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ernment in March, last, with respect to the cost of its army of occupation on the Rhine. The French Ambassador read the memorandum and said that he merely desired to add that the situation was a very difficult one from a financial standpoint and that he hoped a way would be found to meet the American wishes without disturbing what had already been done; that of late Germany had been making payments only in kind and possibly some arrangement could be made to pay the United States in some manner. The Secretary asked the other Ambassadors and the Italian Chargé if they desired to add anything to the note or to say anything in addition to what the French Ambassador had said and they said they did not.

The Secretary said that in hearing the note read he had observed a reference to some matters to which our Government desired additional information. The Secretary said he supposed there had been no question about the facts which had been jointly fully presented in a confidential memorandum and the accounts prepared by the Reparation Commission, and he wondered what required further elucidation. The British Ambassador said he understood they did not refer to any question of fact but only as to the way in which payment could be arranged for and the method of adjustment which would be satisfactory to the United States. The Secretary said that he appreciated the difficulties of the situation and while he would not at the moment make a definite response to the invitation he viewed with favor any direct method of approaching the matter with a view to a just settlement. The Secretary said that from the start his principal aim had been that the United States with respect to the army costs should not be put at a disadvantage as compared with the other Powers, as the United States had maintained its army really not in its own interest but at the request of, and in the interest of, the other Powers, and he thought that they should be treated on the same footing. The American Government would be very glad to take the matter up in a friendly spirit to see what practicable course could be adopted.

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The Department of State to the French Embassy 72 The Governments of France, Great Britain and Italy, in the memorandum of November 8, 1922, handed to the Secretary of State on that date by their diplomatic representatives at Washington, with respect to the reimbursement of the cost of maintaining the American Army of Occupation in the Rhineland, refer to the expressed readiness of the Government of the United States to consider suggestions for the reasonable adjustment of the question, and reiterate their willingness to find a practical means of meeting the desires of the United States Government in this matter. In order, therefore, to examine the matter as a whole, they invite the Government of the United States to nominate a representative who could meet with the delegates of the Governments concerned in Paris forthwith, and express the belief that such a procedure will make it possible to prepare for submission to the interested Governments at an early date a satisfactory solution of the question under discussion.

* The same to the British and Italian Embassies.

The Government of the United States welcomes the suggestion that it nominate a representative, and has designated Mr. Eliot Wadsworth, Assistant Secretary of the Treasury, to meet the delegates of the Governments concerned in Paris, to which city he will proceed as soon as possible.

WASHINGTON, November 22, 1922.

CESSATION OF AMERICAN PURCHASE OF GERMAN DYES FROM THE

REPARATION COMMISSION "

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The Secretary of State to President Harding

WASHINGTON, August 16, 1922. DEAR MR. PRESIDENT: Following the signature of the Treaty of Versailles in the summer of 1919, it was manifestly important that some arrangement be made by which American consumers might obtain the advantage of receiving German reparation dyes. Inasmuch as the treaty was not ratified by the United States, this Goyernment was technically not entitled to receive these dyes under the treaty. However, as a part of the general equity of the United States in the peace settlement, it was recognized that the United States should have some participation. The need was particularly acute in view of the shortage of German dyestuffs in the United States, and it seemed necessary to make some arrangement in order that American consumers might not suffer.

Accordingly, representatives of the United States were sent to a conference on the dye situation held at London in September, 1919. This conference adopted a resolution recommending to the Committee on Organization of the Interim Reparation Commission that the immediate needs of the several countries concerned be met from German stocks impounded pursuant to paragraph one of Annex VI of Part VIII of the Treaty of Versailles. The plan proposed was adopted by the Interim Commission and placed in effect. American participation under this plan was approved by the Department of State, and on September 29, 1919, the Department addressed a letter to the Textile Alliance 74 suggesting that the Department would be prepared to have the Textile Alliance import and distribute the dyes in question subject to the following principal conditions: (1) the War Trade Board Section of the Department of State was to allocate the dyes among consumers; (2) the orders were to be placed and the technical arrangements made by the Textile Alliance; (3) the prices to be paid by consumers should be those agreed upon in Paris and communicated to the Alliance; and (4) the Textile Alliance was to receive a commission to cover expenses, any overplus to be distributed pro rata among the consumers. The conditions stipulated by the Department were accepted by the Textile Alliance.

** For previous correspondence concerning the purchase of dyestuffs, see Foreign Relations, 1920, vol. II, pp. 445 ff.

In April, 1920, this Department made a further arrangement with the Textile Alliance for the importation and distribution of additional German dyes.75 This arrangement was similar to the foregoing, but provided in addition that the Alliance should not charge prices considered unreasonable by the Department of State, that there should be no discrimination on the part of the Alliance between consumers of dyes, and that the net profits resulting from the proposed operation should be paid into the Treasury of the United States “on such conditions as shall be authorized by the Secretary of State and the Secretary of the Treasury."

Since it appeared advisable to obtain for American consumers the benefits of receiving a share of the current German production as well as the impounded stocks, another letter was addressed to the Textile Alliance under date of July 30, 1920,76 outlining an arrangement to take the place of previous arrangements.

The arrangement of July 30, 1920, specified in more detail the plan of operations of the Alliance in the matter, and contained a modification in regard to the disposition of the surplus resulting from its operations. The arrangement provided, in substance, that one-fourth of the surplus should be devoted by the Alliance to educational and scientific purposes, and that the remainder should be paid into the Treasury of the United States, the Secretary of State to recommend that said moneys be appropriated for educational and scientific purposes. I may say, parenthetically, that up to the present it has not been possible to bring about the payment of these moneys into the Treasury because of certain questions not as yet

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settled between this Department and the Alliance. The question of modifying this arrangement in the sense that the surplus should be paid into the Treasury on account of the costs of the American Army of Occupation is under consideration. I have not learned whether the suggested modification will be agreeable to those who underwrote the purchase of these dyes, but the matter is under active consideration and an early decision appears likely. Of course, we cannot insist upon payment into the Treasury without performing a condition, that is, making the above-mentioned recommendation to Congress, unless the Textile Alliance should be disposed to modify the arrangement on this point. The Textile Alliance received and sold reparation dyes under this arrangement until the close of 1921. However, a new situation was created by the proclamation of our treaty with Germany in November, 1921." The wartime powers of the Executive had ended, and although the United States was clearly entitled to receive these dyes, it did not appear that the Executive had authority to continue the arrangement with the Textile Alliance. Accordingly, in a letter dated December 14, 1921,18 I notified the Textile Alliance of the termination of the arrangement in question.

You will recall that the situation resulting from the termination of this arrangement was taken up with you by Mr. Fletcher, when he was Acting Secretary of State, in February last. In response to Mr. Fletcher's letter of February 24, 1922,78 with which he forwarded to you certain data relating to this matter, you replied under date of March 278 in the sense that it was your judgment that the matter was one that called for Congressional action, and that " it seems only fair to permit Congress to venture upon a line of solution, which is in accordance with its own expression of policy." You will also recall that you wrote to Senator Frelinghuysen on February 20,18 that the United States should "get the benefit of such reparation credit as might come to us through the German export of dyes to this country." You also suggested that the Senator should confer with some of his associates “ regarding a resolution which will deal with the dye question definitely and directly.”

I now desire to summarize the developments that have occurred since the time of the aforementioned correspondence, and also to lay before you the present situation.

Since the termination of the arrangement between this Department and the Textile Alliance, in December, 1921, the Reparation Commission has continued to allot dyes to the Alliance. This action has been due in large part to the fact that the Textile Alliance had previously been in close relation to the Reparation Commission, during the period in which it has been receiving these dyes in accordance with the arrangement between the Alliance and this Department. However, the Reparation Commission has desired that this Government should indicate positively in what manner it wished the American share of these dyes to be disposed of. In view of the fact that, under existing legislation, neither the Department of State nor, so far as I am aware, any other of the executive departments is clothed with adequate authority in the matter, it has not been possible for this Government to take such action as it might otherwise have wished to take.

* Foreign Relations, 1921, vol. II, p. 29. 78 Not printed.

On April 28, 1922, Mr. Boyden telegraphed "' that the Reparation Commission had decided to continue relations with the Textile Alliance up to June 30, 1922, and indicated that a further extension was unlikely. The following is quoted from the decision of the Commission:

“ That the application of the arrangements at present in force should be continued until June 30th next, in the hope that before that date a decision might have been arrived at by the Committee which the U.S. Government had appointed to consider the question. Mr. Boyden would cable to America in order to hasten the decision of the above mentioned Committee as far as possible."

On June 12 Mr. Boyden telegraphed again,so reporting that the situation remained as before and that relations between the Commission and the Alliance were likely to come to an end on June 30.

On June 16 Senator Shortridge introduced in the Senate a Joint Resolution which would give the President authority to take such measures as might be necessary to secure these dyes. I am attaching a copy of this Resolution for your convenience. So

In view of this situation, it was deemed advisable to address a telegraphic instruction to Mr. Boyden, under date of June 23,80 requesting him to inform the Reparation Commission of Senator Shortridge's resolution. Mr. Boyden was also instructed to make to the Commission a statement similar to that which he had previously made at the time arrangements with the Textile Alliance were terminated in December last, to the effect that this Government would interpose no objection to the continuance of deliveries to the Alliance. On June 30 the Reparation Commission decided to continue its relations with the Textile Alliance pending action by the Congress of the United States.

Telegram not printed ; Roland W. Boyden was acting as American unofficial representative on the Reparation Commission.

Not printed.

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