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

Paris Peace Conf. 180.0501/19

Supreme Economic Council: Nineteenth Meeting Held at the Ministry of Commerce [on 19th May, 1919, at 10 a.m.]

May 18, 1919, 10 a.m.

The Supreme Economic Council held its Nineteenth Meeting on Monday 19th May, 1919 at 10 a.m. under the Chairmanship of Lord Robert Cecil.

The Associated Governments were represented as follows:—

United Kingdom.	Mr. Keynes.
	Mr. Wise.
	Sir Wm. Goode.
United States.	Mr. Hoover.
	Mr. McCormick.
	Mr. Norman Davis.
	Mr. Baruch.
	Mr. Robinson.
France.	M. Clémentel.
	M. Loucheur.
	M. Claveille.
	M. Seydoux.
Italy.	Com. Ferraris.
	Prof. Attolico.
Belgium.	M. Lepreux.
	Lieut. Col. Theunis.

160.

The Minutes of the Seventeenth and Eighteenth Meetings were approved.

161. Blockade of Hungary.

The following resolution submitted by the British Delegates was adopted:—

“That it is desirable publicly to announce that the blockade of Hungary will be suspended as soon as a Government is installed there which gives some assurance of settled conditions.”

It was agreed that the resolution should be submitted to the Council of Heads of States with a request for their observations regarding it.¹

162. Relations With Germany.

(i) With reference to Minute 150 (ii) an Extract from the Minutes of the 13th Meeting of the Finance Section (141) was submitted and the following proposals outlined therein approved:—

(a) that any loss arising out of the food supplies not delivered to Germany by reason of a break-down of negotiations is a general charge whose distribution must be agreed between the Allied and Associated Governments when and if the circumstances arise:

(b) that in the event of such loss arising the German ships should be held as security to cover the loss.

(ii) The desirability of holding Austrian ships as security against loss incurred in the shipment of foodstuffs to Austria was considered and approved in principle. The matter was referred to the Finance Section to work out in detail.

(iii) The American Delegates suggested that there should be a clear definition of the policy to be adopted, in the event of the enemy signing the Treaty of Peace, in order to safeguard the Food and Relief Administrations of the Allied and Associated Governments against loss on foodstuffs shipped to Germany and Austria.

It was agreed:—

(a) that in the view of the Council such losses should be the first charge on German and Austrian assets assigned to reparation.

(b) that the Finance Section should be instructed to prepare a statement on the above lines for submission to the Council at its next meeting and subsequently for transmission to the Council of Four.

163. Blockade of Germany.

With reference to Minutes 150 (i) and 159 the Chairman reported:—

(a) that with one amendment the Council of Heads of States had approved, for publication, the statement prepared by the Supreme Economic Council (140)^1a explaining the present position of the blockade of Germany.

The amendment was as follows:—

That for the words “as soon as the German Representatives have signed the Treaty of Peace” in the first sentence should be substituted the words “as soon as Germany has formally accepted the Treaty of Peace”;

(b) that the following decisions had been reached by the Council of Heads of States regarding the re-imposition of the blockade of Germany should the necessity arise²:—

(a) That if blockade measures have to be re-imposed a formal blockade should be declared. No definite decision was reached as to whether the blockade measures should or should not be taken in the event of Germany refusing to sign the Peace Treaty; but it was understood that such preparations would now be made as would render it possible to give effect to the blockade measures proposed, in the event of its being necessary to take such action;

(b) that the following Démarche to Neutral Governments should be made now:—

“it would greatly increase the effectiveness of the Blockade if the Neutral Governments of the countries with whom agreements are now in force (Norway, Sweden, Denmark, Holland and Switzerland) should consent forthwith to prohibit if called upon by the Associated Governments to do so, all exportation, re-exportation or transit of goods from or across their respective countries to or from Germany, except with the consent of the Associated Governments.”

164. German Exports.

With reference to Minute 158 a resolution from the Blockade Section (142) embodying information to be sent to the Allied Naval Armistice Commission, the Allied Blockade Committee and the Inter-Allied Trade Committees regarding the export from Germany of goods on the prohibition and pre-emption lists was submitted.

The question of maintaining an adequate check on German exports was again considered but it was agreed that the matter was one for consideration by the Blockade Section and that they should be authorised to take such action as they considered necessary to carry out the decisions of the Council.

165. Administration of the Occupied Territories.

A memorandum from the Sub-Committee on Germany (143) was submitted and referred for consideration to a special Meeting of the Delegates.

166. Payment on French Food Supplies to Germany.

An Extract from the Minutes of the 13th Meeting of the Finance Section (144) regarding the partition between the interested Governments of German gold in payment of foodstuffs was submitted.

It was reported that the principal questions involved therein had since been settled and that the French Government had agreed that in due course the proceeds of the sale of coal from the Saar basin to France should be credited to Germany in payment for food.

It was noted, however, that the price to be paid by the French Government for the coal obtained from the Saar Basin had not yet been fixed.

The French Delegates expressed the view that the Saar coal question was not Inter-Allied in character and, further, that it would be a mistake from a political point of view definitely to fix a price for coal supplied during the Armistice which would be different from the price mentioned in the draft Treaty of Peace.

It was agreed that the matter should be settled, if possible, by private consultation between the members of the special Committee on German coal. In the event, however, of it being found impossible to come to an agreement it should be referred again to the Council.

167. Italian Coal Situation.

An extract from Minutes of the 13th Meeting of the Finance Section (145) on the finance of Coal supplies to Italy and a preliminary report (146) on the supply of coal to Italy were submitted.

The French Delegates pointed out that the statement made in the Finance Minutes to the effect that “France is reducing her British imports” was incorrect and it was imperative that the supply of coal to France from this, as from other sources, should be materially increased.

The Italian Delegates referred to the urgent necessity for the maintenance of the supply to Italy of 2,000 tons of coal per day from the Saar Basin and the French Delegates stated that they expected to be able to arrange this or possibly an even larger quantity.

It was agreed:—

(a) That the means of payment for French coal already supplied to Italy and the question of continuing those supplies should be considered jointly by the French and Italian Delegates;

(b) That, if no agreement were reached, the matter should, if necessary, be considered again by the Council.

168. Coal for Serbia.

A Resolution (147) from the Raw Materials Section suggesting that coal should be supplied to Serbia as soon as the question of the disposal of the Banat surplus of foodstuffs had been settled was submitted and approved.

In reply to an enquiry made by the British Delegates as to the source of supply of the coal the Director General of Relief stated that arrangements were now being made for an exchange of foodstuffs for coal from the fields claimed by Poland, Czecho-Slovakia and Germany.

169. Relief Operations.

(a) A Report (148) from the Director-General of Relief regarding relief operations in Europe during April was submitted for the information of the Council.

(b) The Chairman reported that at their Meeting on the 14th May the Council of Heads of States had considered the possibility of exercising economic pressure on countries appealing to the Allies for assistance and supplies and at the same time fighting with their neighbours in defiance of the wishes of the Council.³ It had then been decided to notify the Supreme Economic Council that economic pressure might be applied and that the Supreme Economic Council was free to take such action as seemed to them desirable in such cases.

170. Situation in the Baltic States.

With reference to Minute 153 the proposals (149) placed before the Council of Foreign Ministers by the Committee appointed to report on the best means of establishing and maintaining order in the Baltic States and of revictualling the population were submitted for the information of the Council.

171. Work of the Shipping Section.

With reference to Minute 155 a resolution from the Shipping Section (150) recommending that the Shipping Committee should be abolished was submitted and deferred for further consideration at the next meeting of the Council.

It was noted that the first sentence of the Resolution should be amended to read as follows:—

“That we recommend that the Shipping Committee of the Supreme Economic Council be abolished and that the body responsible for dealing with all shipping questions connected with the Supreme Economic Council should be the Transport Executive in London, it being understood that Belgium should have a representative on the Transport Executive.”

172. Shipping in the Adriatic.

With reference to Minutes 73 and 105 a report (151) from the Sub-Committee appointed to consider certain representations made by the Jugo-Slavs relative to Austro-Hungarian shipping in the Adriatic, was noted.

173. Health Conditions in Southern and Eastern Europe.

With reference to Minute 157 a letter from the League of Red Cross Societies dated 16th May (152[A]) and a report from the British Delegates dated 17th May (153) regarding a scheme for combatting disease in Southern and Eastern Europe, were considered.

It was agreed.

(a) that the Council would be prepared to give every assistance in its power;

(b) that the Director General of Relief and the representatives of the various Governments on the Relief Administration viz:—

• Sir Wm. Goode.
• Mr. Wise.
• M. Fillioux.
• Capt. Caetani.

should act on behalf of the Council and prepare a definite plan in co-operation with the representatives of the League of Red Cross Societies.

174. Communications With the German Economic Delegates at Versailles.

It was reported that a scheme for the organisation of conferences and communications on current economic negotiations with German Economic Delegates at Versailles was being drawn up and it was agreed that the matter should be considered by the Council at their next meeting.

Appendix 141⁴

Extracts From the Minutes of the Thirteenth Meeting of the Finance Section (15th May)

12. Minute 150 of the Supreme Economic Council (Annex H).⁵

Mr. Keynes said that in its present form the minute of the Supreme Economic Council would appear only to cover the losses that might be incurred by the United States Food Administration in the case of a breach with the Germans.

Mr. Davis said that he accepted a wider application of the principle, and agreed that the loss arising out of a breach should be considered as a kind of cost of the war which ought to be shared between all the Allied and Associated Governments.

It was agreed (1) that any loss arising out of the food supplies not delivered to Germany by reason of a breakdown of negotiations is a general charge whose distribution must be agreed between the Allied and Associated Governments when, and if, the circumstances arise; (2) that the Finance Section recommend to the Supreme Economic Council that in this event the German ships should be held as security to cover the loss.

Appendix 142

Extract From the Minutes of the Meeting of the Blockade Section Regarding German Exports

In pursuance of the foregoing action (Minute 158, S.E.C.)⁶ the Council adopted the following resolution:—

Resolved—

“That in consequence of the decision of the Supreme Economic Council of the 13th May regarding the execution of the Brussels Agreement, A.N.A.C., A.B.C., and I.A.T.C. should be informed:—

• “1. That the absolute prohibition upon the export from Germany of gold, silver, securities, and material of war, without the special consent of the Associated Governments, is rigorously maintained.
• “2. That as regards other exports, including goods on the Preemption List, applications to the I.A.T.C. or other blockade authorities for permission to export may for the present be regarded as unnecessary, and any applications already made should be granted.”

Further resolved—

“That the Supreme Economic Council shall be notified of the foregoing action in order that it may determine to what extent and in what manner the foregoing ruling of the Blockade Council shall be communicated to the German authorities.”

May 15, 1919.

Appendix 143

Memorandum by the Sub-Committee on Germany Regarding the Administration of the Occupied Territories

The Sub-Committee on Germany draws the attention of the Supreme Economic Council to the following facts in connection with the present status of the Inter-Allied Rhineland Commission:—

1. On the 21st April the Council of Foreign Ministers considered proposals put forward by the Supreme Economic Council for the reorganisation of the economic administration of the occupied territories.⁷ These proposals included the establishment of an interallied commission, with full authority to co-ordinate the establishment of the four Army Commands on all economic, industrial, and food questions.

2. The Council of Foreign Ministers accepted the proposals without amendment, and, in so doing, agreed to issue orders that the decisions of the Commission should be uniformly executed by the Army Commands throughout the occupied zones.

3. The decisions of the Inter-Allied Rhineland Commission are, in conformity with the orders of the Supreme Council of Foreign Ministers, duly carried into effect by the British and United States Army Commands. The Inter-Allied High Command, however, requests that “the directions of the Inter-Allied Commission charged with the task of co-ordinating the administration of the four Army Commands on all economic, industrial, and food questions in the occupied territories should be submitted to the Marshal, Commander-in-chief of the Allied armies, who will ensure their execution.[”]

In view of these facts the Sub-Committee on Germany, with the object of ensuring that the Commission should be able to exercise in all zones the authority which was assigned to it by the Council of Foreign Ministers, requests the Supreme Economic Council to ask the Council of Foreign Ministers to take such steps as are judged expedient for this purpose.

May 16, 1919.

Appendix 144

Extracts From the Minutes of the Finance Section Regarding the Deposit of German Gold in Payment of Foodstuffs

Mr. Davis stated that the Germans had notified him that 200,000,000 marks in gold would be ready for departure on the 16th May.

It was agreed to confirm in writing to the German Finance Commission at Versailles that this gold should be deposited with the Netherlands banks at Amsterdam.

M. Celier said that he understood that this gold had been divided between the United States and Great Britain in the proportions of 9 to 1.

M. Celier thought that it would be an advantage if a definite rule could be established for the partition of such gold deposits so as to insure that all the interested Governments were equally covered in relation to their commitments on account of food.

The original theory had been that Germany would be required to put up finance as soon as the Allies were effectively involved in expenditure; that is to say, as soon as the foodstuffs were collected for loading. This rule, on account of the dilatoriness of the Germans, had not been adhered to, but no alternative rule had been framed to take its place. France had already delivered 2,000,000 fr. worth of palm kernels, 11,000,000 fr. worth would shortly arrive, 6,000,000 fr. had been spent on the left bank of the Rhine, and further contracts had already been entered into for more than 87,000,000 fr., yet no portion of the gold deposited by Germany had been apportioned to France.

Mr. Davis said that he was in entire accord with M. Celier as to the desirability of establishing a general rule, but that in practice this had been found to be impossible. If M. Celier had been at the joint meeting of the Finance and Food Sections he would realise what large risks both the United States and the British Governments were taking in the matter. Neither of those Governments were covered even to the end of May, whereas the French Government was in the position of being committed to an expenditure of 27,500,000 fr. until the end of May, and of having a claim pending against them by the Germans for 60,000,000 fr.

It was agreed that the French Government should certainly be covered in the same proportion as the other Governments, but that it was impossible to do this until the French Government furnished the Finance Section with a full statement of their account with Germany. Even then it would not be possible to fix a date up to which all Governments were covered at any time, seeing that on account of the longer voyage the risk of American supplies was greater, so that a kind of balance would have to be struck and future deliveries taken into account.

Appendix 145

Extracts From the Minutes of the Finance Section Regarding the Finance of Coal Supplies to Italy

Professor Attolico said that shipments of French coal to Italy had now been restarted, and that France required Italy to pay for this coal in sterling on the ground that the more coal France sends to Italy the more she must buy in the United Kingdom. Professor Attolico contested this point of view on three grounds:—

1. As a matter of fact the resumption of supplies to Italy has happened at the very time when France is reducing her British imports, and there has consequently not been any additional expense incurred by France for coal purchases in England.

2. During the war the British market was the only market on which the French could draw for coal. The position is now different: France has three markets—the United Kingdom, Belgium, and Germany. There is therefore no longer any reason for assuming that what may be called the marginal coal of France is always necessarily British coal.

3. During the period of the Armistice the Saar coal is German coal, and Italy has a right to claim a share of the financial advantages which result from a privilege accorded by the Armistice to France.

M. Celier replied that until February 1918 the coal supplied by France to Italy had by agreement to be paid for in sterling. In point of fact nothing was ever paid for in any form of currency, but in February 1918 a new arrangement was made by which Italy replaced in the French channel ports coal from England to an amount equivalent of the exports to Italy from the mines in the south of France.

This arrangement was in operation until last autumn. The position is now that Italy holds large stocks of coal in England which, for lack of transport, cannot be made available in Italy, hence the necessity of French supplies; but since Italy objects to paying for these supplies in sterling and yet possesses quantities of coal in England, why not revert to the arrangement under which repayment to France was made in kind by British coal being put at French disposal in channel ports.

As to the arguments advanced by M. Attolico, M. Celier replied that the necessity of exporting coal to Italy deprived France of the possibility of making an equivalent economy in British imports, and that therefore, even if these imports were being reduced, it was fair that Italy should pay in sterling, seeing that but for the 5,000 tons a day sent to Italy the demands of France on Great Britain could have been reduced by the same amount and no less. France was still importing about 1,000,000 tons a month from Great Britain and was receiving practically nothing from the Saar for herself, and only about 100,000 tons a month from Belgium. The United Kingdom is therefore still to all intents and purposes the only market upon which France can draw. In any case less than four-fifths of the actual coal sent to Italy came from the Saar Basin. In regard to the Italian claim to be allowed to share in the advantages of the occupation of the Saar Basin during the Armistice, M. Celier said that this was a new claim which raised wide political issues, and should be immediately submitted to higher authorities. The ground on which the Supreme Economic Council had asked the French Government to assist Italy with coal supplies was not that Italy had any claim to the Saar coal as a matter of right. M. Loucheur had agreed to help Italy with French coal as a matter of friendliness and goodwill, and if the question were now put upon entirely new and political grounds, M. Loucheur would probably feel it necessary to withdraw his [offer] until the Italian claims had been considered and determined by higher authorities.

Professor Attolico said that it was not correct to say that the Supreme Economic Council considered the Italian needs of coal without reference to the fact that France had now at her disposal extra coal in the Saar Basin which during the period of the Armistice remained German coal. Nor was the Italian proposal put forward on political grounds; it was purely a technical proposal which amounted to a claim that the coal supplied to Italy by France should not be considered as having been drawn entirely from the more expensive source in England.

M. Celier said that France considered all the Saar coal as entirely at her disposal. He could not agree to look upon Saar coal as German, seeing that France had paid for it by paying for the labour and the transport, feeding, and clothing the miners, and undertaking all the administrative expenses of the district.

Colonel Theunis thought the most that the Italians could ask for would be that they should be considered as receiving the same proportion of British and Saar coal as the French actually received, and this in effect would result in no alteration of the present arrangements.

Mr. Davis thought that if the quantity of coal received from England by Italy were x and by France y, then Italy should be considered as receiving x over y of the Saar coal.

Mr. Keynes drafted a resolution which was accepted by the British, American, and Italian representatives for submission to the Supreme Economic Council in the following terms:—

“That, during the Armistice period the coal received by Italy from France should be regarded from the point of view of payment as a partial set-off against the coal received by France from the Saar, and payment for it should correspond in form and amount to the payments made by France for the Saar coal.

“It is recommended that the proportion of Saar coal to be allotted to Italy shall bear the same relation to the portion kept by France as the total amount of coal received by Italy from England bears to the total amount of coal received by France from England.”

The French and Belgian representatives were unable to accept this resolution, but agreed that the political aspects of the Italian claim should be referred to the Supreme Economic Council for decision.

Appendix 146

Report From the Coal Committee on the Supply of Coal to Italy

Supplies from France.—The amount of 6,500 tons per day, which it was hoped to supply to Italy from France and from the Saar, was not reached. The shipment of 5,000 tons per day, which was reached for a short time, has not been maintained. It is now stated that the shipment of the present quantity of 2,000 tons per day must be discontinued forthwith. Italy will thus be receiving no coal from France or from the Saar.

The following figures represent the French shipments of [to] Italy during March, April, and May:—

Coal Shipments to Italy From France

French Shipments to Italy	March 1919	April 1919	May 1,1919 (up to 14th)
	Tons	Tons	Tons
French coal	13,683	23,494	10,189
Saar coal	4,586	30,561	25,726
Monthly total	18,269	54,055	35,915
Grand total	108,239

Situation in France

The present position is attributed to the decrease in the production of the French mines as compared with 1918. It has also been attributed to a decrease in the shipments to France from Great Britain, but this appears to be due to a misapprehension since the figures, which have now been received, show that British shipments to France for French use have increased instead of decreased.

The following figures represent the production of the French mines in 1918 as compared with the production in 1919 plus the amounts received from Belgium and from the Saar:—

Comparison of the Production of French Mines in the First Four Months of the Years 1918 and 1919

	French Mines		Saar and Belgium	Grand Total	Deficit in 1918 [1919?]
	1918	1919	1919	1919
	Tons	Tons	Tons	Tons	Tons
January	2,244,000	1,893,042	137,939	2,030,981	213,019
February	2,093,339	1,679,825	144,205	1,824,030	269,309
March	2,303,343	1,517,690	193,906	1,711,596	591,747
April	1,945,609	1,299,462	171,093	1,470,555	475,054

It will be seen that the production of the French mines in March and April 1919 was 1,431,800 tons less than that in March and April 1918.

Figures for the exports from France and the Saar to Switzerland have not yet been received.

The result of this situation is that the gas works of Paris are stated to have only one or two days’ stock, the Lyons gas works only two or three days’, whilst the Est railways have only four or five days’ stock.

Shipments From Great Britain

(a) To France.—The shipments from Great Britain to France solely for French use (i.e., excluding shipments for British and American armies, &c., in France) have been as follows:—

	Tons
February	1,067,000
March	1,112,000
April	1,109,000
May, first thirteen days	697,000

It will be seen therefore that supplies to France have materially increased during May.

(b) To Italy.—The shipments from Great Britain to Italy have been as follows:—

	Tons
April (about)	350,000
1st to 13th May	233,000

It will be seen that there has been a very large increase in the shipments during May.

Conclusions

It appears therefore that unless some alternative arrangement can be made at once the entire burden of the supply of coal to Italy will now fall upon Great Britain.

Two proposals are under consideration—

(a) To send British coal to Blaye for French use on the understanding that Italy will pay for this coal, and France will undertake to send at once to Italy shipments corresponding in quality and in quantity.

(b) To arrange for a larger share of the coal from the Saar to be sent to Italy.

Appendix 147

Extracts From Minutes of Raw Materials Section Regarding the Supply of Coal to Serbia

Resolution:—

“The Raw Materials Section considered a report made by the Sub-Committee on Supply of Raw Materials, &c., relative to the Serbian coal requirements. It was decided that Serbia should be given immediate relief as regards coal as soon as there was a satisfactory settlement of the Banat food surplus question. That this resolution should be submitted to the Supreme Economic Council and to the Food Section for information.”

Appendix 148

May 15, 1919.

[Report From the Director General of Relief (Hoover) Regarding Relief Operations in Europe During April]

The Supreme Economic Council.

Gentlemen: The following relief measures were effected in combat of famine in various parts of Europe during the month of April.

The overseas supplies distributed were as follows:—

(Metric Tons)

Country	Bread-stuffs	Beans and Peas	Rice	Meats and Fats	Milk	Clothing	Potatoes	Miscellaneous	Total
Finland	26,477			386	220			173	27,256
Poland	33,495	2,377			826	607		678	37,983
Esthonia	4,000	200		200					4,400
Lithuania	2,000			85	77				2,162
Latvia	2,000			85	77				2,162
Belgium	106,048			20,476	61	155		2,253	128,993
Northern France				1,373	747	87		1,195	3,402
Germany	90,777	9,914	6,174	19,884			50,809	1,188	182,847
German-Austria	45,381	2,845	6,200	14,670	693		4,800	10,660	85,249
Tchecho-Slovakia	58,200			5,423	464				64,087
Greater Serbia	15,613			227					15,840
Roumania	22,220	268		2,959	960				26,407
Armenia and Turkey	3,953								3,953
Bulgaria	7,049								7,049
Total	417,412	15,612	12,382	66,509	7,930	242	55,609	16,147	591,843

These supplies represent the cargoes of about 120 steamers.

The total delivered value was approximately 147,800,000 dollars; the great bulk outside of Germany was furnished on deferred payments with probabilities of reimbursement dependent upon ultimate recovery of Europe.

In addition to the above, approximately 100,000 tons of foodstuffs of European origin were moved into areas of short supplies through the various agencies of the Relief Administration.

The total overseas supplies distributed (excluding 200,462 tons port stocks) from the 1st December to the 1st May, to the above countries were as follows:—

Breadstuffs	1,030,497
Rice	46,800
Peas and Beans	19,827
Fats and Meats	98,139
Condensed Milk	18,354
Potatoes
Miscellaneous	49,763
Clothing	7,332

The total value being approximately 325,314,000 dollars.

Port stocks on the 30th April were as follows:—

	April 30th	March 30th	Increase or Decrease
Breadstuffs	96,114	144,786	–48,672
Beans and Peas	9,081	4,433	+5,248
Rice	17,136	6,406	+10,730
Meats and Fats	41,178	38,303	+2,875
Condensed Milk	15,678	2,905	+12,773
Miscellaneous	16,607	7,530	+9,077
Clothing	4,068	1,664	+2,404
Total	200,462	206,027	–5,565

Transportation.—The arrangements, made under the authority of the Council for indirect control of the railways in the old Austrian Empire by the Director-General and the Communications Section, have very greatly improved the movement of foodstuffs in that quarter during the month, the movement having on average more than doubled.

The arrangements made for transport of supplies to Tchecho-Slovakia from Hamburg via the Elbe instead of from Trieste have been completed during the month, and practically the entire supplies to this area are now moving by the river, much to the relief of the railway situation.

Tonnage necessities have again proved the limiting factor in food distribution, and have been far below actual need.

Coal.—The great decrease in coal production throughout the Eastern and Southern Europe has reduced supplies to a point so acute as to threaten not only railway movement but also the most essential life services. The Council during the month authorised the Director-General and the Communications Section to undertake the provision of some essential materials, and with the stimulation of production, through the better feeding of coal miners and better distribution, it is hoped that this situation can be somewhat ameliorated.

Communications.—Arrangements have been perfected during the month for independent telegraph and wireless service between all of the principal capitals under direct control of operators employed by the Relief Administration.

Special Feeding of Under-Nourished Children.—This division has made most gratifying progress. National Committees, comprising principally women and physicians, have been established in all of the liberated countries and in German Austria. Sub-Committees have been created over the larger part of these areas. The work has been taken up with great enthusiasm and the Committees are receiving a large measure of local financial support. The equipment has been provided locally and the special foodstuffs necessary are in regular distribution through the Relief Administration. At the end of April 2,085,000 under-nourished children were receiving special rations, and the total cost of local and foreign services is estimated at about 5,000,000 dollars per month.

General Food Situation.—While under-nourishment exists in several localities, leading to high mortality through non-resistance to disease, there was no acute starvation during the month, except in Armenia, certain sections of the Carpathians, and Bolshevik Russia. Armenia is solely a problem of internal transportation, and every human effort is being made to overcome the difficulties. The Carpathians are as yet inaccessible. The situation in the Baltic States, outside the Bolshevik areas, which was last month of so acute a character, is being rapidly improved.

Herbert Hoover

Appendix 149

Draft Report by [Committee of] Council of Five Respecting Maintenance of Order in the Baltic

At a meeting of the Council of Foreign Ministers, held on the 9th May, 1919, it was agreed:⁸

“That a Committee consisting of all American, British, French, and Italian economic, naval, and military representatives, should be appointed to report on the best means of keeping and maintaining order in the Baltic States, and of revictualling the population.”

The Committee met on the 14th May at the Ministry of Commerce.

The Committee were of opinion—

(a) That the maintenance of order was a necessary condition of the distribution of foodstuffs in the Baltic Provinces.

(b) That the present position in Lithuania and Latvia, by which the maintenance of order was entirely in the hands of the German forces, was extremely unsatisfactory and should in any case not continue long.

(c) That as the despatch of Allied troops to the Baltic Provinces was out of the question, the only alternative was the organisation of such native forces and volunteers from outside as might be obtainable.

They therefore decided, after thoroughly discussing the whole question in its different aspects, to submit to the Council of Foreign Ministers the following recommendations:

1. In accordance with Article 12 of the Armistice the Germans will be required to withdraw from Latvia and Lithuania as soon as they can be replaced by local organised forces, but must remain where they are until orders are issued. The organisation of local forces should be carried out with the least possible delay.

2. A competent Military Mission under British Command to be organised under a Lieutenant or Major-General with headquarters at Libau or Reval, for the purpose of advising the Governments of Esthonia, Latvia, and Lithuania on questions of organisation, equipment and training of all local forces and such volunteer forces as may be raised from external sources, the Mission to be appointed for the purpose of advising the Governments aforesaid on the best means of defence against the Bolsheviks and for the exclusion of the Germans from their territories.

3. Volunteer forces mentioned in (2) to be raised by voluntary recruitment in the Scandinavian States, including Finland.

4. A credit of 10,000,000l. to be placed at the disposal of the Baltic States by the Allied and Associated Governments, and to be applied as required under the arrangements of the political and military missions.

5. Food supplies, equipment, clothing, arms, munitions, &c., to be supplied by the Allied and Associated Powers, the cost being defrayed from the credit referred to in paragraph 4.

6. It will be the duty of the political and economic missions to see what collateral securities can be obtained from the three Baltic States to cover the credit referred to in paragraph 4 wholly or in part.

May 13, 1919.

Appendix 150

[Resolution From the Shipping Section Regarding the] Work and Organisation of the Shipping Section

The Memorandum (136 [138])⁹ prepared by the British Delegates, suggesting that the Shipping Committee in Paris should cease to function and that its work should be transferred to the Transport Executive in London submitted to the Supreme Economic Council and referred to the Shipping Committee for consideration, was considered by the Shipping Committee at the meeting held on the 14th May, and the following resolution passed unanimously:—

“That we recommend that the Shipping Committee of the Supreme Economic Council be abolished and that the body responsible for dealing with all shipping questions connected with the Supreme Economic Council should be the Transport Executive in London; that nevertheless it is essential that there should be resident in Paris a permanent adviser on shipping questions to the Supreme Economic Council in liaison with the Council and the Transport Executive to whom the Council could apply when urgent shipping matters arise in connection with negotiations now proceeding; and that the Shipping Committee recommend that the Council request the British representatives to appoint Mr. Lodge to act in this capacity.”

Appendix 151

May 15, 1919.

[Report to the Supreme Economic Council by the Sub-Committee on] Shipping in the Adriatic

Sir: I was advised, under date of the 24th April, 1919, of the appointment by the Supreme Economic Council of a Sub-Committee, composed of Captain Hardy (United Kingdom), M. Vignon (France), Commendatore B. Attolico (Italy), and myself (United States of America), as Chairman, which Sub-Committee was charged with the consideration of certain representations of the Yugo-Slavs relative to Austro-Hungarian shipping in the Adriatic.

The Sub-Committee has held four meetings, has had oral and written communication with representatives of the Yugo-Slavs, and the different members of the Committee have, through their respective governmental agencies, investigated shipping conditions in the Adriatic as affecting the Yugo-Slavs.

I now have the honour, on behalf of the Committee, to report as follows:—

The original representations of the Yugo-Slavs dealt with three aspects of the situation, namely:—

1. The detrimental effect of the blockade of the Adriatic coast by the Italians.

2. The beneficial interest, through stock ownership, of Yugo-Slavs in ships of Austro-Hungarian flag and registry, which interest, it was claimed, should lead to a substantial tonnage of these ships being definitely attributed to Yugo-Slavia.

3. The need of remedial measures to ensure an increased utilisation of ships (seagoing and coastwise) for meeting the immediate economic needs of the Yugo-Slavs.

Prior to the appointment of our Committee, the blockade of the Adriatic coast, published by the Italians, was cancelled, thereby giving relief under the first point.

With regard to the second point, the Committee considered that it had no jurisdiction to determine or to make recommendations as to the permanent allocation of ships of Austro-Hungarian flag and registry. This the Committee regarded as the task of the Peace Conference. The Committee being aware that this question was already being considered by the Conference, Mr. Pachitch was informally advised in a letter, a copy of which is attached, to present his claims in this respect to the Peace Conference.

With regard to the third point, investigations, conducted independently by the representatives of Great Britain, Italy, and the United States, concurred in indicating that, from the point of view of the immediate utilisation of tonnage, conditions are as satisfactory as could be expected, given the continuance of a state of war with Austria-Hungary. In particular, coastwise shipping appears generally to be in movement in useful trade along the Dalmatian and Istrian coast. It is to be noted, however, that the action of the Allied Maritime Transport Council, taken at its sessions of the lst–11th February, 1919, to the effect that Austrian vessels under 200 tons gross shall be used as determined locally by the Italian Government, does not appear to have become fully operative, and the Committee is of the opinion that the present situation should not be disturbed by an effort to give full and literal effect to this decision.

That the present situation is, from an immediate economic aspect, relatively satisfactory is confirmed by the fact that representatives of the Yugo-Slavs, although invited to do so, have failed to specify any concrete and detailed remedial measure which they regard as immediately desirable.

In view of the foregoing, the Committee does not feel that any action is required of the Supreme Economic Council in respect of the matters presented by the Yugo-Slavs above referred to.

Respectfully submitted,

John Foster Dulles

Chairman

To the Secretary,
Supreme Economic Council, Paris.

[Enclosure]

May 12, 1919.

My Dear Sir: I have the honour to acknowledge receipt of your communication of the 3rd May, 1919, which has to-day been considered by the Special Committee of the Supreme Economic Council of which I am Chairman.

The Committee regrets that misunderstanding has existed as to the jurisdiction of the Committee in so far as relates to claims for the merchant fleet of the former Austro-Hungarian Empire. As explained to Messrs. Cingrija and Banaz on the 30th April, this is a question which, in our opinion, should be presented directly to the Peace Conference, and the Committee takes the liberty of informally suggesting to you that your claims in this respect should at once be presented to the Peace Conference, as the Committee is not aware of any group of experts which have been charged to study this question, but is, on the contrary, informed that claims of a character similar to your own have been presented directly to the Supreme Council of the Peace Conference, which may now be considering them.

With respect to the matter of the immediate utilisation of ships of Austro-Hungarian registry, the Committee is reporting to the Supreme Economic Council, which, after acting upon our report, will doubtless communicate with you.

I am, &c.

John Foster Dulles

His Excellency Hon. N. P. Pachitch,
Hôtel Beausite, Rue de Presbourg, Paris.

Appendix No. 152A

Paris, May 16, 1919.

[Letter From the Director General, League of Red Cross Societies (Henderson), to] Miss Gertrude C. Dixon, British Council Officer, Supreme Economic Council

Madame: In reply to your letter of the 13th May, on the subject of the spread of epidemic diseases, especially typhus, in Southern and Eastern Europe, inquiring to what extent the League of Red Cross Societies could co-operate in alleviating the distress and suffering, and in preventing the spread of disease in these countries, I beg to inform you that, since its formation, the League has been seriously considering these questions.

I would draw your attention to the attached copy of the identic telegram of the 11th April, sent to M. Georges Clemenceau, Mr. Woodrow Wilson, Mr. Lloyd George, and Signor Orlando,¹⁰ in which it is stated that “the assistance (in relation to the control of typhus fever) must be rendered on a colossal scale, and only the great Governments of the world have the resources to meet the demands”; and, further, that “to undertake the task proposed under conditions existing to-day would, of course, require assignment from the armies of doctors, nurses and other necessary personnel, together with provision of special food, medical and other supplies, which we understand are actually available. Should you desire to have the Committee of Red Cross Societies undertake this task, placing under its control the personnel, and furnishing the transportation, supplies and foods necessary for the success of the undertaking, we are prepared promptly to assume the responsibility.”

I invite your attention also to the attached copy of the memorandum addressed by the League to the Supreme Economic Council on the 8th May,¹¹ in which is stated the preparedness and disposition of the League to mobilise the energies and resources of the respective Red Cross Societies to assist in this task.

It is understood that there are now in France the professional personnel, medical stores, hospitals, motor transports, and surplus supplies of food and clothing belonging to the Allied armies, which form the necessary equipment for the work contemplated.

If, as is more fully indicated in the attached telegram and memorandum, the sufficiency of these necessaries, otherwise unobtainable, can be made available for the purposes of the emergency, and their free transportation in bulk to the affected countries be arranged, the League will be able to co-ordinate the resources of its constituent members, to administer all the resources at its command for the best advantage of the suffering populations, and with the assurances of authorisation by the Governments of the affected countries, to carry out the necessary measures to prevent the spread of the disease.

The problem appears to be one which can best be attacked by combining governmental and voluntary effort. The task is so great, and requires such specialised personnel and supplies, as to be beyond the power of any agency, without the support of the Governments which control the available equipment and hold the necessary authority. But, with the assistance now proposed, the League is prepared to call upon its constituent members, the Red Cross Societies, with their present and potential resources, to provide additional workers and funds, so that the assumed responsibility of the League in its agreed sphere may be carried out with efficiency and satisfaction.

Moreover, the League will undertake to encourage and assist the Red Cross Societies of the countries in which it operates to develop their own resources and methods for dealing with the aftermath of their present problems and for meeting their problems of the future.

Should these proposals meet with your approval, details of the scheme of operations and schedules of the necessary personnel, supplies and other equipment can be promptly furnished.

As the matter is urgent, an early expression of the views of the Supreme Council will be welcomed.

Very truly yours,

D. Henderson

Appendix 152B

(Intercan 5772)

Cannes, April 11, 1919.

Telegram (From the League of Red Gross Societies] to Mr. Georges Clemenceau (Chairman), Hon. Woodrow Wilson, Hon. Lloyd George, Signor Orlando, Inter-Allied Peace Conference, Quai l’Orsay, Paris

We desire to bring to your attention the following minute which has been adopted by the distinguished scientists now sitting in conference at Cannes:—

“The conference of physicians, nurses, and others from France, Great Britain, Italy, United States, and Japan, called by the Committee of Red Cross Societies, and consisting of representative persons engaged in public health and child welfare work, and in the control of tuberculosis, malaria, and the venereal diseases in these countries is now in session in Cannes.

“The Conference was called to assist in the formulation of programmes of work which the Associated Red Cross Societies of the world may wisely undertake in times of peace to improve the health and to contribute to the betterment of the peoples of the world.

“Another disaster, which may prove of the greatest magnitude unless efficient measures for its control are immediately taken by the Allied Governments, has suddenly been brought to its attention.

“Information has reached the Conference through the representatives of the American Red Cross of the wide and very rapid extension of typhus fever in Central Europe. The region now known to be directly involved extends practically from the Baltic to the Black Sea, and to the Adriatic, and includes Poland, Ukraine, Serbia, Roumania, Macedonia, and the northern shore of the Black Sea.

“From our previous knowledge of this disease and the conditions known to exist in Russia, Bulgaria, and other parts of Central Europe, it may be fairly assumed that the area actually the seat of prevalence is probably much wider, foci of disease having already appeared much farther west, notably in Vienna, Rotterdam, and Marseilles.

“In three of the areas referred to above it has been estimated that 275,000 cases of the disease now exist. The accuracy of these estimates requires confirmation. Some of the countries now afflicted by this new disease had already been devastated by four years of war, and suffered conditions of severe deprivation, due to hunger, cold, and hardship, followed by an epidemic of influenza. In their turn came revolution and disorder, and almost anarchy. Now comes disease and pestilence. The situation cannot be viewed with less than the gravest concern.

“But history has often shown how terrible the ravages of this disease may become after war and when famine conditions prevail. If a large proportion of the population affected are to survive this last and possibly greatest disaster, assistance must be rendered them on a colossal scale, and only the great Governments of the world have the resources to meet the demands.

“The Committee of Red Cross Societies of the Allied Nations is, in our opinion, the natural and at present only agency available to undertake this work if the required resources are placed at its disposal and it is invested with proper powers.

“On behalf of humanity, we should appeal to the representatives of the Allied Governments, now assembled in Paris, to give this subject immediate consideration, and to make available the necessary resources to carry on the work.

“We regard the situation as so serious that we advise that the Committee of Red Cross Societies should immediately send an international commission of experts to initiate measures to deal with a large number of typhus cases now known positively to exist; to take all possible steps to restrict the further spread of the menace; and to direct the actual disposition which shall be made of the personnel and supplies which may later be made available. We are all of the opinion that prompt action in this matter should not alone relieve widespread suffering but contribute immeasurably toward safeguarding the health and peace of the world.”

We respectfully refer the foregoing for your consideration. The Committee of Red Cross Societies fortunately finds itself in a position immediately to undertake the task suggested. Participating in our conference here are several of the foremost authorities of the world on infectious diseases, two of them, Richard P. Strong of the United States of America and Dr. Castellani of Italy, having taken a leading part in stopping epidemic of typhus in Serbia in 1915. To undertake the task proposed under conditions existing today would, of course, require assignment from the armies of doctors, nurses, and other necessary personnel, together with provision of special food, medical and other supplies, which we understand are actually available.

Should you desire to have the Committee of Red Cross Societies undertake this task, placing under its control the personnel and furnishing the transportation, supplies and funds necessary for the success of the undertaking, we are prepared promptly to assume the responsibility.

Committee of Red Cross Societies:

H. P. Davison

, Chairman.

Appendix 152C

Memorandum Presented [to the Supreme Economic Council] by the League of Red Cross Societies

The League of Red Cross Societies, which has just completed its formal organisation, being possessed of information which it believes to be authentic, feels the responsibility of submitting the information to the attention of the Supreme Economic Council for their consideration.

1. The present state of many millions of peoples in Eastern Europe is such as to command, not merely the sympathy, but the active assistance of the Allied Powers. The conditions which have prevailed during the past four years in such regions as Serbia, Poland, Rou-mania, Montenegro, Lithuania and other places have, besides accounting for the death of large numbers of people, reduced the vitality of vast populations so as to leave them slight power of resistance. It is generally known that starvation and disease have ravaged these regions. It is not generally known that the distress at this moment is so appalling as to constitute the darkest picture of widespread human misery offered to mankind over a period of at least 300 years. This is not the place to catalogue in detail the causes and effects which are involved. It is perhaps sufficient to say that by reason of the long and continuous dislocation and suspension of the normal forces of production and distribution, the need of these unfortunate peoples is today dire and extreme. In these countries over which the tide of war has swept back and forth for several years, typhus, small-pox and other scourges have recently appeared. The inhabitants lack nearly everything required to maintain life for any considerable length of time, under these conditions. Babies and children are perishing miserably in large numbers each day. The aged and infirm and the sick cannot be expected long to survive without immediate help. There are more than 100,000 cases of typhus in Eastern Poland alone. Roumania is not only carrying on active warfare on her borders, but is fighting want, small-pox, and typhus throughout the land. In the Kuban there are at least 300,000 refugees without the ordinary necessities, and wounded men from the army, maintaining the front north of the Kuban district, are being operated upon without the use of anæsthetics whenever it is possible to operate at all.

The facts are well authenticated, and in many cases have been carefully investigated and corroborated. Specific instances of deep and wide distress may be multiplied almost indefinitely. From the records and files of the American Red Cross at its Paris headquarters, a bill of particulars can easily be compiled to justify the sweeping generalisations above laid down. A relief problem of unparalleled magnitude is here presented.

2. The fundamental needs are food, clothing, and medical and hospital supplies. Food, for the present, has been and is being in many places supplied. The distribution of food under Allied direction is an impressive demonstration of efficiency in a great emergency. This effort has until now really saved the situation. The “ravitaillement” program has been unqualifiedly successful. Whether it will later have to be repeated will depend upon the forthcoming harvests in the affected areas. Our observation, however, is that the critical need, after food, is medical and hospital care and service, and unless the governmental effort toward “ravitaillement” can be expanded to include the other service, the crisis will continue to be acute. In order to cover the field, as we have suggested, the Allied Governments would have to develop a further and somewhat different organisation from that which has been thus provided. Lack of clothing is almost everywhere reported. The measures now being taken cannot possibly meet the need fully. Medical and hospital supplies of all kinds are practically nonexistent in Central and Eastern Europe. It is quite impossible to exaggerate the importance in this emergency of the classes of supplies just mentioned. The amount of human life dependent upon efficient and prompt action at this time is difficult to estimate, but we are convinced that the figure runs well into the hundreds of thousands. Many conscientious investigators would say millions.

3. It so happens that the various supplies most needed to relieve the suffering in Central Europe are to be found in France. The Allied armies at the time of the Armistice had accumulated in this country vast stores of food, clothing, and medical and hospital supplies. These materials are no longer required for military uses, and are being disposed of by the armies and Governments through their respective liquidating boards. For obvious reasons supplies in such quantities cannot be marketed in the usual way. The liquidators work under strict limitations, and at best can hope to realise only a small percentage of the true value.

4. The thought which must be in the minds of all who are conversant with the general state of affairs is that these resources, accumulated for war purposes, should now be used to relieve the distress created by the war. This is a measure so manifestly appropriate and necessary as to call for no apology or explanation. We are all of us concerned only with the form which the transaction should take.

The Red Cross Societies of the various nations are in a peculiarly helpless position. The world places upon them a very large measure of responsibility in this situation. The sufferers to-day are looking to these organisations, as well as to Governments, for the help which they must have. The relief problem, however, presents itself on so gigantic a scale that the resources of the Red Cross Societies are pitifully inadequate to meet the demands which are being made upon them. Take, for example, the American Red Cross. During the past few months it has been meeting its responsibilities as best it can with the limited funds and supplies at its disposal. Since the beginning of this year it has placed an organisation of more than 1,000 workers in the Balkan States. It has sent 150 workers to Poland, 150 into Germany (to care for Russian prisoners of war), a small group to Tchecho-Slovakia, and is responding to urgent and pathetic appeals from Esthonia, Lithuania, and the Kuban. The effort of the American Red Cross must soon terminate unless its hands are strengthened. It is, of course, appreciated that the Red Cross Societies are dependent upon voluntary popular subscriptions in their respective countries. Requests for funds have to be carefully presented at opportune times. It is not feasible for any of the Red Cross Societies to replenish their funds during the next few months. The consequence is that for the agencies upon which the responsibility for administering relief now rests, the way to the acquisition of the supplies through the avenue of purchase is closed.

5. The League of Red Cross Societies therefore respectfully suggests to the Supreme Economic Council, that in the interest of peace and humanity, such steps as may be necessary be taken to make the surplus army stores of the Allied nations available for carrying on such work as the American Red Cross and other similar organisations have already begun. It is our profound conviction, based upon the most attentive consideration of the question, that in no other way can the proper results be attained. Such relief as is called for in this situation has never been, nor do we believe can it be, effectively rendered by and through governmental distribution.

Any plan for turning over the supplies should include the mobilisation of other governmental assets, such as transport facilities. The transportation difficulties in Europe to-day are well-nigh insurmountable where large operations are involved, unless governmental aid can be obtained.

With the data now before us, and with a deep and sincere sense of responsibility, we have deemed it our duty to bring the foregoing considerations to your attention. If, upon consideration, the Allied Governments should deem it necessary to call upon the League of Red Cross Societies to undertake the programme of relief, and should place at its disposal supplies and transportation necessary, the League will immediately give the matter its consideration with the hope and expectation that a way can be found for the League to undertake the work on such a comprehensive plan as must be involved.

Appendix 153

[Report From the British Delegates Concerning] Health Conditions in Southern and Eastern Europe

I discussed on Saturday, the 17th inst., with Sir David Henderson, Director-General of the League of Red Cross Societies, his letter dated 16th May,¹² and we arrived at the following conclusions:—

1. The degree of assistance which could be rendered by the League of Red Cross Societies primarily depends upon the degree of financial assistance which the Allied and Associated Governments can provide towards the purchase of medical and other supplies and the transportation of them.

2. In the event of the Allied and Associated Governments being prepared, either through credits granted to the countries to be relieved or otherwise, to place at the disposal of the League of Red Cross Societies even a moderate percentage of the surplus medical stores, hospitals, motor transport, &c., now under their control, the League of Red Cross Societies anticipate that they would be able to provide and maintain out of their own resources units which would at any rate limit the spread of typhus and other epidemics. Sir David Henderson stated that there were already about 1,000 Red Cross workers, without counting local Red Cross workers, engaged in Eastern Europe, and that if the contemplated scheme were put into operation these numbers would naturally be largely increased. This was as far as he could go at the moment. He anticipated being able to obtain the best scientific assistance in preventing the spread of epidemic diseases.

3. Assuming that the League of Red Cross Societies would have the advantage of assuring their respective nationals and subscribers that voluntary contributions would not be dissipated in the purchase of supplies otherwise indisposable by the various Governments, Sir David Henderson was of the opinion that in most of the countries constituting the League appreciable financial support would be forthcoming.

4. Without having the opportunity of discussing the matter with either of our respective authorities, Sir David Henderson and I agree that probably the simplest method of working this plan would be for the League of Red Cross Societies to appoint a representative who should be a member of the Food and Relief Section of the Supreme Economic Council, and that in each of the countries where Inter-Allied Relief Missions exist a representative of the Red Cross League should be added to these missions, with power to direct such operations as would naturally fall within his scope. It is thoroughly understood that medical and sanitary operations can only be effectual by means of intimate co-operation on the spot with the administrative authorities of the various countries affected.

5. If the Supreme Economic Council approve in principle of some plan of this character and are prepared to inform the League of Red Cross Societies that they desire their co-operation on these lines, I gather that Sir David Henderson will be able to make immediate progress.

William Goode

May 17, 1919.

1. See CF–23, minute 1, vol. v, p. 813.
2. Ante, p. 263; see also CF–12, minute 2, vol. v, p. 599.
2. See CF–12, minutes 3 and 4, vol. v, p. 600.
3. See CF–12, minute 5, vol. v, p. 601.
4. Appendixes 141 to 153 are filed separately under Paris Peace Conf. 180.0501/34.
5. Minute 150, p. 248.
6. Ante, p. 262.
7. FM–7, minute 3, vol. iv, p. 600.
8. See FM–13, minute 5, vol. iv, p. 687.
9. Ante, p. 258.
10. Appendix 152B, infra.
11. Appendix 152C, p. 287.
12. See appendix 152A, p. 283.