611.626/36: Telegram

The Commission to Negotiate Peace to the Secretary of State

4270. The following telegram has been received from American Embassy London:88

“[257.] Your 374, September 18 [8], 1 p.m. At meeting today of Committee to discuss exports of German dyestuffs which was attended [Page 453]by representatives of France, Italy and Belgium, with Lord Moulton as chairman, following resolution was agreed to.

‘This Committee recommends to the Committee on Organization that France, Italy and Belgium be authorized to obtain their immediate needs for dyestuffs up to a maximum quantity of 2200 tons out of the dyes to which the Allies have an option under the peace treaty, such dyes to be at prices not higher than those proposed by the Germans in their lists of stocks at the 15th August last, but on the condition that the proceeds shall be credited to the reparation fund and that these prices should be without prejudice [be in proportion] to those payable for the remainder of the dyes under any [the] option. Such authorized quantities shall not consist of more than 30 percent of amount under the option of any particular dye (i.e. 15 percent of the total stock). This arrangement to be entirely without prejudice to any ultimate decision of the Reparation Commission as to their action under the powers of the Treaty as to dyes and all necessary adjustments to be made accordingly. France, Italy, and Belgium to agree among themselves as to the division of the dyes thus taken and to agree to consent to England and America each receiving under like terms a quantity not exceeding 1500 tons should they so desire, it being understood that these quantities in no wise prejudice the eventual rights of each of the interested countries so far as the stock under option is concerned.[’]

“Certain of the delegates to this meeting are leaving London at once but Herty will be fully informed regarding the course of the discussions by Embassy representative who was present.”

The meeting in question took place on Monday, September 15. Herty did not reach Paris until Sunday night and it was therefore impossible to get him to London in time for the meeting but he arrived in London Tuesday morning in hopes that discussions would not be finished. The wording of the resolution appears open to serious criticism as it conveys the impression that the option is to be partially exercised. Dresel has therefore stipulated that when the proposal is put to the Germans the statements shall be explicitly made:

1.
That the proposals embodied in this resolution are not to be construed in any sense as an even partial anticipation of the option conferred by the treaty.
2.
That the acceptance of the lists of stocks as of August 15, must not be taken as an official act in accordance with annex VI to part VIII and that the delivery of lists by the Germans is a purely voluntary act.

The British Delegate agrees in considering the resolution as worded an attempt to anticipate the treaty provisions. He states however that his Government is now inclined to agree to such anticipation. The question is likely to be academic as the universal opinion is that the Germans will not consent to deliver any quantity of their dyestuffs at the prices stated in the lists furnished unless there is a definite understanding that the option is to be exercised leaving the remainder of their stocks as of August 15 free for export. The vital question is evidently that of price and as to this further difficulties must be anticipated.

[Page 454]

Noyes89 has furnished information regarding the present situation as to dye stuffs in the occupied districts which may be summarized as follows:

1.
The Rhineland Commission is only issuing licenses affecting the daily output of the factories and is using discretion in cases where the daily output for a certain period comprises all of the particular dye which is produced for say a year in order that the stock of that dye may not be completely exhausted.
2.
It is only issuing licenses affecting the stocks as of January 15, by direction of the Interim Reparation Commission, as in case of 850 tons recently licensed for France, Belgium and Italy.
3.
The control established of stocks as of January 15 is said to be fully recognized by the Germans and according to statement of Noyes these stocks are safe under lock and key.
4.
So far as modifying the export prohibition in force pursuant to the decisions of the Armistice Commission, the Brussels convention has remained a dead letter.
5.
So far as deliveries stated to be possible in your number [2984], August 28, 5 p.m., are concerned, Noyes confirms American Mission’s understanding that delivery can only be contemplated either out of stocks accumulated in neutral countries or by the daily output granted by Rhineland Commission.

A written memorandum is to be furnished by Noyes the substance of which if important will be cabled.

American Mission would be glad to receive at earliest practicable moment your comments on resolution passed by London meeting and any suggestion[s] as to future action. If Germany refuse[s] proposal only solutions in sight appear to be: (1) to anticipate the option, or alternatively (2) to continue to license under direction of Reparation Committee such quantities as are necessary for needs of countries interested without reference to treaty procedure. To this course obvious difficulties of high prices and absorption of stocks apply.

Herty is expected to return almost immediately to Paris and Department will be kept informed of later developments. Polk.

American Mission
  1. The telegram was dated Sept. 16, 11 a.m.
  2. Pierrepont B. Noyes, American observer on the Rhineland High Commission.