462.00 R 296/793: Telegram
The Ambassador in France (Herrick) to the Secretary of State
[Received 2:39 p.m.]
606. L–291 [from Logan].
1. During conversation on December 22 with Leith-Ross, British representative experts’ committee, latter stated that he had not been advised by his Government of the full text of the “Memorandum dealing with the question of American participation in the payments to be made by Germany under the Dawes Plan”, dated November 15, which Kellogg handed Chamberlain,10 and particularly he had not been formally advised of any willingness on our part to reduce the Wadsworth Agreement annuities provided our other claims position was recognized. Therefore on December 22 I wrote him a letter wherein I simply referred to our conversation [omission?] “For your convenience therefore I quote the following excerpt from the memorandum handed Mr. Chamberlain by Mr. Kellogg on November 15 [19] last.”
My quotation from the November 15 memorandum was an extract of about half the last paragraph of that memorandum starting with the words “It is the desire of the United States to facilitate in every way the settlement of the reparation question, etc.” and finishing with the words “The Army costs are of course a prior charge.” I concluded my letter with the statement that “I trust that in accordance with your statement that the foregoing will be of assistance in reaching an early solution of the question at issue.”
2. Under date of December 23 I received the following letter from Leith-Ross:
“I have to thank you for your letter of the 22nd instant calling attention to the passage in the memorandum left with Mr. Chamberlain by the United States Ambassador on the 15th November last in which it is stated that ‘The United States are willing to recast the Army Costs Agreement and to make an extension of time of payment provided a reasonable percentage of the money paid into the bank for reparations is also allowed on its general claims’.
In order that the precise import of this passage may be made clear I should be glad to know whether I am right in understanding that the intention of the United States delegation is to claim that: (a) the United States Army costs arrears should be met by an annuity spread over 24 years from the 1st January 1923, which would be a prior claim charge on future cash receipts and which would amount [Page 118] to from 45 to 50 million gold marks per annum; (b) the other claim would be met by an annuity not exceeding 40 to 50 million gold marks per annum expressed at a percentage of the Dawes annuity, i. e. as the annual payments in the normal year are fixed at 2½ milliards the percentage required would not exceed 2 percent. These payments would not be entitled to any priority and would be transferred pari passu with the reparation shares of the Allied Powers.
If you can confirm definitely that the above corresponds with your intentions I shall be happy to communicate this information to the proper quarter.”
3. Subject to Department’s approval I propose to hand the following informal memorandum to Mr. Leith-Ross:
[Here follows draft of memorandum. The memorandum as presented to Mr. Leith-Ross on January 3, 1925, is printed post, page 132.]