[Sailor Steve]

Friday, April 25, 1919

PARIS PEACE CONFERENCE

President Wilson’s House, Place des Etats-Unis, Paris 16:00

Meeting of the Council of Four (Italy not in attendance)


1. M Loucheur says that he, Lord Cunliffe and Mr Lamont, in accordance with the decision taken the previous day, had interviewed the representatives of Belgium, Serbia, Portugal and Brazil, and had explained to them the reparation clauses. The results of the interview had been set forth in a memorandum which M Loucheur had prepared, but might be summarized as follows:

Belgium demands the costs of the war, provisions as regards certain works of art and certain new categories of damage.

Serbia demands to be represented on the Commission and had made some small demand in regard to categories.

Brazil claims the same treatment as the United States of America in regard to captured enemy ships.

Portugal claims the costs of the war and reparation for shipping.

All ask to be heard by the Supreme Council.

M Loucheur suggests that, as Belgium was the most important, her representatives should be heard separately.

President Wilson thinks this is quite right.

Mr Lloyd George says he has received a letter from Lord Sumner describing the interview which he and some of his colleagues had had with the representatives of Romania, Greece and Japan. Romania has said nothing, but has given the impression of being not very contented. Greece has been satisfied. The Japanese representative has been enigmatic and they have not been able to judge of his attitude.

No complaints nor demands have been made. This is a matter that will have to be dealt with by the Supreme Council. In regard to the ships, he has always felt that Brazil would take this attitude.

President Wilson remarks that the difference between the case of Brazil and that of the United States is very great.


2. The Supreme Council has before them the articles prepared by the Economic Commission.

Economic Commission: Articles To Be Inserted in the Treaty of Peace With Germany.

President Wilson says that the differences between the experts are now very few and he proposes that they should only discuss those articles to which his colleagues wished to draw attention.

a) President Wilson says that one of the points in which the United States of America are especially interested is raised in Part I, Chapter D, Article 1. Although it is a matter of policy, it does not directly affect the United States of America. The point he wishes to raise refers to the limitation to be imposed on the duration of these clauses. What the United States are particularly interested in is a uniform provision as to the length of time for which these articles are to be applicable. They desire an automatic application of a term of 5 years, at the end of which the articles should cease to be operative except under some action by the League of Nations. The alternative proposal is that they should remain operative until they are terminated by some affirmative action by the League of Nations. The United States’ view is that they ought to terminate automatically unless renewed.

Sir Robert Borden says that the discussion at the British Empire Delegation centered on this point. The general view had been that the articles should be terminated unless renewed by the League of Nations.

President Wilson says this is precisely his view.

Mr Lloyd George asks how the matter stands in the report.

M. Baruch says that the articles would continue until terminated by the League of Nations.

M Clémentel says that there are two classes of articles to be considered. The first class deals with customs and the second class deals with the treatment of nationals of Allied and Associated Powers in ex-enemy countries, etc. and shipping. In regard to customs, it has been generally accepted that the provisions should terminate automatically at the end of 5 years, unless renewed by a decision of the League of Nations, which, he remarked, was rather difficult and uncertain, because a unanimous decision is necessary and any one party is at liberty to refuse assent. He asks that it should be remembered what Germany had done not only during the war but before the war. Countries like France, for example, had suffered very much from Germany’s action before the war, in her attempts to capture the iron trade; to obtain control of such articles as bauxite in order to get the aluminum trade under control; and in regard to dyestuffs, where she had checked competition. To this must be added what had happened during the war, when prodigious damage had been inflicted by Germany, both of a material and personal character. When this was borne in mind, the difficulty would be realized for peoples who had so suffered to forget within so short a term as 5 years. If the provisions came to an end at the end of 5 years, those countries would be obliged to receive the Germans in the same position as before the war. If they refused, they would, of course, be exposed to reciprocal treatment by Germany. It has been suggested that the invaded countries should receive separate treatment, and that the provisions should continue automatically unless stopped.

President Wilson says that M. Clémentel’s argument proved too much. If the League of Nations could not extend the period because it would not be able to reach a unanimous decision, it would equally be unable for the same reason to terminate the operation of the provisions. He, himself, thinks that it is a mistake to suppose that the League of Nations would not be able to reach unanimity.

M. Clémentel says that it is realized that the system cannot be permanent. What is proposed is a maximum period within which the provisions should operate. The first proposal is for 20 years. Now, however, this has been reduced to 10 years. Five years is, in his opinion, too short a period. The result of fixing only 5 years would be that France would have to shut the Germans out, in which case they would receive reciprocal treatment in Germany.

M Clemenceau says that he would accept the demand for 10 years as a maximum for countries that had been ravaged.

Mr Baruch says that the United States Delegates on the Commission think five years is too long. He hopes, therefore, that five years would be accepted as the maximum unless the League of Nations decides to prolong it. His personal view is that five years is too long.

M Clemenceau says that it should be taken into account that the different nations had not been affected during the War in the same manner. In France damage had been done which would be perceptible for more than a century. Nations which had taken part in the War and had not been exposed to the same terrible suffering as France naturally had not the same mentality as a country which could not be completely repaired for more than a century. In his view, five years might be adopted for all countries but a special provision should be made for countries like France which were in a different position.

Sir Robert Borden suggests that the five years which has already been fixed should be adopted as a minimum and ten years should be taken as the maximum period. The League of Nations should have power to appoint a Commission which should, by majority, fix a period for which in particular cases an extension should be granted, such extension not to go beyond a maximum of ten years from the original date.

M Clemenceau says France would accept that proposal.

Mr Lloyd George also agrees in the proposal.

President Wilson says that one aspect is constantly in his mind in regard to the whole of the Treaty with Germany. When the German plenipotentiaries come to Versailles they will be representatives of a very unstable Government. Consequently, they will have to scrutinize every item, not merely to say that it was equitable, but also as to whether it could be agreed to without their being unseated. If the present Government is unseated, a weaker Government will take its place. Hence the question has to be studied like a problem of dynamics concerning the action of forces in a body in unstable equilibrium. Any special restrictions on their nationals which they cannot meet by corresponding restrictions will place them in difficulties. The Treaty will hit them very hard since it will deprive them of their Mercantile Marine; will affect their international machinery for commerce; will deprive them of their property in other countries; will open their country by compulsion to enterprising citizens of other countries without enabling their enterprising citizens to try and recover their position in foreign countries. He does not think that the fact has been sufficiently faced that Germany cannot pay in gold unless she has a balance of trade in her favour. This means that Germany must establish a greater foreign commerce than she had before the war if she is to be able to pay. Before the war the balance of trade in Germany’s favour had never equaled the amounts which she will now have to pay. If too great a handicap is imposed on Germany’s resources we will not be able to get what Germany owes for reparation. Moreover, if the business world realizes that this is the case the securities on which the payment of reparation will depend will have no value. If this reasoning is sound it provides a formidable argument. He only looks towards reaching a peace and in doing so putting Germany in the position to build up a commerce which will enable her to pay what she ought to pay in order to make good the robbery and destruction she had perpetrated. But if the robber was to be in such a position that he cannot pay the penalties will be inoperative. These penalties ought to be operative and real. We ought to see that Germany can put herself in a position where she can be punished. At the present time we are sending food to Germany but she will not be able to pay for that for more than about two months.

M Clémentel says he thinks there is some misunderstanding. There is perfect agreement as far as customs clauses are concerned, namely, that they should terminate at the end of five years or that at the end of four years the League of Nations should consider whether there is to be any extension. As regards persons it is not desirable from Germany’s point of view that it should be automatically terminated too soon, as if it were, Germans in countries like France would be exposed to violence. He will be quite satisfied if Sir Robert Borden’s proposal is adopted. The countries concerned will then have a right to state before the Commission set up by the League of Nations whether public opinion would enable them to terminate the provisions at the end of five years or would render it desirable to extend the term of their operation. Nothing will be gained by Germany by unduly shortening the period. In accepting Sir Robert Borden’s proposal France is making a considerable concession when it is remembered that 20 years had been the period originally proposed.

President Wilson says he does not much like Sir Robert Borden’s proposal and he thinks it is a mistake. He thought it would be quite safe to decide that the provisions should terminate in five years unless continued by the League of Nations. He would point out that the term used should either be ‘Council of the League’ or ‘Body of Delegates’.

Mr Lloyd George says that this is the case.

President Wilson says that he wants in every possible case to yield to the desire of his French colleagues. He realizes to the full the position of the French Government and people and the suffering which France had undergone. Although it is a serious matter for the treaty as a whole, therefore, he would accept Sir Robert Borden’s suggestion but he urges that the clauses should be very precisely drawn.

Sir Robert Borden says he will be glad to cooperate with the Drafting Committee.

(Sir Robert Borden’s proposal is accepted, namely that the period during which the provisions should apply should be fixed at five years unless extended by the League of Nations. The maximum period to which the extension could be made should be ten years from the original date. The League of Nations should by majority vote set up a Commission which by majority vote should decide the length of any extension within the total period of ten years.)

The Drafting Committee of the Commission should formulate the necessary amendments to be forwarded to the Drafting Committee of the Peace Conference.


3. President Wilson asks Dr Taussig to explain points which arose on the clauses in Article 4.

Dr Taussig illustrates the point raised by Article in the following manner:

Supposing a German subject possesses property in Italy, the Article provides that such property could be utilized towards the payment of amounts due to subjects of the Allied or Associated Powers in regard to property which they had in German territory. The question is whether, in the event of there being a surplus on the German property, it could be used to make good debts owed to Allied and Associated subjects in Austria or other enemy territory. The Italian Delegation had taken the view that it could be so used, but the United States Delegation had reserved their adhesion.

Mr Lloyd George says he agrees with the Italian view. The principle of joint liability by enemy powers had been accepted in regard to reparation, and he thought it would be difficult to avoid applying the principle here also.

Sir Hubert Llewellyn Smith points out that compensation to the enemy subjects in such case is provided for, but will have to be paid by the enemy Government concerned.

President Wilson says he does not much like the Article, but he will not press his objections.

(The Article was accepted.)


(Conclusion: Sir Maurice Hankey is instructed to forward the Report of the Economic Commission to the Secretary General for Conclusion communication to the Drafting Committee of the Preliminary Peace Conference as soon as the expert Drafting Committee has completed the necessary alterations in the Articles.)
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