862.85/1000: Telegram

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

165. R–221 for Department and Davis.

1st. Following from Belgian Minister of Railroads, Shipping Post[s] and Telegraphs to Belgian delegate Reparations, who asks information as to our knowledge of the matter.

Journal of Commerce Antwerp announces America has put on sale 30 German liners seized during war adding that purchaser must be American and must employ vessels on routes to be designated by Shipping Board. Although this news seems to me at least premature if not untrue, please ascertain facts and advise. Signed Picard [Poullet].”

Request instructions as to what reply should be made and information whether and, if so, what negotiations are contemplated along that line.

2d. According paragraph 2 Wilson–Lloyd-George Agreement final establishment of title and ownership ex-German vessels seized in our ports will be made by Reparation Commission. Also consummation this final establishment depends upon the adoption of agreement Allied Powers concerned and upon appropriation of funds by Congress to pay Reparation [Commission] for excess tonnage. If agreement fails in United States and treaty ratified, annex III reparations clauses applies and part of ships would have to be returned. Consequently my view: Negotiations for future sale should not contemplate delivery or change of title until United States position on treaty settled and matter ownership established here. Also to avoid suspicion of bad faith, which may prejudice acceptance Wilson–Lloyd-George Agreement, believe any plans for future sale should be kept confidential pending final settlement.

3d. Request your views and full information of any steps contemplated. Rathbone.