462.00 R 29/211: Telegram

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

1138. B–82 for Davis.

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World opinion is evidently gradually forcing France consider more seriously immediate determination specific sum or more [Page 387] likely minimum, eventually increasing from time to time according to increase in Germany’s ability, to be determined by Reparation Commission or other tribunal on basis some statistical standard agreed upon by Powers or determined by Commission or tribunal.
Present legal position of Reparation Commission clear. Seems to be accepted by our legal service and entire Commission that while we have certain powers with respect to postponement of payment, also certain power of determining when bonds shall be issued, we have maintained [have no?] power to negotiate with Germany for payment of any fixed sum smaller than total reparation bill determined according to prima facie evidence as stated in treaty. Also settled that four months period allowed Germany to make offer of fixed sum either for whole or any specific part of reparations has expired because four months period dated from signature and not from coming into force of treaty. Baruch’s recent statement seems based on theory that Reparation Commission had full power which is fundamentally wrong. Legally matter is for Governments, not for Commission.
All members of Commission except France thoroughly convinced necessity of recognizing practical conditions and desirous having Commission at least formally recommend to Powers immediate definite determination Germany’s liability using all possible influence of Commission to secure this result. Matter not yet formally discussed in Commission. Poincaré’s attitude in article Revue des Deux Mondes also article in Matin, shows distinct hostile tendencies. We have been endeavoring arrange informal conference with him for interchange of views. Have had difficulty and delay even in arranging this informal conference which we regard as important preliminary to proposed discussions at Spa. We think delay probably due to fact Millerand and Poincaré not wholly in agreement and Poincaré probably trying to arrange understanding with Millerand before discussions with us. Poincaré in brief discussions relies mainly on technical legal situation inclining to view that our powers depend on treaty and not our business to close [change?] treaty or even to suggest changes, also emphasizes France’s difficulties, saying France has no objection to determination of fixed sum if large enough to pay reparations but obvious purpose of all present discussions is not so much definiteness of indemnity as reduction in amount of indemnity, that reduction will not meet France’s needs and that even if Millerand should be convinced that reduction ought to be made very doubtful if he can get support of Chamber for necessary vote modifying treaty.
I have no hesitation in assuming your policy favors both definiteness and reduction of amount to some figure within the limits of economic possibility which is most strong personal view. In [Page 388] foregoing statement this policy shall of course emphasize that fundamental reason is no[t] charity towards Germany but belief it represents economic wisdom for the world and fully as important in interest of France as in interest of any other country.
Even if present endeavor to secure determination of definite figure for German indemnity [and] reduction in amount does not succeed and Reparation Commission still remains under obligation to determine full amount of Germany’s bill, some arrangement ought to be worked out sooner or later for determining amount of this bill in a wholesale way without going through all infinite details and complexities of accounting. If Governments call for any of their percentages in reparations then Commission ought to be able to arrange somewhat arbitrarily with Germany agreement on amount of total bill, the purpose being to reach definite idea of figure which would be reached by detailed accounting without bother expense and delay of such accounting. Mistake of a few milliards will be of slight importance compared with advantages to all parties but even this arrangement might be regarded as technically contrary to the treaty and so require assent of Governments.
Any determination of amount Germany is to pay and particularly any reduction in amount of her present returns of liability involves question how far United States is to share in reparation payments. My understanding is policy of administration not to share in reparation payments except so far as we retain ships and apply property in the hands of Alien Property Custodian, also reimbursement expenses Army of Occupation. This policy cannot be final without ratification by Senate perhaps by Congress. Anything possible to bring about final decision should be done. Whatever our decision we are of course to be charged with whatever dyes and pharmaceutical supplies we receive [garbled group]. In connection with discussion of our policy and application of policy when determined, also in connection with discussion various reparations [proposals] as they arise here from time to time, we shall need as accurate and complete information as possible about United States damages prepared on the same lines as damage claims of other Governments I transmitted. Think we are likely to need this even if we never ratify the treaty, therefore suggest your consideration arrangement for competent intensive study of problem. Possibly this already arranged but I seem to have nothing later than Lansing letter to you dated December 3, 1919.68 This seems very good but probably needs to be corrected in the light of further information and preparation should be made for supporting claims by evidence in case necessity arises.
Every cent spent on Army of Occupation reduces amount available for reparation. Know nothing about subject but am wondering whether anything can be done by us or other Governments towards cutting off this expense. Substitution of French troops for our own troops would reduce expense somewhat. Ought any action to be taken on this subject? Boyden.
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