462.00 R 29/131: Telegram

The Ambassador in France ( Wallace ) to the Secretary of State


815. R–455 for Davis.

The Reparation Commission has discussed the procedure to be adopted under article 260 at various meetings. In accordance with your opinion with which I agree entirely, I have advocated taking no action under article 260 until lists were obtained from the principal governments concerned regarding rights to concessions which they wished to acquire and then to confine the demand to rights and interests set forth in these lists. Commission, however, was unwilling to adopt this procedure.
Reparation Commission first decided to warn Germany not to dispose of rights and interests covered by article 260 until Commission had acted thereon. See sixth paragraph of my R–362.66 At meeting of March 22, form of letter was presented. General policy to be adopted was to request the principal governments concerned to furnish within 30 days lists of rights and interests they desired to acquire but meanwhile to call upon Germany to prevent alienation [Page 378] of such rights and interests and to take measures and pass laws necessary to prevent such alienation by German nationals; revised form of communications to be submitted March 24 to Commission. I made strongest possible reserve to this procedure.
It was agreed at meeting of March 24 to adopt following procedure if I would consent for the United States: (a) Communications to be sent to the Governments of United States, France, Great Britain, Italy, Japan and Belgium requesting these Governments to furnish by May 1 lists of interests and rights covered by article 260 which they wished to acquire; (b) in the meantime to communicate with Germany substantially as set forth in this cable, paragraph 5.
The question was left open as to how rights and interests listed by the above-mentioned Governments would be disposed of. It was recognized that the question was left open to Reparation Commission to decide later if it so determined that any specific right and interest listed by any government might be sold to another, whether mentioned in paragraph 3 or not, or even at a public auction. It was recognized also that the Governments from which lists were to be asked might ask more time to furnish the lists, even approximating the period mentioned in article 260, or might desire to examine the list furnished by Germany before submitting final lists. Procedure of the Commission in these contingencies left open.
The German Government is requested to furnish the Reparation Commission as soon as possible with the list of rights and interests mentioned in article 260 of the Treaty of Versailles in order to enable the Commission without unnecessary delay to exercise the option it holds under said article. It is in the German Government’s interest to enable the Reparation Commission to arrive at a decision as soon as possible on this subject, since, until the option has been renounced or exercised, the German Government or its nationals are not in a position to directly or indirectly alienate or to mortgage or pledge the above-mentioned interests and rights in favor of foreigners nor to take any measures regarding them except those concerned with administration. The Reparation Commission, as soon as possible after receiving the list, will take steps to notify the German Government of the interests or rights, cession of which it is decided not to demand.
Delegations represented on Reparation Commission stated that if I reserved approval of communication to Germany in form set forth above that it should be changed so as to demand that Germany immediately take measures in accord with their previous decision to prevent alienation by their nationals of rights and interests. Upon my request they delayed final approval of form of communication to Germany in order that I might receive instructions.
I recommend we agree to indicated procedure. I do not think notice to Germany substantially as given in paragraph 5 will cause any harm and believe our concession in agreeing to such communication being sent is more than compensated by demanding the form of procedure indicated above, thus preventing an immediate demand on Germany which, if complied with, would necessitate the creation of complicated machinery to prevent the alienation by nationals of the interests and rights in question.
Also important in order to preserve our influence and prestige on the Commission to make such concessions as are possible without surrendering the principles for which we stand. Delegates now very reluctant to cooperate on American reserve, however whenever Commission takes action over our reserve it is easier for the Commission to as in this case. The first move to approach our views was made by French Delegation, Poincaré stating he had drafted a letter omitting stipulation that Germany must take measures to prevent alienation of interests and rights by German nationals in order to conform to the views I had intended to reserve. Said provisions in any case might as well be included as all the delegates favored it. Since Commission formally organized this is, I believe, the first time French Delegation has seemed disposed to modify their stand to meet our views, unless it was already indicated that other delegates backed us.
Aside from the conflict between articles 260 and 297 so far as China is concerned, I see but one question of interpretation of the treaty involved which is avoided in the form of note to Germany above set forth: Are the rights and concessions in article 260, those owned by German nationals and Germany (a) at date of signature of the treaty, (b) at date of ratification, (c) at date of demand? Please give your interpretation. Legal service unanimously of opinion that (b) is proper interpretation.
It is very important that I receive an immediate reply to this cable. Advise later whether United States desires to submit a list of rights and interests covered by article 260 which it wishes to acquire and if so the specific rights and interests to be included in the list. Rathbone.
  1. Not printed.