The Netherland Chargé (De Beaufort) to the Secretary of State

Sir: I have the honor to enclose herewith a memorandum regarding the German-Netherland Telegraph Company, which operated the cables Yap–Menado, Yap–Shanghai and Yap–Guam.

These cables being mentioned in Annex VII of the Peace Treaty of Versailles, will be one of the subjects under discussion at the Preliminary Cable Conference, which is now being held in this City.

Under these circumstances my Government wishes me to bring to the knowledge of the delegates to this conference its point of view with regard to this question, and I have therefore taken the liberty to send you the enclosed statement.

Please accept [etc.]

Wm. de Beaufort
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According to Annex VII of the Peace Treaty of Versailles, Germany has renounced on her own behalf and on behalf of her nationals in favour of the Principal Allied and Associated Powers all rights, titles or privileges of whatever nature in the submarine cables or in any portions thereof mentioned in this Annex, amongst others in the cables of the German-Netherland Telegraph Company, t.w. those from Yap Island to Shanghai, from Yap Island to Guam and from Yap Island to Menado.

The rise of this Company originated in a treaty concluded between The Netherlands and Germany at Berlin on July 24th, 1901 which Treaty was ratified by Holland by an Act promulgated on August 5th, 1902 (Stbl. No. 122 of 1902).

In this Treaty the Netherland and German Governments jointly undertook to further the laying and exploiting, by a Dutch-German Company, of a cable connecting the Dutch East-Indian Government cable system at Menado with the American Pacific Cable at Guam and with the Transsiberian system via Shanghai, in both cases via the then German Island of Yap. The Dutch and German Governments each undertook to grant to the Company the right of abutting on their territory for 40 years, without prejudice in each case to their respective sovereign prerogatives. Both Governments agreed to pay subsidy to the Company.

In the concession subsequently granted by the Netherland Government to the German-Netherland Telegraph Company (which is in all important respects identical to the one granted by the German Government) and in the statutes of this company provisions are made to the effect that the Company should obtain its capital from both Dutch and German sources, that the Company’s statutes should require the assent of both Governments, that of the two managing directors one should be of Netherland nationality, that his nomination should require the assent of the Netherland Government, and that the Netherland Government should moreover officially be represented on the Board of the Company by a commissioner.

In order to be able to judge about the question in how far its rights and those of its nationals are affected by Annex VII of the Peace Treaty the Netherland Government starts from the principle,

that a Treaty between States only affects those persons and all those other things who and which are subject to the Authority of the State which has acceded to that Treaty,
that a treaty being a joint act of two States stands above their respective national laws but not above a Treaty concluded at an earlier date by one of the contracting states with a third state.

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Thus did Germany according to the wording of Annex VII not transfer the cables in question but its “rights, titles or privileges” whatever they were.

The Netherland Government is of the opinion that the following situation with regard to the cables Yap–Menado, Yap-Guam, Yap–Shanghai, has arisen in consequence of the ratification of the Peace Treaty: The Netherlands and The Netherlands’ share and bondholders in their relation to this cable-system find now before them the Powers to whom Germany has transferred those rights.

Confident that these Powers agree with the point of view as outlined above, Her Majesty’s Government wishes to state that it will be glad to take into favorable consideration any proposals aiming at a continuation of the cable-system of the German–Netherland Telegraph Company.

Such aim could be realized f.i. by transferring the exploitation of the cable-system to a combination which would be willing and in a position to establish, by preference in The Netherlands, and in accordance with provisions to be agreed upon between The Netherland Government and the Governments concerned, a company for that purpose.