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

Paris Peace Conf. 180.0501/28

Supreme Economic Council: Special [Twenty-eighth] Meeting Held at the Ministry of Commerce [on 26th July, 1919, at 6 p.m.]

July 26, 1919, 6 p.m.

The Supreme Economic Council held its Twenty-eighth Meeting on Saturday, 26th July, 1919 at 6 p.m. under the chairmanship of M. Clémentel.

The Associated Governments were represented as follows:—

United Kingdom.	Mr. Waley
	Mr. Gorvin
	Mr. Waterlow
United States.	Mr. Hoover
	Mr. Dulles
France.	M. Jouasset (Representing M. Klotz)
Italy.	S. E. Maggiorino Ferraris
	The Hon. Salvatore Orlando
Belgium.	Major Bemelmans.

269. Finance Section.

The Council considered a report (250) submitted by the Finance Section in accordance with the request of the Council at its 26th Meeting (Minute 251).

The American Delegates pointed out that the Committee for the Organisation of the Reparation Commission needed the assistance of the Finance Section and its technical organisation in the decision of financial questions arising with reference to reparations, and suggested that as a practical matter it would be desirable for the Finance Section henceforth to report to the Committee for the Organisation of the Reparation Commission instead of the Supreme Economic Council.

After further discussion it was agreed:—

i) that the Finance Section should be maintained until the definite organisation of an International Economic Council and of the Reparation Commission.

ii) That the Finance Section should be asked to collaborate with the Committee for the Organisation of the Reparation Commission in all financial questions which are in process of execution or the solution of which is urgent.

iii) That the Finance Section should refer to the Committee for the Organisation of the Reparation Commission all decisions to be made relative to financial questions concerning a) the supply of food and raw materials to ex-enemy countries and b) reparations.

270. Sub-committee on Germany.

The American Delegates suggested that the Sub-Committee on Germany should in future report to the Committee for the Organisation of the Reparation Commission instead of to the Supreme Economic Council.

The French Delegates called attention to the fact that the Organisation Committee was already dealing directly with the Germans.

It was agreed that the decision of this question should be deferred until the Meeting of the Council to be held in London on August 1st, at which time the report of the Sub-Committee would be presented for the consideration of the Council.

271. Allied Maritime Transport Executive.

It was agreed that the Allied Maritime Transport Executive as one of the sections of the Supreme Economic Council, should in future refer for final decision to the Committee for the Organisation of the Reparation Commission, instead of to the Supreme Economic Council, all questions of enemy tonnage which relate to reparations.

Appendix 250

Report to the Supreme Economic Council on the Necessity of Maintaining the Finance Section

I

The Supreme Economic Council, in its meeting of the 10th July, decided that the Finance Section should be authorised to continue its work, with a view to settling all questions which are still pending as quickly as possible.

The Finance Section has in fact been principally engaged on investigating and applying the financial means of execution of the Armistice clauses:

(a) The carrying out of the Spa, Trèves and Brussels Agreements as far as Germany is concerned.

(b) The carrying out of the Armistice with Austria, and of the subsequent agreements concerning the provisioning of Austria by the Allied Powers.

The raising of the blockade of Germany only dates from the ratification of the Peace Treaty by the German National Assembly.

The Agreements with Austria are still in process of execution, and a letter from Dr. Renner, dated the 9th July, requests the continuance of Allied assistance.¹ The National Assembly of German Austria only voted the laws concerning the requisitioning of securities and the organisation of mortgages on the forests in its meeting of the 8th July.

The Finance Section has still to undertake the final solution of the following questions:

(a) As regards Germany:—

1. The ultimate disposition of the gold delivered by Germany in payment for foodstuffs. The amount intended for the United States will be sold by Germany without option of repurchase.

The Germans have not yet replied on the question of the proposed sale with option of repurchase on the part of the United Kingdom.

2. The procedure to be followed in the sale of the requisitioned securities transferred to Amsterdam by the Germans, and the division of the proceeds of this sale among the Allied and Associated Powers.

3. Utilisation by the Germans of Argentine securities for German purchases of foodstuffs in the Argentine.

4. Final examination of a proposition made by a consortium of Dutch banks to make an advance for which requisitioned securities would serve as guarantee.

5. Settlement of the French account; provisioning of Germany by France.

6. Utilisation of proceeds of the sale of lignite briquettes to Switzerland (application of the Agreement of 25th March).

(b) As regards Austria:—

1. Final settlement of the conditions of the new advance of 3 million dollars allowed by the Government of the United States to the three Allied and Associated Powers.

2. Delivery of gold and securities. This, delivery was demanded to take place on the 12th July in the case of gold, and on the 31st July in the case of securities. These periods will have to be extended.

3. Supervision of the transport of the gold and securities to Venice.

4. Nomination and despatch of experts to Venice to examine the gold and securities.

5. Nomination and despatch of forestry experts to Austria to fix the value of the pledge.

6. Settlement of the food accounts among the Allies in consequence of supplies provided by Italy for the account of France and Great Britain.

It would seem that the Finance Section, which is acquainted with all these questions, is better fitted than anybody else to supervise the execution of the decisions which have been made, and that in any case it is most desirable that the Section should be able to continue and complete this part of its work.

II

The work of the Supreme Economic Council, however, has not been confined to the provisioning of Germany and Austria. The Council has had to listen to appeals from the reconquered or liberated countries, from the new nations and from the devastated regions.

The Finance Section has had to grapple with the difficult problem of the financial measures necessary for the reconstruction or the provisioning of countries or of groups, but it has only been able to deal with the most urgent affairs; the most immediate requirements have been satisfied, thanks to the great relief work undertaken by Mr. Hoover’s organisation and by each of the Associated Governments. Thus it has been necessary to defer the settlement of questions which are now of extreme urgency, and the solution of which has as yet only been outlined by the Section.

Thus, to mention only questions which have been raised and are not yet settled, the following should be quoted:—

(a) Financial assistance to be given to the three Baltic States. General Gough has requested that 500,000l, should be placed at his disposal immediately, and other credits will become necessary in the near future.

(b) The agreement for the expenses of maintenance of Russian prisoners in Germany.

(c) The expenses of the restoration of navigation on the Danube.

(d) Expenses for the supply of locomotives and trucks to Lithuania.

(e) The investigation of methods of co-ordinating the advances which have already been made to Russia by the different Treasuries.

When the Council decided to transform itself into an International Economic Council, it recognised that collaboration in economic affairs between the Allied and Associated countries must continue. Such collaboration necessarily involves corresponding financial collaboration, and it is desirable that there should be no breach of continuity between the action of the Finance Section of the Supreme Economic Council and that of whatever body is to fulfil similar functions in the International Council.

III

It is necessary, on the other hand, to take into account the fact that the raising of the blockade of Germany and the approaching signature of the Peace Treaty with Austria will involve the disappearance of the bodies set up to co-ordinate the measures which had to be taken during the Armistice.

The execution of the financial clauses of the Peace Treaty is to be entrusted to the Reparations Commission, which is at present in process of organisation.

As a matter of fact, the Preparatory Committee entrusted with setting up the Reparations Commission has not limited its activities to this only. It has already had before it such definite questions as the utilisation of the proceeds of German exports, and it will doubtless shortly have to consider the question of the provisioning of Germany, all of which matters have hitherto been dealt with by the Finance Section, acting as a Sub-Committee of the Supreme Economic Council.

It would seem, both in view of avoiding at present any clashing of functions and, in the immediate future, to hasten the solution of problems with which the Finance Section is better acquainted, as it has dealt with them for several months, that it would be desirable for the Finance Section to act in close collaboration with the Preparatory Committee of the Reparations Commission, even if only to transmit to the latter such questions as are at present being investigated or negotiated, and which will henceforward fall within its competence.

Consequently, the Supreme Economic Council may think fit:—

1. To decide that the Finance Section be maintained until the definite organisation of an International Economic Council and of the Reparations Commission.

2. To recommend to the Council of Representatives of the principal Allied and Associated Powers that the Finance Section should be asked to collaborate with the Preparatory Committee of the Reparations Commission on all financial questions which are in process of execution, or the solution of which is urgent.

1. Appendix 237, p. 458.