462.00 R 296/893: Telegram
The Ambassador in France (Herrick) to the Secretary of State
[Received 4:46 p.m.]
88. L–339 [from Logan]. Reference Department’s L–206, January 22.
1. Discussed exchange of letters [with] Gutt representing Theunis20 concerning article 4 finance agreement. Gutt suggests following changes in proposed letters.
2. Gutt letter to Logan: Omit following phrases in first paragraph “on account of the indebtedness of the Belgian Government to the United States”. Change last sentence same paragraph21 to read as follows: “I take pleasure to assure you that my Government”, insert following phrase, “unless and until the transfer committee authorizes the transfer into foreign currencies of the marks received”. Letter then continues to its end as originally drafted by the Department.
Logan letter to Gutt: Change first and second paragraphs to read as follows “In reply to your letter of blank regarding the payment to the United States of the sums received by Belgium under article 4 of the agreement of January 14th, 1925, I am directed to express my Government’s appreciation of your assurances given with respect to the intention of the Belgian Government to make these payments available to the Government of the United States in Belgian francs or currencies freely convertible into dollars”. Letter then continues to end as drafted by the Department.
3. Gutt frankly explained that the exchange of letters without the modification suggested somewhat dangerous from an internal Belgian political point of view, that as a matter of fact the distinct reference in the proposed exchange of letters to article 4 of the finance agreement of January 14th in itself constituted a practical admission that our Government was in no way committed to last paragraph of article 232 of the Treaty of Versailles and the connected agreement signed by Wilson, Lloyd George and Clemenceau22 (which Congress never accepted), [that] we therefore had what we wanted with the additional advantage that such an exchange of letters with the modifications he proposed would not cause internal Belgian public clamor concerning the foregoing point.
Confidentially hope Department will cable its approval of these proposed changes in the text thus permitting the immediate exchange of these two letters.
[Page 529]4. The total priority accorded the Belgian war debt under article 4 of the finance agreement for the first Dawes annuity, viz., September 1st, 1924, to August 31st, 1925, is 36,000,000 gold marks. Twelve percent of the foregoing to be paid to Belgium “by reason of her debt to United States of America” is 4,300,000 gold marks to be made available to Belgium during the 7 months beginning February 1st and ending August 31, 1925, at a monthly average of slightly over 600,000 gold marks or in other words under proposed exchange of letters Belgium should deposit in the Federal Reserve Bank on foreign accounts approximately $125,000 monthly from March 1st to September 1st, 1925.
We have checked the foregoing figures under paragraph 3 of article 4 and find them correct. Logan.