462.00 R 296/192: Telegram
The Ambassador in France (Herrick) to the Secretary of State
93. L–100, from Logan. Your telegram L–50, February 23, 5 p.m.
(1) I have ascertained that the experts’ committee is to deal with the manner and the amount of payments Germany is to make beginning 1924, and that it has neither intention nor competence to deal with the question of distribution.
(2) In regard to our Army costs it should be borne in mind that under a short moratorium on cash payments no amounts would accrue to us under the agreement of May 25, 1923, during that period. The amounts deferred, however, would be allocated, under the agreement, to the last eight years daring which we have an absolute priority on all cash received instead of only 25 percent. Purpose of any moratorium is to increase cash payments in following years, so that actually under a cash moratorium we are technically and practically more likely to be paid in full than without a moratorium.
Your second paragraph. I do not understand that by our arms and ammunition costs agreement the Allies bound themselves in any way not to grant Germany a moratorium if the necessity arose. I fear that were we to demand a cash payment of one-twelfth of the capital sum of the Army costs during the moratorium period, we would not only confuse adjustment but would greatly prejudice our own equity in the settlement. Under the present plan of the experts’ committee, Germany will be asked to make substantial deliveries in kind during moratorium period which are to be financed, probably, by a loan largely internal. If Germany is also called upon to make cash payments for our Army costs the moratorium becomes a fiction.
The committee wishes for technical reasons to avoid use of the word moratorium. A claim on our part for any cash payments would lead, probably, to other claims by Allies for similar payments and undoubtedly would have a disastrous effect on the ratification of agreement of May 25, now pending in the French Parliament.
(3) In regard to the claims before the Mixed Claims Commission, I am convinced that the committee’s plan, as at present conceived, has no direct bearing on the legal rights of the United States. It is my personal belief that our legal rights will not be prejudiced by the proposal any more than by the schedule of payments, or by any other suggestions that might be made by the signatories of the Treaty of Versailles who endeavor, naturally, to get all they can out [Page 4] of Germany. Even so, the reservation indicated in the paragraph (4) below could be framed in such a way by the Department that our position would be protected from any possible prejudice.
(4) For the reasons stated above and in view of the special position of the Government of the United States on the question at issue, due to its unofficial connection with the Separation Commission, it is my belief that the broadest interests of our Government are best protected by refraining at this time from interjecting the claims mentioned by the Department into the discussion now under way in the two committees of experts appointed by the Separation Commission, and that American interests will be best served by encouraging in every way we can the reaching of a solution of the economic and financial phases of the problem by the experts’ committees and the commission, and if, and when, the Reparation Commission takes definite decisions on the reports of the two committees, and if then there is any question that the equitable rights of the United States have been infringed, I am in a position, should the Department so instruct me, to make a statement of record or a reservation which will adequately protect our position. I feel that after the Army Costs Agreement becomes effective through its ratification by the French Parliament, our position is amply safeguarded for the reasons stated under (2). So far as adjustment of our claims resulting from operation of Mixed Claims Commission is concerned, should we not elect to deal directly with Germany, settlement [is always possible?] through medium of value of German property at present sequestered by our [Government?]. [Always possible?] to negotiate with Allies in hope of reaching some agreement in regard to participation on percentage basis in annual cash payments hereafter to be made by Germany under plan of the committees as at present conceived.
(5) I consider it highly inopportune at present to press the Allies to arrange an adjustment with Germany giving specific mention and space to our claims, as I feel certain that such a request at this moment and in the particularly delicate situation existing would jeopard the hope of constructive work following the experts’ work. There would be many, indeed, who would say that the real object of American participation in the experts’ committees, even in the present indirect and entirely unofficial way, was the hope of slipping through the American claim and in this way forcing the consent and cooperation of the Allies. Aside from good ground of this argument, the purely technical aspect of which I ignore, a much more acute danger from practical business point of view would be raised by failure of the committees to reach constructive findings than would be presented by some possible technical prejudicing of American equity in the two categories of claims to which Department refers in its instruction. We have claims against Europe [Page 5] much more important than those of the Army costs and the findings of the Mixed Claims Commission; namely, Europe’s indebtedness to us. Our best hope for reimbursement of this latter account depends upon Europe’s early rehabilitation and reconstruction, and at least for the present this is largely dependent on successful issue of the work of the committees. I should be alarmed, therefore, were we virtually to throw away all chance of successful results by pressing claims in question before experts’ committees.
(6) I shall not press views expressed in your telegram L–50 upon Dawes and Young unless instructed to do so. Logan.
- Telegram in three sections.↩