763.72119/10168: Telegram
The Ambassador in France (Wallace) to the Secretary of State
1427. B–165. For Department and Davis.
1st. Following attempt give personal impression of Spa Conference. No one except newspaper reporter could be absolutely sure of such impressions even if actively engaged in discussions or on most intimate terms with actors themselves which was not my case. Nevertheless personal impressions may be of interest and possibly of assistance but my guess is that Dresel’s opinion as to reactions of German delegation after their return home and course of political events in Germany for next three or four weeks will give best indication whether Spa accomplished anything or not.
2d. I was at both Brussels and Spa. I took part in only two official meetings both near end of conference—one, the only meeting of Reparation Commission. At this meeting coal agreement was submitted for criticism, of Commission before signature. Commission approved agreement. Second meeting was so called mixed committee composed of representative[s] of Prime Ministers and members of Reparation Commission to which committee Supreme Council referred Germany’s indemnity proposal. Purpose of reference was not to negotiate or make decisions but merely obtain explanations from Germans and get clear understanding of proposals for report to Supreme Council. This purpose distinctly stated by Belgian chairman to Germans at the beginning of meeting. Germans made some general explanations and answered a few [Page 399] questions. Then chairman asked for their proposal for amount of minimum indemnity. This demand was in direct contradiction of chairman’s opening statement as above explained inasmuch as German proposal clearly contemplated determination of amount of minimum indemnity by experts. Germans instead of making this obvious reply admitted they had minimum figure in mind which they hesitated to propose—first, because it was much below expectations of Allies; second, because they had not been authorized to name figure by Government. Allies chairman insisted that further discussion useless until figure named and meeting adjourned to allow Germans obtain authority from Berlin to name figure. This took place while coal discussion was at most acute stage. Germans later sent word that they could not consider naming any minimum figure until coal question settled. After coal question settled Supreme Council decided refer indemnity question for discussion to later conference between representatives of Allies and of Germany at Geneva. Result was that no further meeting of this mixed committee took place.
3d. Information came to me so slowly during earlier stages that I got impression they were purposely avoiding keeping me informed. I could not make special efforts to obtain information without loss of dignity and felt rather embarrassed although I had made it perfectly plain to everybody that I was there wholly on my own responsibility without any instructions, that my purpose was to be useful if I could be of service, that I was particularly anxious not to be in the way and wanted to be told if my presence was an embarrassment at any time. Later concluded that nothing of this was intentional because it became evident when Reparation Commission became officially concerned they had no reservations regarding my presence or participation. Also members of Reparation Commission later talked freely with me regarding coal and anything else under discussion while discussions were continuing and also talked freely about matters previously discussed. I speak of my earlier impression merely as an indication of the difficulty of keeping close touch which is bound to exist when our representative is not a participant. It also is significant in indicating: first, that no advantage was taken of my presence to try to get United States into the game; and second, that no one thought it worth while to use me as medium of communication to keep United States informed confidentially or otherwise of decisions and policies. The decisions were by the Prime Ministers and their representatives and Reparation Commission as a commission was merely an incidental factor, this was one obvious fact. Some suspect this was result of definite purpose to minimize importance of Commission. I think it probably attributable mainly to fact that [Page 400] Premiers naturally took the lead and were very busy, were close [enough] in touch with individual members of the Commission to get all information and advice they needed, had no time to play up Reparation Commission, probably failed to realize failure to do so had strong tendencies to minimize importance of Reparation Commission in eyes of people outside, particularly the Germans. Result also due to fact that earlier discussion had no close connection with Reparation Commission so that they got started on the other theory. As indicated above, Commission took more part towards the end but nevertheless its connection with indemnity meeting to which I have referred was quite subordinate and decision at end to refer indemnity question to later conference made to Reparation Commission and I do not yet know whether it is intention to have Commission present at this conference, though I will be present.
4th. It should be added that the conference, its discussions and decisions, should be those of the Powers as distinguished from Commission. Powers had been notified of default on coal so under terms of the treaty it was for Powers to determine what steps should next be taken. Also contemplated indemnity discussions involve departures from treaty and are therefore for Powers. My only thought is that Powers ought to make considerable efforts to give prestige to Reparation Commission which will otherwise become an ineffective instrument for carrying out treaty provisions and subsequent modifications.
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11th. Details and conditions of agreement as to percentages changed under continued discussion until signed at very end of Conference. Document finally commonly known as the Monster—I have one of later drafts but not final. Roughly speaking, England made her agreement to concession on percentage conditional on agreement as to valuation and hire of ships, terms very favorable to England. Other countries made similar conditions on different [matters] particularly France and Belgium on railway material; also Belgian agreement as to changes in her priority rights [, rather complicated]. Lloyd George kicked a good many of details, which seemed pretty well settled, out of window at end. His vitality easily outlasted others who signed complacently to surprise of some English in spite of the fact that they had seen same thing happen before. Since her [the?] final agreement somewhat simplified will send summary when get final draft.
12th. Probably only important point in agreement preceding paragraph from our point of view is agreement as to hire and valuation ships. Am satisfied that real purpose of English was not to be unfair to Germany but to avoid possibility that high valuation of [Page 401] ships describing reduction England’s percentage in reparations would result in England being obliged to make large payment in cash to reparations pool. Without going into details agreement provides ship valuation for all countries based on England’s sale of reparation ships to English [nationals] at auction. Apart from question whether such auction likely to bring fair prices at the time of auction it is obvious that valuation of each ship should be figured at the time of delivery and this agreement provides for determining value long after many of the ships were received and at times when ships values are much depreciated. This agreement may interest us because of possible effect in the way of precedent in carrying out Wilson–Lloyd George agreement,74 if that ever ratified. I have not considered this as yet, being concerned for the moment only with fact. [It is] also agreed that valuation on this basis shall be value credited Germany in reparations. While I recognize also difficulties in getting any satisfactory valuations [of so many] ships nevertheless credit on foregoing basis will not be fair to Germany. At coal meeting of Commission referred to above I stated that I had not seen [percentage] agreement but understood that it contained certain allowances as to valuations of property received from Germany; that I wanted to state flatly that under the treaty valuation must be made as of time property delivered unless language on any particular property specified differently, am [was] convinced both Commission and Powers appointing Commission were under obligation to see that all valuations were fair to Germany and that I was willing to examine any agreement sympathetically but would not [stand for] anything which did not comply with the principle I stated. I thought members of the Commission were rather glad to have me say this formally and have no doubt they fully agreed with me. My belief is that this question will be eliminated either by Germany’s consent to values in return for some other concession or more likely [by] arranging fixed amount of indemnity exclusive of such deliveries as ships. This will leave this agreement without effect except as between powers who accept it and with that we have no concern.
13th. No need say anything about question of disarmament or war criminals. Will send copy of coal [protocol] which in my judgment should be quite satisfactory to both sides under all existing conditions. German indemnity proposal seems to me correct in [principle]; in fact conforms exactly in principle to theory which Allies formulated at Hythe and Boulogne. My belief would have been foolish for Germany make any definite offer which would be merely subject for attack but they ought to have met psychology of situation better by saying that responsibility of fixing amount [Page 402] must rest with Allies, they being prepared furnish all possible information and even advise as individuals if asked but not to be responsible for any offer, that whatever amount fixed they as beaten nation proposed make every possible effort meet terms and wanted Allies arrange keep in close touch so as to realize their efforts and their difficulties in hopes that if experience demonstrated impossibility Allies would then recognize and meet situation. The Allies are going to fix indemnity themselves in any event and Germans ought to take the opportunity to spill some language indicating acceptance of defeat and determined intention take all reasonable consequences. Possibly politics prevent any such simple attitude.
14th. The conference had to be [held]. It probably could not have come earlier; it is fortunate that it was not deferred longer. Both sides have much to learn and they made as good a start as could reasonably be expected though it was so tremendously over-advertised that its results are now under-appreciated by many. The Germans must have appreciated that they were met in as conciliatory spirit as is humanly possible at this date and must see that this is a big step toward future relations. The Allies saw some very good Germans, particularly Melchoir,73 and Simons74 also made good impression. The Allies also got much better conception of Germany’s tremendous difficulties, not only economical but political. It was common talk for instance that the French were in far more conciliatory attitude at conference then ever before. It was obvious also to me that Allies weakened very much with respect to their confidence in figures which they regarded as settled after Hythe and Boulogne. I felt they shrank from putting forward those figures and were good deal relieved when protracted negotiations on other points made postponement of reparations possible and even natural though most conspicuous thing about conference is its failure to discuss question for which it was called. It is [a mercy] that reparations was not discussed at the end for everyone engaged except Lloyd George was tired to breaking point and tension and irritation would have been too great for any good to come out of it.
15th. Belgium, both cities and country, gave at least superficial impression of activity, prosperity, and even happiness though friends at Louvain emphasized existence of many cases of hardship in their University community but I should be slow to believe Belgium now has difficulties different from or much more serious than those in England or United States; as compared with France Belgium is on easy street.
16th. Will send confidential copy this cable to Dresel. Boyden.