4. The total priority accorded the Belgian war debt under article 4 of the finance agreement for the first Dawes annuity, viz., September 1st, 1924, to August 31st, 1925, is 36,000,000 gold marks. Twelve percent of the foregoing to be paid to Belgium "by reason of her debt to United States of America" is 4,300,000 gold marks to be made available to Belgium during the 7 months beginning February 1st and ending August 31, 1925, at a monthly average of slightly over 600,000 gold marks or in other words under proposed exchange of letters Belgium should deposit in the Federal Reserve Bank on foreign accounts approximately $125,000 monthly from March 1st to September 1st, 1925. We have checked the foregoing figures under paragraph 3 of article 4 and find them correct. Logan. HERRICK 462.00 R 296/893: Telegram The Secretary of State to the Ambassador in France (Herrick) 78. For Logan. L-213. WASHINGTON, February 7, 1925—4 p. m. (1) Your L-339 was communicated to the Treasury which, in view of the Belgian attitude respecting pre-Armistice debt, considers it important that in connection with the proposed exchange of letters it should be made clear that the position of the United States as to the Belgian debt is in no way changed. (2) Treasury suggests that you address the following letter to Gutt: 28 "Pursuant to our conversation I communicated to my Government your suggestions as to the modification of the draft letters and your reasons therefor which we discussed, also your statement that it would be unnecessary to refer in the letters to the position taken by the Government of the United States with respect to pre-Armistice advances inasmuch as the distinct reference in the proposed letters to Article 4 of the agreement of January 14, 1925, constitutes a practical admission that the United States is in no way committed to the modification of this position. I am authorized to inform you that, if it be clearly understood that the United States does not in any way modify its position in the matter, my Government has no objection to the modifications which you proposed in the draft letters." (3) On the foregoing basis you are authorized to exchange with Gutt the proposed letters containing the modifications set forth in your L-339, inserting the phrase "by reason of the debt of Belgium to 23 Transmitted by Mr. Logan to Mr. Gutt on February 16, with "the" before "draft," 1. 2, changed to "your." the United States of America" after the date "January 14, 1925," and before the words "I am directed et cetera" in the first paragraph of your letter to Gutt so as to correspond to his letter. HUGHES 462.00 R 296/941 The Unofficial Representative on the Reparation Commission (Logan) to the Secretary of State PARIS, 17 February, 1925. MY DEAR MR. SECRETARY: With reference to my L-353 of February 17th 24 and Department's L-213 of February 7th and preceding interchange of cables on the subject of Article Four of the Agreement of January 14th, 1925, under which Belgium receives certain moneys from Germany, by reason of the debt of Belgium to the United States of America, and the methods by which these sums are to be paid over to the United States by Belgium when and as received. I enclose herewith the original of Mr. Gutt's letter No. AP: 3/15 A/80920 addressed to me under date of February 17th, together with copies of my letters to Mr. Gutt of February 16th, 1925 and February 18th, 1925.24a (Latter letter dated February 18th though actually delivered February 17th) It will be noted that the enclosures are drafted in the terms desired by the Treasury Department. I venture the suggestion that this letter and its enclosures be referred to the Treasury Department for appropriate collection of the sums due from Belgium. In this connection, I invite attention that "pending the final settlement of the accounts" or in other words, pending any correction of the percentages as between France, Great Britain and Belgium "by reason of her debt to us" and as from February 1, 1925 to August 31st, 1925, Belgium is entitled to receive on this account from the Dawes Annuities, 610,000 gold marks per month. I will promptly notify the Department when and if it is decided that Belgium is to receive any increased percentage "by reason of her debt to us". This office will also inform the Department of any changes in the monthly rate as starting from September 1, 1925, or the date of the commencement of the second Dawes Annuity year. In the meantime, the 610,000 gold mark figure stands for each of the seven months contemplated by the inclusive dates hereinbefore given. In accordance with my understanding, the question of collection is now transferred to the Treasury Department for the 610,000 gold marks per month during the period in question, and that the only further intervention of this office will be a possible notification of the change in the amount after final settlement is reached and the periodical notification of the sums accruing in the second and subsequent Dawes Annuity years. Faithfully yours, [Enclosure] JAMES A. LOGAN, Jr. The Belgian Assistant Representative on the Reparation Commission (Gutt) to the American Unofficial Representative on the Reparation Commission (Logan) No. AP: 3/15 A/80920 PARIS, 17 February, 1925. MY DEAR MR. LOGAN: I desire to confirm our understanding that the sums to be received by Belgium under Article Four of the Agreement of January 14, 1925, by reason of the debt of Belgium to the United States of America, shall be paid over to the United States by Belgium when and as received. My Government is prepared to take appropriate steps to that end and, having in mind your desire that payments be made in currencies freely convertible into dollars, I take pleasure to assure you that my Government, unless and until the Transfer Committee authorizes the transfer into foreign currencies of the marks received, will use the funds to be received under this head in marks for the payment on account of the deliveries in kind to be received by Belgium from Germany and will pay to the United States Government the equivalent amount in Belgian Francs or in currencies freely convertible into dollars. I shall be glad if you will let me know whether the foregoing is agreeable to your Government and advise me as to any details with respect to the procedure to be followed in making these sums promptly available to the Government of the United States. Faithfully yours, 462.00 R 296/969: Telegram GUTT The Secretary of State to the Ambassador in France (Herrick) WASHINGTON, March 31, 1925—11 a. m. 140. L-233 for Hill.25 Your L-362, March 12, 5 p. m.20 Treasury regards the amount of Belgium's pre-armistice debt to the United States as a question solely between the two governments "Ralph W. S. Hill, acting unofficial representative on the Reparation Commission. 25 Not printed. and states that while Germany's obligation to make payments on account of Belgium war debts is governed by Article 232,2 the determination by the Reparation Commission of the amount of Belgium's debt to the United States does not fix the amount due from Belgium to the United States. Treasury agrees that United States cannot properly object to action of the Commission under Article 232 but desires that the position of the United States be made clear to the Belgian Government that in accepting from Belgium payments made to the latter by Germany under Article 232 of the Treaty and Article 4 of the Agreement of January 14, the United States is in no way committed to the decision of the Reparation Commission as to the amount of the debt owed by Belgium to the United States. The Treasury believes that you should take appropriate steps to inform the Belgian Government through Gutt of its position as set forth above and you are authorized in your discretion so to do. KELLOGG 462.00 R 296/976: Telegram The Ambassador in France (Herrick) to the Secretary of State PARIS, April 2, 1925-11 a. m. 208. L-376 [from Hill]. Department's L-233. Communicated with Gutt who is leaving today for a brief vacation. He stated he understood perfectly position of Treasury. In order that there could be no possible misunderstanding I supplemented conversation by letter embodying statement in second paragraph your telegram commencing "in accepting from Belgium et cetera." Mailing copy of my letter.28 Hill. HERRICK "Of the Treaty of Versailles. 28 Not printed. BRAZIL DISAPPROVAL BY THE DEPARTMENT OF STATE OF PROPOSED LOANS FROM AMERICAN BANKERS TO THE STATE OF SÃO PAULO 832.51 Sa 6/26 Memorandum by Mr. Stokeley W. Morgan, of the Division of Latin American Affairs, of a Conversation With Mr. Earle Bailie, August 18, 1925 Mr. Bailie stated that his firm had been approached by the Paulista Institute for the Permanent Defense of Coffee of São Paulo for a loan which it was thought would be in the neighborhood of $15,000,000. The Institute contemplates using the proceeds to (1) found a bank for financing coffee growers; (2) compile statistics on coffee production; (3) fight the coffee plague, and (4) regularize the price of coffee. 3 Mr. Bailie said that after his telephone conversation with Mr. White 2 on July 30, (see attached memorandum) he cabled his representative in São Paulo that he thought the Department would not object to a loan the proceeds of which would be used for any legiti mate business other than the valorization of coffee, to which Mr. Bailie's representative replied inquiring what operations would be objected to by the Department on the plea of valorization, adding that he believed the Institute would be willing to consider any reasonable restrictions. Mr. Bailie stated that he thought the Institute would be willing to obligate itself not to use the proceeds of the loan directly or indirectly to buy or store coffee and asked whether the Department would approve of a loan on those conditions. I pointed out that this restriction on the activities of the Institute would not prevent the bank which was to be founded with the proceeds of the loan from carrying on the valorization program. Mr. Bailie agreed that this was the case but inquired whether the Department wished to go so far as to refuse its approval of money loaned for the ordinary financing of crops, which would be all the bank could be said to be undertaking. In this case, he pointed out, the Department would be practically refusing to approve any loan 2 Francis White, chief of the Division of Latin American Affairs. 3 Not printed. |