Paris Peace Conf. 184.00101/9
Minutes of the Daily Meetings of the Commissioners Plenipotentiary, Tuesday, February 11, 1919
- Me. Lansing
- Mr. White
- General Bliss
- Mr. McCormick
- Mr. Baruch
- Mr. Davis
- Mr. Strauss
- Mr. Dulles
1. Mr. McCormick stated that on behalf of his colleagues that the American delegates on the Commission of Reparations were very anxious to learn the opinion of the Commissioners in regard to certain broad general principles. Briefs had been submitted to this Committee by each of the Delegations, and it was found that very important differences existed between them. Mr. McCormick wished to know whether the President’s 14 points should be adhered to by the American delegation or whether in the computation of the sums which Germany should be required to pay, the entire cost of the war was to be considered. He wished to know how far the American delegates should fight for the American point of view.
Mr. Lansing felt that there were only three classes of claims; one, direct damage to personal property; two, indirect damage, and three, the cost of maintaining military establishments. To point one might be added the removal of the people from, Belgium and France.
Mr. Dulles stated that it would of course be impossible for the American delegation to give a broad interpretation to the President’s 14 points. He added that at the last meeting of the Commissioners, however, Mr. Hughes, the first delegate for the British Empire had said that he did not see that the President’s 14 points entered into this matter at all.
General Bliss expressed a wish that the whole question of the amount which Germany was to pay should be settled once and for all in this small Commission. He felt that it was very important for the United States to learn whether, as a new principle, it could be admitted that the victorious side could charge all the expense of maintaining its military organization to the vanquished. He further felt that if this matter could not be settled at once by the small Commission it should be referred to either a Plenary Council or to the Bureau of Ten. Mr. McCormick observed that except for ourselves, all the other nations felt that the cost of the war should be included in the sum which Germany would be required to pay.
Mr. Dulles stated that the question of reparations was a new question and that the exact definition and formulation of this word was absolutely necessary at the present time. General Bliss observed that in his opinion reparations and indemnities were two separate things, but Mr. McCormick added that all the other nations believed that under the head of reparations, the cost of the war could be included. Mr. Baruch also stated that according to Mr. Hughes, every form of payment came under the head of reparation.
Mr. McCormick observed that as yet no reliable estimate had been made as to the exact sum which Germany would be in a position to pay. He further said that England, as well as the other nations directly concerned were [was] trying to put the blame on President Wilson for reducing the claims of their respective countries.[Page 30]
General Bliss suggested that separate claims be studied by each of the nations for reparation and for indemnity. Mr. McCormick [asked] whether, if this were done, it would be necessary for the Committee on Reparations to make out two separate reports, one a majority report on which all could agree, in regard to reparations, and the second a minority report on which the United States would state its dissent regarding indemnities. Mr. Baruch observed that this was not possible because of the difference in interpretation of the word reparations and indemnities. Mr. Baruch went on to say that all the nations were now trying to put the United States in the wrong. He suggested that inasmuch as there would not be sufficient money coming from Germany to go all the way around, the American delegates merely present their arguments but make no fight, and let the other nations squabble between themselves as to the partition of the available funds.
Mr. McCormick felt that such a procedure might put the President in an uncomfortable position as it would mean that in the first test case the American delegates had backed down from one of the President’s 14 points.
Mr. Dulles then inquired whether the funds now in the possession of the Alien Property Custodian should be applicable for the satisfaction of the claims which the United States has against Germany. He particularly wished the opinion of the Commissioners on this point. He added that if we should pool these funds with the rest of Germany’s assets for the satisfaction of the claims of all the Allies it would make a difference in our attitude towards our own claims. If we actually made the transfer, we would then have a direct interest in the division of the spoils, whereas if we kept it as security for our own claims we could then act entirely on principle in regard to the settlement of other nations claims.
Mr. Strauss felt that it was very important that we should get the opinion of the British in regard to these matters. He stated that they had a scheme for securing the claims of their individual citizens. He also stated that our Treasury believed that the United States could not confiscate the private property of German citizens in the United States. He personally was not sure whether it would be good policy to do this or not. If we compelled Germany to settle with her own citizens in the United States in return for the losses which they had sustained by our taking over all their property this would amount to confiscation.
Mr. Davis inquired whether other countries should be allowed any claim on the German property which the United States holds. Mr. Strauss stated that Jeremiah Smith, a Boston Lawyer and a Judge-Advocate of the Army was studying this whole question and he proposed [Page 31] that a diplomatic official should be assigned to study it with him. Mr. Dulles was suggested for this job.
Mr. Davis then inquired whether the American delegates could not definitely act on the basis that the American government was alone concerned with the disposition of German property taken over by the Alien Property Custodian. The Commissioners agreed that they could.
Mr. Strauss stated that he believed that we should not countenance the confiscation of German property in the United States but that we should certainly not part with it until the American claims were settled. Mr. Lansing agreed that such a procedure would soon induce Germany to agree to an equitable settlement.
Mr. Lansing asked if it would not be advisable to put up to the Supreme Council the whole question of the definition of the word reparation. This matter was discussed at some length and it was finally decided that it would be best to have the President define this point and that then the American delegates should act in accordance with his definition.
The question as to the attitude which the American delegates should adopt was then discussed. Mr. McCormick felt very strongly that we should fight out the whole question in accordance with the President’s 14 points, but of course our fight would have to be qualified by any definition of the word reparation which we could decide upon. Mr. Lansing felt that as Germany had accepted the President’s 14 points this might be the wisest procedure, but at the same time felt that we should not press our point of view too strongly for fear of incurring the animosity of the French and British people. He believed that we should first submit our claims, admit counter claims and let the different nations fight out the division among themselves. Mr. McCormick reiterated his belief that we should fight it out on the basis of the President’s principles as this was the first real test in the practical application of the accepted armistice terms. Mr. Davis pointed out that the campaign which the other nations were carrying on with a view to influencing the United States was in reality making their own people believe that a much larger sum could be extorted from Germany than was in any way possible. He added that the sooner these nations changed their minds the better, as they would otherwise disappoint the expectations of their people and get into a bad mess. He explained that Mr. Hughes represented the point of view of the politicians in England who had been forced to dwell on the question of tremendous reparations as a campaign measure. He added that the Treasury officials of England felt much as we did in this matter.[Page 32]
The question of priority of payment was then discussed. It was agreed that this matter could only be settled after the lump sum which Germany would be able to pay had been determined. Both Mr. Davis and Mr. McCormick felt the tremendous importance of settling this matter at once. Mr. McCormick added that in his opinion the preliminaries of peace could be signed as soon as this figure had been determined.
In the discussions it developed that various nations had figured the sum which Germany would be in position to pay anywhere from 120 billion down to 5 billion.
Everyone present agreed that it would be impossible to force Germany to continue paying for a great number of years.
Mr. Baruch brought up the question of the guarantee which would be asked of Germany to force her to pay the sum finally determined upon.
There was some question as to whether it was the duty of the Commission on Reparations to determine this point or not, because no record could be found that the suggestion made by Mr. Klotz at the second Plenary Session of the Peace Conference had been approved.29
Mr. Baruch recommended strongly that a report which he understood that the Alien Property Custodian was about to submit to Congress, should be held up until the question of reparations had been settled. He also recommended that either Mr. A. Mitchell Palmer30 or Mr. Bradley Palmer should be asked to come to Paris to state their views in the premises.
The general decision arrived at in regard to the attitude which the United States should adopt in the matters above discussed, was the following: The American Delegates should submit their brief of claims to the Commission, stating the basis on which these claims had been worked out and stating the interpretation which the United States gives to the President’s principles in regard to reparation. They should remain content with such a settlement for the time being and not press our views too hard on the other delegates.
It should be clearly stated that the disposition of the property held by the Alien Property Custodian is a purely domestic affair and one in which no other country has any direct concern.