Papers Relating to the Foreign Relations of the United States, The Paris Peace Conference, 1919, Volume X

Paris Peace Conf. 180.0501/13

Supreme Economic Council: Thirteenth Meeting Held at the Ministry of Commerce [on 22d April, 1919, at 10 a.m.]

April 22, 1919, 10 a.m.

The Supreme Economic Council held its Thirteenth Meeting on Tuesday, 22nd April, 1919, at 10 a.m. under the chairmanship of Lord Robert Cecil.

The Associated Governments were represented as follows:—

Great Britain.	Sir Hubert Llewellyn Smith,
	Sir Wm. Mitchell Thomson,
	Mr. Keynes,
	Mr. E. F. Wise,
	Sir Wm. Goode.
U. S. A.	Mr. McCormick,
	Mr. Hoover,
	Mr. Norman Davis,
	Mr. Robinson,
	Mr. Baruch.
France.	M. Clémentel,
	M. Loucheur,
	M. Vilgrain.
Italy.	Signor Crespi,
	Prof. Attolico,
	Count di Cellere.
Belgium.	M. Jaspar.

100.

The Minutes of the Eleventh and Twelfth Meetings were submitted and approved.

101. Transitory Measures.

With reference to Minute 89 it was agreed that the French Delegates should draft a letter for transmission to the Council of Four, setting forth in detail the problems already considered or being considered in connection with the period of reconstruction, together with a résumé of the problems still needing consideration and requesting that definite instructions should be given as to the particular authorities to be deputed to deal with them.

102. The Coal Situation.

The following documents were submitted:—

(i) A Memorandum previously considered by the Raw Materials Section reporting on the Coal Situation in Europe (88).

(ii) Resolutions from the Raw Materials Section regarding the above Memorandum (89).

(iii) A Report from the British Ministry of Shipping relative to the Italian Coal Supply (90).

The French Delegates made the following statement:—

(a) That as regards the French Coal Position the report submitted to the Raw Materials Section was incorrect in that the French Coal Programme for March was at the present time seriously in deficiency both as regards imports and home production even as compared with the 1918 figures and was little more than half the pre-war consumption;

(b) That the French Government fully appreciating the extreme gravity of the Italian Coal Situation were prepared to do all in their power to give emergency assistance and that to this end endeavour was now being made to increase the supply of French coal to Italy to a total of 5000 tons daily of which it was proposed that 3000 tons should be supplied from the Saar Basin and 2000 tons from the Southern French mines.

It was pointed out, however, that the most recent demand of the Italian Government that these supplies should be immediately increased to 6,500 tons daily was one which it would be extremely difficult to meet under existing circumstances though no effort would be spared to increase the supply to the utmost.

After a statement by the Italian Delegates in which it was pointed out that the problem was twofold, viz. emergency supplies and the execution of a definite programme, it was agreed:—

(i) That the British Delegates should endeavour to arrange for the supply immediately of sufficient splint coal to load the boats now awaiting cargoes at Glasgow;

(ii) That the Sub-Committee appointed at the last Meeting of the Council (See Minute 94) should consider what final arrangements could be made to ensure the execution of a definite Italian Coal Programme and report to the Council at its next weekly meeting;

(iii) That the attention of the Supreme War Council should be drawn to the urgent necessity, from the point of view of the coal supply of Eastern Europe, for a settlement of the political situation in Silesia.

103. Enemy Finance.

(I) Circulation by the Enemy of Austrian Kronen and Allied Currencies.

Recommendations (91 & 92) from a Sub-Committee of the Financial Commission of the Peace Conference were submitted and referred back to the Finance Commission, it being the view of the Council that the problems involved should first be considered by that body.

(II) Interest on German Credits Maturing in Neutral Countries.

A Minute (93) from the Finance Section reporting the decision that payment of accruing interest on German Credits maturing in Neutral Countries should be permitted in gold or securities provided that in consideration of such payment the Credits are renewed, was noted and approved.

It was agreed that the Finance Section should have full authority to act on their decisions regarding this and all other similar questions without first referring them to the Council.

(III) Private Remittances to Germany.

With reference to Minute 76 the following recommendation from the Finance Section was adopted:—

“That in all countries private remittances to Germany be permitted provided that the proceeds are made available for the Food Account; each Government being left free to apply this principle in its own way”.

104. Enemy Tonnage.

A Minute from the Shipping Section (94) regarding requests made by the Belgian and Greek Governments that a proportion of enemy ships should be placed under their management was submitted,

It was agreed:—

(a) That the Shipping Section should be requested to submit a fortnightly progress report to the Council regarding the use of enemy tonnage and the arrangements being made for the crews for the boats.

(b) That the Shipping Section should be urged to do all in their power to expedite the arrangements for getting the boats into action, and if any difficulties occurred in manning them that the Belgian Government should be approached regarding the possibility of utilising Belgian crews, of which the Belgian Representatives reported a sufficiency.¹

The Italian Delegates stated that sufficient Italian crews could be found to man any number of vessels.

105. Ships in the Adriatic Claimed by the Jugo-Slavs.

With reference to Minute 73 the American Delegates reported that Mr. Hugh Gibson had been appointed Chairman of the Sub-Committee but that he had not been able to convene a Meeting before his departure for Poland as some delay had occurred in the appointment of the Allied Delegates.

Mr. Dulles was appointed as Chairman in Mr. Gibson’s place and the Sub-Committee was requested to meet immediately with a view to a prompt settlement of the matter.

106. Suspension of Enemy Trade and Black Lists.

With reference to Minute 81 the British and French Delegates reported that their Governments had agreed to the suspension of all enemy trade and black lists.

The proposal now being accepted by all the Associated Governments it was agreed to refer the matter to the Blockade Section with the request that an identic communication be prepared for transmission to the Governments concerned.

107. Relief Measures.

(a) Austria.

With reference to Minute 90 (a) the British Financial Delegate reported:—

(i) That the British Treasury was prepared to accept an increase in the loan for Austrian relief from $10,000,000 to $15,000,000 on the same conditions as before, provided that the other Allied Governments were also willing also to participate.

(ii) That, in consequence of the undertaking given by the French Delegates at the last meeting, instructions had been given by the Wheat Executive for the loading on French account of the 60,000 tons of relief tonnage now at the Atlantic seaboard.

(iii) That he had informed the French Financial Authorities of the action being taken and had asked for confirmation of it but that so far he had received no reply.

The French Delegates stated that they were pressing for an early reply from their Government and hoped to settle the matter at an early date.

(b) General Relief.

With reference to Minute 90 (b) the Director General of Relief reported:—

(a) That it had transpired that the quantity of pork products held in the United States for account of the French Government did not now exceed 2000 tons and that no further action would be taken in the matter.

(b) That the Canadian Government had agreed to finance 29,000 tons of wheat and flour for loading in Austrian tonnage for May arrival in Roumania.

(c) That as regards the relief programme for May Arrival he had not yet received a reply to his request that 50,000 tons of British tonnage should, if possible, be allocated for this purpose.

The British Delegates undertook to refer the matter again to the British Ministry of Shipping with a request for an early reply.

109 [sic]. Removal of Fishing Restrictions.

A telegram to the Permanent Inter-allied Armistice Commission dated 11th April (95) requesting the removal of restrictions on German fishing in the Kattegat and Skager Rak was submitted.

It was agreed to report the matter to the Allied Naval Armistice Commission and to state that judging from the facts placed before them the Council is of the opinion that the above request should be granted.

110. Supplies for Czecho-Slovakia Via the Elbe.

The Chairman reported receipt of a telegram addressed to Mr. Hoover dated 19th April (96) suggesting that the present restrictions in regard to the tonnage allowed on the Elbe should be relaxed.

It was agreed, in view of the urgent necessity for reducing the traffic from Trieste to Czecho-Slovakia that all limitations on the quantity of foodstuffs for relief in transit via the Elbe should be removed.

111. Situation in Latvia and Lithuania.

With reference to Minute 92 it was reported that the Council of Foreign Ministers had decided² that, in spite of the present political situation:—

(1) the despatch of food supplies to Latvia, Lithuania and Esthonia should be continued, provided the local Allied Authorities were satisfied that these supplies would reach the right people.

(2) that coal should still be allowed to go through from Germany, provided it was only used for supplying the front now set up against the Bolshevists.

(3) that instructions should be issued to the representatives of the Allied and Associated Governments on the spot that the food should not be landed unless reasonable security existed that it would reach the people and not the Bolshevists.

112. “Armistice” Locomotives.

An extract from the Minutes of the Communications Section (97) regarding cession of “Armistice” locomotives from the Franco-Belgian front to Poland, Roumania etc. was submitted and deferred for further consideration at the next Meeting.

113. Relations with Germany and Derationing of Northern Neutrals.

(a) The following documents were submitted and referred for detailed consideration to a special Meeting of the Council to be held on Wednesday, 23rd April at 3 p.m.

(i) Note from the British Delegates on the Blockade Section regarding German exports of articles on the pre-emption list (98).

(ii) Report from the Sub-Committee on Germany regarding (i)

(iii) Extracts from the Minutes of the Finance Section regarding (i).(100).

(iv) Memorandum from Lord Moulton on the purchase of German Dyestuffs (101).

(v) Telegram from the President of the German Finance Commission dated 16th April regarding relaxations to be permitted in sailings from Germany to the three Northern Neutral Countries and the Netherlands and in German Coastal Traffic (102).

(vi) Draft Resolutions embodying proposals for rationing Germany in Raw Materials (103).

(vii) Resolutions from the Blockade Section relative to the re-establishment of trade relations with the occupied German territories (104).

(viii) Resolution from the Blockade Section regarding the establishment of unlimited rations of all commodities for Northern Neutral Countries and Switzerland (105).

(ix) Draft Resolutions submitted by the British Delegates regarding the derationing of Germany and the financial problems involved (106).

(b) Purchase of Dyestuffs.

It was agreed that authority should be given for the immediate purchase from Germany of about 50 tons of dyestuffs available which are urgently required for the factories in Alsace, Belgium and Italy.

(c) With reference to Minutes 55 and 66 the Financial Delegates reported that the Finance Section had considered the points raised by the French Delegates but that no action was necessary in view of the proposals put forward by the Blockade Section regarding the removal of restrictions on imports to and exports from the occupied Rhine territories (See Clause (a) (vii)).

Agreed.

(d) With reference to Minute 93 the following documents were submitted and approved:—

(i) A Memorandum on the present status of the Commissions set up under the Armistice with Germany and their Relations to the Supreme Economic Council (107).

(ii) A Note on the establishment of a German Commission at or near Paris to facilitate the conduct of current Economic Negotiations (108).

It was reported that these documents had also been approved by the Council of Ten.³

Appendix 88

[Memorandum Submitted to the Raw Materials Section Regarding the] Coal Situation in Europe

France.⁴

French production and imports from Great Britain continue to be not less than the corresponding quantities during the war, and the main problem is that of meeting the prospective increase in French consumption, for which France desires provision to be made by way of compulsory supplies from Germany. This is at present the subject of consideration in connection with the Reparation Provisions of the Treaty of Peace.

Italy.

The Italian problem is more urgent, as owing to the shortage of shipping she has been unable to transport the quantities of coal which Great Britain was prepared to place at her disposal.

In the note dated the 21st March, submitted by the Italian Delegation to the Supreme Economic Council, it is stated that shipments of coal to Italy from the United Kingdom will not, under the most favourable circumstances, exceed 350,000 tons in March. This probably refers to arrivals at Italian ports, but, taking actual despatches from British ports, the tonnage for March was about 550,000 tons. This quantity of 550,000 tons is still a quarter of a million tons less than the minimum quantity which Italy requires from Great Britain, and which Great Britain is prepared to supply. But it is observed that the Shipping Section has already recommended that the British Ministry of Shipping should increase to the utmost the quantity of tonnage available for shipments of coal from the United Kingdom to Italy. There is a further recommendation that the American representatives should ascertain as soon as possible what amount of American tonnage could, if necessary, be allocated to the shipping of coal to Italy. This may have arisen in connection with the proposal for the shipment of American coal in view of the unsettled state of labour conditions in the British coalfields, but it should be pointed out that now that conditions are more settled it is desirable, in the interests of economy of tonnage, that all tonnage of whatever flag allocated for the transport of coal to Italy should load at ports in the United Kingdom.

It may be added that Italy is also putting forward a claim for an option on German coal to meet prospective increases in her consumption and to replenish her stocks.

Belgium.

Belgium’s pre-war production of coal was about twenty-two million tons per annum, and her consumption about twenty-six million tons, there being a considerable import from Germany. Her production is, at the present time, reduced by about one quarter, but her consumption has also been greatly reduced owing to devastation, and she has certain quantities of coal available for export to France and Switzerland. She is obtaining a small quantity of coal from the United Kingdom for consumption in the western districts, transport to which from her own coalfields is interrupted, and her needs at the present time are being fully met.

Western Europe (except France, Italy & Belgium).

The situation in Western Europe and the Mediterranean hardly requires attention, as these districts will rely on supplies of British Coal, the expanding output of which will, it is estimated, suffice to meet their essential needs.

Germany.

(a) Occupied Area:

The situation in the occupied area is fairly satisfactory. Both the British and the French areas are dependent on certain supplies from the right bank of the Rhine. In the case of the British area, 360,000 tons monthly are being supplied for use of the left bank and in the Bridge Heads, and this, with the production on the left bank—chiefly Brown Coal—has sufficed recently to provide for transport, public services, domestic coal rations, and 70% of the industrial requirements.

In the case of the French area, the chief supply required from the right bank is in the way of coke from the Ruhr District for Blast Furnaces in Lorraine. This is provided for in an article in the Luxembourg Protocol of the 25th December, which requires a daily supply of 13,700 tons of coke for the Furnaces in Lorraine and the East of France. As a matter of fact the Germans are only sending about 7,000 tons daily, and complain that their inability to meet the full obligation is due to the fact that the French are not carrying out promises made by them in an Annex to the Protocol which they agreed to sign in consideration of the Germans consenting to sign the Protocol.

These promises related to coal to be supplied by France from the Saar District in French occupation to the right bank of the Rhine (chiefly for gas-making purposes), and to iron ore, which is essential for the continued working of the Iron Works in the Ruhr District.

(This subject was referred to in a memorandum submitted for the consideration of the Supreme Economic Council on the 9th April.⁶)

(b) Unoccupied Area:

Unoccupied Germany is chiefly of interest as a possible source of supplies for Allied requirements. At the present moment the Ruhr District, the output of which is reduced from the normal figure of about 400,000 tons per day to about 240,000 tons per day, could provide nothing for export in addition to the quantities which are being supplied under the Luxembourg Protocol. The chief trouble is lack of food; but it is understood that a certain amount of food, provided by the Allies, has now begun to arrive in Germany. The Germans have agreed that this food shall be supplied in the first place to the mining districts, and in these Districts to the following Workers in order of priority:

(a)	Underground	Workers	in	Mines.
(b)	Surface	“	“	“
(c)	Industrial Workers in Mining Districts.

The Germans recently asked for a supply of certain materials for the purpose of increasing their coal output and exportable surplus, and the Supreme War Council has agreed that these shall be sold to them, and paid for, if necessary, out of the funds available for payment for food.

The other great Coal producing centre in Germany is Silesia, the pre-war production of which was 44 million tons per annum in Upper Silesia and 6 million tons per annum in Lower Silesia. Until quite recently the output in these Districts was reduced to 25% of the normal figure, largely owing to disputes between the Polish and Czecho-Slovak workers. Normally about 25% of the output of the Silesian fields was exported to Austria-Hungary.

It is understood that the political differences between the Poles and Czecho-Slovaks are not now so acute, and that production has increased somewhat since the 1st April. It will, however, doubtless continue to be restricted, as in the case of Ruhr, so long as the Food problem remains acute, and in this connection the distribution of food obtained from the Allies by the German Government between the purely German Coalfields, and the Silesian Field—in which about 40–45% of the workers are Poles—may require scrutiny.

It is difficult to estimate to what extent it will be possible to secure supplies from the German Silesian Field for export to the East and South, i. e., Poland, Czecho-Slovakia and Austria, throughout which Districts a great and general shortage of coal exists. It would further appear that one of the greatest difficulties will be means of transport, which, as indicated in the next section, are deficient and disorganised throughout the whole of these Districts. A suggestion is made below on this subject.

Poland & Czecho-Slovakia.

These Districts contain practically the whole of the Austrian supplies of hard coal, i. e., 96% of the 1913 production of 16½ million tons. The present production is only 50–60% of the pre-war figures, and the main difficulty here is dis-organization and deficiency of railway transport facilities. The British Food Commissioner at Trieste suggests that the only remedy is Allied control of the Mines and Railways. If rolling stock is to be supplied from the West, it is clear that this justifies and necessitates inter-Allied control. The best hope of ameliorating the position seems to lie in the establishment of some such form of control, if workable from the nationality point of view, working from, perhaps, Trieste, as a centre (where it could survey the distribution of imported coal), and having local controls operating from centres conveniently near to each of the main Coalfields, e. g.:

Coalfield	Pre-War Production	Centre
Bohemia (Czecho-Slovakia)	4,000,000	Prague
Moravia (“ “)	2,000,000	Brunn
Silesia (Polish)	7,500,000	(?) Bendzin
Galicia	2,000,000	(?) Cracow

Esthonia & Lithuania.

Application has been made by these countries for British coal through Baltic ports. This is the natural method of supply.

Appendix 89

[Resolution From the Raw Materials Section Regarding the Coal Situation in Europe]

At the 6th meeting of the Section (April 16, 1919) the following resolution was adopted relative to item 3 of Agenda “Report on the Coal Situation in Europe.”

Resolution:—

That the Report on the Coal situation in Europe be referred:

(a) As regards the occupied area of Germany, to the French Ministry of Industrial Reconstruction to enquire into the statements made by the German representatives as to the reasons for their failure to execute the Luxembourg Protocol of 25th December 1918, and to report to this Section at its next meeting.

(b) As regards the Ruhr and the Silesian mines, to the Food Section with a recommendation that the distribution of food by the German Government to the miners should receive special attention, with the request that they inform this Section and M. Loucheur as Chairman of the Coal committee as to action taken.

(c) As regards the mines of Poland and Czecho-Slovakia, to the Director General of Supplies and Relief and to the Communications Section with a recommendation that the scheme of extended control by the Allies over the railways and mines be favorably considered.

(d) To the Supreme Economic Council for consideration generally, and with the special suggestion that the attention of the Supreme War Council be drawn to the importance, from the point of view of the coal supply of Eastern Europe, of obtaining an early political settlement in Silesia.

That the Secrétariat communicate this action to the Supreme Economic Council.

Appendix 90

Memorandum by the British Ministry of Shipping on Italian Coal Supply

1. The Italian Government find the present position of the Italian coal supply to be so serious that they fear internal disturbances in their country which may well prove extremely embarrassing to the general cause of the Associated Governments. The British Government, recognising the gravity of the position, has taken every possible step to meet the immediate needs of Italy, and if their action were supplemented by the resumption at once of the railing of French coal to Italy at about the rate of despatch prevailing at the Armistice, Italy’s difficulties would be met. The British Government very much regret to learn, however, that the French Government has refused to supplement the Italian supply and to meet the balance of that country’s needs in the only possible manner, viz.: by the railing of French coal to Italy.

2. A brief survey of the Italian Coal Supply during the last twelve months shows that it was the first subject of discussion at the First Session of the Allied Maritime Transport Council in March 1918, when it was unanimously agreed that a supply of 600,000 tons of Coal a month to Italy was the absolute minimum necessary to meet her requirements. It was further arranged that this supply should be furnished as follows:

• 150,000 tons a month of British coal by long sea route to Italy.
• 100,000 tons a month of British coal to be shipped to Blaye and to be railed thence to Italy.
• 350,000 tons a month of French coal to be railed from French Southern mines to Italy, or to Marseilles or other French port, for short sea shipment.

The French coal was to be replaced in France by British coal shipped from the United Kingdom.

3. During the eight months from mid-March 1918 to the date of the Armistice in November 1918, the average monthly quantity of coal sent to Italy was approximately 595,000 tons, of which France supplied 210,000 tons and Great Britain 385,000 tons.

4. It was only by the greatest sacrifices, and often by gravely imperilling essential services, that Great Britain was able during these eight months to provide Italy with 150 per cent, of the British coal, which was arranged for under the agreement of March 1918, viz.: 385,000 tons a month as against 250,000 tons, and thus to secure to Italy her agreed essential minimum.

5. Since the Armistice, the supply of French coal, which at that date was being sent at the rate of 150,000 tons a month, has gradually diminished, and by the end of January 1919 had practically ceased.

6. In the three months mid-November 1918–mid-February 1919, Great Britain sent coal to Italy at rate of 468,000 tons a month, while the supply of French coal averaged 36,000 tons, Italy’s coal supply during this period being thus at the rate of 504,000 tons monthly.

7. During the period of six weeks to end of March 1919, 516,000 tons of coal were shipped from the United Kingdom, while the supply of French coal amounted to 24,000 tons. Italy thus received 540,000 tons, or 360,000 tons short of the approved minimum requirement, i. e., 900,000 tons for the present.

8. The shipments of British coal during this period, and, indeed, during the greater part of the previous three months, were only effected with the greatest difficulty. Labour troubles at the ports immobilised a vast amount of shipping under repair, and strikes of varying lengths, at many of the coal mines, coupled with the threat of a general coal strike, interfered to a serious extent with the coal shipments, that the British Government did all that was humanly possible in the circumstances, as indicated by the level to which the shipments were brought in spite of the many grave hindrances. Had the supply of French coal not ceased, Italy’s minimum supply of 600,000 tons a month over the 4½ months would have been secured.

9. During present month of April, 730,000 tons of shipping have been allocated to load coal to Italy. It is feared, however, that the Easter Holidays (which will doubtless be lengthened by the receipt of the miners of back pay under the Sankey award) will prevent a considerable amount of the tonnage actually loading in the month. Every possible diversion to this, however, is being made and every priority is being given to Italian coal.

10. Great Britain can do no more, and in any case additional shipments from the United Kingdom cannot reach Italy in time to cope with the immediate requirements for the internal transport and distribution of food in that country, for which there are no available stocks in consequence of the shortage in supply since the Armistice.

11. This urgent need can only be met in one way, i. e., by railing coal from France, and in the interests of everybody, France should arrange for this to be commenced forthwith.

Appendix 91

Recommendation From the Mixed Sub-Commission on Currency Questions To Be Transmitted to the Supreme Economic Council

Whereas the Austro-Hungarian Bank, after the dissolution of the Dual Monarchy on 30th October, 1918, has, contrary to all right and precedent, continued to print and issue notes similar to those previously in circulation in Austria-Hungary;

And whereas, the issue of such notes is now, for the first time on record, effected not only in Vienna but in Budapest;

And whereas, by reason of the above, the circulation, which on 31st October, 1918, had attained the figure of 30 milliard crowns, had increased to over 35 milliard crowns at the end of 1918, to 37½ milliard by the end of February 1919, and will shortly attain 40 milliards;

And whereas these notes are liable to come into circulation in territories emancipated from the former Austro-Hungarian Monarchy, thus indirectly increasing the liabilities of the interested States;

The Mixed Sub-Commission therefore recommends:—

That the Supreme Allied Economic Council should without delay adopt all measures which would:—

(1) authorize the seizure of the plates used for printing these notes issued by the Austro-Hungarian Bank, and of all the issues put into circulation to date;

(2) prohibit the Austro-Hungarian Bank from printing and circulating notes bearing the stamp of any former issue.

(3) allow of confiscation (for stamping or destroying [)] of all notes printed from former plates and not yet in circulation which may be held by the Austro-Hungarian Bank in Vienna, Budapest and other branches, and in the German-Austrian or Hungarian Treasuries;

(4) permit the formation of a controlling Inter-Allied Commission at which the nations concerned should be represented, which would ensure the carrying out of the measures provided for in the preceding paragraphs, being:

(a) the stamping of all or part of the notes printed from old plates, and not yet in circulation;

(b) the printing of new bank-notes peculiar to German Austria and Hungary.

Appendix 92

Recommendation from the Mixed Sub-Commission for Currency Questions for Transmission to the Supreme Economic Council

1. Whereas the Germans, during their occupation of Roumania, issued paper money to a value exceeding 2½ milliards, on the form of notes of the Banca Generala Romana;

And whereas furthermore, according to their ledgers a reserve of such printed notes to the value of 111 millions was held in Berlin;

And whereas the bad technical conditions under which this issue was effected, and the insufficient control thereof, have facilitated to a large degree the circulation of spurious notes by individuals;

And whereas detailed information has been received from the Roumanian Government to the effect that even now the Germans are introducing in neutral markets bank-notes of the type issued by the Banca Generala Romana and intended to make their way back to Roumania, which will constitute a grave danger to that country, particularly as the enemy holds the plates in Berlin and can use them at pleasure, the continuance of these proceedings by Germany after the Armistice amounting in effect to an issue of spurious coin, against which unparalleled abuse the Roumanian Government protests energetically;

The mixed Sub-Commission recommends:—

That the Supreme Economic Council should undertake with the utmost speed all measures necessary for the purpose of seizing in enemy countries all designs, photographic negatives, dies and plates used for the printing of notes issued in Roumania through the intermediary of the Banca Generala Romana, also all designs, dies and stamps used for the minting of metal currency corresponding to the above-named paper currency, together with all stocks of such banknotes and metal currency discovered within enemy territory.

For the same reasons, the Sub-Commission recommends:—

That the Supreme Economic Council should undertake with the utmost speed all measures for the purpose of seizing in enemy countries all designs, photographic negatives, dies and plates used for the printing of Polish Marks and Ober-Ost roubles issued by special Loan Banks created by the enemy for the purpose, and all designs, dies and stamps used for the minting of the metal currency corresponding to the above-named paper currency, together with all stocks of such bank-notes and of metal currency which shall be discovered within enemy territory.

2. And whereas the enemy Governments established in the Italian territories temporarily occupied by them, an institution known as the Casa Venetia dei Prestiti, which issued bank-notes for forced circulation within the said territories;

And in view of the unanimous recommendations as to confiscation of plates used for the issue of notes of types formerly issued by the Austro-Hungarian Bank, and of those of the Banca Generala Romana, and seizure of such of the said notes as are not yet in circulation;

And whereas this recommendation referred to the dispatch, to Vienna and Budapest, of an Inter-Allied Commission for the purpose of ensuring the execution thereof;

The mixed Sub-Commission considers:—

That, if such a commission is constituted, it would also be desirable to authorize it to seize all notes in enemy countries not yet circulated and to confiscate all designs, negatives, dies and stamps used for the printing of notes by the Casa Venetia dei Prestiti.

Appendix 93⁷

Minute From the Finance Section Regarding German Credits Maturing in Neutral Countries

It was decided to permit the payment, either in gold or in securities, of the accruing interest on German credits maturing in neutral countries provided that in consideration of such payment the credits are renewed. This will be a matter for arrangement with the neutrals at the next meeting with them.

It was agreed to inform the Supreme Economic Council of this decision, and to call the attention of the Council to the fact that the Finance Section have in this and similar questions been acting on the assumption that they have authority to make and carry out such decisions without further reference to higher authority. In view of the fact that these decisions may imply a relaxation of the general terms of the Armistice conditions (e. g., the general prohibition against the export of gold and securities from Germany) the Finance Section request that their authority to take effective action may be confirmed.

Appendix 94

Minute From the Shipping Section With Reference to the Management of Enemy Ships—Requests From Greece

(1) The Greek Delegation have made a formal application to the General Secretariat of the Peace Conference that a proportion of enemy ships should be placed under Greek flag and management, remaining under the control of the Allied Council in so far as employment is concerned.

The Greek Delegates made it clear that this request is independent of the request that they have made with regard to the permanent allocation of enemy ships to Greece in reparation for Greek ships sunk.

A similar request has been received from the Belgian Government.

It is suggested that both Delegations should be informed that the present division of management of enemy ships is based upon convenience, and that it will not affect in any way the ultimate distribution of the vessels. The Associated Governments are bound to employ the vessels, in so far as they are not needed for the supply of food to Germany, in the general relief problem [programme], and there would therefore be no advantage and considerable inconvenience in multiplying the number of nations upon whom the duty of running enemy tonnage in general Allied interest is imposed.

Appendix 95⁸

Spa, April 11, 1919.

Telegram From the German Government Regarding Relaxation of Restrictions on German Fishing Trade in the Kattegat and Skager-Rak

General Hammerstein to General Nudant

Concerning the opening of Skager-Rak and Kattegat for fishing requested in note 14652 Mar of the 21st March.

In our 14652 Mar of the 21st March, a request was made for the freedom of fishing in the North Sea, as well as the opening of Skager-Rak and Kattegat, upon the basis of the negotiations in Brussels, and with a detailed statement of the reasons.

By a radio message from the Permanent Allied Naval Armistice Commission of the 3rd April, the district of the North Sea was released, and at the same time it was stated that fishing in Kattegat and Skager-Rak could not be allowed.

The district release does not allow the fishermen to use the “neutral passage.” Therefore the possibility of arriving at the district opened up to them by a way that is more or less free from mines is taken away from them.

The release of Skager-Rak and Kattegat is, aside from their richness in fish, especially important, because the fishermen can then land their catch in North Sea or Baltic Sea harbours, according to their circuit.

The purpose alleged by the Associated Powers in Brussels and maintained by Germany for the extension of the fishing district is in effect a real alleviation in food conditions in Germany.

This will not be possible from the district released for fishing up to the present on account of the reasons above stated.

We therefore again request the release of the district asked for in No. 14652 Mar of the 21st March.

Von Hammerstein

Appendix 96⁹

American Mission, Paris, April 19, 5:40 p.m.

Telegram Received by the Director-General of Relief Regarding the Shipment of Relief Supplies to Czecho-Slovakia Via the Elbe

For Hoover. Hamburg, dated April 19, 1919. Received April 19, 11:30 p.m. Referring telegram the 22nd March, Allied authorities place limitation of 8,000 tons Tchecho-Slovak shipment on Elbe at one time. After mature consideration of the situation I am convinced that there is more danger in keeping the shipments stored in the warehouses in Hamburg than there is in having them en route in barges down the Elbe. The time of passage from Hamburg to Sphandan is approximately twelve days. The representatives of the Tchecho-Slovak Government agree with me in this opinion. I recommend that the restrictions in regard to the tonnage on the Elbe be reconsidered and that authority be granted to expedite shipments as rapidly as they arrive at Hamburg.

Leahy

Appendix 97

Extracts from Minutes of Fifteenth Meeting of the Communications Section Held April 16th, 1919, [Regarding the Cession of Armistice Locomotives to Countries in Central and Eastern Europe]

9. (a) Lt. Col. Lefort made the following statement in reply to the question put in para. 3 (d) of the minutes of the 14th Meeting:—

Marshal Foch is responsible for the Armistice locomotives to the Powers concerned on the Franco-Belgian front. He cannot therefore give these locomotives to other Powers. If the Allied Powers are of the opinion that 500 locomotives can be spared from the Franco-Belgian front, he is willing to authorize their cession, but it must be understood that it is in the nature of a positive or temporary cession, to count in the settlement of the final accounts, either in material or by any other means.

(b) Gen. Gassouin, as head of D. G. T. M., stated that these locomotives were available provided that he should be allowed to draw 200 from the “Armistice” locomotives turned over to the Americans.

(c) It was decided that the Communications Section should request the Supreme Economic Council to pass a resolution setting out the form of obligation to be executed by the countries to which rolling stock is ceded.

Appendix 98

Note [From the British Delegate] for Submission to the Supreme Economic Council [Regarding] German Exports of Articles on the Pre-emption List

1. I venture to call the attention of the Council to the impossible position which exists as regards the practical administration of the blockade, owing to the uncertainty which still prevails as to the true intent of the provisions regarding the Pre-emption List of German exports.

2. As regards exports from Germany by land to contiguous neutrals (Denmark, Holland & Switzerland) the position is comparatively clear. The telegram to the Germans of 24th March¹⁰ states that (clause 2):—

“The above prohibitions (of export) shall not be understood to interfere with such existing privileges as Germany may have to export over her land frontiers.”

The Council has in its minute of 9th April further interpreted the provisions of the Telegram as follows:—¹¹

. . . . . . .

Assuming, therefore, that at the beginning of May the Germans find themselves with, e. g., an estimated production during the month of 90,000 tons of coal surplus to their domestic requirements, they are entitled under the above decisions to export the whole 90,000 tons to Denmark, Holland & Switzerland without offering any to the Associated Governments.

3. Assume, however, that the Germans are only able to arrange for Denmark, Holland, and Switzerland to take up 60,000 tons out of these 90,000, but that Norway and Sweden are prepared to take up the balance of 30,000 tons. The Germans are bound, in accordance with the telegram of 24th March, to declare to the Associated Governments an exportable surplus of 30,000 tons, and to offer to the Governments 20,000 tons thereof for reply within 4 days. It is provided (see telegram of 24th March as interpreted by minute of 9th meeting of S. E. C.) that the offer is to be made at an equitable price fixed by the Associated Governments. No such price has yet been intimated to the Germans.

4. In order that the necessary instructions may be sent to the Fleet, who have at present only been directed by the Council to stop exports of gold, silver, securities and war material, it is imperative that an early answer should be given to the following queries, which have been formulated with reference to the hypothetical case above referred to. It is also, of course, essential that the Germans should have precise information as to what they may or may not do.

5. Query A. Until the Germans have declared the exportable surplus, are they free to export by sea, any, and, if so, how much of the 30,000 tons?

Query B. If the Associated Government fail to fix and intimate a price, are the Germans free to export by sea, any, and, if so, how much of the 30,000 tons?

Query C. If the Associated Governments fix and intimate a price, which the Germans fail to accept, are the latter still free to export by sea 10,000 tons?

Query D. If a price has been fixed, intimated, and accepted, and the Germans, declaring an exportable surplus of 30,000 tons, offer 20,000 tons to the Associated Governments, do they instantly become free, by the act of making the offer, to export 10,000 tons by sea, or, if not, at what subsequent point in the proceeding do they so become free?

Query E. Is it contemplated that the Germans are to report to the Associated Governments each outward cargo, as shipment is made, and that when the 10,000 tons has been reached further shipments of coal are to be prohibited for the rest of the month?

It has been ascertained from the Allied Naval Armistice Commission—

(a) That they have definitely forbidden the export of:—Gold, Silver, Securities and War Materials of all kinds.

(b) That as regards the other articles on the prohibited list they have referred the Germans to the telegram of March 24, now under consideration.

(c) That they have forbidden the export of coal and coke from Germany on account of the shortage of coal in Germany.

(d) A.N.A.C. state that they have not received the list of prohibited exports from Germany.

[

Wm. Mitchell Thomson

]

Appendix 99

Note for the Supreme Economic Council by the Sub-Committee on Germany on Export of Articles on Pre-emption List

In connection with Sir Wm. Mitchell Thomson’s memorandum on this question,¹² the Sub-Committee on Germany, without expressing an opinion on the questions of policy involved, desire to recommend to the Supreme Economic Council the following answers to the queries contained in paragraph 5:—

(a) Until the Germans have declared the exportable surplus, are they free to export by sea, and, if so, how much of the 30,000 tons?

Answer.—The Germans are not free to export anything.

(b) If the Associated Governments fail to fix and intimate a price, are the Germans free to export by sea any, and, if so, how much of the 30,000 tons?

Answer.—If the Allied and Associated Governments fail to fix and intimate a price, the Germans are free to export any quantity.

(c) If the Associated Governments fix and intimate a price which the Grermans fail to accept, are the latter still free to export by sea 10,000 tons?

Answer.—The telegram of the 10th April, 1919,¹³ bears the interpretation that in these circumstances nothing can be exported, and this has been declared to be the intention of the Supreme Economic Council.

(d) If the price has been fixed, intimated and accepted and the Germans, declaring an exportable surplus of 30,000 tons, offer 20,000 tons to the Associated Governments, do they instantly become free by the act of making an offer, to export 10,000 tons by sea, or if not, at what subsequent point in the proceedings do they so become free?

Answer.—Yes; so soon as definite contracts are made, unless there is reason to suppose that the Germans are not acting in good faith.

(e) Is it contemplated that the Germans are to report to the Associated Governments each outward cargo as shipment is made and that when the 10,000 tons has been reached, further shipments of coal are to be prohibited for the rest of the month?

Answer.—The answer is in the negative. The actual operation of the general agreement should be by adjustment over reasonable periods. It is clear that in any case it is desirable that the Germans should make export returns to the S. E. C.

In connection with (e) above, the Sub-Committee on Germany recommends to the Supreme Economic Council that it should be authorised to obtain from the Germans monthly trade returns, showing in particular production, exports, and imports of the more important commodities.

Appendix 100

Extracts From Minutes of Finance Section (9th Meeting 17th April, 1919) [Regarding German Exports of Articles on the Pre-emption List]

3. Meeting With the German Finance Committee at the Château de Villette.

Mr. Lamont reported the results of this meeting and stated that the neutral financiers had been informed of what passed. He added that, at the request of the French Delegate, no answer had been given to the two questions put verbally by the Germans at the previous meeting and since considered by the Supreme Economic Council, viz.:—

(i) Whether the Allies retain an option over two-thirds of Germany’s exportable surplus after or before the deduction of the amounts normally exported over land frontiers to contiguous neutral countries.

(ii) Whether the prices proposed by the Allies are to be considered as dictated prices or as subject to negotiation.

It was agreed to refer these questions once more to the Supreme Economic Council, as the French Delegate had been instructed to withhold his consent to the interpretation placed upon the telegram of the Supreme Economic Council by the other members of the Finance Section, viz.:—

(i) That exports over land frontiers to contiguous neutrals are free absolutely;

(ii) That of the remaining exportable surplus one-third is free absolutely;

(iii) That the Allies retain an option on the other two-thirds and will dictate fair and equitable prices for what they choose to buy.

Appendix 101

Memorandum [From Lord Moulton] on Purchase of Dyestuffs

The question of the purchase of German dyestuffs during the Armistice is very pressing. The position is somewhat complicated, and I have reason to think that the Delegates who have to decide upon the action which is to be taken almost immediately are not fully seized of the legal position of the matter, and therefore steps might be taken which would have serious and unforeseen consequences. I think, therefore, that it will not be out of place for me to review the matter in order to define the rights of the parties.

At the Brussels Conference, the Associated Delegates undertook that the list of articles whose export from Germany was to continue prohibited would be given as soon as possible to the German Government. In fulfilment of that promise, a despatch was sent by telegram to the German Government by the Supreme Economic Council on the 24th March which I shall refer to as “the dépêche Foch?.”¹⁴

So far as dyestuffs are concerned, it informed them that they were included in the prohibited list, but that the Allies were prepared to allow exceptions under certain conditions set out in the telegram.

For the present purpose, it is only necessary to refer to the following of these conditions:—

(i) The Allies shall have the right to purchase during the Armistice any dyestuffs which Germany might have available for export, but that this right should not be exercised to any extent greater than two-thirds of the total quantity available;

(ii) The price was to be fair and equitable, which was interpreted by a further telegram to mean: Such as the Supreme Economic Council pronounced to be fair and equitable;

(iii) Meetings of the Delegates were to be held at certain times and places, where lists of the amounts available for export were to be given by the German Government;

(iv) The Allied Governments were to have four days after the receipt of the lists to declare how much they wished to purchase, and after that, the Germans were free to export the balance of the listed commodities.

It will be seen that in its nature this telegram was an offer to lift the prohibition otherwise applying to dyestuffs upon certain conditions. It did not alter the rights of the parties in any way unless these conditions were accepted by the German Government and the offer acted upon. So soon as this took place, the rights and liabilities of the parties became those set out in the telegram containing the offer.

The German Government replied to the dépêche Foch by a note dated the 2nd April; this is a plain rejection of the offer.

I am satisfied that the German Government has not in any way qualified that rejection, and no action has been taken under the dépêche Foch with regard to dyestuffs, so that its existence does not in any way affect the legal position of any of the parties.

Meanwhile, in the expectation of arrangements being made for the purchase by the Allied Governments of portions of the stocks of dyes held by the Germans, meetings had been organized between technical delegates acquainted with the dye trade, with a view to arranging details of the kinds and quantities of the dyes to be purchased. One such meeting took place at Mayence on the 25th March. The existence of the dépêche Foch was apparently known, but was not the subject of discussion between the Delegates, and they parted apparently with an understanding that the German Government should give lists of the dyes they were prepared to sell.

In fulfilment of this agreement lists were handed over on the 5th April with a covering letter. This letter stated that they were handed over by the eight German dye-making firms in pursuance of a request given at Mayence on the 25th March, and it set out the nature and quantity of the dyes that they were prepared to supply for exclusive use in Belgium, France, Great Britain and the United States, and the prices at which they would be so supplied.

The terms of the letter are carefully chosen and clearly set out that it is a voluntary offer to sell under the prices and conditions fixed by the sellers. It makes no further reference to the circumstances which led to its being made and in no way does it purport to be, or is it in effect, action under the dépêche Foch.

Nothing further has transpired, and the position of the parties therefore is that which I have described, namely, that the Allies have under their consideration an offer of voluntary sale by the Germans of certain dyes at certain prices and under certain conditions.

The following consequences arise:—

1. In no respect does this offer comply with the conditions set out in the dépêche Foch. The Delegates, therefore, must secure the permission of the Supreme Economic Council for the export from Germany of the dyes they wish to take under this offer, because no such permission has been granted by the dépêche Foch.

2. The offer being in all respects a voluntary one, it follows that it must be accepted at the prices and under the conditions set out in the offer. This does not mean that, if the Delegates desire to accept any portion of it, they are prevented from negotiating for obtaining that portion on more reasonable terms, or from bringing influence to bear on the German firms to modify the offer in this respect, but it rests with the German firms to decide whether they will, or will not, do so.

3. No action taken by the parties under this offer affects, or is affected by, the existence of the dépêche Foch, or the rights and obligations of any of the parties thereunder. But it is most important to make it clear that the Allies realize that the lists furnished by these eight firms are not lists furnished under, or in accordance with, the conditions set out in the dépêche Foch, otherwise it might lead to the contention that these lists amounted to such action, and if that could be established the purchase of even a single pound of the listed dye-stuffs would set free for export the whole of the listed stocks.

The consideration which dominates the action of the Delegates of the Allied Governments with regard to this offer must be the present necessities of certain of the Allied countries with regard to particular dyes. For instance, certain dyes are imperiously needed within a very few weeks by the textile trade in Alsace. From what I could learn, the amount thus required is not large, and therefore the effect of the unreasonable prices demanded would not represent a great sum of money. Moreover, the condition that the dyes must be used exclusively in the Allied countries ceases to be material, because the intention is to use them solely there.

I can see no reason, therefore, why this should not be treated in its proper legal character as a voluntary offer, giving to the Allies the power of purchasing at the named prices the dyes that are essential for their immediate needs, provided that the Supreme Economic Council consents to allow the export from Germany to the Allies of the amounts so selected on the terms demanded. But the views of the Supreme Economic Council on this point should be ascertained before action is taken, and, seeing that the Delegates propose to meet on Saturday next to decide on the dyes which they will take, there is no time to lose.

Moulton

April 17, 1919.

Appendix 102

[Translation]

Château de Villette, 16 April, 1919.

The President of the German Finance Commission to the President of the Allied and Associated Finance Commission

Telegram No. 184

According to a communication received from the German Government, the Allied & Associated Governments (through the permanent Allied Naval Commission) informed the German Government two and a half weeks ago, that certain relaxations were about to be permitted in sailings to the three Northern Neutrals and the Netherlands and in coastal traffic.¹⁵ The sailing of German ships under 1,600 tons gross was to be set free with the following limitations:—

The ships are only to carry foodstuffs or goods specified in an agreement of the Allied & Associated Governments with the Neutral Governments.

The German Government was also to notify to the permanent Allied Naval Commission from time to time which ships were selected for the commerce in question.

As it was not clear what goods were actually permitted to be transported in this manner by sea, the German Government entered into communication with the Permanent Allied Naval Armistice Commission and enquired what precise meaning was to be attached to the phrase “goods specified in an agreement of the Allied & Associated Governments with the Neutral Governments.” The Permanent Allied Naval Armistice Commission referred in reply to the list of prohibited goods handed in to the German Government.

The German Government is even now not sure of having interpreted correctly the meaning of the Allied & Associated Governments. It is assumed that the intention is that foodstuffs and all such goods as are not included in the prohibited list should be permitted to be transported by sea.

It is urgently requested that a reply may be sent as soon as possible, either through the Finance Commission or through the Permanent Allied Naval Armistice Commission, in order that the German Government may be in a position to give correct information on the subject to interested parties and to the official Departments concerned.

Melchior

Appendix 103

[Draft Resolutions Embodying] Proposal To Ration Germany in Raw Materials

The following draft resolutions were passed on April 19th, 1919, by the Committee on Sales appointed by the Raw Materials Section for consideration by Supreme Economic Council:—

1. That the import of raw materials into Germany is approved in principle, subject to the views of the Finance Section as to the financing of such imports.

2. That, in view of difficulties of shipment and of finance, such imports should in general be confined during the Armistice to monthly rations.

3. That all goods imported within these rations should be consigned to specified authorities to be named by the German Government.

4. That the Committee of Four to which the Raw Materials Section have referred the examination of such rations should be empowered to communicate with the Germans and to fix the rations forthwith, reporting to the Blockade Section as to the action taken.

Appendix 104

[Resolution From the Blockade Section Relative to the Reestablishment of Trade Relations With the Occupied German Territories]

The Blockade Section ask that the following resolution should be considered as a matter of urgency:

At a meeting of the Blockade Section held on the 19th April, a memorandum on the reestablishment of trade relations with the occupied German territories was considered.

The following resolution was adopted for submission to the Supreme Economic Council:

Resolved that after the day when the Preliminary Peace Treaty is presented to the German delegates, it should be announced that importations into the occupied Rhine territories (including of course Luxemburg) are free, with the exception of commodities specified on the prohibited list as set out in § 51 of the 11th meeting of this Council concerning the restoration of trade with Austria and, in the case of shipments from the Associated countries of commodities the exportation of which may be restricted by domestic regulation.

Further resolved that purely from a blockade point of view there is no reason for control over exports from the occupied Rhine territories, except in the case of exports to non-occupied Germany, which should still be subject to the control of the Interallied Committee of Luxemburg, and the Blockade Council refer this question to the Supreme Economic Council for consideration from all other points of view, with a view to determine as early as possible what measures, if any, are necessary for the control of exports from occupied Rhine territories.

M. Seydoux has reserved his assent to this action, in so far as the same relates to export from the occupied Rhine territories.

Appendix 105

Extracts From Minutes of Sixteenth Meeting of the Blockade Section Held on April 16

The Chairman read to the Council a Resolution, submitted by the American Delegation, with a view to establishing unlimited rations of all commodities for Northern Neutral Countries and Switzerland. After an extended discussion the Council adopted the following Resolutions:

“Resolved, That on and after April 25th, 1919, or such earlier date as may be approved by the Allied Blockade Committee, all commodities, other than finished munitions of war may be imported by the Northern Neutral Countries and Switzerland without limits as to quantity and without requiring the issuance of individual import certificates as a condition precedent to the issuance of Export licences by the Associated Governments.

“Provided, That all of the provisions of the existing agreements between the Associated Governments and the Governments of the above-mentioned neutral countries or Import Associations therein, which provisions are not contravened by the foregoing resolution, shall be continued in full force and effect except as the same may be expressly relaxed by the establishment of free lists or other measures adopted by the competent Associated Authorities.

“Further resolved, That all shipments to the above-mentioned Neutral Countries must be consigned to the respective Importing Associations in these countries in the case of shipments for members thereof, provided that the said bodies give the usual guarantees to the satisfaction of the respective I.A.T.C.’s against re-export to destinations not approved by said I.A.T.C.’s; in the event that any of said Import Associations shall be unwilling to receive the consignment of shipments intended for importers, not members of said bodies, the Associated Governments will permit shipments to be made for the account of such persons, provided the same are consigned to the I.A.T.C. in the country of destination, release to be made upon the execution by the actual purchaser, or ultimate consignee of satisfactory guarantees against re-export to unapproved destinations.

“Further resolved That all shipments to Germany from the above-mentioned Neutral Countries, except those authorized by the several rationing agreements, shall be permitted only in the event that the same shall have been approved by the I.A.T.C. in the country from which shipment is proposed to be made. With respect to shipments to Germany which are authorized by any of said rationing agreements, the issuance of permits for said shipments shall be administered in the manner heretofore followed.

“Further resolved That the Associated Governments maintain as heretofore the principle of the blockade and reserve the right to re-impose any or all of the restrictions heretofore in effect should circumstances later warrant such action.”

Appendix 106¹⁶

Draft Resolutions Submitted by the British Delegates Regarding the Derationing of Germany

(i) “That the Council is of the opinion that all blockade restrictions on the importation of food into enemy countries should be removed and an announcement made to that effect.”

(ii) “That the matter should be referred to the Blockade Section to take the necessary action and to draft the announcement which should be submitted to this Council and to the Council of Four before being published.”

(iii) “That the Finance Section should consider what steps can be taken, in view of the above decision, to free German means of payment to enable her to benefit to the utmost by the above concession.”

Appendix 107

Memorandum by the Supreme Economic Council for the Council of Ten

The attached memorandum has been approved by the Supreme Economic Council, subject to approval by the Council of Ten of such questions as are not economic in their nature and are, therefore, outside the scope of the Supreme Economic Council.

The memorandum is, therefore, submitted to the Council of Ten, and they are asked in particular to give their approval to the following proposals:—

1. That an Inter-Allied Commission, consisting of four commissioners, one from each Ally concerned with the administration of the occupied territories, should, together with an Italian liaison officer, be set up with full authority to co-ordinate the administration of the four Army Commands on all economic, industrial and food questions, in accordance with the policy laid down from time to time by the Supreme Economic Council.

2. That orders should be issued under the authority of the Supreme War Council to the Army Commands in the various areas, that directions given by the Commission shall be uniformly executed throughout the whole area.

April 15, 1919.

[Enclosure]

Memorandum on the Present Status of the Commissions Set Up Under the Armistice With Germany and Their Relations to the Supreme Economic Council

1. There exist various commissions and bodies set up directly or indirectly under the Armistice to handle relations with the Germans. Clearly, so long as the state of war continues, and perhaps for some time afterwards, these bodies must operate through and under the authority of the High Command, and they must look to the High Command for instructions and policy on all matters of a military nature, or concerned with the maintenance of public order.

2. But many of the affairs with which they deal affect directly the industrial and economic situation, or are merely questions of civil administration. It is clearly desirable that the policy followed by them should be closely co-related with the general policy which the Allies are pursuing with regard to Germany generally. For example, the policy adopted in carrying out the Armistice conditions as to the withdrawal of machinery stolen by the enemy from Northern France should be considered in its bearing on the problem of making Germany work for her living, which is one of the most serious which the Economic Council has now to face. It is similarly desirable that the provision of food and the control of food distribution in the occupied territories should be considered in its relation to the problem of food supplies and administration in the rest of Germany.

3. A list of the more important bodies and commissions now in existence is attached (see Appendix). It is possible that this list is not complete.

4. The Supreme Economic Council is not specially concerned with the Commissions supervising road, rail and water transport, save for special problems, e. g., transport of supplies across Germany, Poland and Austria. But the Communications Sections should be furnished with periodical reports by all such Commissions.

5. The other bodies fall into three groups:—

(a) Those dealing with the actual execution of the Armistice and with communications concerning the Armistice.

(b) Those concerned with the administration of the occupied territories.

(c) Those set up directly under the responsibility of the Supreme Economic Council, and concerned with the whole of Germany.

The International Armistice Commission

6. The International Armistice Commission at Spa fulfils a double function. It is a channel of communication with the Germans, performing in this respect the sort of duties which would in peace be performed by the Embassies at Berlin, and it also supervises the actual execution of provisions as to the return of machinery, securities, &c.

7. The Armistice Commission is responsible to Marshal Foch, who is charged with the execution of the Armistice. So far as economic questions arise in respect of the Armistice, they are referred by the Armistice Commission to the Supreme Economic Council. The Council of Ten decided some time ago that economic delegates should be attached to the staff of the Armistice Commission to deal with such questions. The arrival of German delegates at Chateau Villette will probably result in this being now unnecessary.

The Supreme Economic Council and the Administration of the Occupied Areas

8. The administration of the occupied territories inevitably presents difficulties, on account of the mingling of military and civil responsibilities. There can be no question that in matters of military importance the authority of the Army Command, acting under directions of the High Command, must be supreme. But many of the problems to be dealt with are of a civil, economic or industrial rather than of a military nature, and they must be considered in their bearing on the general problem of economic relations with Germany as a whole. Economic and civil questions should be treated by an Inter-Allied Civil Commission, whose powers should, as far as necessary, be authorised by the Council of Ten.

9. The importance of the occupied territories in restarting trade with Germany must not be overlooked. The sooner the practical difficulties and the inevitable prejudice which have blocked the resumption of ordinary trade relations with Germany are removed, the better it will be, not only for Germany, but for the whole world. Four months have elapsed and trade even with the occupied territories has not yet restarted. In the meantime, the paralysis of the whole commerce of the world—a by no means unimportant cause of the prevailing industrial unrest—gets more serious. The financial difficulties of trade with the occupied territories are less, and the prejudices against trading with them are less than with the rest of Germany. It is clearly, then, of great importance that every effort should be made to reopen trade with the occupied territories.

10. Whatever may be the decisions ultimately taken on the delicate political issues involved, it is not possible to deal with the administrative and the economic problems of the occupied territories as other than part of the whole German problem: Under the terms of the Armistice, the Germans claim in any case that the local administration should continue. It would, indeed, be impossible at present to administer the country through any other means. But, of course, the local civil administration is connected by many ties, formal and otherwise, with the Government at Berlin and with the administration of the rest of Germany.

11. The question of the economic relations between the occupied territories and the rest of Germany must obviously depend from time to time on decisions taken with regard to the political status of the left bank. It is clearly necessary, however, that problems of industry in the occupied area, as well as the problems of food control, should be considered with a close appreciation of their relations to the general problem of Germany and to the policy to be adopted by the Allies in respect of them.

12. The functions of the Inter-Allied Economic Committee of Luxembourg should be closely defined. At present it does not concern itself with food questions, but it is mainly occupied with regulating the trade in raw materials and manufactured products between the occupied territories and with the rest of Germany, with neutrals and the Allies.

13. The Supreme Economic Council has agreed to the formation of an Inter-Allied Military Committee independent of the Luxembourg organisation to deal with certain food problems in the occupied territories. Having regard to the military situation, this Committee is able to perform a valuable function in arranging for the transport of food supplies and securing the enforcement of regulations and orders.

14. But the food problem is so interlocked with the financial, the administrative and the industrial problems, with which the Luxembourg Committee to a greater or less extent already deals, that the co-ordination of food policy and administration should clearly be handled by the same persons as those who are responsible for the other economic problems.

Further, the whole elaborate machinery of maximum prices, controlled distribution through trade channels, and centralised buying and marketing set up during the war requires examination and perhaps modification by experts familiar with the difficult agricultural and economic problems involved.

15. At present the Luxembourg Committee has no direct relations with the Supreme Economic Council. M. Tirard, who has been appointed Controller-General by Marshal Foch, is responsible only to the High Command. The Committee does refer a certain number of questions to a Paris Committee set up by the Ministers of Blockade, but the relation of this Paris Committee to the Supreme Economic Council and the various sections of it has not been defined. It is clear that the Luxembourg Committee should, on all matters not of a military nature affecting the industry or economic life of the occupied provinces, receive its directions from the Supreme Economic Council.

April 15, 1919.

Recommendations for Better Organisation To Deal With Economic Relations With Germany as Regards Both Occupied and Unoccupied Territories

Subject at all times to military necessity, the following recommendations are put forward:—

1. The full responsibility for taking all necessary executive action in accordance with any policy decided upon for the occupied areas will rest upon the Army Command in each area, who will, on civil and economic matters, follow the instructions of the Inter-Allied Commissioners referred to below.

2. The Army Commands will, so far as is considered necessary, be assisted by the best available expert advisers on the particular branches of administration or industry with which, as the ultimate executive authority in the occupied areas, they have to deal, e. g., finance, food, industry, fuel, labour, &c. These expert advisers will receive instructions direct from the Inter-Allied Commissioners.

3. An Inter-Allied Commission (hereinafter referred to as the Inter-Allied Rhineland Commission) will be formally constituted by the Council of Ten to co-ordinate the administration of the four Army Commands on all economic, industrial and food questions, in accordance with the policy laid down from time to time by the Supreme Economic Council. The decisions on economic matters of the Inter-Allied Rhineland Commission will have executive force, and will be observed by the Army Commands in the different zones.

The Inter-Allied Rhineland Commission will be responsible to the Supreme Economic Council and will report to it through the channel set out in paragraph 8, it being understood that matters of a military nature will be referred by it to the High Command to be dealt with.

Any matters of a political nature on which the Inter-Allied Rhine-land Commission requires instructions will be referred by it to the Sub-Committee of the Supreme Economic Council in Paris (see recommendation 8) for transmission to the proper authorities concerned. Copies of any such reference will be at the same time furnished to the High Command.

It is recommended that the headquarters of the Inter-Allied Rhineland Commission should be at Cologne, but the Commission will itself settle this matter.

4. The Inter-Allied Rhineland Commission will be composed of four commissioners, one from each Ally, concerned with the administration of the occupied territories, who should be men of wide administrative and official experience. They will have to be trusted with wide discretionary powers. M. Tirard, the French Commissioner, will act as Chairman. In this capacity he will be responsible solely to the Supreme Economic Council.

The Italian Government will appoint a representative to act as liaison officer with the Inter-Allied Rhineland Commission.

5. For the present the Inter-Allied Military Food Committee will co-ordinate the transport of food supplies in the occupied territories and will attend to the uniform enforcement throughout the occupied territories of Food Control Orders and Regulations.

6. The administrative policy to be followed by the Inter-Allied Rhineland Commission in connection with economic, industrial or food matters will be laid down from time to time by the Supreme Economic Council. Questions of difficulty as they arise will be referred to the Sub-Committee on Germany (see recommendation 8) for decisions or for reference to the Supreme Economic Council.

7. In framing its policy the Supreme Economic Council, whilst paying proper attention to the special circumstances of the occupied territories, and to any political or other decisions of the Council of Ten, will endeavour to assure the necessary co-ordination in Inter-Allied policy as regards the occupied and unoccupied territories. The Supreme Economic Council will ascertain the views of the Council of Ten in respect of any matters involving political considerations.

8. With a view to expediting decisions on questions concerning occupied or unoccupied Germany, involving more than one section of the Supreme Economic Council, there will be constituted in Paris a Sub-Committee of the Supreme Economic Council (hereinafter referred to as the Sub-Committee on Germany) consisting of one delegate only of each Ally represented on the Supreme Economic Council. The duties of the Sub-Committee will be—

(a) To co-ordinate the work of the various commissions and sections of the Supreme Economic Council concerned with current economic negotiations and relations with Germany.

(b) To deal with references from the Inter-Allied Rhineland Commission to the Supreme Economic Council.

(c) To centralise all communications received from and sent to Germany in connection with (a) and (b) above.

(d) To decide questions which can be dealt with within the policies laid down by the Supreme Economic Council, or by its separate sections, or which are referred to it for settlement by the Council, or by the sections.

(e) To secure that any preliminary decisions or any action necessary before a definite policy can be formulated by the Council should be taken with the least delay by the appropriate section or national department concerned, and to secure that all necessary steps are taken to bring into effect the decisions of the Supreme Economic Council.

(f) To centralise and render available all reports, statistics and memoranda bearing on economic relations with Germany.

9. The Belgian representative of the Supreme Economic Council will have the right to attend the meetings of the Sub-Committee on Germany.

10. With a view to securing continuous liaison between the Inter-Allied Rhineland Commission and the Sub-Committee on Germany, any commissioner or a representative of the Commission may at any time attend the meetings of the Sub-Committee and may take part in its deliberations when questions affecting the occupied territories are under discussion.

11. All questions involving economic matters relating to Germany arising in connection with the work of the Inter-Allied Armistice Commission and of the Allied Naval Armistice Commission will be submitted by these bodies to the Sub-Committee on Germany for appropriate action.

Appendix

List of Commissions, etc.

Name	Functions
Inter-Allied Permanent Armistice Commission (Spa).	General supervision of execution of Armistice conditions; formal communications with German Government.
Sub-Commission dealing with Clause 9 of Armistice (Entretien).	Recovery from Germany of costs of maintaining troops in occupied areas.
Sub-Commission dealing with Clauses 2 and 4 of Trèves Financial Agreement.	Restitution of stolen and sequestrated securities.
Sub-Commission dealing with Clause 6 of the January Armistice renewal (Wiesbaden).	Restitution of stolen French and Belgian industrial machinery.
Sub-Commission dealing with the handing over of Agricultural Machinery.	Receiving from Germany agricultural machinery instead of rolling-stock.
Commissions de Réception (Brussels and Metz).	Receiving from Germany rolling-stock and raw materials handed over under the Armistice.
Calais Railway Commission …	Control of Belgian railway system.
Field Railway Commission.…	Control of Luxembourg and German Rhine-land railways.
Calais Navigable Waterways Commission.	Control of Belgian navigable waterways.
Field Navigation Commission …	Control of the Rhine, Moselle, and Sarre navigation.
Commission for Postal Control (Luxembourg).	Control of correspondence, telegraphs and telephones in occupied areas.
Commission Économique (Luxembourg).	Supervises distribution of raw materials to factories in the occupied area and output of goods, and regulates economic relations in occupied territories and the rest of Germany.
Paris Left Bank Committee…	To deal with blockade trade and other questions referred to it by the Army Command or by Luxembourg.
Shipping Commission (Rotterdam?): not yet appointed.	To provide channel of communication for settling practical details in handing over German ships.
Rotterdam Food Commission…	To settle the commercial and other details arising out of the sale of foodstuffs to Germany by the Allies.
Compiègne Finance Commission..	To settle details of the financial arrangements between the Allies and Germany.

Appendix 108

Memorandum by the Supreme Economic Council for the Council of Ten

Note on the Establishment or a German Commission at or Near Paris To Facilitate the Conduct of Current Economic Negotiations

With a view to facilitating, giving unity to, and expediting the current negotiations in Germany of the Associated and Allied Powers, in connection with the provision of foodstuffs to Germany, the Supreme Economic Council strongly recommends that the German Government shall be requested to send immediately to a place to be designated in the very near neighbourhood of Paris technical experts on food, shipping, finance, raw materials, trade, and communications.

These delegates should be entrusted by their Government with full power to decide on all questions arising out of the provision of foodstuffs to Germany and on immediate economic relations with Germany.

They should be provided with proper and sufficient means of communication with their Government and with all necessary facilities to enable business to be transacted conveniently and rapidly.

April 15, 1919.

1. Attached to the file copy of the minutes is the following note:

   “Clause b. of the decisions recorded in Minute 104 has not been agreed by the American Council Officer on behalf of the American Delegates.

   “Their interpretation of the decision reached would read as follows:—

   “‘That the Shipping Section should be urged to do all in their power to expedite the arrangements for getting the boats into action and to consider the possibility of utilising Belgian crews of which the Belgian Representative reported a sufficiency.’”

2. See FM–6, minute 5, vol. iv, p. 589.
3. The documents were approved by the Council of Foreign Ministers on April 21, 1919; see FM–7, minutes 2 and 3, vol. iv, pp. 599–600.
4. The French delegates disagreed with this paragraph (see minute 102).
6. See appendix 68, p. 135.
7. Appendix 93 is filed separately under Paris Peace Conf. 180.0501/34.
8. Appendix 95 is filed separately under Paris Peace Conf. 180.0501/34.
9. Appendix 96 is filed separately under Paris Peace Conf. 180.0501/34.
10. See appendix 37, p. 89.
11. See minute 78 (1) (a), p. 107.
12. See appendix 98, supra.
13. See appendix 67, p. 134.
14. See appendix 37, p. 89.
15. See minutes 56 and 72 (a) and appendix 57, pp. 84, 104, and 120.
16. Appendix 106is filed separately under Paris Peace Conf. 180.0501/14.