462.00 R 296/834: Telegram

The Secretary of State to the Ambassador in France (Herrick)

[Paraphrase]

17. Lā€“189 for Logan. Your Lā€“304, January 9, noon. The Department has noted that you have indicated a willingness to accept the minimum of 100,000,000 gold marks, but that Army costs would commence on September 1, 1926, and that other payments would commence on September 1, 1924. In view of the willingness of this Government to postpone payments for past Army costs, notwithstanding that other Governments have been substantially paid, and in view of the further postponement of Army cost priorities to September 1, 1926, because of the provisions of the Dawes Plan in regard to expenditure of payments in these years within Germany, the Department believes that you should insist on the minimum of 100,000,000 gold marks in normal year, of which 50,000,000 at least and preferably more would consist of priority payments on Army costs.

If percentage is accepted for other claims, then priorities should be so defined as to yield to this Government the estimated minimum, or, if possible, a flat sum should be stipulated.

[Page 137]

It appears to us to be inequitable, considering the delay in reimbursement of Army costs, that interest on arrears should be waived. This matter should not, however, present great practical difficulty, as it is difficult to believe that the relatively small payments necessary to cover amount due us will not in fact be made.

Of course, it is understood, as pointed out in your memorandum to Leith-Ross,13 that balances which have already accrued to our Army costs account through payments coming due before the going into effect of the Dawes report, are not to be considered as annuities, but are to be credited to capital amount of our Army costs claims.

Hughes