Paris Peace Conf. 184.011102/291
Mr. Albert Halstead to the Secretary of State 22
Subject: Further comment on the peace treaty.
Sir: I have the honor to further discuss certain features of the revised draft of the Peace Treaty with German-Austria and to present further Austrian views on the subject, with especial reference to provisions which it is feared in Austria are wholly destructive.
The Commission, I feel certain, is now appreciative of my own belief that the treaty means bankruptcy and with bankruptcy will come disorder and probably bolshevism; that Austria bitterly resentful of what she would regard as the triumph of the states carved from the old empire would in the future be a menace to the peace; and that bankruptcy here will also threaten social order in the new states. However, in the views that follow the effort is made only to give the opinion of an Austrian publicist, not connected with the government nor in sympathy with it, which are those of every thinking German Austrian. I take it that such views are desired because it is manifest that the United States desires to conclude a just treaty.
[Page 558]It is held that Part VIII of the Treaty entitled “Reparation” practically mortgages all property, national, commercial, or personal for the payments which the treaty imposes on Austria, that it grants unlimited rights regarding the levying on property and as to the means which shall be used to enforce the Treaty. It makes German Austria absolutely dependent upon the Commission in all respects. The budgets must have the approval of the Commission and under Annex 12, Subsection B which follows Article 183, it may even require heavier taxes so as to demand that “the Austrian scheme of taxation is fully as heavy proportionally as any of the powers represented on the Commission.” It can practically dictate the laws. This is a Commission in which German Austria has no voice and no weight. It is further stated that the Treaty is worse than that of Versailles, because of the rights granted to the states, except German Austria, that succeeded to the territory of the old Austrian Empire. Though the United States, Great Britain, France and Italy form the controlling force in the Reparation Commission, the other states may be represented by one delegate. Therefore, in questions involving the vital rights of German Austria, while she may have no voice, the Czecho Slovaks for instance who are regarded as the most threatening enemies of German Austria, have a voice and at least part of a vote. Inasmuch as Section XIII of Annex 2 above referred to, in Sub-Paragraph A provides for the unanimous vote of the Reparation Commission on any questions involving the cancellation of the whole or any part of the debt of German Austria, the Czecho-Slovaks’ interest or that of any of the three remaining new states would be able to veto a proposition to lessen the burden on Austria. They could do that either because it meant financial loss to themselves or because they desire to bring pressure to secure Austrian agreement to some other proposition. It is declared that while Germany must pay all that is possible under the Treaty of Versailles, the decision as to what she is able to pay rests with the United States, France, England and Italy who would not be benefited by and would suffer commercially if the payments demanded of Germany were in excess of her ability to pay, but in the case of German-Austria under the Treaty of St. Germain, the more she pays the more the Czechs gain, but if German Austria pays less—certain payments from the Czechs may have to be greater.
Further, under Paragraph 18 of the Second Annex to the Reparation Clauses the Allied and Associated Powers in case of voluntary default by Austria “may include economic and financial prohibitions and reprisals” which are not to be regarded as acts of war, as may be necessary. This permits the Allies to forbid exports and imports and to do all that they care to do to enforce their will. To all practical [Page 559] purposes and intentions this leaves Austria governed by the Reparation Committee. Her people would be subject during the years of its continuance to any command it imposes. This is a dictatorship—it takes away absolutely the right of self-government.
In the above connection it is said that Austria does not fear the Reparation Committee but it does fear its relations with the other nations formerly of the Empire. It would prefer to negotiate with the Conference Powers only. The danger is, and it is very great, that the Czechs, Jugo-Slavs and Poles will charge German-Austria with the major part of the debt—billions and billions—dispensed for their benefit.
In conclusion I would myself say that the criticisms to the reparation clauses are based on the natural objection of a former great nation to be under the practical domination of other nations; but this objection is the greater because the new states which they have reason to believe are not only unfriendly but are seeking their own interests, have a voice in the government of the country through the Reparation Commission. If the financial clauses with the exceedingly heavy obligations they impose upon German-Austria are to remain unchanged or only to be amended in slight details, the provisions creating the Reparation Commission are imperative. If, however, the voice of Austria is made equal to that of the new states a decided improvement will result.
I have [etc.]
- Copy transmitted to the Commission by Mr. Halstead under covering letter No. 382, August 8; received August 11.↩