Foreign Relations of the United States Diplomatic Papers, 1934, Europe, Near East and Africa, Volume II
The American Commissioner on the Turkish-American Claims Commission (Nielsen) to the Secretary of State
[Received August 28.]
Sir: I am enclosing, as of possible interest and future use, a record of a cursory survey made of all cases filed here,28 with the exception of those deposited by Mr. Max Rhoade on August 14, 1934. I also enclose a record of so-called declarations verbales made at a meeting on August 14, 1934. That record shows some analysis of figures contained in the first-mentioned enclosure.
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I also enclose some so-called déclarations verbales of August 16, 1934, dealing with the subject of percentages of amounts claimed, as that method may be used in connection with a lump sum settlement. It may be observed that the above referred to subjects were discussed orally at considerable length, but only meagre records were made of the discussions.
Déclarations Verbales by Mr. Nielsen on August 14, 1934
Is it not possible for the Turkish delegation, at this stage, nearly five months after our first meeting, to make an offer, that even though manifestly inadequate fully to meet all losses of American claimants, would be such that there would be a possibility that the Government of the United States could accept it?
It seems to me that, in the light of the general survey we have made of cases, it would be out of the question to say that the United States in putting forward what might be called a compromise offer of $5,000,000 asked for an excessive sum.
The examination that we have just completed has, of course, not been made in a strictly judicial manner. The declared purpose of the two Governments is to avoid the time and expense necessary for that kind of an examination with respect to each case. I hope that, after we furnished to the Turkish delegation all information regarding cases which they requested, we have also evidenced a sincere purpose to contribute to the best of our ability toward reaching some valuable conclusions with regard to law and facts that might be the basis of the diplomatic settlement undertaken by the two Governments.
I have noticed brief newspaper accounts of steps taken to settle a great number of outstanding claims between Mexico and the United States. In satisfaction of a large number of claims preferred by the United States, with respect to occurrences that took place between the years 1910 and 1920, it appears that the Government of Mexico has obligated itself to pay in connection with a lump sum settlement the sum of $500,000 annually. The total sum has not yet been computed. Another agreement which was part of a general plan to settle all outstanding claims between the two Governments covers all claims arising since the year 1868. Arrangements for the final disposition of those cases are being perfected.
The results of the cursory examination we have just completed may be summarized as follows:
1. “Serious cases”, approximately $12,099,994.18.
This classification covers cases, which, in the light of applicable rules and principles of international law and in the light of evidence produced by claimants, appear prima facie to involve responsibility on Turkey. They might be said to be cases that would require careful, serious consideration by a tribunal entrusted with the judicial determination of responsibility.
2. “Prima facie but unconvincing cases”, $1,419,614.60.
This classification includes cases which even a casual examination revealed to be supported by unsatisfactory proofs, but which it was [Page 920]not deemed to be proper to classify, in the light of such an examination, as obviously without legal foundation.
3. Cases on which it was thought that local Turkish law with respect to abandoned property might have a bearing, $1,366,242.32.
Consideration of them was suspended to permit the American delegation to examine that law with a view to reaching a conclusion whether it might be considered that possibly these claims have a legal basis on the general theory that claimants are entitled to the benefits of important local law with respect to compensation for property appropriated by Turkish authorities.
4. “Insignificant cases”, approximately $49,347.78.
These cases, small in number, which were not rejected, were passed over in view of the fact that they would have little or no bearing on a lump sum settlement.
5. Cases held in abeyance to permit the Turkish delegation to make certain investigations, $905,953.47.
6. “Non-serious cases”, approximately $1,665,026.36.
This classification includes cases which in the unanimous opinion of the Committee were without basis in law.
7. A large number of cases (approximately 600) which the American delegation after a cursory examination considered to be obviously without legal foundation.
A list was furnished to the Turkish delegation.
8. A small number of cases involving questions of dual nationality, Turkish and American.
We examined these cases in which the Department of State evidently considered that the claimants might have shown that they were not of Ottoman origin, and we found that in practically all cases satisfactory showing to that effect had not been made. Some months ago His Excellency, Sevki Bey, requested me to furnish memoranda giving abstracts of claims according to a classification which he said he understood had been made by the Department of State with respect to claims of American citizens not of Ottoman origin, such memoranda being desired by him in addition to memoranda of such claims furnished by the Department in the month of August, 1933.
The Turkish Government has been notified that there are approximately 1900 claims of American citizens of Ottoman origin. The Turkish Foreign Office has through diplomatic channels informed the Government of the United States that the Turkish Government intended to exclude from the categories of American claimants persons who at the time of the injury for which they claim reparation were according to Turkish law Ottoman subjects. It was agreed in the Committee that, in connection with the negotiations for a lump sum settlement, the legal issues involved in cases of this nature would not be discussed.[Page 921]
Finally, I venture to call attention, as I perhaps have already done to some extent, to the results of the labors of the Commission set up by the Allied Powers to determine judicially claims against Turkey of nationals of France, Great Britain, Italy, Rumania and Japan. The awards were as follows:
I have taken the figures from page 16 of the Commission’s official report. I do not mean to suggest that all the principles applied by this eminent tribunal must govern our Committee. I merely call attention to these awards as indicating the extent of certain foreign properties and to suggest that at the outbreak of the Great War American property interests in Ottoman dominions which suffered during the course of that war, as other foreign interests did, were extensive, find that comparisons are of interest in connection with the general survey we have been making.
I sincerely trust that the Committee may not fail to effect a friendly, satisfactory adjustment of the only outstanding problem between our respective Governments; that there may be little further delay in the proceedings of the Committee; and that, after the considerable delays which have already occurred, there may be no need of long-drawn, expensive proceedings of arbitration.
Declarations Verbales by Mr. Nielsen on August 16, 1934
Reference has been made to percentages of amounts claimed as revealed by awards of tribunals. Let me comment briefly on that subject. Valid and invalid claims are submitted to tribunals in large numbers. It is a general practice to include all kinds of claims when there is a cleaning of the slate, so to speak. And that practice has resulted in relatively low percentages of recoveries before Commissions, and also in similar percentages when lump sum settlements have been made.
Of course, excessive amounts are often claimed both in private and in international litigation. In cases in which that occurs we find comparatively lower percentages of recoveries. But we should not lose sight of another fact, namely, that when comparisons have been made as to the totalities of the amounts claimed and the totalities of [Page 922]awards made, account has been taken, as I have indicated, of all claims presented, valid and invalid, in relation to the much smaller number of cases in which awards have been made.
Now, if we take all of the cases which were presented to this Committee, which I think totals approximately 2,500, the percentage of awards on the basis of the offer of settlement made by the United States is not large. And this is true even if we exclude the cases of persons who are said to have a dual nationality, Turkish and American, and the so-called “non-serious cases”, classified by the Committee, and the large number which the American delegation informed the Turkish delegation we considered to be without legal foundation. However, when we exclude 1,900 cases of a certain class that were presented to the Committee but not considered, and exclude further the so-called “non-serious cases”, and about 600 other cases, we must assuredly, if we are taking account in a worth-while manner of average percentages of recoveries, see the justice of using a higher percentage for this greatly condensed list than would be used if account should be taken of the entire list presented to the Committee.
If account is taken of the list which remains after we deduct 1,900 cases, and approximately 600 cases which the Committee excluded (subject of course to the possibility of the presentation of documents prior to August 15th), the figure on which a percentage should be computed is $15,841,150. The low percentage of 15% on claims totalling $15,841,150, which is the total of a list on which it could not be positively said that a single case is worthless, would be close to the sum of only $2,500,000. This is a low percentage when account is taken of the great number deducted from the total number presented to the Committee. And we know of course that in arbitrations generally, and in instances of lump sum settlements, there are many unfounded cases.
It is important that, in figuring percentages on the total of claims, we should bear in mind that, in estimating the total, we have not taken account of the well-established rule of international law that, in cases of destruction or seizure of property, the amounts of indemnity must include not only the value of the property but also the value of its use, that is, interest. The small sum put forward by the Turkish delegation would evidently cover not even a small fraction of the interest on just awards to compensate for seized or destroyed or damaged property and would cover nothing for the value of any such property.
In the settlement between Germany and the United States of claims growing out of the Great War, the Commission entrusted with that settlement allowed interest at 5% on all awards; not alone on those relating to property losses, from the dates of the origins of the claims up to the dates of payment.[Page 923]
Reference was made the other day to percentages of amounts claimed which have been awarded by international tribunals. I have available only some records in a single arbitration. Percentages may be computed on a total of all claims presented, including those dismissed, or only on the total of amounts claimed in cases allowed. In connection with our computations it is well to bear in mind, as I have previously observed, that, while we have not concluded that all cases other than those classified as non-serious were valid, we have greatly condensed our list by throwing out a great number. Let me indicate, as of possible interest, the two kinds of computations with respect to a volume of opinions I have here. It was published in 1927 with respect to the first effective session held by the Commission created by a Convention concluded between the United States and Mexico on September 8, 1923.29 At that session 56 cases were decided. A great majority of them were allowed. Most of them involved what might be said to be comparatively small amounts, growing out of so-called personal injury cases. One case involved large property interests. In all cases presented, including those allowed and those disallowed, claims were made for a total sum of $3,942,746. Awards were made in a total sum of $2,261,268. The percentage allowed was 57.4 of the total sum claimed. The total sum claimed in the cases allowed was $3,302,095. The total sum allowed in these cases was $2,261,268. That sum was 68.5% of the total sum claimed. It may be further mentioned that in addition interest was allowed in cases involving property interests.
Of course, there have been much lower percentages of recovery. Naturally recoveries will depend largely on the nature of the claims, and that will be influenced by conditions under which claims arise. In abnormal times, particularly in a period of war when, as evidence before us reveals, much property is requisitioned, or otherwise seized, or destroyed as a result of arbitrary acts, considerable losses will occur and responsibility will readily be fixed.