Annex V (1 to 10)

Note to VIII, Annex V

The German delegation declared that Germany was prepared to export to France coal equal to the difference caused by the destruction of the French mines—20,000,000 tons annually for five years and after that up to 8,000,000 tons; it was also ready to undertake the reconstruction of part or the whole of the damaged mines (Foreign Relations, The Paris Peace Conference, 1919, vi, 861). The options demanded in paragraphs 2–9 were unacceptable, owing to decreased German production. Nevertheless Germany would grant a priority for 10 years to France and Belgium on the surplus [Page 509] above German internal requirements. In return Germany would expect adequate supplies of minette ore “from Lorraine and France”. So far the decreased production of coal derivatives made it impossible to meet the Allied demands, but specific quantities of benzol, coal tar, and sulphate of ammonia were promised.

Coal and its derivatives were recognized from the outset as important commodities in the reparation program. In 1919 the European Coal Commission of the Supreme Economic Council made an investigation to determine the extent and duration of the fuel shortage. German coal could play an effective part in hastening a large return to normal industrial life, but increase of export would affect Germany’s industrial ability. On December 25, 1918 a protocol signed at Luxembourg provided for the supply of coal and coke to the metallurgical industries of Lorraine under the armistice. The Organization Committee of the Reparation Commission on August 29, 1919 negotiated a protocol with Germany to obtain delivery of coal in anticipation of ratification of the peace treaty; deliveries of 1,660,000 tons a month until April 30, 1920 were to include deliveries under the Luxembourg protocol, which were to be credited to Germany on the reparation account.

On August 31, 1919 the Organization Committee, in order to give the requisite 120 days’ notice, informed the German delegation of a program of coal deliveries for January 1920. The German delegation entered a reservation on the ground that the Reparation Commission was not yet officially organized or constituted, but, nevertheless, began deliveries in September. In order to supervise deliveries, the Organization Committee constituted a coal commission at Essen which held its first meeting on November 10, 1919, against the protest of the German delegates. On November 14, 1919 the Supreme Council requested the Organization Committee of the Reparation Commission to reach an agreement with the Upper Silesia Plebiscite Commission concerning the allocation of Upper Silesian coal as part of the German supply for both the domestic and export trade. Upper Silesian coal was allocated to Austria, Poland, and Italy.

When the Reparation Commission was officially constituted with the entry of the treaty into force, the delivery programs established by the Luxembourg and Versailles protocols were generally confirmed, and precise powers given to the Essen Coal Bureau and the Central European Coal Bureau at Moravska-Ostrava. The program was established by the protocol signed at Spa, July 16, 1920. The [Page 510] circumstances resulting in the signing of this instrument arose from a decision by the Reparation Commission May 29, 1920 to increase the quantity of Upper Silesian coal allowed to Poland from 250,000 to 450,000 tons a month, on condition that Poland would supply means of transportation for 100,000 tons. This decision was taken as a pretext for the German Government to reduce deliveries already in arrears from the Ruhr. The Reparation Commission thereupon, in application of paragraph 17, annex II, formally notified the Allied and Associated Powers on June 30, 1920 that Germany had defaulted in fulfilment of its obligations for the delivery of coal.

The Spa protocol of July 16, 1920 registered an agreement of Germany to place at the disposal of the Allies 2,000,000 tons of coal each month for six months from August 1. The Allied Governments agreed:

(a)

to pay in cash a premium of 5 gold marks for each ton of coal delivered by rail or inland waterway, granted in consideration of the admission of the right of the Allies to require certain specified qualities of coal; the premium to be spent in purchasing foodstuffs for German miners;

(b)

to make Germany advances during the period of six months, equivalent to the difference between the internal German price and the English f.o.b. export price in English ports, these advances enjoying absolute priority over all other claims of the Allies on Germany.

The protocol also provided for the institution: (1) of a permanent delegation of the Reparation Commission at Berlin with the object of making sure that the coal deliveries provided for were carried out; (2) of a commission, on which Germany was to be represented, with the object of preparing an agreement on the allocation of Upper Silesian coal; (3) of a commission at Essen, with German representation, with the object of seeking means by which conditions of life among the miners in regard to food and clothing could be improved with a view to a better working of the mines.

This protocol was an agreement between the Conference of Ambassadors and the German delegation, who, however, signed with reservation of article 7, which read as follows;

[Page 511]

Deliveries under this protocol began to fall off in November, and continued below the schedule for many months. By the end of the six months there was a deficit of 661,000 tons. Along with other instances of default in the German obligations, this failure to fulfil requirements was a factor in the decision of the French to occupy the Ruhr from March 8 to October 1, 1921 and was one of the bases on which the ultimatum of May 5, 1921 rested.

During the six months of the Spa protocol, advances to Germany amounted to 360,791,378.64 gold marks. An agreement signed at Paris, December 28, 1920, for the repayment of these advances provided for an issue of German treasury bonds to mature May 1, 1921. The bonds not repaid on that date were to be charged off against deliveries in kind.

In the course of adjustments leading up to this settlement, the Spa protocol had been modified by a convention of October 27, 1920, between the Reparation Commission and the Kriegslastenkommission which among other things determined that three tons of coke were credited at the rate of four tons of coal, and seven tons of lignite briquettes for four tons of coke. The Committee of Inquiry at Essen on October 20, 1920 signed a protocol respecting the food supply of the mining population. The permanent delegation of the commission left Berlin with the expiration of the Spa protocol at the end of January 1921.

The situation in Upper Silesia was affected by a decision of the Conference of Ambassadors on July 28, 1920 concerning the frontier between Czechoslovakia and Poland in the Teschen district, which left to those states the allocation of their reciprocal supply of coal. The Reparation Commission attempted to devise a general allocation plan, but its proposal of December 27, 1920 was not approved by the German and Upper Silesian delegates. The Reparation Commission did not continue with its plan because the imminence of the plebiscite in Upper Silesia made the question less vital; the allocation of Upper Silesian coal was eventually a subject dealt with in the German-Polish Convention of May 15, 1922.

Difficulties with respect to coal deliveries continued. The Reparation Commission on August 25, 1921 notified the German authorities of its refusal to admit the claim that Germany was not bound to deliver coal between the periods mentioned in annex V. This decision was based upon the fact that the commission was alone competent to postpone or cancel quantities determined in exercise of the option specified in the annex. A reduction of deliveries occurred as [Page 512] a result of disorders in Upper Silesia in May 1921 following the plebiscite. In an attempt to insure maintenance of deliveries at the levels fixed, the commission informed Germany on December 9, 1921 that Germany might export neither coke nor coal without previous authority from the Reparation Commission.

During 1921 there was a deficit of coke deliveries to France, which in December requested the Reparation Commission to notify a default on Germany’s part to the Allied and Associated Governments in conformity with paragraph 17, annex II. On December 30 the commission decided that proposals of the Kriegslastenkommission were calculated to insure proper deliveries and hoped to avoid consideration of the question of reporting a default.

During the period January 1920 through January 1922, the schedule of monthly deliveries totaled 53,209,350 tons, and deliveries amounted to 37,554,461 tons. The final credits for delivery up to August 31, 1924 were determined at 50,876,400 metric tons valued at 953,904,330 gold marks, of which 22,086,049 metric tons (433,140,064 gold marks) were delivered before May 1, 1921 and 28,790,351 metric tons (520,763,266 gold marks) after that date.

Coal under the Dawes Plan continued to represent a considerable proportion of the German deliveries in kind. Eventually quarterly programs were agreed to in advance, the quantity varying with the season, the requirements of the recipients, and the conditions of supply. The deliveries for the quarter June–August 1929 were fixed at 1,000,000 metric tons monthly to France and 570,000 metric tons to Italy.

Coal, coke, and lignite credited at 896,580,931 gold marks had been received up to the closing of accounts on January 20, 1930.

1.

Germany accords the following options for the delivery of coal and derivatives of coal to the undermentioned signatories of the present Treaty.

2.

Germany undertakes to deliver to France seven million tons of coal per year for ten years. In addition, Germany undertakes to deliver to France annually for a period not exceeding ten years an amount of coal equal to the difference between the annual production before the war of the coal mines of the Nord and Pas de [Page 513] Calais, destroyed as a result of the war, and the production of the mines of the same area during the years in question: such delivery not to exceed twenty million tons in any one year of the first five years, and eight million tons in any one year of the succeeding five years.

It is understood that due diligence will be exercised in the restoration of the destroyed mines in the Nord and the Pas de Calais.

3.

Germany undertakes to deliver to Belgium eight million tons of coal annually for ten years.

4.

Germany undertakes to deliver to Italy up to the following quantities of coal:

July	1919	to June	1920		4½	million tons,
—	1920	—	1921		6	—
—	1921	—	1922		7½	—
—	1922	—	1923		8	—
—	1923	—	1924	}	8½	—
and each of the following five years

At least two-thirds of the actual deliveries to be land-borne.

5.

Germany further undertakes to deliver annually to Luxemburg, if directed by the Reparation Commission, a quantity of coal equal to the pre-war annual consumption of German coal in Luxemburg.

Note to VIII, Annex V (5)

Deliveries to Luxembourg of coal, coke, and lignite were valued at the closing of accounts on January 20, 1930 at 57,328,353 gold marks.

6

The prices to be paid for coal delivered under these options shall be as follows:

(a) For overland delivery, including delivery by barge, the German pithead price to German nationals, plus the freight to French, Belgian, Italian or Luxemburg frontiers, provided that the pithead price does not exceed the pithead price of British coal for export. In the case of Belgian bunker coal, the price shall not exceed the Dutch bunker price.

[Page 514]

Railroad and barge tariffs shall not be higher than the lowest similar rates paid in Germany.

(b) For sea delivery, the German export price f.o.b. German ports, or the British export price f.o.b. British ports, whichever may be lower.

7.

The Allied and Associated Governments interested may demand the delivery, in place of coal, of metallurgical coke in the proportion of 3 tons of coke to 4 tons of coal.

8.

Germany undertakes to deliver to France, and to transport to the French frontier by rail or by water, the following products, during each of the three years following the coming into force of this Treaty:

Benzol	35,000 tons.
Coal tar	50,000 tons.
Sulphate of ammonia	30,000 tons.

All or part of the coal tar may, at the option of the French Government, be replaced by corresponding quantities of products of distillation, such as light oils, heavy oils, anthracene, naphthalene or pitch.

Note to VIII, Annex V (8)

Up to December 31, 1922 benzol, sulphate of ammonia, and other byproducts of coal had been delivered in the amount of 164,327 gross tons, credited at 29,533,445 gold marks, and to January 20, 1930, at close of accounts, 30,687,609 gold marks.

9.

The price paid for coke and for the articles referred to in the preceding paragraph shall be the same as the price paid by German nationals under the same conditions of shipment to the French frontier or to the German ports, and shall be subject to any advantages which may be accorded similar products furnished to German nationals.

10.

The foregoing options shall be exercised through the intervention of the Reparation Commission, which, subject to the specific provisions [Page 515] hereof, shall have power to determine all questions relative to procedure and the qualities and quantities of products, the quantity of coke which may be substituted for coal, and the times and modes of delivery and payment. In giving notice to the German Government of the foregoing options the Commission shall give at least 120 days’ notice of deliveries to be made after January 1, 1920, and at least 30 days’ notice of deliveries to be made between the coming into force of this Treaty and January 1, 1920. Until Germany has received the demands referred to in this paragraph, the provisions of the Protocol of December 25, 1918, (Execution of Article VI of the Armistice of November 11, 1918) remain in force. The notice to be given to the German Government of the exercise of the right of substitution accorded by paragraphs 7 and 8 shall be such as the Reparation Commission may consider sufficient. If the Commission shall determine that the full exercise of the foregoing options would interfere unduly with the industrial requirements of Germany, the Commission is authorised to postpone or to cancel deliveries, and in so doing to settle all questions of priority; but the coal to replace coal from destroyed mines shall receive priority over other deliveries.

Note to VIII, Annex V (10)

A protocol in execution of article VI, paragraph 5, of the armistice was concluded at Luxembourg on December 24, 1918 and confirmed on behalf of the Allied and Associated Powers on December 25. An exchange of notes for the execution of article XIX of the armistice with respect to coal, coke, manganese, scrap iron, and manufactured products was effected at Luxembourg on December 25, 1918. See Der Waffenstillstand, 1918–19: das Dokumenten-Material der Waffenstillstands-Verhandlungen …, ii, 239, 251.