462.00 R 294/49a: Telegram
The Secretary of State to the Ambassador in France (Herrick)52
90. You are instructed to communicate the following note textually to the Government to which you are accredited and repeat to Embassies at London, Brussels and Rome for similar action as Department’s instruction No. 76, 14 and 29 respectively.
“The Government of the United States has believed, and still believes, that the Governments of the Allied Powers have no disposition to question the right of the United States to be paid, upon an equal footing with them, the actual cost of its Army of Occupation which it has maintained in Germany since the joint Armistice Agreement of November 11, 1918. While the attitude of the Government of the United States in expecting full payment of these costs has been repeatedly set forth, it is deemed to be appropriate, in view of recent developments, to make this statement of its position.
The amount of the claim of the United States for its army costs is understood to be well known and to be free from any substantial dispute. According to the information and accounts in the possession of the Allied Governments, it appears that the total cost of all the Armies of Occupation from November 11, 1918, to May 1, 1921, amounted to 3,639,282,000 gold marks; that the amounts due to Belgium, France and Italy for their army costs for that period have been paid in full (chiefly through deliveries of property); and that the unpaid balance of army costs due May 1, 1921, amounted to [Page 221] 1,660,090,000 gold marks due to the United States and the British Empire as follows:
|United States||966,374,000 gold marks|
|British Empire||693,716,000 gold marks|
It is understood that between May 1, 1921, and December 31, 1921, the British Government received cash payments as against this balance, of about 130,696,000 gold marks. In view of the position taken by the Government of the United States, this payment was expressly made and received subject to the rights of the United States.
In November, 1921, the Commission appointed by the Supreme Council to give its opinion on the expenses of the Armies of Occupation made its report, dealing with the army costs since May 1, 1921. This included calculations with respect to the American Army, and its actual costs since that date were included in the proposed provision for payment pari passu with the other Powers.
It had been supposed that this report to the Supreme Council would be referred to the Conference of Ambassadors and would pave the way for suitable action with respect to the American army costs both current and accumulated. It was with surprise that the Government of the United States recently learned that negotiations, in connection with and following the meeting at Cannes in January last,53 apparently contemplated the substitution for the recommendation of the Army Costs Commission of other arrangements which would ignore American army costs altogether, although estimates both for army costs and reparations were being made on the basis of the entire capacity of the German Government to pay. When it came to the notice of this Government that it was proposed at the meeting of the Finance Ministers, to convene at Paris on March 8, definitely to assign the greater portion of the amount heretofore paid in cash by Germany, and not yet finally allocated, to the payment of army costs without making any provision for those of the American Army, it was deemed advisable again to direct attention to the position of the United States. The Government of the United States has been advised that all the arrangements of the Finance Ministers have been made subject to the rights of the United States and that these Ministers have also suggested that the Government of the United States should take up the question directly with the Governments concerned.
The Armistice Agreement concluded between the Allied and Associated Governments and Germany on November 11, 1918, provided for military occupation by the Allied and United States forces jointly, and it was expressly provided that
‘The upkeep of the troops of occupation in the Rhine districts (excluding Alsace-Lorraine) shall he charged to the German Government.’
It is not believed that the meaning of this Agreement can be regarded as doubtful. It had not only its express provision but its necessary implications. It is the view of this Government, and it is confidently believed that it is the view of all the Governments concerned, [Page 222] that this Agreement on the part of the Allied and Associated Governments with Germany, and with each other, had the clear import that the Powers associated in this joint enterprise should stand upon an equal footing as to the payment of all the actual costs of their Armies of Occupation and that none of the Powers could, consistently with the Agreement, make any arrangement for a preferential or exclusive right of payment. Further, it is assumed that it would not for a moment be contended that any of the Allied Powers would have been entitled to enter into any arrangement by which all the assets or revenues of the German Empire and its constituent States would be taken for their benefit to the exclusion of any of the other Powers concerned.
It was apparently in recognition of the existing and continuing obligation as to army costs that, in the Treaty of Versailles, in undertaking to place ‘a first charge upon all the assets and revenues of the German Empire and its constituent States,’ (Article 248) priority was given to the total cost of all Armies of the Allied and Associated Governments in occupied German territory from the date of the signature of the Armistice Agreement.
Articles 249 and 251 of the Treaty of Versailles provide:
By the Treaty between the United States and Germany, signed August 25, 1921,54 the ratifications of which were exchanged on November 11, 1921, it is provided that the United States shall have and enjoy the rights and advantages stipulated for the benefit of the United States in the Treaty of Versailles, notwithstanding the fact that the Treaty has not been ratified by the United States.
The Government of the United States entertains the view, and submits it to the consideration of the Allied Governments, that the United States is entitled to payment of the costs of its Army of Occupation pari passu with the Allied Governments, and that payments received by them from Germany in the circumstances disclosed cannot be used to the exclusion of the United States without its consent.
The Government of the United States is unable to conclude that the justice of its claim is not fully recognized. The Governments of the Allied Powers will not be unmindful of the fact that the [Page 223] Government of the United States has repeatedly and earnestly been solicited not to withdraw its Army of Occupation, and this Army has been continued upon the basis of the right to be paid its actual cost upon an equal footing with the Allies. But, while it is believed that the Allied Governments cannot fail to appreciate the manifest equity of the claim of the United States, it is understood that it has been suggested that there are technical difficulties which stand in the way of its recognition. While willing to take into full consideration every possible question, this Government is unable to find any such technical obstacle.
It is assumed that if any technical question were raised, it would be based upon the fact that the United States has not ratified the Treaty of Versailles. It may be pointed out, however, that Germany has explicitly consented to the priority of payment of the cost of the American Army of Occupation notwithstanding the fact that the Treaty of Versailles has not been ratified by the United States. Hence, any technical objection to the application of the payments made by Germany to the discharge of the just claim of the United States for the cost of its Army of Occupation upon the ground that the United States had not ratified the Treaty of Versailles, would necessarily rest, not upon any action or lack of action on the part of Germany, but solely upon the refusal of the Governments of the Allied Powers themselves to permit the discharge of an admittedly equitable claim and thus to seek to maintain in their behalf exclusively a first charge upon all the assets and revenues of the German Empire and its constituent States for demands exhausting the full capacity of the German Government to pay. The Government of the United States finds it impossible to conceive that any such attitude would be taken by the Allied Governments.
The Government of the United States believes that its right to priority of payment for its actual army costs, upon an equal footing with the Allied Powers, is not in any way affected by its failure to ratify the Treaty of Versailles. The right of the United States to share in this priority was not expressly conditioned, and in view of the nature of the claim and of the fact that the Treaty purported to create a first charge upon all the assets and revenues of the German Empire should not be construed as being conditioned upon the ratification of the Treaty by the United States. It may be noted that the Treaty was to come into force on the ratification on the part of Germany and of three of the Principal Allied and Associated Powers. By Article 251, quoted above, there is provision for priority of the ‘cost of the Armies of Occupation’ during the Armistice and its extensions and the cost of ‘any armies’ of occupation after the coming into force of the Treaty. This would seem clearly to embrace the cost of the Army of Occupation maintained by the United States.
The Government of the United States believes that its right to be paid the actual cost of its Army of Occupation pari passu with the cost of the armies of the Allied Powers is not only a clearly equitable right but is free from any technical objection.
This Government will welcome any suggestion from the Allied Governments for the reasonable adjustment of this matter. Upon receiving assurances of payment this Government will be only too happy to proceed to the consideration of suitable means by which [Page 224] its just claim may be satisfied. Pending such consideration and adjustment, this Government earnestly hopes that the Allied Governments will be disposed to refrain from giving effect to any arrangements for the distribution of cash payments received from Germany to the exclusion of the claim of the United States.”