462.00R294/674a: Telegram

The Secretary of State to the Ambassador in Germany (Schurman)

64. The United States, under the Paris agreement of January 14, 1925,57 to which Germany is not a party but of which it has cognizance, is receiving from Germany 55,000,000 gold marks a year on account of the costs of the American Army of Occupation58 and 45,000,000 gold marks a year on account of the awards adjudicated and to be adjudicated by the Mixed Claims Commission constituted under the agreement of August 10, 1922.59 As of September 1, 1929, the unliquidated balance owed by Germany on account of army costs was $193,936,765.20 and on account of Mixed Claims Awards approximately $251,300,000, interest included.

In view of the schedule of payments recommended by the Committee of Experts appointed by Germany and the Reparation Commission to submit proposals for a final and definitive settlement of Germany’s [Page 1084] obligations,60 the President is prepared to recommend to the Congress that the United States accept in full discharge of Germany’s obligations in the aforementioned categories the annuities allotted the United States in the report of that Committee. To this end it is desired to ascertain whether the German Government will agree to pay directly to the United States the said annuities over the period of years provided for in the Experts’ report, with a provision, on the lines of postponement provisos in other debt settlements negotiated by the United States, permitting postponement of payments at the debtor’s option for a period of time not to exceed two years (viz “Provided, however, that Germany may at its option, upon not less than ninety days advance notice to the United States, postpone any payment to a time not more than two years distant from its due date, but only on condition that in case Germany shall at any time exercise this option as to any payment, the payment falling due on the corresponding date in the next succeeding year cannot be postponed to any date more than one year distant from the date it becomes due unless and until the payment previously postponed shall actually have been made, and the payment falling due on the corresponding date in the second succeeding year cannot be postponed at all unless and until the payment of principal due two years previous thereto shall actually have been made.”).

The President is not prepared to relinquish the rights and priorities the United States enjoys under the Paris agreement of January 14, 1925 until authorization of Congress has been obtained. It is desired at the proper time to lay the matter before Congress in the form of an agreement with Germany, which shall have been recognized in such appropriate form as may prove convenient by the other creditor powers signatory to the agreement of January 14, 1925.

You are requested to communicate the foregoing orally to the appropriate German authorities and report reaction of the German Government. While no reluctance on its part is anticipated, you may find it appropriate to refer to the proposal as a new exemplification of the consistently liberal attitude which the United States has displayed toward Germany, as in renouncing its right to general reparations, returning private German property sequestered during the war, and subjecting the claims of American citizens against Germany to adjudication by a mixed tribunal constituted under an agreement with Germany. The position of this Government is also influenced by the wish to submit to Congress a simple question which will not draw the whole Young Plan into controversy and delay.

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You will make it clear that besides the Young Plan annuities payable after September 1, 1929, the United States expects that payment of the 100,000,000 marks due under the fifth Dawes annuity will be completed.

You may further add that pending the submission of the new agreement to the Congress and the obtaining of the necessary authority from the Congress, this Government is prepared to accept payments based on the new schedule, reserving, however, all its rights under the Treaty of Berlin61 and under the agreement of January 14, 1925, and with the understanding that the existing methods of payment will remain undisturbed.

Mail cipher copy to Paris for Wilson’s62 information. Keep him fully informed.

  1. Foreign Relations, 1925, vol. ii, p. 145.
  2. See ibid., 1923, vol. ii, pp. 110 ff.
  3. Ibid., 1922, vol. ii, p. 262.
  4. Report of the Committee of Experts on Reparations, June 7, 1929, commonly referred to as “The Young Plan”; Great Britain, Cmd. 3343 (1929).
  5. Treaty between the United States and Germany, signed August 25, 1921; Foreign Relations, 1921, vol. ii, p. 29.
  6. Edwin C. Wilson, First Secretary of Embassy in France, and acting American observer on the Reparation Commission.