462.00 R 294/156: Telegram
The Ambassador in France ( Herrick ) to the Secretary of State
157. W–16. Department’s telegram W–12, March 25.
At the conference yesterday it was felt essential by the Allies that the approval of other nations interested, namely Japan, Portugal, Greece, Rumania and Serbia, be obtained. The Allies were confident that such approval was obtainable and will place a two months’ time limit on the obtaining of consent, the agreement to be reconsidered or to fall if such approval refused. Although this not satisfactory I could get nothing better.
[Page 151]The words “an immediate” were eliminated in accordance with your instructions.
With reference to section 1, paragraph 3, there was a long technical discussion on the general question of the reservation of rights. The matter was left with the understanding that the Allies will attempt to draft a single clause covering all the reservations on both sides, which clause shall go at the end of the agreement. The same provision applies also to the second, fourth and fifth sections.
With reference to section 2, paragraph 2, the word “et cetera” has been eliminated.
With reference to section 2, paragraph 3, there was also a hairsplitting discussion because technically the Reparation Commission has the authority to determine the amount but I think this can be arranged.
With reference to section 3, paragraph 1, the wording you requested was discussed at length. According to the French this would prevent them from ever charging interest on future army costs. The Allies are willing that the clause read that if interest is hereafter charged during any period the United States shall also receive interest on the balance still due from the same date.
With reference to section 3, paragraph 2, your wording was accepted. I asked for the insertion of the following words after the word “account”, namely “for army costs or reparations”. As under the treaty the Allies consider the costs payable in cash and the special agreement which expired December 31 provided for payment by deliveries in kind, this insertion is important. In previous conferences it was clearly understood that our priority applied to all receipts of cash. There was objection to this by the Allies, but they admitted that if only payments on reparation account were considered available our priority would be nullified. The Allies will try to draft a new formula by which they will agree to accept payments in kind for all army costs taking cash only, if payments in kind are insufficient. I would like full instructions on this point as this is an important matter.
With reference to section 3, subparagraph (a) I will endeavor to have existing approved agreements listed and others barred. Your suggestion for agreement as to excess deliveries in kind met the same objection as before, namely that deliveries in kind are not cash and are not convertible into dollars. My point was seen by the Allies but they argued that as this agreement must be made public it would be for political reasons impossible to mention either a percentage as between deliveries in cash and in kind or a certain limit for deliveries in kind. While some suggestion as to the formula covering this point may be obtained, I doubt if a satisfactory one will be found.
[Page 152]With reference to section 3, subparagraph (b) there was an absolute refusal by Bradbury to consider any change. Our position is understood by him but he says the British cannot agree to put any cash collection under any priority. If the British ultimately collect more than their percentage of reparations and should pay the balance to the Reparation Commission the priority would apply. But this is a most doubtful contingency.
Section 3. The covering of clearing house payments was not discussed. The word “calendar” was inserted in section 3 next to the last paragraph. Your W–13, March 26, also noted. The suggestion of the Allies contained in my W–15, March 29, noon. They objected to the 12–year basis and to agreement that deficits should carry interest at a fixed rate, but recognized our right to interest on the 8-year basis which is something. Please let me have your views on this point.
With reference to section 3, last paragraph, I could obtain no satisfaction on this point. The clause seems to be first that France and Belgium reserve their rights, etc. England then insisted on the reservation of her rights and Italy followed. The Allies agreed that the clause might mean a different thing for each of them. At first Bradbury suggested we might join in the reservation as England would like our cooperation and as our interests would certainly be the same as England’s. There is little chance of altering or eliminating this clause.
With respect to section 4 you are referred to my W–15 for suggestion of ample guarantee; there was not time to discuss this matter.
The meeting lasted for four and a half hours and there was a most frank discussion but when it comes to putting in writing our verbal understandings, the Allies are united and very wary. The next meeting is to be held on Wednesday the 4th of April. Wadsworth.
- Telegram in two sections.↩