462.00 R 29/228: Telegram

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

1218. B–105. For Davis. Reference your 984, Treasury B–306[B–36].39

Please consider following suggested form of statement to be presented to Commission when question of distribution of ships is directed by Commission.

“No objection is made by the United States to the conclusion of the Commission against taking into account pre-war shipping losses in connection with distribution of ships acquired from Germany by the Commission in view of the fact that the United States has not as yet ratified the Treaty of Versailles and that in any event it is hardly possible that the United States shall share in such distribution.

With reference to the possibility that the principle involved might otherwise be regarded as having some bearing on interpretation of the so called Wilson–Lloyd George Agreement, not yet ratified by the United States, or as affecting in some other way the position of the United States as to the German ships of which possession and title was, during the war, taken by the United States under authority of an act of Congress. I am instructed, by my Government, to state to the Commission that it now makes all reserves necessary so that the question may remain an open one for consideration by the proper United States authorities when, if ever, it becomes material.

In addition I am instructed by my Government to call to the attention of the Commission the fact that the principle that participation in reparation must be confined to losses during the period [Page 535] of belligerency of each nation, tends to the result that nations which did not participate in the war may be unable to collect their legitimate claims against Germany and that nations which did not participate in the whole war may have outstanding legitimate pre-belligerency claims against Germany which cannot be collected. The difficulty in the collection in both cases arising from the fact that the reparation payment is classed as charge against the revenues and assets of the German nation, leaving nothing available for other claims. This result tends towards unfairness and ill feeling as between nations and has the further unfortunate result of leaving outstanding, against Germany, claims, which, so long as they remain unsettled, will constitute a disturbing factor in all trade relations between Germany and the outside world and will to that extent be a barrier to the economic rehabilitation of Germany and also of those countries whose prosperity depends to a greater or less extent upon business relations with Germany.”

The Reparation Commission, if they say anything, which is not probable, would reply that the difficulty is inherent to treaty and can be remedied only by the Governments themselves but see no harm in making the statement to Department [Commission].
  • Boyden
  • Wallace
  1. Not printed.