462.00 R 294/316: Telegram
The Secretary of State to the Ambassador in France (Herrick)
48. L–47, for Logan. Your L–86, February 1, 5 p.m. If, as appears to be the fact, the amount of reparation assessed against Germany also includes the amount for damages caused by her allies, then obviously any payments made by the latter on their reparation accounts should be set down as credits against Germany’s obligations. This principle is implicit in article 1 (c), Schedule of Payments, and in paragraph 11, Finance Ministers’ Agreement. The Department believes, therefore, that unless Bulgarian payments are used to cover Army of Occupation costs in Bulgaria, or costs of commission of control, or possibly the service of the external Ottoman debt referred to in the Treaty of Neuilly, article 135, they should be credited to the reparation account of Germany; and if these payments are credited in this way then the charge created in favor of the Government of the United States by paragraph 3 under article 2 of the Army Costs Agreement would apply when the agreement goes into effect.
If Bulgarian payments are credited to the reparation account of Germany and should the question of American participation therein arise, the Department desires, in accordance with the facts set forth in the above paragraph, that you support our right to participation before the commission in such manner as to indicate that this Government has taken it for granted that the Army Costs Agreement would be held to apply, and that a share of the Bulgarian payments [Page 154] would be set aside for payment to the United States when the Army Costs Agreement is finally ratified.
The Department agrees with you that the Reparation Commission is not competent to settle any disputed question of interpretation of the Army Costs Agreement without a specific mandate from the signatory powers, and should the commission oppose our participation under that agreement in Bulgarian reparation payments credited to Germany, you should, as you stated, reserve all rights for the United States.
If an attempt should in the meantime be made to release the blocked Bulgarian account, you may take appropriate steps to prevent this, and advise Department promptly.