Paris Peace Conf. 180.0501/22
Supreme Economic Council: Twenty-second Meeting Held at the Ministry
of Commerce [on 10th June, 1919, at 3:30 p.m.]
June 10, 1919, 10 a.m.
The Supreme Economic Council held its Twenty-second Meeting on Tuesday
10th June 1919, at 3:30 p.m. under the Chairmanship of Lord Robert
Cecil.
The Associated Governments were represented as follows:—
|
United Kingdom
|
Sir Hubert Llewellyn Smith |
|
Mr. Wise |
|
Sir Wm. Mitchell Thomson |
|
Mr. Barrie |
|
United States
|
Mr. Hoover |
|
Mr. McCormick |
|
Mr. Norman Davis |
|
Mr. Baruch |
|
Mr. Gordon |
|
France
|
M. Clémentel |
|
M. Claveille |
|
M. Vilgrain |
|
M. Seydoux |
|
Italy
|
Signor Crespi |
|
Commendatore Attolico |
|
Comm. Ferraris |
|
Captain Lazzerini |
|
Belgium
|
M. Jaspar |
|
M. de Cartier de Marchienne |
|
Lieut. Col. Theunis |
202.
The Minutes of the Twenty-First Meeting were approved.
203. Restriction of Trade With Hungary
and Bolshevik Russia.
With reference to Minute 196 it was reported that a memorandum agreed by
all the Delegates of the Allied and Associated Governments on the
Blockade Section had been prepared and submitted to the Council of Heads
of States.1
204. Italian Coal Position.
A letter from the Italian Delegates dated 4th June (182) reporting upon
the situation of Italy as regards coal supplies, at present and during
the period following on peace, was submitted.
[Page 345]
The Italian Delegates drew particular attention to the terms of the
reparation clauses of the Peace Treaty as regards coal from Germany
which, as agreed by the Council of Three, gives priority to the delivery
of coal to replace that from destroyed mines.
This would mean that, if the German output should prove sufficient only
to cover the coal required for replacement, Italy would receive none
during the period when it would be of the most use to her.
They stated, further, that on behalf of the Italian Government the
fullest reserves had been made on this and all other points in the Peace
Treaty which had been changed during the absence of the Italian
Representatives from the Conference.
It was agreed:—
- (a)
- that it was of the greatest importance that the supply of coal
to Italy should be facilitated to the utmost;
- (b)
- to recommend that the French and Italian Governments should
confer as soon as possible with a view to coming to some
arrangement for safeguarding the Italian interests in the above
respect.
205. Reported Violation of Blockade of
Hungary.
The Chairman referred to reports received by the British Delegates of the
passage of commodities from the Adriatic to Hungarian Bolsheviks in
contravention of the Blockade restrictions on Hungary and requested that
these reports might be carefully examined.
The Italian Delegates stated that they had no information regarding the
matter but they undertook to make enquiries and report to the Council as
soon as possible.
206. Transfer of Shares of Austrian
Shipping Companies.
A letter from the Allied Maritime Transport Executive dated 31st May
(183) was read, reporting that certain Italian interests have acquired
shares and holdings in large Austrian and Hungarian Shipping Companies
contrary to the resolutions of the Allied Maritime Transport
Council.
The Italian Delegates stated that the communiqué regarding the use and
management of enemy ships referred to in the above letter had been
published in Italy and that they understood that the shares which
Italian interests had acquired related to shipyards rather than actual
shipping and had been purchased at the risk of the buyers.
They agreed, however to make enquiries and report to the Council as soon
as possible.
207. Work and Organisation of the
Council.
With reference to Minute 201 the following documents were submitted:—
- (a)
- A memorandum from the Director General of Relief dated 10th
June (184) reporting on further steps taken as regards the
liquidation [Page 346] of
Inter-Allied Food Control, the continuation of the United States
Relief Measures and the measures being taken for child
welfare.
- (b)
- Resolutions from the British Delegates (185) regarding the
future of the Council.
The Chairman reported that the Sub-Committee appointed by the Council at
the last Meeting to consider the future organisation of the Council had
met but had not yet been able to prepare an agreed report.
The American Delegates pointed out that the Supreme Economic Council had
been created to deal with matters arising during the armistice, and
transitory measures, and that most of these problems, such as these
dealing with blockade, relief and foodstuffs until the next harvest, had
already been solved.
Because of the fact that the present personnel of the American Delegation
are purely war officials of the Government and all retire from Office at
the signing of Peace, the American Delegates feel that they are not in a
position to bind their Government to the suggested continuation of this
Council, as outlined in the proposed resolution. They continued that,
while the United States not only took a sympathetic interest in the
position of Europe, but would bear her share in the various economic
measures necessary for the restoration of free and normal commercial
life, the present Delegation were not authorised to accept definite
proposals because the Government Departments and the Public Agencies
that would have to entertain these matters subsequent to Peace would no
doubt wish to set up organisations corresponding to their own views on
this question and that at this date it was impossible to determine what
these Agencies would be or their authority.
They further suggested that the Sub-Committee should reconsider the
matter and prepare a report for consideration by the Council at a
subsequent Meeting.
The French, Italian and Belgian Delegates supported the view expressed in
the resolutions proposed by the British Delegates.
After some further discussion the following resolutions were adopted:—
- 1.
- In view of the changing economic world conditions and the
importance of re-establishing as soon and as completely as
possible the economic life and energy of Europe, the Council
directs the Committee on Policy appointed at the last meeting to
report within a fortnight what changes in the Constitution,
Powers and Objects of the Council are desirable. Until one week
after the receipt of that Report the Council should continue as
at present.
- 2.
- This report should be communicated to the Council of Four for
their action.
[Page 347]
It was further agreed that each Delegation should also prepare a report
setting forth their views as to the constitution, scope and activities
of the Council after Peace.
208. Finance of German Coal Supplied
to France.
An extract from the Minutes of the 16th Meeting of the Finance Section
held on 5th June (186) reporting that a request received from the German
Finance Commission to the effect that a Centralised Accounting Bureau
might be established at Rotterdam had been refused, was submitted and
approved.
With reference to Minute 200 the following verbal report was made by the
French Delegates:—
- (i)
- that the price fixed by arbitration for coal and coke
purchased by France from Germany namely—35 francs per ton for
coal and 45 francs per ton for coal [coke?], had been accepted by the French
Government.
- (ii)
- that the French Ministry of Finance had agreed that the German
food account
- (a)
- should be credited with the total value of all the
coal received by France from Germany, whether from the
Ruhr or Saar Coalfields, since the date of the
Armistice.
- (b)
- should be debited with the value of all food supplies
delivered by the French Food Administration at
Rotterdam, or supplied to the Left-Bank of the Rhine or
the Saar Basin.
- (c)
- should further be debited with the loss incurred by
the French Government in operating German
vessels.
- (iii)
- that it was estimated that after an adjustment of these
accounts up to 31st May the German Government would still owe to
France approximately, 1,100,000 francs.
The American Financial Delegate stated that the German Financial
Delegates at Versailles were pressing for an adjustment of outstanding
accounts and enquired whether the information given by the French
Delegates could be introduced at the Meeting with the German Financial
Delegates to be held on the 11th June.
It was agreed that unless the French Delegates made a statement to the
contrary before 10 p.m. the information given verbally as recorded above
should be considered as final.
Enquiry was also made as to whether the French Government had agreed that
the profit on any German coal sold by France to Neutral Countries should
also be credited to the German food account as this had been an
essential factor in the American arbitration as regards price.
The French Delegates undertook that a reply should be given before the
meeting with the German Financial Delegates.
[Page 348]
209. Finance of Austrian Food
Supplies.
(a) With reference to Minute 193 the French
Delegates reported that the French Budget Committee had withdrawn their
objection to the establishment of a revolving fund, the balance of which
is to be kept below one hundred million francs, for the financing of
relief supplies to Europe, including Austria.
It was agreed that the 160,000 tons of ex-Austrian tonnage available for
transport of supplies from North American ports for Austrian relief
should be loaded for French account, within the limits of the finance
referred to in the first paragraph of Minute 191.
The Italian Delegates referred to the fact that the value of the
foodstuffs supplied by the Italian Government acting as a mandatory for
England and France exceeded by $8,000,000 the value of the loan made to
Italy.
It was agreed that the Italian position as regards this matter should be
referred to the Committee of the Directors of Relief, in consultation
with the Financial Delegates, for detailed consideration and final
adjustment.
210. Navigation on the
Danube.
A telegram from Admiral Troubridge to the Communications Section dated
28th May (187) was submitted, reporting that the only obstacle to the
complete and immediate use of the Danube and its existing transport
equipment for the distribution of relief and commerce on the river is
the closure of the river by the authorities in control at Budapest.
It was agreed that there was no action which the Council could take
regarding this matter, for the present.
211. Allied Economic Policy in
Connection With the Rhineland Republic.
Note from the Sub-Committee on Germany for the Council of Heads of States
dated 3rd June (188) regarding the economic problems which would arise
if an independent Rhineland Republic were set up, was submitted for the
information of the Council.
It was noted that no reply had yet been received from the Council of
Heads of States.
212. Allied Economic Policy in
Russia.
A Memorandum from the British Delegates dated 3rd June (189) and a Note
from the American Delegates dated 10th June (190) regarding the economic
policy to be adopted as regards Russia in the event of the
re-establishment of a stable Government, were submitted.
It was agreed that the Sections of the Supreme Economic Council should be
asked to consider to what extent they would be affected in the event of
a decision to include Russia in the sphere of operations of the Supreme
Economic Council as and when that country becomes [Page 349] available, and to submit preliminary
reports giving an outline of the measures they would propose, including
a rough estimate of the cost.
213. German Imports of Raw
Materials.
Extracts from the Minutes of the Meeting of the Raw Materials Section
held on 7th June (191) recommending that the importation of Raw
Materials into Germany should be permitted in so far as they can be
financed on credits of not less than one year’s term, were
submitted.
It was noted:—
- (a)
- that this matter had previously been placed before the
Blockade Section in the form of a draft resolution (192) but
that it had been decided to defer action upon it.
- (b)
- that the German Government had so far made no effort to avail
themselves of the concession granted by the Council whereby they
were at liberty to take delivery of such stocks of raw materials
as were held for their account in Neutral Countries and which
had been bought and paid for prior to 7th May. (See Minute 152
of S. E. C.)
It was agreed that, in view of the information given above, the Council
should take no action regarding the proposal put forward by the Raw
Materials Section.
Appendix 182
[Letter From the Italian Delegate
to] the Rt. Hon. Lord Robert Cecil,
Chairman, Supreme Economic Council, Paris
Dear Sir: The war has shown what a grave
economic and political peril it is for Italy to be entirely
tributary to abroad for her coal supplies.
I feel it therefore incumbent upon me at this stage of our
international co-operation, as Italian representative on the
Economic Council, to put before you, and through you to the Council,
in a comprehensive form, the situation of Italy as regards coal
supplies, with respect also to the period following on Peace.
I. The privations and torments to which Italy was exposed throughout
the war owing to shortage of coal constitutes one of the noblest
forms of national sacrifice, and one of Italy’s finest
contributions—though a silent one—to Victory.
Italy is a country in which the use of coal is not widely diffused.
In order to reduce the consumption thereof she was thus compelled to
restrict not so much its non-essential uses, as those of primary
necessity. Italy went short of coal for her trenches; her hospitals
were [Page 350] often left entirely
unheated. At a time when the closing of the Adriatic required her to
redouble her transports by rail, Italy cut these down by nearly
one-half. In this manner national consumption—including that of
food—was compressed even beyond the limits which the alarming fall
in imports imposed. The peoples’ sufferings were consequently much
severer here than elsewhere, and the cost of living rose in a manner
unparalleled in any Allied country. National industries, no less
than the people, have all along been living from hand to mouth, in a
state of continuous uncertainty and apprehensive of the morrow—often
in a state of complete paralysis. The consequences of all this on
commerce and exchange are too well known to require any
emphasis.
II. Italy’s hardships have shown no signs of abatement with the
cessation of hostilities. Indeed, whereas national requirements,
following on the Armistice, were augmented by the liberation of
invaded provinces and the addition of new territories, and Italian
imports ought consequently to have been proportionately increased,
these have, on the contrary, fallen since that date to an incredibly
low figure. The following data may be worthy of consideration:
|
Tons
|
| Minimum agreed monthly requirements during
the war*
|
600,000 |
| Minimum agreed monthly requirements during
the Armistice peroid†
|
800,000 |
| Pre-war monthly importation |
900,000 |
| Minimum monthly requirement after Peace‡
|
1,000,000 |
| Importation |
per month |
during |
1915 |
697,000 |
| “ |
“ |
“ |
1916 |
697,000 |
| “ |
“ |
“ |
1917 |
440,000 |
| “ |
“ |
“ |
1918 |
567,000 |
| “ |
“ January |
|
1919 |
426,191 |
| “ |
“ February |
|
“ |
518,989 |
| “ |
“ March |
|
“ |
413,432 |
| “ |
“ April |
|
“ |
448,000 |
| “ |
“ May |
|
“ |
612,000 |
Wretched as they are, the above figures are the result of the highest
political pressure and of very strenuous efforts on the part of
everybody concerned.
The modesty of the results and the prolonged state of distress after
the cessation of hostilities, afford us evidence that the situation
is not dependent on altogether transitory causes. It must also be
remembered [Page 351] that Italy has
been, and still is, backed up by agreements in regard to both
tonnage and finance. These Conventions will lapse in a few weeks.
What fate awaits Italy after that?
Italy cannot be abandoned in such a position. Every other Allied
country either provides entirely for its own needs of combustibles
from home resources (United States, Great Britain, Belgium), or, as
in the case of France, at least does so in considerable measure.
While France, moreover, as a consequence of the war, has acquired
the coal resources of the Saar Valley, and other countries are
acquiring territory rich in natural combustibles (oils), Italy does
not come in for any such corresponding acquisitions. Is Italy to be
the only one among the Allied Nations left to the hazards of
chance?
Furthermore, being compelled, in the most favourable hypothesis, to
import the whole of her coal by sea, and from distant sources of
supply, under conditions of heavier freights and with exchange rates
greatly to her disadvantage, Italy would—I repeat in the most
favourable hypothesis—find herself precluded from competitive
production and from export trade on any considerable scale.
IV [sic]. The situation is as critical and
pressing as it can be for the following reasons:
-
a)
- While Governmental financial agreements have practically
come to an end, no private arrangements of any kind have, up
to the present, been made for coal.
-
b)
- A personal investigation which I have recently conducted
in London convinces me of two impending facts to be reckoned
with:—
- 1.
- The output of British mines is going to decrease,
thereby further restricting exports to Italy.
- 2.
- The price of British coal is bound considerably to
rise.
-
c)
- Italy is practically precluded from a share in the German
coal which would, in the natural course of things, become in
the near future, a very important asset to her.
V. This last point is deserving of particular consideration. The
reparation clauses as regards coal from Germany had been agreed
among the Allies (Italy included) with regard to Italy as follows:—
“The German Government undertakes to accord to the French and
Italian Governments the following options for the delivery
of coal to France and Italy respectively and to provide the
necessary means of transport.…,1a
For the delivery to Italy, during the ten years specified in
the preceding paragraph, of not more than 75 million tons of
coal, the amount to be delivered in any of those years being
not more than 9 million tons.”
[Page 352]
What a change the text has undergone in the hands of the Council of
Three can be seen by reading paragraphs 4 and 10 of the Annex V on
Reparations of the Peace Treaty with Germany. The most material
alteration is the addition made in paragraph 10 of the following
proviso:—
“If the Commission (Reparations) shall determine that the
full exercise of the foregoing options would interfere
unduly with the industrial requirements of Germany, the
Commission is authorised to postpone or to cancel deliveries
and in so doing to settle all questions of priority; but the
coal to replace coal from destroyed mines shall receive
priority over other deliveries.”
This practically means that Italy will receive coal only when plenty
for everybody is assured. If, on the contrary, the German output
should prove sufficient only to cover coal in replacement of the
output of destroyed mines in the period immediately following on
peace—that is to say in the most critical period of world
production—Italy will receive none. This would be a great injustice,
and it is always wise to prevent an injustice while there is still
time.
VI. To meet the situation, the following ways suggest themselves:—
-
a)
- If the Heads of States are reluctant to alter the terms of
the Peace Treaty by striking out the concluding lines of the
paragraph above quoted, an interallied agreement might be
come to whereby a fair proportion of the German coal would,
in any case, be secured to Italy, on the same financial
terms, of course, as to the other nations.
-
b)
- A system of cooperation on broad and liberal lines might
be involved [evolved?] for the
operation of some of the mines of the Saar Valley, whereby
Italian capital and labour would be associated in the
commercial exploitation of same, guaranteeing a fair
proportion of the output to Italy. Ample guarantees ought to
be given with respect to the treatment of Italian labour,
which would be consonant with the times, and such as to
avoid even the remotest appearance of any exploitation of
our labour.
-
c)
- The Allied Governments as such ought to give an
undertaking for the finance of a minimum supply of coal to
Italy up to the end of 1920. Coal is so essential a key
import that it cannot be left to hazard. It will certainly
pay in the long run to make such an exception. Private
enterprise in this field has accomplished almost nothing,
and indeed it will be easily seen that its task is fully cut
out in taking care of the importation of other raw
material.
I am honestly convinced that the Allies do want to help Italy in her
recovery. From the knowledge I have of the situation and of the
circumstances of the case, I also honestly believe that the above
requests represent the minimum requisite to enable Italy to
recover.
I am [etc.]
[Page 353]
Appendix 183
Ministry of Shipping
,
31 May,
1919.
[Letter From the Allied Maritime
Transport Executive Regarding Transfer of Shares of Austrian
Shipping Companies]
Sir: I am directed by the Allied Maritime
Transport Executive to request that you will be so good as to bring
before the Supreme Economic Council the question of the purchase of
shares in Austro-Hungarian Shipping Companies by Italian interests.
The matter was dealt with by the Executive at their seventh meeting
on May 24th (see Minute 152 which has already been forwarded to
you.)
It will be remembered that at the fifth session of the Allied
Maritime Transport Council held in Paris in February last a
resolution (No. 13) was passed in the following terms:—
“In view of the extreme importance of the principle being
maintained that the allocation of enemy tonnage for
management and use shall in no way prejudice the ultimate
disposition of the vessels in accordance with Resolution 1,
the Council recommend that the Associated Governments take
the necessary steps to prevent and formally announce that
they will hold as null and void any action (such as the
transfer of shares in enemy shipping) likely to render the
said principles more difficult of
application.”
At the fourth meeting of the Shipping Section held in Paris on April
8th, it was agreed to publish a communiqué subject to the approval
of the respective Governments dealing with the question of the use
and management of enemy ships. The draft communiqué stated that in
the discussion of the ultimate disposition of enemy ships no
argument would be founded on their allocation for management and
service in the meantime, and that the Associated Governments would
hold as null and void from the standpoint of the final disposition
any action such as the transfer of shares in enemy shipping which is
likely to render it more difficult to apply the principle that the
interim allocation of enemy tonnage for management and use shall in
no way prejudice its ultimate disposition.
In pursuance of this resolution a notice was published, in the terms
agreed by the Shipping Section, in the Times
of April 12th, and it is understood that a similar publication was
made in the French press. No information has been supplied to the
Executive as to whether a similar notice has been published by the
Italian or American Government.
During the course of April, letters were received by the Ministry of
Shipping from London business houses enquiring on behalf of Italian
clients as to the position of certain ex-Austrian steamers [Page 354] which it was stated had
been the property of Austrian Companies, but were not transferred to
Italian concerns. Replies were sent by direction of the Executive
that the desired information could not be supplied and attention was
called to the declaration which has been published in the Times on April 12th, it being added that the
Italian Government had been requested to arrange for a similar
publication in Italy, if such publication had not already been
made.
No information has been supplied by the Italian Delegate to the
Executive as to the real position in Italy in this matter, but
substantial reports have now been received from British
Representatives in Italy to the effect that it is the case that,
acting under the protection of the Italian Government, certain
Italian interests have now definitely acquired shares and holdings
in the large late Austrian Companies, lately held by Austrian and
Hungarian Banks, on behalf of the holders, mainly German. The
Companies whose shares have been acquired are the Austrian Lloyd
Company, the Austro-American (Cosulich) and probably the situation
is the same in regard to the Adria Co. and Libera Triestina.
An advertisement of the Cosulich line is enclosed,2 which has been received from
Rome and which shows that an enemy line of commercial steamers is
being openly advertised.
The Executive desire to call the attention of the Supreme Economic
Council to this matter for such action as the Council think
proper.
I am [etc.]
J. F.
Henderson
Secretary
Appendix 1843
Memorandum From Director-General of
Relief
With respect to my memorandum of the 31st May,* the following further steps have been
taken:—
I. Inter-Allied Food
Controls
The British Government has notified the other Governments who are
parties to the Wheat Contract of 1916 that it will be terminated on
the 31st of August. This necessarily terminates the Inter-Allied
joint purchase and shipment of grains.
The only other remaining Inter-Allied food activity engaged in active
commercial operations is that relating to sugar, which is founded
[Page 355] entirely upon the
joint purchase of the Cuban harvest of 1919.4 This contract will have been fulfilled by
the end of November, and it seems to me extremely improbable that
any of the European Governments concerned would want to join in the
purchase of the Cuban crop.
II. Relief Measures
We are notifying the various Governments that while American
intervention in the distribution of overseas foodstuffs in the
present form will cease with harvest, we will be glad to receive an
estimate from each of the Governments under relief in respect to the
assistance which they will need during the coming year from the
United States. Further that we consider it desirable that these
estimates should be presented in the United States by a Commission
fully empowered to handle credit, shipping, and collateral
questions. Under this arrangement there will therefore be no break
in American interest and helpfulness, and, on the other hand, a
definite step will have been attained in advancement from sheer
relief to economic measures in co-operation with the countries
concerned.
We cannot assume that these States so lack the foundations of
initiative and government as not to be able to administer these
affairs; if we assume this we must agree that the political
rearrangement of Europe is a failure.
All these arrangements are premised upon continuation of relief until
harvest and of protective measures (transport, coal, communications,
&c.), until such a short period after Peace as will allow
resumption of Peace relationships in these matters.
III
In the matter of charity in support of the 3,500,000 sub-normal
children now under special relief, I am instituting measures that
will afford continuous support to the organisations already
established in each country for this purpose and providing for the
continuance of expert staff in their assistance in this and food
matters generally.
Herbert Hoover
June 10, 1919.
Appendix 1855
Resolution From British Delegates
Regarding Future Work and Organisation of the Council
- 1.
- The period of transition from war to peace conditions will
continue even after Peace is signed, and during that period the
continuance [Page 356] of Allied
consultation and co-operation in economic matters is
desirable.
- 2.
- In view of the changing economic world conditions and the
importance of establishing as soon and as completely as possible
the economic life and energy of Europe, the Council directs the
Committee on Policy appointed at the last meeting to report as
to what changes in the constitution, powers, and objects of the
Council are desirable. Pending the consideration of that report,
the Council should continue as at present, except that its
headquarters should be removed to London as soon as possible and
not later than the signature of Peace with Germany.
- 3.
- These resolutions should be communicated to the Council of
Four for their sanction.
Appendix 186
[Extract From the Minutes of the
16th Meeting of the Finance Section Held on 5th June, 1919,
Regarding] Establishment of a Centralised
Accounting Bureau at Rotterdam
At their 16th Meeting held on 5th June the Finance Section considered
the attached letter from the German Finance Commission regarding the
formation of a Centralised Accounting Bureau at Rotterdam and agreed
[to] the following resolution for submission to the Supreme Economic
Council:—
It was resolved further that a copy of the German note should
be transmitted to the S. E. C. with the information that
this request had been refused on the grounds that each of
the Governments supplying food to Germany was concerned with
its own buying and selling only and because the Finance
Section was of opinion that the object of the German
proposal was to make the Allied & Associated Governments
as a whole responsible for all credits due to the Food
Account, e.g. the credit due by France to the Food Account
for the sale of coal from the Saar Valley, estimated by the
German Government at 135,000,000 francs. The Finance Section
desires to draw the attention of the Supreme Economic
Council to the fact that they feel they are put in a
position in which they may be accused of bad faith by the
German Government owing to the failure of the French
Government to credit the Food Account with the proceeds of
the sale of Saar Coal, especially as even at the lowest
price payable for the coal there is still a large balance in
favour of the German Government.
[Page 357]
[Enclosure]
The Chairman of the German
Finance Commission to the Chairman
of the Finance Section of the Supreme Economic Council,
Paris
Versailles
, 31 May,
1919.
On the basis of the Agreement concluded in Brussels on 14 March 1919,
an extensive settlement of accounts is to take place, which
concerns, on the one hand, the food deliveries of the Allied and
Associated Governments, and on the other hand, the payments,
deposits and other transactions on the part of Germany. In order to
provide and maintain the necessary clearness and perspective in this
settlement of accounts, it seems desirable to the German Finance
Commission to centralize the settlement in one place through some
agency of the Allied and Associated Governments and of the German
Government. Through a direct settlement by these two agencies, all
the matters concerning the “food account” would be dealt with
according to the books. In view of the Brussels Agreement, the
German Government established such an agency in Rotterdam under the
direction of Herr Rabbow, and the German Government has the honour
to suggest that the Allied and Associated Governments also authorize
their representatives in Rotterdam to make a practical execution of
the whole settlement of accounts.
In our opinion, the following accounts would come under the
jurisdiction of these agencies for the present:
- (1)
- Goods accounts with—
- (a)
- The Food Administration Grain Corporation.
- (b)
- His Britannic Majesty’s Government.
- (c)
- The Commission for Relief in Belgium.
- (d)
- The Agencies of the French Government.
- (2)
- Payments in Germany to the representatives of the Food
Administration Grain Corporation.
- (3)
- Payments in Germany by direction of the American Relief
Commission.
- (4)
- Payments and deposits of the German Government to the
favour of the Allied and Associated Governments.
- (5)
- Creditings of the Allied and Associated Governments to the
favour of Germany for incidental goods received, creditings
which are to be placed to the favour of the “food
account.”
- (6)
- Settlement of the balances of the Navigation Treaty
concluded in Brussels.
The decision of the Finance Section of the Supreme Economic Council
is requested as soon as possible.
[Page 358]
Appendix 187
Commandement
de la Navigation du Danube,
May 28,
1919.
[Telegram From Admiral Troubridge to
the Communications Section]
(No. 665)
Problems of relief distribution and of traffic on the Danube were
discussed at my headquarters to-day, 25th May, at a meeting at which
the following were present: Captain Gregory, United States of
America; C. K. Butler, Great Britain; Colonel Olivari, France;
Captain Trivati, Italy; all four belonging to Inter-Allied Food
Commission; also Henry James and myself, representing Inter-Allied
Danube River Commission. At this meeting it appeared clearly that
the only present obstacle to the complete and immediate use of the
Danube and its existing transport equipment for the distribution of
relief and for commerce on the river is the closure of the river by
the authorities in control at Budapest. The Supreme Economic Council
is urged to realise that all other obstacles to navigation from the
South to above Vienna would disappear if Budapest could be
passed.—Admiral Troubridge.
Communications Section,
Supreme Economic Council, Paris.
For Admiral, President of the Inter-Allied Danube River
Commission.
A. Stead,
C. V. S.
Appendix 188
Note for the Supreme Economic Council
by the Sub-Committee on Germany [Regarding the] Formation of a Rhineland
Republic
The reported attempts in the Palatinate to set up an independent
Rhineland Republic will inevitably raise both political and economic
issues of considerable difficulty in the near future.
The Sub-Committee on Germany expresses of course no opinion on the
political issues involved, but it is certain that, almost at once,
difficulties will arise with regard to the interchange of food and
other (commodities between the rest of Germany and the revolting
territories. Under the existing economic arrangements for the
provision of finance for food supplies, Germany is treated as a
whole and, consequently, negotiations with regard to food supplies
for the Rhine-land and the Palatinate are conducted with the
representatives of [Page 359] the
German Government at Versailles and Rotterdam. It is expedient,
therefore, that the Sub-Committee should receive directions as to
the policy which is to be adopted in dealing with the
representatives of the German Government in respect of the occupied
territories and as to the degree of recognition, if any, which is to
be given to the Republican Government if and when it succeeds in
establishing itself. It should of course be pointed out that in
present circumstances recognition in matters economic would probably
suffice to enable the Republican Government to establish itself, if
this is thought to be desirable.
The Sub-Committee on Germany, therefore, requests the Council of the
Heads of States to give a ruling on the questions of political
policy involved, and forwards this note for the information of the
Supreme Economic Council.
Appendix 189
[Memorandum From British Delegates
Regarding] Future Work of the Supreme
Economic Council [as Regards
Russia]
It is submitted that the time has come to consider seriously the
relation of the Supreme Economic Council to allied policy in Russia.
During the last few days an important decision has been arrived at
regarding Allied political and military policy in Russia.7
Briefly summarised, our political objects are to secure peace,
liberty and self-government to the Russian people with the minimum
of interference in the internal affairs of Russia. As this cannot be
obtained by dealing with the Soviet Government at Moscow, the Allies
will continue their military assistance to the anti-Bolshevik forces
in Russia with a view to the Government of Admiral Koltchak
establishing itself as the Government of All Russia. This assistance
is subject to Admiral Koltchak agreeing to the formation of a
freely-elected constituent assembly as early as possible and to the
settlement of the boundaries of the Russian State and its relations
with neighbouring States through the instrumentality of the League
of Nations.
The above decision makes it possible for the Allies to consider a
comprehensive policy for the re-establishment of normal conditions
in Central and Eastern Europe as a whole. To have the greatest
chance of success and to economise effort, this policy should
combine in the most effective manner military, political, relief and
economic action. It is no good if the results of military action in
one direction are undone by the failure to take relief or economic
action in another direction. [Page 360] The economic side of the question has been qualitatively dealt
with by a note submitted by Lord Robert Cecil dated the 5th of
April,8 on the general
economic position. This Note equally applies to Russia. If we do not
succeed in averting complete collapse in Central and Eastern Europe
we will suffer immeasurable loss or utter disaster. Millions of
people who are only supported by an intensive industrial system will
die and it will take many years and millions of money to restore
even moderate conditions of prosperity in Europe. It is generally
agreed that we should try and straighten out the situation. A great
deal has been done by utilising resources which happened to be
available in various directions. It is time the extent of the
problem, the measures necessary to solve it, the cost and the
distribution of effort among the Allies should be squarely faced and
funds definitely allotted to correspond with the decisions arrived
at. The sooner we organise the more likely are we to stem the flood
and the less effort it will cost us.
In order to carry out the combined policy indicated above, it is
submitted that, in addition to completing the food relief and
assuring the re-establishment of communications and the restoration
of industries in Central Europe, we should at once push forward with
relief and with economic assistance towards the re-establishment of
normal conditions and the resumption of trade with anti-Bolshevik
Russia and with the Border States, thereby,
- (a)
- immensely contributing to their stability:
- (b)
- provoking a desire for similar conditions in adjoining
Bolshevik territory:
- (c)
- facilitating the reconstruction which will inevitably have
to be undertaken of what is now Bolshevik Russia.
Sufficient funds should at once be allotted to the Supreme Economic
Council for this purpose. The money could not be spent more
effectively and for lack of it precious time is being lost.
It is suggested that the Sections of the Supreme Economic Council
should be asked to consider to what extent they would be affected in
the event of a decision to include Russia in the sphere of
operations of the Supreme Economic Council as and when that country
becomes available, and to submit preliminary reports giving an
outline of the measures they would propose, including a rough
estimate of finance.
[Page 361]
Appendix 1909
Note From American Delegates on
Proposition in British Memorandum on Allied Economic Policy in
Russia
The programme in this memorandum implies:—
- (a)
- “The Allies will continue their military assistance to the
anti-Bolshevik forces in Russia.”
- (b)
- That a definite economic offensive be entered upon against
Bolshevik Russia.
It appears to the American Delegates that these premises and so
extensive a programme require ratification—
- (a)
- By the Heads of State.
- (b)
- So far as the United States is concerned, probably by
Congress.
- (c)
- Definite appropriations by the various Governments.
If such premises and procedure are determined upon sequently, step by
step, by each of the Allied and Associated Governments, then it
appears to the American Delegates that a special Commission of
limited members should be set up to deal with the entire matter.
Appendix 191
Extracts From Minutes of the Meeting
of the Raw Materials Section [Regarding] German Imports of Raw
Materials
With reference to Minute 206 of the minutes of the Blockade Council
of the 28th May, to the effect that action had been deferred upon a
draft resolution proposing the importation by Germany of raw
materials, which could be financed on credit of not less than one
year’s term,
It was agreed that the matter should be submitted to the Supreme
Economic Council, pointing out the decision of the Blockade Council,
and stating the Raw Materials Section were in agreement with the
proposal contained in the draft resolution referred to.
It was further agreed that the Supreme Economic Council should be
asked to decide what policy should be adopted regarding this
matter.
[Page 362]
Appendix 192
Resolution Submitted by the British
Delegation Regarding German Imports of Raw Materials
That this Council recommends to the Supreme Economic Council that,
within the rations already fixed, importations of raw material into
Germany should now be permitted in so far as they can be financed on
credits of not less than one year’s term.
In order to give effect to this proposal, it is intended, subject to
the approval of the Supreme Economic Council, to request the
Sub-Committee on Germany to make arrangements whereby the agents of
neutral firms may get into touch with German importers at Cologne,
or other convenient place, under suitable Inter-Allied supervision;
and that this arrangement should apply equally to the agents of
firms in Allied and Associated countries in so far as such
transactions may be permitted by their respective Governments.
