462.00 R 294/63: Telegram

The Secretary of State to the Ambassador in Great Britain (Harvey)


99. The discussion of arrangements for the payment of accumulated army costs should proceed only on the basis of an unequivocal recognition of the right of the United States Government to be paid both accumulated and current army costs on an equal footing with Allied Governments. It should not be difficult to arrange reasonable terms if this right is admitted. This Government desires that suggestions as to settlement should come from the Allied Governments, but in order to aid you in conversation which may lead to such proposals from them, the following points may be noted:

Germany has made cash payments, since May 1, 1921, of more than 1,400,000,000 gold marks, or almost enough to pay the balances due on that date for army costs, which according to Reparation Commission accounts amounted to about 1,660,000,000 gold marks. Not taking account of the large deliveries in kind made to the Allied Governments, the entire claim of the United States as of May 1, 1921, should have been met out of the cash payments strictly applicable to army costs. While this Government does not desire to be over-exacting, and wishes to take account of all circumstances and especially the payment of interest by Great Britain on her debt, it feels that it should participate to a substantial extent in cash payments already made by Germany. In view of what the other Powers have already received, it would not seem too severe to ask that the United States should have, out of the payments made heretofore, not less than 300,000,000 gold marks; 100,000,000 gold marks of this amount should be paid immediately and the rest during the next two years, as the Allies might arrange. It should then be understood that in whatever cash payments may be made hereafter by Germany, the United States should proportionately share until the army costs of the United States are paid in full. Until army costs are fully liquidated the Government of the United States feels that not less than one-half of such cash payments should be applied to army costs, preference being given to the Powers whose costs have not been paid in full and in proportion to their unpaid claims. These suggestions are made merely to facilitate discussion and are tentative and informal.