462.00 R 29/417: Telegram
The Ambassador in France (Wallace) to the Acting Secretary of State
Paris, December
15, 1920—10 p.m.
[Received December 16—3 p.m.]
[Received December 16—3 p.m.]
2013. B–352 for Davis.
- 1st.
- Have been studying United States technical legal position on army costs in preparation for possibilities when Reparation Commission actually begins collection. Commission so far merely getting together figures. We alone have presented complete figures requested. Commission has shown no tendency to make discrimination between us and others except I noted casual reference by Bradbury47 to fact we did not seem to have rights under the treaty until ratification, also Bradbury made some objection to Belgium collecting its share of expenses Rhineland Commission direct from Germany because gave Belgium priority for these expenses over army costs. Believe Bradbury raised no objection to our doing same thing evidently feeling we could do what we pleased because not bound by treaty.
- 2d.
- Examining written agreements about army costs find nothing after February 16, 1919, except agreement June 28 regarding Rhine-land Commission and army costs which agreement you do not regard as binding. See your despatch Department number 71 January 9th last to Embassy;48 also B–152 [B–132], October 1. After ratification of the treaty by other powers you notified Germany United States regarded armistice as still continuing. Please send me complete list of pertinent documents so I can check my list.
- 3d.
- Our claim against Germany for army costs seems to be resting with written armistice, was following General Allen’s lead in this respect. Agreements prior to June 28th which, assuming agreement June 28th not binding, were extended by implication, results from course of action of both parties since June 28 plus definite written notice by us after ratification of treaty by the Powers. This notice [Page 339] was doubtless acquiesced in by Germany. All this seems clear but gives us only unsecured claim.
- 4th.
- Rights of Allies for army expenses depend on treaty which gives first lien against German property and revenue with priority of army costs over all reparation payments. We do not share in these advantages except by ratification of treaty or by some arrangement already made or to be made. We have many times put on record our statement that we expected to get our full costs and that if others wanted our costs reduced must be done by withdrawal of our troops, but this does not give us any lien on German property or revenue or give us any legal rights on payments made by Germany to Separation Commission by virtue of treaty or any claim for payment by Allies. We are technically unsecured creditors of Germany all of whose property is mortgaged to other Powers.
- 5th.
- By article 249 army costs apparently paid direct to Powers. Powers have now appointed Reparation Commission their agent to make collection. United States also expects Commission make collection. Seems inevitable Commission will find itself in technical difficulty because of distinction between our position and position of other Powers. Commission cannot waive security and priority of other Powers in our favor without instructions from other Powers. Seems necessary therefore make some arrangement with Germany and all Powers interested in reparation by which our army costs stand on same footing and have same security and priority as other army costs followed by notification by all Powers to Commission to treat matter on this footing.
- 6th.
- If such arrangement made, necessary consider whether or not we accept Spa arrangement not yet binding on us. Probably not very important because coal protocol not very serious, also Belgian priority over army costs under percentage agreement seems now unlikely but these points would need consideration.
- 7th.
- Preceding paragraphs ignore possible effect agreement June 28. Strong argument may be made that this agreement was additional armistice agreement separate from treaty not dependent on ratification of treaty, although it refers to treaty for part of its terms providing for mortgage and priority for army costs of each and every Power regardless of ratification by any or all Powers. This of course involves full recognition of validity June 28th agreement which would be merged in treaty if ratified but would remain valid as between United States and other Powers and Germany even if United States never ratified. This would have been my view if you had not cabled otherwise.
- 8th.
- While nobody has raised this technical question, seems to me inevitable. Commission knows nothing except written agreements and treaty and knows we have not ratified the treaty and that we [Page 340] do not recognize agreement June 28. I agree with your B–10747 that Governments ought to recognize equitable considerations and treat our army costs like their own but this is beyond competence of Commission unless Governments so instruct Commission. Probably not difficult make any necessary arrangements but desire your views: first, on legal situation; second, whether any and what agreement with other Powers necessary to regularise United States position and put Reparation Commission in position to collect for us; third, if further agreement necessary have proper representatives begin negotiations after definite decision exactly what want ask Government[s] to do.
- 9th.
- Incidentally individual delegates have inquired several times whether United States would reduce costs to uniform basis. Have always said flatly not necessary consult you, impossible. This conversation repeated recently with Delacroix.48 As already cabled I have no doubt Powers really want to arrange payment of our army costs out of balance property held by Alien Custodian. They would doubtless have already approached you on this and kindred matters, except for realization that political situation [did] not permit discussion of these points. I asked Delacroix informally if he thought would accept suggestion from United States to withdraw army leaving only smallest possible nucleus to show general cooperation. He replied affirmatively. Delacroix said he believed very large part of all troops ought to be withdrawn because now no real danger of German aggression. This statement should be treated very confidentially. Has added interest because he had evidently recently discussed subject with Poincaré though gave no indication that Poincaré agreed. If he [I?] could I would add emphasis to my views previously expressed on this particular subject. Boyden.
Wallace