862.85/1648
The Chargé in France (Armour) to the Secretary of State
[Received September 15.]
Reparation
Sir: I have the honor to acknowledge the receipt of the Department’s letter (EA) dated August 21, 1928, enclosing a copy of a letter and memorandum from the office of the War Claims Arbiter under the Settlement of War Claims Act of 1928, requesting replies to nine queries concerning the valuation of German shipping by the Reparation Commission.
After search through the Commission’s records and consultation with the competent officials I beg to transmit as hereinafter replies to the queries of the War Claims Arbiter.
I. Queries 1–4 inclusive. As for ships delivered prior to May 1, 1921, credit was given Germany on a lump sum basis without placing a value upon each separate ship. The lump sum valuation was adopted by the Reparation Commission on the basis of a memorandum submitted by Mr. Boyden (Annex 1079).36 Debits to the Allied Powers were passed, in the case of Great Britain, on the basis of the actual price realized by the sales of the vessels; in the case of other Allied Powers, on the basis of prices realized by the sale of similar ships on the British market.
As regards post-May 1, 1921, deliveries, both credit to Germany and debits to the Allied Powers were given on the basis of the actual sales price of the vessels.
Detailed accounts showing the calculation of the debits to the Allied Powers (see Annexes 1214 a–b, 1248, and Reparation Commission decision 1743) were circulated in the form of statements Nos. 1–19, and were transmitted to the Department on the respective dates of March 14, April 9, 1925, and March 26, 1926.37 These accounts give tonnage figures, sales prices, depreciation charges, costs of repairs, etc.
[Page 487]II. Queries 5–9 inclusive. No ships were completed and delivered by Germany under paragraph 5 of Annex III of the Treaty.38 The two ships ordered for French account under Annexes 1458 a–e and 1508 a–b39 were laid down in Germany but construction was subsequently suspended (presumably following the Ruhr occupation). After the Dawes Plan entered into force new contracts were made for the completion of the ships in question and for payments out of the Dawes Annuities. The value of the two orders amounted to the same sums as those mentioned in Annex 1508 a2 under the original order, i. e., 6 million gold marks and 8 million 500 thousand gold marks. It is understood that these ships have been completed and delivered and that payment therefore has been made from the Annuities.
As to the two ships ordered for Italian account under Annexes 1703 a–d,36 it appears that they were never built. Their construction was either not begun at all or was suspended at an early stage because of the Ruhr occupation (a search of the Commission’s records does not reveal definite information as to whether construction of these ships was ever actually begun but it is certain that they were never completed and delivered).
The records of the Commission indicate that the only orders passed for construction of ships under paragraph 5 of Annex III of the Treaty were those referred to above.
I have [etc.]