1. (The Council had before it a note from the French Delegation (See Appendix "A"), a historical résumé of the question by Captain Fuller (See Appendix "B") and a new British proposal dated November 14th, 1919 (See Appendix “C”). SIR EYRE CROWE said he had asked the British naval representative to summarize the proposals made by the British Admiralty, which he hoped would be approved by the Council.

Disposition of
Enemy War
Ships

CAPTAIN FULLER read and commented upon the Historical Summary (See Appendix "B") on the distribution of enemy war-ships, and upon the new British Proposal (See Appendix "C").

M. CLEMENCEAU wished to ask whether this proposition which had just been read was an entirely new one?

SIR EYRE CROWE replied that it was. The American and French Delegations had discussed this proposition but had not read the new text. The Italian naval expert had read the proposition and agreed with it.

M. CLEMENCEAU said it was impossible for him to make up his mind on a proposition which was quite new to him; he should first have to discuss the proposition with his naval experts.

MR. POLK asked Captain Fuller with reference to paragraph 3 what could prevent any country breaking up ships allotted.

CAPTAIN FULLER explained it was a question of labor and of shipyard facilities.

MR. POLK also asked why battle-ships, etc., should be loaned for one year.

CAPTAIN FULLER replied this was for experimental and propaganda purposes. The percentages laid out in the proposition were based only on information in their hands; other countries could furnish their own figures and it would be possible to come to an agreement.

M. CLEMENCEAU asked that the further examination of this question be postponed until the next day as he wished to examine the question closely with his naval experts.

(The question was adjourned until the next day).

German Oil
Tank Ships

2. MR. POLK stated that in the discussion which had taken place at the meeting of November 14th (See H. D. 92)1 he had omitted to bring out an important point and wished to make the record complete. He had omitted in his discussion to go into the history of the question. Originally it had been agreed that all the German ships should be turned over to the Allies, who were to use them to furnish to Germany food which she needed, the charges to be attributed to the Reparation

1 Minute 2, p. 159.

fund. At a meeting which had taken place at Brussels it had been voted that the 14 German oil tank ships should not be delivered. The Germans had asked to use these. At that time Messrs. Hoover and Davis had talked with their colleagues about the question of letting the Germans get oil; no record was made of these conversations, but the resolution read that temporarily the ships should be exempted from allocation. Since that time the American contention was that the Germans could operate the vessels under the Inter-Allied Flag and with an Inter-Allied representative on board, but it had been said that this could not be done. According to his information their records showed that exceptions had been made and that the Germans had operated certain ships with German crews on board, for instance: The Fritz von Straus from Hamburg to Hull, the Kehrweider and the Paul from Hamburg to New York, to obtain oil, also a number of other ships in the Baltic Sea, also certain ships used in the Mediterranean to repatriate German prisoners. In the discussion which followed the Scapa Flow sinking the question again came up; they maintained that it was not contrary to the Allies' views to let the Germans operate these ships to bring oil to Germany. On July 13th the question was again discussed in the Reparation Commission; but on August 15th the President of the A. N. A. C.2 had cancelled the exemption without giving notice to the United States representative until the following day. The United States had always questioned that decision. The difficulty arose in this way: their understanding was, first, that the ships should be exempted to get oil and secondly that the ships could be operated by German crews under the Inter-Allied flag and with an Inter-Allied Representative on board. They held further that other German ships had been given a free sailing to Constantinople and other ports. They had taken this to constitute a precedent.

SIR EYRE CROWE said that it seemed to be a question of whether or not German crews should be used on these steamers. He confessed it puzzled him very much why the American Government insisted upon the use of German crews. He asked what inspired that policy.

MR. POLK said that was the original American view and that contracts for transporting oil to Germany should be carried out.

SIR EYRE CROWE said that oil could reach Germany without using German crews; there must be another reason.

MR. POLK said there was no mystery about this. It was simply the question of the disposal of the ships: they wanted to let the Germans have a temporary use of the ships until the permanent title was decided upon.

'Allied Naval Armistice Commission.

SIR EYRE CROWE maintained that the United States' position amounted to ignoring the unanimous decision of the Supreme Council which had attributed the temporary management to the Allies."

MR. POLK repeated the view of his Government that the question had been discussed and agreed upon at Brussels.

SIR EYRE CROWE felt that he must insist that at the time of the decision the Germans had made no demand for oil. The Allies did not take these ships simply because they had no need of them.

MR. POLK regretted the unfortunate situation created by the lack of minutes; there were the recollections of Mr. Hoover on the one hand and those of his colleagues on the other.

SIR EYRE CROWE said that with regard to the precedents which Mr. Polk had cited, he wished to make the following remarks. First, in the Baltic, the Germans had long been allowed to navigate. As for the particular case of the Fritz von Straus, this was a ship of only 800 tons: There was very little interest to the Reparation Commission in this boat on account of its small tonnage. As to the other ships mentioned, it would be easy to ascertain the reason for their operation, and probably their small tonnage was again the reason. As for the German ships in the Mediterranean, that was a different question; the crews were Turkish and not German. The Supreme Council, as a matter of fact, had decided that the Allied Naval Armistice Commission was wrong and insisted on taking those crews off and putting on the Inter-Allied flag in place of the German. Under these conditions it appeared that the precedents cited by Mr. Polk did not carry much weight. He emphasized the fact that he had received formal instructions from his Government that these ships should not sail with a German crew. No other position could be taken by the British Government.

M. DE MARTINO stated that he had no objection to the first trip being taken, even with German crews on board, provided that the final distribution of these ships should not be prejudiced by this trip, and as a matter of fact, the final distribution belonged to the Reparation Commission.

M. CLEMENCEAU then read a telegram from Admiral Goette to A. N. A. C., dated November 15th, (See Appendix "D"), from which it appeared that the Germans had informed the Allies that steps were being taken for the delivery of these steamers. That appeared to him to be a decisive fact which did not leave them any choice. What impression would the Council give to the whole world if it were to let the Germans keep these ships at that time? There seemed to him to be two questions. First, there was the question of final ownership

HD-62, minute 1, vol. vII, p. 403.

'See HD-62, minute 2, ibid, p. 406.

which the Council had agreed should be settled by the Reparation Commission. There remained the question of operating the ships. He did not quite understand the position of the United States. What objection did the Americans have to an Allied rather than a German crew? He personally saw a very grave political and moral objection to German crews being used which he thought was even more important than the economic objection. There had just occurred at Berlin demonstrations in favor of Hindenburg which were of a disquieting nature and had given a great deal of trouble to the German Government. These seemed to bear the marks of a Nationalist uprising. Therefore would it be opportune to let those ships sail with German crews and under the German flag? For himself, he had the greatest objections. There was no doubt whatsoever that the Principal Powers had pledged themselves to stand by the decisions of the Reparation Commission; that was full security for America. He therefore earnestly requested Mr. Polk to accept Sir Eyre Crowe's proposal so as to not make the situation more difficult. It seemed to him all the more important to come to an agreement on this question as there were a number of vital matters to be settled with the Germans, such as the delivery of guilty individuals. Should the Germans be allowed to operate these ships there would be general stupefaction in France. He had often shown readiness to make concessions, but always on one condition that public opinion should understand them. This would not be the case in the present instance. He understood there might be some American emotion on the subject, but he felt sure that America would understand France's position in the matter and he hoped that secondary considerations which moved American opinions would give way to the stronger, and, to his mind, more justified feeling of public opinion in France.

M. DE MARTINO stated that in view of the strong case presented by M. Clemenceau he was ready to agree with his views.

MR. POLK remarked that M. Clemenceau's declarations carried much weight and he also saw that the use of the German flag at this time might be misconstrued in France. They maintained however, that an arrangement had been made which had not been carried out. He also wished to point out that his position with his Government made it difficult for him to give his entire approval to the Chairman's views. As he understood the proposal which Sir Eyre Crowe had made at a preceding meeting, the 14 oil tank ships were to go to the Firth of Forth; 5 were to be operated, and 9 were to remain there until a compromise had been reached. He would recommend that proposal to his Government. He wished, however, to have the Council take note of the feeling in the United States on the question of the allocation of these vessels. He had not put up an imaginary case; they did not agree and.

had not accepted the present system of distribution. He referred to the last sentence of the telegram from the British Ministry of Shipping to the British Delegation and he wished to ask Sir Eyre Crowe whether this phrase did not sound like a threat.

SIR EYRE CROWE explained that the phrase occurred in an Interdepartmental telegram and represented simply the attitude of the Shipping Controller which was uncompromising.

MR. POLK asked whether it was not advisable to instruct the Naval Armistice Commission that no disposition of these 9 oil tank ships be made at this time.

M. DE MARTINO wished to ask what was to be done with the other 5? M. BERENGER replied that according to his information only 11 ships remained which therefore would leave only two for the Allies.

M. DE MARTINO added that should this information be correct it would be very serious for Italy, as she had counted absolutely on sharing the 5 ships with France and Belgium to remedy the scarcity of oil fuel. M. BERENGER wished to point out how important it was to prevent a further waste of these tank ships considering the shortage of oil fuel in Europe. Mr. Dulles, an American representative on the Committee of Organization of the Reparation Commission, had written to M. Loucheur on August 28th protesting that such a waste of fuel oil should not be permitted. Since that time these ships which could carry 60,000 tons could have made two trips and thus been able to bring 120,000 tons of fuel oil which had been lost to the Allies and Germany as well. If Sir Eyre Crowe's proposal were to be sustained by the Council, that would mean a continuation of this waste for three months or more as the Reparation Commission would not be taking a decision in the matter until then. The explanation of the Brussels meeting given by Mr. Polk could not be accepted. If Mr. Hoover had promised the Germans to give them exemption in favor of certain ships in order to get them oil, this was something that the Allies had never heard of and it did not figure in a single Allied record. On March 29th M. Clementel had written, as President of the Supreme Economic Council, a letter which clearly showed that the Germans at that time were not in need of fuel oil, and he was not aware that an agreement had been reached between Mr. Hoover and the Germans. The Germans had emphasized on July 30th for the first time their need for fuel oil, and the real reason for exempting those tank ships had been that at that time there was sufficient tonnage in the way of tank ships. He could not tell whether the rumor were true that there had been an agreement between Messrs. Hoover and Davis and the Germans, and that a part of the payment had been made by the latter without any knowledge of the Reparation Commission.