462.11 W 892/42: Telegram

The Ambassador in Germany ( Houghton ) to the Secretary of State

141. Your 87, June 22, noon. Foreign Office this morning handed me revised draft of claims agreement with written memorandum and reasons for change. Cordial approval is given in principle. Full text of the revised agreement and of memorandum being sent by mail.98 Paraphrase of reasons is as follows:

According to the German Constitution necessary to insert a clause providing that the decisions of the Commission or of the arbitrator must be approved by the Reichstag. It is therefore proposed that the last paragraph of article number 6 in the Department’s draft shall read “the decisions of the Commission and those of the umpire (in case there may be any) shall be accepted as final and binding upon the two Governments subject to ratification of in accordance with the constitutional forms of the two parties.”
The German Government proposes to strike out under paragraph 3, article 1, of Department’s draft the four words “or by German nationals” on the ground that the procedure of the Commission can only affect claims between governments. To support this contention it is asserted that according to the German Constitution private rights cannot be affected by an agreement between the two Governments which is not ratified by the Parliament previous to signature. The memorandum points out further that in the preamble of the Department’s draft mention is made “of the amount to be paid by Germany in satisfaction of Germany’s financial obligation”.
German Government assumes American Government does not intend to avail of article number 304, Versailles Treaty, relating of [to] mixed arbitral tribunal for private debts and states therefore advisable for American Government to make declaration of non-intention upon signature of the agreement. Memorandum states further that the form of the first two paragraphs of article number 1 might lead to the assumption that the American Government intends to include not only all claims contemplated in the Versailles Treaty but in addition [claims which?] might go beyond this treaty (such as those included in the paragraphs 5 to 7 of annex 1 to article 244 of the Versailles Treaty). It is asserted that the German Government will find it difficult to make the agreement seem acceptable to the German public if it is not in a position to indicate scope of [Page 251] the claims. This task would be facilitated if the American Government would state that upon the signature of the agreement it would make a declaration as to its intention regarding the non-inclusion of the last mentioned claims as well as claims going beyond the Versailles Treaty.
The German Government agrees to the appointment of the umpire as provided in article 2 of the Department’s draft but Governments concerned would be left to agree on the appointment. If this were done the German Government would then at the signature of the treaty present a note to the President of the United States requesting him to make the appointment. Accordingly it is suggested that in article 2 the second sentence read “an umpire shall be chosen by agreement between the two Governments concerned to decide upon”, etc., as in original draft. Above they allege for political reasons.
The memorandum then suggests that an article be inserted between articles 6 and 7 of the Department’s draft reading as follows: “from the procedure provided for in the foregoing articles shall be excluded all claims not presented to the commission within two months after its first meeting.” It is stated that this proposal is made with the sole purpose of facilitating the work of the commission and any reasonable time limits will be satisfactory.
Finally the memorandum states that in accordance with Mr. Dresel’s memorandum of August 22, 1921,99 the German Government believes itself justified in the expectation that the conclusion of the agreement in question will open the way to a speedy return of the German property retained in the United States to its legal owners.

  1. Not printed.
  2. See Department’s telegram no. 1376, Aug. 20, 1921, Foreign Relations, 1921, vol. ii, p. 19.