763.72119/10211: Telegram
The Chargé in France (Harrison) to the Secretary of State
1465. B–173 for the Department and Davis.
First. I summarize coal protocol referred to in paragraph 13, my B–165, 21st, as follows:
- 1.
- Germany to deliver for six months from August 1, 2,000,000 tons monthly.
- 2.
- Allies credit Reparation Commission at German internal price under paragraph 6(a), annex 5. “In addition in consideration of the admission of the right of the Allies to have coal of a specified kind and quality delivered to them, a premium of five gold marks per ton payable in cash by the party taking delivery shall be applied to the acquisition of foodstuffs [for] the German miners.”
- 3.
- In the exercise of stipulations of annex to protocol which annex provides Reparation Commission required immediately establish delegation at Berlin to arrange programs of distribution of coal as between Germany and Allies including details of origin and kind; also see that programs are carried out and no modification of programs involving reduction in deliveries to Allies made prior approval of Berlin delegation. Reparation Commission to notify to interested powers any infraction of principles adopted.
- 4.
- Provides for agreement between Allies for distribution of Upper Silesian coal by a commission on which, according to English text, Germany shall be represented and according to French text, at whose deliberations German representatives shall be present, agreement to be submitted for approval Reparation Commission.
- 5.
- Commission on which Germans represented to meet at Essen to improve conditions of life among miners with a view to better working of mines.
- 6.
- “The Allied Governments [declare] their readiness to make advances to Germany equal in amount to the difference between the price paid under paragraph 2 above and the export [price] of German coal f.o.b. in German ports or the English export price f.o.b. in English ports whichever may be the lowest as laid down in paragraph 6b of annex V, of part VIII of the Treaty of Versailles. These advances shall be made in accordance with articles 235 and 251 of the Treaty of Versailles; they shall enjoy an absolute priority over all other Allied claims on Germany. The advances shall be made at the end of each month in accordance with the number of tons delivered and the average f.o.b. price of coal during the period. Advances on account shall be made by the Allies at the end of the first month without waiting for exact figures.”
- 7.
- “If by November 15th, 1920, it is ascertained that the total deliveries for August, September and October 1920 have not reached 6,000,000 tons the Allies will proceed to the occupation of a further [Page 404] portion of German territory, either the region of the Ruhr, or some other.”
Foregoing is end of protocol.
There is attached a second annex signed by Belgium, England, France, Italy as follows:
- 1.
- “Advances shall be made to the German Government in accordance with the protocol relating to the deliveries of coal to the Allies by Germany, signed today, and the signatory Governments shall severally take responsibility for the making of the said advances in the following proportions, viz, France 61 per cent, Great Britain 24 per cent, Italy 7 per cent, Belgium 8 per cent.
- 2.
- Such advances shall be repaid with interest at the rate of six per cent per annum not later than May 1st, 1921, out of the first payments made by the German Government on cash on account of reparation, and shall be additional to and (subject to the approval of the Reparation Commission under article 248 of the Treaty of Versailles) shall have absolute priority over all charges against the German Government arising under that treaty or any agreements supplementary thereto.”
Protocol and two annexes accepted by Germany. There is also supplementary memorandum or third annex providing that in determining amount of loan, average price of June deliveries shall be taken. English f.o.b. price to be average price of unscreened coal delivered by England to France calculated in gold marks. German pit head price to be average of pit head price to German nationals calculated in gold marks of unscreened coal ruling [in the] Ruhr. Four tons of coal are to be equivalent to three tons coke and three tons coal equivalent to seven tons lignite briquettes both for the purpose of payment of extra five gold marks [and] for the purpose of loan. The terms of this annex have been agreed upon by powers interested but not yet discussed by Germany. Our representatives of [on] Restitution Committee to discuss these proposals with Bergmann. Purpose of these details is to make loan arrangement more definite and easily workable.
Second. Incidental remarks.
- [1]
- Two does not apply to sea-borne coal. Unless instructed to contrary I will not put any American representative on proposed Berlin delegation which at present seems to Logan and me loaded with possible future trouble; first, because of controversies with Germans respecting arrangement and carrying out of programs; second, its decisions may lead to occupation of territory under later provisions of protocol and as United States has [no?] direct interest in coal distribution as between Germans and Allies and no intention of [Page 405] participating in further occupation of territory probably ought to keep free as possible from this particular complication. Referring to paragraph 4 I made definite statement in course of Reparation Commission discussion that proposed agreement must take into account pre-war distribution of Upper Silesian coal and economic necessities of outside European powers dependent on Upper Silesia for coal, that this principle was important and would be insisted upon so far as United States had influence. Reparation Commission has no responsibility at present with respect to commission contemplated.
- 2.
- Though this responsibility may possibly be later delegated to Commission, decision what is and what is not seagoing coal under language of treaty, referred by Commission [to] Bradbury and Mauclère,74 however [at] their suggestion [I] was added as disinterested third party.
- 3.
- Loan arrangement was proposed by Theunis75 at late stage when negotiations seemed likely to be broken off. Germany was demanding full market price for coal apparently supported more or less by Lloyd George. France and others refused absolutely. Theunis suggested loan from Allies for food and raw materials under terms of the treaty would be well protected, would temporarily, at least [serve] purpose Germans had in mind and would not be surrender by Allies of right to treaty principles. All parties accept this expedient for saving their face. Regulations adopted so hurriedly they forgot Luxemburg and are now arranging for Luxemburg pay additional five marks and also share in loan. Other delegates have remarked facetiously United States if so desires may share in loan. Language as to priority not clear, speaks of payment out of cash payments on account of reparations but later refers to priority over all charges. Did not attract my attention at Spa that priority over all charges might possibly be broad enough to give priority over all costs armies of occupation. Delegates say this point not discussed by anyone at Spa, they do not know whether such priority really intended or not. Our rights depend on armistice, not on treaty, and we have so many ways of protecting this point that I have not considered it seriously important but I told Commission United States would have lively interest on this point and in this and other connections have intimated that whatever else they might discuss it was not safe for them to raise any question about payment cost of United States troops. Participation in [Page 406] loan seems to have been divided somewhat along lines of indemnity percentage with changes resulting from fact only four powers participate, France getting largest additional percentage. Loan obviously gives opportunity for trade advantages to countries participating in loan, but as yet do not know of any agreement to this effect. Shall ask [Dresel?]. …
- 4.
- Inter-Allied agreement about percentage contains article stating question of reduction cost armies of occupation to uniform basis reserved until can be discussed with the United States. I do not believe they have any hope of the United States agreeing to accept anything but actual cost so my guess is that they may have in mind question of reducing number. Mention this here merely to point out will afford opportunity to discuss relation this coal loan to our arrangement for payment. Will add that Commission is actively engaged on the question of army costs and payment for the same including Inter-Allied Rhineland Commission and in this connection show no tendency whatever to treat our costs on any different basis from others. Boyden.
Harrison