Papers Relating to the Foreign Relations of the United States, The Paris Peace Conference, 1919, Volume VI

Paris Peace Conf. 180.03401/57

CF–57

Notes of a Meeting Held at President Wilson’s House in the Place des Etats-Unis, Paris, on Wednesday, June 11, 1919, at 11 a.m.

Paris, June 11, 1919, 11 a.m.

• Present
  • United States of America
    • President Wilson.
  • British Empire
    • The Rt. Hon. D. Lloyd George, M. P.
  • France
    • M. Clemenceau.
  • Italy
    • M. Orlando.

Sir Maurice Hankey, K. C. B.	}	Secretaries.
Count Aldrovandi,
Professor P. J. Mantoux.—Interpreter.

1. The Council had before them the revised draft circulated by Sir Maurice Hankey on the previous day for a reply to the German counter-proposals. (Appendix I.)¹ Reparation

Mr. Lloyd George said that he had two alterations in principle to suggest, which he would mention at the appropriate stage of the reading of the document.

The first was that account should be taken in giving commercial facilities to Germany, of the prior claim of countries that had suffered in the war owing to German aggression, for example, France and Belgium. This should be the first obligation of their Allies in disposing of raw material; for example, in the case of the British Empire, wool.

His second proposal was that an undertaking should be given for an opportunity for the Germans of inspecting and surveying the damage done. Facilities ought to be given for this.

President Wilson then proceeded to read the draft, and in the course of the discussion the following alterations were agreed to:—

Page 1, Paragraph 1.

Mr. Lloyd George proposed to insert after the word “prepared” “with strict moderation and”.

President Wilson did not like the addition, and Mr. Lloyd George withdrew the proposal.

After the quotation from the final memorandum of 5th November, 1918,^1a Mr. Lloyd George suggested another addition to the effect that the Allied and Associated Powers might, if they had wished, have made a much more extensive definition of the damage done to the civilian population.

M. Clemenceau suggested that this would have a bad effect on public opinion in Allied countries. The public would ask why, if they could have claimed more, they had not done so.

Mr. Lloyd George agreed, and withdrew the proposal.

Last paragraph of Page 1.²

It was agreed to delete the words “propose to”, so that the sentence should run “The Allied and Associated Powers, recognising this situation, themselves delegate power and authority to a Reparation Commission”.

Page 2, last Paragraph.³

President Wilson suggested to alter the word “distorted”.

Mr. Lloyd George suggested that it was not an offensive word and it was agreed to make no alteration.

In the following line the word “difficult” was substituted for “impossible”.

Page 3. Lines 12–16⁴ were altered to read as follows:—“The German observations appear to miss the point that the Commission is directed to study the German system of taxation for the protection of the German people no less than for the protection of their own.”

Line 18.⁴ For “poverty” the word “inability” was substituted.

Page 4, 1st Paragraph,⁵ Line 5. Omit the words “as to” before “why”.

At the beginning of the second paragraph,

Mr. Lloyd George suggested to insert the following:—“The Allied and Associated Powers, in proof of their willingness to facilitate the execution of the Treaty, suggest the following procedure”.

After some discussion, it was agreed instead to insert the following words at the end of the first paragraph:—“The Allied and Associated Governments are therefore ready to agree to such a procedure as the following”.

Paragraph 2. The word “forthwith” was deleted.

Paragraph 3, 6th line. After the word “purposes” it was agreed to put a colon instead of a full stop.

In the 13th line, the word “service” was substituted for “assistance”.

Page 5, 6th line. Mr. Lloyd George said that this was the point⁶ at which he wished to introduce a phrase giving the Germans opportunities of inspecting the damage.

After some discussion the following phrase was accepted:—“Suitable facilities for inspecting the damage done will be afforded to Germany’s agents at reasonable times”.

Page 5.

M. Clemenceau said that M. Loucheur had proposed that somewhere in the last half of page 4 or the first half of page 5, words should be introduced to provide for conference between the German experts with the Allied experts in regards to the works of repair and reconstruction by Germany.

(After some discussion it was agreed to amend the sentence beginning in the 6th line of page 5^6a as follows:

“Three conditions and three only are imposed upon the tender of these proposals. First the German Authorities will be expected before making such proposals to confer with the representatives of the Powers directly concerned.

Secondly such offers must be unambiguous and must be precise and clear.

Thirdly they must accept the categories of the Reparation clauses as matters settled beyond discussion.”)

(It was agreed that the sentence following this should be amended to read as follows:—

“The Allied and Associated Powers will not entertain arguments or appeals directed to any alteration.”)

The sentence following this and commencing with the words “[The] Allied and Associated Powers” was considerably criticised.

Mr. Lloyd George thought on the whole it would be wiser to omit it. Either the reference to the German offer of £5,000,000,000 should be omitted altogether, or else a full explanation should be given as to why it was not a real offer.

M. Clemenceau thought the second alternative was the better.

After some discussion Mr. Lloyd George left the room to consult Lord Sumner, and later in the meeting the following passage, based on Lord Sumner’s draft slightly amended, was approved for introduction after the word “undefined”:—

The sum of £5,000,000,000 is indeed mentioned, and this is calculated to give the impression of an extensive offer which, upon examining it proves not to be. No interest is to be paid at all. It is evident that till 1927 there is no substantial payment, but only the surrender of military material, and the devolution upon other Powers of large portions of Germany’s own debt. Thereafter a series of undefined instalments is to be agreed which are not to be completed for nearly half a century. The present value of this distant proposal is small, but it is all that Germany tenders to the victims of her aggression in satisfaction of their past sufferings and their permanent burthens.”

The following addition proposed by Lord Sumner was not accepted:—

“This is not an offer at all: but it is only an admission that the minimum claims of the Allied and Associated Powers can certainly be proved at a sum exceeding £5,000,000,000.”

Last paragraph of page 5,⁷ 3rd line.

(It was agreed to substitute for the words “above proposals” the following “any proposals that may be made.”

In the following line the word “may” was substituted for “will” and in the line after that the word “proper” before “conditions” was deleted.)

8th and 9th line from the bottom of the page.⁸

(It was agreed on President Wilson’s suggestion to omit the following words “no one could profit more than they”.)

Page 6, 7th line.⁹

(Instead of “they recognise” it was agreed to substitute “they are fully alive to”.)

9th line, page 6.¹⁰

President Wilson proposed to substitute for the words “intercourse and assistance” the word “facilities”.

(After some discussion this was agreed to.)

Mr. Lloyd George said that he wished to introduce in this paragraph the point he had already alluded to, namely, that in giving commercial facilities to Germany, regard should be had to those countries which had suffered so much from German aggression. He proposed that in line 12 after the words “in advance” to insert the following “and subject also to the necessity for having due regard to the special economic situation created for the various countries by the German aggression in the war.”

President Wilson did not like the use of the term “various countries” and proposed instead to substitute “particular countries”.

Mr. Lloyd George said that he was particularly anxious not to convey the impression that most favoured nation treatment was being given to Germany.

President Wilson and M. Clemenceau thought that this was safeguarded against by the sentence “commercial facilities without which this assumption [resumption] cannot take place”.

Mr. Lloyd George in regard to President Wilson’s proposal said he did not want to be put in the position of choosing between the different Allied and Associated countries. He would be willing to use the term “belligerent Allied and Associated countries”.

President Wilson did not like the use of this term, which he thought was equivalent to saying to the Germans, we will let you have these facilities when we can spare them.

Mr. Lloyd George said it was a difficult point to draft but what he meant was that the Allied and Associated countries had been put in a position in which they would not have been put but for German aggression, and that this ought to be taken into account.

(After some further discussion the following form was finally agreed to for insertion after the words “in advance”.

“And subject also to the necessity for having due regard to the special economic situation created for Allied and Associated countries by German aggression and the war.”)

2nd paragraph of page 6.¹¹

The following sentence was deleted: “The [A] great part of the damage done has been done by German hands in faithful execution of German plans.”

The reason for this change was that, Mr. Lloyd George pointed out, it was an admission that the Germans had not done the whole of the damage and would give them a loophole for arguing.

M. Clemenceau proposed to omit the last sentence on page 6,¹² but

Mr. Lloyd George considered it rather valuable and M. Clemenceau withdrew his objection.

(Subject to the above alterations the draft was approved, and Sir Maurice Hankey was instructed to incorporate the above alterations in the revised document.)

2. Mr. Lloyd George said that he had only received that morning a French copy of a report of the Commission instructed to draw up a Convention for the military occupation of the Rhine provinces. He had as yet received no English copy and he had not had time to study the document. Convention Concerning the Military Occupation of the Rhine Provinces

President Wilson said he was in the same position.

M. Clemenceau considered the project drawn up by the Commission too complicated, and said he had himself drawn up a 12 line project which in his view did all that was necessary. Moreover, just as he was leaving his office, Marshal Foch had come in with a project based on the German occupation of France in 1871, which ought to be considered.

(The subject was adjourned until the afternoon.)

3. Mr. Lloyd George circulated the draft of a letter covering the rejoinder to be made to the German counter proposals. This draft he said had been prepared by Mr. Philip Kerr, and was German Counter submitted by himself as a basis for discussion. Reply to the German Counter Proposals

Sir Maurice Hankey drew attention to a large number of reports from Commissions on the German counter proposals, and asked that they might be considered at an early date by the Council.

4. President Wilson said he had received a new draft prepared by Colonel House, Lord Robert Cecil, M. Leon Bourgeois and their group, and that Mr. House had seen M. Clemenceau.

(It was agreed to discuss this in the afternoon, and Sir Maurice Hankey was directed to reproduce and circulate it.) League of Nations. Revised Reply to the Germans

5. President Wilson and Mr. Lloyd George reported that they had received advance copies of the report of the Commision. Eastern Frontiers of Germany

(It was agreed to discuss this in the afternoon.)

6. M. Clemenceau said he had received a letter from M. Paderewski asking that the Polish army should be placed under the Polish Marshal Foch. If his colleagues agreed he proposed to give his consent. Command of the Polish Army

(President Wilson, Mr. Lloyd George and M. Orlando agreed.)

7. M. Clemenceau reported that the Italians had occupied Tarvis, and that the forces of the kingdom of the Serbs, Croats and Slovenes had occupied Klagenfurt. Events on the Austrian Frontier

Villa Majestic, Paris , 11 June, 1919.

Appendix

WCP–950

reparation

Project for Reply to German Counter Proposals

The Allied and Associated Governments, consistently with their policy already expressed, decline to enter into a discussion of the principles underlying the Reparation Clauses of the Conditions of Peace, which have been prepared with scrupulous regard for the correspondence leading up to the Armistice of November 11th, 1918, the final memorandum of which dated 5th November, 1918, contains the following words:—

“Further, in the conditions of Peace laid down in his address to Congress of the 8th January, 1918,¹³ the President declared that the invaded territories must be restored as well as evacuated and freed, and the Allied Governments feel that no doubt ought to be allowed to exist as to what this provision implies. By it they understand that compensation will be made by Germany for all damage done to the civilian population of the Allies and their property by the aggression of Germany by land, by sea, and from the air.”

To the extent that your reply deals with practical phases of the execution of the principles enunciated in the Conditions of Peace, you appear to proceed on the basis of a complete misapprehension, which is the more difficult to understand as the inferences you draw and the statements which you make are wholly at variance with both the letter and the spirit of the Treaty Clauses. For purposes of clarification, however, and in order that there may be no possible ground for misunderstanding, the Allied and Associated Governments submit the following observations:—

The vast extent and manifold character of the damage caused to the Allied and Associated Governments in consequence of the war, has created a reparation problem of extraordinary magnitude and complexity, only to be solved by a continuing body, limited in personnel and invested with broad powers to deal with the problem in relation to the general economic situation. The Allied and Associated Powers, recognising this situation, themselves propose to delegate power and authority to a Reparation Commission. This Reparation Commission is, however, instructed by the Treaty itself so to exercise and interpret its powers as to ensure in the interest of all, as early and complete a discharge by Germany of her reparation obligations as is consistent with the due maintenance of the social, economic and financial structure of a Germany earnestly striving to exercise her full power to repair the loss and damage she has caused.

The provisions of Article 241, by which the German Government is to invest itself with such powers as may be needed to carry out its obligations, are not to be misconstrued as giving the Commission power to dictate the domestic legislation of Germany. Nor does Paragraph 12 (b), of Annex II, give the Commission power to prescribe or enforce taxes or to dictate the character of the German budget, but it is to examine the latter for two specified purposes. This is necessary in order that it may intelligently and constructively exercise the discretion accorded it in Germany’s interest particularly by Article 234, with regard to extending the date and modifying the form of payments. The provisions of Article 240 with regard to the supply of information are similar in character and purpose and there should be little occasion for the exercise of these powers when once the amount of the liability of Germany is fixed, if Germany is in a position to, and does, comply with the schedule of payments which then will have been notified to her and with the specific provisions of the several Annexes relative to reparation in kind. It is further to be observed that the power of modification accorded by the said Article 236 [234] is expressly designed to permit of a modification in Germany’s interest of a schedule of payments which events may demonstrate to be beyond Germany’s reasonable capacity. The Allied and Associated Powers vigorously reject the suggestion that the Commission, in exercising the power conferred by Article 240 and by Paragraphs 2, 3 and 4 of Annex IV, might require the divulgence of trade secrets and similar confidential data.

The observations of the German Delegation present a view of this Commission so distorted and so inexact, that it is impossible to believe that the clauses of the Treaty have been calmly or carefully examined. It is not an engine of oppression or a device for interfering with German Sovereignty. It has no forces, which it commands; it has no executive powers within the territory of Germany; it cannot, as is suggested, direct or control the educational or other systems of the country. Its business is to fix what is to be paid; to satisfy itself that Germany can pay; and to report to the Powers, whose Delegation it is, in case Germany makes default. If Germany raises the money required in her own way, the Commission cannot order that it shall be raised in some other way; if Germany offers payment in kind, the Commission may accept such payment, but, except as specified in the Treaty itself, the Commission cannot require such a payment. The observations appear to miss the point that the Commission is directed to study the German system of taxation equally for the protection of the German people as for the protection of their own. Such study is not inquisitorial, for the German system of taxation is not an object of curiosity to other Powers, nor is a knowledge of it an end in itself. If any plea of poverty, which the German Government may advance, is to be properly considered, such a study is necessary. The Commission must test whether a sincere application is being given to the principle, accepted in the observations, “that the German taxation system should impose in general on the taxpayer at least as great a burden as those prevailing in the most heavily burdened of the States represented on the Reparation Commission”. If the German resources are to be properly weighed, the first subject of inquiry, and perhaps the first ground for relief, will be the German fiscal burden.

It is understood that the action necessary to give effect to the provisions of Annex IV, relative to reparation in kind, will be taken by Germany on its own initiative, after receipt of notification from the Reparation Commission.

The provisions of the Treaty are in no wise incompatible with the creation by Germany of a Commission which will represent Germany in dealings with the Reparation Commission and which will constitute an instrumentality for such co-operation as may be necessary. The Treaty specifically and repeatedly provides opportunities for the German Government to present facts and arguments with respect to claims and modes of payments, within the limits of the principles and express provisions of the Treaty. This may be done through a commission and no reason is perceived as to why such a commission could not work in harmony with the Reparation Commission. Certainly this is greatly to be desired.

Immediately after the Treaty is signed, Germany may present forthwith and the Allied and Associated Powers will receive and examine such evidence, estimates, and arguments in writing, as she may think fit to present. Such documents need not be final but may be presented subject to corrections and additions.

At any time within four months of the signature of the Treaty, Germany shall be at liberty to submit, and the Allied and Associated Powers will receive and consider such proposals as Germany may choose to make. In particular, proposals will be acceptable on the following subjects and for the following purposes. Germany may offer a lump sum in settlement of her whole liability, or in settlement of her liability under any of the particular categories which have been decided upon and laid down. Germany may offer to undertake to repair and reconstruct part or the whole of any damaged district, or certain classes of damage in each country or in all the countries which have suffered. Germany may offer labour, materials or technical assistance for use in such work, even though she does not undertake to do the work herself. She may suggest any practicable plan, category by category, or for the reparations as a whole, which will tend to shorten the period of enquiry and to bring about a prompt and effectual conclusion. Without making further specifications, it may be said in a word that Germany is at liberty to make any suggestion or offer of a practical and reasonable character for the purposes of simplifying the assessment of the damage, eliminating any question or questions from the scope of the detailed enquiry, promoting the performance of the work and accelerating the definition of the ultimate amount to be paid. Two conditions and two only are imposed upon the tender of these proposals. Firstly, they must be unambiguous, they must be precise and clear, and they must be made in earnest. Secondly, they must accept the categories and the reparation clauses as matters settled beyond discussion. The Allied and Associated Powers will not tolerate arguments or entertain appeals directed to any alteration. The Allied and Associated Powers have to remark that in the Observations submitted the German Delegation has made no definite offer at all but only vague expressions of willingness to do something undefined, and that the one suggestion, namely, as to the payment of £5,000,000,000, which appears to be expressed in concrete terms, is so hedged about with conditions and qualifications as to appear to be intended to provoke controversy and not to promote peace.

Within two months thereafter the Allied and Associated Powers will, so far as may be possible, return their answer to the above proposals. It is impossible to declare in advance that they will be accepted, and if accepted, they will be subject to proper conditions, which can be discussed and arranged. The Allied and Associated Powers, however, declare that such proposals will be seriously and fairly considered; no one could be better pleased than they, no one could profit more than they, if, in the result, a fair, a speedy and a practical settlement were arrived at. The questions are bare questions of fact, namely, the amount of the liabilities, and they are susceptible of being treated in this way. Beyond this, the Powers cannot be asked to go.

The Powers will, however, make a declaration on another point, as follows. The resumption of German industry involves access for German manufacturers to the necessary raw materials and provision for their transport to German factories from overseas. The resumption of German industry is an interest of the Allied and Associated Powers as well as an interest of Germany. They recognise this fact and therefore declare that they will not withhold from Germany the commercial intercourse and assistance without which this resumption cannot take place, but that, subject to conditions and within limits, which cannot be laid down in advance, they are prepared to afford to Germany facilities in these directions for the common good.

Even if no settlement were arrived at, it must be evident that the early production of the German evidence would greatly abbreviate the enquiry, and accelerate the decisions. The information at present at hand comes from one side only. A great part of the damage done has been done by German hands in faithful execution of German plans. The German Authorities have had long occupation of a large part of the damaged areas and have been over the ground, forwards and backwards, within the last twelve or fifteen months. Their information must be extensive and exact. The Allied and Associated Powers have as yet had no access to this mass of material. The mere comparison of the evidence forthcoming on the one side and the other must greatly narrow the field of dispute and may eliminate dispute altogether. It is obvious that, if the class of damages done in the devastated areas can be dealt with in this fashion, the liability under the other categories can be quickly established, for it depends on statistics and particulars of a far simpler character. By giving a satisfactory covenant to execute the work of rebuilding themselves, the Germans could at once dispose of the only difficult or long subject of inquiry.

Meanwhile, the draft Treaty must be accepted as definitive and must be signed. The Allied and Associated Powers cannot any longer delay to assure their security. Germany cannot afford to deny to her populations the peace which is offered to them. The Reparations Commission must be constituted and must commence its task. The only question open will be how best to execute the provisions of the Treaty.

The foregoing should suffice to demonstrate the reasonableness of the conditions under which Germany is to discharge her reparation obligations, and how utterly unfounded are the criticisms of the German reply. These are, indeed, explicable only on the theory that the German plenipotentiaries have read into the Conditions of Peace, in clear defiance of their express terms, an intent which it would be not unnatural to see evidenced by victorious nations which have been the victims of cruelty and devastation on a vast and premeditated scale. The burdens of Germany undeniably are heavy, but they are imposed under conditions of justice by peoples whose social well-being and economic prosperity have been gravely impaired by wrongs which it is beyond the utmost power of Germany to repair.

Paris, 10 May [June], 1919.

1. There is only one appendix to CF–57.
2. Foreign Relations, 1918, supp. 1, vol. i, p. 468.
2. Beginning “The vast extent …”
3. Beginning “The observations of the German Delegation …”
4. In the same paragraph as the preceding.
4. In the same paragraph as the preceding.
5. Beginning “The provisions of the Treaty …”
6. Before the words “Two conditions and two only …”
7. Beginning in the draft “Two conditions and two only …”
7. Beginning “Within two months thereafter …”
8. In the same paragraph as the preceding.
9. In the paragraph beginning “The Powers will …”
10. In the same paragraph as the preceding.
11. Beginning “Even if no settlement …”
12. Beginning “By giving a satisfactory covenant …”
13. Foreign Relations, 1918, supp. 1, vol. i, p. 12.