362.115 St 21/362½
The Chargé in Great Britain (Sterling) to the Secretary of
State
London, February 26,
1925.
[Received March 13.]
No. 1084
Sir: In accordance with the Embassy’s telegram
No. 83 February 26, 5 p.m., 1925,42 I have the honor to enclose a copy, in triplicate,
of the note mentioned therein from Mr. Chamberlain, dated February 25,
1925, concerning the Tanker case.
A copy of this note has been forwarded to Mr. Logan, and the solicitor of
the Standard Oil Company in London, Mr. Piesse, has been informed of its
contents.
I have [etc.]
[Enclosure]
The British Secretary of State for Foreign
Affairs (Chamberlain) to the
American Chargé (Sterling)
[London,] 25 February,
1925.
No. C 2191/651/18
Sir: In conversation on February 2nd, His
Excellency the United States Ambassador drew my attention to the
interest of the Standard Oil Company in certain tank steamers of the
Deutsche Amerikanische Petroleum Gesellschaft, which had been handed
over by the German Government to the Reparation Commission in
execution of the Treaty of Versailles.
- 2.
- I understand the essential facts of this question to be as
follows. The point originally at issue was whether or not the
tank steamers in question were properly deliverable by Germany
under the provisions of Part VIII of the Treaty of Versailles.
It was claimed by the Standard Oil Company that the vessels were
in effect their property and not deliverable. The case was one
which it was within the power of the Reparation Commission to
decide judicially and such a decision would be valid against all
parties. Out of consideration for the United States Government
the Reparation Commission refrained from proceeding to such a
decision but consented to an arrangement, embodied in an
agreement with the United States Government signed
[Page 167]
on June 7th,
1920,43 under which the
matter was referred to two arbitrators, one representing the
Reparation Commission and the other the United States
Government, with the provision that a third disinterested person
should be nominated to join the Tribunal in the event of the
disagreement between its original members. If the third
arbitrator were called in, the decision of the majority of the
Tribunal was to be final. On June 28th, 1924, the two
arbitrators reported44 that they were unable to reach
agreement on the legal questions involved, but without calling
in the third arbitrator as provided by the agreement of June
7th, 1920, they suggested to the Reparation Commission a
compromise which in outline was that the vessels should be sold
and the proceeds divided equally between the Deutsche
Amerikanische Petroleum Gesellschaft and the Reparation
Commission as representing the Allied and Associated Powers, the
German Government obtaining credit for only one half of the
total value of the tankers.
- 3.
- The request made to me by Mr. Kellogg on February 2nd was that
I should draw the attention of the Chancellor of the Exchequer
to the subject in the hope that the Chancellor would be willing
to instruct the British representative on the Reparation
Commission to accept the compromise suggested by the arbitrators
in preference to calling in the third arbitrator as contemplated
in the agreement of June 7th, 1920.
- 4.
- I lost no time in conveying Mr. Kellogg’s request to the
Chancellor of the Exchequer who had already received a copy of
the memorandum on the subject dated January 27th [28th?] which had been communicated to my
department by a member of the United States Embassy.45
- 5.
- The question has now been fully considered and I have the
honour to inform you that in a matter in which the Reparation
Commission acts in a judicial capacity His Majesty’s Government
have not the power and would not consider it proper to give any
instructions to the British member of the Commission. But apart
from this question of principle involved, the view of His
Majesty’s Government is that the Reparation Commission would not
be justified in now agreeing to the suggested compromise. This
could, in fact, only be accepted by an agreement between all the
interested parties who comprise not only the Reparation
Commission, as generally representing the Powers entitled to
reparation, and the Standard
[Page 168]
Oil Company and its German subsidiary, but
also the German Government, whose interests are affected, and
the British Government, which under the existing interallied
arrangement is entitled to the tankers themselves if they are
deliverable.
- 6.
- There is indeed grave objection in principle to departing from
the arbitral procedure formally agreed upon which in itself
constituted a compromise assented to as an act of courtesy to
the United States Government. Procedure by arbitration is likely
to prove a matter of great practical importance on numerous
occasions arising-out of the Dawes plan and of interallied
agreements; and if in such cases agreed procedure is to be
modified ex post facto to suit the
convenience of one of the parties to the case the whole method
may easily be brought into disrepute.
- 7.
- His Majesty’s Government trust that the United States
Government will recognise the force of these considerations and
will allow the arbitration now to take its course. No excessive
delay need be anticipated and, as the case has already occupied
several years, no serious inconvenience can reasonably be held
to be involved by a further short delay in order to obtain the
independent and impartial judicial decision which the parties
have engaged themselves to accept.
I have [etc.]
