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the view of the German Government regarding presence of American troops on the Rhine was unchanged and emphasized that he believed it essential that General Allen be left enough troops to hold Coblenz.

HOUGHTON

8620.01/408: Telegram

The Secretary of State to the Ambassador in Germany (Houghton)

WASHINGTON, June 3, 1922—4 p.m. 79. Your 103, May 22, 9 a.m., your 6[82], April 25, 3 p.m., and Dresel's 63, March 29, 3 p.m. Please communicate substantially the following to German Government:

“My Government has given the most careful consideration to the request contained in your note of March 29, 1922, and to similar requests expressed on behalf of the Allied Governments, to the effect that American troops be retained at Coblenz. My Government has now decided, and has instructed me to inform you, that a force of approximately 1,000 American soldiers, under the command of Major General Henry T. Allen, is to remain at Coblenz for the time being."

HUGHES

EFFORTS BY THE UNITED STATES TO SECURE REIMBURSEMENT FOR THE COSTS OF THE AMERICAN ARMY OF OCCUPATION IN GERMANY

462.00 R 294/2: Telegram

The Secretary of State to the Ambassador in France (Herrick)

WASHINGTON, March 9, 1922–6 p.m. 71. For Boyden.18 B-312.

(1) American Ambassador, London, under date of March 8, 5 p.m., reports as follows:

Sir Robert Horne 47 and Sir Basil Blackett 48 represent England at conference of Allied finance minister's meeting today which will discuss: 1. Financial convention of August 13, 1921, dealing with division of coal furnished by Germany, valuation of Sarre coal and division of first milliard gold marks paid by Germany. 2. Wiesbaden agreement.49 3. Repayment of cost of armies of occupation.

Roland Boyden, American unofficial representative on the Reparation Commission.

Chancellor of the British Exchequer.
A Comptroller of the British Treasury.

An agreement between the French and German Governments concerning the application of part III of the Treaty of Versailles regarding deliveries in

48

England is expected to ratify Wiesbaden agreement in return for French ratification of the August convention modified as follows: 640,000,000 gold marks to go to repayment of military expenses incurred before May 1st, 1921, of which England will receive 500,000,000, France 140,000,000, remainder of milliard to Belgium except 30,000,000 for Italy. Cash payments for 1922 all to go to Belgium. The fixing of total German payments for 1922 and guarantees of financial and budgetary reforms to be demanded of Germany is to be dealt with by Reparation Commission.”

(2) Please inform Committee of Finance Ministers that the Government of the United States desires them to take note of the fact that the net amount of the accumulated costs of the American Army of Occupation to May 1, 1921, is approximately $241,000,000. State that in view of the priority of army costs over reparations and the fact that the claims of the Allied Governments for army costs have been substantially met, excepting possibly those of England, (these would apparently be taken care of if the distribution reported by the American Embassy in London, as stated above, were approved), the Government of the United States expects to obtain payment in full of costs of its army of occupation, with interest from May 1, 1921, until payment of the amount of the claim outstanding, before any part of payments by Germany is distributed for reparations or other purposes.

(3) [Paraphrase.] If the question of current costs of American army of occupation comes before the Committee, you should definitely state that the Government of the United States will insist upon full payment and upon receiving assurance of payment, there will not be difficulty in agreeing upon a practicable method. [End paraphrase.]

HUGHES

462.00 R 294/11 : Telegram

The Ambassador in France (Herrick) to the Secretary of State

Paris, March 14, 1922–8 p.m.

[Received March 15—12:31 a.m.] 119. B-653. First. Letter of Finance Ministers dated March 11th just received. Complete text follows:

We have the honor to acknowledge receipt of the memorandum placed before us by yourself under date of March 10th regarding the payment of the costs of the American Army of Occupation."

Your communication has received our most serious consideration. You will find enclosed the text of the arrangement signed at Paris

See Department's telegram no. 71, Mar. 9, supra.

today.51 A special article has been added to this document in order to meet the points with which the memorandum is concerned. While we have thus safeguarded all rights of the United States of America, whatever they may prove to be, we are of opinion inasmuch as we are acting under the Treaty of Versailles to which the Government of the United States of America are not a party, the question is one which concerns our respective Governments and should be raised directly through diplomatic representations made by the Government of the United States of America to the Allied Governments."

Second. Have not yet received text of special article referred to but this article is simply brief reservation to the effect that all the decisions of the conference are taken subject to the rights of the United States. Boyden.

HERRICK

462.00 R 294/49a : Telegram

The Secretary of State to the Ambassador in France (Herrick) *2

WASHINGTON, March 20, 1922—2 p.m. 90. You are instructed to communicate the following note textually to the Government to which you are accredited and repeat to Embassies at London, Brussels and Rome for similar action as Department's instruction No. 76, 14 and 29 respectively.

“ The Government of the United States has believed, and still believes, that the Governments of the Allied Powers have no disposition to question the right of the United States to be paid, upon an equal footing with them, the actual cost of its Army of Occupation which it has maintained in Germany since the joint Armistice Agreement of November 11, 1918. While the attitude of the Government of the United States in expecting full payment of these costs has been repeatedly set forth, it is deemed to be appropriate, in view of recent developments, to make this statement of its position.

The amount of the claim of the United States for its army costs is understood to be well known and to be free from any substantial dispute. According to the information and accounts in the possession of the Allied Governments, it appears that the total cost of all the Armies of Occupation from November 11, 1918, to May 1, 1921, amounted to 3,639,282,000 gold marks; that the amounts due to Belgium, France and Italy for their army costs for that period have been paid in full (chiefly through deliveries of property); and that the unpaid balance of army costs due May 1, 1921, amounted to

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Agreement between Great Britain, Belgium, France, Italy, and Japan respecting the distribution of German reparation payments, signed at Paris, Mar. 11, 1922; British and Foreign State Papers, 1922, vol. OxVI, p. 612.

The same to the Ambassador in Japan, without instructions to repeat (file no. 462.00 R 294/80a).

62

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1,660,090,000 gold marks due to the United States and the British Empire as follows: United States

966,374,000 gold marks British Empire

693,716,000 gold marks It is understood that between May 1, 1921, and December 31, 1921, the British Government received cash payments as against this balance, of about 130,696,000 gold marks. In view of the position taken by the Government of the United States, this payment was expressly made and received subject to the rights of the United States.

In November, 1921, the Commission appointed by the Supreme Council to give its opinion on the expenses of the Armies of Occupation made its report, dealing with the army costs since May 1, 1921. This included calculations with respect to the American Army, and its actual costs since that date were included in the proposed provision for payment pari passu with the other Powers.

It had been supposed that this report to the Supreme Council would be referred to the Conference of Ambassadors and would pave the way for suitable action with respect to the American army costs both current and accumulated. It was with surprise that the Government of the United States recently learned that negotiations, in connection with and following the meeting at Cannes in January last,“3 apparently contemplated the substitution for the recommendation of the Army Costs Commission of other arrangements which would ignore American army costs altogether, although estimates both for army costs and reparations were being made on the basis of the entire capacity of the German Government to pay. When it came to the notice of this Government that it was proposed at the meeting of the Finance Ministers, to convene at Paris on March 8, definitely to assign the greater portion of the amount heretoforé paid in cash by Germany, and not yet finally allocated, to the payment of army costs without making any provision for those of the American Army, it was deemed advisable again to direct attention to the position of the United States. The Government of the United States has been advised that all the arrangements of the Finance Ministers have been made subject to the rights of the United States and that these Ministers have also suggested that the Government of the United States should take up the question directly with the Governments concerned.

The Armistice Agreement concluded between the Allied and Associated Governments and Germany on November 11, 1918, provided for military occupation by the Allied and United States forces jointly, and it was expressly provided that

The upkeep of the troops of occupation in the Rhine districts (excluding Alsace-Lorraine) shall be charged to the German Government.'

It is not believed that the meaning of this Agreement can be regarded as doubtful. It had not only its express provision but its necessary implications. It is the view of this Government, and it is confidently believed that it is the view of all the Governments con

See vol. I, p. 384.

cerned, that this Agreement on the part of the Allied and Associated Governments with Germany, and with each other, had the clear import that the Powers associated in this joint enterprise should stand upon an equal footing as to the payment of all the actual costs of their Armies of Occupation and that none of the Powers could, consistently with the Agreement, make any arrangement for a preferential or exclusive right of payment. Further, it is assumed that it would not for a moment be contended that any of the Allied Powers would have been entitled to enter into any arrangement by which all the assets or revenues of the German Empire and its constituent States would be taken for their benefit to the exclusion of any of the other Powers concerned.

It was apparently in recognition of the existing and continuing obligation as to army costs that, in the Treaty of Versailles, in undertaking to place a first charge upon all the assets and revenues of the German Empire and its constituent States,' (Article 248) priority was given to the total cost of all Armies of the Allied and Associated Governments in occupied German territory from the date of the signature of the Armistice Agreement.

Articles 249 and 251 of the Treaty of Versailles provide: 'ARTICLE 249. There shall be paid by the German Government the total cost of all armies of the Allied and Associated Governments in occupied German territory from the date of the signature of the Armistice of November 11, 1918, including the keep of men and beasts, lodging and billeting, pay and allowances, salaries and wages, bedding, heating, lighting, clothing, equipment, harness and saddlery, armament and rolling-stock, air services, treatment of sick and wounded, veterinary and remount services, transport service of all sorts (such as by rail, sea or river, motor lorries), communications and correspondence, and in general the cost of all administrative or technical services the working of which is necessary for the training of troops and for keeping their numbers up to strength and preserving their military efficiency....'

'ARTICLE 251. The priority of the charges established by Article 248 shall, subject to the qualifications made below, be as follows:

'(a) The cost of the armies of occupation as defined under Article 249 during the Armistice and its extensions ;

'(0) The cost of any armies of occupation as defined under Article 249 after the coming into force of the present Treaty; ...'

By the Treaty between the United States and Germany, signed August 25, 1921,"4 the ratifications of which were exchanged on November 11, 1921, it is provided that the United States shall have and enjoy the rights and advantages stipulated for the benefit of the United States in the Treaty of Versailles, notwithstanding the fact that the Treaty has not been ratified by the United States.

The Government of the United States entertains the view, and submits it to the consideration of the Allied Governments, that the United States is entitled to payment of the costs of its Army of Occupation pari passu with the Allied Governments, and that payments received by them from Germany in the circumstances disclosed cannot be used to the exclusion of the United States without its consent.

The Government of the United States is unable to conclude that the justice of its claim is not fully recognized. The Governments of the Allied Powers will not be unmindful of the fact that the

** Foreign Relations, 1921, vol. II, p. 29.

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