[Sailor Steve]

Friday, June 27, 1919

PARIS PEACE CONFERENCE

President Wilson’s House, Place des Etats-Unis, Paris, 11:00

Meeting of the Council of Five


Under consideration is the Report of those members of the Reparation Commission, who had been deputed to negotiate with Poland, Czechoslovakia, Serbia and Romania with regard to the payment of contributions towards the cost of the war.

I. Colonel Peel explains that they had initiated negotiations on the basis of the instructions given at the last meeting of the Council on this subject. Taking the value of the Kroner at 25 per cent of its value had finally suggested a total sum in respect of the four states amounting to 2 milliards Francs Swiss gold. Generally speaking these states are reluctant to undertake this liability though Czechoslovakia had undertaken to do so if the other three would consent. Serbia and Romania had not absolutely declined but he doubts whether they are seriously willing to pay. He does not know what decision had been taken by the Polish representatives as they had not been present at the last discussion on the subject. He points out therefore that this liability must either be imposed on these States, or the sum might be discussed and proposals for its revision considered or the matter dropped altogether.

President Wilson asks what method is proposed to adopt to impose this obligation on the States in question.

Mr Dulles suggests that they should be told that in the event of a refusal they will again come under the terms of the Austrian Treaty and be liable to pay reparation.

Mr Lloyd George agrees that this is the best method of dealing with them, and reminds the Council that, as he had pointed out before, with regard to Serbia and Romania, a kind of book-keeping transaction could be conducted i. e. the amount of their contributions could be deducted from their claims to reparation.

M Loucheur said that in his opinion to impose on these small Powers the sum of 1, 1½ or 2 milliards is to incur a great deal of odium for very little profit. His attitude might be different if substantial sums were in question. He reminds the Council of the burden of war expenses which would have to be borne by Serbia and Romania. If, however, it is decided to impose this obligation on these States, he agrees that Mr Dulles’ suggestion is the right one. He adds that he had understands from a Romanian Delegate on the previous day that these States are prepared to offer 1½ milliards.

M Clemenceau said that he adheres to M Loucheur’s opinion.

Mr Lloyd George asks whether in effect M Loucheur intends that Serbia and Romania should present in full their reparation claims against Germany, while acquiring between them something like half the former Austrian Empire.

M Clemenceau explains that he has not looked at the matter in this light. Serbia and Romania would certainly have to diminish their claims against the reparation fund.

M Loucheur thinks that Mr Lloyd George’s position is right but in view of what had been embodied in the German Treaty with regard to the principle of “solidarity” he does not think that his attitude could now be maintained.

Mr Lloyd George says that he is not calling in question the principle of solidarity. His point is that the Reparation Commission must strike a balance in the case of Serbia and Romania and deduct the amount of their contributions from their reparation claims.

M Loucheur says that the negotiations which, as had been reported, had proved unacceptable to these smaller States, had been conducted on this basis. In any case the balance would be enormously in favour of Serbia and Romania and he adheres to his opinion that the amount in question is not worth the trouble involved. The reparation claimed by these States would very likely amount to 20 milliards and contributions as suggested to 2 milliards only.

Mr Lloyd George says that if this position is taken up with regard to Serbia and Romania, the Czechoslovaks would, he supposed, agree to make a payment. He adds that it is well known that in Czechoslovakia there are a very large number of rich Germans. He cannot consent to a proposal which would relieve them of the burdens to be borne by men in similar positions in the Allied countries.

M Loucheur suggests therefore that the total amount of contributions to be demanded should be 2 milliards of francs.

Mr Lloyd George says that he will not express an opinion as to a figure and thinks that it should be left to the Reparation Commission, when this comes into being, to assess it.

Mr Davis says that they have attempted, without success, to persuade these States to agree to this proceeding.

Colonel Peel suggests that the experts there present and previously delegated for these negotiations should have authority to settle a figure at once.

(It is agreed:

That Poland, Czechoslovakia, Serbia and Romania should be called upon to accept liability for the payment of contributions in respect of the expenses of the liberation of formerly Austrian territory to be acquired by them.

That the amount of the contributions should be fixed by the experts of the Reparation Commission who will already be deputed to negotiate with them.

That if these States refuse this settlement they should be liable for the payment of reparation under the Clauses of the Treaty with Austria.)


II. The Council approves the following provision for insertion in the Financial Clauses of the Polish Treaty:

Poland shall undertake responsibility for a part of the Russian Public Debt and of all other financial obligations of the Russian State as these shall be determined by a special Convention between the principal Allied and Associated Powers of the one part and Poland of the other. This Convention shall be drawn up by a Commission appointed by the said Powers. In case the Commission should not arrive at an agreement, the questions in dispute shall immediately be submitted to the League of Nations.

(A copy of the above provision, initialed by Council of Five is handed to M Cheysson for immediate communication to the Drafting Committee.)

Baron Makino says that he initialed the document on the assumption that provision would be made for the representation of Japan when the matter in question was under consideration.


III. The following addition to paragraph 3 of Section 3 of Annex II of the Reparation Clauses was initialed for insertion in the Treaty of Peace with Austria, to follow immediately after this clause, “the composition of this section . . . . . . claims”.

When voting takes place the representatives of the United States of America, Great Britain, France and Italy shall each have two votes.