Paris Peace Conf. 180.0501/6

Supreme Economic Council: Emergency [Sixth] Meeting Held at the Ministry of Commerce [on 7th March, 1919, at 12 noon]

The Supreme Economic Council held its Sixth Meeting on 7th March, 1919, at 12 noon under the Chairmanship of Lord Robert Cecil.

The Associated Governments were represented as follows:—

Gt. Britain Mr. J. Keynes
Sir W. Mitchell Thomson
Sir H. Llewellyn Smith
U. S. A. Mr. McCormick
Mr. Hoover
Mr. Norman Davis
Mr. Baruch
Mr. Robinson
France M. Clémentel
M. Boret
Italy M. Crespi
M. Chiesa

33. Supplies for Germany.

With reference to Minute 27 a report of Admiral Hope (21) of the Conference with German Delegates at Spa on 4th and 5th March and resolutions regarding the conditions on which the Associated Governments would be prepared to consider the supply of foodstuffs to Germany until the next harvest, were submitted:

(a)
Resolution proposed by the British Delegates (22),
(b)
Resolutions proposed by the American Delegates (23),
(c)
Resolution proposed by the French Delegates (24).

It was agreed that as the Council was unable to agree upon the final form of the resolution to be adopted the drafts submitted by the different Delegates should be submitted to the Supreme War Council for their decision.1

The British Delegates reported that the Technical Experts were about to proceed to Rotterdam to discuss with German Representatives the question of arranging contracts for the supply by Germany of certain miscellaneous goods such as timber, dyes, potash, etc. and enquired, whether in view of the present position, it was considered [Page 49] desirable that the above negotiations should be suspended for the present.

It was agreed that the Technical Experts should be authorised to proceed to Rotterdam as previously arranged.

Appendix 212

Preliminary Report of Meetings Held at Spa on the 4th and 5th March, 1919, Between Delegates of Associated Governments and Delegates of the German Government With Regard to the Financial, Shipping, and Food Supply Arrangements for Carrying Out the Revictualling of Germany

The first meeting of the German Delegates at Spa was held at 6 p.m. on the 4th March.

Admiral Hope opened the meeting by making a statement as to the questions which were to be discussed.

He informed the German Delegates that no foodstuffs would be permitted to enter Germany until substantial progress had been made in the handing-over of the German passenger and cargo vessels. It was pointed out that it was impossible to secure the revictualling of Germany without having the ships, and he concluded by demanding that the German Government should take immediate steps to ensure the departure of the German ships now ready and to take all steps necessary to place the whole German fleet at the disposal of the Allied and Associated Governments in accordance with the agreements already made.

A statement referring to the financial questions was then read, in which certain questions which had been put by the Germans at Treves on the 14th–16th February, 1919, were answered.

The Germans were informed that they would be allowed to import cereals from the Argentine into Germany up to a maximum of 100,000 tons in the first instance, in addition to the supplies already promised, provided the German Government was able to make its own financial arrangements, subject to the approval of the Supreme Economic Council. They were also informed that the Associated Governments would raise no objection to the grant of credits by banks or other institutions in neutral countries, provided arrangements were made for the transfer of the net proceeds of such credits in payment for food supplies to Germany. The paper concluded with a statement that the whole of these arrangements were conditional upon the delivery of the German mercantile marine in accordance with existing arrangements.

[Page 50]

A paper laying down the details for the delivery of the ships was also read.

The President of the German Delegation, Herr von Braun, then stated that the German Government was of opinion that the delivery of the German merchant fleet could only begin from the moment when the revictualling of Germany with foodstuffs was secured and details regarding shipping matters brought to a satisfactory conclusion.

He stated that the arrangements which had taken place up to the present had not led to the point where the revictualling of Germany was secured.

The German Government agreed that the delivery of the vessels must precede the import of foodstuffs into Germany, but they could only consider this importation of foodstuffs into Germany as secured if a contract were made in which it was stated at what price and in what quantities foodstuffs would be introduced into Germany from this time on to the next harvest. He pointed out that the total of 370,000 tons now promised was not sufficient to keep Germany going until next harvest.

Herr von Braun added that there was, therefore, an essential point of difference. The German Government was of the opinion that the fixing of the amount of foodstuffs to be imported into Germany must precede the delivery of the German mercantile fleet, as they could only look upon the revictualling of Germany as secure when the amount of foodstuffs which could be imported had been fixed.

The German Delegation was then informed that the Armistice Clause was perfectly clear in the minds of the Associated Governments. It did not say to what extent they would provision Germany and the rest of Europe; it merely said that in order to be able to carry out the revictualling of Germany and the rest of Europe, the ships should be handed over. On the following day, the 17th January, the German Representative had signed a definite convention to hand over the ships immediately, and at that time the Associated Governments made a definite promise to supply a certain quantity of foodstuffs; there had never been any mention of provisioning Germany or anybody up to the next harvest.

They were informed that the Associated Governments contemplated further supplies of foodstuffs to Germany, but that at the present time they were not prepared to make any definite arrangements as to the quantities and terms.

Further discussion on this question then took place.

Finally, the meeting was adjourned about 7.30 p.m. to enable the German Delegates to communicate with their Government.

The adjourned meeting took place at 4 p.m. on the 5th March.

Herr von Braun read a statement in which he reiterated the arguments brought forward at the previous meeting.

[Page 51]

He concluded by stating that the German Government could not decide to hand over the merchant fleet without obtaining further substantial confirmation of the existence of the intention to supply Germany to a further extent.

The German Government had instructed him to stand firm on this point, viz., that the German merchant fleet would only be put at the disposal of the Allies as soon as a binding agreement assuring the provisioning of Germany up to the time of the next harvest had been made. He understood that the Allied Representatives were not empowered to enter into such agreement. He suggested that, with a view to finding a possibility of continuing the negotiations, we should endeavour to arrange to come to an agreement as to a partial handing-over of the fleet in proportion to the amount of foodstuffs approved to be delivered, but that he must make the stipulation that they must have the certainty of the definite drawing-up of a scheme for the provisioning of Germany to be accomplished in the near future in return for the handing-over of the remainder of the fleet, and that the questions regarding the shipping agreement which were as yet unsettled would be arranged.

The meeting was then adjourned for a few minutes to enable the Allied and Associated Government Representatives to consider Herr von Braun’s statement.

On the re-assembly of the meeting the German Delegates were informed that the German Government had undertaken to deliver the whole of their merchant ships immediately against a specific promise of the delivery of the first instalment of the food and a general undertaking as regards the future.

They were informed that the Associated Representatives were not authorised to vary this agreement. With a view, however, to clearing up, for the German Representatives, the position which they did not appear completely to understand, the Associated Representatives were prepared to make the following declaration, and they trusted that this declaration would constitute to the German Government the explanation it desired, covering the promise of the deliveries of food during the coming months.

“In reply to the representations made on behalf of the German Government, the Representatives of the Associated Governments desire to state that, subject to the immediate delivery of the German mercantile marine, it is the intention of the Associated Governments to facilitate the provisioning of Germany from month to month, subject to the decisions of the Supreme War Council as to quantities and conditions; that they are already authorised to settle finally the terms and amounts of the first instalment; and they desire also formally to reiterate the declarations already made on behalf of their Governments.

[Page 52]

“They repeat that the object of the delivery of the German mercantile marine is to ensure the supplying of Germany and the rest of Europe with food supplies; that ‘in the first instance’ the importation of food will be permitted up to 270,000 tons, and that the question of further supplies will be referred to the Supreme War Council for decision; and that the Supreme Economic Council ‘is disposed, subject to the approval of the Associated Governments, to consider a request from the German Representatives for additional foodstuffs for delivery in the immediate future, provided that satisfactory financial arrangements are made by the German Representatives with the financial Representatives of the Associated Government.’”

Herr von Braun replied that his declaration contained no new factor as far as they were concerned. They could see no definite assurance for the provisioning of Germany, as it was made dependent on three uncertain conditions, viz., questions of amounts, conditions and financial agreements; another difficulty was that the decision regarding these three factors was made subject to the consent of the Supreme War Council. He returned to the suggestion that a way might be found to make a preliminary agreement whereby only a part of the German fleet should be handed over in return for certain consignments of food. He pointed out that it was impossible for the German Government to remain in the present state of uncertainty, and that it was a life and death question for the people of Germany. He added that no Government would take the responsibility of continuing such a state of affairs and without the certitude that we would help them. They could not deprive themselves of the only method of keeping themselves.

In reply, it was pointed out that the German proposal to hand over the ships proportionately to the delivery of food was impracticable, as it would be impossible to make any programme for the supply of food unless all ships were handed over.

Beyond that, the Associated Representatives had no authority to go further or to say more than they had already done, and that they had endeavoured to make it clear that their Governments adhere to the letter and spirit of their previous engagements. They must, therefore, demand that the German Government should carry out their engagements under the terms of the Armistice, as it was beyond the competence of the Conference to vary them.

It was proposed that the meeting should be again adjourned to enable them to get into communication with their Government.

After further discussion, the German Delegates agreed to adjourn the meeting in order once more to communicate with their Government.

About 11 p.m. the following letter was received from Herr von Braun:—

“I have the honour to report that a telephone communication I have just had with Weimar has once more asserted to me that they cannot [Page 53] alter their standpoint, because they cannot consider themselves justified to put the German mercantile marine fleet at the moment under the control of the Associated Governments without the food supply of Germany being assured to her at the same time. I would much regret if the Representatives of the Associated Governments were to consider it necessary to break off the present negotiations, and beg that you shall once more consider whether the method suggested by us for a partial delivery of the mercantile marine in proportion to the deliveries of food already settled does not offer the possibility of a continuance of the negotiations. I can assure you that the German Representatives are ready to meet you as far as possible with regard to the apportionment of numbers and nature of the ships which are to be handed over now.

“If this proposed solution is not at the moment practicable for the Representatives of the Associated Governments, the re-assembly of the Conference would serve no useful purpose.

“I hasten to inform you of this decision to-night.”

A meeting of the Allied and Associated Representatives was held to consider this letter, at which it was decided that the solution proposed by the German Delegates was not one which was within their competence to discuss, and that the reassembly of the Conference would not, therefore, serve any useful purpose, and they decided to return to Paris immediately in order to report to the Supreme War Council.

A letter in the following terms was then sent to Herr von Braun, and the arrangements were made for the immediate return to Paris.

“Admiral Hope begs to inform the Chairman of the German civilian Delegates at Spa that he is in receipt of his letter of to-day, notifying the Delegates of the Allied and Associated Governments of the inability of the German Delegates, in view of their instructions from Weimar, to modify their attitude as communicated this afternoon. In view of the nature of the instructions of the Delegates of the Allied and Associated Governments the solution proposed by the German Delegates is not one which it is within their competence to discuss. The reassembly of the Conference to-morrow would not appear, therefore, to serve any useful purpose, and the Allied and Associated Delegates are leaving for Paris immediately to report to their Governments.

G. Hope,
Rear-Admiral.”

June 3 [March 6], 1919.

Appendix 22

Resolution Proposed by the British Delegates Regarding the Conditions on Which the Associated Governments Will be Prepared To Consider the Further Supply of Foodstuffs to Germany

1.
We are prepared to deliver immediately the food now stored at Rotterdam, for which payment has been arranged, as soon as twenty [Page 54] German ships have left harbour on their way to be handed over to the Associated Governments. Further, we will deliver the rest of the 270,000 tons agreed on as soon as one hundred Germans ships have left harbour similarly.
2.
Finally, the Associated Governments undertake to deliver 400,000 tons of food per month, until harvest, upon financial terms to be arranged, provided that the rest of the German Mercantile Marine is handed over within one month from the date of the acceptance of this offer.
3.
A Conference to meet immediately to arrange the financial terms referred to.

Appendix 23

American Resolutions Regarding the Supply of Foodstuffs to Germany

(A) Preamble

1.
The food situation in Europe requires the use of the German Mercantile Fleet at once.
2.
Assurance of regular and limited food to Germany will not affect the political conditions of peace.
3.
Germany can only pay if her population can get into production and export of commodities.
4.
Germany will collapse and peace be impossible if such assurance of food and productivity is not immediately given.

(B) Resolutions

1.
It is agreed that Germany must receive a regular monthly import of food until next harvest for humanitarian reasons and if order and stability of government are to be maintained, peace effected and reparation secured.
2.
It is agreed that Germany must place her mercantile fleet in the service if she is to receive food, as this fleet must be used to effect the general provisioning of Europe as well as Germany.
3.
It is agreed that Germany must pay for this food. She can pay—
(a)
By exporting commodities;
(b)
By neutral credits;
(c)
By other liquid assets.
4.
It is agreed that Germany needs approximately 300,000 tons of food per month. This will require the use of 7–800,000 tons of shipping in constant employment, or, say, one-third (?) of her total tonnage.
5.
It is agreed that Germany should be assured:—
(a)
That one-third of the shipping handed over shall be used in transport of food to Germany between now and next harvest;
(b)
That Germany can export commodities (except a black list), the proceeds from the sale of such commodities to be used for food purchases;
(c)
That she can use the outward voyage of the one-third of her shipping for the export of her commodities as well as exports to surrounding neutrals and Allies;
(d)
That she can use such credits as she can set up with neutrals or elsewhere to buy food;
(e)
That she can convert into food purchases any currency she obtains from sale of commodities;
(f)
That she can use hire of ships to buy food;
(g)
In order to give immediate delivery of food before the above plan begins to materialise, part of the first 300,000 tons which Allies or neutrals can provide will be delivered in ratio to ships sent out under the present plan of finance.

Appendix 24

French Resolutions Regarding the Supply of Foodstuffs to Germany

1.
That Germany should be informed that she is bound by the terms of the Armistice to hand over the whole of her mercantile fleet forthwith.
2.
On the grounds of humanity, the Associated Governments will deliver the 270,000 tons of food already agreed on as soon as the German Government show their genuine intention to carry out their obligations referred to in the first paragraph, by sending to sea for that purpose not less than . . . . . . ships, to be selected by the Associated Governments, and to comply with such financial arrangements as have already been made.
3.
That in order to establish a general supply programme for Germany, the Associated Governments are prepared to study the matter with German delegates.
  1. See BC–47, minute 5, vol. iv, p. 274.
  2. Appendixes 21 to 24 are filed separately under Paris Peace Conf. 180.0501/33.