INTEREST OF THE UNITED STATES IN THE DISPOSITION OF THE PROPOSED LIBERATION BONDS OF THE AUSTRO-HUNGARIAN SUCCESSION STATES" 463.00 R 29/163: Telegram The Ambassador in France (Herrick) to the Secretary of State PARIS, January 21, 1925—3 p. m. 75. Sargent has just sent me memorandum which British Embassy has been instructed to send in to the Ambassadors Conference: "The Reparation Commission recently fixed the contributions towards the cost of liberation referred to in the St. Germain Agreement of the 10th September 1919, modified by the statements of December 18 [8], 1919, as follows: Poland 225,495,000, gold; Roumania 235,140,000 gold francs; Serb-Croat-Slovene State 178,035,000 gold francs; Czechoslovakia 750,000,000 gold francs; total 1,388,670,000 gold francs. Italy 59,252,000 gold francs.98 97 This re-partition does not take into account any questions which may subsequently arise in regard to the territory of Fiume. In deciding to communicate the result of this re-partition and the above observation regarding the Fiume territory to the British, French and Italian Governments the Commission also decided to request these Governments to make known their opinion on the following points: (a) As to whether the United States of America should be consulted; (b) whether a formal request should be made for the issue of the bonds referred to in the agreements of 1919 in respect of the liberation debt; (c) if so to whom these bonds should be delivered. In the opinion of His Majesty's Government the most convenient procedure would be for a decision on all these points to be reached by the Ambassadors Conference on behalf of the Governments concerned. If the Conference approves this course the British Embassy would propose that it reply to the inquiries of the Reparation Commission as follows: (a) That the United States [observer] on the Conference should be asked to express his views but that by mutual agreement the decision [on?] question whether the United States Government is being consulted as a matter of courtesy or as a matter of right should be left in abeyance; (b) that the Ambassadors Conference acting in the name of the Governments concerned should make a formal request for the issue of the bonds; (c) that the bonds should be delivered to the Reparation Commission as mandatory of the Governments concerned. It is to be noted that the Repara 94 Continued from Foreign Relations, 1924, vol. 1, pp. 154–157. Telegram in three sections. "Orme Garton Sargent, first secretary in the British diplomatic service, attached to the British Embassy at Paris for the work of the Conference of Ambassadors. "Malloy, Treaties, 1910-1923, vol. I, pp. 3299 and 3303. For agreement with regard to the Italian reparation payments, and declaration modifying that agreement, see ibid., pp. 3301 and 3305. tion Commission decision does not take into account any questions which may subsequently arise with respect to the territory of Fiume. His Majesty's Government understood from information received from the British representative on the Reparation Commission that that body has no official cognizance of the annexation of the territory of the Free City by Italy and that it was accordingly thought best to leave the matter open by making a reservation of a general nature about this territory. In these circumstances the British Embassy would propose that when notifying the Reparation Commission in the sense of (a), (b) and (c) the Ambassadors Conference should at the same time inform them officially of the annexation of Fiume to Italy under the provisions of the Italo-Yugoslav agreement of January 27, 1924." 9 In his letter Sargent stated that he wanted us to see this memorandum, which is dated January 8, 1925, before receiving it in the ordinary course from the Secretariat General and added that the procedure proposed is somewhat curious but that he hoped we would see no objection to it. Please instruct. HERRICK 463.00 R 29/163: Telegram The Secretary of State to the Ambassador in France (Herrick) WASHINGTON, January 22, 1925—6 p. m. 52. Please show your 75, January 21, 3 P. M. to Logan 1 and request him to cable his comment to the Department with particular reference to any right or interest which he may feel the United States has under present circumstances in the bonds in question. See L-89 from Logan, February 9, [1924,] 3 P. M. and Department's L-54, February 29, [1924,] 6 P. M.2 HUGHES 463.00 R 29/164: Telegram The Ambassador in France (Herrick) to the Secretary of State PARIS, January 27, 1925-4 p. m. 83. L-336. Your 52, January 22 to American Embassy Paris. 1. Problem presented indirectly raises question of method of our participation in reparation payments made by or on behalf of Austria "League of Nations, Treaty Series, vol. xxiv, p. 37. 'Col. James A. Logan, Jr., American unofficial representative on the Reparation Commission. 2 Foreign Relations, 1924, vol. 1, pp. 154 and 155. 'Telegram in two sections. and Hungary. Consider it desirable that we take a definite stand on subject and for that reason following considerations are offered. 2. Informally understand that there will be a mixed claims commission to adjudicate American [claims] against Austria and Hungary. Whatever be the amount of awards it shall be seen that to collect them we shall have to reach an agreement with the Allies as in the case of Germany unless we employ sequestrated Austrian and Hungarian property. This latter method probably difficult in view of likelihood of the return of German property. It would seem that our treaty right[s] with respect to Austria and Hungary are identical with our treaty rights vis-à-vis Germany and that the arguments employed in the recent exchange of notes with England relative to Germany, apply with equal force to Austria and Hungary. Granting then that we have claims against Austria and Hungary and enforceable right[s], the question of the method of exercising them arises. 3. As Department is aware Allied Powers in granting priority to Austrian reconstruction loan postponed their reparation claims for 20 years and we postponed maturity of our relief bonds. In the case of Hungary, Allies while granting a priority to its reconstruction loan, nevertheless insisted on certain considerable annual payments as reported in my L-96, February 22nd, and my letter of February 25th, 1924.7 [Paraphrase] In consequence of the foregoing it now seems improbable that Austria will make direct payments for a long period and that, unless new arrangements prove to be possible, Hungary will not pay anything in addition to sums already allocated to Allies. There appears to be no substantial source, therefore, from which the United States could satisfy its claims in absence of special arrangement with Austria or Hungary, which might meet with objection from Allied Powers, except from proceeds of the liberation bonds. Value of these bonds is to be credited on Austro-Hungarian reparation account, and if distributed among powers the receiving powers will be debited on reparation account. In this connection see article 2 of Spa Agreement and paragraph 3, annex to Finance Ministers Agreement, March 11, 1922. 'See agreement between the United States and Austria and Hungary, Nov. 26, 1924, Foreign Relations, 1924, vol. 1, p. 152. *Foreign Relations, 1920, vol. I, p. 406. 'British and Foreign State Papers, 1922, vol. cxvi, pp. 612, 621. 4. Czechoslovakia's liberation bonds have value as to same degree, as have also bonds of Poland. Probable that other states will have reparation claims so large as to outweigh their liberation bond issue. 5. I think that we have an interest in the distribution of these liberation bonds on account of our claims. I suggest that we take no action in the Conference of Ambassadors until March and then request that delivery of bonds should be made to Reparation Commission as trustee with instructions to it to make no disposition of the said bonds or of their proceeds except in agreement with the United States. In Conference of Ambassadors we could indicate that we had unsatisfied claims against Austria and Hungary and in consequence could claim share in amounts distributed. 6. In past negotiations on participation in German reparation payments we were criticized for delay in not advising the Allies that we intended to collect damages from Germany. I think it good tactics, therefore, in present matter to state our position in advance. As far as I am able to gather from present conditions apart from use of Austrian-Hungarian property in the United States and possible separate financial arrangements with Austria and Hungary, I am inclined to believe that the proceeds of the reparation [liberation?] bonds offer the most promising outlook for some payment in near future. It is desirable, therefore, to make statement. Logan 463.00 R 29/166: Telegram The Chargé in France (Whitehouse) to the Secretary of State PARIS, February 6, 1925—1 p. m. 108. My 75, January 21, 3 p. m. British memorandum was adopted by the Conference this morning, subject to my reservation that I had as yet received no instructions. WHITEHOUSE 463.00 R 29/166: Telegram The Secretary of State to the Chargé in France (Whitehouse) WASHINGTON, February 7, 1925—2 p. m. 76. Your 108, February 6, 1 P. M. (1) In view of suggestion in Logan's L-336, January 27, that the United States may be interested in the liberation bonds, and his suggestion in paragraph 5 that action of the Conference of Ambassadors be deferred until March, Department regrets that the matter was permitted to be acted upon by the Conference pending instructions from the Department. (2) Is the Department to understand that Conference of Ambassadors will not reply to Reparation Commission along lines proposed in British memorandum until you have received instructions respecting the views of this Government regarding the British proposal? Please cable reply, and give Logan copy of this message and your reply. HUGHES 463.00 R 29/167: Telegram The Chargé in France (Whitehouse) to the Secretary of State [Paraphrase] PARIS, February 9, 1925-6 p. m. [Received 6:50 p. m.] 115. Your No. 76, February 7, 2 p. m. The Conference of Ambassadors will not reply to the Reparation Commission until I have received your instructions. From Department's previous telegrams, I have understood that this decision is more or less in accordance with our interests, except for wording of answer to question (c), which Department may desire be modified along lines of Logan's telegram L-336 (January 27), paragraph 5, by adding statement that any financial arrangement of bonds is to be made only in agreement with United States. It seems to me that, in view of answer to question (a) that United States should be consulted, it will be difficult for Allies to refuse to accept modification along that line. If this prove to be so, I suggest that it would be better to wait until the Reparation Commission has received this official communication before any statement is made about our general attitude on this question. Should Conference raise difficulties, however, it might be advisable to have statement ready to present, thus immediately throwing question wide open and causing the Ambassadors to say that they would have to refer the matter to their Governments. I have consulted Mr. Hill,10 and he concurs with this view. WHITEHOUSE 10 Ralph Waldo Snowden Hill, of the Office of the Solicitor for the Department of State, had been sent to Paris to assist Colonel Logan. |