441.11 W 892/73

The Assistant Secretary of State (Olds) to the Secretary of State

Dear Mr. Secretary: This letter which I am dictating now in order to get it into the next pouch, is, of course, only a preliminary report on the matters mentioned. I have been in London less than [Page 246] two days and shall, of course, have more precise information before I leave.

(1) Immediately upon my arrival I had a brief conference with the Ambassador and Mr. Phenix and then went to the Foreign Office for a conference with Sir William Tyrrell at his request. Enclosed is my memorandum covering the conference at the Foreign Office. It is understood that after I have gone into matters more fully with Mr. Phenix, I shall have another talk with Sir William next week. Generally speaking, I find that the problem of the adjustment of the claims is surrounded by an atmosphere of optimism. Everybody here thinks that we are on the right track and that these perplexing questions will be speedily disposed of when the pending examination into the facts is concluded. It is estimated that this examination will come to an end about the third week in October. There may be some routine work after that but by the first of November we ought to be in a position to wind up the business. You will note that Mr. Vansittart, the head of the American Section of the Foreign Office is to be in Washington at that time and my understanding is that he will have authority to discuss the matter in the light of facts as they may then appear. The main favorable factor at this juncture is that the British Authorities are now fully convinced that our method of going at it is the right one and that they have perfect faith in our ability to reach a mutually satisfactory result. As we have long supposed, and as you told the British Ambassador in Washington, the so-called “war claims” in the aggregate will eventually boil down to a residuum which ought to present few difficulties. The brain storm phase is over and the British appear to be just as anxious as we are to have a clean up. Naturally they have been much relieved to find that our records and their own, when brought into comparison show that the volume of claims which must form the subject of real negotiation will be not at all what it had been assumed to be. Mr. Phenix tells me that so far as they have gone the records disclose settlements in one way or another of most of the claims which we had on our list. I expect to go into the details so far as I can within the next few days and make certain that we are not giving away any part of our case and that nothing in the present procedure will operate to embarrass us on any question of principle which may be involved. I am, myself, becoming convinced that we can find an ultimate formula for settlement which will not bring the two countries face to face on issues which cannot be conceded by either of them. The trick will be, through careful consideration of the individual cases left in dispute after the examination of facts is concluded, to dispose of them on grounds which will permit us to say that we have waived no question of principle, and at the same time enable the British Government to avoid an acknowledgment [Page 247] on the record that the operations of the British Navy were necessarily invalid. Probably, as part of the settlement, an exchange of Notes between the two Governments can make all of this plain, and save the respective positions of the two Governments. The important thing for us is to get the record in such shape as to allow us to satisfy our own Congress that no question of principle has been directly or impliedly sacrified by us. I suppose it would be quite possible for our Government, if it wanted to do so, to take some of these claims and crowd the British Government into a most embarrassing and difficult position. As I have indicated in my memorandum of the conversation with Sir William Tyrrell, the Foreign Office recognizes that possibly we have this power, and it is stated flatly that if we proceeded to exercise it serious complications would ensue. Everybody I have talked with here agrees that the Baldwin Government would in all likelihood fall if it attempted to make an adjustment on any basis which would concede the invalidity of the blockade. It goes without saying that the affair must be handled with the utmost discretion, but I think that with the disposition which is now evidenced on both sides, the problem admits of fairly prompt solution. If we succeed it will be an exceedingly important and almost unprecedented accomplishment. At the Foreign Office the matter is apparently fully in the hands of Sir William Tyrrell who is following it closely. Unless it later drifts into the bitter controversial and political phase, probably Sir Austen Chamberlain and the rest of the British Cabinet will not be concerned with it. I am satisfied that Sir William is ready to go to great lengths to settle up everything on the merits.

. . . . . . . . . . . . . .

I think there is fully enough here to keep me busy for the next few days until I sail on the 30th. The Ambassador has already talked over a great many of his problems with me and I shall have much further information to convey to you when we meet. We may go up to Scotland for the week-end with the Ambassador and Mrs. Houghton. Our boat is scheduled to land us in New York the morning of the 8th of October, and I should like to come over to Washington immediately. If the usual Port courtesies can be arranged, it will enable me to save some time and be certain of arriving before night.

As ever [etc.]

Robert E. Olds

Memorandum by the Assistant Secretary of State (Olds) of a Conversation With Sir William Tyrrell, of the British Foreign Office, September 21, 1926

While I was in Paris I received a note from Sir William suggesting that when I came to London he would be glad if I could arrange to [Page 248] have an informal talk with him. I replied, stating that I would of course communicate with him as soon as I arrived. Attached is the correspondence on that subject.23

Within an hour or two after my arrival in London on October [September] 21st, a telephone call was received at the Embassy from Sir William’s office, suggesting that, if possible, we have an interview at 3:30 that afternoon. After a brief talk with Ambassador Houghton I went to the Foreign Office. The interview lasted a little less than one hour. Sir William received me with the utmost cordiality and talked with great freedom and frankness, not only on the subject of the pending claims between the two countries, but about other matters. He launched into a rather extensive dissertation on the relations between the United States and Great Britain and a good deal of what he said was virtually an ad hoc adaptation of the “hands across the sea” theme with which we are all so familiar. He touched upon a great variety of subjects in this connection, discussing what he designated as our Monroe policy, the fundamental causes for Britain’s and our own entry into the World War, and so forth. He made no mention, however, of the Debt Question. Of course, he emphasized the importance at all times of having a complete understanding between the two Governments, and to that end of eliminating every conceivable cause of friction. In his view there would never be anything like a formal alliance between England and the United States. The English, he said, were no more enamoured of alliances than we are. The best sort of alliance, using the term in its broadest sense, was an understanding which would enable the two countries to stand together in any great international emergency. It went without saying, he asserted, that the peace of the world could be effectually preserved whenever England and America agreed to insist that it be kept.

Passing to the matter of the claims, Sir William stated that there was always much difficulty in getting such questions in shape to permit their discussion on the merits. There was always danger that controversies of this nature might, for one reason or another, be embarrassed and to some extent decided on extraneous issues. It seemed to him in the highest degree important that these claims be treated in such a way as to prevent political considerations from entering into the negotiations. He spoke about the difficulty which the Foreign Office had in explaining the situation fully to Parliament and I naturally interjected that we also had Congress to consider.

He then expressed the deepest satisfaction with the present stage of the proceedings. He said that the method now being employed, was in his judgment, perfectly sound and had every prospect of [Page 249] bringing about a complete adjustment. It was obviously necessary to ascertain all the facts so that both Governments might know exactly where they stood. His Government intended to cooperate to the limit for that purpose. I stated that I was informed by Mr. Phenix that he had met with nothing but the most whole-hearted co-operation and that the work of assembling all the data was proceeding without the slightest hitch. Sir William indicated that he had been following the operation very closely. He considered that this controversy was one of the most important ones which had ever arisen between the two countries because if the claims were not handled with the utmost discretion the two Government’s might be brought face to face on certain issues which were vital: on the one hand there was our undoubted interest in maintaining neutral rights and on the other, England was bound to protect its position as a great maritime power. He made it clear that if the issue of the validity of the British blockade should be brought to the surface and presented in any definite way, the whole controversy would at once enter a political phase and the relations between the two countries would necessarily become difficult.

He believed, however, firmly, that when the pending examination is concluded it will be perfectly feasible for us to dispose of the residuum of claims which our Government might feel obliged to press without much trouble. He thought we ought to treat the whole matter as one of more or less routine business. While it was impossible, for the moment, to write a formula for the ultimate disposition of such claims, with the information now before him, he considered that it would be feasible to dispose of the claims on grounds which would not raise vital issues and which would at the same time permit both Governments to reserve their respective positions. He would not expect our Government to waive anything in principle nor did he think that we had any occasion to try to indict the British Government for violation of the principles of international law. He hoped that a way could be found to handle the situation practically as a bookkeeping operation. It was entirely possible considering the way in which the facts are developing that offsets could be made allowing an adjustment without putting the Foreign Office in the position of going to Parliament for a large sum to pay claims of the United States arising out of the War. He said flatly that if his Government had to go to Parliament to pay blockade claims as such, the present Government, in all probability would be thrown out and he did not see how any British Government could survive the attacks which would be made upon it in that contingency.

On the whole, we agreed that the outlook was most favorable and that we had no reason for taking anything but an optimistic point of view.

[Page 250]

At the end of the conversation Sir William called in Mr. Vansittart, the head of the American Section in the Foreign Office and stated that Mr. Vansittart was sailing for the United States and would be in Washington when the “Phenix-Broderick” report is made. Both Sir William and Mr. Vansittart assured me that, at that time, they would be ready to work out a final formula for the disposition of the whole subject.

I gained the impression that Sir William and his associates have been greatly relieved by finding that the United States claims are not at all what they had at first feared and that the amounts involved are not going to be considerable in any event. When the subject was at first broached, they were naturally in the dark and there were rumors that our demands would run into huge sums. The demonstration now being made completely dissipates this anxiety and the general attitude of the Foreign Office is one of optimism and a disposition to go the limit in wiping the slate clean. Sir William agreed that under all of the circumstances the time had arrived to get rid of these claims, once and for all, and that it would be unfortunate to allow them to remain unsettled any longer.

I told him that we felt very strongly that it would be a great mistake for both Governments to delay matters and Sir William again emphasized the danger of permitting the situation to drift into the political phase.

R. E. O[lds]

  1. Date of receipt not known.
  2. Not printed.