Papers Relating to the Foreign Relations of the United States, 1923, Volume II

462.00 R 294/144: Telegram

The Ambassador in France (Herrick) to the Secretary of State

Paris, March 23, 1923—5 p.m.
[Received 11:48 p.m.]

141. W–9. Following is translation of plan presented by Allies. My comments follow in another telegram.⁹⁶

“Costs of the American armies of occupation. Draft. The present agreement is concluded between the Government of the United States of the one part and the Governments of Great Britain, France, Italy and Belgium of the other part subject to the approval of the Governments of the other Allied Powers entitled to participate in the payments affected by the present agreement.

The Governments of Great Britain, France, Italy and Belgium agree to make every effort to obtain this approval.

1. The American Government declares that the fact of its accepting a method of settlement for the amount of the costs of the American armies of occupation in Germany by means of future annuities must not be considered as a renunciation on its part of the right which it considers it possesses to claim an immediate payment from the Allied Governments from the sums already received by the latter from Germany.

The American Government on the contrary desires to state that it reserves the right at any moment in the course of the execution of the present agreement and in case it would deem that this agreement is not working in a satisfactory manner to claim from the Allied powers an immediate payment from the payments already received from Germany by the other countries.

The Allied Governments take note of the reservation of the American Government but state that in case the American Government should deem it advisable to annul the present agreement they reserve the right to discuss the juridical bases of the debt itself.

2. The net amount due to United States for the costs of their armies of occupation will be for the purposes of the present agreement reckoned as follows:

Expenses up to date such as they figure in the accounts of the Reparation Commission after deduction of the amount received in the form of the requisition of paper marks, et cetera, and of the value of the armistice material ceded to the Government of the United States.

The value of this material to be fixed by the Reparation Commission in agreement with a representative of the American Government.

The renunciation by the Allied Governments, valid solely in respect of the present agreement, of their request to see certain receipts realized by the American Government as a result of the war deducted from the sum total of the cost of the American armies of occupation, is made without prejudice to the question of principle and with a view to settling by mutual agreement the payment of the cost of the said armies.

The Allied Governments reserve the right to raise this question again in case the American Government should deem it advisable to use the right which it has reserved by virtue of paragraph 1.

3. The net amount due to the Government of the United States will be paid in 12 equal yearly installments, the first yearly installments to be paid in 1923. No interest shall be charged.

These payments constitute a first charge on the payments of every kind carried to the credit of the Reparation Commission account and made every year by Germany or for the account of Germany to the Reparation Commission or to any other body which might be appointed in order to receive the moneys paid by the German Government with the exception of

(a) Deliveries in kind effected under the terms of the various annexes of part eighth of the peace treaty or any other procedure approved to date by the Reparation Commission to the Allied countries possessing credit on account of reparations.

(b) Proceeds from the British Reparation Recovery Act or any similar measures taken or to be taken by the other Allied Governments in pursuance of the decision of the Allied Governments of March 3, 1921.

(c) Transfers and cessions of property rights and interests made in execution of the peace treaty.

If in the course of one year between 1923 and 1926 inclusive the amount of the sum due to the American Government exceeds 25 percent of the total payments as they are defined above the amount of the payment to be made to the United States will be reduced to a sum equivalent to 25 percent of these payments and one eighth of the sum deducted will be added to each of the future payments to be made in the course of the years 1927 to 1934 inclusive.

If in the course of any year after 1926 the said payments in the course of any determined year should be insufficient to satisfy the amount due in the course of that same year the arrears will be carried over and added to the sum due in the course of the following year.

If at the end of the year 1928 or of any year following the arrears have reached such an amount as might in the opinion of the American Government endanger the complete execution of the payments within the period of 12 years the Allied Governments upon the request of the American Government will consider such modifications of the present agreement as might seem necessary in order to insure the complete execution of the payments within the period of 12 years.

The Allied Governments however reserve all their rights in respect of the payments in kind and in cash which might be collected through the intervention of any Allied authority in occupied territories.

4. If during the period of the operation of the present agreement Germany obtains a loan for the purpose of hastening the discharge of her reparation obligations the Allied Governments undertake to hand over to the American Government on account of the expenses of the American army of occupation 20 percent of the amount of the said loan affected to reparations this levy of 20 percent will however only be taken out of the amount of the loan floated in the United States or out of the share of an international loan subscribed in the United States.

The sums thus given over to the American Government will be considered as anticipatory payments of the annuities fixed according to paragraph 3 of the present agreement due account being taken of the clause affecting the payments due for the years 1923 to 1926 inclusive.

No discount shall be charged for such anticipatory payments.

5. The charge upon the payments in cash to be received from Germany and set up by the last part of article 8 of the inter-Allied agreement of March 11, 1922, on behalf of the unpaid balance of the costs of the British and French armies of occupation up to May 1, 1921 shall only apply to the balance if such there be of the German payments after payment of the monies due to the United States in execution of the present agreement.

6. The American Government will take the necessary steps in order to agree that such quantities of German dye stuffs which may be fixed from time to time in agreement with the Reparation Commission shall be paid by way of deduction from the yearly payments to be made to it.”

• Wadsworth
• Herrick

96. Not printed.