Paris Peace Conf. 180.0501/7
Supreme Economic Council: Seventh Meeting Held at the Ministry of
Commerce [on 10th March, 1919, at 2:30 p.m.]
March 10,
1919, 2:30 p.m.
The Supreme Economic Council held its Seventh Meeting on 10th March 1919
at 2:30 p.m. under the Chairmanship of Lord Robert Cecil.
The Associated Governments were represented as follows:—
| Great Britain |
Lord Robert Cecil |
|
Sir Wm, Mitchell Thomson. |
| U. S. A. |
Mr. McCormick |
|
Mr. Hoover |
|
Mr. Norman Davis |
|
Mr. Baruch |
|
Mr. Robinson |
| France |
M. Clémentel |
|
M. Loucheur |
|
M. Boret |
| Italy |
Signor Crespi |
|
Signor Pirelli |
|
Professor Attolico |
34.
The amended Minutes of the 3rd and 4th Meetings and the Minutes of the
5th and 6th Meetings were approved.
35. The Italian Supply
Position.
With reference to Minutes 10 and 28 the Italian Delegates, submitting a
statement on the general situation (25) emphasized the very serious
deficiencies of the Italian supply in respect of shipping, coal and
foodstuffs and the need of immediate remedy. The British Delegates
explained the present difficulties regarding the labor situation and the
provision of shipping from the United Kingdom.
It was stated that the cessation of the supply of French coal to Italy
was due to the inland transport difficulties and had been with the
assent of the Governments concerned. The French Delegates undertook as
an emergency measure to cooperate to the fullest extent possible in
facilitating the supply of coal to Italy from the Saar Basin, as well as
from other sources, but they stated that the reduced imports of English
coal into France are at present creating the most serious situation in
France.
It was noted that, by Minute 28, the question of the Italian supply had
already been referred to the Shipping Section for consideration
[Page 57]
in connection with the general
questions of the use and the provision of tonnage, and it was agreed,
that the Shipping Section should consider the question at a meeting to
be held immediately.
It was further agreed that the Food Section should study the question of
the priority of needs, in terms of the tonnage required, and report to
the Council at its next meeting.
36. The French Supply
Position.
Upon the request of the French Delegates,
It was agreed that the question of the French supply position should be
considered at the same time and in the same manner as the Italian supply
position.
In connection with the matter of providing tonnage for the relief
programs, the American Delegates referred to a contract under which the
American Army is obligated to deliver a number of railroad wagons for
France. They inquired whether the French Government would not consent to
a postponement of the full delivery in order that the shipping might be
used for the carriage of food. The French Delegates undertook to
ascertain the views of their Government in this regard.
37. Report of Communications
Committee.
It was agreed,
- (a)
- upon the request of the French delegates, that the
determination of the division of responsibility as between the
Associated Powers of assisting the different countries referred
to in the note from the Communications Committee upon its
meetings of 4th and 5th of March 1919 (17),1 should be deferred
until the Council’s next meeting.
- (b)
- that the matter of the allocation and control of rolling stock
for relief purposes to operate over the railroads of the states
of the old Austria-Hungarian Empire, treated in Annex B to the
note of the eighth meeting of the Communications Committee (26),
should be arranged between the Director General of Relief and
the Communications Committee.
38. Supplies for Germany.
The instructions formulated by the Council of Ten at its meeting of March
8th (27) were submitted, and the outstanding questions respecting these
instructions were discussed.
It was agreed
- (I)
- That
- (a)
- the selection by the Associated Governments of the
German ships to be sent to sea,
- (b)
- the determination of the number of ships to be sent as
a condition precedent to the Associated Governments’
facilitating the balance of the month’s supply of food
stuffs, and
- (c)
- the amount of German shipping to be assigned to the
transport of food to Germany
- should be left to arrangement by the shipping delegates to the
coming conference at Brussels.
- (II)
- That when the German ships are delivered, conditional upon the
Germans performing the whole of their obligations under the
proposed agreement, the carriage of the German rations will be a
first charge upon their use.
- (III)
- That Clause 2 of Annex 1 to the Instructions should read—
“2. She may import up to 70,000 tons of fats (including
pork products, vegetable oils and condensed milk) and
300,000 tons of bread stuffs or other food monthly until
September 1st.”
- (IV)
- That at the coming conference each of the Associated
Governments shall have not more than three representatives who
will be given the utmost authority within the principles set
forth in the Instructions.
39. Re-opening of the Rhine to Swiss
Traffic With Holland, Scandinavia and Associated Countries.
It was agreed that the resolutions of the Blockade Section of 5th March
(28) should be adopted.
40. Organization.
It was agreed that, in order to permit of earlier circulation of the
minutes of the meetings of the Council to the various sections,
hereafter the meetings of the Council should be held on Monday at 10
a.m.
41. Finance of Supplies for
Bulgaria.
The American delegates submitted a communication from the American Chargé
d’Affaires at Sofia respecting the possibilities of finance for
Bulgaria’s relief supplies (29).
It was agreed that the communication should be referred to the Finance
Section.
Appendix 252
[Statement of the Italian Delegation
Regarding] Supply of Coal and Foodstuffs
to Italy
1. The Italian Delegation was in the expectation that the technical
side of the Italian situation would be examined by the Shipping
Section of the Supreme Economic Council.
[Page 59]
The following statements are attached hereto3 for the examination of the Council, if
desired:—
- (a)
- Blue Book, giving detailed situation of the tonnage under
Italian control on the 1st February, 1919.
- (b)
- Detailed statement as to the situation of the Italian
ports (diagrams for each port are available).
- (c)
- Latest statement as to the use of the Austrian steamers
allocated to Italy for management.
2. Whatever the arrangements for the future may be, the Italian
Delegation wishes to state that the present situation in Italy calls
for emergency measures, as proved by the following facts:—
(a) Coal.—The estimate
of coal shipments during March from Great Britain to Italy (on the
assumption that no coal strike occurs) amounted, on Friday last, to
about 340,000 tons. At the present date (10th March) the estimate
may be put down at under 400,000 tons, and this figure represents a
strenuous effort on the part of the Licensing Branch of the British
Ministry of Shipping. Assuming that another 50,000 tons of prompt
ships will turn up for March shipment (a very outside figure), the
maximum shipments during the whole of March may be estimated at
450,000 tons.
Italy’s war basis for coal imports was 600,000 tons (a programme
which was adopted after the invasion of a considerable tract of
Italian territory).
In consideration also of the fact that, during the months following
on the Armistice, Italy has received an average of 460,000 tons
only, her minimum requirements for March shipment cannot be put down
at less than 800,000 tons. An extra 350,000 tons must therefore be
provided, the only source of supply for which appears to be the
United States. Immediate measures to meet this need are
essential.
(b) Cereals.—Italy’s
cereal arrivals during March are estimated at 150,000 tons, her
total deficit from the beginning of the cereal year being about 25
per cent.; that is to say, 9 per cent, in excess of the French
deficit, and 30 per cent, in arrear of the British programme.
Extensive transit by rail being hampered by lack of coal, the inland
situation is still further aggravated. The Director-General of
Supplies in Italy states that he is already facing local shortage,
and that, unless the minor ports are properly fed, he cannot cope
with the situation. Fifty thousand tons of soft wheat (especially in
small-sized ships) is indicated as the additional quantity required
for March. During the last few days Italy has obtained from the
Wheat Executive all the nearest unallocated ships that were
available, but none of these will make March arrivals. It is
suggested that only the Food Section of the Supreme Economic Council
may have ships in the Mediterranean ready to fill the gap.
The Italian Delegation wished lastly to warn the Allies that
immediate precautionary measures in respect of Italy are needed so
as to face the eventuality of a strike in the British coal-mines.
Italy could
[Page 60]
not, in this
contingency, rely on any other source of supply than the United
States.
In this connection, it is pointed out that while tonnage under
Italian control engaged in the coal trade between the United Kingdom
and Italy would prove insufficient for the longer route, on the
other hand, the diversion of such tonnage to the United States could
not be effected in time to avoid the occurrence of the most fatal
gap in supplies. This is a very powerful argument in favour of the
immediate despatch of 350,000 tons of American coal, as suggested
under No. 2 (a).
Appendix 26
[Proposals of the Communications
Section for the Control of the Railway From the Adriatic to
Prague]
The Communications Section request that the decisions made by them on
Saturday, the 8th March, should be considered regarding the
formation of an Inter-Allied Commission (decision of the Council of
Ten of the 7th March4) to
control transports on the Adriatic at Prague.
This Commission will be under the presidency of the American
Representative, Lieutenant-Colonel W. R. Ryan, the executive staff
being American.
It is understood that, if necessary, the Commission will have the
control of the French transports destined for the Czecho-Slovakian
army on this route, besides the American transports for the
Czecho-Slovakian population, priority being given to military
transports.
(The Italian Representative has reserved his decision with regard to
the purely American composition of the executive staff of the
Commission.)
Appendix 27
Instructions From the Supreme War
Council5
- 1.
- Before entering into any discussion with the German
Representatives, the principal Representative of the Allied and
Associated Powers makes the following declaration:—
“On condition that Germany formally recognises and agrees
to carry out the obligations of Clause 8 or the
Armistice of the 16th January;
[Page 61]
‘In order to ensure the food supply of Germany
and the rest of Europe, the German Government will
take all necessary measures to put the whole
German merchant fleet, for the duration of the
Armistice, under the control and under the flags
of the Allied Powers and of the United States,
assisted by a German Delegate.
‘This agreement in no way prejudices the final
disposition of these ships. The Allies and the
United States may, if they consider it necessary,
replace the crews in part or in whole. The
officers and crews thus removed will be sent home
to Germany.
‘For the use of these ships, certain payment will
be made, which will be determined by the Allied
Governments.
‘All the details, as well as the exceptions to be
made with regard to the different categories of
ships, will be settled by a special convention,
which is to be concluded at once.’
“The Delegates of the Associated Governments are
authorised and charged to follow their instructions
regarding the revictualling of
Germany.”
- 2.
- After Germany has agreed to Clause 1, the principal
Representative of the Allied and Associated Powers is authorised
to make a communication to the German Representatives (on the
basis of the conditions fixed in Annex 1).
- 3.
- An admiral will be nominated by the British Government to act
as principal Representative of the Allied and Associated Powers
in these negotiations.
- 4.
- In order to avoid delay, the negotiations will take place at
Brussels.
The French Government has taken upon itself the responsibility of
making the necessary arrangements with the Belgian Government.
Marshal Foch has undertaken to send the necessary notice to the
German Delegates.
Annex 1
- 1.
- In the interest of humanity, the Associated Governments
reiterate their decision to deliver to Germany foodstuffs at
present available in Europe, for which payment has been
arranged, as soon as Germany shows her sincere intention to
carry out her obligations by sending to sea the vessels chosen
by the Associated Governments. The Associated Governments will
themselves provide (as soon as the transports are arranged) or
give the necessary permits to import from the neutral countries
adjoining Germany the balance of the quantity agreed upon for
the month, i. e., the 270,000 tons, as soon as . . . . ships
(minimum) have sailed, as mentioned above, and as soon as the
means of payment for such food have been arranged.
- 2.
- She may import monthly up to 300,000 tons of bread cereals and
70,000 tons of fats up to the 1st September.
- 3.
- She must pay for this food and may pay in any of the following
ways:—
[Page 62]
- (a)
- By the hire of ships.
- (b)
- By the export of commodities and the sale of cargoes
of German ships at present in neutral countries.
- (c)
- By her credits in neutral countries.
- (d)
- By the sale of foreign securities or properties in
foreign countries.
- (e)
- By advances against the use of foreign securities or
properties as collateral.
- (f)
- Further, gold can equally be used as collateral for
loans, to be freed as other means of payment provide
means of liquidating these loans. The sale of gold will
only be allowed in cases where the Associated Powers
agree that the above-named means of payment are
inadequate.
- The means of payment outlined in paragraphs (d), (e), (f) will not exceed the sum of $200,000 (which is more
than the financial arrangement already made for the payment of
the first 270,000 tons of foodstuffs), until the Supreme
Economic Council has satisfied itself of the insufficiency of
the means of payment indicated in paragraphs (a), (b), (c).
- 4.
- She may export commodities (with the exception of those on the
black list) to any neutral or other approved destinations. The
money from these exports must, however, be converted into
payment for foodstuffs.
- 5.
- A fixed portion of the tonnage which will have been handed
over will be available for German relief until next
harvest.
- 6.
- Germany may buy and import foodstuffs within the
above-mentioned limits from neutral countries, who will, when
necessary, be allowed to re-import equivalent quantities.
- 7.
- It is understood that the declarations of the Allied and
Associated Governments under this communication will be null and
void should Germany not carry out the conditions of the
Armistice.
At its meeting of the 10th March the Supreme Economic Council
modified Clause 2 above as follows:—
2. She may import each month up to 70,000 tons of fats
(including pork products, vegetable oils, and condensed
milk), and 300,000 tons of bread cereals or other
foodstuffs up to the 1st September.
Appendix 28
Resolution From the Blockade Section
as to the Re-opening of Traffic on the Rhine
In connection with a request of the Swiss Government, presented
through the French General Staff, for the re-opening of traffic on
the
[Page 63]
Rhine and for permission
to send a Swiss engineer and patrol boat to examine the channel
between Basle and Strasburg:—
Resolved—
“That there is no objection, from a blockade point of view, of
allowing the re-opening of the Rhine to traffic for the purpose of
permitting the resumption of Swiss trade with Holland, Scandinavia,
and the Entente countries, which trade, however, is to be subject to
the existing blockade agreements.”
It was further resolved—
“That this question should be referred to the Supreme Economic
Council for its approval and confirmation by the Supreme War
Council.”
Further resolved—
“That, as permission had already been given by the French Authorities
to the Swiss Government to send a Swiss engineer and patrol boat to
examine the channel of the Rhine, no action was necessary in this
connection.”
Appendix 29
Sofia, March 7, 1919.
Received March
8—6:40 p.m.
[Telegram From the American Chargé
d’Affaires at Sofia Regarding Finance for Relief Supplies for
Bulgaria]
Your telegram, signed Hoover, February 1st, submitted to Bulgarian
Government, which replies as follows:—
“Neither the Bulgarian Government nor the National Bank of
Bulgaria have any financial claim nor any credits to be
levied against the New York Life Insurance Company. Having
been in business relations with this company for a century,
and having been of service to it in collecting its policies,
the National Bank asked it for a credit of $2,000,000 at 6
per cent, interest, and this only until telegraphic and
postal communications should be re-established between
Bulgaria and neutral and Allied countries. Inasmuch as this
interruption of communication made it impossible for the
bank to dispose of its property in foreign countries, its
only resource was credit. Here in Bulgaria the National
Bank, exclusive of its gold reserve, has at hand 12,00,000
lei in old Roumanian banknotes, and 5,000,000 roubles in
Imperial Russian banknotes. At present there are no other
foreign securities. Moreover, if Bulgarian banks had the
means to communicate with Switzerland, they could there
reach up to 2,000,000 Swiss francs. Therefore nothing
remains but to notify us as to which Swiss bank we should
concentrate this property in, in order to turn it over to
the Inter-Allied Commission in payment for part of the flour
billed to
[Page 64]
Bulgaria.
In case these forms of payment should be considered slow or
inconvenient, the Bulgarian National Bank, as well as the
most important banks and insurance companies of Bulgaria,
are ready to guarantee a credit of $2,000,000, depositing
securities with the American Legation in Sofia. If it turns
out that our banks are unable to dispose either of their
property or of their paper securities located in neutral and
Allied countries, and if the aforesaid lei and roubles are
unacceptable in payment, then no other means of payment
remain except credit. Consequently the Bulgarian Government
begs the Honorable Mr. Hoover to take these exceptional
circumstances into consideration in which the Bulgarian
Government is caught, and which deprive it of any choice as
to the means of payment. Again, it begs him, under these
circumstances, not to stop furnishing the necessary flour
for this famished people.—Theodoroff, Prime Minister,
Bulgaria.”
