362.115 St 21/151: Telegram
The Secretary of State to the Ambassador in France (Wallace)
1006. For Boyden: B–39.
Your B–92.
Your second. Last sentence garbled, but it would seem wise to assure your colleagues that we have no desire to delay agreement on tribunal, and if necessary let them know that both the Standard [Page 596] Oil Company and the Department will be willing favorably to consider tribunal made up of one man appointed by the Reparation Commission, one by the United States and one by a neutral party or by agreement between the United States and R[eparation] C[ommission]; or will consider some other suggestion along similar lines.
Your third. Department believes “Governments concerned” to mean United States and Allied Powers who are entitled to pass upon the disposition of enemy shipping under Paragraph 2 Annex II. Department would be willing to have the R.C. act as agent for the ether Governments concerned if they so desire, but does not consider it advisable to change wording of paragraph Eye.
Your fourth. We feel that matter of powers to be delegated tribunal is one for a further protocol, but for your information without deciding on advisability of tribunal being given full executive powers of R.C. under treaty, we do not feel such delegation would be necessary. Tribunal might merely exercise the arbitral function of deciding whether tankers are such property as R.C. can accept or require from Germany in payment of its reparation debt, or whether S[tandard] O[il] is entitled to financial compensation from R.C. for loss sustained by it because of loss by D.A.P.G. of its assets. In case of negative decision on the first issue on ground of proven beneficial ownership, all that may be necessary is for R.C. to execute decision or perhaps to affirm decision of tribunal and agree to keep hands off tankers or give some sort of quit claim, leaving to United States the possession of the vessels. The matter of title would then be arranged between S.O. and D.A.P.G. The S.O. Co. have stated that they would be satisfied with the latter result. If found desirable paragraph “F” could be amended so as to expressly give Commission or tribunal sufficiently broad authority to permit title to tankers to remain in D.A.P.G. As we understand German Government has not yet expropriated title, we see no necessity for credit from the R.C. to the German Government, and no action by the R.C. would be necessary other than confirming decision of tribunal and perhaps executing some further quit claim. In the second case, if beneficial ownership were not proven but tribunal finds financial reimbursement due, the R.C. would confirm decision and pay in tankers as per agreement. In this event title should come through the German Government and the R.C. but it would be perfectly possible to consider the title as coming to the R.C. subject to an equitable obligation of settlement for American interest. Credit therefore would be due the German Government only to the amount of the value of the tankers less the reimbursement found due. This would be a just and practical solution of the credit problem if the S.O. makes arrangement for the D.A.P.G. to give the German Government [Page 597] and/or the Reparation Commission a release of any claims against the German Government or the R.C. up to amount found due and paid to S.O. by way of settlement. It may possibly be found necessary to give the tribunal certain further powers or executive functions but it would seem wiser in general and would perhaps avoid legal difficulties if tribunal should not be held to function particularly as executive under the treaty and be subject to specific regulations in regard to procedure which the treaty provided for the R.C. The tribunal should be free to decide on principles of international law giving proper effect to the provisions of the treaty which are applicable. The R.C. acting as such should ratify the agreement so that it may be bound to execute the decisions of the tribunal.
We will reserve comment on your eighth until we see what eventuates from this cable.
Your thirteenth. We have obtained consent of the S.O. to paragraphs “F” and “G” as stated, as proposed by Bradbury, with the following change which we approve to be inserted after the words “selected by the Standard Oil Company and accepted by that company on the valuation aforesaid” (change agreed upon) “any award of tankers under either paragraphs “F” or “G” shall, if the tribunal finds that the necessity therefor exists, be conditioned upon the Standard Oil Company obtaining and delivering to the German Government or the Reparation Commission a release by the D.A.P.G. of any claims against the German Government and/or Reparation Commission on account of such award”.
It is believed that such arrangement would solve the credit difficulty as it would make it in either case proper for the Reparation Commission to exclude from its credit to Germany the value of the award made. Unless one or more of the Allied Powers desires to obtain control of the securities of the D.A.P.G. we see no reason why, with the concessions which we have now proposed, you should be unable to obtain their adherence and close the matter up.
B–94 received.81
- Not printed.↩