462.11L5232/630

The American Agent (Bonynge) and Counsel (Martin), Mixed Claims Commission, to the Secretary of State

[Extract]

Sir: In accordance with your letter of instructions to the undersigned bearing date June 19, 1936, we proceeded to Germany on the [Page 273]S. S. Europa arriving at Bremerhaven on June 27, 1936. We were met there by a representative of Germany who advised us that the German Government desired to have the discussions of the matters mentioned in your letter at Munich. We thereupon left Bremen on the evening of June 27, arriving in Munich on the morning of June 28.

On July 1 we formally met Hauptmann von Pfeffer who was designated by his government to discuss the matters with us. We advised Hauptmann von Pfeffer at that time that our positions were those of Agent and Counsel respectively before the Mixed Claims Commission United States and Germany and that we were not authorized or privileged to discuss any other matter pertaining to the general relations between the two countries and that settlement of the sabotage claims could not be conditioned upon discussion or settlement of any such matter.

At this conference the Agent of the United States was requested to write a letter to the Representative of Germany giving information relating to the claims pending before the Commission. This led to correspondence between the representatives of the two governments and to the receipt of a written proposal dated July 6 from Germany84 for a compromise settlement of the sabotage claims and the entry of awards accordingly in favor of the United States on behalf of the American nationals involved. After conference with and approval of the proposed settlement by representatives and attorneys for the American nationals the American Agent accepted the proposed settlement on behalf of the United States by a letter bearing date July 6, 1936.85

The proposed settlement was ratified at a meeting of the Representatives of both Governments on July 10, 1936, and minutes of the meeting were prepared and duly signed by representatives of each government. The proposal included an offer to settle the Drier Claim on the basis of the unconsummated settlement between the two agents arrived at in February 1933, which settlement has heretofore been recognized by the two governments and the acceptance included this offer.

It was understood and agreed that no publicity was to be given to the settlement until both governments agreed upon the date for a release of the terms of the agreement.

. . . . . . . . . . . . . .

All of which is respectfully submitted.

  • Robert W. Bonynge
  • H. H. Martin
[Page 274]
[Enclosure 1]

The American Agent, Mixed Claims Commission (Bonynge), to the Representative of the German Government (Von Pfeffer)

Sir: The American Agent before the Mixed Claims Commission United States and Germany has the honor to submit for the consideration of the German Government the following statement of the amount involved in the claims pending before the commission known as the “Sabotage Claims.”

There are filed and are now pending before the Mixed Claims Commission “Sabotage Claims” on behalf of 153 American nationals against the Government of Germany in the aggregate approximate sum, including interest to July 1, 1936 at the treaty rate of 5 percent per annum of $51,780,000.00.

As the German Government is aware there is also pending before the Commission a claim of the United States on behalf of Catherine M. Drier, an American national, for the sum of approximately $319, 000.00 as of July 1, 1936.

The “Sabotage Claims” and the “Drier Claim” constitute all the claims now pending before the Mixed Claims Commission in which awards have not been entered and with the disposition of those claims the work of the Mixed Claims Commission United States and Germany, could be terminated.

In accordance with the instructions received from my Government, I am authorized to discuss with the Representatives of the German Government, agreeably to the desire heretofore expressed by the German Government, a possible compromise settlement of the “Sabotage Claims” and my authority is thus limited.

In order to comply with the practice and procedure of the Mixed Claims Commission it is respectfully suggested that if a satisfactory compromise settlement of the “Sabotage Claims” can be reached at this conference, which I trust may be accomplished, the German Government should direct and instruct its Agent before the Mixed Claims Commission to enter into an agreed statement embodying the agreement arrived at in this conference and also authorizing and instructing him to agree to the entry of individual awards in favor of the United States on behalf of each of the 153 American nationals interested in the “Sabotage Claims”, pursuant to such compromise settlement as may be agreed upon at this conference.

I have [etc.]

Robert W. Bonynge
[Page 275]
[Enclosure 2—Translation]

The Representative of the German Government (Von Pfeffer) to the American Agent, Mixed Claims Commission (Bonynge)

Sir: I have the honor to acknowledge the receipt of your letter of July 1, 1936, regarding the status of matters before the Mixed Claims Commission United States and Germany.

As stated in the discussions already had by Ministerpresident Goering and myself with the American Embassy in Berlin, the German Government is desirous of settling the Sabotage Claims pending before the Commission. I may also point out to you that the settlement is intended to be the first step on the part of Germany for an energetic effort to improve the mutual relations between our countries; furthermore this really unpleasant and disagreeable matter shall be at last wiped out; but in no case there should be any appearance that the German Government might concede any liability with respect to the claims.

1. We assume that there are at present in the Special Deposit Account in the United States Treasury certain funds estimated to be in the neighborhood of $20,000,000. available for payment of further awards to American nationals. With these funds the Sabotage Claimants shall be satisfied as specially described in § 2.

2. We propose that an award is to be entered to each sabotage claimant in such sum as will yield an immediate cash payment to that claimant from the Special German Deposit Account in the United States Treasury on the date of entry of the award, such immediate cash payment to be equivalent to 50 percent of the principal of the claimants claim with interest at 5 percent per annum from the date of the destruction out of which the claim arose to the date of the award. This formula is solely for the purpose of determining the amount of such immediate cash payment. It is intended that the result of this agreed formula will be to apply whatever cash is available in the United States Treasury to immediate cash payments to sabotage claimants pro rata in proportion to the principal of their respective claims. If the cash immediately available is not sufficient to cover payments in accordance with this formula, all of the sabotage claimants would suffer reductions in such payments pro rata to the principal of their claims. If after the available cash has been exhausted with these payments and any further credits may enter in the Special Deposit Account then these credits ought to be divided according to the same formula and Settlement of War Claims Act.86

[Page 276]

This proposal shall not preclude the entry of individual awards by the Commission which shall take into account any adjustment of interests agreed to between the individual claimants as long as the total of all cash payments as herein above provided remains unchanged.

3. The mathematical computation of the amounts to be entered as awards to yield the immediate cash payments required by this formula is to be done under the supervision of the American Agent.

4. This agreed statement applies to all claims now pending before the Mixed Claims Commission, especially arising out of the fires and explosions at the Lehigh Valley Railroad Terminal at Black Tom, N. J. on July 29–30, 1916 and the Kingsland Assembling Plant at Kingsland, N. J., on January 11, 1917,87 described as Docket Numbers 8103, 8117, et al. and list numbers 11,333, 4830, et al.

In order to simplify matters, the Drier Claim should be settled too, if it can be done under your present powers. We propose a basis of $160,000.—plus interest from January 1, 1920, as previously discussed. This amount should be paid beforehand out of the Special Deposit Account.

5. The understanding of the German Government is that this settlement of these claims will dispose of all claims now pending before the Mixed Claims Commission, so that these unpleasant matters can be finally concluded.

I am [etc.]

V. Pfeffer
[Enclosure 3]

The American Agent, Mixed Claims Commission (Bonynge), to the Representative of the German Government (Von Pfeffer)

Sir: I have the honor to acknowledge receipt of your letter of July 6, 1936 and beg to advise you that the proposal as contained therein for the settlement of the Sabotage Claims and the Drier Claim pending before the Mixed Claims Commission is hereby accepted on behalf of my Government.

The proposal having been made and accepted, I beg respectfully to suggest that the German Government take the necessary steps to effectuate the settlement and the entry of awards by the Mixed Claims Commission in accordance with the rules of the Commission.

I have [etc.]

Robert W. Bonynge
  1. Enclosure 2, infra.
  2. Enclosure 3, infra.
  3. 45 Stat. 254.
  4. See Foreign Relations, 1933, vol. ii, pp. 492 ff.