Papers Relating to the Foreign Relations of the United States, 1924, Volume II

462.11 W 892/318: Telegram

The Acting Secretary of State to the Ambassador in Great Britain (Kellogg)

[Paraphrase]

Washington, July 16, 1924—8 p.m.

217. L–105, for Logan.

(1) Your L–195, July 13, noon, from London. The Department’s L–81, June 14, 2 p.m., did not cover question of interest. Department has been informed that the date from which interest begins in awards of the Mixed Claims Commission varies according to the category of the claim, in some instances from the date of damage, in others from the Armistice. Decisions to date, furthermore, relate only to some categories, while others are expressly excepted for future consideration. The Department is of the opinion, however, that it is wholly probable that the commission in handing down its awards will provide payment of interest at 5 percent up to the date of payment. This matter lies outside the jurisdiction of the Department. As you will recall, 5 percent is the rate usually specified.

(2) As stated in Department’s telegram June 28, 2 p.m., L–91, you may, if you think it absolutely necessary, give the estimated award, although as already indicated, the Department holds to the opinion that we should avoid giving this figure, and the question of interest is only one more reason in support of this view. Lacking Congressional authorization, the Department would not be in a position specifically to waive any portion of the amount to be awarded by the Mixed Claims Commission, but if a detailed discussion of the award is avoided, this point would not be raised, and the Department could agree to accept definite percentage of German payments as long as the Government of the United States is left free to distribute its share in payments in accordance with its own wishes.

(3) To supplement statements paragraph 2, telegram L–80, June 14, 1 p.m., Department submits following in connection with view that to present estimated amount of award would probably have prejudicial effect on the percentage in German payments desired by this Government. The amount of the American award will represent the bottom figure with all inflation removed. No American claims under categories of damages 5, 6 and 7 of annex I, part VIII, which cover probably more than half of the claims of the Allies. The 132 billion gold marks which has been established as the amount for which Germany is liable includes damages from acts of her allies. The amount of the American claims is, however, principally for acts of Germany alone, as it is planned that claims of the United States against Austria and Hungary will be presented to a separate tribunal.⁴² The basis for any final distribution among the Allied Governments of Germany’s payments will in all probability be the Spa Agreement, which was not based on adjudicated claims of the several Governments, such as will be the award to be handed down by the Mixed Claims Commission on American claims against Germany.

(4) When the question comes up, it is not improbable that the Allies might take position that the distribution of Germany’s payments should be on pro rata basis, each State to receive a percentage representing ratio its claims bear to total claims of all the Governments. Were the estimated amount of the American award to be given, it would be most difficult, if not impossible, to keep before the Allied Governments the fact that proportionately this amount was very much less than were the claims of these Governments. The Department believes it preferable for this reason merely to give the total of claims filed, which, not including Army costs, amount approximately to one and a quarter billion dollars, and to state that although it is thought that this amount will be materially reduced in the award, yet inasmuch as the Mixed Claims Commission has to the present reached decisions in comparatively small number of cases only, it is not possible to indicate the precise amount of the award. An indefinite statement such as that will leave this Government much freer to insist on percentage it desires than it would be were it to give an estimated figure of its total claim reduced far below the figures on which claims of other Governments to participation will be based.

Grew

42. See vol. i, pp. 142 ff.