Extract from letter of Secretary of State to the President, February 3, 1925, transmitting information in response to Senate resolution 301. In its report, the Dawes committee made recommendations with respect to annual payments by Germany stating that these payments were to be of an inclusive character. The committee said: Before passing from this part of our report we desire to make it quite clear that the sums denoted above in our examination of the successive years, comprise all amounts for which Germany may be liable to the allied and associated powers for the costs arising out of the war, including reparation, restitution, all costs of all armies of occupation, etc. It is evident that it was the intention of the committee to provide a comprehensive plan of economic reconstruction and that the annual payments to be made by Germany were to be applicable to all her obligations to the "Allied and associated powers," this descriptive term manifestly including the United States. The United States has two classes of claims against Germany: (1) for the costs of its army of occupation, and (2) for the claims upon which it is entitled to recovery under the treaty between the United States and Germany of Aupgust 25, 1921, An executive agreement had been made under date of May 25, 1923, for the gradual liquidation of the claim for the costs of the American army of occupation, but this agreement had not yet become effective. The amount of the claim for unpaid costs of the army of occupation was approximately $250,000,000. The other claims which the United States is seeking to recover are the subject of an executive agreement with the German Government under date of August 10, 1922, providing for a Mixed Commission to determine the amount to be paid by Germany. This commission consists of an American commissioner, a Germany commissioner, and an umpire who by agreement of the Governments of the United States and Germany is an American citizen. Under the agreement establishing the Mixed Commission it is provided that the following categories of claims shall be passed upon, to-wit: (1) Claims of American citizens, arising since July 31, 1914, in respect of damage to, or seizure of, their property, rights and interests, including any company or association in which they are interested, within German territory as it existed on August 1, 1914; (2) Other claims for loss or damage to which the United States or its nationals have been subjected with respect to injuries to persons, or to property, rights and interests, including any company or association in which American nationals are interested, since July 31, 1914, as a consequence of the war; (3) Debts owing to American citizens by the German Government or by German nationals. This Mixed Commission has been sitting in Washington, and the claims of the Government of the United States and its nationals against Germany are in course of adjudication. While it is not possible at this time to fix precisely the total amount of the awards, it is estimated that they will not exceed $350,000,000. On July 16, 1924, a conference of representatives of the allied powers was convened in London to consider the recommendations of the Dawes committee. In view of the inclusive nature of the payments contemplated by the Dawes plan, the American ambassador at London was directed to attend the conference in order that the interests of the United States might be appropriately safeguarded. While the London conference resulted in agreements between the allied powers and between those powers and Germany for the putting into effect of the Dawes plan, that conference did not attempt to distribute the payments which it was expected would be received by Germany under the plan. It was arranged that a meeting of finance ministers of the allied powers should be convened for the purpose of allocating these payments. That meeting was held in Paris on January 7, 1925. As it was important that the payments expected under the Dawes plan should not be distributed without appropriate recognition of the claims of the United States and ist participation in these payments, the American ambassador at Paris, the American ambassador at London, and Mr. James A. Logan, jr., who has been acting as an observer in relation to the transactions of the Reparation Commission, were instructed to attend and to represent this Government at the Paris meeting. They did so, and this meeting resulted in an agreement between the representatives of the respective powers as to the allocation of the payments expected to be made by Germany under the Dawes plan. With respect to the purpose and scope of this meeting and of the agreement there reached, I made on January 19 the following public statement: (1) The conference of finance ministers held at Paris was for the purpose of reaching an agreement as to the allocation of payments expected through the operation of the Dawes plan. In view of the inclusive character of these payments, it was necessary for the United States to take part in the conference in order to protect its interests. (2) The conference at Paris was not a body, agency, or commission_provided for either by our treaty with Germany or by the treaty of Versailles. In taking part in this conference there was no violation of the reservation attached by the Senate to the treaty of Berlin. (3) The agreement reached at Paris was simply for the allocation of the payments made under the Dawes plan. It does not provide for sanctions or deal with any questions that might arise if the contemplated payments should not be made. With respect to any such contingency, the agreement at Paris puts the United States under no obligation legally or morally, and the United States will be as free as it ever was to take any course of action it may think advisable. (4) The agreement of Paris neither surrenders nor modifies any treaty right of the United States. With respect to payments to the United States, the agreement provides as follows: (Here follows article 3 of the agreement, which is printed in full in the supplement to this journal, pp. 66-68.) It will be observed that while provision is thus made for the participation of the United States in the payments to be made by Germany under the Dawes plan, there is no agreement to limit the amount of the claims of the United States, which, as I have said, can only be estimated at the present time. As I said in the statement above quoted, the agreement makes no provisions for sanctions and does not commit the United States in any way to any action in case the contemplated payments are not made. Moreover, the agreement itself provides as follows: "The provisions of the present arrangement concluded between the powers interested in reparations do not prejudice any rights or obligations of Germany under the treaties, conventions, and arrangements at present in force." In conclusion, it may be said that this agreement was negotiated under the long-recognized authority of the President to arrange for the payment of claims in favor of the United States and its nationals. The exercise of this authority has many illustrations, one of which is the agreement of 1901 for the so-called Boxer indemnity. AGREEMENT REGARDING THE DISTRIBUTION OF THE DAWES ANNUITIES (JANUARY, 14, 1925) FINAL PROTOCOL The representatives of the Governments of Belgium, France, Great Britain, the United States of America, Italy, Japan, Brazil, Greece, Poland, Portugal, Roumania, Serb-Croat-Slovene State, Czechoslovakia, assembled at Paris from the 7th to the 14th January 1925 with a view to settling as between their respective Governments questions which arise out of the distribution of the receipts arleady entered, or to be entered, in the accounts of the Reparation Commission, in particular after the 1st January 1923 to 1st September 1924, and also in the first years of the application of the Dawes Plan which formed the subject of the Agreements concluded in London on 31st August 1924, 28623-27- -24 Have agreed on the provisions contained in the Agreement of to-day's date of which a copy is attached to the present Protocol. The Governments of Belgium, France, Great Britain, Italy, Japan, the United States of America, Brazil, Greece, Poland, Portugal, Roumania, the Serb-Croat-Slovene State, and Czechoslovakia, respectively represented by the undersigned, have agreed as follows: SUMMARY CHAPTER I.-Allocation of Dawes Annuities. ART. 1. Costs of Commissions. ART. 2. Costs of Armies of Occupation 1924-1925. ART. 3. Share of the United States of America in the Dawes Annuities. ART. 5. Restitutions. ART. 6. Belgian Priority. ART. 7. Greek and Roumanian share of reparations. ART. 8. Miscellaneous Claims. ART. 9. Compensation due to the European Commission of the Danube. CHAPTER II.-Settlement of Past Accounts. ART. 11. Distribution of Accounts: Provisions as to Arbitration. CHAPTER III.-Special Questions Arising out of Previous Agreements. ART. 15. Costs of Armies of Occupation from 1st May 1922 to 31st August ART. 16. Debits for vessels allotted or transferred to Belgium under ART. 17. Debits for Shantung Mines and Railways. CHAPTER IV.-Interest and Arrears. ART. 18. Interest Account. ART. 19. Account of Excesses and Arrears as at 1st September 1924. ART. 20. Recovery of Arrears. ART. 21. Costs of Armies of Occupation to 1st May 1921. CHAPTER V.-Miscellaneous Questions. ART. 22. Repayment by Czechoslovakia in respect of certain Deliveries in ART. 23. Bulgarian Payments. ART. 24. Properties ceded to the Free City of Danzig. ART. 25. Recommendations with regard to the distribution of the payments throughout the year. ART. 26. Interpretation and Arbitration. ART. 27. Reservation as to the rights and obligations of Germany. CHAPTER I.-ALLOCATION OF THE DAWES ANNUITIES ARTICLE I.-Costs of the Commission A) The maximum normal charge on the Dawes Annuities of the Reparation Commission, including the organisations set up under the Dawes Plan, shall be: For the year from 1st September 1924. 94 million gold marks. For the later years.-- 72 million gold marks. (to be taken partly in foreign currencies or in German currency as required). Of these sums not more than 3,700,000 gold marks a year shall be attributable to the organisations set up under the Dawes Plan. If necessary this sum may be increased in order to meet the costs of the arbitral bodies provided for by the Dawes Plan and the London Protocol. B) The maximum charge for the Interallied Rhineland High Commission (including deliveries under Articles 8-12 of the Rhineland Agreement) shall not exteed 10 million gold marks (to be taken in foreign currencies or in German currency as required) for the year from 1st September 1924, this sum being allocated between the French, British and Belgian High Commissariats in the proportion of 62:16:22, after providing for the other expenses of the Commission. The amount for any later year will be settled at a later date. C) The charge of the Military Commission of Control shall not exceed a maximum of 8 million gold marks (to be taken in German currency) in the year from 1st September 1924. The amount of any later year will be settled at a later date. This figure does not include the Commission's expenses in national currencies, which shall continue to be paid by the Governments concerned, the amounts so paid being credited to their respective accounts by the Reparation Commission. ARTICLE 2.-Costs of Armies of Occupation 1924/1925 A) The sums to be allowed as a prior charge on payments by Germany during the year 1st September 1924 to 31st August 1925 in respect of the costs of the Armies of Occupation of Belgium, Great Britain and France, shall be fixed at the following amounts: Belgian Army French Army. 25, 000, 000 gold marks. 25, 000, 000 gold marks. 110, 000, 000 gold marks. B) Belgium, Great Britain and France will meet their additional Army costs during the period mentioned out of their respective shares in German reparation payments, but shall not be debited on reparation account therewith, that is to say, their respective reparation arrears will be increased by corresponding sums. C) The additional Army costs shall be calculated as follows. Each Power will be entitled to receive: 1. The sums payable under the Finance Ministers' Agreement of 11th March 1922, calculated in the case of Great Britain on the basis of the French capitation rate with a special allowance of 2 gold marks a man, converted into sterling on the basis of the mean rates of exchange of the respective currencies during the month of December 1921. The value of German marks supplied to the Armies of Occupation and the value of any requisitions under Article 6 of the Rhineland Agreement shall, as heretofore, be included in these sums, and 2. The value of the requisitions and services under Articles 8-12 of the Rhineland Agreement, which are credited to Germany in the accounts of the Agent General for Reparations. For each Power the additional Army costs shall be the difference between the total sum so calculated and the amount of the prior charge set out in paragraph (A) above. D) It is agreed that the Powers concerned in the occupation shall not charge for effectives in excess of the strength authorised for each respectively by Article 1 (2) and (3) of the Agreement of 11th March 1922. E) The provisions of this Article for the year to 31st August 1925 are accepted without prejudice to any question of principle, and the Allied Governments and the Government of the United States of America will discuss, before the 1st September 1925, the arrangement for Army Costs in the future. ARTICLE 3.-Share of the United States of America in the Dawes annuities A) Out of the amount 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 10th, 1922. 1. Fifty-five million 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 million gold mark German external loan, 1924, and for the costs of the Reparation Commission, the organisations 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 of America be admitted. If in any year the total sum of fifty-five million gold marks be not transferred to the United States of America the arrears shall be carried forward to the next succeeding annual instalment payable to the United States of America, which shall be pro tanto increased. Arrears shall be cumulative and shall bear simple interest at 42% from the end of the year in which the said arrears accumulated until they are satisfied. 2. Two and one quarter per cent (24%) 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 forty-five million gold marks. B) Subject to the provisions of Paragraph A above, the United States of America agree: 1. To waive any claim under the Army Cost Agreement of May 25th 1923, on cash receipts obtained since 1st January 1923 beyond the sum of $14,725,154.40 now deposited by Belgium to the account of 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 25th 1923 does not apply to payments on account of reparations by any ex-enemy Powers other than Germany. 3. That the Agreement of May 25th 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 recognised as having an interest, proportionate to its 24% interest in the part of the annuities available for reparation, in any distribution of 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 recognised as having an interest in any other disposition that may be made of the bonds if not sold or distributed. ARTICLE 4.—Belgian War Debt A) As from the 1st September 1924 5% of the total sum available in any year after meeting the charges for the service of the German External Loan, 1924, and the charges for Costs of Commissions; Costs of U. S. Army of Occupation; Annuity for Arrears of pre-1st of May 1921 Army Costs; Prior charge for current Army Costs; and any other prior charges which may hereafter be agreed, shall be applied to the reimbursement of the Belgian War Debt as defined in the last paragraph of Article 232 of the Treaty of Versailles. |