800.51 W 89Belgium/41: Telegram

The Secretary of State to the Ambassador in Belgium (Phillips)

[Paraphrase]

35. Your 65, June 2, 6 p.m.

(1) Belgian note is unsatisfactory. On our proposition (a), it leaves the matter in doubt whether the present Government unconditionally accepts it. Article 232, Treaty of Versailles only requires that Germany reimburse Belgium for money borrowed from Allied and Associated Governments and does not in any way relieve Belgium of her primary obligation, and our right to reimbursement from her does not depend, therefore, upon either ratification of or failure to ratify that treaty.

In regard to our proposition (b), the Belgian note does not pledge that Government to negotiate on that basis; it simply says that credits must be submitted to Parliament. All that we ask is that negotiations should be conducted on basis of the three principles set forth in Department’s 32, May 29, 4 p.m. Department presumes that any settlement recommended by the negotiators will have to be submitted to Belgian Parliament for ratification as recommendations of our World War Foreign Debt Commission will have to be submitted to Congress.

(2) Subject to paragraph (3) below, you will make following communication to Belgian Government:4

“The Government of the United States has received the communication of blank concerning the indebtedness of Belgium to the United States. It is noted that although the Government of the King adheres in principle to the contents of the memorandum of May 31, nevertheless attention is drawn to the pre-armistice advances made [Page 119]by the Government of the United States to Belgium and it is stated that the conversations which are about to commence should take into account the position set forth in paragraph one of the communication under acknowledgment concerning this matter. It is further noted that, although the Belgian Government does not consider that it can legally make a point of Article 232 vis-a-vis the United States, the contention is advanced that Belgium has ‘a right which continues to exist whatever may have been the fate of Article 232.’

“As stated in paragraph (a) of the memorandum of May 31, the Government of the United States continues to look solely to Belgium for payment of this indebtedness, and cannot consent that Germany be substituted directly or indirectly for Belgium in respect of the pre-armistice debt. The Government of the United States is in doubt whether the Belgian Government unconditionally accepts the proposition contained in paragraph (a) of the memorandum of May 31, and does not find in the communication of the Belgian Government a pledge that the Government of Belgium will negotiate on the basis set forth in that memorandum. The Government of the United States desires more express assurance on this point.

“The Government of the United States has also noted that the Belgian Government engages itself to send to Washington at a time to be fixed by agreement a mission charged to negotiate a settlement of the indebtedness of Belgium, and understands that this mission could go forward in July. The Government of the United States would be glad) if negotiations could commence at Washington at a date in July that may be convenient to the Belgian Government.”

(3) If you think preferable and can obtain satisfactory communication in place of that quoted in your telegram No. 65, you may proceed on that line. It is essential, however, to receive unequivocal statement from Government of Belgium (eliminating conditions stated in its note as quoted in your telegram) that it accepts and will negotiate on basis of principles set forth in memorandum of May 31 (the capital and interest of the debt to be subject to verification) and that the Belgian mission will commence negotiations in Washington next month.

Department will await your reply before taking any action on loan sought by Belgium from J. P. Morgan and Company.

Kellogg
  1. Memorandum not paraphrased.