Office of the Historian

763.72119/10287: Telegram

The Chargé in France (Harrison) to the Secretary of State

Paris, August 10, 1920—noon.
[Received 7:40 p.m.]

1521. B–194 for Davis.43

[Reparation] Commission conclusions to date on collection costs of armies of occupation excepting unimportant details as follows:44 [Page 332]

1st.
Commission will transmit to Germany, claims presented by Governments without any attempt to audit reserving right ask for subsequent justification if any question raised by Germany.
2d.
Recommend[s] to Governments bills be prepared on capitation basis classified for officers, men, horses, etc. Total cost then obtained by multiplying capitation rate by actual number of effectives. Governments requested to signify whether or not they have adopted this system.
3d.
Bills to be accompanied by Government certificate to effect that claim covers only expenses specified article 249 (United States certificate to refer to agreement of June 28th, 1919,43 instead of article 249).
4th.
Accounts to be presented to Commission in national currencies and transformed into gold marks at average rate of exchange of quarter concerned prior to presentation to Germany. Paper marks to be converted into gold marks at current official rate of exchange in use by armies of occupation at date of transfer.
5th.
Present system whereby military authorities requisition paper marks from Reichsbank approved.
6th.
Method of liquidating cost of armies reserved until Commission has arrived at decision as to what deliveries, if any, can be credited against twenty milliards.
7th.
Question technical opinion Legal Service that reimbursement by Germany of billeting costs paid by armies in cash must be credited Germany under article 235 although payments made by Germany to her nationals for property requisitioned for billeting purposes need not be credited. Former system used by United States troops. Latter system used by all other armies. Therefore Commission requested me ascertain whether or not in future American Army could arrange adopt same practice as other armies.
8th.
Agreement of Governments of June 16th, 1919, that annual cost of armies of occupation under certain conditions should not exceed 240,000,000 gold marks called to attention Commission by Finance Service with the suggestion that delegates ascertain whether or not Governments propose do this. In this connection see article 13, Spa inter-Allied [percentage] agreement, my B–181.44
9.
Have sent all papers to General Allen with comments asking for his views. Our claims and accounts already correspond substantially with Commission’s suggestions so these created no difficulty. Question of transforming claims into gold marks raises question whether not desirable avoid exchange risks by presenting bills in [Page 333] national currencies and so [obtaining?] from Germany exact amount dollars, pounds, francs or lire actually expended by each Government. This involves assumption exchange risk by Germany which she could avoid by making her payments approximately contemporaneous with expenditures, adjusting slight differences when accurate figures determined. Protests [Provisions] of article 249 requiring in part payment in gold marks may raise difficulty in some technical minds but I cannot believe this is a really practical difficulty. I thought Commission would take up their request for change in American billeting system but thought it involved practical difficulty possibly also question of policy. Expect Allen to object to this change but wish to know whether War Department objects if Allen sees no objection. Agreement to reduce costs to 24,000,000 [240,000,000] gold marks not yet effective because conditions not fulfilled so not likely to be practical importance now.
10th.
You will see as I have previously reported, Commission apparently proceeding collect United States Army costs with others and on exactly same basis but cannot help feeling that sooner or later Commission will run into technical difficulties in this connection because Commission must act under the treaty and we have not ratified the treaty. They would probably refer any such difficulty if it arises in their minds to Powers but in my mind this possibility emphasizes necessity for taking up question of army costs with Powers and arranging all details as I previously suggested.

  • Boyden45
  • Harrison
  1. Norman H. Davis, Under Secretary of State, June 15, 1920.↩
  2. See also Boyden’s cable of Aug. 2, paragraph 7, and Department’s reply of Sept. 1, paragraphs 2 and 3, pp. 415 and 428, respectively.↩
  3. For text of agreement, see Treaties (S. Doc. 348, 67th Cong., 4th sess.) vol. iii, p. 3524.↩
  4. Telegram not printed; agreement referred to is printed on p. 406.↩
  5. Roland W. Boyden, American unofficial representative on the Reparation Commission.↩