462.00R296/4917: Telegram
The Acting Secretary of State to the Chargé in France ( Marriner )
399. Reference is made to your telegram No. 503 of August 12, 10 a.m. The formal consent of all other interested Governments has [Page 284] been given to the American suggestion, and the Treasury of the United States awaits only the French action to send out the checks.
If the information in your cable under reference proves to be accurate, please see Flandin or the Foreign Office at once and urge them strongly to reconsider this decision.
The net amount of these payments will run strongly in favor of German nationals and therefore should assist them greatly at this critical time. The payments are wholly in favor of private individuals and do not fall within the scope of the President’s proposal. These points should be again emphasized to the French Government.
Should the payments in question be continued, it would mean that the American Government would pay within the year at least $18,000,000 on account of the awards of the War Claims Arbiter in payment for privately owned patents, radio stations, and ships taken by this Government. Moreover, if the decision on the so-called sabotage claims is sustained by the Mixed Claims Commission, this amount will be increased by another $13,000,000. $16,000,000 of the $18,000,000 just mentioned would be distributed at once by the Treasury. Germany, on the other hand, would pay to the American Government during the moratorium year only $9,700,000, all of which would be re-distributed to American private individuals in accordance with the decisions of the Mixed Claims Commission.
The following information is for your use at your discretion. Under arrangements with the Reichsbank, the required sums are made available by it to the American Treasury in reichsmarks in return for dollars. Then the Treasury draws checks payable in reichsmarks at the Reichsbank for the individual German claimants. These payments are clearly private in nature. It would seem to be unwise on the part of the French Government to withhold its consent to these payments in view of their private character and considering the further fact that all other countries concerned have agreed. Such an action on the part of the French would be seen in an unfavorable light both here and in Germany. The President’s proposal is assured of coming into full effect as a result of the agreements reached in London yesterday. If the proposal is to contribute to a revival of the belief that states can straighten out their financial disputes, it is vital that the series of agreements reached be not disturbed by this small difference which will almost surely be interpreted as evidencing an unfriendly intention.
Unless you find it absolutely necessary do not use these arguments with the French Government. We hope sincerely that the French Government will give its consent without further controversy when it has made a fuller examination of all aspects of the case.