462.00 R 296/840: Telegram

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

28. L–307 [from Herrick, Kellogg, Logan]. We have just finished conferences with Churchill. We called on Churchill this afternoon for the purpose of discussing claims position. We finally agreed on following tentative proposal:

“It is recommend[ed] that the United States Government should receive: (1) 55,000,000 gold marks cash priority for 17½ years [commencing?] September 1, 1926; (2) two and a fourth [percent?] of reparation yield of Dawes annuities from September 1, 1924, provided that the annuity resulting from this percentage shall not in any year exceed 45[,000,000] gold marks. Subject to above, the United States Government (a) to waive any claim under the existing Wadsworth Agreement on the cash receipts from the Ruhr beyond [Page 138] the sum of 62,500,000 gold marks now deposited at the Federal Reserve Bank, New York, which sum would be immediately released to the United States Treasury, and (b) waive the claim that the charge under the Wadsworth Agreement applies to reparation payments by any ex-enemy powers other than Germany.”

[Paraphrase]

On the basis of the foregoing Churchill stated that he was prepared to settle. We said that we should have to have the Department’s approval. We feel that this is all that we can get; acceptance of this proposal will probably prevent discussion in the Conference.

Will Department verify balance “62,500,000 gold marks” said to be on deposit in Federal Reserve Bank in blocked account to our credit? It is Logan’s impression that a larger sum is now on deposit there and that arrangement can readily be effected to have it included in the figure mentioned in the proposal. Please reply as soon as possible. Herrick, Kellogg, Logan.

Herrick