Foreign Relations of the United States, 1946, The Far East, Volume VIII

740.00119 PW/3–1646

The Secretary of State to the Ambassador in the United Kingdom (Harriman)

restricted
No. 48

Washington, May 20, 1946.

The Secretary of State refers to Department Instruction Number 6475 of March 4, 1946, to Department’s telegrams 2135 of March 8, 1946, 2266 of March 13, 2325 of March 15, 4090 of May 17, and to the Embassy’s telegrams 3029 of March 15 and 3083 of March 16.⁵⁶

The Department has now examined the American claims against Siam which have been filed with the Department.

Set forth below in two groups are summary analyses of the categories of American claims which so far have been filed with the Department. In Group I are set forth those categories which in the opinion of the Department are clearly proper and as to which it believes there will be little disagreement as to the treatment proposed. Personal hardship is especially involved in any delay in the settlement of claims in this Group. In Group II are listed categories of claims and proposed treatment of a possibly more controversial nature, or in the propriety of which the Department does not concur.

The Department is anxious to initiate not later than June 15 discussions with the Siamese Government looking to the settlement of American claims. It would therefore appreciate receiving as promptly as possible the comments of the British, Australian and Netherlands Governments regarding the American views as to the categories listed. It should be understood that the claims of a single claimant may fall into one or more categories listed in both Group I and Group II and that settlement of a claim in one category would not in any way limit the presentation of claims in other categories on behalf of the same claimant. The Department hopes that it may be able to commence negotiations at least with regard to some or all the categories of claims listed in Group I even while discussion on principles involved in the categories listed in Group II may be proceeding.

The Officer in Charge is requested promptly to inquire whether the British Government is agreeable to an immediate joint approach to the Australian and Netherlands Governments suggesting that settlement of claims against Siam should be negotiated separately by each Government with Siam but in conformity with informal agreement between the four Governments as to the categories of claims and the methods of evaluating and settling such claims which are considered proper. It is suggested that such joint approach might be made to the Australian and Netherlands representatives in London in order to expedite decision and that for such purpose it might be advisable to hold an informal conference of the representatives of the four Governments at which the history and problems involved in such claims can be discussed.⁵⁷ The Officer in Charge in authorized to associate himself with a representative of the Foreign Office in such joint approach. It might be well at such a conference to indicate that, unlike the usual reparations cases, it has been agreed by the British and Australian Governments (in which view the United States Government concurs) that Siam should be required only to make restitution of Allied property, rights or interests or to pay compensation for losses or damage sustained by Allied property, rights or interests.

Outline Analyses of American Claims

comments:

1. General. While several bases for evaluating claims might be adopted, this Government believes that in connection with claims against Siam the fairest and at the same time simplest formula would be, in general, to evaluate claims on the basis of the value of property lost or damaged as of December 7, 1941 or the amount of money owed to claimant on such date. It believes that certain types of claims clearly should be compensated in foreign exchange but equally that as to other claims compensation should be payable in baht. In the former case, no problem of currency value is involved but in the case of compensation payable in baht, the decreased purchasing power of the baht raises a serious question as to the adequacy of compensation. While no country should be held responsible for fluctuations in the internal purchasing power of its currency it is suggested that, in the present instance, if the evaluation of claims is based on the value of property lost or damaged as of December 8, 1941 some formula should be adopted which would take into account the decreased purchasing power of the baht at the present time. Obviously there can be no exact determination of such decreased purchasing power in view of the constantly fluctuating prices of various commodities in Siam. The decrease in value of the baht in terms of foreign exchange since December 7, 1941 might, however, be used as a practical measure of such decreased purchasing power. The new rates of exchange for the baht are just under one-third of the foreign exchange value of the baht on December 7, 1941, and the Department suggests as a simple, workable formula to reflect the decreased purchasing power of the baht that in connection with claims compensation for which is payable in baht, compensation should be payable at the rate of three baht for each baht of the agreed baht value of the claim.

2. Interest. If the view of the Department is accepted that in general claims should be evaluated in terms of the loss or damage to property, rights or interests as of December 7, 1941, the Department believes that the Siamese Government should also pay interest from that date to the date of settlement of each claim computed at 4 percent per annum, in the case of settlements payable in foreign exchange; and at 6 percent per annum in the case of settlements payable in baht.

3. Payments in Foreign Exchange. Where settlement is payable in foreign exchange, the Department believes that such foreign exchange should be in the currency of the claimant country. In the case of compensation payable in dollars, the Department believes that such payments should be made in the United States or, if paid in Siam, should be free of foreign exchange controls.

4. Items Recovered. It is probable that many items for the loss of which claims have been filed may be recovered and restored to the claimant. The value of such items should be deducted from the claim, but the claimant should, it is suggested, receive as compensation for the loss of use of such items the interest on the amount of such value from the time it was lost to the date of restoration as well as such sum as may be agreed upon as compensation for any damage to such item. If items are recovered or restored to a claimant subsequent to settlement, the claimant would agree to repay the Siamese Government the amount of compensation received on account of the loss of such item less any sum agreed upon as compensation for any damage to the item.

5. To Whom Compensation Payable. The Department believes that it is a matter for each Government to decide whether compensation should be paid by the Siamese Government to that country on behalf of its claimant nationals or be paid directly to the claimant. In the case of American claimants, the Department hopes that compensation will be paid directly by the Siamese Government to the claimants.

[Here follows a discussion of nine categories of Group I claims such as dollars or other foreign exchange, baht currency, personal and household effects, tangible movable business assets, records and other business documents, salaries of interned Allied nationals and accounts receivable from the Siamese Government, and of eleven categories of Group II claims including amounts owed by private individuals or corporations, insurance claims, goods lost in transit, good will, agency contracts, expenses of internees, expenses of evacuation and rehabilitation, stocks and other non-negotiable instruments, and stockholders’ claims.]

Several claims not falling apparently within any of the foregoing categories have also been filed with the Department. However, until further and fuller information is received by the Department, it will not be possible to analyze their nature or express views thereon. Further analyses and views will be forwarded from time to time if and when adequate information is received or new categories of claims are filed.

56. Telegrams 2135, 2325 and 4090 to London and 3029 and 3083 from London not printed; regarding telegrams 2325 and 3083, see footnote 27, p. 959.
57. In instruction 177, June 28, to London, the Department noted that as far as could be ascertained, the United States, the United Kingdom, Australia, and the Netherlands were the only countries which Siam treated as enemies, interning their nationals and seizing their property (492.11/6–2846).