467.11/846
The Secretary of State to the American Commissioner on the Turkish-American Claims Commission ( Nielsen )
Sir: The Department is in receipt of your communications of May 25 and May 28, 1934,23 regarding the Turkish claims situation.
[Page 914]It is noted that in your communication of May 25 you call attention to the fact that the names of certain claimants were included in the list sent to the Turkish Government, whereas examination of the papers in the cases discloses that the cases are not properly to be taken up with the Turkish Government, for various reasons.
You will, of course, appreciate from your experience in these matters that in handling a large group of claims, such as the Turkish group, it is well-nigh impossible to have them developed by the claimants in accordance with the ordinary requirements of the Department, or with those of international law. You will also appreciate that when an agreement has been entered into to settle all outstanding claims, with a time limitation for the filing of notice of the claims and the supporting evidence, it is customary to file notices within the time prescribed, whether or not, at the time of filing, a good claim has been established, since failure to file such notice would bar the claimant, despite the fact that, within the time remaining for the perfecting of the claim, a good claim might be shown to exist. Hundreds of notices of claims were filed with the Mexican Claims Commissions, on which you sat for several years, which had not been developed as legal claims, and many of which, it seems, may never be so developed. It is expected that when the appropriate time comes these claims will be dismissed for lack of proof. Such a practice has its advantages and its disadvantages, with both of which you are familiar. The principal advantage is that, if the claim is dismissed by the Commission, it may be regarded as a closed incident; whereas, if it is not presented to the Commission, the claimant may feel that he has not had his day in court, may be dissatisfied with the action of the Department or the Agent, and endless correspondence may result.
The practice of including all claims, good and bad, thus cleaning the slate, so to speak, has resulted in a very low percentage of recoveries before Commissions and small percentages in lump sum settlements.
To eliminate in the first instance all so-called claims that have not been properly developed, and to apply to the select group the percentages established, as above indicated, would place upon this group of select cases a lower estimated value than would accrue if the past practice were followed. It is for this reason, and for the further reason, as explained above, namely, that claimants have until August 15, 1934, in which to present supporting evidence, that many claims in the list submitted to the Turkish Government may appear at the present time to have been improperly included.
These considerations, however, do not justify the inclusion of cases wherein it is obvious that the claimant was not a national at the time the claim arose, or cases where the claimants had withdrawn their applications. It is not believed that there are many such cases in the group to which you refer and those found should be eliminated by you. [Page 915] Any such cases were included by error, resulting from haste in the preparation of the list, and the voluminous amount of correspondence with claimants that ensued following public announcement that Turkish claims were to be taken up by your committee. Several hundred of these claims were filed following that announcement, and, obviously, little opportunity was afforded the Department to develop the claims to a finished state prior to the filing date—February 15, 1934.
If your discussions with the Turkish representatives reach the point where claims that are obviously unsupported by evidence, and those in which it is apparent claimants are not entitled to consideration should be segregated from those that are entitled to consideration, it is not believed that you should have any difficulty in making such segregation. It may well be that, by preparing a list of claims which you think might properly be withdrawn, you would be able to use it to advantage in your deliberations.
The purpose of the Department’s instruction of April 12, 1934,24 enclosing a list of “closed cases” and one of “presumably non-Ottoman” cases, lists prepared after the names of the claimants had, for the reasons stated above, been included in the list sent to the Turkish Government, was to enable you to agree with your Turkish colleagues, at such time as might seem appropriate to you, definitely to dismiss the first mentioned list of cases and to deal appropriately with such of those on the other list as might not, within the remaining time for the filing of evidence, be shown to be of non-Ottoman character. The Department has felt, as it has so often stated, that, by reason of your familiarity with the claims work, you would experience no difficulty in properly disposing of such cases.
In view of the apparent confusion that has resulted from the messages that have been exchanged with you during recent months, it seems desirable at this time to recapitulate the developments that have taken place and to indicate the Department’s present understanding of the situation and its views as to possible future courses of action.
As the situation now stands, the Department understands that the Committee will proceed to an examination of claims with a view to arriving at a lump sum settlement. Although it is realized that such an examination will not be extensive, it is anticipated that the Committee will be able to agree upon the rejection of such claims as shall not have been adequately established when the period for the filing of evidence expires on August 15, next. Such rejection should definitely eliminate claims of that character from future consideration. If a lump sum settlement can be arrived at an agreement should be concluded, leaving this Government a free hand in the distribution, among [Page 916] those claimants whose claims have not been rejected by the Committee, of the amount to be paid by the Turkish Government.
Finally, with respect to a lump sum settlement, it would seem pertinent to refer to the American and Turkish offers previously made. You will recall that in its instruction No. 93 of April 4, 1933, this Government suggested a lump sum settlement of $5,000,000. This sum was arrived at by taking approximately ten percent of the gross amount of all claims that had been submitted up to that time. Included among such claims were many which the Department fully realized could not be legally substantiated. It was considered quite proper, however, to lump all these claims together and to accept a very moderate percentage of the total as a final settlement. Had only the fully substantiated claims been taken into consideration, the Department would not, of course, have felt itself justified in accepting such a small fraction as ten percent of the total, since the fully substantiated claims, if brought before an impartial tribunal, might have been expected to produce a much larger percentage of recovery. In the original lump sum negotiations, moreover, it was the Department’s understanding that both parties wished to avoid a lengthy, close and costly examination of each individual claim, which would have been the only method of arriving at an accurate estimate of the value of the claims involved. Under the circumstances, it was deemed proper to base the first offer of this Government upon the total amount of the claims which has been submitted to it.
However, the Turkish offer of $500,000 as a lump sum settlement led the Department to believe that the Turkish members of the Committee had misinterpreted the motives of this Government and it became apparent that it would be necessary to conduct a more intensive examination of the claims than had at first been considered essential. It is such an examination that is now about to take place.
As explained in the Department’s No. 93 of April 4, 1933, this Government is anxious to arrive at a just and final settlement of the troublesome claims question as expeditiously as possible, while preserving to the maximum the rights of those American citizens who suffered losses in Turkey. In arriving at such a settlement, however, it is necessary to take into consideration the existing situation in Turkey. Accordingly, the Department will be glad to consider such suitable offer for a lump sum settlement as you may be able to obtain.
Turning now to the situation with which you will be faced in the event it proves impossible to arrive at a satisfactory lump sum settlement, the Department understands that steps will be taken to give finality to the proposed protocol by which the members of the Committee will proceed to consider on their merits the various individual claims before them, their findings to be conclusive upon the two [Page 917] Governments in those cases in which they agree; those cases on which the members are unable to agree will then be submitted to a sole arbitrator whose decisions shall be considered as final and binding upon the two Governments.
In the event it becomes necessary to consider each individual claim along the lines indicated above it would be obviously advantageous to come to an agreement with respect to the appointment and functions of a sole arbitrator before actually proceeding to a consideration of the claims in this manner. It is possible, as indicated in the Embassy’s cable No. 4 of February 8, 1934, 6 p.m., that the Turkish Government will not consent to the negotiation of such an agreement before proceeding to a consideration of the individual claims, though there would appear to be no valid reason for such a position on its part. In the event of its refusal, however, you are authorized in your discretion to negotiate the proposed agreement after the Committee has passed on the individual claims.
The agreement itself should preferably take the form of the protocol or exchange of notes suggested in the Department’s telegram No. 8 of January 13, 1934, as modified by your suggestions contained in the Ambassador’s cable No. 22 of April 10, 6 p.m.,25 approved by the Department in its cables No. 53 of May 22, 6 p.m.,25 and No. 60 of June 7, 6 p.m.25 In this connection it is desired to make clear that although the Department has accepted the general outlines of the proposal contained in the undated Turkish note No. 55773/11, quoted in the Embassy’s cable No. 4 of February 8, 6 p.m., and transmitted with the Embassy’s despatch No. 167 of March 11, 1934,26 it cannot agree, and this is also understood to be your position, to exclude from consideration by the Committee or by the arbitrator all claims of American citizens whose nationality is contested. (See Department’s cable No. 19 of February 10, 2 p.m.). In view of the attitude of the Turkish authorities, as displayed on several occasions prior to and during the present negotiations, you are authorized, subject to the last preceding sentence, to make such concessions with respect to the scope of the claims to be considered as may be absolutely necessary.
The Department would wish to be furnished with the text of any proposed exchange of notes or protocol on this subject before signature.
To recapitulate, the Department now envisages the following possible courses of procedure:
- (1)
- Consideration of claims, with a view to arriving at a lump sum settlement, those claims which in the judgment of the Committee are lacking in proof to be definitely and finally rejected after August 15.
- (2)
- Failing an agreement on a lump sum settlement, the negotiation of an exchange of notes or protocol for the adjudication of each individual claim either by the Committee, or as a final resort by an arbitrator.
- (3)
- In the event of the refusal of the Turkish Government to negotiate such a protocol or exchange of notes prior to the consideration of individual claims, the Department would reluctantly be willing to have the Committee first pass upon the individual claims and subsequently to negotiate the proposed protocol or exchange of notes.
The Department feels confident that the Ambassador and Mr. Shaw, through their contacts with members of the Turkish Government, may be able frequently to assist you in bringing your discussions to a desired conclusion.
Finally, it is desired to stress the fact that the President and the Department have full confidence in your ability to arrange a satisfactory settlement of the only outstanding problem in American-Turkish relations. In your efforts to bring about such a settlement you may count upon the full support of this Government.
Very truly yours,