462.11 W 892/52: Telegram

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

108. Your 158, August 7, 4 P.M.

Last sentence paragraph 2 Department’s 105 read “paragraphs 5 to 7 inclusive”. It was evidently garbled in transmission.

It is not practicable to accede to request of Foreign Office with regard to the addition of the words “and the Treaty of Versailles”.

There would be no objection if phrase were used in same sense as in Article 1. That article does not limit claims to those defined in Treaty of Versailles but also embraces claims, if any others, covered by Treaty of August 25, 1921. See preamble which makes this clear.

The proposed addition at end of second paragraph Department’s 105, August 5th, would seem to be intended to impose different construction by requiring claims to be defined in both treaties and thus limit claims to those covered by Treaty of Versailles. The President has no authority actually to limit treaty rights in this manner, and if he were to give assurance so as to bar bona fide claims of American citizens, result would be that Congress would undoubtedly assert them and make provision for their payment out of sequestered property. Germany would not be gainer by such a course. Government claims in paragraphs 5 to 7 above mentioned stand in different position because of question of policy involved as to war pensions and allowances.

As a matter of fact under a proper interpretation of the Treaty of Versailles probably all claims which are covered by the Treaty of 1921 are included in the Treaty of Versailles. But it is undesirable that there should be any misunderstanding with regard to technicalities or as to any just claim covered by the Treaty of 1921. It is made clear by the Resolution of July 2, 1921,2 that the Government of the United States must insist on suitable arrangements being made for the settlement of claims growing out of acts of the German Government or its agents since July 31, 1914. Paragraph 4 of the Annex following Article 298 of the Treaty of Versailles, relates to [Page 261] claims growing out of acts committed since July 31, 1914, and before the United States entered the war. Of course, these are embraced in the claims agreement. But this Government’s attention has been specifically called to certain classes of claims which arise out of acts committed since that date and which although evidently covered by the Treaty of Versailles, might give rise to unfortunate controversy should the assurance proposed by the German Government be given and a question then be raised. Attention may be called by way of illustration to the claim of the Western Electric Company for damages to property in Belgium, which appears to have been brought to the attention of the German Government informally by the Company. Claims of this character seem clearly to fall within paragraph (9) of Annex I following Article 244 of the Treaty of Versailles. It is understood, however, that, although the subsidiary of the Western Electric Company is incorporated in Belgium, the Belgian Government has refused to deal with the Company’s claim as a Belgian claim, in view of the fact that the entire beneficial interest in the Company is American. It is believed that the German Government will perceive the desirability that there should be no question raised concerning claims of this character. Since they come undoubtedly within the scope of the Resolution of July 2, 1921, and therefore within the Treaty of 1921, and since the ultimate disposition of sequestered property which the Resolution provides shall be held pending the making of suitable provision for such claims rests with Congress, no advantage could accrue to the German Government through any declaration which might render doubtful the competency of the Commission to consider these claims. (This would on the other hand at once stimulate action by Congress.)

Communicate with Foreign Office in sense of the foregoing.