yond the sum of 62,500,000 gold marks now deposited at the Federal Reserve Bank, New York, which sum would be immediately released to the United States Treasury, and (b) waive the claim that the charge under the Wadsworth Agreement applies to reparation payments by any ex-enemy powers other than Germany." [Paraphrase] On the basis of the foregoing Churchill stated that he was prepared to settle. We said that we should have to have the Department's approval. We feel that this is all that we can get; acceptance of this proposal will probably prevent discussion in the Conference. Will Department verify balance "62,500,000 gold marks" said to be on deposit in Federal Reserve Bank in blocked account to our credit? It is Logan's impression that a larger sum is now on deposit there and that arrangement can readily be effected to have it included in the figure mentioned in the proposal. Please reply as soon as possible. Herrick, Kellogg, Logan. HERRICK 462.00 R 296/840: Telegram The Secretary of State to the Ambassador in France (Herrick) WASHINGTON, January 10, 1925—5 p. m. 26. L-193 for Herrick, Kellogg and Logan. 1. Department understands proposal your L-307 14 involves: first, 55,000,000 gold marks cash priority 171⁄2 years equivalent to about $230,000,000 from September 1, 1926; and second, 24% of reparation yield from September 1, 1924, such yield not to exceed in any year 45,000,000 gold marks; also that subject to the above the United States (a) would not claim Ruhr receipts beyond the amount already received in accordance with the understanding with Belgium, which sum would be released to the United States Treasury at once, and (b) waive claim on reparation payments by ex-enemy powers other than Germany. 2. (a) Amount received from Belgium to be credited on army cost account pursuant to understanding with Belgium is $14,725,154.40. Treasury states that it has notified this amount to the National Bank of Belgium. (b) Assume waiver in (b) above would apply only while Dawes Plan in effect. 3. Priorities should be defined as set forth in previous instructions so that portion of Dawes annuities on which percentage applies will 14 Supra. in normal year yield this figure. In this connection refer to your L-305 15 in which Churchill seems to have been committed to the understanding that this amount should be at least 2,000,000,000 gold marks. 4. Adding to $230,000,000 (see paragraph 1) about $15,000,000 in blocked account, there remains about $10,000,000 uncovered in our total bill of about $255,000,000. Department's information indicates that credits under Wadsworth agreement will be somewhat less than $10,000,000. Therefore 171⁄2 year provision should be qualified so that there will be no question of full payment of army costs. If necessary it should be extended, for example, to 18 years. 5. [Paraphrase.] Regarding interest on Army costs, which you do not mention, the Department would prefer interest on arrears but would not insist. [End paraphrase.] 6. Subject to foregoing which should present no difficulty, you are authorized to accept above mentioned proposal. 7. I am very gratified and congratulate you upon your successful handling of this difficult negotiation. HUGHES 462.00 R 296/842: Telegram The Ambassador in France (Herrick) to the Secretary of State 31. L-309 [from Logan]. PARIS, January 11, 1925-6 p. m. 1. Please cable earliest possible moment whether agreement to be drawn up at end of present Conference can be given effect by Executive approval also. Our impression is that this agreement does not require Senate approval, being governed by Wadsworth Agreement precedent. 2. Tentative draft findings of Conference generally follow arrangement of report of Experts Committee [of] Finance Ministers, see my L-294, December 30.16 [Paraphrase.] There are some disadvantages to our signing an agreement on these lines, in that it commits us tacitly to subjects in which we have no direct concern; but on the other hand our signature together with the signatures of the Allies on one document is easier to effect. [End paraphrase.] Could arrange for preamble of general agreement in effect to state that it was adopted for purpose of fixing the distribution of annuities under the Dawes report. [Paraphrase] If, however, the Department desires, we can arrange to have our settlement included in a separate document to which we and the Allies could subscribe, avoiding in this way the necessity of signing their agreement. 3. We feel, however, that entire effort this Conference involves exclusively a determination of distribution of annuities flowing from Dawes report, in which we took prominent part and in which our claims to participation have been recognized; as it is attempt to settle reparation question under Treaty of Berlin " as well as under Treaty of Versailles, best practical results as well as best effect on public opinion generally and on German public opinion especially would be to have one inclusive agreement at this moment. Separate agreement presents the decided disadvantages which have been encountered in the press due to psychological factor resulting from the lack of unity in handling this question of reparation. 4. Presume final instrument should be signed by all representative members. Herrick, Kellogg, Logan. HERRICK 462.00 R 296/844: Telegram The Ambassador in Great Britain (Kellogg), Temporarily in Paris, to the Secretary of State [Paraphrase] PARIS, January 13, 1925-11 a. m. [Received January 13-8:15 a. m.] I see no reason why anyone but Logan need sign the agreement. All the details will probably be arranged and will finally be agreed upon tonight. Signing may be delayed by reason of the smaller powers desiring to examine the instrument. Is there any reason why I should wait after the matter is fully settled? Herrick agrees with me. KELLOGG 462.00 R 296/846: Telegram The Ambassador in France (Herrick) to the Secretary of State PARIS, January 13, 1925-11 a. m. 35. L-312 [from Herrick, Kellogg and Logan]. Following is text that part of Conference report entitled "Share of the United States of America in Dawes annuities": 17 Signed Aug. 25, 1921; Foreign Relations, 1921, vol. II, p. 29. 18 Telegram in two sections. "A. Out of the amounts received from Germany on account of the Dawes annuities there shall be paid to the United States of America the following sums in reimbursement of the costs of the United States Army of Occupation and for the purpose of satisfying the awards of the Mixed Claims Commission established in pursuance of the agreement between the United States and Germany of August 10, 1922, the latter in an amount not exceeding $350,000,000: (1) 55,000,000 gold marks per annum, beginning September 1st 1926, and continuing until the principal sums outstanding on account of the costs of the United States Army of Occupation as already reported to the Reparation Commission shall be extinguished. These annual payments constitute a first charge on cash made available for transfer by the Transfer Committee out of the Dawes annuities after the provision of the sums necessary for the service of the 800,000,000 gold marks German external loan, 1924, and for the cost of the Reparation Commission, the organizations established pursuant to the Dawes Plan, the Interallied Rhineland High Commission, the Military Control Commissions and the payment to the Danube Commission provided for in article 9 below, and for any other prior charges which may hereafter with the assent of the United States be admitted. If in any year the total sum of 55,000,000 gold marks be not transferred to the United States, the arrears shall be carried forward to the next succeeding annual installment payable to the United States which shall be pro tanto increased. Arrears shall be chargeable [sic] and shall bear simple interest at four and a half from the end of the year in which said arrears accumulated until they are satisfied. (2) Two and one-quarter percent (two and one-fourth percent) of all receipts from Germany on account of the Dawes annuities available for distribution as reparations, provided that the annuity resulting from this percentage shall not in any year exceed the sum of 45,000,000 gold marks. B. Subject to the provisions of paragraph one [4] above the United States of America agree: (1) To waive any claim under the Army Cost Agreement of May 25, 1923, on the cash receipts obtained from Germany since 1st January, 1923, beyond the sum of [$114,725,154.40 now deposited by Belgium to the Treasury of the United States in a blocked account in the Federal Reserve Bank of New York, which sum shall forthwith be released to the United States Treasury. (2) That the agreement of May 25, 1923, does not apply to payments on account of reparations by any ex-enemy power other than Germany. (3) That the Agreement of May 25, 1923, is deemed to be superseded by the present agreement. C. The provisions of this agreement relating to the admission against the Dawes annuities of charges other than reparations, and the allotments provided for such charges, shall not be modified by the Allied Governments, so as to reduce the sums to be distributed as reparations save in agreement with the United States of America. D. The United States of America is recognized as having an interest, proportionate to its two and one-fourth percent interest in the part of the annuities available for reparation, in any distribution of "Foreign Relations, 1922, vol. II, p. 262. railway bonds, industrial debentures, or other bonds issued under the Dawes Plan, or in the proceeds of any sale of undistributed bonds or debentures, and as having the right also to share in any distribution or in the proceeds of any sale of such bonds or debentures for any arrears that may be due to it in respect of the repayment of its Army costs as provided in the present agreement. The United States of America is also recognized as having an interest in any other disposition that may be made of the bonds if not sold or distributed." The foregoing will undoubtedly be approved by Conference. We consider this text meets Department's desires as communicated to us in cabled instructions and that therefore further approval of Department unnecessary. Herrick, Kellogg, Logan. HERRICK 462.00 R 296/846: Telegram The Acting Secretary of State to the Ambassador in France (Herrick) [Paraphrase] WASHINGTON, January 13, 1925-noon. 30. L-195, for Herrick, Kellogg and Logan. Your L-312, January 13, 11 a. m. The reference to the limitation of our claims to $350,000,000 raises the serious question of whether treaty rights are modified, because the exact amount of these claims is not ascertainable until the adjudication which is not yet completed, and also through the possible waiver of interest. An agreement so limited as to amount would have to be submitted to the Senate for advice and consent. If limitation were omitted submission would probably be unnecessary. Please endeavor immediately to eliminate the limitation, which as drafted appears to be unnecessary. You will recall that the $350,000,000 is only an estimate of the probable total awards. The Department will furnish you with instructions on other points at the earliest possible moment. GREW 462.00 R 296/846: Telegram The Acting Secretary of State to the Ambassador in France (Herrick) WASHINGTON, January 13, 1925-1 p. m. 31. L-196, for Herrick, Kellogg and Logan. Your L-312.20 Department understands that waiver with respect to payments on account of reparations of ex-enemy Powers other than Germany applies only to waiver of participation in respect of army costs. It 20 Ante, p. 140. |