862.85/983: Telegram

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

40. From Rathbone for Davis.24 R–195.

Department’s 9478, December 31st, 1919.25 Embassy’s 21 January 3rd, 1920, R–191.25

[Page 509]
Embassy’s 21, January 3, 1920, my R–191, gives our views on questions of importance raised.
Following from minutes O[rganization] C[ommittee,] R[eparation] C[ommission] meeting 2d October, delegates from the United States, England, France, Italy, Belgium present, Loucheur presiding:

“Brazilian ships. Chairman recalled that on several occasions this question had been raised before the Committee. In its meeting of 25th September 1919, it had charged Major Monfries to telegraph again to A[llied] M[aritime] T[ransport] E[xecutive] on this matter. In respect for decisions of the Commission, French Government had refrained from entering into negotiations with Brazil for purchase of these ships, but it stated that it considered it as formally understood that no other Allied or Associated Power should enter into or should authorize its subjects to enter into negotiations before decision was received. Committee declared itself in agreement.”

Under Wilson–Lloyd George Agreement it seems plain that irrespective of amount of claims against Germany by country (a) availing of that agreement and (b) receiving thereunder more tonnage than under the ton for ton theory, the reasonable value of such excess must be paid into common reparation fund notwithstanding the President’s reservation in signing agreement. If Congress should refuse to make disposal of funds as contemplated, should doubt whether Britain would then be bound by agreement. On other hand French in accepting this agreement, so far as United States is concerned, did so subject to power of Congress to make disposal of funds under resolution approved May 12th, 1917. It is my view that Wilson–Lloyd George Agreement applied to all ships whether or not legal tender [title] has passed to Government capturing, seizing or detaining same.
Annex III applies to German merchant ships, that is, ships the title to which was in Germany at date of treaty. If a country not accepting Wilson–Lloyd George Agreement has made [taken] title to ships before date of treaty in my opinion there is great force to contention that such ships do not pass under treaty and proceeds of sale so far as property of German nationals must be then dealt with in accordance with article 297 of treaty. This opinion is granted [given] without examination of international law bearing on question. …
You will recall (a) that at meeting of second subcommittee on reparations March 31 Hipwood, British expert, said it was intention of draughtsman of annex III, paragraph 3, “to exclude from delivery to be demanded only boats captured and definitely condemned by prize courts”. The amendments were rejected that [Page 510] Robinson25 proposed on behalf of United States involving recognition of [by?] Central Powers, of validity of seizure during war of merchant shipping and relinquishment of titles thereto, the Government holding such ships to be charged with reasonable value thereof; (b) that at meeting of Council of Four April 28 “it was agreed to inform Brazilians and Portuguese that it was not feasible to meet their claim in regard to shipping and that they would share in common pool.”
Would appreciate earliest possible information as to what position it is determined United States will take, without this information it will be difficult to discuss questions which will arise in connection with German ships seized by Brazil. Rathbone.
  1. Norman H. Davis, Assistant Secretary, U. S. Treasury, from Nov. 1919 to June 1920; assumed duties as Under Secretary of State, June 15, 1920.
  2. Not printed.
  3. Not printed.
  4. Henry N. Robinson, technical adviser, American Commission to Negotiate Peace.