832.85/112
The Department of
State to the Brazilian
Embassy
Memorandum
The Department of State desires to acknowledge the receipt of two
memoranda from the Brazilian Embassy dated December 29, 1919,28 one setting
forth the claim of the Brazilian Government in effect that Brazil
has the right under certain provisions of the treaty of peace with
Germany to sell German tonnage taken over by the Brazilian
Government in Brazilian ports and apply the proceeds to the payment
of claims of Brazilian nationals for war damages, the surplus after
making such payments to be delivered under Article 297(h) (2) for reparation purposes, and
requesting that the United States support this position before the
Supreme Council; and the other expressing the opinion that the
claims of Brazil are consistent with the Wilson–Lloyd-George
Agreement.
In view of the fact that the United States has not as yet ratified
the treaty with Germany, it is not in a position to state definitely
at this time its views as regards the construction of the treaty in
respect to the question of the Brazilian Government. Should the
United States become a party to the treaty and should Congress raise
no objection to the Wilson–Lloyd-George Agreement, the United States
would be committed by that Agreement to the course of action laid
down therein. (A copy of the Wilson–Lloyd-George Agreement is
enclosed herewith for the confidential information of the Brazilian
Government.) The United States accordingly is very willing to offer
such support to Brazil as it may be possible to give consistent with
the provisions of this agreement. In this relation, however, it
should be pointed out that in the view of the United States the
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Wilson–Lloyd-George
Agreement does not allow the application to the payment of war
claims generally of the compensation to be made under the agreement
to the Reparation Commission. It is understood, however, that the
amount would be determined only after deducting certain costs and
expenses such as those arising in connection with the taking over of
the German ships. If, therefore, it should be deemed advisable by
the Brazilian Government to adhere to the Wilson–Lloyd-George
Agreement, the United States would be glad to support Brazil in such
contentions in respect of German ships mentioned as seem to the
United States to come within the scope of that agreement.
With reference to the statement of Brazilian Embassy that the
Government of the United States has declared itself in agreement
with Brazil’s theses in a communication made for the President of
Brazil in August last to Ambassador Morgan, it may be stated that
Ambassador Morgan was informed, on August 26, last, that Mr. Polk at
Paris had notified the Department of State that on information of
the contents of a note which the Brazilian Government was about to
present to the Government of France, the matter would be taken up by
Mr. Polk informally with the French authorities, and his support
lent to any satisfactory request which Brazil might formulate, with
the qualification, however, that the freedom of action of the United
States with reference to the disposition of these vessels was in a
certain manner limited by the Wilson-Lloyd-George Agreement which
provided among other things in substance that Brazil is authorized
to obtain or dispose of these ships on condition that the value
thereof is paid over to the Reparation Commission.
Washington
,
January 12, 1920
.
[Enclosure]
Wilsons–Lloyd George Agreement
The Allied and Associated Governments whose signatures are hereto
affixed, severally agree as regards merchant shipping as
follows:
1. The Reparation Commission will as soon as possible compile a
list giving fullest particulars available on all enemy ships
still in existence, captured, seized or detained by any Allied
or Associated Government during the war, and also all other
enemy ships or boats which the enemy Powers are required to cede
under the Treaty of Peace.
2. The Reparation Commission will take such steps as will secure
that each of the Allied and Associated Governments will retain
as its own the complete title to and use of all ships captured,
seized, or
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detained
during the war as a war measure and prior to November 11, 1918,
and will own the same free from any claim of any of the other
Allied and Associated Governments.
In all cases where the ships and boats so to be retained by any
Allied or Associated Government are in excess of the claims of
such Governments respectively for war losses in merchant ships
such Governments shall not make any claim for a share in other
ships and boats ceded under the Treaty of Peace.
3. In all cases where the ships and boats so to be retained by
any such Governments are insufficient to satisfy in full the
claims of such Governments respectively for war losses in
merchant ships, the enemy ships which remain and which are to be
ceded under the Treaty of Peace will be divided into three
classes, viz. liners, other merchant ships, and fishing boats,
and will be distributed to such Governments on the basis of
ton-for-ton and class-f or-class of the ships and boats lost and
not replaced by the ships and boats retained, but in proportion
to the balances due on the claims of such Governments
respectively.
4. As the ships and boats so to be retained will, in the case of
Brazil, China, Cuba, Siam, and the United States, exceed the
total amount of tonnage which would be allocated to those
countries were the total enemy tonnage captured, seized,
detained or still in existence shared in proportion to losses of
ships and boats during the war, in each such case a reasonable
value on the excess of ships and boats over the amount which
would result from such a division will be determined. The amount
of the value so fixed will be paid over by each such state to
the Reparation Commission for the credit of Germany towards the
sums due from her for Reparation, in respect to war losses of
merchant ships.
5. As soon as the Reparation Commission has collected the
necessary information, and is in a position so to do, they will
give public notice that after an interval of two months they
will proceed to divide the vessels except those captured,
seized, or detained by the Allied and Associated Governments
which are to be retained by them respectively as hereinbefore
provided. If within one month of the publication of the notice,
any Allied, Associated or Neutral Government, person or
corporation, a national of such Government and acting through
such Government, notifies the Commission that they have an
equitable claim against any vessel which has not been, or is not
being satisfied by the enemy Governments, that claim will be
considered on its merits by the Commission which may adopt any
procedure it thinks fit, provided it is expeditious and is
calculated to do substantial justice as between the Allied and
Associated Governments on the one hand and the claimant on the
other.
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The Commission will have power to determine claims so presented,
and such determination will be conclusive and the Commission
will also have power to enforce its findings.
- Woodrow Wilson*
- D. Lloyd George
[Memorandum]
I deem it my duty to state, in signing this document, that,
while I feel confident that the Congress of the United
States will make the disposal of the funds mentioned in
clause four which is there agreed upon, I have no authority
to bind it to that action, but must depend upon its taking
the same view of the matter that is taken by the joint
signatories of this agreement.
