362.115 St 21/125: Telegram
The Acting Secretary of
State to the Ambassador in France (Wallace)
Washington, February
27, 1920—7 p.m.
438. Your urgent 541, February 23.73
For Rathbone. Your R–297, R–302, R–351 for Department and Davis.74 As outlined in
Department’s 273, February 3, this Government can not agree to
temporary allocation of tankers to other than United States. You may
so inform Kemball-Cook and submit, on behalf of this Government, the
following counter-proposal to his as outlined in your R–201 of
January 9:
- “(a) The 8 D.A.P.G. tankers now
at Leith to be provisionally allocated to the United
States Government, and temporarily placed under American
registry with understanding that they shall fly A.M.T.E.
flag together with United States flag.
- (b) Until determination of
question of final disposition tankers to be used for
transporting cargoes to France, Belgium and Italy, if so
desired by the respective Governments, up to the
following gross tonnage for each country: 17,000 to
France, 12,000 to Belgium, 9,000 to Italy; tankers may
also be used for transportation of one or two relief
cargoes to Germany from United States, unless
Reparations Commission should decide otherwise. To
extent, if any, that these tankers should not be
required to transport cargoes to Germany, France,
Belgium and Italy as above, the United States shall be
free to use them without restriction.
- (c) If any of tankers are used
for transportation of relief cargoes to Germany, freight
rates representing the cost of the voyages shall be paid
by Germany.
- (d) When the vessels are used
otherwise than for German relief cargoes, the current
rate of freight for time being will be charged.
- (e) Irrespective of the
question as to whether there may be any obligation now
to pay charter hire to the German Government, it is
agreed that all proceeds arising from the use of
vessels, less the cost of operation and fees for
management will be credited, or if so desired, deposited
as they accrue with the Reparations Commission, to be
held in trust pending final disposal with interest
accrued in accordance with the decision as to the
disposition of the tankers as provided for below. If,
however, it is decided that charter hire is due Germany,
charter hire on British blue book bare boat rates less
operating costs shall be refunded to the United States
by the Reparations Commission, and credited by it to
Germany for the purchase of food in compliance with
agreements pursuant to Brussels Convention.
- (f) If Standard Oil Company
makes good its claim before Reparations Commission or
independent tribunal mentioned in paragraph i, then Allied and Associated
Powers agree to satisfy claim
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by handing over and transferring
tankers to Standard Oil Company under American flag in
tonnage bearing to the entire tonnage of the tankers a
ratio not less than that which the par value of the
D.A.P.G. securities proved to belong to the Standard Oil
Company bears to the par value of all D.A.P.G.
securities.
- (g) If the Standard Oil Company
fails to make good its claim before Reparations
Commission or independent tribunal mentioned in
paragraph i then the United
States will transfer the ships in accordance with any
allocation or decision which may be made by that
Commission or tribunal.
- (h) The Reparations Commission
is to settle final question of Standard Oil Company’s
claim if United States finally ratifies Peace Treaty and
an American representative is duly qualified and acting
on commission, except as otherwise provided in paragraph
i.
- (i) If United States has not on
July 1, 1920, ratified Peace Treaty and an American
representative is not qualified and acting on commission
then Standard Oil Company’s claim shall, at request of
United States or other interested Government, be
adjudicated by an impartial tribunal to be agreed upon
between the U.S. and other Governments concerned so that
all parties interested may be properly heard.
- (j) The Wilhelm A. Riedemann now building in Germany
to be completed and to follow fate of other
tankers.
- (k) It is understood that
temporary allocation will in no way prejudice claim of
beneficial ownership of Standard Oil Company and, on
other hand, will in no way recognize validity of any
such claim.”
For your information, it will not be possible to place tankers under
the United States Navy as suggested by you. If provisionally
allocated tankers will be placed in charge of Shipping Board, and
probably under management of Standard Oil Company. You may, if
inquiry is made, so inform [Kemball]-Cook. The Department, however,
considers it preferable not to definitely make this a term of the
agreement.
With reference to above modification of paragraph f, Standard Oil Company states that the ratio whether
determined by financial or market value or by par value would be
substantially the same, since all three classes of the securities
received the same return, the stock warrants and the so-called
debentures being by their terms entitled to returns at the same rate
as the dividends on the shares, and all returns have been declared
and paid accordingly.
In view of this Government’s willingness to agree to carry cargoes,
as outlined in paragraph b, it is felt that
the agreement should not contain any further restrictions as to use
of vessels during provisional allocation, and Department is
therefore not disposed to agree to French and Italian reservations,
which would limit the discretion of this Government as to what oil
products shall be transported on
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the vessels. No attempt has therefore been
made to modify proposal to accord with their position. This
Government cannot of course assume any responsibility other than
that of fair dealing in respect to the oil products to be
delivered.
