Paris Peace Conf. 180.0501/9

Supreme Economic Council: Ninth Meeting Held at the Ministry of Commerce [on 22d March, 1919, at 2:30 p.m.]

The Supreme Economic Council held its Ninth meeting on Saturday 22nd March, 1919, at 2:30 p.m. under the chairmanship of M. Clémentel.

The Associated Governments were represented as follows:—

Great Britain Lord Robert Cecil
Sir W. Mitchell Thomson
Mr. Keynes
Sir H. Llewellyn Smith
Mr. E. F. Wise
U. S. A. Mr. McCormick
Mr. Hoover
Mr. Norman Davis
Mr. Baruch
Mr. Robinson
France M. Loucheur
M. Vilgrain
Italy Signor Ciuffelli
Professor Attolico
Count di Cellere

49. Exports to Germany.

The question of the prohibited list of German exports under Article 4 Appendix II of the Brussels Conference 13th and 14th March,1 and of conditions to be established regarding the export of commodities by Germany, were discussed.

It was agreed that, subject to final confirmation of the position of the French Government in the matter, the editing of the telegram to be sent to the German representatives in accordance with the Council’s tentative decision, should be left to a sub-committee consisting of a representative of each of the Associated Powers, which should meet on 23rd March, at 11:00 a.m. The Delegates undertook to notify the Secretaries of the appointments to this Committee in order to permit notification of its membership by the first post on 23rd March.

It was further agreed that, in the event of failure of final agreement, the questions should be referred to the Supreme War Council for decision.

[Page 76]

50. Finance Section Report Regarding Administration of Brussels Agreement.2

A report of the Finance Section dated 20th [19th] March, 1919, regarding the administration of the Agreement with the Germans at Brussels (33) was submitted.

It was agreed that the first and third resolutions of the report should be adopted. It was noted that action had already been taken regarding the second resolution.

51. Blockade Section Report.

A memorandum from the Blockade Section, dated 20th March, 1919, regarding the interpretation of certain clauses of the report of the Brussels Conference (34) was submitted. The inquiries and requests in this memorandum were agreed as follows:—

I
(Appendix clause 4).
(a)
That Germany shall be permitted to export all commodities except those on the prohibited list to all countries of the world, including the Associated Countries and not merely the Neutral Countries, subject to the right of any country to make municipal limitations as to imports from Germany.
(b)
That the imports of food stuffs may take place from countries other than those in which German credits are created by the export of permitted commodities; and it was further agreed that the Finance Section should consider and report upon the manner in which the transfer of credits is to be effected.
(c)
That Germany shall be permitted to continue without control the exports across the frontiers into contiguous Neutrals which they had been permitted to make during the period of war under existing arrangements, but that these exports should not include gold and securities.
II
(Appendix 3, clause 3).
(a)
That the Blockade Section would be furnished as soon as possible with the German reports regarding the materials required for increasing the German Coal output.
(b)
That the Council should insist that the Germans should give special rations to coal miners and other hard workers.
III
(Appendix 3, clause 8).
That no report was as yet available regarding the operation of the machinery for control of the foodstuffs imported into Germany, but that the Blockade Section would be informed as soon as possible.
IV
(Appendix 3, clause 4).
(a)
That, with a view to assisting Germany to obtain credits in Neutral Countries for the purchase of food supplies, in accordance with the promise of consideration given by the Delegates at Brussels, the Associated Governments should inform Germany that immediate [Page 77] announcement will be made that no firm in any neutral Country will in the future incur the penalty of blacklisting solely because it has
(a)
exported foodstuffs to Germany within the limits approved by and in accordance with the regulations of the Associated Governments.
(b)
afforded credits to Germany for the purchase of such foodstuffs.
(c)
imported goods permitted by the Associated Governments to be exported from Germany.
(b)
That the question of permitting Germany to negotiate with blacklisted firms should be referred to the Blockade Section to devise means whereby blacklisted firms in neutral countries or other approved territories should be permitted to carry on trade with Germany for the purpose of creating credits to be used in the purchase of food stuffs as agreed at the Brussels Conference, but subject to the approval of the Blockade Authorities.
V.
That the vegetables and fish referred to in Appendix 4, Clause 2 should be in addition to the ration of 370,000 tons and that the vegetables include all kinds.

52. Report of Food Section.

A report of the Food Section, dated 20th March, 1919 (35) regarding the administration of the Brussels Agreement3 was submitted.

In connection with Clause 1, it was agreed that it was unnecessary to appoint representatives of the Finance Section at Rotterdam.

In connection with Clause 2, it was noted that Naval Authorities have already been advised regarding the removal of restrictions on German fishing in the Baltic. It was agreed that the Blockade Section should immediately take the necessary steps for the relaxation of the quantitative restrictions on the import of fish from Scandinavian neutrals.

In connection with the arrangements regarding the provisioning of the left bank of the Rhine, it was noted that the German representatives objected to the supplementary food supplies brought in by the Allied Armies being financed by them. It was agreed that this matter should be referred to the Finance Section and to the Rotterdam Food Commission for adjustment between them and the representatives of the Allied Armies.

With reference to Clause 4, it was noted that the Naval Authorities have already been advised respecting the undertaking by the German Government to give facilities and protection to shipments through German ports and inland routes to Czecho-Slovakia and Austria.

With reference to Clause 5, it was agreed that communications by the Germans to foreign countries for the purpose of purchasing food [Page 78] stuffs from neutrals should go through the Rotterdam Food Commission.

53. Report of Shipping Section.

A report of the Shipping Section, dated 20th March 1919, (36) regarding the administration of the Brussels Agreement,4 was submitted.

It was noted that an agency is being established at London under the authority of the Council to make the necessary administrative arrangements, and that no further action by the Council was necessary.

It was noted by the French Delegates that the provisional exemption of tank steamers asked by the Germans at the Brussels Conference had been agreed to by the French Delegates on the understanding that there is a sufficient supply of tank steamers available for use by the French.

Appendix 335

Report From Finance Section Regarding the Administration of the Agreement With the Germans at Brussels

The following resolutions have been agreed to by the Finance Section regarding the administration of the agreements reached with the Germans at Brussels:—

“1. With reference to Section 5 of the Financial Agreement made at Brussels, the Financial Section recommend that the German Government be invited to send a small Financial Committee to Versailles, not exceeding six members, including secretaries. This Committee would be given full facilities for rapid communication with its Government. It would be the regular channel of communication with the Financial Section of the Supreme Economic Council on all important financial questions; and, in particular, they would be authorised to deal with:—

  • “(a) Questions connected with the disposal of requisitioned securities.
  • “(b) Questions of German liabilities in neutral countries immediately falling due, and applications for the export of gold, &c.
  • “(c) Methods of securing for the food account the money proceeds of exports to neutral countries.”

(Minutes of Fifth Meeting, Section 3.)

“2. With reference to paragraphs 1 and 4 of the Financial Agreement made at Brussels, the Financial Section recommend that the [Page 79] Report of the Raw Materials Section should be amended to read as follows:—

“‘The export of all commodities from Germany will be free, with the following exceptions:—

  • “‘(a) The export of; material and products of war of all kinds, including ships of war, is prohibited.
  • “‘(b) The existing prohibitions on the export of gold and silver and securities remain unaffected.
  • “‘(c) With the approval of the Supreme Economic Council, any of the Allied and Associated Governments may, at ninety days’ notice, demand priority of delivery of specified amounts of specified commodities against payment for credit of the food account at the same prices and terms that other purchasers are prepared to pay.’”

(Minutes of the Fifth Meeting, Section 4.)

This recommendation is, however, subject to revision at a joint meeting of the Finance and Raw Materials Sections, to be held on Thursday, the 20th March, at 10 a.m.

“3. Paragraph 3 of the Financial Agreement. The Finance Section decided to ask the Supreme Economic Council to authorise the Financial Section to issue invitations to the Governments of Sweden, Norway, Denmark, Holland, and Switzerland to nominate one financial representative each, who should be available for semi-official and consultative discussions with the Finance Section regarding the future financial relations between Germany and neutral countries.”

(Minutes of Fourth Meeting, Section 13.)

March 19, 1919.

Appendix 34

Memorandum to the Supreme Economic Council From the Superior Blockade Council

The Superior Blockade Council would appreciate an interpretation of the following clauses of the Memorandum of the Brussels Conference of the 13th and 14th March:—

Appendix 2, Clause 4, when read in connection with paragraph 5 of Appendix 5.

(a)
Can Germany export all commodities, except those on the prohibited list, to all countries of the world (i. e., including the Associated countries and not merely neutral countries), provided that the funds which they receive for said exports are to be used for the purchase of foodstuffs? In other words, are the Associated countries included in the words “approved destinations”?
(b)
Should the imports of foodstuffs into Germany take place only from that country in which German credits are created by the export of permitted commodities, or may such credits be transferred to finance imports of foodstuffs into Germany from any other country?
(c)
Is Germany to be permitted to continue without control the exports across the frontiers into contiguous neutrals which they have been permitted to make during the period of war under existing agreements, even though these exports may consist of prohibited articles, e. g., gold and securities?

Appendix 3, Clause 3.

  • Paragraph 1.—The Superior Blockade Council request that the Supreme Economic Council furnish them, as soon as available, with the detailed report which the Germans agreed to submit as to the imports of materials required for increasing the German coal output.
  • Paragraph 2.—With reference to this paragraph, the Superior Blockade Council would appreciate being informed what method of control is to be established to insure that the consignments of foodstuffs are not distributed to unemployed persons who by their own fault or choice fail to obtain work.

Appendix 3, Clause 8.

The Superior Blockade Council is of the opinion that the machinery which has been adopted for execution by the Food Section and the Inter-Allied Trade Committee (whom the Blockade Council have instructed to co-operate with the Food Section) for the control of the exports of foodstuffs into Germany is working satisfactorily. The Blockade Council would appreciate being informed if this is the case.

Appendix 3, Clause 4, Paragraph 1:

1.
The following resolution as to the modification of the black-listing procedure was adopted by the Superior Blockade Council, which would appreciate the views of the Supreme Economic Council thereon:—

Resolved:

“That, with a view to assisting Germany to obtain credits in neutral countries for the purchase of Food supplies, in accordance with the promise of consideration given by the Delegates at Brussels, the Associated Governments should inform Germany that immediate announcement will be made that no firm in any neutral country will in the future incur the penalty of black-listing solely because it has—

  • “(a) Exported foodstuffs to Germany within the limits approved by and in accordance with the regulations of the Associated Governments.
  • “(b) Afforded credits to Germany for the purchase of such foodstuffs.
  • “(c) Imported goods permitted by the Associated Governments to be exported from Germany.”

2.
The Superior Blockade Council would appreciate being informed whether or not Germany will be permitted to negotiate with blacklisted firms, whether in (a) Associated countries, (b) neutral countries, or (c) all countries.

Appendix 4, Clause 2:

The Superior Blockade Council would appreciate being informed—

(a)
If the vegetables and fish referred to are to be included within the 370,000 tons of foodstuffs or are to be in addition thereto.
(b)
If the vegetables referred to mean (1) fresh vegetables, (2) dry or preserved vegetables, or (3) all kinds.

Appendix 35

Note by Food Section on the Brussels Agreement of March 14, 1919

1. Rotterdam Food Commission.—The Agreement provides for the setting up of a Standing Commission at Rotterdam “for the purpose of discussing with German Delegates from time to time commercial and other details arising out of the food traffic under this Agreement.”

One Delegate from each Associated Government is being appointed, and he will be assisted by the necessary commercial experts. These Delegates will be appointed within a few days.

The Shipping Section proposes to appoint a similar Commission to deal with details arising out of the transfer and handling of German ships, and it would be desirable that the two Commissions should work together at Rotterdam.

2. Fishing.—The Agreement (Clause 2) provides for the removal of restrictions on German fishing in the Baltic. This point has been referred to the Naval Armistice Commission for action.

It is also laid down that the import of fish caught in European waters and the import of vegetables from neutrals are not to be included against the ration of 370,000 tons of food per month allowed under Clause (1) of the Agreement. As it stands, this merely allows the Germans to import what they can under existing Blockade Agreements without thereby diminishing their import of other foodstuffs within the stipulated ration. It is suggested that the Blockade Section should take into consideration the further relaxation of the restrictions on the import of fish from Scandinavian neutrals and from Holland.

3. Left Bank of the Rhine.—With regard to the left bank of the Rhine, it has been arranged that the ration of 370,000 tons per month, in addition to the preliminary emergency supplies of 270,000 tons, are to be regarded as a ration for the whole of Germany, occupied and unoccupied, and that supplies for the occupied territories will be financed in the same way as supplies for the rest of Germany. Certain [Page 82] emergency supplies are being shipped by the Allied Military Authorities for use in the occupied territories, and they will be financed in the same manner, but they will be taken into account in the later partition of supplies. It was stipulated by the Germans that no supplementary supplies to the left bank itself, which would bring the ration in the occupied area above the ration in the rest of Germany, should be financed from the general funds of Germany. Consequently, any supplementary supplies will have to be financed either by the Allied Military Authorities or under special arrangements, if these are possible in the occupied territories. It is suggested that the Finance Section should examine the possibility of making any special arrangements.

The Allies reserve to themselves the right to determine the proper share of the supplies to be handed over to the Allied Military Authorities at Rotterdam for consigning to the occupied territories after considering the proposed distribution scheme submitted by the Germans. It is contemplated that for the present time this matter will be dealt with by the Standing Food Commission at Rotterdam.

4. Transport Through Germany.—The German Government has undertaken to give all facilities and protection to shipments through German ports and inland routes to Czecho-Slovakia and Austria. The Communications Section has been asked to instruct the Naval Authorities as to this undertaking.

5. Business Communications.—The Germans were informed that the Associated Governments would facilitate communications by the Germans to foreign countries for the purpose of purchasing foodstuffs from neutrals. For the present, such communications will go through the Rotterdam Food Commission.

Appendix 36

Report from the Shipping Section Regarding the Administration of the Brussels Agreement

The attached document6 (which should be added to the reports of the other sections already circulated) shows the new shipping provisions agreed to at Brussels.

These provisions have been studied by the Shipping Section. They consider the agreement raises no new questions of policy requiring decision by the Council, and that the great amount of administrative work which they involve can only be properly carried out through the London organisations. Arrangements are being made accordingly.

  1. For appendix II to the memorandum of the Brussels Conference, see Miller, Diary, vol. xvii, p. 200.
  2. See appendix III to the memorandum of the Brussels Conference, Miller, Diary, vol. xvii, p. 202.
  3. See appendix IV to memorandum of the Brussels Conference, Miller, Diary, vol. xvii, p. 208.
  4. See appendix V to memorandum of the Brussels Conference, Miller, Diary, vol. xvii, p. 210.
  5. Appendixes 33 to 36 are filed separately under Paris Peace Conf. 180.0501/33.
  6. Not attached to file copy; see appendix V to memorandum of the Brussels Conference, Miller, Diary, vol. xvii, p. 210.