(c) crown copyright
Catalogue Reference:CAB/24/136
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r'"-irumo':d
t i s tiio P r o p e r t y
of
3987o
Homo, "by tho S e c r e t a r y o£ S t a t o
for Foreign i f f a i r s .
( C i r r a l a t o d wifrii r e f e r e n c e
I t bra 1. on t o d a y fa C a b i n e t
1
2,
W h i t e h a l l Gar d o n s , 3 . If.,
May ZAcd, 192S
a
to
igoMa)
Attitude of French Government in the event of the
failure by Germany to meet her reparation
obligations.
PRIME MINISTER.
E
These papprrs and the advice in which they
culminate are the result of-a conversation between
Sir Eyre Crowe, Sir Cecil Hurst, Mr. Wigram and
myself this afternoon.
The legal ground on which we stand i s strong
(vide Sir C.Hurst's note) though not absolutely
impregnable. We may be sure, however, that
strong as i t i s , i t will not convince the French
and we may go on anguing the matter in interminable
notes.
It i s preferable therefore to regard the
question from the political standpoint.
Here, we are in a position not without
advantage.
1.
The situation demanding action cannot
arise on May 31st, nor before June 15th. It may
conceivably not arise until a l i t t l e later.
2. Monsieur Poincare has indicated his
willingness to concert with the Allies upon the
situation produced by the probable German default,­
3.
The right thing to do i s to take him at
his word and propose or agree to such a consult­
ati on.
4 . In i t , the French and the Belgians will
be or may be on one side. The British, Italians,
and Japanese w i l l be on the other.
v
511
5. Should the French decide to "break away­
after such a consultation and to act on their own,
the onus and odium of breaking the Entente will
then devolve publicly upon them.
They w i l l not do i t .
For Poincare would at once £ a l l .
I have not here discussed the German action
either on May 31st or June 15th because I am not
familiar with their intentions.
But i t i s
obvious that a move on their part might throw a
different light on the situation.
(Initialled)
C.
May 22nd, 1922,
M. Poincare's note of May 19th respecting the
attitude to be adopted by the French Government In
the event of the failure by Germany to meet her
reparation obligations.
(A brief summary of the recent history of the
reparation negotiations and a note on the state of
execution of the allied ultimatum of May 5th 1921,
as modified by the Reparation Commission's
decisions of January 13th 1922 and March 21st, 1922
are appended to the present memorandum as Annexes
i and i i ) .
Thejpurpose of M. Poincare's note i s to
explain :
512
(1)
That t h e French government
(a)
will
i n accordance w i t h t h e p r o c e d u r e
c o n t e m p l a t e d i n paragraphs 17 and. 18 of annex
2 t o p a r t 8 of t h e t r e a t y of V e r s a i l l e s
t h e announcement t o e a c h . o f t h e
interested
powers hy t h e r e p a r a t i o n commission of
a c t u a l f a i l u r e of Germany t o f u l f i l
her o b l i g a t i o n s ,
(b)
the
any of
and,
t h e n be ready t o c o n c e r t w i t h t h e i r
a l l i e s i n examining t h e
(2)
await
position.
That t h e F r e n c h government c o n s i d e r
under paragraph 18 of annex 2 t o p a r t 8 of t h e
of V e r s a i l l e s t h e r e s p e c t i v e governments
that
treaty
nevertheless
r e t a i n t h e r i g h t t o t a k e such measures as t h e y may
c o n s i d e r n e c e s s i t a t e d by c i r c u m s t a n c e s ,
(3)
and
That t h e F r e n c h government do n o t c o n s i d e r
t h e m s e l v e s i n t h e l a s t r e s o r t debarred from t a k i n g
s e p a r a t e a c t i o n d e s p i t e t h e p l e d g e which M . M i l l e r a n d
gave t o t h e B r i t i s h government a f t e r t h e
occupation
of F r a n k f u r t on A p r i l 6 t h 1 S 2 0 .
The p r o c e d u r e c o n t e m p l a t e d by t h e r e p a r a t i o n
commission i n t h e e v e n t of t h e f a i l u r e by Germany t o
a c c e p t t h e demands s e t o u t i n t h e c o m m i s s i o n ' s
note
t o t h e German government of March 2 1 s t 1922 i s
clear­
l y s e t out i n t h e l a s t s e c t i o n of t h e d e c i s i o n which
accompanied t h a t l e t t e r .
The f o l l o w i n g p r o c e d u r e
is
t h e r e l a i d down:
(a)
On May 3 1 s t 1922 t h e commission w i l l
examine t h e p r o g r e s s made by t h e German
government towards s a t i s f y i n g t h e c o n ­
d i t i o n s l a i d down i n t h e
l e t t e r of March 2 1 s t ,
(b)
commissions
1922.
Should t h e p r o g r e s s made bp judged
unsatisfactory
513
u n s a t i s f a c t o r y the provisional
arrangement
c o n t e m p l a t e d f o r tlie y e a r 1922 w i l l be c a n ­
c e l l e d and t h e payments due under t h e London
u l t i m a t u m of May 5 t h 1921 but n o t p a i d t o
d a t e w i l l become due w i t h i n 14 days of
foregoing cancellation, i . e .
(c)
the
about June 1 5 t h .
Should t h e s e payments not be
f o r t h c o m i n g paragraph 17 of annex 2 t o p a r t
8 of t h e t r e a t y of V e r s a i l l e s w i l l
l y operate, i . e . ,
immediate­
t h e r e p a r a t i o n commission
w i l l f o r t h w i t h g i v e n o t i c e of t h e d e f a u l t of
Germany t o each of t h e i n t e r e s t e d p o w e r s .
(d)
Paragraph 18 of annex 2 t o p a r t
3 of t h e t r e a t y of V e r s a i l l e s , which r e a d s
as f o l l o w s , w i l l then o p e r a t e : ­
"The measures which t h e a l l i e d and
a s s o c i a t e d powers s h a l l have t h e r i g h t
to
t a k e i n c a s e of v o l u n t a r y d e f a u l t by Germany
and which Germany a g r e e s n o t t o regard as
a c t s of war may i n c l u d e economic and
f i n a n c i a l p r o h i b i t i o n s and r e p r i s a l s and
i n g e n e r a l s u c h o t h e r measures as t h e
r e s p e c t i v e governments may d e t e r m i n e t o be
necessary in the
circumstances."
The i n t e r p r e t a t i o n of paragraph 18 i s
i n t h e accompanying n o t e (annex I I I ) .
discussed
I t w i l l be
apparent from t h i s t h a t , from t h e p o i n t of view of
strict legality,
i t w i l l be p o s s i b l e t ^ d i s p u t e t h e
c o n t e n t i o n put forward by Ivi. P o i n c a r e .
t h e French would f i n a l l y a c c e p t t h e l e g a l
But t h a t
argument
i s o b v i o u s l y most i m p r o b a b l e .
In view, therefore,
of t h i s and of t h e f a c t
immediate
that
immediate i n d e p e n d e n t a c t i o n by t h e French i s n o t i n
q u e s t i o n , i t i s f o r c o n s i d e r a t i o n whether t h e r e p l y
which we s h o u l d r e t u r n t o M. P o i n c a r e s h o u l d n o t he on
some s u c h g e n e r a l l i n e s as t h e
following:-
M . P o i n c a r e i s a t p a i n s t o argue t h a t t h e s o l e m n
p l e d g e s , g i v e n t o H i s M a j e s t y ' s Government i n A p r i l
1 9 2 0 , t h a t t h e French government would, f o r t h e f u t u r e
o n l y a c t i n agreement w i t h i t s a l l i e s i n a l l
inter­
a l l i e d q u e s t i o n s which a r e r a i s e d by t h e e x e c u t i o n of
t h e t r e a t y , do n o t apply i n t h e p r e s e n t c a s e ,
v a r i o u s t e c h n i c a l and l e g a l
for
reasons.
H i s M a j e s t y ' s Government do not admit t h e s o u n d ­
n e s s of M . P o i n c a r e ' s argument and are f u l l y p r e p a r e d
t o show c o n c l u s i v e l y why i t i s f a u l t y .
An o u t l i n e
of t h e i r c o u n t e r - a r g u m e n t i s - g i v e n i n t h e annexed
memorandum.
They a r e , however, l o t h t o f o l l o w M. Poincare"
i n t h e p a t h of l e g a l c o n t r o v e r s y i n r e g a r d t o a m a t t e r
t o u c h i n g , as t h i s d o e s , tibB
ance.
v e r y h e a r t of t h e a l i i . ­
They p r e f e r t o d w e l l on t h e d e f i n i t e
intima­
t i o n g i v e n i n h i s n o t e t h a t t h e French government w i l l
i n f a c t be r e a d y , i f
and when t h e r e p a r a t i o n corn­
mi t t e c has d e c l a r e d Germany t o have d e f a u l t e d ,
c o n c e r t w i t h t h e i r a l l i e s f o r t h e p u r p o s e of
to
consider­
i n g t h e p o s i t i o n as r e g a r d s t h e measures t o he t a k e n .
H i s M a j e s t y ' s Government t h i n k i t u n n e c e s s a r y a t
t h i s moment t o pursue t h e t h e o r e t i c a l and h y p o t h e t i c a l
q u e s t i o n as t o what i s o l a t e d a c t i o n i f
any, might
l e g i t i m a t e l y he t a k e n by one or t h e o t h e r of t h e
a l l i e d powers i n t h e e v e n t of t h e i r f a i l i n g t o come
t o an agreement among t h e m s e l v e s f o r common a c t i o n .
They would f a i n b e l i e v e t h a t i n t h i s , as i n
all
p r e v i o u s i n s t a n c e s , t h e l o y a l c o - o p e r a t i o n of
allied
the
515
a l l i e d governments w i l l e n s u r e t h e s u c c e s s f u l
pursuit
of a common p o l i c y on t h e b a s i s of u n a n i m i t y .
I t i s i n t h i s c o n v i c t i o n t h a t t h e y now ask t h e
French government t o arrange f o r a m e e t i n g of
r e p r e s e n t a t i v e s of t h e f o u r a l l i e d powers as s o o n as
p o s s i b l e a f t e r t h e r e p a r a t i o n commission have made
their
report.
Foreign
Office,
May 22nd, 1 9 2 2 .
516
8WLM.-T
MMORANDUM
Recent history of the reparation negotiations.
The hopeless situation of the German finances at
the end of last year led, at the Cannes conference in
January, 1922, to proposals for a large reduction in
the 1922 payments due under the London ultimatum of
May 1921. Instead of the payments totalling a sum of
3* 3 milliards of gold marks (due under the London
ultimatum) the allied experts at Cannes recommended
the payment during the year 1922 only of some
720,000,000 of gold marks and deliveries in kind
to the maximum value of 1,450,000,000 gold marks.
The f a l l of M. Briand, however, rendered i t
impossible for the Supreme Council to take any definite
decision on the experts' proposals, and the Cannes
conference contented i t s e l f with instructing the
Reparation Conmission to summon the German government
to put forward their own proposals for the 1922
payments, and for the guarantees in the shape of
budgetary and currency reform which might reasonably
be expected as the result of the partial moratorium which
the a l l i e s proposed to-grant.
The German proposals were received an January
23, 1922. They may be said to have been not un­
reasonable so far as the guarantee budgete.ry and
currency reforms were concerned. They contained,
however, no definite proposals for the 1922 payments,
the/
5
t h e German government c o n t e n t i n g t h e m s e l v e s w i t h
p l e a d i n g t h e i r i n a b i l i t y t o make such l a r g e payments
as t h o s e s u g g e s t e d by t h e Cannes e x p e r t s .
The R e p a r a t i o n Commission r e p l i e d t o t h e German
p r o p o s a l s on March 2 1 , 1 9 2 2 .
The p r o p o s a l s of
Cannes e x p e r t s ware adhered t o .
the
In a d d i t i o n t o the
g u a r a n t e e reforms o r i g i n a l l y demanded, t h e German
government were summoned ( a p p a r e n t l y i n order t o meet
the further d e t e r i o r a t i o n in the f i n a n c i a l
c o n s e q u e n t upon t h e r e c e n t f a l l
position
i n t h e mark)
to
i n c r e a s e , by a f u r t h e r 60 m i l l i a r d s of paper marks,
t h e German t a x e s of which a heavy i n c r e a s e was a l r e a d y
foreshadowed by t h e " t a x a t i o n compromise" of January
26, 1922.
The German government were f u r t h e r
in­
formed t h a t t h e y would have t o keep t h e R e p a r a t i o n
Commission f u l l y s e i z e d o f a l l t h e i r
fiscal
legislation.
As was t o be e x p e c t e d , t h e R e p a r a t i o n Commission
demands were r e f u s e d by t h e German government on A p r i l
7, 1922.
The "German government d e c l a r e d t h e i r
i n a b i l i t y t o impose f u r t h e r new t a x a t i o n ,
or t o make
f u r t h e r c a s h payments, o t h e r w i s e than by means of a
foreign loan,
or t o a c c e p t any " c o n t r o l ? which would
be such a s t o Imply t h e e x e r c i s e by f o r e i g n Powers
of "a d e c i s i v e i n f l u e n c e on t h e p a s s i n g and t h e
a p p l i c a t i o n of l e g i s l a t i o n " .
The German government,
however, welcomed t h e i n s t i t u t i o n by t h e R e p a r a t i o n
Commission of a s p e c i a l commission of e x p e r t s ,
with
t h e p a r t i c i p a t i o n of n e u t r a l s and a German r e ­
presentative,/
518
representative,
t o examine t h e p o s s i b i l i t y of
payment of r e p a r a t i o n by means o f a f o r e i g n
the
loan.
They o f f e r e d a l s o t o submit t o "an e x h a u s t i v e
e x a m i n a t i o n of Germany's f i s c a l
c a p a c i t y , i n conform­
i t y w i t h a r t i c l e 234 o f t h e t r e a t y , under t h e
of t h e R e p a r a t i o n Commission and by means of
n o t c o n f i n e d t o n a t i o n a l s of t h e s t a t e s
auspices
experts
directly
concerned."
The R e p a r a t i o n Commission, i n a n o t e o f A p r i l
1 3 , 1922 adhered t o t h e demands made on March 2 3 , 1 9 2 2 .
I n so f a r , however, as t h e demand f o r t h e
additional
60 m i l l i a r d s p a p e r marks t a x a t i o n was c o n c e r n e d ,
they
announced t h e i r r e a d i n e s s " t o c o n s i d e r any p l a n ,
w h i c h t h e German government may be a b l e i t s e l f
to
p r o p o s e g i v i n g & r e a s o n a b l e p r o s p e c t of d e a l i n g
s a t i s f a c t o r i l y w i t h t h e whole of t h e budget
deficit".
The German government r e j o i n e d on May 9 , 1 9 2 2
t h a t , w h i l s t t h e y f u l l y r e a l i z e d t h e need f o r m e e t i n g
e x p e n d i t u r e o u t of c u r r e n t t a x a t i o n , t h e y c o u l d n o t ,
i n o r d e r t o poy r e p a r a t i o n ,
a g r e e t o Impose a t t h e
moment f r e s h t a x e s amounting t o a f u r t h e r 60 m i l l i a r d s
o f paper marks.
They were r e a d y , b e f o r e May 3 1 , 1922
"to sutxnit a c o m p l e t e scheme f o r t h e purpose" of
m e e t i n g as f a r a s p o s s i b l e a l l e x p e n d i t u r e out o f
c u r r e n t t a x a t i o n : but "important payments due by
Germany i n f o r e i g n c u r r e n c y c a n n o t be met w i t h o u t t h e
a i d of f o r e i g n l o a n s " .
also their readiness
The German government announced
"to a f f o r d t o t h e R e p a r a t i o n
Commission a l l t h e f a c i l i t i e s
for
investigation
asked f o r " and t h e i r w i l l i n g n e s s "to c o n s u l t w i t h
t h e commission a s r e g a r d s t h e l e g i s l a t i v e
projects
planned/
519
p l a n n e d by t h e German government i n f i n a n c i a l ma t i e r s . "
Thus t h e p o s i t i o n remains t h a t on May 3 1 , 1922
t h e R e p a r a t i o n Commission - w i l l i i n a c c o r d a n c e w i t h
t h e i r n o t e 6f March 2 1 , 1 9 2 2 , examine t h e measures
t a k e n by t h e German government t o g i v e e f f e c t t o t h e
demands made i n t h a t n o t e .
C e r t a i n of t h e s e demands
appear to have been a c t u a l l y e x e c u t e d .
Thus t h e
payments due on A p r i l 1 5 t h , and M*y 1 5 t h 1922 have
been made.
The s u b s i d i e s appear t o hawe been
abolished.., of t o be i n c o u r s e of a b o l i t i o n .
German government have announced t h e i r
The
willingness
t o a c c e p t , t o some e x t e n t t h e c o n t r o l pf German f i n a n c e
demanded by t h e R e p a r a t i o n Coaniission.
But t h e
German government have n o t a c c e p t e d t h e demand o f t h e
R e p a r a t i o n Commission t o i n t e r f e r e w i t h what may be
c a l l e d t h e r i g h t of l e g i s l a t i v e i n i t i a t i v e ;
and t h e y
s t i l l pro-test t h e i r i n a b i l i t y t o continue t o meet
t h e p a y r o e n t B - d e m a n d e d - u n l e s s t h e y can s e c u r e a
loan.
Foreign Office,
May 2Snd, 1 9 2 2 ,
foreign
520
STATE OP EXECUTION OF THE ALLIED ULTIMATUM OF
MAY 5 , 1 9 2 1 , AS MODIFIED BY THE REPARATION COMMISSION'S DECISIONS OF JANUARY 1 3 , 1922 AND
MARCH 2 1 , 1 9 2 2 .
Under t h e a l l i e d u l t i m a t u m of May 5 , 1 9 2 1 ,
t h e German Government u n d e r t o o k :
1.
To c a r r y out, w i t h o u t r e s e r v e or c o n d i t i o n ,
t h e i r o b l i g a t i o n s a s d e f i n e d by t h e R e p a r a t i o n Corn­
m i s s i o n , and t o a c c e p t and p r o v i d e t h e g u a r a n t e e s
in
r e s p e c t of t h o s e o b l i g a t i o n s demanded, by t h e Corn­
mission.
2. To c a r y c u t , w i t h o u t r e s e r v e or d e l a y ,
t h e measures of m i l i t a r y , n a v a l and a i r disarmament
n o t i f i e d i n t h e a l l i e d n o t e from P a r i s of January 2 9 ,
1921.
3.
trial
To c a r r y o u t , w i t h o u t r e s e r v e or d e l a y ,
the
of t h e war c r i m i n a l s and c e r t a i n o t h e r u n f u l ­
filled articles
of t h e t r e a t y r e l a t i n g m a i n l y t o
German customs d i s c r i m i n a t i o n a g a i n s t a l l i e d
nationals
and German d i s c r i m i n a t i o n a g a i n s t a l l i e d i n t e r e s t s
the emigration
in
traffic.
1. R e p a r a t i o n .
The German o b l i g a t i o n s
m a t u r i n g i n 1921 were d u l y e x e c u t e d , i . e . ,
quarterly instalments
t h e two
of t h e f i x e d a n n u i t y were
covered by t h e payment of t h e f i r s t m i l l i a r d on May 25
1 9 2 1 , and t h e i n s t a l m e n t
of t h e v a r i a b l e a n n u i t y ,
on November 1 5 , 1 9 2 1 , was c o v e r e d by t h e v a l u e
due
to
d a t e of d e l i v e r i e s i n kind and of p r o c e e d s of t h e
R e p a r a t i o n ( R e c o v e r y ) Act.
B
The g u a r a n t e e s demanded
by t h e R e p a r a t i o n commission" were a c c e p t e d by t h e
e s t a b l i s h m e n t of t h e Committee of G u a r a n t e e s .
NO
521
)
No f u r t h e r
o b l i g a t i o n s matured under t h e
u l t i m a t u m of May 5, 1 9 2 1 , as i t s t e r m s were m o d i f i e d
on January 1 3 , 1922 by t h e d e c i s i o n of t h e R e p a r a t i o n
Commission t o d e c l a r e a p r o v i s i o n a l moratorium.
Under t h i s moratorium t h e German; Government had t o
pay 31 m i l l i o n s of g o l d Marks e v e r y t e n d a y s a s from
January 1 8 , 1 9 2 2 , and t o s u trait a d e f i n i t i v e
scheme
of f u t u r e payment and g u a r a n t e e s on or b e f o r e January
28, 1922.
The scheme of f i n a n c i a l reform may be s a i d t o
h a v e b e e n s u b m i t t e d on January 2 8 , 1 9 2 2 , but t h e
German Government p r o f e s s e d t h e m s e l v e s u n a b l e ,
v i e w of t h e i r f i n a n c i a l
in
c o n d i t i o n , t o submit any
d e f i n i t i v e scheme f o r f u t u r e payments.
The t e n ­
d a i l y payments were p u n c t u a l l y made amounting i n a l l ,
w i t h C e r t a i n o t h e r m i s c e l l a n e o u s sums, t o
281,948,920
g o l d marks.
The R e p a r a t i o n Commission announced t h e i r new
d e c i s i o n on March 2 1 , 1922 and under t h i s
decision
demanded:
( 2 ) 7 2 0 m i l l i o n s of g o l d Marks i n c a s h d u r i n g
1 9 2 2 , l e s s t h e 2 8 1 , 9 4 8 , 9 2 0 g o l d Marks p a i d under t h e
p r o v i s i o n a l moratorium.
(N.ft.
This l e a v e s ,
at
t h e t i m e of w r i t i n g May 2 1 , 1 9 2 2 , 370 m i l l i o n s
of
g o l d Marks t o be p a i d during t h e remainder of t h e
year;
t h e payments due on A p r i l 1 5 t h , 1922 and
May 1 5 , 1922 h a v i n g b e e n d u l y m e t . )
(b)
D e l i v e r i e s i n k i n d t o t h e v a l u e of
1,450 m i l l i o n s
of g o l d Marks. ( N , B . The e x e c u t i o n
of t h i s demand w i l l presumably i n l a r g e p a r t depend
on t h e - s u c c e s s f u l working of a r e c e n t agreement
between
522
between t h e German Government and t h e Rppapatj.0^
Commission, u n d e r which t h e amount of d e l i v e r i e s
k i n d i s p r a c t i c a l l y dependent on p r i v a t e
in
arrangement
between a l l i e d i n d i v i d u a l p u r c h a s e r s and German con­
tractors.
The o n l y i n t e r v e n t i o n of t h e Governments
c o n s i s t s i n t h e d e c i s i o n of an a l l i e d Government t o
count such and s u c h a c o n t r a c t as p a r t payment of
r e p a r a t i o n , i n which c a s e t h e German Government pays
t h e German s e l l e r and t h e a l l i e d buyer t h e
allied
Government).
(c)
1922,
The l e g i s l a t i v e a b o l i t i o n b a y A p r i l 5 ,
of b r e a d , r a i l w a y and p o s t s s u b s i d i e s .
(N.B.
Dr.Wirth informed Mr. Lloyd George on May 4 t h a t
t h e r a i l w a y s and p o s t B s u b s i d i e s had a l r e a d y d i s ­
appeared and t h a t t h e bread s u b B i d y would d i s a p p e a r
this
summer.)
(d)
The p a s s a g e , b y A p r i l 3 0 , 1 9 2 2 , of
measures t o p r e v e n t t h e e x p o r t of c a p i t a l , a n d , by
May 3 1 , 1 9 2 2 , t o s e c u r e t h e independence of t h e
Reichsbank and t h e p u b l i c a t i o n of p r e - w a r
and f i n a n c i a l s t a t i s t i c s .
economic
( N B . No i n f o n n a t i o n
r
i s a v a i l a b l e on t h e p r o g r e s s made by t h e German
Government i n t h e e x e c u t i o n of t h e s e m e a s u r e s ) .
(e)
The e s t a b l i s h m e n t of a b u d g e t a r y s u r p l u s
by means of t h e o p e r a t i o n b y A p r i l 3 0 , 11522 ' 6 f t h e
new t a x e s d e c r e e d i n January, 1 9 2 2 by means of a
f r e s h r e v i s i o n of e x p e n d i t u r e , t o be e f f e c t e d
before
A p r i l 2 1 , 1 9 2 2 , and b y means of a n i n c r e a s e i n
t a x a t i o n of a f u r t h e r 6 0 m i l l i a r d s
of p a p e r Marks,
t o b e e f f e c t e d b y May 3 1 , 1 9 2 2 . ( N . B . The German
Government i n t h e i r n o t e t o t h e R e p a r a t i o n Commis­
s i o n of May 9 , 1 9 2 2 , s t a t e d t h a t i t was
impossible
523
t o l e v y t h e e x t r a 60 m i l l i a r d s .
They added, h o w e v e r ,
t h a t t h e y w o u l d "submit t o t h e Commission b e f o r e
May 3 1 , 1922 "a complete scheme f o r t h e purpose
of g i v i n g e f f e c t t o t h e p r i n c i p l e " o f b a l a n c i n g t h e
German budget.
(f)
F a c i l i t i e s f o r t h e R e p a r a t i o n Commission
not o n l y t o examine t h e l e g i s l a t i v e and a d m i n i s t r a ­
t i v e measures p a s s e d and i n t e n d e d t o s e c u r e t h e
e x e c u t i o n of t h e R e p a r a t i o n C o n s i i s s i o n ' s demands, b u t
a l s o f a c i l i t i e s f o r t h e R e p a r a t i o n Commission t o
examine t h e s e m e a s u r e s "at each s t a g e " i n order t h a t
" i f o c c a s i o n a r i s e s " t h e Commission w i l l be a b l e
t o r e q u e s t Germany "to t a k e t h o measures n e c e s s a r y
t o remedy d e f e c t s d e t e c t e d " .
(NJB^ fne
German
Government i n t h e i r n o t e t o t h e R e p a r a t i o n Corn­
m i s s i o n of May 1 1 , 1 9 2 2 , s t a t e d t h a t t h e y were p r o ­
p a r e d "to a f f o r d t o t h e R e p a r a t i o n Commission a l l
t h e f a c i l i t i e s f o r i n v e s t i g a t i o n a s k e d f o r and t o
c o n s u l t w i t h t h e Commission a s regardB t h e
tive financial projects
2.
(a)
legisla­
planned",)
Disarmamenta
A e x p n s u ^ i s a l . T h i s i s now c o m p l e t e ,
The
A e r o n a u t i c a l C o n t r o l Commission was f c r m a l l y
l i q u i d a t e d a s from May 5 , 192-2,,and t h e new a l l i e d
A e r o n a u t i c a l committee of G u a r a n t e e s , p a i d by t h e
allies,
e n t e r e d upon i t s d u t i e s , w i t h German c o n s e n t ,
as from May 5 , 1 9 2 2 .
(o)
524
(b)
Naval
The Control. Commission i s
t
still
engaged i n v e r i f y i n g c e r t a i n d e t a i l s , and w i l l
apparently
be so engaged f o r some t h r e e o r four m o n t h s .
The B r i t i s h
Admiralty have, however, long considered the e x e c u t i o n of
t h e n a v a l c l a u s e s complete f o r a l l p r a c t i c a l p u r p o s e s , and
would n o t , i t i s u n d e r s t o o d , b e a v e r s e to t h e immediate
w i t h d r a w a l o f t h e C o n t r o l Commission,
(c)
Military.
(i)
Army s t r e n g t h .
R e d u c t i o n to
1 0 0 , 0 0 0 men h a s l o n g s i n c e b e e n e x e c u t e d , but c o n t r o l corn­
m i s s i o n have so f a r b e e n u n a b l e to reach a f i n a l
in ent o f v a r i o u s l e g i s l a t i v e and a d m i n i s t r a t i v e
Ui)
War M a t e r i a l ,
settle­
details,
The f o l l o w i n g
qantities,
on March 9, 1922,; remained t o be d e s t r o y e d o u t o f t h e
following q u a n t i t i e s surrendered (the l a t t e r
being
b e l i e v e d to be b u l k o f m a t e r i a l s u r p l u s t o t h a t
allowed
German army under t r e a t y ) : Guns and b a r r e l s
122 o u t o f
Trench m o r t a r s
33.452
8
11,596
108
87,076
Small arms
25,309
4,366,090
S h e l l s , loaded
732 t o n s
Machine guns
Small arm
ammunition
(iii)
(iv)
of c i v i l p o p u l a t i o n .
f
tons
450 , 584,000
43,125,600
3?ortresses
accordance w i t h t r e a t y ,
11,410
Reductio naef f e c t e d i n
except in occupied t e r r i t o r y ,
Disarmament o f u n a u t h o r i s e d f o r c e s and
The f o l l o w i n g arms s u r r e n d e r e d to
January, 1 9 2 2 ;
Guns , e , . o , . r o
171
Machine guns
,,,12,245
R i f l e s and
carbines
1,473,720
The/
The Y/ar O f f i c e do not c o n s i d e r t h a t
further
e f f o r t s by the German Government to complete t h e d i s ­
armament of the c i v i l p o p u l a t i o n w i l l y i e l d any c o n s i d e r a b l e
r e s u l t s , a l t h o u g h a c e r t a i n number of r i f l e s a r e
s c a t t e r e d about the c o u n t r y
(v)
Police,
still
e
reduced to s t i p u l a t e d s t r e n g t h ­
150,000 ( p o l i c e ) and 17,000 ( g e n d a r m e r i e ) , - b u t a
d i s p u t e i s s t i l l proceeding w i t h the German Government
on the ground t h a t p a r t of t h e p o l i c e - t h e " s c h u t z p o l i z e i " ,
s t r e n g t h 35,000 men a r e lodged i n b a r r a c k s , s u b j e c t to
quasi m i l i t a r y d r i l l organized
i n formations and
r e s p o n s i b l e to the s t a t e s and not to the m u n i c i p a l i t i e s .
(vi)
Factories.
6,097 out of 6,942 f a c t o r i e s ,
known to have manufactured m u n i t i o n s , have been con­
v e r t e d and passed by t h e Control Commission f o r the
manufacture of n o n - m i l i t a r y m a t e r i a l .
(vii)
Import and Export of War M a t e r i a l ,
Necessary
laws long s i n c e p a s s e d , b u t the Control Commission a r e
s t i l l verifying
3.
details,
War Criminals and v a r i o u s T r e a t y Clauses
r e l a t i n g to d i s c r i m i n a t i o n aga.inst a l l i e d n a t i o n a l s
in
German customs a d m i n i s t r a t i o n , and a s r e g a r d s e m i g r a t i o n
traffic
There have been no complaints
respecting
the l a s t two m a t t e r s r e c e n t l y , and t h e s e q u e s t i o n s may
t h e r e f o r e be assumed to be t e m p o r a r i l y dead.
As/
AS r e g a r d s war c r i m i n a l s , t h e p o s i t i o n i s a s
f o i l o 791
Of t h e s e v e n o a s e ^ put up "by the B r i t i s h Govern­
nient f o r t r i a l b y t h e L e i p z i g C o u r t ,
c a s e s had d i s a p p e a r e d ,
so t h a t no t r i a l s c o u l d take p l a c e .
In one o f t h e remaining c a s e s ,
m3
the a c c u s e d i n t h r e e
t h e p l e a of s u p e r i o r , o r d e r s
a d m i t t e d by t h e o o u r t , and the a c c u s e d a c q u i t t e d , and
in t h e remaining t h r e e ,
s e n t e n c e s were p a t s e d , which S i r B .
P o l l o c k , who was p r e s e n t a t the t r i a l s , a t t h e time c o n s i d e r
?d jjot u n s a t i s f a c t o r y .
At the time a l s o he paid a t r i b u t e
to t h e manner i n whioh t h e c o u r t had o o n d u c t e d i t s work.
Ho I t a l i a n o a s e s e v e r came b e f o r e t h e c o u r t f o r t r i a l , a s ,
apparently,
t h e I t a l i a n Government had d i f f i c u l t y i n c o l l e c t
ing t h e e v i d e n c e .
Three French c a s e s and o n e B e l g i a n c a s e
came b e f o r e t h e c o u r t .
Ho d e t a i l s ' a r e a v a i l a b l e , r e s p e c t i n g
t h e i r c o n d u c t , b u t a t some p e r i o d d u r i n g the t r i a l o f
these
e s s e s F r e n c h o f f i c i a l s were i n s u l t e d i n t h e town o f L e i p z i g ,
the F r e n c h m i s s i o n w i t h d r e w , and the c a s e s came t o an e n d .
On August 1 3 , 1 9 2 1 , t h e m a t t e r came b e f o r e t h e Supreme
C o u n c i l i n P a r i s , and t h e Supreme C o u n c i l d e c i d e d t h a t a
co-iomission s h o u l d be a p p o i n t e d to r e p o r t to t h e Supreme
Council on t h e r e s u l t o f t h e t r i a l s b e f o r e t h e L e i p z i g Court
and on the s e n t e n c e s p r o n o u n c e d , and t h a t t h i s commission
should a l s o
submit p r o p o s a l s on the c o u r s e t o be pursued
in the f u t u r e , w i t h a v i e w to the a p p l i c a t i o n o f
articles
228 - 230 o f the t r e a t y .
This Commission, which was composed of F r e n c h , B r i t i s h ,
B e l g i a n and I t a l i a n r e p r e s e n t a t i v e s ,
r e p o r t e d on January
7, 1922, t h a t " e x c e p t p e r h a p s i n a v e r y few c a s e s ,
the
L e i p z i g Court h a s n o t g i v e n s a t i s f a c t i o n i n t h e s e n s e
that
adequate e f f o r t s have n o t b e e n made t h e r e to a r r i v e a t t h e
truth.
A S r e g a r d s t h e judgments g i v e n by t h e c o u r t t h e
unanimous/
527
unanimous o p i n i o n of the commission i s t h a t , i n a l m o s t
a l l oaseo,
the c o u r t h a i n o t g i v e n e a t i e f a a t i o n ,
i n the
s e n s e t h a t c e r t a i n a c c u s e d p e r eons have b e e n a c q u i t t e d
when t h e y s h o u l d h a v e been condemned, and t h a t ,
where the a c c u s e d have been judged g u i l t y ,
a p p l i e d h a s n o t "been
even
the p e n a l t y
sufficients"
The c o m m i s s i o n t h e r e f o r e r e p o r t e d t h a t f u r t h e r
trials
b e f o r e the L e i p z i g Court were u s e l e s s , and recommended
t h a t t h e a l l i e d Governments s h o u l d summon the German
Government to feand o v e r t h e war c r i m i n a l s t o the
Governments f o r
allied
trial.
T h i s r e p o r t s t i l l a w a i t s the c o n s i d e r a t i o n o f
Supreme C o u n c i l .
F^UA^
May;i6Vl922.
(Tj$W^
the
unanimous o p i n i o n of t h e commission i s t h a t ,
in
almost a l l c a s e s , the court has not g i v e n s a t i s ­
faction,
in the sense t h a t c e r t a i n accused persons
h a v e b e e n a c q u i t t e d when t h e y s h o u l d have b e e n con­
demned, and. t h a t ,
even where t h e a c c u s e d have been
judged g u i l t y , t h e p e n a l t y a p p l i e d h a s n o t b e e n
sufficient".
The commission t h e r e f o r e r e p o r t e d t h a t f u r t h e r
t r i a l s b e f o r e t h e L e i p z i g Court were u s e l e s s ,
recommended t h a t t h e a l l i e d governments
and
should
summon t h e German government t o hand over t h e war
c r i m i n a l s t o t h e a l l i e d governments f o r
trial.
The Supreme Council have n o t s o f a r
t h i s report into consideration.
taken
Nor i s i t p r o b a b l e ,
had i t done s o , t h a t i t would h a v e a c t e d on t h e
a d v i c e , t h a t t h e demand f o r t h e s u r r e n d e r of t h e war
c r i m i n a l s s h o u l d now be f o r m a l l y renewed.
The
a l l i e d governments a r e w e l l aware t h a t s u c h a
demand c o u l d o n l y l e a d t o a r e p e t i t i o n of Germany's
c a t e g o r i c a l r e f u s a l on t h e p l e a of i n a b i l i t y ,
t h r o w i n g them back i n t o t h e same d i f f i c u l t y
thus
which
t h e y had a t t e m p t e d t o s o l v e by a g r e e i n g t o t h e
e x p e r i m e n t of t h e L e i p z i g
trials.
On t h e o t h e r hand. I t i s c l e a r l y
unsatisfactory
t o do n o t h i n g a t a l l and l e a v e m a t t e r s s i m p l y a s
they are.
The French government t h e r e f o r e h a v i n g ,
on t h e i r p a r t , d e c i d e d t o withdraw a l l t h e i r
cases
from f u r t h e r p r o c e e d i n g s a t L e i p z i g now p r o p o s e t h a t
t h e Ambassadors Conference a d d r e s s a n o t e t o t h e
German government c o n f i n e d t o announcing such w i t h ­
drawal
J
f
withdrawal and. t o "taking n o t e " of Germany's
t o c a r r y out t h e t e r m s of t h e t r e a t y .
failure
The
S e c r e t a r y of S t a t e h a s a u t h o r i s e d Lord Hardinge
t o c o - o p e r a t e w i t h h i s c o l l e a g u e s of t h e Am­
b a s s a d o r s Conference i n p r e p a r i n g t h e d r a f t
such a n o t e ,
of­
on t h e c l e a r u n d e r s t a n d i n g t h a t t h e
d r a f t must be s u b m i t t e d t o H i s M a j e s t y ' s
Government
f o r t h e i r approval, before i t i s f i n a l l y
adopted
and a c t e d upon.
FOREIGN OFFICE,
May 22nd 1 9 2 2 ,
ANNEX I I I .
Memorandum on t h e Legal
Situation.
The French r e l y on paragraph 18 of annex 2 t o t h e
r e p a r a t i o n s e c t i o n of t h e t r e a t y of V e r s a i l l e s as
justify ­
1
i n g i n d e p e n d e n t a c t i o n , s u c h as an advance i n t o t h e
Ruhr, i n c a s e t h e r e p a r a t i o n commission n o t i f y under
paragraph 17 t h a t Germany i s i n d e f a u l t .
Paragraph 18 i s as f o l l o w s : ­
"The measures which t h e a l l i e d and a s s o c i a t e d powers
s h a l l have t h e r i g h t t o t a k e , i n c a s e of v o l u n t a r y d e ­
f a u l t by Germany, and w h i c h Germany a g r e e s n o t t o regard
a s a c t s of war, may i n c l u d e economic and f i n a n c i a l p r o ­
h i b i t i o n s and r e p r i s a l s and i n g e n e r a l such o t h e r
measures as t h e r e s p e c t i v e governments may d e t e r m i n e t o
be n e c e s s a r y i n t h e c i r c u m s t a n c e s . "
The i n t e r p r e t a t i o n of t h i s paragraph i s not v e r y
e a s y , but t o my mind t h e i n t e n t i o n was t h a t t h e
action
was t o be t a k e n by t h e i n d i v i d u a l governments and t h a t
t h e i n d i v i d u a l governments had a d i s c r e t i o n as t o t h e
a c t i o n t h e y would t a k e , but t h e f a c t t h a t t h e a c t i o n
is
t o be d e c i d e d on by t h e i n d i v i d u a l governments shows
t h a t i t must be a c t i o n of t h e t y p e which i t i s
f o r governments t o t a k e i n d i v i d u a l l y .
financial prohibitions,
etc,
proper
Economic and
c o n s t i t u t e measures which
would be t a k e n w i t h i n t h e t e r r i t o r y of t h e
individual
a l l i e d s t a t e concerned and t h e proper d e d u c t i o n t o be
drawn from t h e p r e s e n c e of t h e word " r e s p e c t i v e " i s
that
t h e "other measures" r e f e r r e d t o a r e a l s o s u c h as i n ­
d i v i d u a l governments would t a k e w i t h i n t h e l i m i t s of
t h e i r own s o v e r e i g n t y .
The o c c u p a t i o n of German t e r r i t o r y i s not s u c h a
measure as an i n d i v i d u a l government i s e n t i t l e d ,
s i s t e n t l y w i t h t h e s p i r i t of t h e t r e a t y of
con­
Versailles,
t o t a k e f o r t h e purpose of e n f o r c i n g t h e e x e c u t i o n of
the.
ths treaty.
A r t i c l e 428 p r o v i d e s f o r a j o i n t ' a l l i e d
o c c u p a t i o n of c e r t a i n t e r r i t o r y w e s t of t h e Rhine as
a g u a r a n t e e f o r t h e e x e c u t i o n of t h e t r e a t y ,
and
a r t i c l e 430 p r o v i d e s f o r t h e r e o c c u p a t i o n of any s u c h
territory, if
p a r t s h o u l d have b e e n e v a c u a t e d , on a
f i n d i n g by t h e r e p a r a t i o n commission t h a t Germany
r e f u s e s t o o b s e r v e t h e whole or p a r t of her o b l i g a t i o n s
under t h e p r e s e n t
treaty.
The f o r e g o i n g i n t e r p r e t a t i o n of paragraph 1 8 i s
c o r r o b o r a t e d by t h e o t h e r p r o v i s i o n s of t h e t r e a t y of
Versailles.
The l a s t paragraph of a r t i c l e 233 p r o v i d e s
as f o l l o w s : ­
"The commission s h a l l c o n c u r r e n t l y draw up a
s c h e d u l e of payments p r e s c r i b i n g t h e t i m e and manner
f o r s e c u r i n g and d i s c h a r g i n g t h e e n t i r e o b l i g a t i o n
w i t h i n a p e r i o d o f 30 y e a r s from May 1 s t , 1 9 2 1 .
If,
however, w i t h i n t h e p e r i o d m e n t i o n e d , Germany f a i l s
t o d i s c h a r g e h e r o b l i g a t i o n s , any b a l a n c e r e m a i n i n g u n ­
p a i d may, w i t h i n t h e d i s c r e t i o n of t h e c o m m i s s i o n , be
p o s t p o n e d f o r s e t t l e m e n t i n s u b s e q u e n t y e a r s , or may
be h a n d l e d o t h e r w i s e i n s u c h manner a s t h e a l l i e d and
a s s o c i a t e d governments, a c t i n g i n accordance w i t h t h e
p r o c e d u r e l a i d down i n t h i s p a r t of t h e p r e s e n t
t r e a t y , shall determine."
I t w i l l be noticed t h a t d e f a u l t i n the discharge
of a payment due i s h e r e r e g a r d e d a s p r o d u c i n g a s i t u a ­
t i o n t o be h a n d l e d by t h e a l l i e d and a s s o c i a t e d s o v e r n ­
ments i n conmon.
I t seems u n r e a s o n a b l e t h a t a p a r t i c u ­
l a r power s h o u l d h a v e a more e x t e n d e d r i g h t of i n d i v i d u ­
a l a c t i o n i n r e s p e c t of t h e non-payment of a p a r t i c u l a r
i n s t a l m e n t t h a n i n r e s p e c t of t h e w h o l e sum due of
which t h e i n s t a l m e n t forms but a p o r t .
Paragraph 1 8 , t h e p r o v i s i o n on w h i c h t h e F r e n c h
r e l y , m e r e l y f o r m s p a r t of one of t h e annexes t o t h e
reparation section.
I t i s an annex which may even be
cacwad/td -by t h e a l l i e d powers r e p r e s e n t e d on t h e r e p a r a ­
id&n commission w i t h o u t t h e c o n s e n t of Germany: ­
(See paragraph 2 2 .
"Subject t o t h e p r o v i s i o n s of
t h e p r e s e n t t r e a t y , t h i s annex may be amended by t h e
Unanimous d e c i s i o n of t h e
rcQVPrrrnents
r e p r e s e n t e d from
t i m e t o t i m e on t h e c o m m i s s i o n . " .
Viewed
Viewed i n i t s proper s e t t i n g as a p r o v i s i o n i n an
annex t o t h e r e p a r a t i o n s e c t i o n , paragraph 18 does n o t
seem t o j u s t i f y a c l a i m by France t o t a k e i n d e p e n d e n t
a c t i o n a g a i n s t German t e r r i t o r y i n c a s e of a d e f a u l t hy
Germany i n payment of an i n s t a l m e n t due under t h e
treaty.
(Signed)
Cecil J.B.Hurst,
22nd May, 1 9 2 2 .