Paris Peace Conf. 180.0501/20

Supreme Economic Council: Twentieth Meeting Held at the Ministry of Commerce [on 26th May, 1919, at 10 a.m.]

The Supreme Economic Council held its Twentieth Meeting on Monday 26th May, 1919 at 10 a.m. under the Chairmanship of Lord Robert Cecil.

The Associated Governments were represented as follows:

United Kingdom. Sir Hubert Llewellyn Smith.
Mr. Keynes (part time).
Mr. Wise.
Sir Wm. Goode.
Sir Mitchell Thomson.
United States. Mr. Hoover.
Mr. Norman Davis.
Mr. Baruch.
Mr. Robinson.
France. M. Clémentel.
M. Claveille.
M. Seydoux.
Italy. Com. Ferraris.
Prof. Attolico.
Belgium. M. de Cartier de Marchienne.
Lieut. Col. Theunis.


The Minutes of the Nineteenth Meeting were approved subject to the following amendments:—

That the second paragraph of Clause (b) of Minute 163 should read as follows:—

that it would greatly increase the effectiveness of the Blockade if the Neutral Governments of the countries with whom agreements are now in force (Norway, Sweden, Denmark, Holland and Switzerland) should consent forthwith to prohibit, if called upon by the Associated Governments to do so, all exportation, re-exportation or transit of goods from or across their respective countries to or from Germany, except with the consent of the Associated Governments and that a démarche in this sense should at once be made to the Neutral Governments concerned.

That the words “and the question of continuing these supplies” in clause (a) of Minute 167 should be deleted from the English translation of the Minutes.

[Page 293]

176. Blockade of Hungary.

With reference to Minute 161 it was reported that the Council of Heads of States had approved the resolution proposed by the Supreme Economic Council and had given instructions that the necessary announcement should be made at once.1

It was agreed to instruct the Press Committee to arrange immediately for its publication in the Press of the Allied and Associated Powers and to take such steps as lay in their power to ensure that it was given wide publicity in the Press of European Neutral Countries.

177. Coal for Serbia.

With reference to Minute 168 the Director-General of Relief reported—

that Allied representatives were at present in Belgrade endeavouring to arrange an exchange of foodstuffs from the Banat region for coal from Transylvania though no definite agreement had yet been reached.
that the necessary financial and other arrangements had been made for the supply of a total quantity of 1,000 tons of foodstuffs per day from the Banat surplus to Austria, and, eventually, to Hungary, as soon as the situation there would permit, but that the Serbian Government had so far refused to grant the necessary export licences.

It was agreed that the present position did not call for action by the Council, but that the Director-General of Relief should bring the matter to their notice again if he considered it desirable.

178. Relations With Germany.

(i) With reference to Minute 162 (i) the British and French Delegates stated that they could only accept the principle that “in the event of loss arising, German ships should be held as security to cover the loss” as applying to the Armistice period and that the decision, therefore, could not, in their view, be interpreted as affecting in any way the ultimate disposition of the ships under the Treaty of Peace.

The American Delegates pointed out that under such conditions the security offered against loss on the shipments of foodstuffs to Germany was entirely inadequate and at their request it was decided to refer the matter back to the Finance Section for further consideration and with a request that a report should be submitted to the Council at its next Meeting.

(ii) A note (154) on the Organization of Conferences and communications on Current Economic Negotiations with the German Economic Delegates at Versailles was submitted and approved.

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(iii) A Memorandum (155) from the Sub-Committee on Germany regarding—

the possibility of the export from Germany of unduly large exports of commodities such as dyestuffs and chemical drugs with a possible prejudicing of the intentions of the Peace Treaty.
the proposal of the German Government to nationalise the soda industry,

was considered.

It was agreed

As regards (a):—

That the German Government should be informed that no concession granted to them in economic matters between the time of the signature of the Armistice and of the Treaty of Peace permits them to take any action intended to prejudice the intentions of the Treaty of Peace.
That the Rhineland Commission should be informed of the above decision and instructed to notify the Council immediately if there is any symptom of an intention on the part of the Germans to try to evade this decision especially by the export in unduly large quantities of dyestuffs and chemical drugs to Neutral Countries.

As regards (b) that the proposal could not be considered as “a transitory measure” and was not, therefore, one which the Council was authorised to examine.

179. Purchase of Dyestuffs From Germany.

A Minute passed by the Raw Materials Section at their 10th Meeting (156) relative to the proposed purchase on behalf of the French, Italian and Belgian Governments of approximately 120 tons of dyestuffs from Germany, was submitted.

The British Delegates requested that this matter might, before final approval, be referred to the technical experts for further consideration to decide whether they desired on behalf of their Government to obtain supplies from Germany also.

It was agreed that the proposal put forward by the Raw Materials Section should be approved but that the British Delegates should hand in a list of their requirements, if any, within 48 hours.

180. Financial Restrictions on Germany.

With reference to Minute 139 an extract from the Minutes of the 14th Meeting of the Financial Section (157) recommending that the present financial arrangements with Germany should be modified to allow of German owned cash balances and bills held in neutral Countries being available for the payment of interest accruing to 15th August on credits granted to Germany, was submitted and approved.

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181. Finance for German Food Supplies.

A letter from the Chairman of the German Financial Commission dated 22nd May (158) stating that the German Government was ready to send 18 million pounds sterling to Amsterdam to the credit of the food account was introduced and referred to the Finance Section.

182. Administration of the Occupied Territories.

With reference to Minute 165 the President reported that the following formula regarding the administration of the occupied Territories had been adopted by the Council at its special Meeting held on the 19th May:—

“The Interallied High Command represented on the Interallied High Commission by the President of the Commission has granted to the latter the right to transmit to Commanders of Armies instructions discussed and approved by the Commission.

The President will transmit the decisions of the High Commission by order of the Interallied High Command.

In accepting this formula the Supreme Economic Council considers that the High Commission is supreme on all economic questions.[”]

183. Control of Rhine Traffic.

A Note from the Communications Section (159) recommending that arrangements should be made for the continuance of the control of the traffic on the Rhine by the Commission Inter Alliée de Navigation de Campagne during the interim period between the signing of the Treaty of Peace and the establishment of the International Rhine Commission authorised under the Peace Treaty, was submitted.

It was agreed that the Communications Section should be authorised to deal with the matter on the basis of their recommendation and report to the Council at the next Meeting.

184. Use of Enemy Tonnage.

A Report from the Food Section Freight Committee dated 3rd May (160) regarding the employment and disposition of enemy tonnage was submitted for the information of the Council.
The following Resolution (161) from the Food Section regarding the use of surplus enemy tonnage for general relief was submitted and approved:

“That endeavour should be made to use surplus enemy tonnage for general relief in preference to other tonnage, with a view to increasing the funds available for relief and that the freight rates to be chargea for this tonnage should be the same as those charged for vessels carrying foodstuffs to Germany.”

The Director-General of Relief suggested that the Allied and Associated Governments should have the right to call upon the use of German tonnage to the extent to which they have supplied national tonnage for the provisioning of Germany.
[Page 296]

It was reported that this principle had already been adopted by the Allied Maritime Transport Council in February last and it was agreed, therefore, that the matter did not call for any action by the Council.

185. Management of Enemy Ships.

Extracts from the Minutes of the Meeting of the Allied Maritime Transport Executive held on 16th May (162) regarding the allocation to Great Britain for management of enemy vessels in Mexico, Central and Southern America were submitted.

It was agreed that subject to the concurrence of the British Foreign Office and the United States Government the proposed allocation to Great Britain for management should be approved.

186. Use of Austrian Steamers Completed Since the Armistice.

Extracts from the minutes of the Meeting of the Allied Maritime Transport Executive held on 16th May (163) referring to a proposal made by the Italian Government that steamers under construction in ex-Austrian ports before the Armistice and completed by Italy should be treated as Italian ships, was submitted.

The Italian Delegates stated that this matter was being placed before the Council of Heads of States and it was, therefore, agreed that it was unnecessary for the Supreme Economic Council to consider it.

187. Work of the Shipping Section.

With reference to Minute 171 a further resolution from the Shipping Committee (164) regarding the discontinuance of the Shipping Committee in Paris was submitted and approved with the substitution for the present of Mr. Hipwood for Mr. Lodge as the Liaison Officer between the Transport Executive and the Council.

188. Trade Between Alsace and Unoccupied Germany.

With reference to Minute 151 the French Delegates stated that they were in a position to present the Council with a written report at the next Meeting.

189. Despatch of Supplies to Poland.

Notes from the Communications Section (165) and the Food Section (166) regarding the despatch through Dantzig of supplies other than foodstuffs required for relief and reconstruction purposes in Poland, were considered.

General Thwaites attended and suggested that as Article 16 of the Armistice Agreement concerns also military operations in the maintenance of order the matter should be reported to Marshal Foch and a telegram prepared for his approval before transmission to the German Government.

A draft telegram (167) was submitted by General Thwaites and it was agreed that the Director General of Relief and General Payot [Page 297] should agree upon the final form of the telegram to be despatched to Marshal Foch.

190. Health Conditions in Europe.

With reference to Minute 173 the Director General of Relief reported that the League of Red Cross Societies was now preparing a scheme in accordance with the decision of the Council and that the Military Authorities were being approached provisionally regarding the supply of the medical stores.

The question of affording assistance as regards medical supplies to Northern Russia, where the need is reported to be great, was considered and it was decided to request the League of Red Cross Societies to extend their scheme to include the old Russian Empire.

191. Financial Arrangements for Austrian Food Supplies.

A Memorandum from the Director General of Relief dated 24th May (168) was submitted, reporting on the position as regards Austrian Relief and the urgent necessity for a settlement regarding the proposed loan by the United States Treasury of 15,000,000 dollars to France for the purchase of food supplies from the United States and the sale on credit of foodstuffs to Austria.

The Director General of Relief stated that if this matter were not settled immediately the whole Austrian programme must break down. He pointed out that, under present conditions, and if the proposal that any further loadings of Austrian ships should be made on Italian account were carried into effect, wheat and wheat flour would have to be used instead of rye and rye products as was originally intended. This would be a serious drain upon the surplus of wheat and wheat flour available in the U. S. A. and might result in a deficiency on the Allied programme before the end of the Cereal Year.

The French Delegates stated that no effort had been spared by their Government to obtain a satisfactory decision regarding this matter and, having explained the difficulties which had arisen, they requested the Council to defer taking any decision for a week. They reported that the Austrian Government were reluctant to accept the proposals made regarding the securities to be assigned for food as no assets would be left for financing additional supplies until the harvest. They stated that they anticipated that, in the course of a few days an agreement with Austria would have been reached and the question of obtaining adequate securities for advances to Austria would thereby be simplified. They suggested therefore that the present instruction as regards loading of Austrian vessels should be allowed to stand.

In reply to an enquiry from the Director General of Relief as to whether these boats could be loaded with rye and rye flour and then ordered to France if no settlement were reached before their ports of [Page 298] discharge must be named the French Delegates undertook to give a reply in 24 hours.

With reference to the reluctance of the Austrian Government to pledge their securities the British Financial Delegates suggested that the Austrian Government might be informed that such securities as have been already named by the Allied and Associated Governments would only be claimed up to the value of the credits of 45 million dollars already established and that in the event of additional credits being arranged the unused portions of the same securities would be utilised.

It was agreed that in view of the statement made by the French Delegates the matter should be adjourned for further consideration at the next Meeting of the Council.

The Italian Delegates pointed out that in supplying foodstuffs for Austria up to the value of 23 million dollars the Italian Government had acted as mandatory for the other Allied and Associated Governments and requested that the Finance Section might be instructed to safeguard the Italian position in this respect.

The British Financial Delegate stated that this was already receiving consideration and that the necessary precautions would be taken.

Appendix 154

Note on the Organisation of Conferences and Communications on Current Economic Negotiations With the German Economic Delegation at Versailles

The German Economic Delegates at Versailles have, at the request of the Allied Governments, formed an Economic Section under the presidency of Dr. Melchior. There will be sub-committees for food, finance, raw materials and for questions relating to the occupied territories. The business of these Sections will be to deal with current economic negotiations arising under the armistice.
Under these circumstances it becomes necessary to establish a uniform system of communication with the newly formed Economic Section.
According to recommendation 8 (c) of the memorandum of the S.E.C. of 15th April3 on the organisation of economic relations with Germany accepted on the 21st April by the Council of Foreign Ministers,4 the Sub-Committee on Germany is charged with the duty of centralising all communications relating to current negotiations with Germany covered by the terms of the memorandum in question.
The following proposals are therefore put forward for the detailed organisation of such communications:—

I. Conferences.

Conferences at Versailles will be arranged, at not less than 24 hours’ notice, by the Inter-Allied Secretariat of the Sub-Committee, Room 117, 26, Rue de Bassano, Tele. No. Passy 1180, Exts. 111, 112, 113 which will keep in touch with the secretary of the German Economic Section through the medium of Col. Henry’s Mission at Versailles.
Conferences at Versailles will in all cases be reported in French and English, and copies of the minutes of each conference will be in the hands of the Secretariat at the latest by 24 hours after the time of the Conference.
The Secretariat of the Sub-Committee will be charged with the duty of:—
Referring to the Sub-Committee on Germany any points arising out of conferences at Versailles which can be dealt with within the policies laid down by the S.E.C. or by its separate sections, or any points concerning more than one section which require consideration by the Sub-Committee.
Circulating the minutes of conferences after they have been approved by allied delegates present at the conferences.
Drawing attention of any section of the S.E.C. concerned to any decision requiring action by it.
The Sub-Committee on Germany will be responsible for notifying, through the usual channels, the German Government, the Spa Armistice Commission, A.N.A.C. and any other body concerned, of decisions taken at conferences.

II. Written Communications.

No communication shall be made to the Germans without being authorised by the signatures of the delegates on the Sub-Committee.
Any delegate may on any occasion waive or depute his right of signature.
All written communications from the German Economic Delegation shall be sent under cover to the Secretariat, which will be responsible for forwarding them to the Section of the S. E. C. concerned.

Appendix 155

Note for the Supreme Economic Council [From the Sub-Committee on Germany]

1. The Sub-Committee on Germany draws the attention of the Supreme Economic Council to the fact that cases have come to its knowledge of action taken or contemplated by the German Government which is likely to prejudice the working of the Reparation and Economic clauses of the draft Treaty of Peace.

[Page 300]

2. In particular, the Sub-Committee on Germany refers to the following instances:—

(a) (see annex 1 attached.) Under Annex 6 to part 8 of the draft Peace Treaty, the Germans are to be required to place at the disposal of the Allied Governments such quantities and kinds of dyestuffs and chemical drugs as the Reparation Commission may designate not exceeding 50% of the total stock of each and every kind of dyestuffs and chemical drug in Germany or under German control at the date of the coming into force of the draft Treaty. The Sub-Committee on Germany points out to the Supreme Economic Council that its decision of May 13th (No. 158)5 regarding the interpretation to be placed on telegram No. C. I. P. A. 766/g.6 on the subject of the prohibition and pre-emption lists may permit the Germans seriously to prejudice the intention of the Peace Treaty. It has been found in practice that it is quite impossible to deal with all dyestuffs in accordance with the conditions laid down in the telegram referred to above in the time allowed. It is possible, therefore, that the Germans may even claim in respect of dyestuffs to export not only one-third, but the whole of their exportable surplus. In any case, it would be possible for the Germans, if the Peace Treaty is not signed for two or three months, to put in safe custody the greater part of their present stocks by taking full advantage of their privileges of export over land frontiers. On this point the Sub-Committee on Germany recommends to the Supreme Economic Council that the Germans should be informed that, whilst the Allies are prepared to allow the export of a reasonable quantity of dyestuffs per month during the period while the Peace Treaty is under discussion, they cannot permit the intentions of the Peace Treaty to be avoided by specially large exports. The Germans will, therefore, have to supply detailed figures of export in respect of dyestuffs and other articles included in the Reparation Clauses of the Peace Treaty, the Allied and Associated Governments reserving the right to prohibit such export whenever it appears that such export is prejudicing the intentions of the Peace Treaty.

(b) (see annex 2.) Article 298 of the draft Peace Treaty provides that Germany shall undertake

to restore and maintain the property rights and interests of the nationals of Allied or Associated powers in the legal position obtaining in the respective property rights and interests of German nationals under the laws in force before the war;
not to subject the property rights or interests of the nationals of Allied or Associated Powers to any measures in derogation of property rights which are not applied equally to the property rights and interests of German nationals, and to pay adequate compensation in the event of the application of these measures.

The Belgian delegate on the Sub-Committee on Germany points out that the German Government contemplates the nationalisation of the [Page 301] soda factories in Germany, and that 70% of the soda production of Germany is in the hands of Solvay & Co., the interest of which firm is almost entirely in Allied and Associated countries. He urges that the consequence of the nationalisation of German soda factories would be to deliver to the German competitors of Solvay & Co., the secrets of the industrial processes belonging to this firm and to the Belgian, British and American affiliated companies.

The Belgian delegate claims, therefore, that a nationalisation of German Soda Factories, to the exclusion of other German chemical factories, is contrary to the spirit of article 298 of the Treaty of Peace.

3. The Sub-Committee on Germany makes a general recommendation to the Supreme Economic Council that the Germans should be informed that no concession granted to them in economic matters between the time of the signature of the Armistice and of the Treaty of Peace permits them to take any action calculated to prejudice the intentions of the Treaty of Peace.

[Annex 1]

Memorandum [Regarding] Dyestuffs on the Left Bank of the Rhine


As the result of information collected from the competent authorities of the Ministry of Industrial Reconstruction, it appears that about 90% of the total production of dyestuffs is made on the left bank of the Rhine or in territories occupied by the Allies.

All the kinds of dyestuffs manufactured in unoccupied Germany are equally manufactured in the occupied territories.

The actual production of dyestuffs of the occupied German factories is negligible, these dyestuffs being under the blockade.

With regard to the value of dyestuff stock, this value is very variable, according as the pre-war price or the selling price to consumers, or the price which the Germans ask to Allied consumers is taken into consideration, e. g.:

Blue Methylated, pre-war price 4 the kilo.
Present price in Germany to German consumers 15 the kilo.
Price asked to French consumers 51.70 the kilo.

With a view to preventing the export of dyestuff products to neutral countries, which might have the effect of leaving the Associated powers at the moment of the signature of the Peace Treaty faced with stocks reduced to zero, it would seem that the following steps should be taken:—(1) the prohibition of the export of existing stocks of dyestuffs from the left bank of the Rhine, stocks not to be diminished [Page 302] on any pretext; (2) export permit to be given for the daily production of factories.

The existing stocks are at the moment on the left bank of the Rhine about 20,000 tons. Existing stocks on the right bank are probably not in excess of 1,000 tons, while the total capacity of all the factories on the left bank would seem to be about 8,000 tons.

The procedure indicated above is, moreover, the procedure adopted in the occupied territories by the Committee of Luxemburg and approved by the Commission for the Left Bank of the Rhine from the time of the creation of this Commission. It had the double advantage of keeping up stocks while preserving for factories their general activity and capacity for work.

[Annex 2]



We venture to call your attention to the latest information we have just collected from an absolutely reliable source on the nationalisation projects of the German Government. It is now certain that the German Government has undertaken the nationalisation of mining concessions and of all the potash industry in Germany, and wishing to assimilate soda to potash, the German State has resolved to nationalise in the same way the whole industry concerned with the manufacture of soda.

The identification of soda manufacture with the working of salts of potash can in no way be justified. Salts of potash are direct products of the mine, and are separated one from another by solution and evaporisation under certain special conditions, but without undergoing any chemical transformation. They are used almost entirely in agriculture.

Soda manufacture is a chemical process and necessitates the use of several different raw materials, salt provides the sodium, limestone the carbonic acid. These are the 2 chief components of the product. Coal distillation furnishes the ammoniac which is necessary to carry out the chemical reaction. All chemical industries occasion reactions between different materials extracted as a rule from the ground. There is no more reason for nationalising the soda industry than for nationalising any other chemical industry.

Soda is of no importance to agriculture but is utilised in many chemical industries.

Nevertheless the German Government appears to wish to nationalise only the soda industry. The motive of this procedure is doubt [Page 303] less that this industry is virtually under a single company and that the principal interest is foreign.

The danger to which we have called your attention above can be summed up as follows:—

The German Government wishes to dispossess the German soda industry but it seems that there is no question of applying to our Branch, the German Solvay Works, a treatment different to that applied to other German companies working the same industry. However we must seek by all means to prevent our processes, our secrets of manufacture, our industrial experience by which the whole world has benefited, through the medium of our factories in all countries, from falling into the hands of a Government whose economic system and whose abuse of power we know by past experience.

The other Governments, France, Great Britain, U. S. A., and Italy, have the same interest in securing that the soda industry, which is so prosperous in their countries, should not become in Germany a monopoly of the Government, and we are persuaded that they will support your action.

Solvay & Co.

Appendix 156

[Minute Passed at Tenth Meeting of the Raw Materials Section Relative to the] Purchase of Dyestuffs From Germany

The following Minute is recorded in the Records of the 10th Meeting of the Raw Materials Section:—

The French and Italian delegates stated that they required to purchase immediately further quantities of dyestuffs, in addition to allocations already made or to be made from the original amount of 50 tons.

It was understood that the French would apply for a total of 80 tons, the Italians for 70 tons, the Belgian allocation being 20 tons. It would be necessary, therefore, to authorise the purchase of approximately another 120 tons.

The American delegates stated that they had no objection to increasing the amount of dyestuffs for immediate purchase, more especially in view of the British Treasury’s decisions on Lord Moulton’s scheme.

M. Baruch was of opinion that the French and Italians should be allowed to proceed with the purchase unless Mr. Layton on further consideration saw any grounds for objection to the plan.

The actual negotiations should be entrusted to M. Froissard, in connection with the Luxembourg Committee.

The approval of the Supreme Economic Council to the proposed purchase is desired.

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Appendix 157

Extract From Minutes of 14th Meeting of the Finance Section Held on May 22nd, 1919

11. Relaxation of Financial Restrictions.

The second and third paragraphs of the resolution contained in Minute 9 of the 10th meeting of the Finance Section, subsequently approved by the Supreme Economic Council, read as follows:—

  • “2. That German owned cash balances and bills held in neutral countries be freely available in payment of imports.
  • “3. That the proceeds of exports from Germany be freely available in payment of all kinds of permitted imports.”

Mr. Keynes said that a misunderstanding had arisen regarding the agreement with the neutral financiers. The Finance Section had only intended to allow the payment of interest on loans which matured before August 15th, but M. Ter Meulen had understood that the permission covered the payment of interest on all loans. The additional amount involved might be estimated at perhaps £1,000,000. It was not possible at this stage to consider any extension of the arrangement already made and if the neutrals persisted in their interpretation it might be better to let the whole agreement fall to the ground. But at the same time it would perhaps be possible to relieve the situation by an explicit recognition of the fact, which in any event could not be prevented, that German balances in neutral countries and the proceeds of German exports can be used for the payment of interest as well as for imports.

Captain Jung said that he would prefer to leave things as they are. His recollection was that the Finance Section deliberately made this limitation though they knew that it could not be enforced, and the intention had been to prevent the neutrals from having an absolutely free hand. He would not formally object to the relaxation now proposed, but he thought that it would have serious consequences.

M. de Lasteyrie pointed out that the resolution in any event only covered the period of the Armistice.

Mr. Davis said that he thought the proposal should only cover interest accruing up to August 15th.

It was agreed that German owned cash balances and bills held in neutral countries, and the proceeds of exports from Germany to neutral countries shall be freely available for the payment of niterest accruing up to August 15th on credits granted to Germany.

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Appendix 158

The Chairman of the German Financial Commission to the Chairman of the Financial Section of the Supreme Economic Council

(Tg. No. F 381)

With reference to the session of day before yesterday I have the honor to make the following communication:

The German Government is ready to send 18 million pounds sterling to Amsterdam to the credit of the food account. With regard to the general situation, we assume that independently of any turn of military or political events—

this gold will remain reserved exclusively for its purpose—the importation of food into Germany;
also that the Brussels Convention, insofar as it deals with food for which gold has been provided, will be executed likewise for the unoccupied German territory.

I beg for a reply; for technical reasons the shipment of the gold cannot begin before the beginning of June. I request that the Allied and Associated delegates be informed of the preceding.

Max Warburg

Appendix 159

Note [From the Communications Section] for the Supreme Economic Council on the Navigation of the Rhine

The control of the navigation of the Rhine is at present undertaken by the Commission Inter-Alliée de Navigation de Campagne, with headquarters at Cologne, working under the orders of Marshal Foch. Under the régime envisaged by the Peace Treaty the navigation of the Rhine will be controlled by the International Rhine Commission.

The Communications Section therefore is of the opinion that the transitory régime to be adopted between the declaration of peace and the time when the International Rhine Commission will start to function should be studied so that a body will continue to exist capable of regulating the river to assure the best economic results to the countries it serves.

The Communications Section has decided therefore to bring this question to the notice of the Supreme Economic Council, at the same time putting before it the solution which the Communications Section itself envisaged with regard to this, and which, while hastening as much as possible the formation of the International Rhine Commission, would consist in keeping as a provisional executive body the existing Commission Inter-Alliée de Navigation de Campagne with such [Page 306] detailed modifications as might be necessary in its functions (and composition).

Appendix 160

Report [No. 1] of Enemy Tonnage Sub-Committee

1. Appendix I sets out the procedure laid down and the provisional loading programme of cereals approved by the Food Section of the Supreme Economic Council.

2. Appendix II sets out the detailed procedure governing the employment of Enemy tonnage which has been approved by the Freight Committee. Suitable forms of charter have been submitted to the Allied Maritime Transport Executive and it is anticipated that standard charters for the homeward voyage in each route, together with rates of freight applicable to the several voyages, will be agreed shortly.

3. Meanwhile all tonnage has been ordered to proceed to loading ports as it has become available.

Appendix III sets out the names and tonnage (dead weight) of the German vessels so ordered.

The totals are as follows:—

Appendix III a
N. America (consigned to U. S. Food Administration)
April May loading 291,530 tons
June 35,550
Canada (consigned to the Wheat Exports Co.) May 9,500
Ordered to Louisberg and not yet allocated May 42,500
Appendix III b
May 32,520
June 94,705
Appendix III c
French West Africa
May 15,500
June 7,600
Appendix III d—Australia June 79,800

4. N. America. As regards North America Mr. Barnes reported that he would be able to handle 300,000 tons of German shipping during May and tonnage to that amount will be available. The great bulk has, in accordance with his request, been sent to Hampton Boads for loading at Northern Range ports. The Wheat Commission will require 50,000 tons directed to the United Kingdom in replacement of May arrivals diverted to Germany and Poland.

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Plate. Cable advices from Rotterdam state that the Germans have purchased 100,000 tons of flour and anticipate that they will be able to arrange credits there. Further information has been asked for.

French West Africa. The French Commission have asked for tonnage to lift 60,000 tons of palm kernels sold to Germany and this is being arranged.

Australia. The tonnage has been offered to the Australian Wheat Committee to load on the understanding that the first call on the cargoes is given to Germany, second to relief, third to the Allies.

5. Appendix IV gives the tonnage provisionally ordered, in response to a request from the Food Section, to lift American Army Stores from France to Poland. Further information is awaited as to the ports and quantities and as to who will charter the vessels and pay the freights. Smaller German Vessels

It is anticipated that a considerable number of vessels of between 1,600 and 2,500 tons will be available shortly. It is proposed to utilise them in the first instance for the conveyance of potatoes from the U. K. to Hamburg.

6. Appendix V gives a list of the further tonnage amounting to 190,300 tons deadweight, which has been nominated by the A. M. T. E., but has not yet been ordered to loading ports. It is offered proposed to order the smaller vessels to the Plate and the larger to North America and Australia, the primary considerations being the position forecasted in N. America at the time when the boats require orders and the progress of German arrangements for credits in the Plate. The Wheat Exports Co. have been instructed to consult with Mr. Barnes and report as to whether Canada or the United States can handle further tonnage over and above that already arranged for May. Vessels not yet Ordered

7. Appendix VI gives the position and allocation of Austrian tonnage. Vessels have so far been allocated as follows:—

To Italy in replacement of 48,000 tons tonnage used in carrying supplies, afterwards delivered to German Austria:
Arrived to end April 9,169 tons
To arrived May/June 16,938
Leaving balance to be allocated 21,893
To Italy in exchange for three Australian cargoes diverted to German Austria 19,688
To German Austria May/June arrival 57,386
“ Roumania “ “ arrival 29,451
May loading U. S. A. 36,500
June/July loading 213,574
May/June Plate 33,100
May Australia 7,500

F. B. Elliot
[Page 308]

Appendix I

Provisioning of Germany and Direction of Enemy Tonnage

1. The attached statement shows how enemy tonnage should be programmed in order to secure that Germany shall receive to 1st September the ration agreed at Brussels. A similar programme should be drawn up for the supply of fats.

Any prompt German tonnage which cannot be fitted into North America or the Plate should be sent to Australia.

The amount of tonnage that can be directed to Europe from Canada and the United States is limited by the amount of wheat available. In Canada this quantity was estimated on 1st March at 1,760,000 tons, in U. S. A. at 4,000,000 tons. In the Argentine the limiting factor is the monthly maximum cereal port capacity, which for wheat may be put at 650,000 tons, assuming an export of 100,000 tons of maize and 50,000 tons of Oats.

The ships to load food will be nominated by the Allied Maritime Transport Executive to Captain Elliot, who will direct them in accordance with the programme laid down, in consultation with the representatives in London of the United States Food Administration and the French and Italian Commissions.

The Freight Committee sitting in London will have before them weekly the food requirements and arrivals of Germany, Relief and the Allies and this Committee will be responsible for utilising to the best advantage enemy tonnage nominated by the Allied Maritime Transport Executive giving priority in the above order and reporting regularly to the Food Section of the Supreme Economic Council.

All purchases made by Germany will be reported to Captain Elliot in order that the necessary tonnage may be provided by the Freight Committee.

Enemy tonnage to load in U. S. A. ports will be ordered to Hampton Roads or Sand Key consigned to the United States Food Administration. In order to prevent overlapping and delays, the Food Administration and the Wheat Export Company will co-operate closely in selecting cargoes and ports. Enemy tonnage to load in Canada will be consigned to the Wheat Export Company.

In the general interests of the Associated Governments and of Germany purchases of wheat by Germany in the Argentine with finance provided under the Brussels Agreement will be made through the Wheat Executive Agency in the Plate, certain firms hitherto excluded being allowed to compete in the business. In any case where Germany [Page 309] obtains direct credits in South America, the Wheat Executive Agency will be kept fully informed of business done.

It is suggested that the Allied Maritime Transport Executive should charter the ships to the Shippers and settle and collect freights to be credited to Germany, after debiting the cost of operation.

Australian sales to Germany will be made by the Wheat Commission on behalf of the Australian Government.


Statements Referred to in the Memorandum Dated 7th April, 1919, Approved at the Wheat Executive Meeting in Paris on the Provisioning of Germany and Direction of Enemy Tonnage

I. Suggested European Importation Programme for Arrival 1st April to 31st August, 1919

wheat & flour (as wheat) & rye

(Thousands of Metric Tons)

Prog, for Cereal year Re. to March 31 Balance
I. Allies
U. K. 5,500 2,950 2,550
France 3,025 1,300 1,725
Italy 2,925 1,200 1,725
Total U. K., Italy & France 11,450 5,450 6,000
Greece 45
Portugal 60
Belgium 500
[Total] 605
II. Recovered territories
Finland 100
Poland 200
Czecho-Slovakia 250
Greater Serbia 100
Roumania 150
Armenia & Turkey 50
Baltic States 50
Total recovered territories 900
III. Enemy countries
Austria 140
Hungary 25
Bulgaria 50
Germany 1,500
Total enemy countries 1,715
IV. Neutral countries
Holland 250
Denmark 50
Sweden 100
Norway 100
Switzerland 125
Total neutral countries 625
Grand total 9,885
[Page 310]

II. Source of Supplies of Wheat and Flour (as Wheat and Ryes) To Meet European Importation Programme

Thousands of Metric Tons

Reduced requirements for Europe 9,885
Exportable surplus March 1st 800
Wheat Exp. Stocks Canadian 685
” ” ” American 275
[Total] 1,760
U. S. A.
Exportable surplus March 1st
Wheat (115,000,000) bushels (including 450,000 tons Wheat Export Co.’s Stocks) 100
Rye 1 600
Allow for possible underestimates of U. S. A. Wheat Surplus 500
New Crop Wheat 300
[Total] 4,500
Total North America 6,260
Australia probable arrivals 700
[Grand Total] 6,960
Balance to be drawn from Argentine; to be filled by substitutes from U. S. A. or to be made good by economies as follows:— 2,925
(a) Wheat from Argentine 1,750
(b) Substitutes from U. S. A. 500
(c) To be made good by economies in Allied Countries or by reductions in Relief and Enemy Programmes 675

III. Suggested Shipment Programme by Exporting Countries

wheat and flour (as wheat) and rye for arrival april to august 1919

Thousands of Metric Tons

Shipments by months
Feb. Mar. Apr. May June July Aug. Total
Allies 100 100 200 250 650
Germany 50 50
Total Australia 100 100 200 300 700
Canada 11/4 mos. shipment
Allies 150 350 360 350 450 1,660
Neutrals 25 25 50
Germany 25 25 50
Total Canada 150 350 360 400 500 1,760
United States 1¼ mos. shipment
Allies 150 400 500 600 665 2,315
Relief (including Belgium) 350 300 300 300 150 1,400
Neutrals 50 50 50 50 75 275
Germany (Enemies) 200 250 60 510
[Total United States] 550 950 1,100 1,010 890 4,500
Plate ½ mo. shipment ½ mo. shipment
Allies 50 50 50 225 325 145 845
Neutrals 20 20 50 75 75 60 300
Germany 225 250 130 605
[Total Plate] 70 70 100 525 650 335 1,750
Substitutes from U. S. A. for enemy countries 155 155 190 500
To be made good by economies in Allied countries or by reduction in relief or enemy programmes 675
[Page 311]

Appendix II

Procedure Regulating the Employment of Enemy Tonnage

1. All tonnages will be nominated to the Allied Maritime Transport Executive, London, by the Shipping Authorities of the respective countries by which it is managed.

2. Vessels allocated to carry foodstuffs will be nominated by the A. M. T. E. to Captain Elliot,

3. Vessels will be allocated by Captain Elliot under the direction of the Freight Committee of the Supreme Economic Council (Food Section).

4. Such allocations will be notified by Capt. Elliot as follows:—

a. Vessels loading in U. S. A. to the United States Food Administration, London.
b. Canada to the Wheat Export Co’y.
c. Plate to Sir H. Gibson and in the case of firms selling to Germany to such firms.
e. French West Africa to the French Commission London.
f. Australia to Mr. Love and in cases where cargo is to be supplied by the Australian Government to the Australian Wheat Committee.

5. On allocation of vessels Charters on a standardized form, with appropriate freight and demurrage clauses agreed with the A. M. T. E. will be supplied for signature to shippers as set out in clause 4, except that in the case of (b), (c), and (f) the charters will be signed by the Wheat Commission as Charterers. In the case of British-managed ships the charters will be forwarded by Captain Elliot. In the case of French-managed ships by the French Commission.

6. Orders to ships prior to allocation will be given by Captain Elliot in the case of British-managed ships, and by the French Commission in the case of French-managed ships.

7. Subsequent orders will be given by charterers.

8. All enemy vessels will be chartered with a wide range of discharging port options and will be sent to suitable ports of call on the homeward voyage.

9. In the case of ships carrying cargo to Germany charterers will obtain information as to port of discharge required from their representative at Rotterdam to whom they will report shipments.

10. All shipments will be advised to Captain Elliot.

11. Captain Elliot will supply the A. M. T. E. with a weekly statement showing the position of all enemy tonnage on Food service.

[Page 312]

12. All money due under charters of British-managed vessels will be paid by the respective charterers to the managers in London.

13. The French Commission will be the agents in London of Managers of Enemy vessels under French management, and all money due under the charters of such vessels will be paid by the respective charterers to the French Commission in London.

14. In the case of Austrian vessels managed by the Italian Government, the above procedure applies only as regards Clauses (1), (2), (3), (4), (10), and (11). The Italian Commission will cable to Rome orders for loading and discharging ports, as agreed with Captain Elliot.

[Appendix] IIIa

Vessels to Load [in] North America

Allocated to United States Food Administration

April/May D. W. Tons
Weissenfels 11,250
Rudelsburg 9,160
Kronenfels 11,100
Kybfels 7,000
Falkenfels 11,200
Altenfels 9,850
Artemesia 8,110
Solfels 8,200
Burmuda 10,200
Gertrud 7,750
Gallipoli 6,000
Franziska 7,250
Santa Cruz 8,750
Hornfels 5,700
Grieffenfels 8,150
Oundomar 15,000
Augsburg 10,000
Lippe 9,900
Wolfram 8,800
Naimes 7,850
Ehrenfels 6,675
Waldenburg 8,775
Erfurt 9,000
Dessau 9,900
Isis 10,800
Gerfrid 8,800
Elbing 7,870
Hanau 7,110
*Kagera 9,080
*Therese Horn 7,400
*Slavonia 6,800
*Plitvice 6,200
Wartburg 6,400
[Total] 291,530
June (After delivery of coal cargo in Italy)
Crostafels 7,000
Aschenburg 9,150
Somenfels 8,150
Schwarzenfels 11,250
[Total] 35,550
[Grand Total] 327,080

*Steamers under French Management.

Allocated to Wheat Commission

D. W. Tons
April–Burgomeister Schröder 9,500

The following vessels have been sent to Louisberg for orders and have not yet been allocated:

May D. W. Tons
Totmes 8,000
Atto 8,000
Tasmania 8,000
Matsuria 5,900
*Kribi 6,000
Arabia 6,000
[Total] 42,500

*Steamers under French Management.

[Page 313]
[Appendix] IIIb

Vessels to Load in the Plate

May D. W. Tons
Itayahy 6,660
Louise Horn 5,580
Wotan 8,600
Elbe 5,500
Bosporus 6,280
[Total] 32,500
Oehringen 5,100
Karl Lambardt 4,700
Sausenburg 4,500
Sofia 5,000
Derindje 4,400
Rhenania 5,850
Plauen 6,300
Eichfelde 6,000
Olympos 5,130
Irmgard 5,950
*Malaga 4,960
Pionier 4,865
Erika 4,150
Sieglinda 4,500
(After delivery of coal cargo in Italy)
Pera 6,000
Alster 5,500
Horncap 5,200
Germanicus 6,000
Gudron 5,850
Aronsburg 5,800
Normania 4,950
[Total] 94,705
[Grand Total] 127,225

*Steamer under French Management.

[Appendix] IIIc

Vessels to Load in West Africa

Allocated to French Commission

May D. W. Tons
Borussia 4,000
Hornsee 4,000
Austria 3,500
Alma 4,000
[Total] 15,500
Regina 4,000
Uhlenhorst 3,600
[Total] 7,600
[Grand Total] 23,100
[Appendix] IIId

Vessels to Load in Australia

June (After delivery of coal cargo to Italy) D. W. Tons
Gera 9,000
Fürst Bülow 11,150
Heilbrunn 10,100
Treuenfels 10,100
(Troops outwards)
Helouan 10,850
Roda 10,900
Giessen 10,500
Cordoba 7,300
[Total] 79,800
[Page 314]
[Appendix] IV

Vessels Provisionally Ordered To Lift American Army Stores From France to Poland

May/June D. W. Tons
Antwerpen 3,240
Hamburg 3,650
Atta 4,200
Spezia 3,300
Roma 4,000
Schwinge 4,000
Karpathos 4,000
Anni 4,000
[Total] 30,390
[Appendix] V

Vessels Nominated by the A. M. T. E. but not Ordered to Loading Ports

A. Under British Management D. W. Tons
Pyrgos 5,300
Steigervald 7,200
[Total] 12,500
B. Under French Management

(Delivered or Arrived in Downs for Delivery)

Name of Ship Est. D. W.
*Altenburg 10,100
Altmark 7,400
Aragonia 7,000
Belgravia 9,000
Bisgravia 9,600
*Burgemeister Von Melle 6,500
Christian Horn 3,900
Freida Horn 4,000
*Genua 4,000
Hollandia 4,600
*Java 10,900
Mannheim 8,800
Meiningen 9,800
Nordmerk 8,100
Procida 4,200
*Raimund 9,700
Romscheid 10,100
*Randsburg 7,200
*Rovuma 8,200
Secundus 7,100
Wachtfels 7,300
Waldeck 8,800
Varrega 5,400
Warundl 5,100
[Total] 176,800

*Under orders to take coal cargo to Italy.

[Appendix] VIa

Austrian Tonnage Arrived at Discharging Ports From North America

Allocated to Italy

Sirena Philadelphia 8/3 Beri 8/4 3,045
918 C. M.
Fiume 25/3 Siracusa 19/4 3,896
President Wilson New York 5/4 Genoa 22/4 1,310 C. M.
[Total] 9,169
[Page 315]
[Appendix] VIb

Austrian Vessels on Passage


Allocated to Italy

Argentina New York 10/4 Geona 30/4 551 Flour.
73 C. M.
632 Beans.
Dalmatia “ “ 31/3 Trpani 28/4 2,801
*Corsinia Philadelphia 6/4 Gib. f. o. 4/5 2,801
*Iris Baltimore 10/4 “ “ 8/5 8,433
*Magyarorszag Philadelphia Trieste 4,701
Francesca New York 17/4 Naples 15/5 1,333
511 Flour.
Vendobono Portland 3/4 Gib. f. o. 1/5 4,567
[Total] 28,311

*In exchange for Australian cargoes diverted to German Austria.

Allocated to German Austria

Africana Galveston 18/4 Trieste 25/5 4,689
Perseveranza Jacksonville 14/4 Trieste 21/5 4,712 Flour.
Hungaria Portland 8/4 Trieste 6/5 4,285
[Total] 13,686

Allocated to Roumania

Gerania Portland 23/4 Constaza 5,717
1,233 F.
Baron Edmund Vay “ “ 24/4 “ “ 3,668
335 F.
Ablrtea “ “ 30/4 “ “ 4,360
1,938 F.
[Total] 17,251


Allocated to Italy

Filippo Wallaroo 21/4 P. Said f. o 8,315
[Appendix] VIc

Austrian Vessels Loading


For Italy D.W. Tons
Carolina 4,800
For German Austria
Laguna 8,000
Maria Immacolata 5,800
Adrlatico 5,200
Szenterenzi 5,000
Dubac 3,800
Mrav 5,000
Trieste 7,000
Fiume 3,900
[Total] 43,700
For Roumania
Burmah 7,500
Principessa Christiania 3,700
[Total] 11,200
[Page 316]


H. R. f. o. D. W. Tons
Szent Istvan 4,000
Caterina Geroluinich 8,000
Kossuth Ferencz 6,500
Bosanka 5,400
Lapad 3,500
Graf Tisxa Istwar 3,600
Kossuth 5,500
[Total] 36,500
[Appendix] VId

Austrian Vessels Unallocated (June Loading).


D. W. Tons
Dardania H. R. f. o. June 4,700
Contessa Adelina 4,700
Atlántico 4,500
Emlila New York 5,000
Marinne 5,400
Sofia Hohenberg H. R. f. o. 5,000
Iskra 6,500
Istinia 5,000
Aug,Foherczegno 7,700
Gerty 6,688
Grof. Hedervary 7,700
Columbia 5,000
Erdely 7,700
Izvor 5,600
Protes 5,000
Innsbruck 5,000
Nippon 5,000
Maria 5,386
Arcadia 7,000
Leopoldina 6,000
Radium 4,500
Immacolata 5,500
Srgj 5,000
Abbazia 3,500
Gastein 4,500
Graz 3,500
Baltico 5,000
Karlsbad 3,500
Leopoldis 3,000
Jadera 6,000
Mirza Blauburg 5,000
Persia 5,000
Giulia 5,000
Meran 3,500
Giorgia 8,000
Palacky 4,000
Praga 6,000
Baron Fejervary 5,000
Cleopatra 4,400
Marie Valerie 4,400
Ellernia 7,300
[Total] 213,574


D. W. Tons
Bucovina May–June 3,500
Carinthia 3,000
Melpomere 7,000
Carnlolia 3,000
Sirena 3,900
Baron Call 3,500
Barone Kemeny 3,200
Jokal 6,000
[Total] 33,100


D. W. Tons
Terreno May 7,500
[Page 317]

Appendix 161

Resolution From the Food Section Regarding the Use of Enemy Tonnage

At the 14th meeting of the Food Section it was pointed out that there would in all probability shortly be a considerable quantity of German tonnage in excess of that required for the transport of the foodstuffs which Germany has been able to finance, and this tonnage should, in accordance with the decisions of the Supreme Economic Council, be used for the transport of general relief supplies.

It appears that the Allied Maritime Transport Executive are proposing that, whereas the freights charged in the case of vessels carrying foodstuffs to Germany are based on Blue-Book Rates, the freights to be charged for all other purposes should be based on Allied Limitation Rates or Commercial rates, whichever are the lower.

The following resolution regarding this matter was passed by the Food Section for consideration by the Supreme Economic Council:

“That endeavour should be made to use surplus enemy tonnage for general relief in preference to other tonnage, with a view to increasing the funds available for relief and that the freight rates to be charged for this tonnage should be the same as those charged for vessels carrying foodstuffs to Germany.”

Appendix 162

Extracts From Minutes of the Transport Executive (16th May, 1919), Regarding the Allocation for Management of Enemy Ships in Mexico, Central and South American Ports to Great Britain

Telegrams were read between the United States Mission in Great Britain and the Shipping Board in the United States suggesting that the enemy vessels in Mexico, Central and South America, should be allocated to Great Britain for management.

The telegrams were as follows:

To Washington

13th May, 1919.

435. In view of fact that great majority of damaged German ships now in South American ports will probably be assigned to Great Britain in peace terms the Allied Maritime Transport Executive is considering allocating vessels in Mexican, Central American and South American ports to Great Britain to be placed in service pending decision of ultimate disposition of these ships. This would cancel obligation imposed on US several months ago to place all vessels in ports in service.

British feeling is that Great Britain can place vessels in service quicker than United States, and this is based on inability of United States to put any vessels in service so far. Please expedite reply as [Page 318] to whether there is any objection to this procedure. Answer requested by 15th May for next meeting. Knapp.

From Washington


16 May, 1919.

Boards Navy 907 Admiral Knapp from Stevens. Your 435. German ships in Mexico, Central and South American ports. This cable not received until 15th. Shipping Board and Department of State have no objection to the procedure outlined in your cable for allocating these vessels to Great Britain to be placed in service pending decision as to ultimate disposition of these ships. We approve this plan. American representatives in these countries have negotiated for the release of these vessels but we have not actually taken possession of any of (them) yet, because we have not yet secured definite information as to conditions of the ships, and the amount of money required to pay off due the liens and …7 Please inform us at once if this procedure is approved by the Supreme Economic Council in Paris so we may notify American representatives in Central and South America. Opnav.

The Executive decided to recommend to the Supreme Economic Council that this re-allocation should take place. Secretary

Appendix 163

Extract From the Minutes of the Transport Executive (16 May 1919) [Regarding the Disposal of the Steamers Under Construction in Ex-Austrian Ports]

Austrian Steamers Building.

With reference to the question of the vessels under construction in ex-Austrian ports at the time of the Italian occupation, and which were subsequently completed and put into service by the Italian authorities, such as the Pilsna, Innsbruck, Cracovia, Ombla and others, still in the course of completion, I am instructed to advise the A. M. T. E. that the Italian Government does not agree that the same principle applying for German ships should apply for the Austrian.

The latter were building in the Austrian ports when same were occupied by the Italian Army before the Armistice, and were completed as mentioned above by the Italians—such vessels, being, therefore, in effect seized by force of arms, must be considered as Italian property and must be treated as Italian ships, and as same do not fall in the pool, as the pool only contemplates enemy ships. The Italian authorities will agree to place these ships in the food service when possible, but on the understanding that they are not pool boats.

[Page 319]

The Allied Maritime Transport Executive did not feel able to come to a decision on this point, and therefore submit the same for the instructions of the Supreme Economic Council.

Appendix 164

[Resolution From the Shipping Committee Regarding] Work and Organization of Shipping Section

A recommendation that the Shipping Committee should be abolished was referred back by the Supreme Economic Council (Min. 171, 19th meeting) to the Shipping Committee.

The following resolution was unanimously agreed by the Shipping Committee on the 23rd May:

That a recommendation be made to the Supreme Economic Council that the Shipping Section or Shipping Committee of the Council discontinue as a committee of the Council: that the Allied Maritime Transport Executive be constituted as a committee of the Supreme Economic Council to sit in London, and that a representative of Belgium be added to such committee: that this committee should report to and be under the control of the Supreme Economic Council and that under such control it should deal with all shipping questions growing out of the interallied use of ships: and with a further recommendation that the Supreme Economic Council request the British representatives to appoint Mr. T. Lodge to act as liaison officer between the Transport Executive and the Supreme Economic Council, and that he be stationed in Paris.

Appendix 165

Extracts From the Minutes of 21st Meeting of the Communications Section Held May 21 Regarding Despatch of Railway Material to Poland Via Dantzig

3a. It was decided that the Communications Section should request the S. E. C. to insist that the Germans should allow railway material and commercial shipments to pass through Dantzig to Poland.

Appendix 166

[Note From the Food Section Regarding] Detention by German Government of Supplies for Poland

Draft Telegram to German Armistice Commission

The German Government recently detained a number of cars carrying Red Cross supplies from Dantzig to Poland but have now given instructions for them to proceed to their destination.

[Page 320]

The Germans have, however, asked for a guarantee that only foodstuffs and Red Cross stores would be transported to Poland through Dantzig.

This request was considered by the Food Section at their 14th meeting in conjunction with Article 16 of the Armistice Agreement which reads as follows:—

“The Allies shall have free access to the territories evacuated by the Germans on their Eastern frontier either through Dantzig or by the Vistula in order to convey supplies to the populations of those territories and for the purpose of maintaining order.”

As this agreement obviously was not intended to apply only to foodstuffs it is proposed that the following telegram should be despatched to the Allied Armistice Commission at Spa:—

“Article 16 of the Armistice places no restriction on the character of the supplies which can be conveyed to the populations of the territories evacuated by the Germans on their eastern front, or for supplies necessary for the purpose of maintaining order, and in the view of the Supreme Economic Council it would therefore be impossible and highly inadvisable to give a guarantee to the German Government that only food supplies and Red Cross Stores are to be transported to Poland via Dantzig. It is almost certain to be necessary to import for relief purposes raw materials, clothing and railway repair material. In our view the Germans should merely be informed that they must conform with the letter and the spirit of Article 16.”

Appendix 1678

Draft Telegram Regarding the Despatch From Danzig of Supplies Destined for Poland

Reference paragraph 14 of your despatch No. 180 of the 16th May. No answer need be returned to question raised by Germans with regard to despatch of war material via Danzig which is irrelevant. You should merely demand passage for any trucks certified by Allied representatives as containing supplies, stores or material intended for relief purposes. Such a certificate would not, of course, be given for arms or munitions of war.

[Page 321]

Appendix 168

Memorandum From Director-General of Belief [Regarding Financial Arrangements for Austrian Food Supplies]

At a meeting of Food representatives to consider the position of Austrian relief, it was decided that the Supreme Economic Council should be asked to reconsider the entire situation. Up to the present moment, supplies and their costs, as shown by the annexed memorandum, have been sent into Austria from all quarters.

It will be recalled that the finance of Austrian relief has been arranged on the basis that the United States Treasury would provide a loan of $30,000,000 as to $10,000,000 each to England, France, and Italy, for the purchase of food supplies from the United States. The three Allies were to in turn sell on credits to Austria, as might be arranged. Subsequently this was increased to $45,000,000 by an increase of $5,000,000 to each Government. Upon the faith that these arrangements had been accepted by all of the Governments, the relief has so far proceeded and the sums shown in the table represent expenditures incurred.

The French representatives inform me that they have not so far secured the approval of the Chamber to the necessary appropriation for the Austrian loan corresponding to the American Treasury advances, but upon agreement with the French representatives, confirmed at meeting of the Supreme Economic Council on April 14th,9 approximately 60,000 tons of cereals have been loaded at the Atlantic seaboard by the Wheat Executive for French account, and are now either arrived or en route.

I understand that the French authorities have given directions that any further loadings of Austrian ships for French account should be diverted to France. It was agreed, however, by the Italian representatives, that in view of the fact that finance for freights has already been provided for by Italy, that this should be altered to a direction to the Wheat Executive that further loadings of Austrian ships should be made for Italian account, so that if there is a failure in finance for German-Austria, the cargoes will be available for Italy. By this means there would be no interruption in the loading and, on the other hand, unless the French appropriation can be completed, the whole food supply to Austria will collapse within the next twenty days.

[Page 322]

I am informed that the outstanding difficulty with the French Government is the matter of obtaining adequate securities for advances to Austria. I am also informed that the question of obtaining adequate security has been taken up with the Austrians by the Finance Section. At a meeting held on May 21st, the former seemed willing to assign any form of security the Finance Section might intimate to them. Accordingly, on May 22nd, the Finance Section drew up a paper for signature by the Austrian Government, undertaking to assign as security for the food, if called on to do so, any or all of the following:

Gold and silver, including objects of gold and silver as well as coin, now in the hands of the Austrian Government or obtainable by requisition.
Foreign securities similarly obtainable.
The salt mines of Austria.
The State forests of Austria and also the proceeds of all exports of timber, including those effected by private persons.
The buildings and real estate of all Austrian towns exceeding 50,000 inhabitants.
All public utility enterprises in Austria.
All future revenues of the Austrian Government of whatever description.

It would hardly be possible to go further than the above and there is no other asset, except the Austrian ships which are already in the hands of the Allies. This last item presents special difficulties, but should not be overlooked inasmuch as it represents the only asset available for immediate realization independent of the future of Austria.

It has already been laid down that the cost of food supplies to Austria should take precedence over all reparation payments to be demanded of her.

The only obstacle to the provisioning of Austria up to $45,000,000 lies therefore with the French Government.

I should like to point out that the expenditure on food relief in Europe by the American, British and Italian Governments, outside of any recoveries of liquid assets, will, since the Armistice to the end of May, exceed the sum of $400,000,000, and that so far as I am aware the French Government has so far not found itself able to take any participation in this burden except for the small sums expended on Russian prisoners. The technical situation surrounding Austria seems to make the matter entirely hopeless unless we can have support by the French Government, accepting the loan from the United States Treasury for this purpose.

In view of the urgency of securing a settlement to the Austrian question, I do urgently recommend to the Supreme Economic Council that [Page 323] the situation be either settled at once or brought to the notice of the Council of the Heads of States, as will enable the acceptance by all parties of the plan.

Herbert Hoover

Director-General of Relief

Food Delivered to Austria

The following represents the approximate amounts paid for American food by the different Governments, from January 1st to May 19th:

United Kingdom $8,000,000
Italy 23,000,000

These estimates do not include transportation paid by France, Italy or the United Kingdom.

In addition to the above, about $2,500,000 has been supplied from the United States by charity and exchange and about $13,000,000 supplied from surrounding areas through trading by Austria itself.

The available balances upon the $15,000,000 basis would be:

United Kingdom $7,000,000
France 15,000,000
Total $22,000,000

This will perhaps furnish them a meagre ration until mid-July, leaving a lacuna of about a month until harvest. If peace is made soon the Austrians should be able to find a month’s supply by some device. The harvest will be sufficient for about four or five months.

  1. See CF–23, minute 1, vol. v, p. 813.
  2. Ante, pp. 206, 207.
  3. See FM–7, minute 2, vol. iv, p. 599.
  4. Minute 158, p. 262.
  5. Telegram of March 24, appendix 37, p. 89.
  6. Omission indicated in the original.
  7. Appendix 167 is filed separately under Paris Peace Conf. 180.0501/34.
  8. See minute 90 (1a), p. 158.