462.11W892/2475
The Department of State to the German Embassy
Memorandum
In view of the approaching close of the work of the Mixed Claims Commission, United States and Germany, the time would seem to be propitious for a definite statement by the German Government of its position regarding payments due the United States under the Debt Settlement Agreement of June 23, 1930,98 with respect to awards of the Mixed Claims Commission.
[Page 494]It will be recalled that the Resolution of Congress approved July 2, 1921,99 provided, inter alia, for the retention by the United States of all property of German nationals that had come under the control of the United States during the period of the war, “until such time as the Imperial German Government” or its “successor or successors” shall have made—
“suitable provision for the satisfaction of all claims against said [Government]1 …of all persons, wherever domiciled, who owe permanent allegiance to the United States of America and who have suffered, through the acts of the Imperial German Government, or its agents … since July 31, 1914, loss, damage, or injury to their persons or property, directly or indirectly, whether through the ownership of shares of stock in German,… American, or other corporations, or in consequence of hostilities or of any operations of war, or otherwise …”
The above provisions of this Resolution were incorporated in the Treaty between the United States and Germany, signed at Berlin, August 25, 1921,2 Article I of which stipulated that the United States should have and enjoy—
“all the rights, privileges, indemnities, reparations, or advantages specified in the aforesaid Joint Resolution of the Congress of the United States of July 2, 1921 …”
By certain other treaty provisions the United States had the right to retain and liquidate all property rights and interests in the United States of German nationals or companies controlled by them. Notwithstanding these several treaty provisions, practically eighty per cent, of the property belonging to German nationals, held by the Alien Property Custodian, has been returned pursuant to Acts of Congress. Specifically, Section 9 of the Trading with the Enemy Act3 as amended by Section 14 of the Settlement of War Claims Act of 19284 provided for the return of eighty per cent, of the property belonging to German nationals held by the Alien Property Custodian upon their agreeing to a temporary postponement of the return of an amount equal to twenty per cent, of the value of such property. The same section provided that where the value of the property to be returned was less than $2,000, the whole amount should be returned.
Pursuant to Section 3 (a) of the Settlement of War Claims Act of 1928, an Arbiter was appointed by this Government to determine the fair compensation to be paid by the United States to German [Page 495] nationals in respect of merchant vessels, radio stations, and patents taken over by the United States during the war. Awards, in the amount of $86,738,320.83, including interest to December 31, 1928, were rendered by the War Claims Arbiter, and $43,368,211.71 have been paid thereon to the German nationals out of appropriations made by Congress, in accordance with provisions of the Act of 1928.
On August 10, 1922, the two Governments signed an Agreement providing for the establishment of a Mixed Claims Commission to adjudicate the claims of American nationals against Germany. Awards in favor of American nationals, totaling $170,000,000, including interest to January 1, 1928, and awards in favor of the Government of the United States, totaling $61,000,000, including interest to January 1, 1928, have thus far been made. On these awards the German Government has paid $52,000,000.
On June 23, 1930, the Governments of the United States and Germany signed an Agreement whereby Germany undertook to pay to the United States an amount sufficient to cover the awards entered and to be entered in favor of the United States and its nationals by the Mixed Claims Commission, referred to above, and also to reimburse the United States for the costs of its Army of Occupation. The payments by Germany on account of the awards of the Mixed Claims Commission were fixed at the rate of 40,800,000 reichsmarks per annum, a comparatively small annual payment. Germany is now in arrears on these payments in an amount of approximately $50,000,000.
The United States accepted the full faith and credit of Germany as the security and guaranty for the fulfillment of Germany’s obligations under the Agreement, subject, however, to an express understanding that the Agreement did not require the United States to release any German property it then held other than as theretofore or thereafter authorized by the Congress of the United States.
The facts recited above show the consistently liberal policy followed by the United States toward Germany and German nationals and should leave no doubt as to the obligation and duty of the German Government to make the payments provided for in the Debt Settlement Agreement.
The Government of the United States would, therefore, appreciate an early statement by the German Government of its intentions with respect to payment of the amount in arrears under the Agreement and of the further annual payments as they fall due. It is important that this information should be received by the Department of State at as early a date as possible, in order that the Congress of the United States may be advised in the premises.
- See Foreign Relations, 1930, vol. iii, pp. 106 ff.↩
- 42 Stat. 105.↩
- Brackets appear in original memorandum; omissions also indicated in the original memorandum.↩
- For text of treaty, see Foreign Relations, 1921, vol. ii, p. 29.↩
- 40 Stat. 411, 419.↩
- 45 Stat. 254.↩