Pursuant to the conversation I had a few days ago with Mr. Phillips, I
have the honor to transmit to you in the note herein enclosed the
results of the examination to which the French Government has proceeded
on that subject.
[Enclosure—Translation14]
Aide-Mémoire
The French Government has examined with the closest attention the
plan for distributing the ex-German cables as submitted to the
representatives of the powers by Mr. Fletcher at the meeting of the
first subcommission of the International Conference on Electrical
Communications held at Washington March 6, 1923 [1922].
As this document constitutes only an initial attempt intended to
enable the respective Governments to set forth their views on this
subject, the French Government feels at full liberty to frame the
following observations:
It wishes to remark first of all that certain data used in preparing
the plan submitted by Mr. Fletcher are not entirely correct.
Thus the plan seems to take it for granted that the value of the
ex-German cables has been permanently fixed by the Reparation
Commission.
Now, to the knowledge of the French Government, certain appraisements
which ought to figure in the fixation of this value, though,
however, of slight importance (calculation of depreciation, wear and
tear, deduction of certain expenses of establishment, etc.), are
still under discussion before the Commission, while others which
have been accepted by the other Allied Powers have not yet been
accepted by the United States.
Furthermore, if we compare the figures appearing in Mr. Fletcher’s
distribution plan with those furnished by the Reparation Commission
(subject to the slight uncertainties referred to above, the amount
of which does not exceed 3 percent), we shall note considerable
discrepancies among them as shown by the table appended hereto.
On the other hand it will be well to observe that in determining the
value of the ex-German cables according to their cost price alone
[Page 767] and after making a
deduction for depreciation through wear and tear, the Reparation
Commission is acting within its jurisdiction, since the purpose of
its mission is to determine the intrinsic value of the cables with a
view to crediting the value thereof to Germany. But it seems that,
for purposes of a distribution among the Allied and Associated
Powers, account ought to be taken of the degree of economic
importance and utility of the cables. As a matter of fact it is
impossible to place on the same footing cables which connect
different points of the coast to Africa, the traffic over which is
exceedingly small, and trans-Atlantic cables with much greater
traffic.
As the French delegation proposed to the conference of October, 1920,
it would be well therefore to assign to the value of each cable a
coefficient to be fixed according to the data indicated above.
Account ought also to be taken of the expenses of readjustment to
which these cables have given rise.
Finally, the French Government has noticed that two ex-German cables
whose approximate appraisement was made by the Reparation
Commission, viz, the Yap-Shanghai and Yap-Menado cables, are not
mentioned in the plan submitted by Mr. Fletcher.
Now these two cables constituted the subject matter of an agreement
concluded in last December between Japan and the United States, and
when, as in the case of the other agreements reached at Washington,
the French delegate, Mr. Sarraut, gave it his endorsement, this was
done only ad referendum.
The French Government by no means thinks of refusing its final
approval to this arrangement, but it deems it its duty to maintain,
as Mr. Jusserand expressly specified during the labors of the
Commission, that the question of distribution of the cables forms an
aggregate from which the Pacific cables cannot be separated.
Consequently the Yap–Shanghai and Yap–Menado cables ought henceforth
to appear in the distribution plan.
Furthermore, in the opinion of the French Government the Yap–Menado
cable ought to appear therein with a different assignment than that
given it in the American-Japanese agreement, since the Netherlands,
which received it, does not figure among the five Allied and
Associated Powers and possesses no right to the ex-German cables. As
the French representative likewise pointed out during the course of
the discussion, it will be the duty of that one of the five Allied
and Associated Powers to which the cable is assigned, to conclude
such arrangement afterwards with the Netherlands as it may deem
proper. However, the value of the Yap–Menado cable will have to be
placed, in the distribution, to the account of that power and the
latter will be debited therewith toward Germany in the Reparations
account.
[Page 768]
On the other hand the French Government deems it necessary to frame
certain objections as regards the principle involved in making the
distribution in equal parts, as underlying the plan presented by Mr.
Fletcher.
As a matter of fact this principle does not take into account annex
VII, section I, part VIII (Reparation) of the Treaty of Versailles,
in which Germany waived, in behalf of the Principal Allied and
Associated Powers, all rights and titles which she possessed to the
cables enumerated in said annex.
This transfer of the cables by Germany to the Principal Allied and
Associated Powers is really in the nature of reparations. The
provisions of the treaty which relate thereto appear in Part VIII
(Reparation), viz. article 244 and annex VII. This character
furthermore is confirmed in the final paragraph of this annex, which
reads thus:
“The value of the above mentioned cables or portions thereof
in so far as they are privately owned, calculated on the
basis of the original cost less a suitable allowance for
depreciation, shall be credited to Germany in the reparation
account.”
This annex VII is referred to in the second paragraph of article 237,
relating to the distribution of the successive payments to
Germany.
Now it should be observed that part VIII of the Versailles Treaty was
accepted as valid by the United States and was mentioned as such in
the enumeration contained in article II of the peace treaty between
the United States and Germany of August 25, 1921.15
The value of the cables transferred to the Principal Allied and
Associated Powers by the putting into force of the Versailles Treaty
ought therefore to be considered as one of the payments referred to
in article 237 but made exclusively for the benefit of the said
Principal Powers. Article 237 furthermore provides that the payments
of Germany “shall be distributed by the Allied and Associated
Governments in the proportions determined by them in advance and
based on the equities and rights of each.”
Neither during the peace conferences nor since the treaty went into
force has any arrangement been concluded on the distribution of the
cables which is of such a nature as to diminish the validity of
these provisions.
On the contrary, since the treaty went into force some general
agreements have been concluded among the Allied Powers with a view
to distributing Germany’s payments among them and it would seem that
in the absence of other bases the coefficients fixed at Spa, [Page 769] for instance, on July 16,
1920,16 might be utilized in fixing the distribution
of the cables between France, Italy, Great Britain, and Japan. These
countries would then have no transfer to make to one another in
consequence of the assignment.
As the United States failed to participate in this agreement, it
would seem to be now merely a question of the share due them by
virtue of the provisions of article 237 of the treaty.
In addition to the foregoing considerations, owing to which the
French Government regrets its inability to join in the distribution
plan of the ex-German cables submitted to it, the French Government
desires to state the reasons why it believes it is justified in
urgently demanding that the ownership of the German cable from Brest
to New York be preserved by France.
The French Telegraph Cable Company, as a matter of fact, now
possesses only three cables:
- 1.
- The P. Q. cable, dating from 1879, worn out, in a bad
condition, often interrupted, and hard to repair.
- 2.
- The Brest–Cape Cod cable, opened up to operation in 1898,
but a long section of which is without intermediate landing
or relay, whereby its transmitting capacity is
reduced.
- 3.
- The ex-German cable, which, with an intermediate landing
and relay at the Azores, possesses a transmitting capacity
superior to the two preceding ones.
On the other hand the American cable companies, to which the
Brest–New York cable would without doubt be retransferred, already
own or control 13 cables connecting North America and Europe.
Moreover these companies have, with the consent of the German
Government, recently decided to lay two cables between the United
States and Germany under very rapid conditions, these cables being
provided with all improvements and enjoying a process which enables
an efficiency obtained which was hitherto unknown.
Under these circumstances we are warranted in saying that the
independence of communications between the United States and Europe
is amply assured and that general American interests would not be
threatened if the Brest–New York cable were left to France in the
distribution to occur. While there is no doubt that the resumption
of this cable and its assignment to the United States would gravely
compromise the possibilities of operation of the French Cable
Company and make it very difficult for it to insure free
communication in future between the French Government and North
America.
In framing the foregoing observations and suggestions, the French
Government confidently hopes that the United States Government [Page 770] will kindly take them into
account when the question of distributing the ex-German cables comes
up again for discussion.