462.11 W 892/302b: Telegram
The Secretary of State to the Ambassador in France (Herrick)
[Paraphrase]
Washington, June 14,
1924—2 p.m.
182. L–81, for Logan. You may find helpful the following information on how the Department reached views set forth in its telegram L–80, June 14, 1 p.m.
- (1)
- The total amount of the probable awards on account of American claims, which includes claims of this Government except Army costs, has been estimated roughly at $300,000,000. You will understand that this figure is given with the greatest reserve and without any commitment whatever, and that you are not to divulge it or use it in any way. The total amount finally awarded may quite possibly differ substantially from above estimate.
- (2)
- In regard to the total amount of American claims it is important to note two points: first, total amount of Germany’s capital debt under the plan has not been fixed, and second, Spa Percentage Agreement22 was drawn up before Germany’s debt of 132 billion gold marks was agreed upon. For these reasons the Department does not believe that the Allied Governments can properly insist on being informed of the amount of American claim, more especially as it will represent amounts which have actually been adjudicated, not merely estimated amounts.
- (3)
- In regard to the amount of German property which is held by the Alien Property Custodian, the Department has nothing additional to say.
- (4)
- On the one hand the Department is anxious to retain the prior position of the Army cost claim, because of the manifest equity which the Allied Governments cannot dispute; and on the other, it is important that private claims should be paid at earliest date possible. The Department has felt, accordingly, that the most desirable arrangement would be one providing for current payments to cover both classes of claims on what would amount to a fifty-fifty basis, as the total amount of Army costs and other claims would be not far from equal if the estimate given above be correct.
- (5)
- If the payment of the Army costs be extended over a period of 20 years, the United States should receive annually one-half of the estimated installment of $31,500,000, or about 65,000,000 gold marks. If the payments were to be extended over a period of 24 years, the annual amount received would approximate 53,000,000 gold marks. In payment of other claims, 2½ percent of, say, 2,150,000,000 gold marks, making allowance for prior charges against [Page 24] normal annuity payments (see Department’s L–80, last part of paragraph 3), would be equivalent to 54,000,000 gold marks. On the foregoing computation the Army cost claim would be covered in 18 to 22 years from the present, and the other claims in about 24 years.
Hughes