Note to X, 303, Annex

The German delegation complained that the question of the maintenance of contracts between nationals or residents of belligerent states was not decided in a uniform manner and that the continuance was made dependent on the inclination of the Allies or their nationals [Page 617] (Foreign Relations, The Paris Peace Conference, 1919, vi, 891). Furthermore the same principle, whether of cancelation or of validity, could not always be carried out. Thus there were “serious objections” to the proposal that all pre-war contracts were void. A mixed commission of experts was needed to clear up this question. Several articles of the annex were protested against; also the special provision that the French Government should have the right to cancel contracts between Germans and Alsace-Lorrainers “for reasons of public interest”. Explanations were asked about several clauses of article 300, while certain provisions of article 302 were declared incompatible with the dignity of German courts.

The Allies replied that the constitutions of the United States, Japan, and Brazil stood in the way of a uniform treatment of contracts, that the question of continuing a contract depended on an Allied Government, not on a national of that state, and that action must be taken within six months (ibid., p. 985). Certain classes of contracts were in fact exempted from the general rule of dissolution. The several articles criticized by the Germans were explained and defended.