662.1115/15: Telegram

The Commission to Negotiate Peace to the Acting Secretary of State

3037. [Department’s] 2499, July 3rd, 8 p.m. Our views with reference to the resumption of commercial relations with Germany are as follows:

Mr. Clemenceau in the name of the Allied and Associated Powers has assured the Germans that upon their ratification of the Treaty of Peace the blockade would be lifted. This has been construed by the Supreme Economic Council, at meeting held June 30th, to mean that economic freedom would be restored to Germany, including freedom to export as well as import and the majority of the Supreme Economic Council, including American members, expressed the view that such resumption of economic freedom implied the abandonment of censors [censorship] as an international war measure. It nevertheless appears that for one reason or another the British and French will maintain a considerable amount of control. For instance, the British and French are apt to maintain censorship for national purposes as to prevent dissipation of credits and the introduction of counterfeit money. Also British and French assert necessity of continuing control after Germans ratify treaty to prevent direct settlement of debts with Germans in contravention “clearing house “system established by treaty. They also point out necessity of assuring a distribution of Germany’s commodity [exports] so as to prevent Germany disabling herself from performing treaty clauses relative to coal, dye stuffs, etc. Even though, as is probable, the British and French will quietly push commercial relations, yet the attitude of [Page 237] these Governments will on the surface and to the [great] mass of Germans appear to involve a breach of faith.

So many promises made to Germany since the armistice have been nullified in fact, that it is important that the United States at least so act that Germany obtain something of substance conformable to Mr. Clemenceau’s assurance above referred to.

It is thus our opinion that the reasons of a resumption of commercial relations with Germany upon Germany’s ratification of the treaty are considerations of Germany’s interest rather than our own. We do not feel that our own commercial relations [interests] would be seriously jeopardized by a brief delay or that they should materially influence our action.

On the other hand, it is recognized that there are reasons for the maintenance of certain restrictions until the Senate has ratified the treaty and that unless this is done the administration may be criticised for treating the treaty as an accomplished fact without awaiting the action of the Senate.

We suggest that the two points of view above referred to can best be reconciled through licensing trading with the enemy to the extent that this can be done by correspondence or by meeting with Germans outside of Germany, but that until the treaty is ratified by the Senate passports should not be issued to American business men to proceed into unoccupied Germany nor should any United States officials, such as consuls or commercial agents, be sent into Germany. This would leave Germany free to transact business in so far as she took the initiative but it would restrain initiative on the part of the United States.

With reference to the specific questions put by your 2499:

The treaty will go into effect as to ratifying powers as soon as the treaty has been ratified by Germany and by three of the principal Allied and Associated Powers.
If Germany and three of the principal Allied and Associated Powers ratify the peace treaty the ratifying Allied and Associated [Powers] will be able to open trade with Germany and to send consuls and official and private trade representatives.
The extent to which American traders may have access to Germany pending ratification by the United States depends on legislation and policy. Trade restrictions as an international measure cease upon Germany’s ratification of the treaty, leaving each Allied and Associated Power free to act as it [sees fit]. Accordingly, for the United States the question depends on how far we can go pursuant to existing legislation and given a continuance in law of a state of war with Germany and second, upon the policy of resuming trade relations prior to ratification by the Senate. As above indicated we doubt the wisdom of fully [Page 238] reestablishing commercial relations official and private until the treaty has been ratified by the Senate.
Our 2932, July 2, 9 p.m. also designed only [to suggest] that if there were serious delay in ratification by the Senate and which delay had been demonstrated to be detrimental to American interests the question might then be reconsidered as to whether or not further steps to reestablish trade relations should be taken irrespective of ratification.

Referring to the Department’s 2506, July 5, 3 p.m.5 with reference to the instructions to the French Chargé d’Affaires, it should not in our opinion be taken to imply that after ratification of the treaty by Germany the Allied and Associated Governments should adopt a uniform practice with reference to the resumption of commercial relations. As above indicated we understand that international control measures as such cease upon ratification by Germany, leaving each country after that date free to act as it sees fit. In the case of France, for instance, which has adopted the “clearing house “system for settlement of debt, restrictive measures may well be appropriate, which would not be appropriate for United States.

It is suggested that you discuss this cable fully with McCormick on his arrival. Lansing.

American Mission
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