462.00 R 29/282: Telegram
The Acting Secretary of State to the Ambassador in France (Wallace)
Washington, September
1, 1920—2 p.m.
1437. For Boyden. B–104.
Your B–181, August 1.84
- 1.
- Article 3. Are loans for internal requirements of Germany same as coal credits? If not, what does expression signify, what are plans for permitting such loans and under what conditions? As to fixing a definite capital sum to be paid by Germany, Department approves of plan to leave this to premiers. At your discretion it might be wise to point out that in determining this sum Reparation Commission’s judgment should be sought and utilized. Commission is body which should have fullest information on sum practicable to demand from Germany. It would seem advisable that Commission and not premiers should fix annuities and all other questions of administration. Allied and Associated Powers as whole agreed to delegate fixation of reparation sum to Principal Powers of which United States is one. Present action by Allied Powers affecting Treaty must be taken into account on final ratification by the United States. It may have an important effect. You should exert every effort to prevent creation of precedent of not consulting us on all questions which involve our rights.
- 2.
- Article 4. As matter of policy, when Reparation Commission begins to enter debits and credits on its books under this article endeavor where possible to have accounts opened for United States, particularly in regard to costs of army of occupation. This would greatly facilitate action if and when ratification takes place, and arrangements can easily be made to prevent causing thereby difficulties to Allied Powers. This Government is also interested that Germany should receive due credit for all goods and services accounted for under this article. In your opinion will any cash be paid to Commission under sections 2, 3 and 4? Also is interest on contingent reserves to be paid in cash to Commission?
- 3.
- Article 5. Belgium’s claim that her priorities take precedence over costs of army of occupation does not appear to be valid, but will be glad to have your views.
- 4.
- Article 6. Attitude of this Government is that Germany must be credited with full value of ships as of date they were surrendered to Allied and Associated Powers rather than with price they [Page 429] may bring on May 1, 1921, after values of ships have notably declined. While procedure contemplated by Allies would be strictly in accord with financial interests of this Government, under Lloyd George agreement, it seems unjust to Germany. Moreover, as method of valuation was decided upon by premiers whereas Reparation Commission is charged with such duties, a distinct change in Treaty is involved. This is another instance of invading the rights of the Commission and virtually changing Treaty without consultation with us. Our position is not that Treaty should not be modified by interpretations which make it workable, but such modifications, when involving reparation questions, should be decided finally by Reparation Commission upon which you represent this Government. It should be constantly kept in mind that if and when we ratify we shall have to object to every change, as the Executive cannot waive Treaty stipulations without authorization by Congress. Therefore it is desirable that all necessary modifications be accomplished before we become parties to Treaty.
- 5.
- Article 7. It seems to Department that premiers have no jurisdiction over question whether credit should be given Germany for floating docks, et cetera. Department approves your position at Spa as stated in your B–182, August 2, paragraph 4, and agrees with opinion of Legal Service that credit should be allowed Germany for these items.
Davis