mobilized debtors. Naturally, there was no hesitation in applying a forced execution of these measures with the result that the property of Serbian debtors was sold at an excessively low price by public auction. Of course, the sequester placed on the possessions of AustroHungarian nationals in Serbia was immediately raised and they were reinstated in all their rights.

Consequent to that condition of affairs, the situation in Serbia in 1919 with relation to Hungary, relative to property, rights and interests, is as follows:

Hungary has collected all her credits from the Serbian nationals, and her own subjects have been reinstated and are in possession of all their seized property (there are scarcely any Hungarian structures in Serbia). We are, therefore, in our relations with Hungary, relative to domestic law, in a very unfavorable position. We are deprived of a pledge which the Allies qualified as "essential" (Reply of the Allied and Associated Powers to the Remarks of the German Delegation, page 51) 10 for the recovery of their credits from the enemy, and for the payment of the indemnities due Allied nationals, as a result of the application of exceptional war measures and provisions concerning the possessions, rights and interests of our nationals in Hungary.

The only way left by which we may reestablish the situation and repair the detrimental consequences of the arbitrary measures of the Hungarian Government in Serbia can only be realized by the insertion of provisions relative to the possessions, rights and interests of nationals, in the Peace Treaty with Hungary similar to those which were inserted in the Peace Treaty with Germany. This measure would not constitute a privilege in our favor, and we do not ask for any advantage other than those recognized to our Allies in their relations with Germany. What we claim is simply the application of common law, and the maintenance of the same principles which were admitted in settling the same question in the Peace Treaty with Germany.

The derogation admitted, to the advantage of Austria, in Article 267 of the Peace Treaty of Saint-Germain, has already caused us considerable injury. But we understood the gravity of the motives which provoked the adoption of that exceptional measure by our Allies and we kept silent in face of the superior interests to which our pledge was sacrificed. However, it is unnecessary to extend that measure in favor of Hungary, that is: to have it apply in a case concerning which the motives invoked for Austria have no application. Such a provision would be absolutely unjustified, and would cause us an extremely prejudicial injury in every respect.

10 Vol. VI, pp. 926, 983.

With confidence in the high spirit of justice of our Allies, we feel certain that they will protect our interests and we are firmly convinced, after examination of the reasons above presented, our claim will be accorded favorable consideration.

From: The Secretary General of the Economic Commission. To: The Ambassador of France, Secretary Gen'l of the Peace Conference.

The Economic Commission has examined, in detail, the Serbian note under date of December 12,1 treating the interdiction to liquidate Hungarian property in the territories transferred to the SerbCroat-Slovene State.

The Commission esteems that, by the application of the Articles of Part X of the Peace Treaty, especially those having reference to the prejudices caused by decisions rendered in cases of property, rights and interests, without the party concerned having an opportunity to offer any defense, the cases indicated by the Serb-CroatSlovene Delegation, treating the actions of the Hungarian authorities relative to the recovery of the Hungarian credits during the occupation of Serbia, justify the Serbian Government in demanding an indemnity from the Hungarian Government.

The Economic Commission was uncertain as to whether, in order to permit the Serbian Government to reimburse its nationals for the damages caused by the above mentioned acts, it would be advisable to authorize a liquidation of Hungarian property in new Serbia. The commission recognized, however, that even if this authorization were accorded to the Serbian Government, the Government might be unable to employ the proceeds of the liquidation as a reparation of the damages in question, since by the terms of Article 297 of the Treaty with Germany (249 of the Treaty with Austria) the proceeds of the liquidation can be levied upon only for indemnities relative to the properties or credits of Serbians in Hungary.

"Appendix G, supra.

However, the Economic Commission esteemed that, by a slight revision of Article 260 of the Treaty with Germany (211 of the Treaty with Austria) it would be possible to meet the serious objection presented by the Serb-Croat-Slovene Delegation, without infringing on the general system which rules in the Treaties with Austria, Hungary, and Bulgaria concerning enemy property in transferred territory.

The Serb-Croat-Slovene Delegation specified, in demanding the liquidation of Hungarian property in the transferred Hungarian territories, that an interdiction to permit the liquidation would maintain, within the territories which the former Empire recognized as of Hungarian influence, the economic superiority of Hungary as beneficiary, not only of the most of the public concessions, (transportation means, canals, lighting, etc.) but also of the majorats which afford certain Hungarian subjects with an important economic influence over vast domains and seigneurial rights, which might entail difficulties of an administrative or political nature.

The Economic Commission esteemed that it was impossible to not recognize the argument presented by the Serb-Croat-Slovene Delegation, and is of the opinion that satisfaction might be accorded Serbia by a sufficiently extensive application of Article 260 of the Treaty of Versailles (211 of the Treaty of Saint-Germain), which provides that in the transferred territories, the Reparation Commission may, within a period of one year after the entry into force of the Treaty, demand that the enemy State acquire full rights or interests for its nationals in all enterprises of public utility, or in all concessions. With special reference to the question of majorats, the Economic Commission is of the opinion that mention of the majorats be inserted in the Article above referred to in the Treaty with Hungary, under the form "demand that Hungary acquire full rights or interests for her nationals in all enterprises of public utility, or in all concessions, as well as in all majorats, etc. . . . ”

In order that, on one hand, the regime adopted concerning enemy property situated in transferred territory be not infringed on, and on the other hand, equitable guarantees be assured the Serb-CroatSlovene State against a danger which cannot be disregarded, it will be advisable after having introduced the revision proposed by the Economic Commission in Article 260 of the Treaty of Versailles (211 of the Treaty of Saint-Germain) that the Supreme Council ir dicate to the Reparation Commission that an extended application of this Article is to be anticipated regarding the Hungarian territories transferred to the Serb-Croat-Slovene State.

D. SERRUYS

Paris Peace Conf. 180.03501/120

HD-120

Notes of a Meeting of the Heads of Delegations of the Five Great Powers, Held in M. Pichon's Room, Quai d'Orsay, Paris, Wednesday, December 31, 1919, at 10: 30 a. m.

The following were also present for items in which they were concerned:

GREAT BRITAIN

Capt. Fuller, R. N.

Cmdr. MacNamara, R. N.

Mr. Malkin

Mr. Carr

Lt. Col. Beadon

FRANCE

Gen. Weygand

Gen. Le Rond

Adl. Le Vavasseur

Mr. Serruys

Mr. Fromageot

Mr. Tannery

Mr. Hermitte

Mr. de Montille

ITALY

Gen. Cavallero

Mr. Pilotti

JAPAN

Mr. Shigemitsu
Mr. Nagaoka.

M. DUTASTA told the Council that at five o'clock on the previous day he had had an interview with M. von Lersner and had communicated to him the draft letter that was to be addressed to the German Delegation

1. Negotiations
Relative to the
Signing of the
Protocol

by the President of the Conference.1 The only thing left blank was the space for the figures relative to tonnage as estimated by the Allies on one hand and by the Germans on the other. Mr. von Lersner appeared on the whole satisfied with the letter. His only hesitation had been about the period of two years granted to the Germans for supplying the additional port material: he thought that period too short. He had told Mr. von Lersner that in his own opinion it might be possible to have the time extended to thirty months. Mr. von Lersner had gone away satisfied, and it was agreed between them that the afternoon of January 6th, might be taken as the date for signing the Protocol which would take place at the Quai d'Orsay, and would coincide with the coming into force of the Treaty.

Since that interview Captain Fuller had submitted the figures to be inserted in the blank spaces left in the draft letter. The estimate of the Allies was 624,275 tons and that of the Germans, 527,380 tons. These figures referred to the docks exclusively, and the difference between the two figures would, after verification, be deducted from the 400,000 tons originally claimed. He had then had the completed text presented to Mr. von Lersner by Mr. de St. Quentin. In acknowledging the document Mr. von Lersner told Mr. de St. Quentin that M. Loucheur had given, as the Allied figure, 700,000 tons and claimed that the situation was considerably modified if the estimate of the Allies was only 624,000 tons. Under the circumstances Mr. von Lersner said that he would be obliged to telegraph Berlin for instructions. What had occurred in reality was that M. Loucheur had suggested the estimate of 700,000 from memory and, no doubt, as an example for the sake of argument. The Germans were not justified in basing an argument on that estimate which was indicated merely in the course of conversation. And it ought further to be borne in mind that the figures submitted by Captain Fuller and which appear in the draft letter were more favorable to the Germans than those established by the French Admiralty, namely 612,000 tons.

M. DE ST. QUENTIN stated that Mr. von Lersner had claimed in his presence that the figure of 700,000 tons had been given in the course of the discussion that took place between the Allied and the German Experts. But, as a matter of fact, no trace of that figure having been given could be found in the procès-verbaux, and their Experts could not recall having heard it quoted. There was every ground for thinking that Mr. von Lersner's affirmation was inexact.

MR. DUTASTA mentioned that, as he had already said, the figures referred to the floating docks alone. No statistics had been supplied on the number of tugs, cranes, etc., in the possession of Germany.

1 Appendix B to HD-119, p. 713.