462.11 W 892/663
Memorandum by the Assistant Secretary of State (Olds)
The German Ambassador came in this afternoon at my invitation and I discussed with him the possibility of reaching some general agreement for the final disposition of all outstanding claims of a [Page 126] pecuniary nature against Germany. I pointed out that in the first place there is a certain amount of unfinished business pending before the Mixed Claims Commission.19 This includes certain claims known as the sabotage claims. A second large class of claims is those pending in the Department which have never been sent to the Mixed Claims Commission because they were filed subsequent to the date fixed by the Executive Agreement, and, therefore, do not fall within the jurisdiction of the Commission as it is defined at present.
I suggested the desirability of making some arrangement for prompt disposition of both classes of claims. With respect to the claims already before the Commission, the only complication arises from the Black Tom and other cases known as the sabotage claims. For obvious reasons it would be embarrassing to have these cases go to trial, and I expressed the hope that a way might be found to settle them without trial.
With respect to the claims which were filed too late for presentation to the Commission under the Executive Agreement, I pointed out that these claims were apparently not barred by the provisions of the treaty and that there is considerable doubt as to whether they could be effectually barred by an executive agreement not ratified by the Senate.
In conclusion I asked the Ambassador whether he had seen a draft of a proposed agreement on this whole subject which had been prepared, and as I understood it, approved by the American and German Agents.
The Ambassador seemed to be entirely familiar with the situation. He first dealt with the sabotage claims, stating that whatever else Germany may have been responsible for in the way of violations of neutrality prior to our entrance into the war, she was not responsible for these particular claims. He was prepared to admit that a trial of these sabotage cases would be unfortunate. Nevertheless, he was advised by his Government that it was ready to prove absolutely that Germany was not responsible, and he was sure that his Government would not entertain any suggestion by which Germany would be called upon, even by implication, to admit liability. I inquired whether it might not be possible to include the sabotage claims with the late claims and others in an omnibus award. The Ambassador finally agreed that this would be worth considering.
Passing to the late claims, the Ambassador insisted that they were barred by the Executive Agreement and that if Germany was to admit them now she ought to have some compensation. This brought us to the real point of the discussion. According to the Ambassador, Germany will make no agreement covering the late claims or the sabotage [Page 127] claims or anything else which is not contingent upon the return of the alien property fund to its German owners. The Ambassador was emphatic on this subject. He said he would be willing, of course, to put up any proposal that might be made, but he was perfectly sure that an unconditional agreement covering the American claims would have absolutely no chance of approval by his Government.