462.00 R 296/2149: Telegram

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

50. Reparation 79.

1.
Reference my letter December 12, 1927,25 enclosing annexes 3314 A–C regarding disposal of unused balances of Rhineland High Commission. This question has not yet been acted upon formally by Reparation Commission but has been discussed at various meetings of managing committee. As a result of discussions, Secretary General has addressed letter to interested representatives, including myself, inquiring whether the governments would be prepared to substitute for the assurance already given in reply to Reparation Commission decision number 3539 of July 27, 1927,25 as to covering claims under article 6 of the Rhineland agreement26 an assurance along the lines set forth in the conclusions of annex 3314 A27 which would extend the assurance to cover claims under articles 8–12 as well.
2.
For reasons set forth in my letter under reference I see no objection to advising the Reparation Commission that the United States Government is prepared to substitute the suggested assurance for that already given.
3.
In this connection, a question of interpretation has arisen as to the meaning of paragraph 5 of article 2 of the Paris agreement of January 13, 1927,28 of which we were a signatory, annex 3091 A. The Agent General has blocked from the funds of the third annuity a sum of 550,000 gold marks under the provisions of the article cited. Various representatives on the Commission feel that the guarantee given by the powers under this article meant only that if at any given date claims should become payable, the powers concerned would be prepared for sums up to the amount of the savings of the Rhineland Commission to be taken out of their shares of the annuity then current. [Page 883]It is felt that the powers had not contemplated that the guarantees would entail blocking the amounts in question in each annuity and that in fact the guarantee constituted an arrangement between the powers to deal with a contingency in respect of which neither the Reparation Commission nor the Agent General would be called upon to intervene until the claims became payable.
4.
It seems clear to me that the interpretation outlined above is correct. It is further the only reasonable interpretation of the assurance which the Department has recently given as regards article 6 of the Rhineland agreement and of the extended assurance which it is now requested to give covering articles 8–12 as well. It is obvious that the advantages to be gained from the distribution of the 1,450,000 gold marks of savings now available would be offset if a corresponding amount were immediately blocked in the fourth annuity.
5.
I understand that the Agent General has been informally sounded out and that if the powers are prepared to give the extended assurance along with their interpretation of article 2 of the January 13, 1927, agreement on the general lines set forth above, he will doubtless be willing to disperse the accumulated savings of the Rhineland Commission without blocking a corresponding amount in the current or subsequent annuities.

[Paraphrase]

6.
Representatives of the powers interested will shortly meet to consider these questions. I respectfully suggest, therefore, that you authorize me to define the United States Government’s position substantially thus:
(a)
That the United States Government is prepared to substitute the assurance recommended for that already given subject to all other interested governments’ giving similar assurance; and,
(b)
That said Government interprets this assurance and article 2 of the agreement of January 13, 1927, in accordance with lines set forth above in paragraph 3.
Herrick
  1. Not printed.
  2. Not printed.
  3. Great Britain, Cmd. 222, Treaty Series No. 7 (1919).
  4. “… that a sum not exceeding the unused balances of the allocation for the administrative expenses of the Interallied Rhineland High Commission for the first and subsequent years of the Experts’ Plan distributed as reparation will be made available in the annuity then current to meet such of the German Government’s claims under Article 6 of the Rhineland Agreement in respect of the period after 1st September 1924 as may be proved to be justified, and any difference in favour of Germany between the provisional lump sums paid in respect of deliveries and supplies under Articles 8–12 of that Agreement for the period after 1st September 1925 and the definite value of these deliveries and supplies as fixed by the competent Assessment Commissions.” (462.00 R 296/2087.)
  5. Foreign Relations, 1927, vol. ii, p. 726.