Paris Peace Conf. 184.00101/123
Minutes of the Daily Meetings of the Commissioners Plenipotentiary, Friday, July 25, 1919
- Present:
- Mr. White
- Gen. Bliss
- Mr. Harrison
conversation with mr. stettinius
Mr. White stated that during a conversation the previous evening with Mr. Tittoni, the latter had referred to the desire of the Italian Government to secure a credit in the United States for $650,000,000 for three years. The United States Government had put in a caveat that nothing must be done for three weeks. The Italian Government was particularly anxious to obtain this credit, as their needs are very pressing, and Mr. Tittoni inquired whether the President would not consent to remove the veto on one-quarter of this amount.
Mr. Stettinius, in reply, stated that he thought that he might perhaps go into the history of the matter. Some six weeks or two months ago Mr. Crespi19 had approached him on the subject of an American loan to Italy. At that time Mr. Davison20 was considering most [Page 346] tentatively the question of forming some plan or corporation in the United States to handle the whole subject of European credits. As he looked into the matter, he was soon convinced that government support was necessary, and came to realize that nothing should be done in any way whatsoever without government approval. He had endeavored at that time to ascertain what the Italian requirements were, and had also asked the British the same question, as well as the French, his purpose being to present a statement of total requirements to American bankers.
As regards security for an Italian loan, the Italians had proposed that their importers form consortiums, that the importers be held personally responsible, that the drafts of the importers be guaranteed by these consortiums or the Italian banks, and that the latter be then guaranteed by the Italian Government. The Italians had approached the representatives of our leading banks on this matter about June 22nd. On or about July 4th, Mr. Stettinius had received a cable from Mr. Davison stating that American exporters and bankers were not keen about the proposition, and there was serious doubt in Mr. Stettinius’ mind whether the plan could be put through.
Mr. Stettinius stated that he had written Mr. Jung that no arrangements had been worked out for Italian credit, and expressed the hope that Mr. Jung and his associates would be able to make arrangements through their usual channels. Last Friday or Saturday Mr. Springer, Governor of the Bank of Italy, had referred to Mr. Stettinius’ letter to Jung, and had asked whether it would not be possible for the big plan to take over any temporary arrangements which might be made in the meanwhile. Mr. Stettinius had replied that for his part he saw no objection, and thought that this might be done, but laid stress on the fact that the whole matter was in abeyance. There was, moreover, this difficulty, that American exporters were accustomed to having the money paid them in the United States, and were not used to giving long term credit, while American bankers seemed desirous of carrying on their old arrangements. In addition, the United States Treasury representatives in New York had been instructed to withhold action, possibly on account of the fact that the President had in mind the issuance of a general statement regarding the whole question of credits to Europe.
Mr. Stettinius stated that he had seen the Italian Minister of Finance last night, and that Mr. Schanzer had repeatedly asserted the urgent need of the Italian Government to obtain money. In reply to a question he had stated that it was for the purpose of purchasing food, particularly wheat, which Mr. Stettinius understood Italy did not need. Mr. Schanzer had urged Mr. Stettinius to help in obtaining the flotation of short term treasury bills. Mr. Stettinius had replied that nothing could be done with private people until the government had reviewed [Page 347] the situation and had taken action. Mr. Schanzer stated that he was proceeding to London to place 12,000,000 Pounds sterling of short term notes, and that he wanted to place $100,000,000 worth in the United States. Mr. Stettinius had advised him to talk with Hoover if he needed food supplies. Mr. Schanzer had asked him to arrange a meeting for him with Mr. Hoover, and this would take place this evening. Mr. Stettinius had spoken to Mr. Hoover, and the latter stated that Italian food requirements were fully covered.
In reply to a question by Mr. White regarding the financial situation in France, Mr. Stettinius expressed the opinion that France was in a healthier condition financially than any European country, with the exception of Belgium. A group of young men had been formed here in France who were courageous, intelligent and straight. They had friends in the government, although they were not actually connected with the Government. Mr. Stettinius had been much impressed by them. They had gone into the situation very carefully, and had well-considered plans for bringing down the cost of living. In his opinion, the principal requirement of France at this time was coal. They seemed to think that they could get it in the United States, but they had probably not realized the difficulties of moving it in the United States, and the importance of having port facilities for shipment. Mr. Stettinius estimated French requirements for financing exports from the United States as from $700,000,000 to $1,000,000,000.
Mr. White then reverted to Mr. Tittoni’s statement to him the previous evening, and asked Mr. Stettinius if it were correct that the Italian proposals regarding terms had been accepted, and that the only thing that stood in the way of the completion of the credit was the President’s veto.
Mr. Stettinius replied that Mr. Tittoni’s statement was quite incorrect, and pointed out that all that had taken place so far was in the nature of conversations of a most informal character. These had related to the $100,000,000 short term treasury bills, not $150,000,000 as Mr. Tittoni had stated. Moreover, the conversations were purely tentative, and it was extremely doubtful whether the matter would go through at all.
Mr. Hoover then entered the meeting.
Mr. Hoover stated that he had looked into the question of what the United States had to sell. He estimated that the amount of wheat, copper, coal and iron the United States would have for export would amount to $3,000,000,000 during the next year. He called attention to the fact that our production is “seasonal”. European countries who needed this $3,000,000,000 worth of exports from us, were not in a position to purchase these goods when they were seasonal. He thought, therefore, that the United States must form some organization to control the sale of these exports and control the purchase by [Page 348] the European countries in such a manner as to protect the United States. Through this same organization we might have a lever to force these European countries to disarm and get down to work.
There then ensued a discussion between Mr. Hoover and Mr. Stettinius regarding the labor situation in Europe. Mr. Hoover mentioned the fact that in certain places in northern France the French had 2,000 German prisoners working in a certain locality, where there were 15,000 French workmen idle.
Mr. Stettinius then left the meeting.
The Commissioners then discussed with Mr. Hoover the three following telegrams which had been received from Captain Gregory in Vienna:
“A. R. A. Received July 25, 1919.
For action.
1 VN
Col. Logan.
“ZZ” strongest factor past and present military personages in the territory now under consideration approached Cunningham with view ascertaining terms on which Entente willing come again in contact with people of said territory after conference Allied representatives here. Formula was submitted to him set forth my 935 and 937.21 He has accepted it provisionally as working basis and is going conference with associates. He can control army and handle situation without outside military support. This is best proposition by far which has come up and each representative here is sending message to respective Government Paris of which foregoing is substance and which you will get copy but we understand mission of four Generals ordered proceed into said territory to repeat the former Generals’ fiasco and most important this mission be stopped. It involves tacit recognition and would again strengthen hand of present control.
Gregory.”
“A. R. A. Received July 23, 1919.
For action.
54 x go 92 rush.
Vienna July 23, 9 p.m.
1919.
Col. Logan, Paris.
Ham 937. First: Assuming of dictatorship in which complete powers of Government are vested in names to be discussed: Haubrich. Agoston, Garamy. Second: Dismissal of communistic Kuhn Government, repudiation of Bolshevism and complete cessation of Bolshevistic propaganda. Third: Dictatorship to bridge over until formation of Government representative of all classes. Fourth: Immediate cessation of all terroristic acts of confiscation and seizures. Fifth: Immediate call of Entente advisory body. Sixth: Raising of blockade and immediate steps to be undertaken by Entente to supply food, coal and assistance in opening Danube river. Seventh: No political prosecutions. Eighth: Ultimate determination of socialization to be left to permanent Government.
Gregory.”
[Page 349]“A. R. A. Received July 24, 1919.
For action.
52 x u. 53.
Vienna July 23, 1919.
Hoover,
Paris.
Ham 935. For Logan. Am sending important message which would like to know if acceptable at once as working basis for business about which we have been talking. Head of affair would be General Boehm who accepts principle stated and believes can arrange business along these lines at once.
Gregory.”
Mr. Hoover suggested that the matter be placed on the Agenda for the Council of Five at the earliest possible moment, and recommended that the civilian representatives of the Principal Allied and Associated Powers in Vienna be instructed to handle the matter. He was led to make this recommendation, as he thought it would be very unfortunate if the French Military were mixed up in the conversations with General Boehm.
In this connection Mr. Hoover seemed to think that it would be preferable if his representative, Captain Gregory, should act for the United States …
After some conversation, Mr. Hoover made the proposal that the Allies should, in his opinion, inform General Boehm that if the Social Democrats in Hungary should set up a government of law and order and guarantee the immediate calling of general elections, the Allies would undertake to treat with them for peace, open the Danube, and lift the Blockade.
Mr. Hoover also touched on the coal question of Central Europe, and referred to the meeting of yesterday with the Germans. He pointed out that the Reparations Organization Committee was starting in to make demands on the Germans for the delivery of certain quantities of coal and that it was quite clear that France and Italy required a large portion of the coal to be supplied by Germany. He stated that Colonel Goodyear had at last been able to complete the contract between the Poles, Czechs and Germans, and that starting from tomorrow, under this contract, Vienna would begin to receive German coal. If the Reparations Committee insisted on their demands for German coal for France and Italy, it would be impossible for the Germans to make the necessary shipments to Poland, Czecho-Slovakia and Vienna, although the Germans had stated yesterday that they were prepared to carry out the Goodyear contracts. But if the Reparations Committee insisted on their demands, Germany will of course comply, and Czechs, Poles, and especially the Viennese, would be left stranded.
It seemed to Mr. Hoover that his organization had better be withdrawn. Either the United States should have the controlling voice or we should leave it to the Europeans to arrange their own troubles.
[Page 350]Mr. Hoover spoke of the present situation in the Silesian coal fields. The situation there had been torn to pieces by the propaganda carried on by the Germans and the Poles. The Poles were doing all they could to keep down production to force the Allies to take charge, while the Germans had increased the allowances to the miners, had made other promises, and were doing all they could to get as much coal as possible out of the Silesian fields, before the territory was lost to them. At the present time the production of the Silesian fields was about 50 per cent of what it ought to be.
General Bliss suggested that it would be well to have a full memorandum prepared on the whole situation showing the necessities of all countries for next winter. Mr. Hoover stated that such a memorandum was already in course of preparation, and that in the memorandum the necessity for some dominant action would be pointed out, that it was a European action and not an American action that was required, and that it was vital for Europe to establish a general complete control over the whole coal situation. Mr. Hoover mentioned the fact that lately there had been talk about obtaining coal for Europe in the United States, and that they had spoken of obtaining a million tons in America. Even if it were possible to get this out of America on account of the lack of dock facilities which were now and would be for the next six months entirely taken up with the handling of our coastwise shipments, it would be necessary to find some two and a half million tons of shipping to handle this coal, and that this would result in the complete disorganization of the tonnage of the world. The world tonnage situation was, in any event, going to be affected by the fact that the northern neutrals had ordered coal in America, and would use their ships for this purpose, when they should be engaged in other trade.
I. Major Tyler’s memorandum dated July 24th, regarding his conversation with General Slatin was read.
The Commissioners desired that the matter brought up in this memorandum regarding the refusal of the Allies to permit the departure of an Austrian Red Cross Delegation to Siberia, should be referred to the American Representatives on the Prisoners of War Commission for report and recommendation. Austrian Red Cross Delegation to Siberia
II. The Commissioners approved the dispatch of a telegram to the State Department asking for an immediate reply to the cablegram of July 18. They also approved the draft telegram attached to Memorandum No. 505, but desired that the last sentence be stricken out, and the following inserted: Commission to the Baltic Provinces [Page 351]
“Can you not obtain an immediate reply from the Secretary of War to question raised in our telegram No. 3211 of July 18, 7 p.m.”
The Commissioners also approved the suggestion that Col. Greene should be asked to wait a few days longer before taking any action in the matter of closing up the work of the Commission to the Baltic Provinces.
III. The Commissioners approved the payment by the Commission of Mr. Howe’s transportation to the United States as stated in Memorandum No. 506. They suggested, however, that before authorizing an allotment for this purpose, inquiry should be made as to whether the Army would not carry Mr. Howe to the United States as a member of the Peace Commission. Payment of Transportation to the U. S. of Mr. George Howe
IV. The Commissioners approved the recommendation submitted in Memorandum No. 507 regarding the appointment of Colonel Goodyear to succeed Mr. George Howe on the Teschen Commission, provided Mr. Hoover gave his consent.
The Commissioners also expressed the desire to hear Mr. Goodyear regarding the coal situation of Central Europe, as well as the problem involved in the settlement of the Teschen question, at their next meeting. Colonel Goodyear To Succeed Mr. Howe on the Teschen Commission