462.00 R 294/364: Telegram
The Ambassador in France (Herrick) to the Secretary of State
302. L–175, from Logan.
1. Reference to Department’s telegram L–76, May 28, 6 p.m. I am in receipt of the following letter from Gutt, the Belgian assistant delegate on the Reparation Commission, dated June 14, 1924:52
“As I told you the other day, La Comptabilité des Gages at Coblenz is in the possession of certain sums which in ordinary course should be deposited with the Reparation Commission.
In order that this deposit may not give rise to discussions which everyone agrees are superfluous at this time and inasmuch as it appears certain that the Reparation Commission itself would allocate these sums to the Belgian priority under reserve of such rights as may accrue to the United States under the agreement of May 25, 1923, it has been decided that the sums in question shall be turned over directly to Belgium, Belgium remaining accountable for them to the Reparation Commission and eventually to the United States for the portion which may be payable to it.
In conformity with the letter which Mr. Bemelmans addressed to you on November 22, 1923, the Belgian Government is ready to deposit in a special blocked account 25 per cent of the cash above referred to.
I shall be obliged to you if you will kindly inform me of the desires of your Government and indicate the manner in which you wish the account to be opened.
Accept, etc.”
2. Unless I shall receive instructions to the contrary, I shall reply using language reported in my L–161, May 13, 3 p.m., paragraph 6, except that it now seems likely that the first paragraph will be eliminated entirely and the second paragraph will contain the following clause:53
“In acknowledging your courteous letter of June 14, 1924, relative to the pending American Army Cost Agreement and the establishment of a special blocked account into which should be deposited 25 percent of the cash sum which you inform me the Belgian Government is about to receive upon the reparation account of Germany, I have the honor, etc.”
3. The Department will observe that Belgian letter states that Belgium will in any event be accountable to Reparation Commission for the funds. Taking into consideration this assurance as well as [Page 144] the individual informal approval of the delegates to present procedure and also the further fact that under the existing agreements it seems clear that the Belgians are entitled to priority on this payment, I do not see how our Government can be prejudiced by acquiescing in opening of this account. The suggestion made in Department’s telegram L–76, May 28, 6 p.m., that the Belgians be requested to obtain advance consent of all interested Governments in opening this special account, is not practicable, for to obtain this formal consent would of necessity bring up very discussion which both Belgians and individual delegates wish wholly to avoid, that is, question of source of the funds. If, as is virtually certain, the Belgians are entitled to this money, it is somewhat anomalous, moreover, for them to ask permission of the other powers to dispose of their own funds in legitimate ways as they deem proper. Furthermore, the French Parliament not yet having ratified the Army Costs Agreement, the new French Government might hesitate to commit itself so definitely before obtaining legislative opinion. For these reasons I suggest that the Department waive this proposed step.
4. If the experts’ plan is put into execution, as appears more probable daily, I feel reasonably confident that the Ruhr episode will give rise to no further discussion by the Allies among themselves and that past differences will not be reawakened. The only effect will be that in rearrangement of financial payments for the future, naturally some weight will be given to fact that Belgium has received some proceeds from this source. In the state of feeling here at present, I think that no one would object to allocation of portion of this sum to American Army costs, particularly as this would be helpful to all the Allies by reducing the amount due to us. If we do not accept the Belgian offer or if we bring forward conditions and qualifications to put off acceptance, it is my opinion that we would merely be throwing away the first excellent opportunity we have had to obtain real money. Logan.