Notes on International Affairs
From July 23 to August 23
Prepared By Allan Westcott, Professor, U. S. Naval Academy
Germany and Reparations
British Condemn French Policy. - The British draft for a joint Allied reply to Germany regarding reparations, which was submitted to the Allied powers and the United States in July, was in general approved by Italy, but was rejected by France and Belgium in notes sent to the British Foreign Office early in August. The French and Belgian replies not only failed to fall in with the British proposals but practically disregarded them, consisting instead of arguments in justification of the course taken by France and Belgium and in support of special priority claims upon German payments.
After some division of opinion within the British Cabinet, due to the opposition of "die hard" Conservative members to a break with France, a decision was finally reached to publish the correspondence on the subject and definitely present the British line of policy. Lord Curzon's note to France and Belgium, delivered on August 11 and made public the following day, argued that the Ruhr occupation was illegal, although suggesting that the point be submitted to arbitration. The note objected to settlement of the amount of reparations by the Reparation Commission, on the ground that the commission had become the mere instrument of Franco-Belgian policy. Finally the note stated that the British Government adhered to the plan of former Premier Bonar Law, under which Great Britain would expect to gain from Germany and her debtor Allies only enough to meet British obligations to the United States.
The British note read in part as follows:
"His Majesty's Government never contemplated and do not contemplate, that Germany should be relieved of all reparation payments. They are determined that Germany shall pay to the maximum of her capacity. What that maximum may be should be decided by an impartial inquiry. It cannot be ascertained by casting up amounts Germany's creditors would like to receive.
"To ask more than Germany's capacity can only destroy assets which Germany would be able to offer the Allies. To force liquidation is not the most profitable way of making recovery from a debtor with resources.
"It is ad mitted that Germany can only make substantial payments if, by restoration of her finances and stabilization of her currency, she secures a budget surplus· available for reparations. Moreover, this surplus must be in a form which can be made available for external payments over the foreign exchanges. External debts cannot be paid by the collection of depreciated paper marks.
"In the view of his Majesty’s Government, forcible interference with the economic life of Germany, even if consistent with the Treaty of Versailles, cannot assist in the necessary restoration. Not only will it prevent realization of any surplus for reparations but, by intensifying the disorder of German finance and currency, will have the gravest reactions on trade.
"His Majesty's Government, therefore, regard as doomed to failure the method pursued by the French and Belgian governments to secure reparations. Despite the wholesale seizures the occupation of the Ruhr has produced, at great cost, less receipts for the Allies, notably of coal and coke, than were forthcoming the previous year. Moreover, his Majesty's Government feel that the resulting situation involves a great and growing danger to the peaceful trade of the world, and not the least to that of Great Britain.
"The Government regard the continuance of the present position as fraught with gravest risk, both economic and political. They consider an impartial fixation of Germany's liability at a figure not inconsistent with her practical power of making payment as a matter of great urgency, and they have suggested what appears to them appropriate means to this end.
"When steps have been thus taken to ascertain the real value of the asset, represented by German reparations, and to secure its realization without further depreciation, his Majesty's Government will be ready to deal as generously as circumstances permit and in the light of their respective capacity to pay with the debts due to Great Britain by her Allies.
"They cannot, having regard to Great Britain's heavy material losses during and since the war, and to future tax burdens on its trade, admit that other countries are justified in claiming that the agreed percentages of reparation payments should now be further modified or changed in the order of priority.
"But they remain prepared to ask for no more in respect for the very large sums due by their Al lies than will, together with the reparation payment by Germany, meet the British war debt to the United States Government."
Germany's Ability to Pay. – Washington, July 20.-Germany at present can pay nothing, according to the conclusions reached by the Institute of Economics in its report on Germany's capacity to meet reparations demands just completed by Harold G. Moulton and C. E. Maguire and scheduled to appear from the press of a New York publisher on September 1.
The report declares it to be the conclusion of the Institute's investigators that since the armistice Germany, in fulfillment of reparations obligations, has parted with goods, money, property, and securities worth to her not less than 26,000,000,000 gold marks, or about $5,188,000,000. This is less than Germany contends, but more than France admits, that the Germans have paid. The Allies, according to the Institute's report, acknowledge the receipt, roughly, of $2,000,000,000. On the other hand, Germany claims credit for payments amounting, roughly, to $11,000,000,000.
The discrepancy between these figures is explained, according to the Institute's report, by the fact that the allied powers refused to allow credit for many of the largest items of German delivery. After declaring that Germany "at present can pay nothing," the Institute asserts that "whether she will be able to pay in the near, or even distant, future depends on circumstances over which she has no direct control." It declares that most of the values surrendered by Germany in fulfillment of reparation obligations have been from capital and not income, and that "she has practically nothing left"; that Germany has no more capital to send across the border, no income, except paper marks, which the Allies will not accept, and that the Allies cannot collect anything from Germany so long as they refuse to permit Germany to earn, by foreign trade, money acceptable to them. - New York Times, 21 July.
Fall of Cuno Cabinet. - Withdrawal of support by the United Socialist Party in Germany forced the resignation of Chancellor Wilhelm Cuno and his cabinet on August 12. A new middle coalition cabinet was subsequently organized by Dr. Gustav Stresemann, with support of the United Socialist, Clerical, People's and Democratic parties.
The Socialist revolt against Cuno called for more aggressive measures to remedy internal economic difficulties, entry into the League of Nations, and more active foreign policy.
United States
Agreement Signed With Mexico. - On August 15 Mexican and American representatives signed the records of the conference which has been going on for some time in Mexico City, the records embodying an agreement designed to make possible the resumption of diplomatic relations between the two countries. Two claims conventions were drawn up covering American claims against Mexico for damages during the revolutionary period from 1910-20 and Mexican claims against the United States resulting from the Pershing expedition and the occupation of Vera Cruz. These must be submitted to the American and Mexican Senates for approval.
The conference records contain Mexican Government interpretations of the subsoil-petroleum and agrarian legislation acceptable to the American delegate, and an express ion of the Government's intention to follow these interpretations in good faith. Under the subsoil-petroleum section American oil companies' rights to suboil acquired prior to the going into effect of the Queretaro constitution on May 1, 1917, remain intact. After that date the provisions of the Queretaro constitution relating to the subsoil prevail, although ti1e non-retroactivity of these provisions, notably the much mooted Article 27, is firmly established.
Nothing is known officially relative to the subsoil-petroleum rights of Americans who acquired lands prior to May 1, 1917, but who did not explore or announce intention to exploit their lands for oil. It is understood the Mexican Government is unwilling to assure them their rights, but the United States delegates specifically reserved the rights of these individuals.
Under the agrarian section of the understanding American rights acquired prior to the 1917 constitution remain intact under the laws then in force and the provisions of the constitution of 1857, but lands acquired since 1917, it is agreed, are subject to the provisions of the later constitution relative to the division of huge estates and also to subsequent agrarian reform laws.
British View of Twelve-Mile Limit. - Washington, July 23. – Acceptance by the British Government of the Hughes proposal for stopping rum-running on the Atlantic coast through the establishment of a twelve-mile limit of search is expected by High Administration officials as a result of the favorable report upon it just made by the British Inter-Departmental Committee examining the question.
A tangible idea of the contents is indicated in the recent letter of Lord Birkenhead in which he suggested acceptance of the twelve-mile limit for liquor search only, the three-mile legal line otherwise remaining, in a convention to be renewed yearly and to contain a return concession by the United States permitting British s-hips to carry sealed liquors for the home-bound voyage.
Treaty with Turkey. - Negotiations at Lausanne between Joseph C. Grew, American Minister to Switzerland, and Ismet Pasha as representative of Turkey, were ended on August 6 by the signing of two treaties, one general and the other relating to extradition. The general treaty provides that American ships and aircraft of commerce and war will secure freedom of the Straits in accordance with the terms of the Straits convention, though the United States has not signed this convention and assume-s no responsibility regarding its application. The difficulty over claims is settled by an agreement to leave them outside the treaty for separate negotiations to begin twenty days later. The treaty abolishes the capitulations, but provides that Americans in matters of personal status shall be subject only to American courts. Americans may travel and reside in Turkey, and engage in pursuits permitted by law to foreigners. Complete liberty of commerce and navigation is provided, and the most favored nation treatment in regard to import and export duties and other restrictions on trade.
Pacific Treaties Ratified. - Washington, August 17. - The two most important treaties negotiated at the Washington Conference of 1921 became effective today with the exchange of ratifications at the State Department by representatives of the signatory powers.
One is the Five-Power Treaty binding the United States, Great Britain, France, Italy and Japan to a reduction in naval establishments, which, for ten-year period, fixes a ratio of 5-5-3 for the capital ship strength of the United States, Great Britain and Japan and of 1.75 for that of France and Italy. The other is the Four-Power Treaty concluded by the United States, Great Britain, France and Japan relating to their insular possessions and dominions in the region of the Pacific.
The exchange of ratifications, consummating that part of the work of the Washington Conference, took place at noon. The last signature was placed on the official documents at 12:12 o'clock. At that hour the Anglo-Japanese Alliance ceased to exist. The Four-Power Treaty expressly stipulates that it "shall take effect on the deposit of ratification, which shall take place at Washington, and thereupon the agreement between Great Britain and Japan, which was concluded at London July 13, 1911, shall terminate."
Reduction of the American Navy in accordance with the terms of the Five-Power Treaty will begin immediately, according to announcement made by Theodore Roosevelt, Acting Secretary of the Navy, after the final exchanges 'today. As soon as the Navy Department had been notified by the State Department that the treaty was considered in full effect orders were sent whereby twenty-eight American capital ships, with an approximate tonnage of 750,000, including ships under construction at private and at navy yards and old ships, will be dropped from the United States Navy.
The document of exchange on the Naval Treaty signed today included the reservation of the French Government, stating that it was the understanding of that Government that the treaty was to apply only to naval craft expressly stipulated in the agreement, and to no others. The procés-verbal after stating that the exchange took place in conformity with Article 24 of the treaty itself, continued:
" 'The French Government considered and always has considered that the ratio of total tonnage in capital ships and aircraft carriers allowed to the several contracting Powers do not rep resent the respective importance of the maritime interests of those Powers and cannot be ex tended to the categories of vessels other than those for which they were expressly stipulated.' "
The Four-Power Treaty contained the reservation which was adopted by the United States Senate at the time that it approved the treaty, which read as follows:
"The United States understands that under the statement in the preamble or under the term s of the treaty there is no commitment to armed force, no alliance, no obligation to join in any defense."
League and World Court
Arms Reduction Plan. - Paris, August 8. - The draft of a treaty for "Mutual International Assistance and Armament Reduction" has finally emerged from discussions of the League of Nations' Mixed Commission for Reduction of Armaments.
The draft will be presented to the representatives of fifty-two nations at the league assembly next month at Geneva. If it is not changed or rejected there the nations which then decide to sign it - it will be submitted to the respective governments-will undertake the following terms:
Any nation may contract defensive alliances as it sees fit just as if there were no league treaty of mutual guarantees. These alliances must next be submitted to the league council for approval as being purely defensive. If they are not approved, that particular nation gets no further into the mutual guarantee system until its defensive alliances are revised to suit the council.
The vote on the draft was not unanimous, but by majority ballot, and there were several objections. France made a reservation that military agreements be exempted from the above provision because their value consisted in secrecy. Italy made reservations in all the three points. She points out the Austro-German alliance that operated in 1914 was such a "defensive" one.
After the alliances have been accepted by the council the contracting nation, the treaty provides, estimates the least armament it needs in consideration of its alliances. This estimate is submitted to the council. When that body has received the estimates of all the signatories of the treaty it may modify them in accordance with a general scheme of armament allotment. The contracting nations must either accept this allotment or quit the mutual guarantee system.
At this point several experts made reservations that their governments might not permit an international majority to prescribe their defensive armament.
Cecil Idea Held Nullified
This scheme is a composite of the ideas of Lord Robert Cecil and of Lieutenant-Colonel Requin, French military expert, who recently declared that in the next war France would be first across the Rhine.
The Italians say the original Cecil idea has been nullified. He intended to replace small groups with a single mutual guarantee, but the Italians say instead of being replaced the new system will simply seek to restrain them. On the whole, the French are well satisfied, they say, because it leaves them liberty of action. The Japanese are wondering if the treaty does not commit their country too deeply to something.
Lord Robert himself admits he is attempting to provide working apparatus for Article 10 of the league covenant, which guarantees international security and which was the chief reason for rejection of the league by the United States senate. - New York World, 9 August.
World Court Rules Against Germany. - The Hague, August 17. – At a public sitting of the World Court today judgment in the case of the steamer Wimbledon, involving the navigation of the Kiel Canal, was pronounced.
The decision, which was drawn up by a majority of the court composed of nine judges, was that the suit was validly submitted and that the German authorities were wrong in refusing to allow passage to the Wimbledon. The German Government is in consequence declared to be under obligation to make good the damages sustained, estimated at approximately 140,749 French francs.
Judge Anzilotti of Italy and Judge Huber of Switzerland were unable to agree with the majority of the Court and availed themselves of the right of delivering separate opinion. Professor Schucking, the German National Judge, appointed especially for this case, the first German Judge to sit on the Court took the same course.
As will be remembered, the British steamer Wimbledon, chartered by a French company and loaded with a cargo of munitions consigned to Poland, presented itself at the entrance to the Kiel Canal en route to Danzig, and was barred from passage by the Germans, who justified their refusal by the German regulations regarding neutrality. The Versailles Treaty states that the Kiel Canal shall be maintained free and open to the vessels of commerce and war of all nations at peace with Germany on terms of entire equality.
In reply to a protest made on the basis of this provision the German Government stated that as the treaty of peace between Poland and Russia had not been ratified, the transit of war materials destined for either of these countries through German territory was forbidden. A preliminary peace treaty between Poland and Russia, however, had been ratified, limiting the frontiers generally, and the final peace treaty between those countries· had been signed, but not ratified.
The judgment is based upon the general rule contained in Article 380 of the Versailles treaty, the effect of which, in the Court's opinion, is that the Kiel Canal has ceased to be an inland navigable waterway, the use of which by vessels of powers other than the riparian State is left to the discretion of that State.
By stating that the Kiel Canal shall be maintained open to the vessels of nations at peace with Germany, the Versailles Treaty, it was held, contemplated the possibility of a future war in which Germany would be involved. If the conditions of access to the canal were also to be modified in the event of a conflict between powers remaining at peace with Germany, the treaty would not have failed to say so, it is declared, and the omission of this statement may be considered as intentional.
The judgment refers to the American Presidential proclamation of November, 1914, for the use of the Panama Canal in the World War, express provision being made for the passage of men of war of the belligerents as well as prizes of war, and no restriction being placed upon the passage of merchant ships of any nationality carrying contraband. The proclamation of May, 1917, issued after the United States had entered the war, which forbade the use of the Panama Canal by enemy ships, whether public or private, was also cited.
The judgment concludes that as it has never been alleged that the neutrality of the United States before its entry into the war was in any way compromised by the fact that the Panama Canal could be used by belligerents' vessels, the case of the Kiel Canal is analagous, it is declared, and the argument is in validated that Germany's neutrality would necessarily have been imperilled if the authorities had allowed the passage of the Wimbledon because it was carrying contraband consigned to a State then engaged in armed conflict. - New York World, 18 August.
World Court Denies Jurisdiction. - The Hague, July 23. - The Permanent Court of International Arbitration today, by a vote of seven to four, declared itself incompetent to pronounce an opinion in a dispute between a member of the League of Nations and a non-member, without the latter's consent.
The non-member in this case was Russ ia, which refused to recognize the Court's jurisdiction in the Soviet Government's controversy with Finland over the Treaty of Dorpat, which as interpreted by Finland obligates Russia to grant a certain measure of autonomy to Eastern Karelia, situated along the frontier of Finland and inhabited by a population belonging to the Finnish race.
These provisions r elating to autonomy were inserted in the peace treaty between Finland and Soviet Russia and in a declaration made by the Russian delegation in the protocol of signature.
The Court observed that this point was at the present moment the subject of acute controversy between F inland and Russia, and for this reason to give an answer to the question or even to form an advisory opinion would be equivalent to settling the dispute.
It also observed that a reply to question submitted would have made an inquiry into the question of fact indispensable, which inquiry the Court would have found difficult to carry out without Russia's concurrence.
This is the first time that the World Court has adjudged itself incompetent to act on a case brought before it, and the Finnish agent in the proceeding, Rafael Erich, professor of international law and a former diplomat, is greatly chagrined, but the decision is generally held by legal experts here to demonstrate the Court's independence of League influences and it’s strictly juridical attitude toward its work.
There has been much speculation in international legal circles at The Hague, now crowded with eminent legal experts as to whether the Court could declare itself competent in a case which was undefended and where the defendant refused to recognize the World Court and the League of Nations. - New York Times, 24 July.
Russia
The New Soviet Constitution. - Washington, August 13. - The new Federal Constitution of Soviet Russia, adopted by the Central Executive Committee of the Union on July 6 last and now to be submitted to the All-Russian Congress, is so much a thing of checks and balances, nominal at least, that it should delight the heart of the professional constitutional lawyer. But it is inaccurate to say that this new Russian Federal Constitution closely resembles the Constitution of the United States, as has been claimed by some of the Soviet spokesmen.
For example, it appears that the judicial processes will not be so independent of legislative and administrative influences; again, there is merging of administrative and legislative powers in a way undreamed of in this country; still again, practically all power derives from the Congress of the Soviet Federation, whereas in this country the administrative power derives directly from the people. Finally, the central Government will have far-reaching power over the finances of the constituent states.
The Constitution is being set up for a federation which is composed of:
The Russian Socialist Federated Soviet Republic.
The Ukrainian Socialist Soviet Republic.
The White Russian Socialist Soviet Republic.
The Trans-Caucasian Socialist Federated Soviet Republic (which includes the Socialist Soviet Republic of Azerbaijan, the Socialist Soviet Republic of Georgia and the Socialist Soviet Republic of Armenia).
This federation of the four big Soviet republics is given the name in the new Constitution of the Union of Socialist Soviet Republics. The authority of the federation will extend over an area that touches the Black Sea on the west, the Arctic Ocean on the north, the Pacific Ocean on the east and dips down as far as Afghanistan on the south. It is an area that includes great shares of Europe and Asia and that is several times larger than the continental territory of the United States.
The Congress is to be composed of one representative for each 25,000 voters in the urban districts and one representative for each 125,000 inhabitants in the rural districts. The representatives in the Soviet Congress are to be chosen in the district Soviet Congresses. Where there is none, the representatives are to be chosen by the Soviet Congresses of the constituent republics.
Provision is made for special sessions of the Soviet Congress, but it is evidently the expectation of the framers of the constitution that it will not be in session for prolonged periods, and thus elaborate provision is made for the exercise during recess of its "supreme authority." When the congress is not in session its authority is to be exercised by the Central Executive Committee of the Union of Socialist Soviet Republics, or by the presidium of that committee-which is a sort of super-executive committee and acts when the full committee is not in session. - Baltimore Sun, 14 August.