462.00 R 29/178: Telegram

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

1034. B–34 for Davis from Boyden.

Reference to Treasury’s B–7 and B–13.69 I am strongly against sending proposed note. Think under present conditions this would be Rathbone’s view. Rathbone thought recent hints from Washington through one Government to its delegate had happy effect but note of the Department following this incident would make this delegate and his Government feel that United States and its delegates were continually critical of Commission and their feeling would probably be communicated to other delegates. I also agree fully as to danger of creating precedent for governmental interference by endeavoring to secure pressure on delegates through their governments. The urgent necessity which might justify this action does not now exist. In addition the situation with respect to article 235 is distinctly improved. I shall be surprised if further serious contention against creating [crediting] the deliveries under the annexes against the twenty billion marks. On this point good policy and technical legal position both favorable. With less certainty I am inclined to think the advent of [sic] whatever the Commission may think as to its legal right to demand securities under article 235 it will not actually do much. As to bad economic policy of such demand there can be no doubt, but as to the technical legal question we, between ourselves, at least, shall make a mistake if we do not keep in mind that the treaty is more than unfortunately worded. Our real strength lies in the letters to the German Commission, though unfortunately again the definite expressions of these letters do not seem to have been embodied in the protocol signed at the time of the treaty’s signature. If proposed note of protest ever becomes necessary should therefore be based primarily on economic [Page 386] principle and principle of good faith resulting from letters to German Commission and not on technical interpretation.
There is no tendency growing or otherwise to ignore your opinion or your delegate. Rathbone, so far as I can judge the situation, is greatly to be congratulated on the position of influence and respect which he established for himself personally and for the United States and the members of the Commission accept me as his heir without reserve. Present Congressional tendency towards peace resolution may change this feeling but no indications of change yet.
Your conception that Commission has [duties toward] Germany as well as rights against her, see third paragraph Treasury B–7, is accepted in principle by Commission. The issue was quite definitely forced by Rathbone at Paris last meeting he attended in connection with the relation of the Ruhr incident to coal supply. The difficulty on this point will come on the practical application of the principle. Recognition of necessity of a liberal and broad policy requires a course of education now obviously progressing slowly but liable to be stopped abruptly by sudden forcing of issue particularly in any general terms. Boyden.
  1. Ante, p. 382, and supra.