Paris Peace Conf. 180.0501/3

Supreme Economic Council: Third and Fourth Meetings Held at the Ministry of Commerce [on 1st March, 1919, at 5:30 p.m., and 3d March, 1919, at 2:30 p.m.]

The Supreme Economic Council held its Third Meeting on the 1st March 1919 at 5.30 p.m. under the Chairmanship of Mr. Hoover and its Fourth Meeting on 3rd March 1919 at 2.30 p.m. under the Chairmanship of Signor Crespi.

The Associated Governments were represented as follows:

Great Britain Lord Robert Cecil
Mr. J. Keynes
Sir Wm. Mitchell Thomson
Sir Llewellyn Smith
U. S. A. Mr. McCormick
Mr. Hoover
Mr. Norman Davis
Mr. Baruch
Mr. Robinson
France M. Clémentel
M. Loucheur
Italy M. Crespi
M. Chiesa

20. Instructions to Delegates at Spa Conference.

On the recommendation of the Blockade, Food, Finance and Shipping Sections the instructions to the Delegates at the Spa Conference were agreed in the form in which they appear in the documents attached hereto, viz:—

(a) Blockade (12)
(b) Finance (13)
(c) Shipping (14)

It was agreed:—

(a)
that the following reservations should be placed on record:—
(i)
that in connection with Clause 2 of the Finance instructions the American Authorities could not bind themselves to accept the actual goods exported but would agree to take in payment the value of such exports or other assets only in an acceptable form.
(ii)
The American delegates stated they would have to record a reservation in case the drafting of the list should be construed as formulating the principle that Germany shall not be allowed to export anything which is competitive with products of the Associated Governments.
(b)
that the Delegates to the Spa Conference should be instructed urgently to impress upon the German Delegates the necessity, in order to secure the maintenance of order and to facilitate further supplies of food to Germany, of the Germans working and producing commodities the value of which might be converted into credits for the payment of food.

21. Replacement to Neutrals of Food Shipped to Germany.

With reference to Clause 2 of the Blockade instructions it was agreed that the Northern Neutrals and Switzerland should receive credit against their rations of food and food products to the extent to which they ship food and food products to the liberated or enemy countries for relief purposes, providing the shipment of food and food products are made under the joint control of the Food and Blockade Sections of the Supreme Economic Council.

22. Powers of Communications Committee.

It was reported that the question had arisen as to whether the Communications Committee in reporting to the Council should make specific recommendations or merely state their findings.

It was agreed that they should make recommendations to the Council.

23. Financial Arrangements for Relief of Countries Other Than Germany.

The outstanding Clauses of the Finance Section Report (viz: 3, 4, 5, 6, 7, 8, 9 and 15) were acted upon as follows:—

1 (ex. 3). Credits to enemy countries other than Germany.

“That credits to enemy countries other than Germany be granted only in the event of no cash assets being available for payment: that the best available non-liquid assets be taken as collateral security against such credits: and that their repayment be a first charge on the future resources of such country ranking in front of any payment for reparation or indemnity. The above principle is established in respect of credits not exceeding $60,000,000 in the first instance.”

Agreed with the following reservations:—

(i)
That the U. S. Treasury is not empowered to make such loans excepting insofar as the Christian population of Turkey is concerned.
(ii)
The Italian and French Delegates agreed to this only in this specific case which should not be construed as a precedent in other cases.

2 (ex. 4). Credits for liberated countries.

“That relief and reconstruction credits to Belgium, Poland, Czechoslovakia, Roumania, Serbia, Montenegro, Jugo-Slavia, and the Baltic States be made a first charge against any receipts by these countries from the enemy in respect of reparation or indemnity.”

Agreed, the French and Italian Delegates making the same reservation as in the instance of paragraph 3 above.

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3. Finance of supplies for Austria.

(a) ex. 5. “In order to secure immediate action for the finance of food supplies required in German-Austria to prevent extreme hardship and starvation and the spread of anarchy the following arrangement is proposed:—

“That Great Britain, France and Italy agree to advance credits in equal thirds up to a maximum of $30,000,000 between now and the next harvest to finance such food supplies as may be consigned to German-Austria under the direction of the Supreme Economic Council inclusive of those already provided under provisional arrangements, it being clearly understood that the above figure is a maximum and that the question of actually opening credits up to this amount depends on the progress of events and the decisions of the Economic Council from time to time.”

Agreed, the French and Italian Delegates making the same reservation as in the instance of paragraph 3 above.

(b) ex. 6. Clause 6 was amended and agreed in the following form:—

“That as security for such credits the Austrian Government should formally agree to place at the disposal of a Commission or Commissioners representative of the three leading powers a suitable lien on (a) the salt mines in Austria, (b) the properties of the City of Vienna, and (c) such other assets as may be agreed upon, in Austria, immediate steps being taken in the case of the salt mines to clear these mines of all prior claims.”

(c) ex. 7. Clause 7 was amended and agreed in the following form:—

“That an Inter-Allied Commission be appointed of three or four members with a view to taking the necessary steps to make arrangements for due repayment of the credits out of the income of the above properties or otherwise.”

(d) ex. 8. “That the repayment of such credits be a first charge on the future resources of Austria, ranking in front of any payment for reparation.”

Agreed, the French and Italian Delegates making the same reservation as in the instance of paragraph 3 above.

4 (ex. 15). Argentine cereals for Austria.

Clause 15 was amended and agreed in the following form:—

“The Associated Governments are prepared to allow imports of cereals from the Argentine into German Austria up to a maximum of 30,000 tons provided German Austria is able to make its own financial arrangements subject to the approval of the Financial Section of the Supreme Economic Council.

The Associated Governments are prepared to transmit through the Wheat Executive to addressees in the Argentine cable messages from [Page 34] the Austrian Government properly and necessarily arising out of the proposed transactions. In the event of contracts being arranged by Austria the Associated Governments will as far as possible facilitate shipping arrangements, any costs being charged by the Associated Governments providing the Shipping against credits available for the purpose accruing to the Austrian Government in respect of the Austrian Mercantile Marine under the management of the Associated Governments.”

5 (ex. 9). Finance for supplies for Bulgaria.

“That the Financial Section recommend for the approval of the Supreme Economic Council the proposed sale of two million dollars worth of foodstuffs by the American Relief Administration to the Bulgarian Government, to be paid in gold or such liquid assets as may be acceptable to the American Relief Administration.”

Agreed.

It was further agreed that the question of providing a permanent method of finance for the relief of Bulgaria should be referred to the Finance Section for consideration.

Appendix 121

Instructions to the Delegates at the Spa Conference

Blockade

With reference to paragraph 5 of the financial instructions, the Associated Governments are prepared to permit the importation of foodstuffs into Germany from the northern neutrals and Switzerland within the quantities already approved by the Supreme War Council and under the control of the Supreme Economic Council.

2. In regard to exports from Germany to neutral countries, in order to furnish means of payment for food bought by Germany, the list of articles which Germany is not allowed to export will be prepared by the Raw Materials Section of the Supreme Economic Council.

Appendix 13

Instructions to the Delegates at the Spa Conference

Finance

For the time being, and at least during the period of the Armistice, no arrangement can be contemplated which would involve the grant [Page 35] of a loan or credits of any kind by any of the Associated Governments to Germany.

2. Germany must be required to pay for such food or other supplies as it has been decided by the Supreme War Council to supply to her directly from any of the associated countries (say a total of 270,000 tons of foodstuffs), out of whatever liquid assets or exports can be obtained from her within the period of the supply in question (giving preference to credits arising from exports of raw materials, such as coal, potash, timber, and of manufactured commodities, such as dye-stuffs, but not excluding gold or other liquid assets, in so far as such exports are not immediately realisable for payment of food), such assets to be finally transferred to the Ally or Associate to whom payment is due for the said supplies.

3. With reference to proposals set forth at the Financial Conference at Treves, 14th to 15th February2

(a.)
The Associated Governments are prepared to allow the net proceeds of the sale of German cargoes which are or are about to be discharged in neutral ports to be utilised for the purchase of foodstuffs.
(b.)
The Shipping and Raw Materials Sections of the Supreme Economic Council have been asked to take all possible measures for obtaining an estimate of the value of the goods and for expediting and organising their realisation.
(c.)
All reasonable facilities are to be given for communication between the persons responsible for realising the goods in neutral countries and the owners in Germany.

4. The Associated Governments are prepared to allow imports of cereals from the Argentine into Germany up to a maximum of 100,000 tons in the first instance, in addition to the quantities mentioned in Clause 2 above, but as a part of such subsequent instalments as may be granted by the Supreme War Council, provided the German Government are able to make their own financial arrangements subject to the approval of the Financial Section of the Supreme Economic Council.

The Associated Governments are prepared to transmit through the Wheat Executive to addressees in the Argentine cable messages from the German Government properly and necessarily arising out of the proposed transactions. In the event of contracts being arranged by Germany, the Associated Governments will, as far as possible, facilitate shipping arrangements, any cost being charged by the Associated Government providing the shipping against credits available for the purpose accruing to the German Government from each Associated Government in respect of the German Mercantile Marine under [Page 36] the management of the Associated Governments. It must be clearly understood, however, that no shipping arrangements can be commenced until a substantial number of German vessels have left German ports for ports of delivery, and the future supplies of Germany must largely depend upon the date at which the German vessels are available for loading in the countries of origin.

5. The Associated Governments are prepared to inform the Governments of neutral countries that, under the control and with the approval of the Supreme Economic Council, they will raise no objection to the grant of credits by banks or other institutions or individuals in neutral countries to the German Government or its nationals, provided arrangements are made for the transfer of the net proceeds of such credits in payment for food supplied to Germany.

Germany shall not, however, export, or make use of, any securities prohibited by the Armistice, without the approval of the Associated Financial Representatives.

6. The Associated Representatives, having in view the understanding that the provisioning of the left bank of the Rhine will be distinct from that of the right bank, and will be placed under the authority of the High Command of the Associated Armies, will notify the German Representatives that an appropriate proportion of any finance which is arranged shall be assigned for the payment of food supplies for the left bank of the Rhine, the interchange of local foodstuffs between the left and right banks of the Rhine being arranged for in such cases as are desirable.

Note.—In the meantime, no financial objection is raised to the Associated Armies providing or continuing to provide as an interim measure such food supplies as are urgently required to the civilian population of the occupied areas against payment in marks, the redemption of such marks to be a first charge on the available means of redemption.

7. There are various assets to be transferred from Germany, the amount and date of transfer of which are at present uncertain, namely:—

(a)
Exports: Coal, potash, dyes, timber, &c.
(b)
Proceeds of cargoes sold in neutral ports.
(c)
Foreign securities to be requisitioned.

Pending the realisation of these assets, the Delegates are authorized to agree to furnish food to a further value of 11,000,000l. (in addition to 6,000,000l. already arranged) for eventual payment out of the above assets, subject to the German Delegates agreeing to deposit gold in the Banque nationale de Belgique, with right to the Associated Governments to transfer to neutral bank or banks, as collateral, pending realisation, the gold to be returned to Germany pari passu with realisation.

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Appendix 14

Instructions to the Delegates at the Spa Conference

Shipping

The Supreme Economic Council instructs the Shipping Representatives to demand from the German Representatives a statement that the German Government will proceed with all possible despatch to surrender the German merchant fleet in accordance with the Armistice of the 16th January,3 the Trèves Agreement of the 17th January, and the terms of the attached statement.

statement

1. Vessels to be excepted.—Paragraph 1 of the Treves Agreement of the 17th January provides for—

“the whole of the German merchant fleet (including all passenger and cargo vessels, other than those excepted by a Commission which shall be set up by the Associated Governments) to be placed immediately at the disposal of the Associated Governments.”

The Associated Governments are prepared, for the moment, to except provisionally (a) sailing vessels, and (b) vessels under 1,600 tons gross register having no passenger accommodation.

The Associated Governments are not at this stage prepared to grant final exemption in respect of any vessels, but must reserve the right to claim at a later date any vessels now provisionally excepted.

2. Vessels in neutral ports.—The Associated Governments require that the German Government shall forthwith deliver a written statement to the effect that all German vessels now in neutral ports are formally handed over to the Associated Governments. They also require that, in so far as action has not already been taken, the German Government shall at the same time inform each neutral Government that the Associated Governments have in consequence authority to send inspectors to examine the vessels and take all other measures that may be necessary to bring the vessels to ports in the territories of the Associated Governments. The German Government shall simultaneously secure that the German owners inform their local agents to the same effect, adding at the same time that they should place themselves at the disposal of the Associated Governments to give any information, advice, or assistance which may be required in connection with the preparation of the vessels for sea. Where the German Government is unable to secure the immediate cabling of a communication to the local agents, they shall at once telegraph a [Page 38] statement of the names and addresses of such agents to the Naval Armistice Commission.

3. Financial arrangements.—The terms of the Armistice of the 16th January provided that “pour l’utilisation de ces navires il sera attribué une rémunération approprieé qui sera fixée par les Gouvernements alliés.” Accordingly, the Associated Governments have come to the following conclusion:—

A rate of hire will be assigned for each vessel and will be credited to the German Government and not paid to the German shipowner. The Associated Governments cannot credit a higher rate in respect of any German vessel than the lowest rate which is being paid for a similar class of vessel by any Associated Government to its own shipowners. They do not, however, intend to credit a lower rate of hire than is determined by this principle. The hire so credited will be accepted by the Associated Governments in payment of supplies to Germany.

4. Crews.—With reference to the provisions of paragraphs 5 and 6 of the Agreement of the 17th January, the Associated Governments will not retain German crews after the delivery of the vessels, at any rate, in so far as the vessels to be delivered in the immediate future are concerned. The crews will be repatriated at the expense of the Associated Government to whom the vessel is delivered.

The Associated Governments will require the German Government to arrange for a competent engineer officer and several other competent persons to remain on any ship in regard to which instructions to this effect are given, for such period as may be required after the delivery of the vessel. Instructions on this point will be transmitted through the Naval Armistice Commission before the vessel is ordered to sail.

The Associated Governments retain the right given in paragraph 5 of the Agreement of the 17th January, to place an armed guard on board vessels whether at the time they first leave their present ports for so long as the German crews remain on board, or in cases where German crews are retained for service after delivery of the vessel.

5. Flag.—Paragraph 4 of the Agreement of the 17th January provides that “German ships shall put to sea under an Allied flag or flags.”

Vessels leaving German ports of delivery shall fly at the stern the flag of the Allied Maritime Transport Council, and, after delivery, the national flag of one of the Associated Governments, in addition to the Allied Maritime Transport Council flag. The latter flag will be flown either at the stern or the fore.

6. Ports of delivery.—It is probable that the majority of the vessels will be required to be delivered either at Liverpool, Brest, or Cherbourg. The exact port for each ship will be indicated to the German Government through the Naval Armistice Commission. It is contemplated [Page 39] that vessels proceeding through the English Channel will pick up pilots in the Downs, and vessels must be provisioned for sufficient time to enable them to reach their ports of delivery in accordance with the instructions of the Naval Armistice Commission, with adequate margin for navigational delays.

7. Administrative arrangements.—The German Government shall nominate as the delegates provided in the terms of the Armistice of the 16th January a person to be resident in Hamburg, who will see that any information required by the body appointed by the Associated Governments under paragraph 1 of the Agreement of the 17th January is obtained from the German Government or from German shipowners, and will secure that any necessary instructions given by that body in connection with the management of the vessels after they have been delivered at the port of delivery are duly carried out.

8. Information required from the German Government.—The German Government shall furnish at the earliest possible moment the following information, except in as far as it has already been given:—

(a)
A full list of all German vessels above 500 tons gross register, with statement as to the present condition of each vessel and her expected date of readiness for sea.
(b)
Full information as to which vessels, whether in the lists already given by the German Government or not, have passenger accommodation, and how many passengers each vessel can accommodate in each class.
(c)
Complete sets of plans, including docking plans of all German merchant vessels, including those under construction which can put to sea within the next six months and those in neutral ports, to be obtained from the owners or otherwise, and to be delivered at the earliest possible moment to the Naval Armistice Commission.

9. The Associated Governments require that the German Government shall at once proceed with the handing over of the German merchant fleet in accordance with the terms of the Armistice of the 16th January, and the Agreement of the 17th January, and the arrangements above indicated.

Any further details connected therewith shall be settled by the Associated Governments after such consultation, if any, as they may think desirable to make with representatives of the German Government.

  1. Appendixes 12 to 14 are filed separately under Paris Peace Conf. 180.0501/33.
  2. See Der Waffenstillstand 1918–1919, band 2, pp. 46–63; for texts of financial arrangements of February 16, supplementary arrangement, and minutes of the conference, see ibid., pp. 64–77.
  3. Vol. ii, p. 11.