362.115 St 21/451: Telegram

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

430. [From Hill.] H–175.

Upon receipt of Department’s H–92, November 10, I furnished British [a copy?] and issued a circulated statement contained in paragraphs numbered 1 and 2.
At meeting of general secretaries last evening question wag raised as to whether Department’s paragraph 2 should be taken to mean that Reparation Commission is free to take immediate possession of Wotan and Loki and to sell them if it sees fit, the question of principle raised by Finance Section remaining wholly reserved.
The British understood the paragraph in this sense and on this understanding were willing to accept the proposal contained in the two paragraphs with following reservation: “In taking delivery of the Hera, Niobe and Pawnee and in assenting to the arrangement proposed by the Government of the United States as to the Loki and Wotan or taking delivery of those two ships or either of them, the Reparation Commission is not to be understood as abandoning or making any admission with reference to the correctness of the view of the Financial Statistics Section above referred to”.
[Paraphrase.] Second paragraph in the Department’s telegram not quite clear to me. Was it Department’s intention in tendering Wotan and Loki and holding them subject to Reparation Commission’s order, that they would be delivered only upon payment of expenses incurred to date, or did Department intend to indicate willingness to deliver upon demand without such payment being made?
Should we return the ships without conditions we would lose certain securities, in view of the fact that others acknowledge that [Page 198] this country has a lien on the ships for sums expended upon them and at the same time the Finance Section and the British are of the opinion that we are not entitled to recoup ourselves for sums expended from the sums earned by the other tankers. [End paraphrase.]
In discussion Aaron of French delegation suggested that if two vessels were immediately delivered to Reparation Commission for sale United States might be asked to cooperate in sale if it desired. Do not know just how this might be done. His idea however was that this would enable United States to see that best price possible had been obtained. He pointed out that immediate sale would prevent further expenses in respect of these two vessels. He also made suggestion that the proceeds of the sale of the two might be held by Reparation Commission for disposition in accord with settlement of question in dispute. No action was taken by others on Aaron’s statements.
All of us understand that words “expenses thus incurred” in the Department’s second paragraph relate to expenses to be incurred by further retention of vessels and have no bearing on previous expenses. On this understanding there was no objection to stipulation in last sentence of paragraph. Believe could obtain adoption of similar provision with regard to expenses of sale.
Upon receipt of Department’s instructions will call another meeting of the delegations.
British expect to sell other three upon delivery. Hill.