. Appendix 71 is filed separately under Paris Peace Conf. 180.0501/34.
  21. See appendix 37, p. 89.
  22. Appendix 74 is filed separately under Paris Peace Conf. 180.0501/34.
  23. Appendix 76 is filed separately under Paris Peace Conf. 180.0501/34.
  24. Appendix 77 is filed separately under Paris Peace Cont 180.0501/12.
  25. Appendix 78 is filed separately under Paris Peace Conf. 180.0501/12.
  26. Appendix 79 is filed separately under Paris Peace Conf. 180.0501/12.