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FINAL REPORT

UNITED STATES
LIQUIDATION COMMISSION

WAR DEPARTMENT

BY
EDWIN B. PARKER, Chairman

WASHINGTON
GOVERNMENT PRINTING OFFICE

1920

n. «f B.

luL ?i (920

I. Sales

II. SHirlHin«'iit>

CONTENTS.

A. FINAL REPORT.

B. BRIEF REVIEW.

Page.
5
6

I. OryauizMtioii aiid I'uiKiitui.s
II. Sales

-If

Sales to the Republic t>f France ~~~ Ig

Sales for "Liberated Nations''

Oift to Ked Cross

< niercial sales of property located in France 31

^5(•I^'ian .sales and j;eneral settlement -^^

Sales in (Jernianv '.,',

' ~ ,i-f

."^ales in Lnpland _ ^f.

Summary of sales "~~ ,^y

III. Settlements of claims — --—

Sottlenieiirs with (Jreat Urirain ~ ~ 4.,

r.rirish artillery and annuunition .settlement 43

Australian wool settlement _ 4:5

The ("uthell settlement 4—

St'irlemeiit of tank agreements _ _ 40

I'.ritish Liberty motor settlement r.>

r.ritish interest claim -.>

l.iquid.-'tinn of nitrate jiool _ __ -^

Kills, acc.iunts. jind .laiins lu-ndiiiL' in Great Britain r,(j

Excess rosts claim -^

Overhead expense claim -q

Suppiomeiiral chiim for railway rranspdrtation 59

Contract claims of nationals ___!'_ m

Sottlemcnts with France "~ 61

French artillery and ammunition settlement 01

French aircraft .settlement " (j3

Liberty motor settlement g5

French transportation .settlement q<5

French port dues .settlement " 70

General settlement with the French Government

Indemnitication of America by France against nil claims of
nationals for torts, workmen's compensation, rents, requi-
sitions, and damages ~_f

Summary _ ,-«

General settlement with Belgium ~~~"~ -^

General settlement with Italy ~ _^ _ ^^

Negotiations for settlement with Luxembourg _ gi

IV. Conclusion __ - -- _ .

FINAL REPORT OF THE UNITED STATES LIQUIDATION COMMISSION-
WAR DEPARTMENT.

To the lionorable the Sjxuktauy (ik War:

The T'niteil States Liijuidation Commission — "War Department
Avas created February 11. WV-K "as the central aL^eney "' (1) to dis-
pose of America's surphis war stocks in Knrope, and (2) to settle
all chiinis and acconnts between Allied (lovernments and their
nationals on the one i)art and the United States War Department on
the other part, ^a-owing ont of or in anywise connected with the war.

The duties and responsibilities of the Commission have fallen
naturally into two ori.neral divisiims: (1) Sales and {'2) settle-
ments of accounts and claims.

Salks. — The stocks, the disposition of which constituted a part
of the Commission's task, were located chiefly in France, but some of
them were in (Jreat Britain, some in (Jermany, Holland. Belo^iiun,
Spain, Portugal, and Italy. Ont of them more than 2.(K)<),0()() men
were fed, supplied, and ecpiipped pending their return to America at
the rate of appi'oximately ■J.'iO.OOO men per month until the return
transportation was completed the latter part of 1911). Supplies and
equipment of the estimated value of $672,000,000 were returned to
the T'nited States. The balance was sold in Europe for $822,-
'.>2:^.22r>.>2.

Sales of approximately $108,700,000 were made for cash on de-
livery; sales of approximately $.')32.500,000 were made to the French
Government: sales amounting to about $29,000,000 were made to
Belgium: and sales aggregating $140,100,000 were made to I'oiand.
Czechoslovakia. Serbia. Txomnania. and other so-called liberated
nations of Central Europe and the Near F^ast. Those made to the
nations mentioned are evidenced by their ."» j)er cent interest-bearing
bonds maturing from 2 to 10 years after date. Other sales were
made on short-term credits, which have been or are l)eing collected by
the appropriate Army services.

Tlie mo.st important sale consummated was what is known as liio
•• liulk .^ale to France" of surplus war stocks remaining unsold in
France on .Vugust 1, 1919; the considerations moving from France

6 UNITED STATES LIQUIDATION COMMISSION.

being (a) $400,000,000 in 10-year 5 per cent bonds; (l) the assump-
;tion by France of all rents for installations accruing after August 1,
1919, and the agreement of France to hold America harmless against
all claims (numbering approximately 150,000) of every nature what-
:soever arising out of American occupation and use of such installa-
tions and lands; and (c) the waiver by France of all claims whatso-
eA^er (conservatively estimated at $150,000,000) for taxes or customs
duties on properties imported into France and sold since April 6.
1917.

Eight hundred and eighty-one thousand nine hundred and nine
animals were sold for $35,133,065.02.

Pursuant to an act of Congress passed in July, 1919. the Secretary
of War, acting through the Commission, delivered to the American
Eed Cross, without cost to it, medical, surgical, and hospital sup-
plies and equipment, and dietary foodstuffs of the value of
$9,964,851.16.

Settlements. — The settlement of the mutual claims between the
United States War Department and the nations associated with us in
the war have for the most part taken the form of a series of contracts
of adjustment. Wherever possible, controversies were composed,
mutual accounts stated, and a balance struck, so that by this set-off
process cash payments were reduced to a minimum. The principal
contracts^ of this nature may be brief!}' summarized as follows:

(1)^ A contract whereby France assumed all of our obligations to
the railroads of France, covering all services rendered from our
entry into the war to October 1, 1919, upon our agreement to pay
434,985,389.73 francs. This payment settles all bills for carrying and
re-carrying more than 2,000,000 men over the longest lines of com-
munication of any of the Allied Armies, including their travel on
leave; for carrying the American Army of Occupation over French
railroads to and from German}': and for transporting and handling-
over 15.000,000 tons of freight.'

(2) A contract whereby France assumed all obligations to local
chambers of commerce and other claimants for costs incurred in rais-
ing water levels for our use and benefit and for all charges for port
dues for the entry of American vessels in French ports between
April 6, 1917, and the time of the complete evacuation of France by
American forces, upon our paying 3,000,000 francs.

(3) A contract whereb}' France assumed all claims of any person,
organization, association, corporation, commune, or department of
France against America for damage to, use, or loss of property, or
injury to or death of persons, arising between April 6, 1917, and
Deceml)er 31, 1919, upon the payment by America of 12,000,000
francs.

UNITED STATES LIQUIDATION COMMISSION. '

(4) A contract of general settlement with France, dated Novem-
ber 25, 1919, finally and for all time disposing of all claims and con-
troversies between France an.l the War Department of the United
States, by the terms of which France acknowledged an indebtedness
to America (in addition to the $400,000,000 evidenced by bnlk sale
bonds) of $177,U1>.S(',('..SC), and America acknoAvledged an indei)ted-
ness to France (in addition to the amounts mentioned in the three
preceding paragraphs) of 1,488,619,027.52 francs.

(5) A contract of general settlement with Belgium, dated Novem-
ber 17, 1919. finally and for all time disi)osing of all claims and con-
troversies between Belgium and the AVar Department of the United
States, by the terms of which Belgium acknowledges a net balance
due the United States of $27.1(i-2,7L>().9:'>. evidenced by three-year 5

per cent bonds.

(6) A contract of general settlement with Italy, dated February
18, 1920, finallv disposing of all claims between Italy and the AA ar
Department of the United States, showing a net balance in favor of
Italy of the sum of 20,106,546.75 lire, which has been paid.

(7) Contracts with Great Britain, whereby (a) the United States
Avas relieved from the payment of all indemnity claims under con-
tracts for the purchase of artillery and ammunition in process of
manufacture, upon the purchase by and delivery to the United
States at cost of completed artillery units and ammunition equal to
such claims: {h) the United States was relieved of a contract to take
delivery of 210,000 bales of Australian wool, at a cost of approxi-
mately $38,800,000, without the payment of any indemnity; (c) the
Anglo-American tank enterprise was liquidated, yielding the United
States 6,000,000 francs; {d) mutual interest claims were settlecl
covering a long period, resulting in the payment to Great Britain of
£797,854; and {e) the nitrate pool was liijuidated.

(s) Numerous claims by nationals of France, Great Britain, Italy,
Spain and Switzerland, principally for indemnity growing out of the
cancellation of war contracts, have been considered and disposed of:
446 claims which, expressed in dollars at the normal rate of ex-
change, totaled $17,427,175.41, were settled by the payment of $8,413,-
984.19: while 5:', claims, aggregating in amount $739,894.91. were

rejected.

Some conception of the C/ommission's task can be formed from {a}
the statement of amounts involved in the settlements negotiated and
actually consummated by and under the direction of the Commission
of mutual accounts and claims between the United States War De-
partment on the one part and the Allied Governments and their
nationals on the other part (which settlements were where possible

b UNITED STATES LIQUIDATION COMMISSION.

consummated through set-otfs without cash payments) and (0) the
amount of sales of property made by the Commission, as follows :

Amounts involved in settlements:

Settlements with France ^ $748,392,004.82

Settlements with Great Britain 112,996,912.16

Settlements with Belgium 2, 279, 827. 12

Settlements with Italy 12, 620, 173. 75

Settlements with indiviihials, associations, and others 17, 427, 175. 41

Total amount involved In settlements 893,716,093.26

Amounts of sales:

Bulk sale to France 400,000,000.00

Other sales, stated in dollars 377,905,193.23

Other sales, stated in francs and converted 45, 018, 032. 59

Total amount of all sales 822,923,225.82

The Commission was created February 11, 1919. The two re-
maining commissioners are herewith tendering their resignations on
this the 31st day of May, 1920. The total expenses incurred and
disbursements made by the Commission aggregate $222,883.17.
These expenditures are a trifle less than thirteen one-hundred-thou-
sandths (0.00013) of the amounts involved in settlements made and
sales negotiated by the Commission.

There is annexed to this report a brief review of the activities
of this Commission. There is also forwarded a bound volmne of the
minutes of the daily meetings, comprising 470 closely t^q^eAvritten
pages, with an index. The files of the Commission have been re-
viewed, indexed, and delivered to your representative.

The Commission desires to acknowledge the loyal and efficient
services rendered by the several members of its staff, without which
the performance of its tasks would have been impossible. It is
also the pleasure and privilege of this Commission to acknowl-
edge that in the performance of its tasks it has had the whole-
hearted and efficient support, assistance, and co-operation of the mili-
tary forces, particularly of Gen. John J. Pershing, commander-in-chief
of the American Expeditionary Forces; of Maj. Gen. J. G. Harbord,
commanding general of the Services of Supply, and later of his
successor, Brig. Gen. William D. Conner; and the chiefs of all of the
services and the members of their respective staffs. While the Com-
mission sometimes found itself handicapped and its work impeded
for want of complete and accurate records, the only wonder is that
the records were as nearly complete and accurate as we found them.
The whole heart and mind and effort of the American Expeditionary
Forces were bent on driving forward to Avin the war, not to make
paper records, and the ordinary rules of business and of commer-
cial usages did not and should not have obtained. For this and

UXITED STATES LIQUIDATION COMMISSION. 9

other reasons, it was i)articularly important that our li(|ui*lali()U
in Europe should be accomplislied as speedily as possible and be-
fore the officers and men who ^yere familiar witli various under-
takin<i:s should be demobilized and their services no longer avail-
able. It is believed that not the least of the beneficial effects flow-
in«i from this speedy li(|uidation Avas the renderin«r possible of the
j)rompt return to tlieir homes and to their normal pursuits of our
soldiers drawn from civil life. The evacuation of Euroi)e liy
American troops has been accomplished in a phenomenally short
time, and the work of li(iuidation of both stocks and claims has kept
pace with it. The Tnited States has been relieved of tiie trouble
breedin<»; task and of the enormous overhead expense of dispoMUi;
at retail of tlie irre^ndar. unbalanced, and rai:)idly deterioratin<r
stocks located 8,000 miles from home. The settlement of claims
has eliminated countless opportunities for annoying; controversies
which miiiht have proved endless sources of bitterness between us and
the (lovernments and peoples of our Allies. Sli«rhtly over a year
after the si<rninir of the armistice, we find the Army home, brinfrin*^
with it the cfood-will of the Governments and their nationals with
whom America made common cause, the surplus stocks have been
sold, and practically every claim settled.

Respectfully submitted,

Edw IN B. Parker,
Chairman^ United States Liquidation Commission —

War Department.
AVashington, D. C, May 31, 1920.

BRIEF REVIEW OF THE ACTIVITIES OF THE UNITED STATES LIQUIDATION
COMMISSION— WAR DEPARTMENT.

I. ORGANIZATION AND FUNCTIONS.

The siiznina- of the armistice, November 11, 1918, found the United
States and the nations associated with her in the war ahiiost as
unprepared for peace as they had been, a few years before, unpre-
pared for war. The various i)()wers had continued to press their
military operations with full viiror up to the very last moment.
It would not have been prudent to do otherwise, for there was
always a chance that the armistice mijzht be rejecteil or delayed.
The constant flow, therefore, of both men and materials into France
continued without interruption to the very end.

Numerous stocks had been assembled by the I'nited States botli
at home and abroad, for the equipment and supi)ly of over 'i.OOD.OO;'
men in France and over 2,000,000 more at camps in the United
States and rapidly movin<r toward France. On November 11, 191!".
the <rreater part of these stocks became surplus.

Where and how, to whom, and on wduit terms should these stocks
be sold? Wiiat were the needs of the various nations of Europe
with respect to them? To what extent, if at all, was it jiracticalile
for our Government to transport them, by land or by sea. with
both kinds of transportation demoralized by the war^ To what
extent could commerce a'bsorl). for peace-time uses, the vast stores
of stocks assembled by the various nations for puri)oses of war?
To what extent could France, Bel<rium. and the " Liberated Na-
tions " of Central Europe use them to repair their wasted and dev-
astated areas? Could these stocks be an important factor in re-es-
tablishing industry and a normal state of atfairs in the countries
tlireatened liy Bolslievism? In the lio-ht of the impoverished con-
dition of many of the peoples of Europe, as a result of war, who
was in a position to pay for what should be bouirht. and to whom
could credit be properly extended? In the light of the unprece
dented fluctuations in the rates of exchange of the currencies of the
various nations, which of them could atford to pay in terms of

12 UNITED STATES LIQUIDATION COMMISSION.

money acceptable to our (jovernment, and to whom could dollar
credits be given ^

Our Government was suddenly called u})on to turn from the busi-
ness of making war to answer, and to answer promptly, all of these
and numerous other questions involved in the disposition of the
surplus war stocks, and the liquidation of war claims. While it may
be that men of experience and ripe judgment might have held diver-
gent vieAvs regarding the answer to some of these questions, there
was one point on which all of the peojde of the Ignited States agreed,
namely, that whatever the cost, whatever the inconvenience, the men
who had been sent across the water to wage war, now that the vic-
tory had been won and their purpose accomplished, should be
speedily returned, demobilized, and permitted to resume their former
pursuits, to live their own lives, in their own countrj^, in order that
that country might return as rapidly as possible to normal conditions.

The cost to the Nation of maintaining this civilian soldiery abroad
was vei-y great, not only as a drain on the Public Treasury, but also
on the private fortunes of the men and on the industrial conditions
of the country. The demand for their prompt return was so insistent
and so persistent that frequently other considerations had to yield ;
and it. in no small measure, determined the solution of many of the
problems of liquidation. The men Avho were tired from the fighting
and elated by the victory could not l)e asked to remain indefinitely
to engage in merchandizing, either at wholesale or at retail, the
numerous stocks which had been assembled for war.

It was believed that a civilian commission, working in co-ordination
with the commander-in-chief of the American Expeditionary Forces
and with the commanding general of the Services of Supply, and,
through them, with each service of supply, could be more effective as
a central agency for directing the litiuidation of stocks, and the
adjustment of claims in Europe than could a purely military body.

It was believed that, under the legislation existing at the time, the
Secretary of War could, by direction of the President and as an
incident to the war, create such a commission and clothe it with suit-
able power to dispose of these claims and of these surplus stocks/

In order, however, that all possible doubt on the legality of the
Commission's power might be removed. Congress passed an act which
became law on INIarch 2, 1919,- conferring poAver on the Secretary
of War, " through such agency as he might designate or establish, to
make equitable and fair adjustments" of claims arising out of war-
time agreements or negotiations.

' See Appendix I for the text of the Act of May 10, 1918, and of the Act of July 9, 1918,
both authorizing sales of war supplies to associated nations and to individuals, corpora-
tions, and societies.

" See Appendix II for the text of section 3 of the Act of March 2, 1919, granting to
the Secretary of War power to make equitable adjustments of war claims.

UNITED STATES LIQUIDATION COMMISSION. 13

The T'nited States Li(|ui(lati()n Commission — War Department,
which will he referred to in this report as tlie "Commission." was.
created hy (leneral Orders, No. '24:, issued Fehnnuv 11. IJ)11),-* and
desiprnivted as the central a<rency for the supervision and <lirection of
(a) the disposition of all claims of every character Ijetween the
Ignited States, on the one part, and any foreit^n State or (lovern-
nient, oi' theii- nationals, on the other part. •rrowin<r out of or in anv
wise connected with the war; and (A) the disposition of all prop-
erty or interest in property of whatever kind or nature helon<j:in<j: to
the United States, ac(iuired. constructed, or manufactured in connec-
tion with or incidental to the war and now located heyond its terri-
torial linuts.

Immediately followin«i- the i)assa<re of the act of March 2. IJ)!!*
(supra), the Secretary of War caused to he issued (ieneral Orders,
No. 40,* desi<rnatinij: the Commission, already created, as the a<rency
throuofh which the i)owers ofranted hy this act should he exercised in
so far as they related to dealino-s with forei^rn Govermnents or their
nationals, with the exception of Canada.

The Comnussion as ori<rinally formeil consisted of four members,
vi/,.. Edwin !>. Parker (chairman), Briof. (ien. Charles (t. Dawes,
Homer H. Johnson, and Henry F. Hollis. The organization meet-
i.UiT of the Commission was held in Paris on March IT. 1'.>11>.

On July I'ti. l!)ii>. when the l>ulk <alc to France \va> jd'acticall;
consummated, (hu. Dawes and Mr. JoluLson tendered their resig-
nations, which were accepted. (len. Dawes returned to the United
States, wheie. after his demohilization. he resumed Ids duties a>
president of the Central Trust Co. of Chicago, having given tVcely
to his country of hi-; time and means through(Mit the wai'. Mr. John-
son joineil a commission created l>y the |)eace conference to study
and rej)orr on conditions in Poland. The nieml)ership of the Com-
mission was then reduced to three, anil Col. J. H. (iraham. who had
for sometime past l)een acting as executive olHcer of the Commis-
sion, was niaile a member. On October -M. 1!>1'.>. Senator Hollis ten.
dered his resignation, which was acce])ted. and the \acancy thus
created was nevei- tilled.

Upon the organization of the Commission, rluiuus (i. Adams,
a member of the Asheville, N. C.. bar, formi-ily a judge advocate
with the rank of major, became the Conuuission's executive secre-
tary, lie attended all the meetings of the Commission and partici-
l)ated in the deliberations. pre])ared the minutes of all otiicial iu-o-
ceedings. and orgaiHzed and <lirected the activities of the Comiiu--
sion's clerical staff. He continued in this po-ition until he was senr

"See ApptMidix III for tt'.xt of ({cneral Ordors, No. :.'4.
* See .\p|H'iulix IV for text of General Orders, No. "10.

14 UNITED STATES LIQUIDATION COMMISSION.

hy the Commission to Germany.' Avhen he was sncceeded by Lieut.
Col. Echvard T. Noble.

In defining its j)olicies, the Conmiission made it clear tliat it did
not propose to create an org:anization to supersede such existing
agencies of the American Expeditionary Forces as were at that time
discharging, in whole or in part, the duties falling within the Com-
mission's jurisdiction. It proposed, rather, to supervise and direct
such activities of these agencies, acting through and in cooperation
with them, creating new ones or supplementing old ones only where
some new development made such action necessary. It would have
been impossible for the Commission to have created in Europe, at
that time, an independent civilian organization of sufficient size to
supersede the Army's forces and to carry out all of the details of
the work for which the Commission was responsible.

"With the Avholehearted co-operation of Gen. Pershing, of Ma j. Gen.
Harbord, and of the chiefs of the several services of supply under
him, no time was lost in taking measures to harmonize the work of
the Commission with that of the various Army units, and in perfect-
ing an organization suitable for making thorough and speedy investi-
gations looking to the adjustment of claims and the disposition of
stocks. For the purpose of instructing all concerned in the matter of
the relation of the Commission to the several agencies of the xlmeri-
can Expeditionary Forces, General Orders, Xo. 18,'' prepared jointly
by the chairman of the Commission and Gen. Harbord, were issued
from the headquarters of the Services of Supply.

Under the plan outlined in this order, the Army services continued
in the custody of all property. They were to exhibit it to pros-
pective buyers and, whenever sales were made, deliver it and procure
the receipts. The General Sales agent of the Services of Supply
functioned also for the Commission, negotiating sales subject to its
approval. The several services of the Army were instructed to col-
lect complete data on all claims falling within their respective juris-
dictions and to report them with recommendations to the Commis-
sion through the Army Finance Officer. The process of pa^dng cur-
rent or other regular bills and accounts through the usual channels
was not disturbed. The work of the Division of Renting, Requisi-
tion, and Claims, so ably carried on by Col. Winship and his staff,
was not interfered with.

Regular daily meetings were held by the Commission for the trans-
action of business, for the consideration and study of problems, for
receiving and acting upon reports, and for hearing and deciding
claims. The minutes of these meetings, carefully indexed, furnish a

^ See p. 34 of this report.

« See Appendix V for text of A. E. F. G. C, No. 18, S. O. S., 1919.

UNITED STATES LIQUIDATION COMMISSION. 15

convenient and condensed chr()nol()<!:i('iil record of the work of the
Commission.

On Friday mornin<j: of each Aveek a special mcclintj; \vas hchl in the
office of the chairman, ^Yhich meeting was always attended by the
Connnissioners, by the (Jeneral Sales Agent, by members of the Com-
mission's staff, and by officers of the Army interested in the par-
ticular word under consideration. The work relating to liquidations
carried on by the various services was reviewed at these meetings,
plans for each ensuing week were formulated, problems were freely
tliscussed, information was sought by the Commission, and opinions
Arere invited and frankly expressed.

The Commission established an Accounting Section, whose func-
tion was to co-ordinate accounts and claims in favor of and against
the various Governments with which the Arni}^ had dealings. This
Accounting Section rendered valuable service in the negotiations
resulting in the general settlement agreements with France, Italy,
and Belgium, and also in the settlements and negotiations with
(ireat Britain. It has also been of considerable assistance to the
Commission in the compilation of statistics prepared from informa-
tion furnished by the various Army services.

The activities of the Commission divide naturally into two main
groups: (1) Those relating to sales, and (2) those relating to settle-
ments and adjustments of claims. Because of the location of stocks
and of claimants, these groups, in turn, divide geographically. The
account of tlie work Avill be given according to these divisions.

II. SALES.

SALES TO THE REPUBLIC OF FRANCE.

When the Commission took up its work, it found over a million
and a half of American troops in Europe, carino: for American prop-
erty scattered all over France, over England, on the Rhine, and, in
limited amounts, in Italy, Bel<rium, and Spain — property of every
kind and description : installations and movables, factories, ware-
houses, docks, railroad yards, railroad equipment, motor transport,
telephone and telegraph lines, food, clothing-, tobacco, ammunition,
guns, machinery, raw materials. Some of it Avas new, some of it
was worn out, much of it was used.

National policy demanded, international policy demanded, that
these troops be sent home without delay. Every day they remained
in Europe cost a huge sum, not only to the Nation as such in pay
and subsistence and in the loss of their enormous producing capacity
at home, but in personal loss to the individuals because of dela^ m
resuming their accustomed pursuits.

The docks, factories, assembling plants, and other installations
were constructed on land belonging to some 150,000 separate ow^ners,
giving rise to unnumbered claims for rents, requisitions, reston cions,
and damages. This property had been assembled and installed under
extreme pressure, for immediate and temporary use, with an eye
single to winning the war, and with only casual reference to its
dis-establishment. Most of it was located in a country bled white in
every vein by more than four years of war. It was located in a
country w^hose exchange was falling on every market in the world.
It w^as located in a country the traditions of whose nationals are
those of careful and exacting purchasers, and a country fully aware
of its financial distress and consequent consideration due it in solving
its problems of peace by the peoples associated with it in fighting
the battles of war. But it was located in a country filled with a deep
and genuine, and, let us hope, lasting good-will toward America.

At the threshold of these labors the members of the Commission

examined with studied care, both individually and collectively and

in conference with the Secretary of War, the problem involving

the wisdom of the United States selling its European surplus stocks

UNITED STATES LIQUIDATION COMMISSION. 17

uhroad or of transportino- them to Aniericu for sale. Obviously
the installations luul to be sold in France; for, if they had been
disniuntled. their salvage value would scarcely iiave covered tiie cost
of sahaginu'. of restoring the land, and of settling rental, requisi-
tion, and damage claims.

The economic as well as tlie social Avelfare of our country made
the demand imi)erative that every available trans-Atlantic- vessel
should l)e i)r('ssed into ser\ice for the speedy return of our trooj^s
to America. Past experience had pro\en and subseciiicnt experi-
ence lias conhrmed that it would have been impracticable to trans-
port by rail to the ports, witliin any reasonable time, these immense
stocks. The French railroads were thorougidy demoralized by the
four years of war during which time maintenance had been reduced
to the minimum: while additions, betterments, and extensions had
been entirely lacking. Consecpiently congesticm in rail trans})orta-
tion was unprecedentedly great in France.

A very large percentage of these stocks, manufactured and as-
sembled under pressure, handled and re-handled under tremendous
handicaps, were in a contlition and of a ciiaracter Avhich clearly
would not have justified the cost of returning them to America. As
our troops were evacuating France, we had to look forward to the
time when we would be left without facilities for keeping posbes-
sion of, guarding, handling, delivering, or shipping home these
go'>ds. It was clear that the hungry, cold, and industrially de-
nu-ralized people of Europe stood in crying need of a large per-
centage of these supplies — supplies which under existing conditions
could not, as a whole, be advantageously returned to America at
any ime, and such part of them as might justify the cost of han-
dling and transportation could hardly be held in France until con-
ditions should become nearly enough normal to make possible tlieir
shipment. It was, therefore, after the most careful and iiainstaking
consideration, and after prolonged conferences between the Secre-
tary of War and the members of the Commission, that the con-
clusion was definitely and unanimously reached that it was to the
interest of the United States and the duty of the United States to
sell the major part of these European surpluses in Europe.

But there were several not inconsiderable obstacles in the way of
a speedy and businesslike disposition of these stocks even in Europe.
France really needed and wanted many of them. Belgium wanted
and needetl some of them. The so-called "liberated countries" of
Central Europe and the Near East were in dire need of all they
could get in the way of foodstuffs, clothing, medical supplies, and
transportation equipment. But none of these countries were in a
position either to pay cash or to purchase on short-time credits.
18317G— 20 2

18 UNITED STATES LIQUIDATION COMMISSION.

The exchanue of every one of them was far below normal and was
declining rapidly.

The first problem, however, which confronted the Commission
was tliat of determining just what it had for sale and what wonld
be reasonable selling prices. The task of preparing comprehensive
but condensed Avorking inventories, classified and summarized within
a compass small enongli for practical use, setting forth the quantities,
nature, and condition of these stocks, their cost laid down in France,
and their probable utilization or sale value, was one of immense
proportions. This difficult}^ was tremendously enhanced by the facts
that (1) the stocks had been acquired from many different sources,
(2) they were located in several liundred places, (3) their quantity
and condition was being reduced by constant use, and (4) their
value was too often diminished by handling, natural deterioration, or
by unavoidable exposure or disuse.

After careful study and c-onferences with the Army officials and
especially with the chiefs of each of the services and the members of
their staffs, the Commission adopted a plan and prescribed a form for
the compilation of inventories of personal or movable stocks (as
distinguished from installations, which were separately inventoried)
under 18 distinct categories or classes, each of which categories was
in turn subdivided.^

The task of compiling these inventories, summarizing and classi-
fying them, Avith a view^ to showing, so far as practicable, the relative
conditions of the various articles was one bristling with difficulties,
especially as during all of this time the American Expeditionary
Forces was a " going concern." The depots w^ere necessarily drawn
upon for current supplies for the troops in France, for return of
materials and equipment to the United States, and for supplying
and equipping the American forces in Germany. New stocks were
coming in from time to time as agreements in cancellation of con-
tracts of purchase or manufacture w^ere reached and small deliveries
taken in liquidation. Stocks were constantly flowing into the main
depots from smaller posts and outlying districts as these were evacu-
ated. For the compilation of these inventories the Commission was
compelled to rely upon the Army, which held the custody of the
stocks. The Army had to rely upon civilians who had come to
France to fight, not to engage in Army clerical work — men who hav-
ing won a glorious victory had one thought uppermost in their
minds — to return home. The Army had a personnel constantly shift-
ing and changing, due to withdrawals for return to the United States,
to civilian life and interests. But it is believed that each service did
its best, and, on the whole, did well, considered in the light of all of

' See Appendix VI for list of the 18 " Categories," witli tbe classes of stocks under
each.

UNITED STATES LIQUIDATION COMMISSION. 19

4
the cireiunstrtnces. It is interestinir, parenthetically, to note here that
neither the British nor the French services have even yet compiled a
general inventory of their surplus stocks.

The problem of valuino- the inventoried stocks was fraught Avitli
many difficulties, Avhich had the most painstaking consideration of
the Commission and its advisors. Clearly, cost, condition, possible
usefulness, supply and demand were the principal factors for consid-
eration in determining selling value. But cost varied greatly on ac-
count of the multiplicity of sources of supply of almost an infinite
number of articles, and the unknown and necessarily estimated ex-
penses of transportation and handling. Condition varied with use,
extent of handling, care, action of the elements, etc. Utilization
value is necessarily indefinite, depending on demand and supply and
the location of the stocks and transportation facilities, on whether
the stocks are complete or broken, balanced or unbalanced, and on
numerous other factors. As the work of preparing, classifying, and
summarizing the inventories by categories progressed, the problems
of valuing these stocks were studied intensively and continuously
by the Commission and its advisors and, at the same time, by the
French authorities, with whom the Commission was negotiating for
their sale.

The work of supervising for the Commission the compilation of
inventories, according to categories, was intrusted to Col. J. H.
Cxraham, who had already, in the Army Engineer Corps, abundantly
demonstrated his ability, thoroughness, and trustworthiness. It took
a strong force, working continuously and under constant pressure,
more than six weeks to complete these inventories and to summarize
and classify them. As the work progressed, the Commission, with
the assistance of Col. Graham, the chiefs of the services and experts
draAvn from each service, carefully studied the inventories, took into
account and discussed every known factor of value, giving to each
factor such weight as seemed proper, and fixed and determined what
they believed to be reasonable selling values. Actual war costs, in-
cluding transportation and handling, were naturally the starting
point and one of the determining factors. Pre-war normal costs were
considered and quite frequently these were found too Ioav. As these
stocks were assembled, shipped, handled, and stored under conditions
of abnormal pressiu-e, their depreciation was in many instances ab-
normally great. jNIany of the stocks were designed for war uses only
and had a relatively small commercial value. Both France and Eng-
land had large surpluses of many of the materials, which supple-
mented by our stocks in Europe, were more than the markets of the
world could readily absorb for several years to come.

All of these facts, and many other incidental ones, were taken into
account in arriving at the '* estimated present values " or " utiliza-

20 UNITED STATES LIQUIDATION COMMISSION.

tion values" of these stocks by cate<2:ories. These were intended to
represent prices at which they could, when classified, assorted, and
conditioned, be sold in France at wholesale. From the ag'gresrate
amount this reached it was oliAiously proper to make liberal deduc-
tions to cover the cost of merchandizino;. labor, storage, insurance.
interest, and other overhead expenses. The fact was taken into ac-
count that there will inevitably be a large deterioration, not only
in the quality of the stocks, but also in their market price before all
of them can possibly be disposed of. The Commission took into
account the risk of loss by fire, by theft, and by other causes. They
took into consideration the fact that the stocks were widely scat-
tered, had not been assembled for commercial purposes, and were
not in the hands of a going concern, equipped to replenish them
from time to time and market them to the best advantage. Giving
due alloAvance to all of these considerations, it was concluded that
a fair deduction from the aggregate " estimated value '" of these
stocks for the purposes of a bulk sale would be 25 per cent. On
this basis the stocks and installations were valued, as of July 19.
1919, at $562.2;3().S(}0.02.^" and this is the value whicli the Commis-
sion had in mind when it entered upon the final stage of its negotia-
tions with the representatives of France, which resulted in the con-
summation of the " bulk sale."

In the meantime the Commission, beginning with interviews held
in March, had been diligent in ])ressing its negotiations with the rep-
resentatives of the French Government with a view to concluding a
sale or to developing the fact that one could not be made. INI. Paul
Morel, the Sous-Secretaire cl'Etat aux Finances pour Liqiddation des
Stocks (the minister particularly charged with the liquidation of
war stocks), had been designated by the French Government as its
representative to deal with the Commission in matters pertaining to
the contemplated purchase. Numerous conferences were held with
him. At a long meeting on April 7. it was agreed in principle that
France should purchase all of the American installations at a price
to be agreed upon, assuming, as part of the price, the payment of all
claims for rents, requisitions, restorations, damages, and other
charges against the United States which had arisen against these
properties.

The disposition of the installations was the first problem under-
taken by the Commission. Immediately after its creation and before
the chairman left the United States, a cable was sent directing the
preparation of an inventory of all American Expeditionary Forces'

^ See Appendix VII, Chart A, which shows summai-ies of values by categories on
which the final negotiations with France wero based. The difference between column F
and column H is represented by a series of differences in quantities. These reductions
are shown by services on Chart B, Appendix VIII. They are calculated also by cate-
gories, and represent sales and other dispositions since the inventories were made.

UNITED STATES LIQUIDATION COMMISSION. 21

installations in France. A very capable committee of officers from
the Engineering Corps, with Col, J. H. Graham as chairman, was
promptly selected and undertook this work. Later Brig. Gen. Jad-
win became chairman of the committee and the oOO-page report which
it prepared is familiarly known as the "Jadwin Eeport." Following
the conference of April 7, a copy of the Jadwin Report, showing
" war costs " and estimated " normal costs," item by item, of all the
American installations in France, was given to M. Morel, who imme-
diately arranged to have a large corps of his engineers make personal
inspections and reports on these installations, checking against the
Jadwin Report. The methods adopted by the French in valuing this
property differed in several respects from those adopted by the Jad-
Avin committee. In order to adjust and reconcile these differences,
the Commission called to its aid Col. J. H. Graham, who, as already
})ointed out, had a large hand in the preparation of the Jadwin Re-
port. He organized a staff and placed an American representative
with each of the units of French engineers sent out by M. Morel to
make a first-hand study and report on the condition and value of
the installations. AVhen the reports were completed. Col. Graham's
committee held a series of meetings covering a period of more than
two weeks with the committee of French engineers at which notes
were compared, adjustments made, and differences reconciled.

The Jadwin Report showed total war costs of all American installa-
tions in France, includin,g transportation and handling of material,
soldier labor, and all other elements, at $165,661,000 and normal costs
of the same properties at $81,543,000. The joint American and
French committee, after making deductions for the estimated liabili-
ties assumed by France for rents, requisitions, restorations, and dam-
ages, placed the net present estimated value of all American installa-
tions in France at $39,256,500.

In comparing these figures and judging their significance, one must
bear in mind that these installations were of every conceivable type —
barracks, camps, hospitals, warehouses, machine shops, docks, tele-
phone and telegraph lines, railroad yards, etc. They had been con-
structed on land for the most part requisitioned for war use and be-
longing to approximately a hundred and fifty thousand separate
owners. Most of these owners had claims against the United States
for rents, for requisitions, for damages, for restorations, for damages
to crops, for removal of vineyards, orchards, trees, and structures,
for building roads, putting in drainage systems, etc. Our right to
occupy these lands terminated with the war. We had taken them
over under obligations imposed by law to return the lands to their
owners in the condition in which we had found them. While the
French Government, under its power of eminent domain, could ac-
quire or permit us to acquire these properties for war use, the French

22 UNITED STATES LIQUIDATION COMMISSION.

law does not permit the exercise of this power in our behalf for ac-
quiring; permanent titles. In fact, the French law does not permit
a foreign sovereign power to acquire a^permanent title to real estate
within its domain except by courtesy for the use of diplomatic repre-
sentatives. The French Government, however, could ac(|uire per-
manent title by eminent domain to such of these properties as it might
wish to preserve or dispose of in their present condition. Manifestly,
therefore, our position as party to a bargain was one of extreme dis-
advantage. We had either to sell to the French Govei'nment or to
tear down and salvage the constituent materials.

Under a salvage program many of the properties would have
turned out to be distinct liabilities instead of assets, especially as we
would have been required, at a ver}^ heavy overhead expense, to hnxe
negotiated and settled a very large number of claims for rents, dam-
ages, and restorations. It is estimated that it would have required the
labor of 40,000 men for a period of 6 or 8 months to dismantle
these installations and salvage the constituent materials. This task
would have fallen upon our Army Engineer Corps, for competent
French labor was not obtainable. Under agreement reached Avith
M. Morel, however, the selling value of each piece of property was
arrived at, not by considering its salvage value to the United States,
but by taking into account every factor entering into the determina-
tion of the net " utilization value " of such piece of property to the
French Government. On the whole, it is believed that the result
obtained Avas a very fair one, alike to America and to France.

While these studies with respect to the value of the fixed prop-
erty were in process, the Commission pressed upon M. Morel and
the other French representatives the plan which it had been develop-
ing for selling to France the major portion of the movable or per-
sonal American Expeditionary Forces' property in France. At first
the French representatives suggested that they might select such of
these stocks as they could use to advantage and undertake to agree
with the Commission on a price and terms of payment. This plan
would have left on our hands vast stocks of a character and condi-
tion such that their return to America would not have been justified,
and at the same time they would have been stocks of which France
and England were carrying large surpluses. Our stores would have
been left creamed off and more unsalable than they were at the start.
The Commission urged upon the French representatives that as all
these stocks were on their soil and many of them located where they
w^ere greatly needed and as great quantities of them could be used
to advantage in the reconstruction of the devastated regions. France
was in a most favorable position as buyer and, under the circum-
stances, it was her duty to buy them in bulk, taking the bad with thfe
good. The Commission desired onlv to reserve a sufficient (luantitv

UNITED STATES LIQUIDATION" COMMISSION. 23

of supplies and equipment for the use of our Ann}'^ while in Europe,
of foodstuffs, clothing, and medical supplies, to satisfy the pressing-
needs of the "liberated nations," and to cover such sales as were
being negotiated in Belgium, Spain, and elsewhere.

In response to this, M. Morel submitted three alternative proposals :
(1) France would sell these stocks as agent of the United States,
accounting without profit for the proceeds; (2) France would take
the stocks at a fixed price, sell them, and if the net proceeds should
exceed the fixed price, would account to America for the balance;
but if the net proceeds should be less than the fixed price, America
should pa}^ to France the difference ; or (3) France would purchase
the stocks outright at a fixed price. The third proposal was con-
sidered by the Commission as the only feasible one and was accepted
by it in principle.

While these negotiations were in progress, the Commission was at
the same time using every agency at its command to develop markets
and to press sales outside of France. Numerous and extensive sales
were made to the various " liberated nations," to relief societies, and
to other associations and to individuals. On May 6, the principle
of the " bulk sale " to France was agreed upon, subject to a con-
clusion between the parties on price and terms of payment; and it
Avas understood that from that day forward all sales made by
America to France should be billed in the usual waj^ and be paid for
by France, should the " bulk sale " miscarry, but that such bills
should be cancelled by America, if the " bulk sale " was consummated.
It was further agreed that the Commission might continue to make
sales to the '* liberated nations," to Belgium, to Spain, and to others,
but that all proposals for such sales should be submitted to M. Morel
in order that he might keep fully informed concerning the extent
and condition of the stocks on which his men were busily engaged
calculating a price. It was in accord with this understanding that
large sales were made for ex.port out of France between the 6th day
of May and the 25th day of July, when the terms of the " bulk sale "
to France were finally settled.

Notwithstanding the greatest diligence on the part of the Com-
mission in pressing its negotiations, progress was too slow to keep
pace with the demand for the rapid withdrawal of troops, especially
from the advance sectors. Therefore, on May 1, an agreement was
entered into between the Commission and the French Government
under the terms of which the American Expeditionary Forces could
withdraw their troops from any particular zone in France, and. by
giving 10 days' notice to the French commander in such zone, deliver
to the French on joint inventories all American stocks located in
the zone. These joint inventories set forth the stocks, showing
" kind," " quantity," and " percentage of condition as compared to

24 UNITED STATES LIQUIDATION COMMISSION.

ncAV,"' and stipulated that the stocks were held by France without
expense to America and subject to the directions of the Commis-
sion. They were sio:ned by French and American officers.''

This procedure did not apply to 18 of the largest depots which
were retained in the custody of America until the stocks were defi-
nitely sold. This plan made it possible to continue the homeward
movement of troops without interruption, and made it unnecessary
for us to hold thousands of men in France as custodians of these
stocks until they could be delivered under the terms of the sale.

During all of this time the work on the inventories was being
pressed forward. As soon as the summaries by categories could
be finished for any service they would be handed to M. Morel, who,
through his representatives, would use them as a basis for check-
ing and inspecting the stocks. While this work was going on, it
became evident that the French were very hesitant about taking the
Avhole body of materials in a bulk, for it was becoming clear to
them that the French Government already possessed stocks of cer-
tain categories in excess of the amount which France could readily
absorb for some time to come. Unfortunately, these were chiefly
categories of materials whose return to the United States could not
be justified and which were at the same time a drug on the markets
of Europe, such as barbed wire, trench materials, ammunition, field
cooking utensils, gas materials, etc.

Finally, after much pressure, on July 2, M. Morel submitted his
first bid, viz, 1,500,000,000 francs. It was submitted orally in con-
ference and the reply was immediately made that the Commission
could not give the bid serious consideration. Numerous prolonged
conferences followed. In order that there might be no misunder-
standing of the Commission's position, the chairman wrote at length
to M. Morel, on July 7, a letter the spirit of which can be gathered
from the following excerpt.

"After the sacrifices, which can not be measured in terms of dollars, wliich have
been made by botli of our peoples, it would be criminal stupidity on the parts
of the representatives of both our Governments to fail to agree on the dis-
position to be made of the surplus war supplies remaining on French soil. This
Commission sincerely hopes that it will not be forced to sell for shipment out
of France anything that the French people really need or can utilize to advan-
tage, and we are therefore not only willing but anxious to make to the Gov-
eniment of France a price for this pi'operty which will be attractive to it and
to extend credit for the entire purchase price.

" See Appendix IX for form of receipt given by the French Army to the American
Army upon the turning over of stocks before the sale. The inventory referred to had the
following headings : " Article," " Unit," " QuaJitity," " Percentage of condition as com-
pared to new " ; and was initialed on each page by both of the signing officers.

UNITED STATES LIQUIDATION COMMISSION. 25

"May I not in conclusion remind yon tliat, as the treaty of peace with Germany
has been signed and measures have been taken by your Government and ours,
together with their associates, to insure a lasting peace, and as the American
Expeditionary Forces are being very rapidly withdrawn and returned to their
homes, it is imperative that the surplus war supplies belonging to our Govern-
ment, in France, should be speedily disposed of, if not to the French Government,
then to others who urgently need and are seeking to acquire them, to the end
that they may be promptly and fully utilized to bring back a measure of pros-
perity to the suffering peoples of the world."

No good purpose could be accomplished by showing here in detail
the course of the negotiations during the succeeding three weeks.
They were carried on not only by the Commission and M. Morel
but by M. Tardieu, Commandant Oppenheim, Commandant Var-
aigne, and numerous other representatives of the French Govern-
ment. Besides the question of price, the question of the currency in
which the French obligation should be stated, was most earnestly
debated between the parties. The French representatives insisted
that the purchase price should be stated and paid in francs, while
the Commission declined to consider any oiler not expressed m
dollars. M. Tardieu, after conferring with the French treasury,
proposed that the purchase price might be stated in dollars, but
that a condition should be added to the effect that if the cost to
France of- finally discharging the indebtedness should be more than
5.18 francs per dollar, such excess should be borne equally by
France and the United States. This proposition was declined.

On July 19 the following proposal was submitted by the Frencii
representatives :

1. France should pay five years after date 2,035,000,000 francs.

2. France, in her own Avay, should proceed to sell the American
stocks and, after deducting the expenses, divide equally with the
United States any balance exceeding the price named.

In response to this proposal the chairman expressed the following

views :

1. France would not wish to dispose of these stocks on a strictly
business basis, nor would she be justified in so doing, but she would
desire to use them, to a great extent, in connection with the rehabilita-
tion of her devastated regions, at prices and on terms which only
France could afford to extend to her nationals.

2. It would be practically impossible for France to keep these
stocks segregated from her own property of the same class, and thus
impossible to make a separate accounting.

3. The plan seemed to contain the germs of controversy and fric-
tion which might in the end cost the two Governments more than
the value of the property involved.

4. A definite, final, complete, and unconditional sale, leaving be-
hind no loose ends calculated to breed trouble, was most desirable.

26 UNITED STATES LIQUIDATION COMMISSION.

Filially, at a i)r()loiiij:e(l conference held on Jnly '24. a tentative
agreement was reached on terms substantially those contained in the
final bulk sale contract. The four members of the Commission, as
Avell as Col. Graham, participated in the discussion and the con-
sideration of this tentative agreement, and the Commission unani-
mously voted to authorize and direct the chairman to i)repare and
execute in the name and on behalf of the commission, the contract
which became the agreement for the bulk sale.^"

Tuder this contract, dated August 1. 1919, the consideration mov-
ing from America is : All property — real, personal, or mixed, Avithout
guaranty of quantity, quality, or condition — belonging to the United
States War Department and located Avithin France on that date: f<are
and crcept (1) all animals; {-2) property otherwise contracted to be
sold and valued at $77,265,597.88 : (H) the equipment of individual
soldiers and military units returning home: (4) other military equip-
ment to be returneci to the United States, valued at $15,000,000: (5)
equipment and supplies for American forces so long as they remain in
France, of the estimated value of $4,000,000: (G) Red Cross supplies
valued at $10,000,000, with agreement by France to re-sell to America,
ui>on demand, further Ked Cross material at cost to France."

Under this ccmtract the considerations moving from France are:
(1) $400,000,000 in 10-year 5 jier cent bonds, with semi-annual in-
terest from August 1. 1920: (2) the assumption by France of all
rents for. installations accruing after August 1, 1919, and the agree-
ment of France to hold America harmless against all claims of every
nature Avhatever arising out of American occupation and use of such
installations and lands: (o) the waiver by France of all claims what-
soever for taxes or customs duties on properties imported into France
and sold since April 6, 1917.

^lost of the jn-operty which the Commission sold in France was
brought in without the payment of import duties. Until this con-
tract was signed the French Government had never relinquished its
right to claim the payment of such duties, though the point was
vigorously pressed, both by the Commission and by the representa-
tives of the British Government in France, that the salvaging of
surplus war stocks was an incident of the war and as such they
could not be held subject to import duties. The French position on
this point was, however, a strong one. It was supported by a preced-

>« See Appendix X for (1) a copy of tJae^lmlk sale contract as signed; (2) the French
law of Oct. 21, 1010, ratifying the sale ; (3) the letter of transmittal of Aug. 4. 1010.
and (4> the supplement to the letter of transmittal, dated Aug. 11. 1010.

1' All ad.iustmeiits arising under these reservations or any of the other terms of this
bulk sale contract have been made by the Commission and the French (Tovernmcnt and are
merged in the contract of general settlement dated Nov. 2r>, 1010. hereinafter referred to.
so that this bulk sale contract is now a completed transaction.

UNITED STATES LIQUIDATIOX COMMISSION. 27

ent set by the Ignited States Government in dealing with the sur-
phis stocks left in the Philippine Islands at the close of the Spanish-
American War. the usual customs duties having been paid on such
stocks. The Commission had the inventories studied in connection
with the French tariff schedules, and it was found that $150,000,000
was a conservative estimate of the aggregate customs duties, payable
under the normal rules, for all of our stocks in France. This claim
was given Aveight in fixing the final purchase price of $400,000,000.

The wisdom of making this bulk sale has been amply demon-
strated by subsequent developments, particularly by the experience
of the British (jovernment. The course pursued by this Commission
was to promptly sell in large l)locks what could be so sold to advan-
taae. and then sell the remainder in bulk to P'rance. XotAvith-
standing the fact that the British war stocks Avere so located in
France that it was unnecessary to ship them exceeding 200 miles
both by rail and Avater to reach central points in England, and Great
Britain Avas. therefore, not confronted Avith the problem of long-
distance hauls on oAcrcroAvded French railroads and a 3,000-mile
ocean voyage in order to reach her home markets ; the British authori-
ties decided that it Avas advisable for Great Britain to consummate a
bulk sale of their Avar stocks in France, and began negotiations with
the French authorities to this end during the time the negotiations
for the bulk sale of the American stocks were in progress. It is
reported that these negotiations are still pending. The cost of hold-
inu:, guarding, and caring for this immense Avar stock has been tre-
mendous, and the percentage of depreciation from natural causes,
exposure, theft, and general deterioration Avill amount to a A'ery sub-
stantial part of their original value. These unsold stocks are of no
benefit to anyone and their value is constantly shrinking.

The En<dish press has severely arraigned its (Tovernment for not
foUoAving the example of America in disposing of these stocks : and.
while disclaiming any intention. CAen inferentially, of joining in such
criticism, Ave feel, in the light of subsequent cA-ents. that our (tov-
ernment has been fortunate in the policy of expedition which it
pursued.

From the point of vieAv of the Commission, this French bulk sale
(1) accomplished a speedy disposition of the stocks, allowing the
American troops to return home promptly: (2) it relieA'ed America
of the trouble-breeding task and of the enormous overhead expense
of otherAvise disposing of the irregular, unbalanced, and rapidly
deteriorating stocks located 3.000 miles from home: (3) it relicA-ed
America of the French claim for customs duties on these and other
stocks in France : (4) it relieved America of many thousand claims

28 UNITED STATES LIQUIDATION COMMISSION.

of French nationals, claims which would have arisen for many years
to come, the settlement of which would have cost vast sums and
which Avould likelj^ have been an endless source of bitterness between
rhe two peoples; (5) it has left America with a "clean slate" and
has eliminated countless opportunities for annojdng controversies;
(6) it has afforded America an opportunity of helping France to
help herself in a manner not to offend the dignity of that nation,
inasmuch as the need of and value to France of these stocks in France
is much greater than is the need of them or their value to the
United States, and finally; (7) it has given America a very fair
money return.

SALES FOR USE OF "LIBERATED NATIONS."

Farly in March careful studies were made by the Commission of
(lie pressing needs of tlie peoples inhabiting the so-called " liberated
nations " of Central Europe and the Xear East. These studies were
with particular reference to the extent to which the United States
would be justified in meeting these needs from sales of surplus war
stocks in P^urope. Extended conferences were held Avith Her-
bert Hoover and numerous members of his staff. Information show-
ing political, commercial, and social conditions in these countries
came to us from this and other sources.

On March IT, the chairman of the Commission received a letter
from Mr. Hoover confirming Avhat he had previously said in per-
sonal conversations and urging the importance of selling surplus
clothing to the peoples of these countries who were suffering from
cold and exposure. This was followed by a letter from President
Wilson, dated March 24. urging the Commission to accept so far as
it could consistently do so Mr. Hoover's views as to the terms upon
wdiich dealings should be undertaken with the liberated peoples.
The President added :

I would be glad, therefore, if the Commission could accept as its guiding
principle in these negotiations the fact that it is not only securing a rapid
liquidation of materials that may otherwise prove practically unsalable, but
also that it is an opportunity to perform a fine human service by approaching
the matter in the most sympathetic mind.'"

Tlirough long conferences not only with the representatives of
the nations and organizations seeking to make purchases, but with
members of the American peace commission and Avith many others
familiar with the needs of these peoples, their resources, and their
prospects; data were assembled with reference to which the Com-

"See Appendix XI for (1) letter, Hoover to Parker, Mar. 17, 1919; (2) letter, the
President to Parker, Mar. 24, 1919; (3) letter, Parker to the President, Mar. 25, 1919 —
all dealing with the question of sales to the liberated countries.

UNITED STATES LIQUIDATION COMMISSION.

mission was able to outline a basis for making sales and extending
credits in these countries.

The great work accomplished by the American Eelief Administra-
tion, with Mr. Hoover at its head, is known to all the world. The
funds, however, which were at the disposal of this organization, were
so limited as compared to the extent of the problems with which it
had to cope, ihat it was unable adequately to supply even the most
elementarv necessities of life to these peoples. The Commission was
called upon to dispose of vast quantities of salvaged clothing, includ-
ing outer garments, underwear, blankets, boots and shoes (many
of^'them patched) which, though decent and warm, had small com-
mercial value. The Commission was also called upon to dispose of
large quantities of foodstuifs, some of which, by reason of its qual-
ity'and condition and of the form of package in which it had l^een
prepared for war uses, had comparatively small commercial value.
Both of these classes of stocks seemed peculiarly suitable for reliev-
ing the absolute hunger and want of the liberated peoples.

Sales were made not only of subsistence and clothing, but also of
the elementary instruments of industry and transportation, in order
that these people might be able to go to work and serve themselves,
instead of continuing to be. as many of them were, objects of charity.
It was believed that these sales would also jserve a very important
function in stabilizing the governments and social institutions which
were beginning to take shape against most terrible odds, and that
they would help to check the insidious advances of Bolshevism.

All of these countries are relatively rich in natural resources and
are for the most part inhabited by sturdy and competent races. A
study of such resources and of the numl)er and quality of their in-
habitants convinced the C^ommission that, under all of the conditions
as they existed at the time, the United States was justified in taking
the risk of extending credits, especially as their indebtedness to us
constituted the major portion of their national debts. In some
instances it was felt desirable to make sales to co-operative societies
or organizations, rather than to the governments. In each case,
however, the Commission has. either directly or through such co-
operative societv, taken government ol3ligations in payment for the
stocks. These bonds all liear interest at the rate of 5 per cent per
annum, payable semi-annually, and they mature in from one to six

years after date.

In the matter of fixing the prices and terms of purchase, the L om-
mission occupied a position of supreme advantage over the buyers,
for in many cases these peoples were in such a position that they had
to buv from us or see their people go hungry and cold. Prices and
conditions were carefully studied, however, by the Commission and

30 UNITED STATES LIQUIDATION COMMISSION.

every effort was made to treat these purchasers, as well as the United
States, with aI)soliite fairness. The foodstuffs were sold f. o. b. our
Avarehouses in France for cost to the American Expeditionary Forces,
incliKlinti: allowances for transportation and handlinjji:. The salvaged
slioes, blankets, and clothing, all '' renovated, overhauled, and classi-
fied," were sold on the basis of cost, less a percentage j^or deteriora-
tion according to class. The medicines, machinery, tools, and trans-
port materials were sold on the basis of cost in France, less a dis-
count for deterioration through use or otherwise. On the whole, the
prices were rather higher than could have been procured at whole-
sale from any other purchasers. They were believed, however, to be
fair and just when considered in the light of the quality of the se-
I'urities and other circumstances associated with the transactions.

The sales which have been made to or for the use of these so-
called *■' liberated nations " ^^ are as follows :

Poland $59, 365, 111. 97

Kingdom of St'rl)s, Croats, and Slovenes 20,464,191.25

Roumania ^___ 13. 012, 689. 00

Russian Government 428, 299. 46

Czechoslovakia 19. 098, 874. 27

Revalis (Estbnina) 12,262.818.99

Vilnis ( Litluiania ) 4, 414, 861. 39

Central Union Konsnms (Latvia) 2, .5.56, 952. 84

Ukrailian (Ukrainia) 8,500,222.67

Total 140, 104, 021. 84

GIFT TO RED CROSS.

Pursuant to an act of Congress, passed early in July. 1910, author-
izing the Secretary of War —

to place at the disposal of the American Red Cross such medical and surgical
sui)iilies and sui)plementary and dietary foodstuffs used in the ti"eatment of the
sick and injured, but which are not now essential to the needs of the American
Expeditionar57 Forces or needed for use in the military hospitals in the United
States or as military or hospital stores for the Army of the United Stattes, to be
used by said American Red Cross as it shall determine to relieve and supply the
pressing- needs of the peoples of the countries involved in the late war,

the Secretary of War, acting through the Commission, placed at the
disposal of the American Eed Cross, without cost to it, medical,
surgical, and hospital supplies and ecpiipment and dietary foodstuffs
of the value of $9,964,851.10, which were expressly reserved from the
stocks sold to France and actually delivered to the Red Cross repre-
sentatives. In addition to this, the French Government has, in the

1^ See Appendix XII for a list of the liberated nations, with corresponding commer-
cial organizations for each, with which the Commission has dealt.

UNITED STATES LIQUIDATION COMMISSION. 31

bulk sale contract of Aiigiist 1, 1919. assumed the obli<ratioii to re-
sell, on the basis of cost to it, any further medical or suroical sup-
plies and dietary foodstuffs which the American Red Cross may need
for use in Europe,

COMMERCIAL SALES OF PROPERTY LOCATED IN FRANCE.

Prior to the consummation of the bulk sale to France, diligent ef-
forts were made by the Connnission to find purchasers, for cash or
its equivalent, for surplus stocks located in France; but on account of
the character and condition of these stocks, the condition of exchange,
and the difficulty of procuring transportation by railroad or water,
it was impossible to dispose of large quantities of these stocks to
advantage.

The first important sale of this kind which the Commission
authorized was made to the American Relief Administration, of
which Herbert Hoover was director. These stocks Avere destined
for Central Europe and the Xear East, and consisted of prime neces-
sities — cereals, fats, condensed milk, a small quantity of medical sup-
plies, and a few motor trucks needed for distributing them. The
sales aggregated $15,959,455.15, and the terms were cash. The prices
were calculated on a basis which would justify the Relief Administra-
tion in taking these supplies in France in preference to having them
])urchased in the Ignited States and shipped over. In this way
shipping was economized, and a considerable portion of our surplus
foodstuffs was promptly disposed of for cash and through a channel
Avhich would use it to satisfy actual hunger and relieve dire distress.

AVhen the Commission arrived in Europe it found that our Army
had 181,909 surplus horses and mules. The demand for horses was
very great, and the prices were good, though the demand for mules
was more limited. Many of these animals were in poor condition, and
the Army was rapidly declaring them surplus. xVs the estimated
average cost of maintaining a horse or mule in France is $2 per day,
and even more in Germany, the problem of their disposition required
prompt attention. The Commission decided to sell them for cash
only, and, so far as possible, at such places and at such times as they
were found surplus. They were disposed of with reasonable prompt-
ness through a\iction sales, sales to the French Government, to Po-
land, to Czechoslovakia, and to others, all at fair prices. The French
minister of reconstruction purchased several thousands, which he in
turn sold on credit in the devastated regions of France, thus using
them to furnish prompt aid in the problem of getting the soil back
under cultivation and of starting the wdieels of industry. More
than 5,000 animals were sold to Poland. The total amount realized

32 UNITED STATES LIQUIDATION COMMISSION.

on the sale of all American Expeditionary Forces, animals was
$35,133,065.02, the number being 181,909.^*

The problem of sales in Spain consumed not a little of the Com-
mission's attention. It had two phases^ During the war our Army
had agents in Spain who were purchasing supplies in considerable
quantities, and upon the signing of the armistice there was a limited
amount of these materials in Spain to be disposed of, as well as con-
tracts to cancel and adjust. Further, during the war, when the gold
embargo was in force, the United States had caused to be borrowed
in Spain, in order to avoid paying a discount on dollars, some 155.-
000,000 pesetas and the Commission made a determined effort to sell
there for cash a sufficient quantit}^ of surplus stock to pay and retire
this indebtedness.

The stocks found in Spain at the close of the war were small.
They consisted principally of horse blankets, cotton duck, vinegar,
off ce supplies, iron buckets, salt bags, cork shavings, etc. All of
these were sold for cash, the total aggregating $823,772.54. In addi-
tion we had some lumber in Portugal which was sold for $38,060.59.

In an effort to make large sales in Spain, special agents were sent
there by the Commission to develop markets and many hours were
spent in conference in Paris with prospective Spanish purchasers.
But the Commission was unable to induce unj responsible Spanish
concern to purchase any of the American stocks in France, except
on condition that the Commission would cause deliveries to be made
either at French ports or on the Spanish frontier. This was because
of the great difficulty encountered in transporting stocks over French
railroads. Finally, in order to make an advantageous sale, the Com-
mission assumed this burden and, through the Army, loaded the cars
at our depots and transported them to the ports or to the Spanish
border, where deliveries were consummated. Endless annoyances
were encountered in effecting these deliveries and there were many
delays. By the time the bulk sale was concluded and the Spanisli
sales discontinued, stocks aggregating in value $4,466,519.77 had
been sold there, but deliveries could not be finished until a long time
afterwards. They consisted principally of tobacco and engineering
and quartermaster supplies.

The Commission sold also to the Spanish Government 10,000 tons
of surplus Irish potatoes which the Army had bought from Great
Britain. The price was 1,616,147 pesetas, which amount has been
paid in full.

Early in 1917, before the arrival in France of sufficient motor
transportation from America, the American Expeditionary Forces

" See Appendix XIII for chart showing animals sold, with their purchasers and
prices.

UNITED STATES LIQUIDATION COMMISSION. 33

found it necessary to purchase motor transportation from Great
Britain. All of these cars of English manufacture which the Com-
mission found in France were sold to an English syndicate for
$1,202,566.46. These cars, generally speaking, had been longer in
use and were more exhausted by wear and tear than the other motor
transport in France.

In addition to the sales noted above, numerous others, some small
and some large, were made for cash from stocks of various kinds
located in France. It should be noted in particular that, in addition
to the bulk sale, stocks aggregating $87,780,942.76 and 232,565,047.51
francs were sold to the French Government.^^

BELGIAN SALES AND GENERAL SETTLEMENT.

The Commission made sales to Belgiiun amounting in all to ap-
proximately $29,000,000. Belgium had claims against the American
Army: (1) Arising out of leases of Belgian locomotives to the
American Expeditionary Forces during the war; (2) for transpor-
tation of troops and supplies, both by rail and on the Khine; (3)
for port charges at Antwerp. These claims were examined and an
account was stated showing approximately $2,000,000 in favor of
Belgium. Instead of paying this amount, it was set off against the
amount due the United States on all sales to Belgium, and that
country agreed to execute and deliver to the United States notes or
bonds for the balance, amounting to $27,162,720.95. These bonds
mature three years after date and bear interest at the rate of 5 per
cent per annum, payable semi-annually.

These agreements are contained in a contract of general settlement
entered into between the Commission and the Belgian Government
on November 7, 1919, by the terms of which —

Belgium releases the United States from any and all debts, claims, and lia-
bilities, whether in contract or tort, which Belgium now has or may have by
reason of any act done or engagement entered into on or before the 31st day
of October, 1919, for materials or services furnished to or damages done by
the American forces in Europe, except as hereinafter stated.

Belgium further agrees —
to save the United States harmless from any and all claims of whatever nature
against the United States or members of its military or naval forces, on the
part of any railroad company within the limits of the Kingdom of Belgium,
whether such railway company is the property of the Belgian Government or
not."

IS See Appendix XIV for three charts : Chart I shows the amounts purchased by
each country by services ; Chart II, the amounts by categories ; Chart III, the location
in Europe of this material when sold.

»« See Appendix XV for copy of contract of general settlement between the United
States of America, acting through the chairman of the Liquidation Commission, and the
Kingdom of Belgium, acting through the premier and minister of finance ; also for a state-
ment of the account upon which this general settlement was based.

18317&— 20 3

34 UNITED STATES LIQUIDATION COMMISSION.

In addition to the stocks sold to the Belgian Government, sales of
goods located at Antwerp were made to other nations, individuals,
firms, associations, and corporations, in the amount of $3,845,032.45.
Of these stocks, motor transport brought $'268,339.97. A sale amount-
ing to $1,852,326.99, consisting principally of clothing, was made
to Czechoslovakia on the basis of 75 per cent of cost laid down at
Antwerp (i. e., cost plus transportation and handling). The bal-
ance of the stocks at Antwerp, consisting of broken and irregular
groups of materials, was disposed of in a bulk sale to Poland for
$976,583.22, the price being calculated on the basis of 70 per cent of
cost plus transportation and handling. The price received for all
surpluses located at Antwerp, and the Hook von Holland, including
sales made to Belgium, averaged a little under 74 per cent of the
cost of the goods laid down in Europe.

SALES IN GERMANY.

When the Army of Occupation took its position on the Rhine
large quantities of Army stores and equipment were moved there,
principally from France and to some extent from the United States.
As this Army was being withdrawn from time to time and returned
to the United States, stocks on the Rhine were becoming surplus and
the duty devolved upon the Conunission to make disposition of
them. The suggestion that they be returned to France and placed
in American Expeditionary Forces' depots there for storage and
disposition with the other stocks in France was rejected, both be-
cause of the difficulty of transportation and the difficulty of dispos-
ing of the stocks already in France.

One of the first problems which arose in Germany was that of the
disposition of surplus horses and mules. There was a serious short-
age of forage, and keeping the animals over a long time while a
market was being found was very expensive. Prompt action was
taken by the Commission. Many of the animals were sold to indi-
viduals and firms through auction sales, competitive bids, and other-
wise. A large number of them went to the Minister of Reconstruc-
tion of France, some went to Poland, and a few to Czechoslovakia.

In order to direct the disposition of the stocks in Germany more
satisfactorily, the Commission established a branch office at Coblenz
about the 1st of July, and put it in charge of J. G. Adams, as
special conunissioner. Mr. Adams had previously been serving as
executive secretary of the Commission. Negotiations were taken up
forthwith with several of the strongest German financial institutions
having connections in the United States with a view to the formation
of groups or syndicates wdth facilities for making purchases in
dollars, or on dollar credits. Consultations were held Avith such

UNITED STATES LIQUIDATION COMMISSION. 35

institutions as Warburg & Co. of Hamburg; Speyer and Ellison of
Frankfort; Oppenheim & Son of Cologne; the Deutches Bank of
Berlin, and others; while at the same time the Commission, through
the War Department at home, was trying to interest the American
correspondents of these houses in the transactions. Negotiations
were also opened with numerous American, French, English, Dutch,
Belgian, and Scandinavian concerns. All of these people were inter-
ested in the stocks which we had for sale. Many of them sent repre-
sentatives to inspect them; but without exception, after days and
weeks of conferences and discussions, they expressed the conclusion
that under the conditions as they existed at that time, particularly in
view of the fluctuating rates of exchange, the business was quite
impossible.

On August 10, after this effort to sell on a dollar basis was believed
to be a failure, it was decided to send out a notice to a large number
of prospective purchasers offering the goods on more liberal terms.
The notice offered the stockis as a whole, or in large blocks, to be paid
for in American dollars, Swiss francs, Dutch guilders, British
pounds, French francs, or German marks, at the several current rates
of exchange, preference being given to bids based on currencies in the
order named. Notwithstanding the fact that every effort was made to
encourage bids under this offer, no satisfactory bid was received.
There were several instances of speculators who made inadequate
offers on small lots of the most desirable stocks, the sale of which
would have prejudiced the sale of the stocks as a whole. All bids were
rejected.

The exchange situation in the Rhine country proved to be an almost
insurmountable obstacle in the way of a reasonably satisfactory dis-
position of these stocks, which were carried on our inventories in
terms of dollars at war-time cost plus 20 per cent for transportation
and handling, save motor transport, to which was added 45 per cent
of first cost for transportation and handling.

A great part of the stocks were of commodities produced in Ger-
many which could be purchased on the Ehine in the open market at
retail, at prices considerably less than those stated in our inventories.
The purchasing power of the mark had decreased, perhaps not more
than 200 per cent, while its exchange value on the American dollar
had decreased more than 500 per cent. The difficulties encountered
in selling American goods in Germany under such conditions are
quite obvious.

An effort was made to organize a syndicate which might buy
these stocks in exchange for certain German products which are
required or can be utilized to advantage in the United States; pot-
ash for example. It was found, however, that the Germans w^ere

36 UNITED STATES LIQUIDATION COMMISSION.

fully aware of the importance to them of disposing of such of their
products as were marketable in the United States for dollars only,
for it is only by selling for dollars that they can strengthen their
exchange with us.

While these efforts were being made to sell the stocks as a whole,
there were certain smaller sales which had to be made by way of
salvage. The Army of Occupation had taken with it a large supply
of Signal Corps equipment, both for its own use and for equipping
the proposed Galician expedition. Such of this stock as was de-
signed for field use and has small commercial value was returned to
the United States for the use of the War Department. What re-
mained, being largely unserviceable, was sold for 1,200,000 marks.

The surplus tobacco was deteriorating and was not an important
factor for fostering a bulk sale, so it was sold separately. It brought
cost plus 6 per cent. The candy and confectionery was deteriorating.
We had a surplus which was carried on the inventory at $1,200,000.
It was sold early in August at 87| per cfent of the inventory valua-
tion, which was more than first cost to the United States.

We had a stock of so-called German armistice trucks. These had
been allotted to the American Army under the terms of the armistice.
They had been built in Germany under war conditions, were equipped
with live axles, chain drives, and steel tires. They had deteriorated
considerably through use and through standing in the open for more
than eight months, and they needed considerable repair before they
would be valuable for commercial uses. They were sold in block
for 13,000,000 marks.

Finally, in October, after numerous failures in other directions,
the Commission was successful in interesting a strong English syndi-
cate in the purchase of the surplus used motor equipment in Ger-
many. This equipment represented a high percentage in cost value
of all our surplus stocks in Germany. It was rapidly deteriorating
from non-use and exposure to the elements and had to be handled
promptly or it would soon have become practically useless. After
a long series of negotiations this syndicate has purchased and taken
possession of all of the American surplus motor transport on the
Rhine on substantially the following basis :

1. The estimated purchase price is fixed at £3,250,000, of which
£325,000 has been paid in cash.

2. This estimated purchase price is subject to increase or decrease
on check of the equipment and material.

3. If any controversy as to quantity or classification should arise
in making such check, such controversy shall be settled by the Com-
mission's present representative in Germany, Lieut. Col. T. H. Krutt-
schnitt, acting for America, and by Lieut. Col. G. W. Parkinson or

UNITED STATES LIQUIDATION COMMISSION". 37

Sir Percival Perry, acting for the purchasers, and in the event of
their disagreement the decision of Lieut. Col. Kruttschnitt shall be
final.

4. The balance of the purchase price shall be paid in three equal
installments, the first maturing July 1, 1920, the second December 1,
1920, and the third April 1, 1921, together with interest on the entire
amount at the rate of 5 per cent per annum from April 1, 1920,
interest payable semi-annually.

5. The United States, through its general sales agent in Germany,
Lieut. Col. Kruttschnitt, or his successor, remains in constructive
possession of and continues supervision over all of the property pur-
chased, retaining a lien upon it for the purchase price until the same
is paid in full. None of these stocks can be withdrawn from their
present locations and sold by the purchasers without the consent of
Col. Kruttschnitt and the payment to America of an amount equal
to the full purchase price of the property so withdrawn.

6. There has been deposited in the Guaranty Trust Co. of New
York, Paris branch, £250,000 to the credit of" T. H. Kruttschnitt,
trustee, and subject to his and the purchasers' joint check. This fund
is to be applied to putting said motor equipment in condition for
use and sale. It is stipulated that the purchasers shall, on the de-
mand of Col. Kruttschnitt or his successor, make additional deposits
from time to time to maintain this fund, so that it shall never be
substantially less than £250,000. It is further stipulated that, if at
any time Col. Kruttschnitt or his successor in office or the War
Department of the United States shall not be satisfied with the
progress made by the purchasers in conditioning and marketing this
motor transport, the entire balance of this deposit may be withdrawn
and applied toward the payment of the purchase price.

7. The contract is to be construed according to the laws in effect
at Washington, D. C. and the purchasers irrevocably designate the
British Consul General at New York as their agent, on whom service
may be had in any suit Avhich may be brought by the United States
to enforce the terms of the contract.^'^

It is believed that this contract amply protects and secures the
United States, and that, all things considered, it is a most advan-
tageous one from our point of view.

The disposition of the motor transport on the Rhine left us with
depleted surplus stocks, the sale of which, excepting the subsistence
and clothing, was difficult. After prolonged conferences with rep-
resentatives of Poland, the Commission effected a sale to the Polish
Eelief & Supply Corporation, by the terms of which all of the re-

»'See Appendix XVI for copy of (1) the contract of sale, dated Oct. 1, 1919, and (2)
supplement to contract of sale, dated Dec. 3, 1919.

B8 UNITED STATES LIQUIDATION COMMISSION.

maining surplus stocks on the Rhine were sold in bulk on a basis of
70 per cent of their inventoried A^alues. These stocks consisted prin-
cipally of subsistence, clothing, ordnance, medical supplies, and a
great variety of miscellaneous equipment. Deliveries under this sale
have been completed and the stocks all moved out of Germany by
Poland. The total bill was $5,536,867.71.

SALES IN ENGLAND.

During the war. Great Britain had been made a United States
military base, called " Base Section No. 3," for the purpose of {a)
bringing troops through, (b) purchasing materials, (c) maintaining
hospitals and rest camps, and (d) training aviators and assembling
machines.

This program involved our owning a large amount of property in
England. AVe could not take title to the land under English law,
and when we took possession it had to be under a contract to re-
store the land to its original condition at the close of the w^ar.
Prior to" the armistice the United States had built, or taken over
from the British, numerous and extensive installations in the form
of (a) aviation plants and airdromes, (h) hospitals, (c) rest camps
and depots.^^ This property had to be sold out as it stood, or, if
salvaged, the ground had to be restored to its original condition.

Besides the buildings and installations constructed by the United
States, many more buildings were rented by our forces either on
ordinary leases or under requisition proceedings carried out on our
behalf by the appropriate British Government department.

Further, we had war materials- — ordnance, quartermaster, engi-
neering, medical, motor transport — of every description, of which
we were in process of taking delivery at the time of the armistice.
A large percentage of these stocks had been purchased for us by
various departments of the British Government, and was of course
British made goods. Shortly after the armistice, the British offered
to assist us in the sale of this surplus property through their Dis-
posal Board, in a manner analogous to the assistance which they
had given us in its purchase. It was found, however, that w^hile the
British Disposal Board got good prices, it w^as rather slow in selling-
stocks for us, and we have therefore taken little advantage of the
offer.

As soon as our sales in England began, the British Government
raised the question of customs duties on goods brought in from the
United States. These duties were paid on some of the earlier sales,

•® See Appendix XVII for a catalogue of all installations, or property attached to
the realty, which the United States has owned in Great Britain during or since the
war, showing the number of buildings, size, approximate cost, and disposition.

UNITED STATES LIQUIDATION COMMISSION. 39

but later when the French Government raised the same question
against the British for the sale of goods in France, and the general
question was under discussion in Paris, the British agreed to with-
draw their claim for duties so far as it referred to American goods.
They did, however, insist that our surpluses should not be thrown
indiscriminately on their markets so as to disturb trade conditions.
As this demand seemed only reasonable, and would be in accord
with our precedent in the Philippines at the close of the Spanish
War, we agreed to sell only after obtaining permission of the ap-
propriate department of their government. This permission they
have always been very generous in granting.

The disposition of buildings and other structures has been the
most serious problem. Each plant, hospital, and camp has had to
be worked out separately. The receipts from this class of property
have naturally been very small in proportion to the original costs,
because our obligation to restore the site would in most cases have
cost more than the salvage value of the buildings removed. We have
thus been in a very awkward position as a party to a bargain. The
British Government, however, has always exhibited a most cordial
desire to aid us in any way possible in these dispositions, even con-
senting to take title to land in our behalf whenever that action would
help us to reach a better settlement.

The personal property has been disposed of in several ways. The
bulk of it was sold out in relatively small quantities, by private sale,
by auction, by sealed bids, through agents, or through the British Dis-
posal Board, to British nationals principally. Some of it has gone to
other buyers — to the Commission for Relief of Belgium and Northern
France, and to Poland."* A considerable quantity of material, es-
pecially artillery, aviation, and chemical-warfare equipment, has
been shipped home, on the theory that these articles would be useful
to the Army for training, educational, and other purposes.

During the war the United States built a submarine cable for war
uses between Cuckmere, England, and Cape d'Antifer, France. Un-
der authorization of the Commission, this cable was sold to England
and France as joint purchasers, for £30,000, paid to us by England.
The conditions of the contract are that the purchasers shall jointly
own and operate the cable, and that at any time, upon request, they
shall lease to the United States this or a similar cross-channel cable.

19 See Appendix XIV, Chart III, column marked " England." This shows the total
receipts from all sales made in Great Britain, the amounts being shown by " Categories "
of property.

40 UNITED STATES LIQUIDATION COMMISSION.

SUMMARY OF SALES.

For the purpose of telling in a brief and graphic way the long story
of all sales of surplus war supplies in .Europe, other than the bulk
sale to France for $400,000,000, three charts have been prepared,
expressed in terms of selling price.^"

Chart I shows the totals in terms of selling value of all sales made
to each purchasing nation and to private firms, arranged according
to the respective services of the American Expeditionary Forces in
whose possession the stocks were held when sold.

Chart II shows the purchasers in the same way as Chart I but
the materials are listed according to the 18 categories ^^ by which
all American Expeditionary Forces' stocks have been classified, both
for the purpose of purchase and of sale in Europe.

Chart III also shows the stocks by categories, but, in place of the
purchasing nations across the top there is given the countries in
which the stocks were located at the time of their sale.

These charts show a total of sales aggregating $377,905,193.23 and
233,254,054.87 francs. Converting these francs into dollars at the
normal rate of exchange, and adding to these sums the $400,000,000 re-
ceived from France for the bulk sate, we have a grand total of
$822,923,225.82 received for all sales of War Department materials
made in Europe.

In payment for these stocks, government bonds aggregating
$564,233,302.87 have been taken from France, Belgium, and eight
countries of Central Europe and the Near East. The French bonds
were for $400,000,000. Sales amounting to $108,570,596.63 and
689,007.36 francs were made for cash on delivery, and short-term
credits were taken for the rest. The appropriate Army services have
been taking care of the collections on these short-term credits and
nearly all of them have been liquidated at this time.

20 See Appendix XIV for Charts I, II, and III, summarizing in different ways alL
sales of war surpluses in Europe, except the bulk sale to France.

21 See Appendix VI for a list of the 18 categories with the sub-headings under each.

III. SETTLEMENT OF CLAIMS.

When hostilities ceased, November 11, 1918, the United States had
2,056,123 men in France, and plans to send over 2,000,000 more men
were far advanced. The country was investing in the war in terms
of billions of dollars. Practically every industry in "America was
doing something to support the Army. The War Department itself
was operating vast factories. It was buying vaster stores of sup-
plies. In laying and developing plans for all of these activities,
available shipping — the limiting factor — had to be taken into ac-
count, as well as the location of raw materials and the equipment
and factory facilities for producing war supplies, both at home and
in Europe. Consequently, America bought from Europe when and
what Europe could produce most effectively and expeditiously, and
she sold to Europe when and what she could produce most speedily
and effectively.

Thus it came about that many buying programs and arrangements
were in full force and vigor when the armistice was signed; some
in the form of technical contracts, some as pools, and some the result
of oral understandings or plans worked out by the Allied Purchasing
Commission. All of these programs, whatever their form, had to be
suddenly broken off. The expense of stopping this vast production
at the end of the war was, in many cases, very great. It was clear
that the Allied and Associated Nations ought to share fully and
equitably this expense, in accordance with the share of work which
each had undertaken in behalf of the other, but in most instances,
the facts were complicated, voluminous, and somewhat obscure,
while a proper basis for the apportionment of such expenses was
very difficult to work out.

Nearly a month prior to the creation of this Commission, the Secre-
tary of War appointed Chester W. Cuthell as his Special Repre-
sentative, and clothed him with full power to organize a staff of
lawyers and accountants for the purpose of developing the facts and
concluding agreements in regard to " the relations of the War Depart-

42 UNITED STATES LIQUIDATION COMMISSION.

ment with the several Governments of our European Allies growing
out of orders, purchases, and engagements given or arising in the
procurement of munitions, supplies, and services in this country by-
such European Allies." Mr. Cuthell^and his staff had their work
well under way when this Commission was established, and the mem-
bers of the Commission conferred with him freely and fully and took
measures for co-ordinating his work with theirs prior to their leaving
America for Europe.

The activities of Mr. Cuthell and his staff have always co-ordinated
with those of the Commission, and through the efforts of each to help
the other, the effectiveness of both organizations has been materially
increased.

All claims between the War Department and the Governments of
any of our European Allies gTowing out of the war and arising in
America were fully developed and presented b}^ Mr. Cuthell and the
members of his staff, either in America or in Europe. In this work,
Mr. Cuthell had the assistance and co-operation of the Commission.
The claims which he established against the French Government were
made a part of the final accounting by this Commission in its " Gen-
eral Settlement " with that government. All claims of this nature
between the War Department and our European Allies, or their
nationals, which arose in Europe, were developed, studied, and dis-
posed of by the Commission. Mr. Cuthell and his assistants have
acted as the Commission's representatives in Washington, and as
such have rendered invaluable services.

The following pages will present a brief record of the more im-
portant settlements which the Commission made in Europe :

SETTLEMENTS WITH GREAT BRITAIN.

On March 10 and 11, 1919, the chairman of the Commission and
Mr. Stettinius held several conferences in London with representa-
tives of the British war office and the British ministry of munitions,
at which the more important claims of Great Britain against America
were considered. Particular attention was given to the claim grow-
ing out of the cancellation by America of the contract, in terms of
which Great Britain had agreed to produce and furnish certain ar-
tillery and artillery ammunition. Mr. Stettinius had already held a
series of conferences with the British on this and other matters.

At these March conferences certain fundamental principles were
recognized by both parties as standards by which mutual claims
should be measured. The chairman had, before leaving Washington,
discussed these principles with Mr. Cuthell. They may be summar-
ized in General terms as follows :

UNITED STATES LIQUIDATION COMMISSION. 43

1. Neither government shall, in connection with any war contract
or transaction, make a profit out of the other, and this principle
shall be applied regardless of prices, tentative or fixed, named in
contracts. Actual cost shall control in fixing prices between the
two governments, and there shall be neither profit nor loss as between
them.

2. An agreement, whether written or oral, regular or irregular, if
clearly established between the authorized representatives of the re-
spective governments, shall be binding on both.

3. In the absence of a definite agreement, where it is clearly es-
tablished that one government, at the request or on the suggestion
and with the advice and consent of the other, incurred obligations
for the common benefit of both, the expense should be shared by
each party in proportion to its benefits, past or prospective.

In a letter written by the chairman to the British representa-
tives, confirming the London interview, the following language was
used :

It is understood that the broad, general principles which have been recog-
nized by both governments in reaching the adjustments above outlined shall
obtain in the settlement of claims of like nature which will be presented by the
United States Government to the British Government for payment, including
claims growing out of the creation of facilities for the manufacture of, as well
as expenditures made for the production of, Liberty motors, nitrocellulose
powder, cotton linters, etc.

This statement was made by way of assistance to Mr. Cuthell, who
was engaged at that time in Washington on the preparation of the
claims against England referred to.

The fact that these simple principles were kept constantly in mind
in all of our dealings with the representatives of Great Britain has
enabled both parties to reach sound solutions of many difficult prob-
lems ; and, on the whole, it is believed that the cordial relations be-
tween the respective governments and peoples have been cemented
rather than strained by the negotiations which have taken place.

BRITISH ARTILLERY AND AMMUNITION SETTLEMENT.

From time to time during the spring and summer of 1918 America
placed orders with Great Britain to manufacture or cause to be
manufactured and delivered to America certain quantities of artil-
lery and artillery ammunition. All such agreements, some of which
were vague and indefinite and might have been so construed as to
have given them far-reaching importance, were merged and super-
seded by a certain agreement, dated October 19, 1918, entered into

44 UNITED STATES LIQUIDATION COMMISSION.

between Mr. Stettiniiis, Special Eepresentative of the Secretary of
War, and Mr. Churchill, British Minister of Munitions.^-

Immediately after the armistice, Mr. Stettinius gave notice of the
cancellation of the contract and at once began negotiations with a
view to reaching a fair and equitable settlement for losses occasioned
thereby. The negotiations which were merged in the agreement of
October 19, 1918, covered a considerable period and it was clear that
the British manufacturing operations had been maintained, and that
she had made plans for increased production, in order to meet
America's demands. A large part of the material contracted for
had already been produced and a majority of the remainder was in
process. Mr, Stettinius conducted his negotiations on the assump-
tion that, as a large part of these materials were already in being and
were in excess of the British requirements, it would be to America's
interest to accept completed guns, equipment, and ammunition rather
than to pay large indemnities and receive nothing in return.

After consulting with our ordnance officials in London, Paris, and
Washington with a view to determining what ordnance equipment
could be used to the best advantage by our War Department. Mr.
Stettinius asked the British for a revision and adjustment of the
contract, in terms of which the number of guns of small caliber to be
taken by us were to be reduced, and in lieu of this, the number of
large-caliber guns slightly increased. A tentative understanding in
general terms had been reached between Mr. Stettinius and the
British ministry when the chairman of the Commission took up the
case. At the conferences held in March, the chairman reached a
tentative agreement which was presented to and approved by the
full Commission in Paris a few days later. This agreement was con-
firmed by the chairman's letter to the British representative, dated
March 21, 1919, setting forth the number and types of artillery units
and ammunition, the delivery of which America agreed to accept
and for which it agreed to pay on the basis of cost to Great Britain,
in lieu of the payment of cancellation damages. It was further
agreed that deliveries might begin at once in order to relieve the con-
gestion at British arsenals and manufacturing plants and in order
to utilize available shipping, and that a final contract would be pre-
pared and executed as soon as the definite unit costs could be pro-
cured by the British and verified by the ordnance representatives of

22 The entire course of those negotiations is very carefully recorded in two type-
written volumes in the Commission's files entitled, respectively : (1) " R6sum6 of negotia-
tions conducted by Mr. Edward R. Stettinius with the French and British Governments " ;
and (2) " Rfeum6 of negotiations conducted by the United States Liquidation Commis-
sion — War Department with the British Government for the settlement of obligations of
the United States consequent upon the purchase of artillery and artillery ammunition,
Paris, Aug. 28, 1919."

UNITED STATES LIQUIDATION COMMISSION.

the American Expeditionary Forces. The formal contract • was
signed August 9, 1919.-^

Under the terms of this contract, Great Britain has delivered, or
will deliver, to the United States the following guns, gun equipment,
and artillery ammunition :

GUN EQUIPMENT.

Nature.

Cost per unit.

Number
of units.

s. d.

6,295

6,390

6,374

100

2,060

5,210

200

Total
value.

8-inch howitzer, Marie VII

8-inch howitzer, Mark VI

6-inch gun, Mark XIX

6-ineh gun bodies complete with breech mechanisms
60-pounder gun •.

£528, 780
408,960
637, 400
103,000

1,042,000

2,720,140

GUN AMMUNITION.

8-inch high explosive

6-inch gun high explosive. .

Shrapnel

60-pounder high explosive .

Shrapnel

High explosive

Shrapnel

Total

Grand total.

£. s. d.

13 10

9 15

10 5

6 3 4

5 5

5 10

1 170,000
125,000
125,000
= 33,500
2 33,500
166,500
166,500

£2,295,000
243,750
256, 250
201,000
206,583
349,125
365, 750

3,917,458

'■ Compt.

- Com. rds.

America pays no indemnities for cancellation of the original artil-
lery and artillery ammunition contract of October 19, 1918, but pays
actual cost for the guns and ammunition purchased under the terms
of this settlement of i^ugust 9, 1919. The total payment has been
finally determined at £6,637,598. When the contract was 'signed 90
per cent of this amount was paid in cash, 5 per cent additional will
be paid upon the completion of deliveries of the' guns and ammuni-
tion, and the remaining 5 per cent upon the completion of deliveries
of the spare parts.

AUSTRALIAN WOOL SETTLEMENT.

During the war the British Government made contracts with the
governments of Australia and New Zealand for large supplies of
wool produced by them. This was obviously done with a view to
financing and stimulating production when shipping was precarious
and when the Allied Governments were in great need of wool. In
October, 1917, our War Departmet contracted with the British Gov-
ernment for the purchase of 247,000 bales of wool for delivery in

25 See Appendix XVIII for copy of (1) the final artillery and artillery ammunition con-
tract of settlement with Great Britain, dated Aug. 9, 1919, together with (2) the covering
letter written by the Commission's chairman.

46 UNITED STATES LIQUIDATION COMMISSION.

Australia during the summer of 1918, In the late summer and early
fall of 1918 negotiations were opened in London for the purchase
by America of additional wool, and on November 7, 1918, a contract
was signed in London between Great- Britain and America (the lat-
ter acting through Messrs. Summers and Patterson, of the War In-
dustries Board) whereby Great Britain sold to America 325,000 addi-
tional bales of Australian wool.

The entire amount purchased under the first contract had been
shipped to the United States during the war and approximately
115,000 bales had been delivered under the second contract before
this Commission came into the situation. The Commission found
that with the coming of the armistice the War and Navy Depart-
ments of the United States had stocks of wool not only in excess of
their own needs but in excess of the requirements of our civilian
population and in excess of what our markets could advantageously
absorb at that time. The chairman of the Commission, therefore,
accompanied by Mr. Cuthell, visited London, and in conference with
Lord Inverforth, minister of supplies. Sir Arthur Goldfinch, British
wool expert, W. T. Layton, and others, urged that America be
relieved of its obligation to accept the remaining 210,000 bales under
the contract of November 7, 1918. The British representatives were
very insistent that America should take and pay for this wool with-
out delay.

Upon studying the contracts and correspondence connected with
the whole series of wool transactions, some ambiguities were discov-
ered. The British Government had two schedules of prices at which
it sold wool — one the " civil issues price," upon which it made a
profit to cover the risk it was taking, overhead and other expenses;
the other the "military price," designed to represent cost to Great
Britain, and at which wool was issued to the British Army. Sir
Arthur Goldfinch, who had negotiated the sales in behalf of Great
Britain, insisted with great earnestness that the contracts provided
in substance that America should pay for all of the wool purchased
by it at the civil issues price, and that it was proper that America
should so pay because she did not participate with Great Britain in
the risk of the purchase of the entire clip. On the other hand, the
chairman, without admitting the construction placed on the con-
tracts by Great Britain, earnestly contended that even if the British
construction of the contract was correct. Great Britain should not
insist on the terms of the contract which would result in its making
a profit out of America on wool purchased for war purposes, and in
furtherance of the cause in which Great Britain and America had
joined forces.

As a result of these conferences and debates, which consumed the
better part of two days, and in which Mr. Cuthell and Mr. Elliott

UNITED STATES LIQUIDATION COMMISSION. 47

(the latter being the wool expert of the Purchase, Storage and Traffic
Division of the War Department) participated, an agreement was
reached substantially as follows: ^*

1. America agreed to pay for all of the wool purchased under the
contract of October 1, 1917, on the basis of the civil issues price less
2^ pence a pound, in accordance with bills already rendered, cover-
ing approximately 247,000 bales.

2. America agreed to pay the bills rendered by Great Britain for
storage and insurance in Australia, and for interest on delayed paj^-
ments under this contract, amounting approximately to $850,000.

3. America agreed to pay for the 115,000 bales already shipped
under the contract of November 7, 1918, on the basis of the civil
issues price less 2^ pence a pound in accordance with the bills already
rendered, plus a payment of 1 penny per pound j)remium for selec-
tion in accordance with the terms of the contract.

4. Great Britain cancelled without cost to America all obligations
on our part to take delivery of that portion of the wool which
remained undelivered under the contract of November 7, 1918,
amounting to approximately 210,000 bales.

5. Great Britain waived all claims for interest and storage against
America covering the wool undelivered under the contract of Novem-
ber 7, 1918.

This was believed by all interested parties to have been a most
advantageous contract from the American point of view. It re-
lieved the War Department of an obligation to take a large amount
of wool for which it had no use and which American markets were
unable to absorb within any reasonable time, and for which America
would have been required to pay in cash approximately $38,800,000.

THE CUTHELL SETTLEMENT.

As heretofore pointed out, Chester W. Cuthell, special repre-
sentative of the Secretary of War, and his staff were responsible for
the development and presentation of claims of the War Department
against Allied Governments arising in America. How thoroughly
and effectively this work was done by Mr. Cuthell and the members of
his staff is illustrated by the manner in which they presented, in
May, 1919, to the British authorities in London and procured allow-
ances of five controverted claims aggregating in amount over
$35,000,000. While the chairman of the Commission participated in
these conferences and the contract of settlement was ratified and ap-
proved by a vote of the Commission, it is nevertheless the privilege,
as well as the pleasure, of the Commission's chairman to bear testi-
mony to the fact that the full credit for the preparation and estab-

=^ See Appendix XIX for the Australian wool settlement, which is paragraph 6 of the
Cuthell settlement with Great Britain, dated May 10, 1919, signed by C. W. Cuthell
and Lord Inverforth.

48 UNITED STATES LIQUIDATION COMMISSION.

lishment of these claims belongs to Mr. Cuthell and the members of
his staff.

After conferences lasting for only a little more than a week,
these claims, as presented to Great Britain, were established and
allowed as follows : ^^

Spruce, fir, and cedar $13,274,550.20

Wood distillates 2, 887, 554. 00

Liberty motors 13, 964, 718. 90

Nitfocelliilose powder 4, 690, 500. 00

Cotton linters 651,500.00

35, 468, 823. 10
SETTLEMENT OF TANK AGREEMENTS.

In the fall of 1917 Great Britain and the United States appointed
a joint commission to study the question of the most desirable types
of tanks and the question of their production. A conference was
held in Paris in December, 1917, the United States being repre-
sented by Col. House and others, England by Mr. Churchill and
others, and France by M. Loucheur and others.

At this conference the desirability of producing heavy tanks on
a large scale, the jjarts to be made in the several countries and the
assembling plant to be built in France, was discussed at length
and agreed to in principle. France, however, because she was
already producing light tanks in great quantities, declined to enter
into a triangular agreement for financing and forwarding such a
proposition, but she agreed to assist the other two nations in acquir-
ing a site for the assembling plant and in other ways within her
power. She did not ask for any part of the output of the plant at
this time.

On the 22d of January, 1918, an agreement was signed between the
United States and the British Government, creating an Anglo-
American commission, which was charged with building a tank-
assembling plant in France with a capacity of 300 tanks per month
and capable of being extended to 1,200 per month; 1,500 tanks to be
produced during the year 1918. This assembling plant was built
at Chateauroux, Neuvy-Pailloux, and is usually spoken of as the
" Chateauroux plant." The component parts of the tanks were to be
produced about half in England and half in the United States, Eng-
land supplying plates, structural members, track shoes, guns, ammu-
nition, etc., and the United States supplying engines complete, motor

=s Copy of Cuthell-Inverforth agreement, together with an explanation of the matters
involved in this settlement is found in Mi\ Cuthell's report to the Secretary of War, dated
Sept. 30, 1919, v?hich is quoted in full in the Annual Report of the Secretary of War,
1919, pp. 105, 106, 117-120.

UNITED STATES LIQUIDATION COMMISSION. 49

parts, sprockets, hubs, shafts, track rollers, track lengths, etc. The
expenditures of the entire undertaking, including the building of
the factory in France, the production of the components, and all
other matters directly connected with the work, were to be shared
equally by the two Governments. Completed tanks were to be sold
to the French, British, or Americans at £5,000 each, this price being
subject to adjustment when the project should be liquidated at the
close of the war. After the undertaking was well under way,
France, through the Interallied Munitions Council, earnestly in-
sisted that the cause of the Allies required that the majority of the
large tanks to be assembled at the Chateauroux plant should be allo-
cated to her. xA.fter much discussion, it was reluctantly agreed that
France and the United States should share equally the tanks as pro-
duced until the first 1,200 had been finished and that the next 300
should be allocated to France. This understanding was never re-
duced to writing as a formal agreement, nor was any agreement
•ever made with regard to the allocation of tanks in excess of the first
1,500 to be produced.

The Chateauroux plant was never quite finished and no tanks were
ever assembled there. Immediately after November 11, 1918, work
on the whole project was discontinued and conversations began with
a view to reaching a settlement in liquidation of the affairs of this
enterprise. Approximately 24,000,000 francs had been expended on
the erection of the assembling plant for substantially one-half of
which the United States was indebted to Great Britain. The amount
which the United States and Great Britain had each expended in
the manufacture of components has been estimated as approximately
£3,000,000. France had invested nothing in the enterprise, although,
as noted above, she was to receive nine- fifteenths of the first year's
output.

The liquidation of this undertaking was discussed by the Com-
mission's chairman and Mr. Stettinius with the representatives of
the British Government in London early in March, 1919, and a
tentative agreement in general terms was reached. This agreement
was reduced to writing, and formally executed under date of
August 8, 1919.2«

The contract provided that the losses sustained by the two Govern-
ments in the manufacture of tank components should be considered
as offsetting each other, and that neither Government should bill the
other, nor bill the Anglo-American Commission for any of them.
The cost of erecting the assembling plant, and all expenses in connec-
tion with that undertaking were shared equally between the two Gov-

2" See Appendix XX for a copy of the " Chateauroux tank agreement " of Aug. 8,
1919.

183176—20—4

50 UNITED STATES LIQUIDATION COMMISSION.

ernments. Nothing remained, therefore, to complete the liquidation
save the disposition of the assembling plant, and the presentation to
France of the equitable claim growing out of the allocation to her ot
nine-fifteenths of the first year's production. It was believed by
Great Britain and the United States that the most satisfactory form
in which to present this claim to France was to ask her to purchase
and take over the plant with all rights and obligations pertaining to
it and pay on the transaction a sum sufficient to cover the purchase
price, and such share of the general loss as might be determined to be
equitably chargeable to France.

It might seem fair, at first blush, for the proceeds of this sale to be
divided equally between Great Britain and the United States because
the two Governments had shared equally in all the expenses of con-
structing the plant. Great Britain, however, contended with much
plausibility that because she had relinquished to France her allocation
of 750 tanks (one-half of the first year's output), and because
America had relinquished only 150 tanks; the major portion of the
payment from France should go to England, in so far as it was a con-
tribution to the general loss, and not a payment for the value of the
plant.

Without settling the point with England concerning the division
of the proceeds, the Commission joined with the representatives of
Great Britain in presenting the claim, through M. Loucheur, to the
French Government. M. Loucheur, in his answer, argued that the
French understanding of the whole tank situation was that, while
the English and American Governments had been planning to con-
centrate on the production of heavy tanks, the French Government
was making large expenditures in concentrating on the production of
light tanks, and that, while the French Government would have re-
ceived heavy tanks from the Anglo-American Commission, both the
English and American Governments would, in turn, have received
light tanks from the French Government. He contended further
that no more definite agreement had been reached to the effect that
France should get heavy tanks than to the effect that England and
America should get light tanks; that the moral force of one claim
was as strong as the other.

After this answer had been carefully examined by the representa-
tives of Great Britain and by this Commission, negotiations were
re-opened with M. Loucheur, which finally resulted in an agreement
by the French Government to pay 20,000,000 francs in settlement of
the claim, France taking over the Chateauroux plant with all rights
and liabilities relating thereto at the time of the contract. It was
estimated that the net salvage value of the Chateauroux plant was
6,000,000 francs, so that 15,000,000 francs might be considered as in-

UNITED STATES LIQUIDATION COMMISSION. 51

demnity paid by the French as their share of the losses connected
with the undertaking.

It was clear that England was entitled to a larger share of this
indemnity than the United States, because she was to receive no tanks
during the first year of the plant's operation, having relinquished
her entire share to the French. Of the 900 tanks which France
would have received from the first. year's production, England would
have contributed 750, or five-sixths, and America 150, or one-sixth.
England contended that while it was proper to divide the 5,000,000
francs equall}^ between the two Governments, the 15,000,000 francs
should be divided five-sixths to England and one-sixth to the United
States. The Commission finally agreed with Great Britain that the
20,000,000 francs received from France should be divided, 70 per
cent, or 14,000,000 francs, to Great Britain, and 30 per cent, or
6,000,000 francs to the United States. On October 4, 1919, a final
contract was signed with Great Britain providing for a complete
liquidation of the affairs of the Anglo-American [Tank] Commission,
and providing in detail for a distribution of funds and settlement
of account.^

Another matter arose in connection with this settlement. It will
be remembered that under the Anglo-American agreement certain
tank parts were being made in the United States and other parts in
England while shipments were to be made to France where the
tanks would have been assembled. Our War Department in Wash-
ington decided that it would be desirable to use some of the com-
ponents already produced under this agreement for the manufac-
ture of tanks for training and educational purposes. The British
Government was approached by the chairman of the Commission and
it consented to turn over to us, at a salvage price, tank parts suf-
ficient to enable us to produce 105 tanks. England estimated that
her share of the components for one tank had cost about £5,000,
but because tank components had little more than salvage value to
her after the war she was glad to offer America these parts at
slightly over £1,000 per tank. The total bill for this purchase
amounted to £105,786 7s.''

There was one more tank transaction which remained to be settled.
Some time before November 11, 1918, Great Britain had supplied to

2^ See Appendix XXI for (1) a copy of the contract of final settlement of the
Chateauroux tank project, dated Oct. 4, 1919: (2) a copy of memorandum prepared by
M. Loucheur and signed by Loiicheur and Morel, on behalf of the French Government ; by
C. C. Barry and F. W. Phillips, on behalf of Great Britain ; and by Edwin B. Parker, on
behalf of the United States, dated Oct. 9, 1919_

2«A full account of all the negotiations carried on in connection with the settlement
of the Anglo-American agreement is contained in a typewritten volume in the Commis-
sion's files, styled " R6sum6 of negotiations conducted by United States Liquidation
Commission with the British and French Governments in the final settlement of the
Anglo-American agreement and the purchase of British tank components," dated Paris,
Auff. 28. 1919.

52 UNITED STATES LIQUIDATION COMMISSION.

the 301st Tank Battalion, United States Army, 64 tanks of various
marks, complete with armament and equipment. These tanks were
used in fighting while this battalion was brigaded with the British
Army, The British supplied spare parts -as they were needed. After
the war, 14 of these tanks were shipped to the United States and
the remaining 50 were returned to Great Britain. A portion of
them had been damaged in action. .The Commission agreed, by a con-
tract dated August 11, 1919, that the United States should keep the
14 tanks, the British should keep the 50 tanks, and that the whole
matter should be settled by a payment to Great Britain of £189,233
2s. lid.

BRITISH LIBERTT MOTOR SETTLEMENT.

Under the Cuthell-Inverforth agreement of May 10, 1919,-^ the War
Department of the United States was obliged to continue its deliveries
of Liberty motors to England until the total should reach 2,252
motors. These deliveries were completed out of the surplus Liberty
motors which we had in our possession in France and which were
not needed to satisfy our obligation under the final aircraft settle-
ment with the French Government.

BRITISH INTEREST CLAIM.

Prior to the creation of the Commission, the British Government
had presented to the American Expeditionary Forces a claim for
interest on money invested by the British in stocks which had been
sold afterwards to the United States at cost and also a claim for
interest on bills payment of which had been delayed more than one
month. These claims had already been tentatively recognized by
the American military authorities and were among the first im-
portant matters with which the Commission was called upon to deal,
the chairman making his first examination of them during his visit
to London early in March.

The British claimed that interest on investments made by them in
stocks afterwards sold to us should begin to accrue from the date of
the investment by the British in such stocks irrespective of the date
of the bill or invoice. The Commission in numerous prolonged con-
ferences protested against payment of interest for any period previ-
ous to the presentation of a proper bill.

The position which the British took was that our contention would
be sound under ordinary conditions, but that the exigencies of war
made conditions abnormal, and that they ought not to lose the interest
on capital which they had invested for us merely because they had

^ See Appendix XXII for the text of section 3 " Liberty motors and proper proportion
of sets of spare parts " of the Cuthell-Inverforth agreement of May 10, 1919.

UNITED STATES LIQUIDATION COMMISSION. 53

not paused in the process of waging war for the purpose of rendering
bills. They claimed that, if America was unwilling to consider inter-
est from the date of the investment by the British, at least we should
pay interest from the date of delivery. They further pointed out
that, during all of this time, they were borrowing money from
America and paying interest on it from the date when the credit
was extended, and that an important part of this same money had
been paid out for the very materials and supplies which they had
delivered to us.

Numerous objections to this claim were put forward by the Com-
mission and it would not be profitable to rehearse them here. It is
enough to say that the fact was clearly developed that there had
been unreasonable delays by each party in the payment of bills.
The British finally abandoned their claim for interest on invest-
ments covering periods prior to the rendition of bills; and it was
finally agreed that interest at the rate of 5 per cent per annum should
be paid by each party on every proper bill which had been rendered
by the other and which had been held for a period longer than a full
calendar month without payment, interest' beginning to accrue on
the first day of the second month following receipt of the bill.

Careful studies were made of all bills rendered by either party
prior to July 31, 1919, and a summary of these bills was prepared.
A balance was struck showing that the British bills against America
exceeded the American bills against the British by £51,062,692 15s.
5d. It was also calculated that the average period during which
all of these British bills had been held unpaid after they had been
presented in proper form was five and one-fourth months. An
average period of one and one-half months being allowed as a
reasonable time for checking and vouchering, it was agreed that in-
terest should be computed at 5 per cent per annum for a period of
three and three-fourths months on £51,062,692 15s. 5d., and the re-
sult, namely £797,854 lis. 2d., should be paid by America to Great
Britain in full, final, and complete settlement of all mutual interest
claims of this nature accruing from the beginning of the war to
and including July 31, 1919. This sum has been paid.'"

The contract of settlement further provides that interest at the
rate of 5 per cent per annum shall begin to accrue October 1, 1919,
on all bills rendered prior to August 1, 1919, and which have not been
paid on October 1, and, further, that all bills rendered in the month
of August which have not been paid before October 1 shall bear in-
terest from the latter date and that on November 1 interest shall
begin to accrue on all bills rendered during the month of September
which have not been paid before November 1. This formula is to be

•o See Appendix XXIII for copy of the contract settling tlie interest claims betwe en
the British and American Governments, dated Oct. 20, 1919.

54 UNITED STATES LIQUIDATION COMMISSION.

followed until all mulual bills and accounts between Great Britain
and the United States growing out of the war have been paid. It
will be noted that this plan allows an average period of 45 days for
checking and vouchering bills before interest begins to run.

Bills are not "rendered" for the purpose of this contract until
they are presented in a correct and proper form, i. e., the form in
which they are ultimately paid. A bill which is delayed in pay-
ment on account of being returned for correction is not " rendered ■'
until presented again in correct form.

It may be of interest to note in passing that measures were taken
hy the Commission to insure the prompt payment by the American
forces of all proper bills rendered b}'^ the British against them and
that practically no interest is accruing at this time nor has any ac-
crued for some months past. It is also interesting to note that, by
force of circumstances for which neither government is censurable,
America has gained very much more by reason of the decline in the
rate of exchange than she has lost by the payment of interest for any
periods of delay.

LIQUIDATIOK OF THE NITRATE POOL.

In the early part of 1918 America agreed with Great Britain,
France, and Italy that the purchase of nitrate of soda, which was
required in large quantities by these Governments for use in the
manufacture of powder and explosives, should be allocated through
a " nitrate executive " stationed in London. The world's supply of
nitrate of soda is located in a small area near the coast of Chile, and
its export is controlled by the Chilean Government. Purchases were
made from time to time by or for account of the respective Govern-
ments, or for importers under allocations made in London by the
nitrate executive.

Immediately after the armistice all importations from Chile to
the United States were stopped, and the War Department took ac-
count of its stocks. It turned over 192,000 tons to the Department
of Agriculture for sale and use in the production of soil fertilizers.
It placed 300,000 tons in War Department reserve. After these dis-
positions it was calculated that the surpluses remaining, including
a small Navy Department surplus, were something over 28,000 tons
in the United States and about 120,000 tons in Chile.

Early in December, 1918, a tentative understanding was reached
between the British ministrj?^ of munitions and the American War
Department for the formation of a pooling arrangement, according
to which the surplus stocks of nitrate held by the two Governments
might be disposed of. The terms of this understanding were not
well defined, and when the matter was taken up with the British
representatives by the chairman of the Commission on his visit to

UNITED STATES LIQUIDATION COMMISSION. 55

London early in March the British were not prepared to admit that
a real " pool " had been formed. After some conversation, however,
the existence of the pool was admitted in principle.

There were several difficulties in the way of a prompt disposition
of the stocks and conclusion of the affairs of the pool. The stocks
were widely scattered. Some of them were in Chile, some in the
United States, some in Great Britain, and some in Canada. It was
difficult to get accurate information about their exact amounts and
exact locations. More than one department of both Governments
was interested in the disposition. Much delay was incident to the
exchange of cables between London, Chile, Canada, Washington, and
the Commission.

Finally, after numerous and prolonged conferences, a contract of
settlement of the entire controversy was executed as of September 15,
1919, and delivered on October 29, 1919.^^ This agreement provides
that the pool shall be construed to exist to the extent of participa-
tion —

Tons.

By the British Governnient, with stocks of 436,628

By the Unitorl States Government, with stoclis of 157, 396

Maldng- a total of .594,024

Of this amount 226,173 tons remained unsold on September 15,
1919. This unsold surplus is bought by each Government from the
" pool " under the terms of the contract, the quantity purchased by
each being in a ratio equal to the ratio of the two contributions. The
price to be paid by each Government and credited to the " pool " is
8s. 6d. per quintal (22 quintals equal 1 long ton) for refined nitrate
and 8s. 2d. per quintal for ordinary nitrate, plus $17.50 per ton for
ocean freight to the United States and 140s. per ton to England, and
plus marine insurance charges. The stocks allocated to America in
this sale consist of 28,376 tons located in the United States, 16.598
tons located in Canada, and 14,951 tons located in Chile, or a total
of 59,928 tons. The stocks allocated to Great Britain consist of
58,468 tons located in the United Kingdom and 107,245 tons located
in Chile, or a total of 165.713 tons. The profits and losses of the pool
are to be apportioned between the two Governments according to the
ratio of their contributions of nitrate as set down in the schedule
above.

Deliveries are now being made under these allocations. When they
are complete it will be necessary to make some adjustments in accord-
ance with the terms of the contract of September 15, 1919, above

31 See Appendix XXIV for a copy of the contract of liquidation of the nitrate pool,
together with a memorandum of the revised figures which have finally been used as the
basis for the allocation of the stocks. See also minutes of Commission meeting held Dec.
3, 1919, Minute Book, p. 452.

56 UNITED STATES LIQUIDATION COMMISSION.

mentioned, and then a final statement can be prapared and the liqui-
dation completed. This pooling arrangement as finally consummated
will prove advantageous to America. It is quite important that the
final accounting should be done by the War Department through a
representative who is thoroughly familiar with the whole series of
transactions. The Commission's files contain a complete record, but
it is voluminous.

BILLS, ACCOUNTS, AND CLAIMS PENDING IN GREAT BRITAIN.

Nearly all the bills, accounts, and claims of America against Great
Britain growing out of the war, whether they arose in the United
States, England, France, or elsewhere, have been presented and finally
disposed of. There still remain, however, a fairly large number of
bills to be presented by Great Britain against America arising out
of transactions both in England and in France. It is roughly esti-
mated that these bills will aggregate £5,000,000 at this time. The
Commission has continuously brought pressure to bear upon the
several departments of the British Government to induce them to
present these bills in order that a full, final and complete mutual
settlement of all transactions between the two Governments growing
out of the war might be concluded. It is believed, however, that
while a large number of these bills and claims have been presented
and disposed of, they will perhaps not all be rendered for several
months to come. The British representatives have assigned, as the
reason of this delay, the constant changes and wholesale reductions
in the personnel of their several departments.

There are three unliquidated claims of Great Britain against
America for very substantial amounts which are still pending. These
have not yet been presented to the Commission in anything like com-
plete form. They are still being studied by British representatives,
who state that they expect at an early date to be in a position to
present them with data, evidence, and arguments in their support.

EXCESS COSTS CLAIM.

The most important one of these pending claims has come to be
known as the " excess costs " claim, or the claim for " hidden loss
on steel." During the series of interviews which the chairman of
the Commission had with the British officials early in March, 1919,
notice was informally given that it was their intention to present a
claim for excess cost of steel, and that the basis of this claim was
the fact that the British had billed America for steel products,
especially artillery and artillery ammunition, using the artificially
low price which had been fixed by the British Government for the

UNITED STATES LIQUIDATION COMMISSION. 57

issuance of steel to their manufacturers, termed by them "manu-
facturers' issues price." The British stated that these bills against
America did not take into account subsidies and other elements of
cost which their government had paid directly or indirectly for the
steel. They also stated that it had become necessary for them to
purchase steel in America at a price not only higher than their
government-fixed price but higher than the actual cost of steel in
England, in order that they might be able to supply the United
States with products of which steel formed a large constituent part.

In concluding the several artillery, ammunition, and tank agree-
ments referred to above, the rights of Great Britain arising under
this "excess costs" claim were specifically reserved without preju-
dice to either party.

On August 1, 1919, the British presented their first written state-
ment of this claim, showing the amount involved according to their
accounting to be approximately £3,770,000. Among other conten-
tions put forth by them in support of the claim, one was to the effect
that, in all America's purchases from Great Britain of finished
articles of which steel formed a constituent element, America had
originally promised to replace the steel ton for ton in Great Britain.
They said that the stocks containing steel had been sold in great
quantities to America and billed on the basis of the British fixed
price of steel to manufacturers; that, the price of steel in America
being much higher than it was in England, America was liable to
Great Britain for the difference between these two prices on all
steel purchased by the latter country in the United States because
such purchases were necessary to replace the steel contained in prod-
ucts furnished to America. They have sought to apply here the prin-
ciple that, in cases of reciprocal supply, neither nation ought to make
a profit nor sustain a loss. In this case they insist that they have
lost money on all steel products furnished to America on the basis
of the bills already rendered.

The Commission has answered in part that the " replacement ob-
ligation " did not, and was never intended to, control or affect prices^
but was entered into as a measure of insurance to Great Britain that
she would secure steel tonnage from America at least equal to the
steel entering into the products sold by Great Britain to the United
States. When this replacement arrangement was agreed to neither
party was greatly concerned about prices, but both were very much
concerned about the allocation of bottoms for steel, because all of
the Allies were in great need of tonnage. It was further pointed
out that the replacement obligation had been entirely cancelled, with-
out reservation or condition, by the agreement concluded between the
representatives of America and Mr. Churchill, British minister of
munitions, in October, 1918,

58 UNITED STATES LIQUIDATION COMMISSION.

The Commission took the position, however, that it was the wish
and purpose of America to compensate Great Britain for every proper
element of cost which could be definitely assigned to products sold to
America by the British. With this in view the British representatives
undertook to ascertain (1) the average loss on all steel which the
British Government furnished to British manufacturers during the
year preceding November 11, 1918, the calculation being based on the
difference between government prices to manufacturers and actual
cost to the government, taking into account every direct element;
(2) the amount of such steel which has entered into products sold to
America by Great Britain; and (3) the hidden loss to the British on
all steel furnished to America as estimated in this way.

Such a calculation was made, and a memorandum setting forth the
items making up the costs was presented to the Commission by the
British representatives on November 10, 1919. This memorandum
furnished the basis of several conferences at which the Commission
pointed out that some of the items of alleged loss were too remote
and indirect in their nature to be considered as " costs." An example
of such indirect charges was an item covering bonuses paid by the
British Government to manufacturers of silica brick, for the pur-
pose of stimulating their production, that the brick might be used in
the building of furnaces for the production of steel for the manu-
facture of shells, some of which were sold to America. The Commis-
sion pointed out how impracticable it would be for each Govern-
ment to trace every remote and indirect element of cost which had en-
tered into the production of materials furnished to the other. Atten-
tion was called to the fact that, under the principle which Great
Britain was seeking to apply here, she might ask America to par-
ticipate in the subsidy which she had paid on the bread which the
workers in her steel mills had eaten. Another point which has been
urged by us is that Great Britain has not included any item of credit
to America for the large smns collected by her in the form of excess
profit and war profit taxes from her steel manufacturers.

The British have urged that both France and Italy have already
recognized the justice of the principle for which they are contending,
because these countries have paid to Great Britain two sets of bills
on all their purchases of steel products. One set covers straight cost
to the manufacturers, the other, or supplemental, set was based on the
price paid by Great Britain for American steel and represented a
" hidden loss " of the character described in the claim which they are
now presenting against us.

The British representatives are making additional studies of this
claim in the light of the objections which we have urged, and they
promise to present it again in revised form.

UNITED STATES LIQUIDATION COMMISSION". 59

OVERHEAD EXPENSE CLAIM.

Another important claim which is still pending is called the " over-
head expense claim." This matter arises out of a general claim by
the British Government for reimbursement for certain expenses such
as inspection, storage, handling, transportation, and insurance, con-
nected with materials which the British Government bought for us
from its own nationals or sold to us from its own stocks. The British
claim that there have been expenses, in addition to the face of bills
rendered by nationals, connected with handling this material in our
behalf between the time when it left the contractor and the time
when it came into the hands of the American Army. The problems
arising in connection with these so-called " overhead charges " have
been solved and all claims adjusted with the British ministry of
munitions.

With the British war office, however, the matter is still unsettled.
From July 29 to August 30, 1919, the overhead expense items in war
office bills were allowed. But, during August, the war office gave
notice that they intended to add 4 per cent, or such part thereof as
might be applicable, to all their overhead expense charged on bills
previously rendered and on all bills in the future. As it was be-
lieved that it would require a great amount of unnecessary work to
audit the overhead expenses, if they were presented in detail by the
war office; it was agreed that the British might present their claim
in lump-sum form ; and, as it was thought best to make no payments
which might interfere with this proposed arrangement, a memo-
randum was issued on August 30 suspending all payments for war
office overhead expenses. This memorandum is still in effect. The
British have presented their lump-sum offer in tentative form, and
the total claim amounts to nearly £1,000,000. The Commission has
made it clear to the British representatives that some of the items of
this claim can not be considered because they are too indirect ; such
items for example as pertain to Government administrative expenses
or interest on capital investments. Other items are believed to be
proper charges against America and should be allowed when they
are suitably presented and established.

SUPPLEMENTAL CLAIM FOR RAILWAY TRANSPORTATION.

America has paid Great Britain for the railway transportation
of troops and supplies at her established military rates, payments
being made when and as the services were rendered. During the
war Great Britain made certain guaranties of income to her railroads
under which she is now being called upon to pay substantial sums.
A short time ago she reached an agreement with her railroads in

60 UNITED STATES LIQUIDATION COMMISSION.

terms of which there is an increase in the military rates for the
transportation of troops and supplies, this increase being retroactive
to the extent that it applies from April 1, 1919, forward. The sug-
gestion has been made that the British now render supplemental
bills against America on the basis of these increased rates covering
all items of transportation of our- troops and supplies since April
1, 1919.

The Commission has said to the representatives of Great Britain
that America can not consider any such claim. It has been pointed
out that the United States might make an analogous claim against
Great Britain for the payment of her share of the loss which has been
sustained by our Government in taking over the operation of our
railroads during the war period. This share might be calculated by
determining the ratio of transportation for the British to the total
transportation in America. Were we to recognize the right of Great
Britain to bind us by retroactive agreements there might be no limit
to the liabilities which Great Britain might incur for our account
in revising contracts for munitions, supplies, and services and in
other ways. Likewise if the United States should begin all over
again to calculate the exact cost to her of everything which she has
procured from her own nationals in behalf of Great Britain every
settlement which has been made would have to be revised.

CONTRACT CLAIMS OF NATIONALS.

During the war it became necessary for the American Expedition-
ary Forces to enter into contracts for the purchase or manufacture
of war supplies with the nationals of France, England, Italy, Spain,
Portugal, and Switzerland. A large number of these contracts were
active when the armistice was signed, and for the most part these
were promptly cancelled in whole or in part according to the state
of production and the extent to which the products would be used
by the American forces. The cancellation of these contracts in
most instances necessarily involved losses to those with whom they
had been placed; but, as the resulting damages were unliquidated
in their nature, there was some doubt as to the right of the several
services of the American Expeditionary Forces, or of the War De-
partment, to settle same. This doubt was removed by Congress
when it passed the act of March 2, 1919, conferring broad powers
upon the Secretary of War, and through him upon the Commission,
to make equitable adjustment of all such claims.

Searching and painstaking investigations were made through the
several services which had negotiated the contracts of manufacture
and purchase in the first instance, and their reports were in turn
reviewed and frequently supplemented by the Chief Finance Officer,
who in turn transmitted the files to this Commission, where they

UNITED STATES LIQUIDATION COMMISSION. 61

were again subjected to a careful examination and frequently were
the subjects of conferences between the claimants, the chiefs of the
services interested, the Finance Officer, and members of the Commis-
sion or of the Commission's staff. It became necessary from time
to time for the Commission to send claims back for re-investigation,
re-study, and re-consideration, and in several cases, notably those
arising in Switzerland and Spain, special representatives were sent
by the Commission to make first-hand investigations and reports.

There were in all allowed 446 claims for cancellation of contracts,
besides a number of disputed bills payment of which the Commission
authorized. Indemnities have been paid in the currencies of the
various nations where the matters arose and the rates of exchange have
varied. Almost everywhere the rate has been considerably below par.
The total amount claimed, expressed in dollars at the normal rate of
exchange, was $17,427,175.41, while the total payments made, expressed
in dollars at the normal rate of exchange, amounted to $8,413,984.19.
There have been 53 contract claims disallowed for various reasons.
Their total in dollars at the normal rate of exchange would have
been $739,894.91.^2

SETTLEMENTS WITH FRANCE.

FRENCH ARTILLERY AND AMMUNITION SETTLEMENT.

During the latter part of July, 1918, Edward R. Stettinius,
then special representative of the Secretary of War, began, in the
light of the increased military program of the United States, to
negotiate with the French and British Governments for increased
allotments of artillery and artillerj'^ ammunition. Numerous esti-
mates were exchanged between him and the French officials, and
French production was increased and pressed to its fullest capacity
in order to meet America's needs.

While no formal contract was ever entered into between the two
Governments, and while neither the exact number of guns which
the French could furnish, nor the exact number of components for
them which the United States could supply was ever definitely agreed
upon, there is no doubt that the United States relied upon the French
to assist them substantially in their artillery program, and that the
French enlarged their production with this in view. A list of the
materials and components which America could supply was drawn
up, and a list of the guns which the French could supply, expressed
in terms of numbers per month, was prepared. Both lists were cor-
rected from time to time and a discussion of these figures continued
until the date of the armistice. In the meantime, however, orders

^ See Appendix XXV for a chart showing the number of claims settled, the total
amount claimed in all cases where specific amounts were claimed, the amount allowed
by the Commission, and the number of claims disallowed.

62 UNITED STATES LIQUIDATION COMMISSION.

were regularly given, and stocks delivered by both parties in pur-
suance of the general understanding.^^

It was understood that the price to be paid by America should be
cost to the French Government. A& the signs of an approaching
armistice began to be detected, efforts to conclude these arrange-
ments in a formal contract were halted, but it was always perfectly
clear that America was obligated to France in regard to the guns
which the French had in process of manufacture for America.

Immediately following the armistice, Mr. Stettinius began negotia-
tions looking to a fair and equitable settlement of these obligations
to the French, with a view to reducing our investments to a mini-
mum, yet at the same time getting, in the form of completed artillery
units, as nearlj^ as possible value received for the money invested.
In the first conference held with the French authorities it developed
that France could not, for economic and social reasons, suddenly
cease production, and that they were inclined to hold us responsible
for accepting large deliveries.

Mr. Stettinius took the position, which he steadfastly and con-
sistently maintained, that the United States ought not to pay for any
materials which had been produced as a result of continuing the
operation of French factories beyond the war period in the interest
of the social and economic welfare of France, and for the benefit of
her people. The French authorities finally acquiesced in this posi-
tion and in December, 1918, Mr. Stettinius had in conference with
M. Loucheur, representing the French Government, agreed in prin-
ciple upon the terms of a settlement.

An inventory was made of the guns in process, with percentages
of completion on the date of the armistice. These figures were re-
duced to terms of completed guns, and America agreed to accept de-
livery of and pay for that many guns, orders for all others being
cancelled, without charge. The artillery ammunition in common
dumps was to be sorted, America taking all of the American manu-
facture, and France all of French manufacture. Contracts under
which the French were to complete shells and load them and con-
tracts under which America was to furnish empty shells were to be
mutually cancelled without charge.

It is believed that the underlying principles of this settlement are
fair and just to both parties. Certain it is that America has no cause
for complaint. As soon as the Commission was established the terms
of this pending settlement were discussed at length by the commis-
sioners with Mr. Stettinius and measures were taken to apply the

33 See Appendix XXVI for (1) a catalogue of artillery components to be furnislied
by United States to France, and (2) a catalogue of guns to be furnished by France to
United States, as established in the arrangement between Stettinius and Mercier on
Sept. 19 and 21, 1918. These figures were never greatly changed, and they were actually
acted upon by the two Governments in order to save time.

UNITED STATES LIQUIDATION COMMISSION. 63

principles already tentatively established and to reduce the matter
to a formal contract, which, however, was not finally executed until
August 28, 1919.3*

The terms of this contract may be briefly summarized as follows :
First. France delivers to the United States —

(a) 944 75-millimeter gun materials, model 1897, with limbers.
(h) 700 155-millimeter howitzer materials, model 1917, Schnei-
der design, with limbers.

(d) Additional spares as specified.

France waives all claims for indemnity for the cancellation of
arrangements for the purchase of artillery components and ammu-
nition.

Second. In consideration of such deliveries the United States,
in the general settlement with France, credits the latter with
117,501,887.45 francs.

Under this settlement the United States has acquired artillery units
of standard types at cost without being required to take and pay for
an}^ additional ammunition, with which we are already abundantly
supplied, and without the payment of $1 in the form of cancellation
indemnities.

FRENCH AIRCRAFT SETTLEMENT.

When the armistice was signed, there was being manufactured by,
or through, the French Government in various factories in France,
for the use of America, large numbers of airplanes, and large quan-
tities of aeronautical material under a contract dated May 3, 1918,
and signed by Gen. Pershing. By the terms of this contract, written
orders were placed from time to time with the French air ministry,
which in turn allocated them to particular French factories. The
price to America was to be the same as that paid by the French
Government for similar articles contracted for at the same time and
on similar terms ; or, if there were no such contracts, then it was to
be the same as the price on current contracts of the French Govern-
ment for similar articles plus, in either case, 5 per cent for inspec-
tion, supervision, and other overhead expenses. The contract would
have expired on June 30, 1919, and it provided for the delivery of
a certain number of planes each month. It contained no cancella-
tion clause, but the French Government had a cancellation clause in
each of its contracts with the manufacturers.

On November 11, 1918, the American Air Service wrote to the
French air ministry giving informal notice of cancellation of all
orders for aeronautical materials, and negotiations were at once

s* See Appendix XXVII for copy of (1) French artillery and artillery ammuniUon
contract dated Aug. 28, 1919, and (2) supplement to French artillery and artillery
ammunition contract dated Nov. 20, 1919.

64 UNITED STATES LIQUIDATION COMMISSION",

begun between Mr. Stettinius and the chief of the air service, Ameri-
can Expeditionary Forces, representing America, and M. Tardieu
and the French air ministry, representing France, looking to an
equitable adjustment of the respective- rights and liabilities of the
parties arising under this contract and its cancellation. Each
party instituted separate far-reaching and intensive studies of the
conditions of manufacture of these materials, factory by factory,
in order to ascertain the actual loss to France in cancelling these
contracts. *

A survey made by an American Air Service committee, con-
sisting of 17 officers and 2 civilians, was completed by the latter
part of December, 1918, This survey showed (1) the number of
cellules (airplanes without motors) of various tj^pes allocated to the
American Expeditionary Forces; and (2) the number of cellules
actually in process of construction, together with their percentage
of completion. With these data in hand, the percentage of com-
pletion of cellules under construction was reduced to an equivalent
of completed cellules, and their purchase price under the contract
computed. These computations were made with a view to proposing
to the French that America might satisfy her obligations in respect
to this contract and its cancellation, by taking and paying for com-
pleted cellules in place of taking and paying for a large quantity
of materials in process, of which the estimated salvage value was
only about 5 per cent of the cost of production.

There were w^ide discrepancies between the estimates made by the
American and French services respectively, and it was only after
long and painstaking conferences and diligent study that these differ-
ences were finally reconciled and adjusted. The problems presented
by this settlement were among the first taken up by the Commission
after it reached Paris. The negotiations and work were carried on
under the supervision, and with the approval of the Commission, by
Maj. Gen. Patrick, Chief of the American Air Service, and the mem-
bers of his staff, and an agreement with the French was reached in
May, providing for the following payments by America :

Francs.

For 3,568 cellules in process 56,295,662

For 3,979 motors in process 64, 563, 788

For " cancellation costs " °^ 14, 710, 537

For spare parts in process ^° 19,962,553

For cancellation of spares 8, 225, 004

For miscellaneous materials in process 3, 496, 628

For cancellation of miscellaneous materials 413,589

167, 667, 761

=* The " cancellation costs " were for raw materials, commitments, and labor, less
salvage value, in connection with articles ordered but not yet in process of construction.

* The " spares " and miscellaneous articles represented aviation accessories in process
of manufacture, calculated on the same basis as that of cellules and motors.

UNITED STATES LIQUIDATIOlSr COMMISSIOlSr. 65

This settlement contemplated that aeronautical material of the
value of 144,318,631 francs was to be delivered to the United States
and paid for by it; while the United States was to psij 23,349,130
francs " cancellation costs." France released the United States from
any further obligations under the contract of May 3, 1918, and sub-
sequent orders placed pursuant to its terms. The underlying prin-
ciple of the settlement was to find the actual cost to France of mak-
ing the cancellations, and then, instead of the United States accept-
ing salvage value only — estimated at 5 per cent — on left-over mate-
rials, it should as far as possible take deliveries of these materials
in t&rms of finished products. From what follows, it will be seen
that the agreement concerning deliveries under this settlement was
considerably modified in connection with the settlement of our '' Lib-
erty motor" claim.

LIBERTY MOTOR SETTLEMENT.

About the middle of May, the Commission, Mr. Cuthell, Gen.
Patrick, and members of his staff presented to the French air minis-
try America's claim against France growing out of the production
of Liberty motors in the United States. After several conferences
with the French authorities, it was agreed that the same principles
which governed in the settlement of the claim of France against
America for the cancellation of the aircraft contract of May 3, 1918,
should apply to the settlement of the Liberty motor claim. By this
method it was established that France owed the United States the
sum of $21,272,250, of which $19,530,000 represented the cost of
Liberty motors and spare parts which France was entitled to receive
from America, and the remainder represented cancellation indem-
nities.

The Iwo settlements of large and complicated transactions, by the
application in each case of the same general principles, left America,
on the one hand, obligated to deliver to France a large number of
Liberty motors, spare parts, and materials, much of which was in the
United States, and for which Fraaice had no particular use ; and, on
the other hand, left France obligated to deliver to the United States
a large number of airplanes and airplane materials which were lo-
cated in France, and for which America had no particular use.
France did want 500 Liberty motors, and America did want a small
part of the quantity due her of airplanes and materials. The French
took delivery of the 500 Liberty motors, and America took delivery
of a number of airplanes and spare parts of the types which she
could use to the best advantage, leaving with France airplanes and
spare parts which America was entitled to receive of a cost value
sufficient to balance the cost value of the Liberty motors which
183176—20 5

66 UNITED STATES LIQUIDATION COMMISSION'.

France was entitled to receiA e but did not take from America, At
this point, the mutual obligations to deliver were canceled.^^ In
this way both parties were relieved from taking delivery of equip-
ment and material which they did not- need, and the enormous ex-
pense of handling and transportation, both by land and sea, was
saved.

The Liberty motors and spare parts belonging to the United
States in France were used in filling our obligations to make deliv-
eries to England, in accordance with our Liberty motor settlement
with her:^* and a limited number of them were sold to Poland.

TKENCH TRANSrOKTATION SETTLEMENT.

When the American Expeditionary Forces arrived in France they
found that all transportation for the French Arm}^ was being for-
warded on " Ordres de Transport " signed by French Army officers,
and that British troops and materials were going forward on like
orders signed by British officers. An agreement was promptly per-
fected with the French Government providing for the transporta-
tion of American personnel and supplies over French railroads under
the same arrangements, the orders being signed by American offi-
cers. When the Commission took up its work it found that, although
the matter had been the subject of careful consideration and numer-
ous conferences, not one cent had ever been paid France or the French
railroads on account or otherwise, no rate had ever been fixed, nor
had any formula or agreement been reached as a basis for payment
by America for the extensive services rendered her by the railroads
of France.

During the war the American Expeditionary Forces brought to
France and put in operation on the French railroads approximately
1,100 locomotives and 17,000 cars. In addition it established large
depots, regulating stations, and repair shops, together with about
tiOO private sidings to connect our installations with the main lines.
Our Army furnished to the French railroads engine crews, train
crews, repair shops, and personnel, together with all kinds of rail-
way materials and supplies. All of these services were rendered,
and all of this equipment was furnished, without any particular
agreement for compensation, although there was always of course
the general understanding on both sides that everything was to be
for " cost ". to the supplying nation.

The reason for the absence of specific agreements on this, as on
several other important matters, is to be found in the enthusiasm and

*^ See Appendix XXVIII for a copy of the contract between the United States, acting
through the Liquidation Commission, and France, acting through the Minister Aero-
nautique, dated Nov. 8, 1919, with exhibit attached.

3^ See p. 52, this report.

UNITED STATES LIQUIDATION COMMISSION. 67

energy with which eAerybody's attention during; the war was very
properly concentrated on the problem of driving forward the mili-
tary program. The accounting and final reckoning always received
secondary attention. ^Vhen the Commission took up this problem,
in March. 1919, it found both the American and French transporta-
tion records extremely difficult to handle because so little had been
done to make cumidati^e summaries from time to time and because
some of the records were incomplete. It was only after a series of
conferences participated in by the commissioners and members of
their staff and extending through many days and weeks, in which
every avenue of information was explored with painstaking care and
various facts and theories of the case were developed, that the Com-
mission was able to formulate and propose a basis for settlement.

In 1898 the French Government entered into an agreement called
the Traite Cotelle with the six principal railroad companies of
France. This covenant provided for the rates and conditions of
military transportation in time of war and it was to continue in force
for a period of 10 years, subject to renewal at the option of the
government. The rates fixed by it were intended to reimburse the
railroads without profit for the services to be rendered, and the
estimates upon Avhich they had been calculated were based on the
low commercial rates existing in 1898. The theory at that time was
that the impending war would be of short duration and that the rail-
roads would be able to handle the large volume of traffic involved in
mobilization and demobilization of the Army at very low figures.

This expectation was not realized. The volume of traffic sur-
passed all estimates and the cost of operation steadily advanced. As
the war went on and the condition of the French railroads became
w^orse and Avorse. the demand from the railroads became A^ery in-
sistent that the rates provided for in the Traite Cotelle should be
substantially increased. It was not, how^ever, until the spring of
1919 that a new agreement was concluded between the French Gov-
ernment and her railroads. The increases provided for in this new
agreement are not excessive. In fact, some of the experienced rail-
road men connected with the American Expeditionary Forces' trans-
portation service with whom the Commission consulted, have advised
that justice to the French railroads recjuired still greater increases.

The charges for the railway transportation of our troops and
supplies in France were, of course, ultimately due to the individual
French railroad companies, the railroads being privately owned.
But, when our troops entered France, the French Government had
assured us that we should have the use of all of the transportation
facilities in France on the same terms which their Government en-
joyed and all of our original dealings were directly with that
government. Moreover, the French Government owed its railroads

68 UNITED STATES LIQUIDATION COMMISSION.

a much largei- sum than we owed them and they were anxious that
we should not make independent settlements with the individual
lines and thus establish precedents which might embarrass them in
their own dealings with the railroad 'companies of their country.
From America's viewpoint it was clearly to our advantage to deal
with the French (jovernment instead of directly with the railroads
inasmuch as the statements of account and settlements with the fi
trunk lines and 79 secondary lines would have required a very large
corps of accountants and an enormous overhead expense, whereas
by dealing with the government directly we were able to make one
final settlement and leave behind no claims to arise and annoy us
in the future.

In discussing the settlement, the Commission insisted upon a
fundamental principle which was finally accepted by the French
(xovernment, viz, that America would pay for transportation of her
personnel and freight at the same rates at Avhich the French Army
paid, provided that the rate fixed shoidd not yield, out of the share
coming from military transportation, a higher operating revenue
than the average operating revenue for the three years prior to 1914.
This principal was an important factor influencing the French Gov-
ernment and the French railroads in their revision of the Trnite
Cotelle. The ncAv military rates were designed to wholly reimburse,
without profit, the French railroads for the cost of the services which
they had performed, including in that cost such share of a fair rate
on invested capital as could be justly assigned to the military services
rendered, but not including enough to make up the deficit which had
resulted from inadequate commercial rates during the war.

Numerous troublesome questions arose in connection with the
application of the general principle ; for example, the question of the
rental rates to be paid by French railways for the larger and more
expensive American engines, the proper rentals for American freight
cars, which were double the size of the French ones, the proper freight
rate by carload lots in the larger cars, etc. It was found that, in
addition to the claims against us for transportation of personnel and
freight over French main line roads, there were a large number of
claims for transportation over 79 secondary lines, claims for main-
tenance of about 800 private sidetracks and connections built to reach
American installations, claims for switching and denmrrage, for
rental of French locomotives leased to America for yard service, for
rental of buildings and other facilities, for French employees en-
gaged in private service in American yards, for supplies including
coal, oil, waste, heat, light and power, for the upkeep of American
rolling stock by the French, for damage to certain equipment and
materials by America, for construction expenses including a large
claim for construction work on the secondary railways used for

UNITED STATES LIQUIDATION COMMISSION. 69

American forestry operations, and for various other services and
supplies.

As a partial set-off to these claims America had a long list of mis-
cellaneous claims against the French railroads and the French Gov-
ernment. They were for rental of locomotives and cars, for services
of train crews, for the repair of French cars and locomotives, for
coal, oil, waste, and other supplies furnished to the French railroads
for their engines, for loss and damage, theft or appropriation of
American freight, for unloading and handling at ports materials for
the French Government, for reconstruction work on French railways,,
in the zone of the advance east of Verdun, for rent of Belgian loco-
motives leased by America from Belgium and re-leased to French
railways, for erection by America of locomotives and cars for French
railroad companies and for the French Government, and for various
other services and supplies.

For the purpose of handling this problem and reaching a settle-
ment the Commission created a special section headed by Col. F. A.
Delano, I deputy director general of transportation of the American
Expeclitionary Forces and formerly president of the Wabash Rail-
road and a member of the Federal Reserve Board. This section
undertook to reduce these claims and counterclaims to concrete form
and to state an account between the United States, on the one part,
and the French Government and the French railroads, on the other
part. Finally, |after several months' work on the part of Col. Delano
and his staff, an account was stated covering all transportation mat-
ters arising betAveen April 6, 1917, and October 1, 1919, which
showed :

Due by United States to France: Francs.

For transportation of all freight and troops 430,000,000.00

For miscellaneous charges - — 71, 107, 336. 53

501, 107, 336. 53
Due by France to United States :

For miscellaneous charges 66,121,946.80

Net balance due by United States to France 434,985,389.73

It was with some difficulty that the French Government was per-
suaded that the settlement should cover not onlj^ the particular items
which had been the subject of controversy but also any and all
claims which might be presented in the future in connection with
the American use of French railroads during this period, and that
it should cover the use of French railroads by naval forces and Army
auxiliary services, such as the Red Cross, Young Men's Christian
Association, Knights of Columbus, Salvation Army, and Jewish
Welfare Society. The contract as eventually signed finally disposed
of every claim or demand of every nature arising between the two

70 UNITED STATES LIQUIDATION COMMISSIOlsr.

parties which was definitely connected with raih-oad transportations,
inchidinir claims for loss or dama<)^e to f reioht and damage to railroad
property. In other words, the railroad transportation settlement,
dated October 1, 1919,^- is a full, final, and complete settlement be-
tween the United States on the one part, and the Republic of France
and the French railroads on the other part, for all claims of any
nature arising in connection with transportation by rail in France
prior to October 1, 1919, and France agrees to indemnify and save
America harmless against any such claims on the part of French
railroad companies. ^

The contract further provides that —

On and after October 1, 1919, and until December 31, 1919, France will
furnish or cause the French railroads to furnish transportation over the
French railroads for the personnel, animals and freight of said forces at the
same rates at which, and on the same terms and conditions tinder which, the
said railroads shall, during the same period, furnish transportation for the
personnel, animals and freight of the French Army.

The payment to France of 434,985,389.73 francs settled all bills
for carrying and recarrying 2,000,000 men over the longest lines of
communication of any of the armies operating in France, including
their travel on leave. It settled the bills for carrying the American
Army of Occupation over French railroads to and from Germany,
and it settled the bills for transporting and handling over 15,000,000
tons of freight. This figure averages onlj^ slightly in excess of 200
francs for each man to cover all his travel by rail during his entire
stay in France; while the cost per ton per mile for handling the
freight is only about one-half of the corresponding cost per ton per
mile for the ocean transportation of the same materials.

FRENCH PORT DUES SETTLEMENT.

The port facilities of France are built by funds appropriated from
the national treasury. The chambers of commerce of the ports, how-
ever, assume responsibility for re-paying the treasury its investments,
and for administering and maintaining the facilities. Funds for this
purpose are raised by means of a charge on each vessel which enters,
known as "port dues" {Taxes de Peage).

Early in the war, national vessels of France and her Allies were
exempt from the tax, but on November 17, 1917, the exemption was
cancelled, and all vessels, French national and allied national, as well
as privately owned vessels, were charged the regular port dues. The
United States never made any current payments of these dues. Be-
fore the Commission went to Europe, however, the question of our
payment had been taken up by the French ambassador at Washington

»» See Appendix XXIX for copy of railroad transportation contract, dated Oct. 1, 1919,
between France and United States.

UNITED STATES LIQUIDATION COMMISSION. 71

who had secured a general promise from our Government that they
should be paid. The American Expeditionary Forces had tried to
arrive at a temporary settlement, first with each port, then w^ith the
French Government, but no settlement had been reached.

The different chambers of commerce had been presenting- claims
for port dues to the American Expeditionary Forces without any
uniformity in the basis of calculating rates; some were very high,
and some were very low. We had dealt with the French Government
alone, and not with the port authorities, in arranging for our entries
into French ports; so, when the Commission took up the case, it
pressed the French Government to make a general settlement for
port dues and take over the responsibilities of the United States to
the separate chambers of commerce. Several methods of calculating
a lump-sum payment were suggested. The first was to have the total
expenses chargeable to the port-dues fund calculated for each port
for the period during which the port had been used by American
vessels, the United States paying a portion of that sum equal to the
ratio of her shipping to all other shipping at the port. This plan
was rejected by the French authorities.

The French proposed that we pay commercial rates, minus certain
exemptions for vessels carrying military personnel and munitions.
The total charges calculated on this basis would have been approxi-
mately 4,825.000 francs. This plan was rejected by us.

The water level had been raised at St. Nazaire. practically for our
sole benefit, and at French expense. On the other hand, we had put
in docking facilities at numerous ports which had been used by the
French Snd others as well as by our vessels. After a series of nego-
tiations, the French agreed to allow a reduction of 50 per cent from
commercial rates at Bordeaux and 40 per cent at all other ports. The
fees were calculated on this basis, and finally the French agreed to
accept a lump-sum payment of 3,000,000 francs to cover dues for
the entries of all vessels of the United States or vessels serving the
United States between April 6, 1917, and the complete evacuation of
France by American forces. The contract was signed October 1,
1919.«

It covered (a) port dues or tonnage dues, which are entry charges
based on tonnage of ships, tonnage of cargoes, and the number of
passengers landed; (h) the raising of water level; and (c) dredging
operations. There were excepted from the terms of the contract
such special charges as (a) pilot's fees; (7j) fees for the use of cranes,
hangars, lighters, warehouses, railroad trackage, etc.; (c) bills for
coal, water, light, and other supplies; (d) repairs; {e) trimming
charges; and (/) port sanitary inspection and hospital fees.

*" See Appendix XXX for copy of contract dated Oct. 1, 1919, and evidencing the
general settlement of port dues with France.

72 UNITED STATES LIQUIDATION COMMISSION.

We used 15 ports in France. At the 6 principal ones, the per-
centage of our commerce to that of the total entering after April 6,
1917, was as follows: At St. Nazaire, GO per cent; at Bordeaux, 27
per cent ; at Nantes, 33 per cent ; at La Rochelle, 46 per cent ; at Brest,
53 per cent; at Marseille, 19 per cent. No current payments had
been made.

GENERAL SETTLEMENT WITH THE FRENCH GOVERNMENT.

When the Commission arrived in Paris, it found that the Ameri-
can Expeditionary Forces were paying in francs all bills rendered
against them by the several departments of the French Government
for supplies, equipment and material and for services, while France
was settling like bills rendered by the American Expeditionary
Forces and the War Department of the United States through credits
extended by the Treasury Department of the United States. On
April 15, 1919, this practice was discontinued by direction of the
Commission, and an agreement M^as reached with the French Gov-
ernment, in terms of which invoices should be rendered by each
government against the other coveriAg all bills, accounts, claims,
and demands of every nature whatsoever growing out of or con-
nected with the war, and these invoices should be checked, audited,
corrected, or approved, but held in abeyance unpaid until such time
as a final statement of account between the two Governments could
be prepared ; and the obligations of one Government were then to be
set off against the obligations of the other.

It was later agreed that this general settlement should embrace all
transactions arising between the 6th of April, 1917, and the 20th of
August, 1919, between the War Department of the United States and
the American Expeditionary Forces, on the one part, and the Re-
public of France, on the other part, and that all bills, accounts or
claims not presented on or before September 6, 1919, should be for-
ever barred. Pursuant to this arrangement, all possible pressure
was brought to bear by the Commission through the several services
of the Army and otherwise to have prepared and presented, liefore
September 6, proper bills, accounts and invoices for all amounts due
from France to us, and the results were gratifying.

Immediately following September 6, a series of conferences were
held between representatives of the several services of the Ameri-
can Army and representatives of the corresponding services of
the French Army, which were attended and directed by H. T.
Klein for the Commission. It was the purpose of these conferences
to adjust and reconcile all items of the long account. The differences
which could not be adjusted in this way were taken up by the Com-
mission directly with M. Edouard Boulanger, Controleur de I'Ad-

UNITED STATES LIQUIDATION COMMISSION. 73

ministration de TArmee, who was designated by the French Govern-
ment to act in this capacity. After numerous prolonged conferences,
satisfactory adjustments were reached, an account was stated, and
two contracts were drawn, evidencing a final and complete settle-
ment.*^

In the contract of general settlement, dated November 25, 1919,
evidencing full, final, and complete settlement of all accounts, initi-
ated, arising, or accruing between the 6th day of April, 1917, and
the 20th day of August, 1919, in respect of transactions between the
War Department of the United States and the American Expedi-
tionary Forces on the one part and the Eepublic of France on the
other part, with four enumerated exceptions, the releasing clause
reads as follows :

The Republic of France does hereby fully, completely, and in all things re-
lease and discharge the United States of America, and the United States of
America does hereby fully, completely, and in all things release and discharge
the Republic of Frarice, in respect of the transactions aforesaid, from all bills,
accounts, claims, obligations, demands, rights, causes of action, suits, and con-
troversies, of every nature whatsoever, which either party now has against the
other, or which may hereafter arise, whether by reason of or in anywise inci-
dent to or growing out of the delivery or contract for the delivery of materials,
supplies, or equipment, or for services rendered or contracted to be rendered,
or for the occupation and use of all public properties of France and all damages
thereto or otherwise, initiated, arising, or accruing during the said war period
between the said War Department on the one part and the Republic of France
on the other part.

The contract recites that the total of all franc credits due by each
party to the other shows a net balance in favor of France of 1,488,-
619,027.52 francs, which America agrees to pay to France ; and the
total of all dollar credits due by each party to the other shows a net
balance in favor of America of $177,149,866.86, which France agrees
to pay to America. The question of the form of payment and the rate
of exchange is noM^ being negotiated between the French representa-
tives in the United States, on the one part, and the representatives of
the United States War and Treasury Departments, on the other part.

The contract further provides as follows :

Article II. Nothing hereinbefore contained shall be held or construed to in
anywise annul, alter, modify, or affect the obligations of France held by America

« See Appendix XXXI for (1) copy of the contract dated Nov. 20, 1919, between
the War Department of the United States and France evidencing the general settlement
of all mutual accounts, claims, and demands arising in Europe, and (2) a copy of the
balance sheet used as the basis of the settlement; and Appendix XXXII for (1) the
contract of general settlement dated Nov. 25, 1919, which concludes all matters outstand-
ing between the War Department of the United States and France, whether arising in
Europe or not, with the exception of four matters specifically enumerated, and (2) a
copy of the balance sheet used as the basis of the settlement. The accountants' records
relating to the settlement are in the files of the Commission,

74 UNITED STATES LIQUIDATIOlSr COMMISSION.

or the obligations of either party liereto arising out of the following special con-
tracts or agreements, namely :

{a) The contract between America and France dated August 1, 1919, where-
by America sold and France purchased certain properties therein referred to,
France agreeing to pay therefor the sum of four hundred million ($400,000,-
000) dollars, with interest thereon, at the time and under the terms mentioned
tlierein ;

(&) The contract between America and France for the settlement of rail-
road transportation and other claims, dated October 1, 1919, in which America
agrees to pay France the sum of four hundred and thirty-four million nine liun-
dred eighty-five thousand three hundred eighty-nine and 73.100 (frs. 434,-
985,389.73) francs;

(c) The contract between America and France for the settlement of all port
dues and similar claims, dated October 1, 1919, in which America agrees
to pay France the sum of three million (frs. 3,000,000) francs;

{d) All contracts, agreements, or arrangements entered into between America
and France for or in connection with sales made by America to France in the
United States since November 11, 1918.

Article III. This contract shall not operate as a release or modification of
or in anywise affect whatever claim France may now have against America
growing out of services rendered by France to America during the war period in
connection with the ocean transportation of American troops.

The importance, from every point of view, of this comprehensive
and far-reaching settlement between the two Governments can not
be too strongly emphasized. Innumerable disputed accounts would
almost certainly have arisen during succeeding years and they might
have become a source of bitter controversy.

Since the consummation of this general settlement France has
presented certain claims aggregating more than $10,000,000. These
were carefully considered by the Commission in conference with
the French representatives, and the conclusion M^as reached by the
Commission that they should be declined and under no circumstances
should the general settlement he re-opened. The accounts are now
clear and the books of both parties are balanced.

INDEMNIFICATION OF AMERICA BY FRANCE AGAINST ALL CLAIMS OF
NATIONALS FOR TORTS, WORKMEN'S COMPENSATION, RENTS, REQUISI-
TIONS, AND DAMAGES.

The general settlement made with France affords America no pro-
tection against tort claims of French nationals, claims of nationals
based on the workmen's compensation act, or claims of nationals for
rents, requisitions, or other damages. These claims were handled
in France by the Renting, Requisition, and Claims Service of the
American Expeditionary Forces.

When the Commission took up its w^ork it found that the Renting,
Requisition, and Claims Service had an admirable organization,
functioning under the direction of Col. Blanton Winship, the staff of

UNITED STATES LIQUIDATION COMMISSION. 75

officers being composed largely of men drawn from such civilian
pursuits as law, architecture, and engineering. The Commission
deemed it the part of wisdom not to interfere unduly with this
work, which was being well done; but in a general way, through
Col. Winship and the members of his staff, to keep in touch with
the work, and, by means of informal conferences, to define the general
policies to be carried into effect.

This ser\dce had been organized in the spring of 1918, pursuant
to the act of Congress of April 18, 1918, which conferred upon the
War Department of the United States the right to pay indemnities
for damages caused by the American forces in Europe to persons
and property of friendly nationals, providing such claims "should
be payable according to the law or practice governing the military
forces of the country in which they occur."

The activities of this service embraced the work of (1) billeting
troops and settling claims for damages to billets {degats) ; (2) rent-
ing lands and buildings, and paying the rentals; (3) requisitioning
real and personal property; (4) examining and settling all claims for
personal injuries and damages to property; (5) handling admiralty
claims arising in European waters; and (6) to a limited extent,
under the direction of the Commission, investigating and adjust-
ing claims for personal injuries or loss of life, under the French
workmen's compensation act, of the laborers employed by the mili-
tary forces of the United States.

This service paid out 50,108,091 francs for billeting American
troops in France, and the accounts show 8 centimes (or, at the rate
of 10 francs to the dollar, less than 1 cent) per day per man as the
average cost of billeting our troops. This European method of
quartering of troops is much cheaper than tenting the men. Under
the Act of April 18, 1918, the service has investigated and settled
38,299 claims, in which the total amount claimed was approximately
15,000,000 francs, paying in complete settlement a total of 8,337,-
719.07 francs. It has investigated and declined 13,446 claims under
this same act, where the amount claimed exceeded in all 10,000,000
francs. In the case of 552 of the claims which were disallowed, a
liability was admitted by the service, but the claimant refused to
accept the amount offered in settlement. This service has paid, for
the use and occupation of real estate, 38,421,780 francs, and for
damage to real estate, 9,623,309 francs.

The work of the service was carried on in 72 Departments of
France, in England, and other places Avhere the American Army
operated. The number of its personnel has changed considerably
from time to time, being highest in June, 1919, when the staff con-
sisted of 663 officers, 37 field clerks, and 1,065 enlisted men, organ-
ized into 52 companies.

76 UNITED STATES LIQUIDATION COMMISSION.

The AYork has been well done, and Awhile the total amount paid has
been large, no individual case was settled without the careful investi-
gation of a competent officer. The total overhead expense of main-
taining the service was estimated at $3,000 a day on September 1.
1919, and at 25,000 francs per day on December 1. 1919.

While the Renting, Requisition, and Claims Service made a deter-
mined drive to dispose finally of all claims within its jurisdiction by
the time the other matters in France should be liquidated, it was
found that new claims were being constantly presented, and claims
W'hich had been declined because of excessive demands, or otherwise,
w^ere being re-opened. The service had, on December 1, 1919, claims
against the American Expeditionary Forces for rentals where the
rate was fixed, amounting to more than 1.500.000 francs, and claims
for damages to leased property estimated at 4.000.000 francs. It
had on file unsettled claims for use of and damage to requisitioned
property estimated at 1,500,000 francs. There were a few unpaid
billeting claims and claims under the workmen's compensation act
for over 500,000 francs. Many of the matters which had not yet
been concluded at this time were those involving peculiarly difficult
or delicate problems where the parties had been unable to reach an
amicable and satisfactory adjustment.

In order to avoid the necessity of maintaining the Renting, Re-
quisition, and Claims organization in France for an indefinite period
to investigate and adjust pending claims, as well as dormant ones
which were constantly being presented, the Commission co-operating
Avith the commanding general of the American Expeditionary Forces,
began negotiations with the French Government as early as August^
1919, with a view to inducing it to step into America's shoes and
take over these investigations and settlements. It was urged that,
since the French Government already had an organization which
was engaged throughout France in handling claims of this character
and would continue in that work, there would be a very small addi-
tional overhead expense connected W'itli their taking up claims in
behalf of America. It was made clear that it was not our purpose
merely to save money by foisting upon France an expense which
should be borne by America; but that, because America would be
eliminating a large overhead expense, she could afford to make to
France a full and even liberal payment in order to induce France
to undertake this work.

After careful study of the problem and numerous conferences by
authorized representatives of the French Government appointed for
that purpose, on the one hand, and by the Commission, the command-
ing general, American Expeditionary Forces, and the Director of
the Renting, Requisition, and Claims Service, on the other hand, an
agreement was reached on December 1, 1919, under the terms of

UNITED STATES LIQUIDATION^ COMMISSION", 77

which the French took over all oblio^ations Avhich our Kentino-, Ive-
quisition, and Claims Service had outstanding on that clate.^'-
The contract provides, amono; other things :

France hereby substitutes itself for America in reference to and guarantees
the latter against all clainvs, demands, obligations, rights, actions, suits, and
controversies of every nature arising in France during the said war period
which any inhabitant or any person subject to the sovereignty of France or
any organization, association, or corporation, coujuiune, or department of
France may now have or which may hereafter accrue for damage to. use, or
loss of property, or injury to or death of persons, caused by or resulting from
acts or omissions of members of the American military forces or any one con-
nected therewith (not including members of the American welfare organiza-
tions) during the said war period — that is. between the 6th day of April, 1917,
and the 31st day of December, 1919.

America in turn agrees to pay France —

in cash the sum of twelve million (12.000,000) francs (hereinafter designated
" minimum payment "). If upon the 31st day of December, 1923, the aggregate
of all payments made by Fi-ance to claimants on account of the claims assumed
by it exceed such mininmm payment, then in such event America agrees on
demand to then pay to France such excess: Provided, hotvever. That such
additional payment by America shall in no event exceed the sum of six million
(6.000-,000) fi-ancs.

It will be noted that the amount paid by France to clahnants
only is taken into account and no allowance is made for overhead and
administrative expenses.

Attention is called here to the status in France of claims arising
out of " acts of war" (faits de guerre). Neither the Renting, Requi-
sition, and Claims Service nor the Commission has ever expressed
any intention of honoring such claims, nor has France or her na-
tionals ever pressed any claim against America for damages arising
in this way. But it is worthy of note that France, by an act of April
IT, 1919, has provided for payments to her own nationals for damages
resulting from faits de guerre. This was done for the purpose of
equalizing the burdens of the war's destruction in favor of the in-
habitants of the devastated regions and is an act of grace on the
part of the French Government. The first article of the act reads,
■' The Republic proclaims the equality and the solidarity of all
French citizens with respect to the charges of war." It is also worthy
of note that the act of Congress of April 18, 1918, under which the
Renting, Requisition, and Claims Service has been settling tort and
similar claims provides that " claims under this statute shall not be
approved unless they would be payable according to the laiv or prac-
tice governing the military forces of the country in which they
occur.''''

*2 See Appendix XXXIII for cOpy of the contract between the United States and
France, evidencing the assumption by France of all claims of French nationals against
America for torts, employer's liability, rents, and requisitions.

78 UNITED STATES LIQUIDATION COMMISSION.

Attention is also invited to the fact that the treaty of peace be-
tween the Allied and Associated PoAvers. on the one partv and Ger-
many, on the other part, signed at Versailles. June 2S, 1010, reads in
part (art. 23-2) as follows:

The Allied and Associated Govenimeiits feco.unize that the resources of Ger-
many are not adequate, after taking into account permanent diminutions of
such resources which will result from other provisions of the present treaty,
to make complete restoration for all such losses and damages.

Part VIII, Annex I, paragraph 0, of the treaty provides in sub-
stance that Germany shall assume liability for damage in respect of
all property wherever situated belonging to any of the Allied or
Associated States or their nationals, which has been carried off.
seized, injured, or destroyed hy the acts of Germany or her allies on
land, on sea, or from the air.

Much of the destruction in the devastated regions of northern
France is, of course, due to acts of war on the part of the armies of
France and her allies, as well as to acts on the part of the armies
of Germany and her allies. As above noted, P\-ance has, by the act of
April IT, 1919, assumed, as between it and its nationals, the burden of
making reparation because of such destruction without respect to the
army responsible for it.

It is conceivable that at some future time a French administration
may feel justified in calling upon America for contribution in dis-
charging so much of this burden as may not be covered by German
reparation payments, in the ratio which the destruction wrought by
the American Army bears to the whole destruction. Attention is
invited to the fact that the releasing clause of the contract of De^
cember 1, 1919, is clearly broad enough to estop France from ever
presenting and pressing such a clajim.

SUMMARY.

1. The total sales of the War Department property in Europe
made by this Commission aggregate $822,923,225.82. Of this,
$400,000,000 is evidenced by French interest -bearing bonds now on
deposit with the United States Treasurer, representing the considera-
tion for the bulk sale in accordance with the contract of August 1,
1919, under which all of the United States War Department prop-
erty in France then remaining unsold was disposed of.

2. The settlement with France by which America's claims against
French railroads were set off against all transportation claims of
every nature of France and French railroads against America left
a net balance due France by America of 434,985,389.73 francs.

3. All claims of France and her several chambers of commerce
for work done at ports for our benefit and for port dues were as-
sumed by France, on America's agreeing to pay 3,000,000 francs.

UNITED STATES LIQUIDATION COMMISSION". 79

4, All claims of any person, organization, association, corporation,
commune, or department of France against America for damage to,
use, or loss of property or injury to or death of persons have been
assumed b}^ France, upon the agreement by America to pay France
the sum of 12,000,000 francs.

5. The general settlement with France of November 25, 1919,
finall}^ and for all time settled all claims and controversies not above
or therein enumerated betAveen France and the War Department of
the United States, France by the terms of said contract acknowledg-
ing an indebtedness to America (in addition to the $400,000,000,
above mentioned) of $177,149,866.86, and America acknowledging an
indebtedness to France of 1,488,619,027.52 francs in addition to the
items mentioned in the foregoing paragraphs, numbered 2, 3, and 4.

By reason of these several transactions, America has avoided in-
curring the enormous overhead expense incident to maintaining large
organizations in France for an indefinite period, and has been en-
abled speedily to withdraw from France all of the representatives of
the War Department and of the Army, leaving behind a clear record
and carrying with her the confidence and good will of France and
of her people.

BELGIAN SETTLEMENT.

Copy of the general settlement agreement entered into with Bel-
gium on November 7, 1919, will be found in Appendix XV ; reference
to this settlement will be found on page 33 of this report.

ITALIAN SETTLEMENT.

On August 13, 1919, John H. Ray, representing Chester W.
Cuthell, as special representative of the Secretary of War, entered
into an agreement with Federico Brofferio, representative of the
inter-ministerial committee of the Italian Government for the read-
justment of the industries of war, wherein Italy agreed to pay to
America the sum of $5,200,000, for picric acid (not delivered),
spruce, fir, and nitrocellulose powder, and America waived claims for
trinitrotoluol and cotton linters.*^

In December, 1919, Harry T. Klein (formerly lieutenant colonel,
judge advocate) was sent to Italy as the Commission's repre-
sentative to negotiate a general settlement of all accounts and claims
with Ital}^ arising in Europe. Gen. Albricci, the minister of war,
appointed Maj. Gen. Angelo Modena as the Italian representative to
consummate this general settlement. After repeated conferences be-
tween the Commission's representative and Gen. Modena and the

*» See Appeildix XXXIV for copy of contract dated Aug. 13, 1919, between Italy and
the United States War Department.

80 UNITED STATES LIQUIDATIOiSr COMMISSION.

representatives of the Italian treasury department, aviation corps,
minister of transportation, and the ordnance department, an agree-
ment was finally reached in February, 1920, that the net balance due
and unpaid in favor of Italy, amounted to the sum of 29,106,546.75
lire. Copies of the proposed contract were furnished by Gen.
Modena to the ministers interested, and Gen. Modena executed this
contract on February'- 18, 1920, under authority conferred upon him
at a meeting of the council of ministers.**

This contract contains not only a complete release of all claims of
the Italian Government against the United States War Depart-
ment, arising in France, Italy, and regions adjoining Italy, between
April 6, 1917, and December 31, 1919, but is also a complete settle-
ment and release of the claims of all Italian nationals for injury to
})ersons or damage to property caused by the acts of the military
forces of America, between the dates mentioned and occurring any-
where in France, Italy, and regions adjoining Italy.

The larger part of the net balance due Italy was composed of the
aviation account, which consisted of items for aviation material fur-
nished by Italy and services rendered in the training of American
aviators. This account was carefully investigated by a board of
aviation officers and recommended by them and by Gen. Patrick,
in charge of aviation in France.

Another large item of the account as finally allowed was for
ordnance material aggregating approximately 6,000,000 lire. Four
requisitions had been placed Avith Italy for ordnance material,
artillery ammunition, etc., Austrian and Italian, to be sent to the
United States for experimental purposes. After this material was
concentrated by Italy for delivery, the prices quoted were found to
be unusually high and attempts were made by our ordnance de-
partment, through militar}' channels, to secure a reduction in prices
or a cancellation of the requisitions in question. Avithout success. The
Commission's representative, after several conferences with Gen.
Modena and Gen. Cortesa, chief of the Italian ordnance department,
succeeded in securing a cancellation of two of these ordnance requi-
sitions without payment of any indemnity, and secured a reduction
of 60 per cent on Austrian material actually delivered and 20 per
cent on Italian material actually delivered under the tAvo remaining
requisitions; resulting in a saving of approximatelj^ 6,000,000 lire
to the United States on the price of the material accepted, at the
then existing rate of exchange. No indemnity whatever was paid
for material not accepted.

Another large item of the account Avas for subsistence stores and
material furnished the American troops by Italy, which under an

" See Appendix XXXV for copy of contract of general settlement dated Feb. 18,
1920, between the United States War Department and the Kingdom of Italy.

UNITED STATES LIQUIDATIOlSr COMMISSION. 81

agreement of the chief of the American Military Mission in Italy
made in 1918, were to be returned in kind. Italy had repeatedly re-
fused to accept a cash settlement of this account. However, after
several consultations with Gen. Modena and his advisers, he finally
agreed to accept a cash settlement of this subsistence account on sub-
stantially the price basis of what it would cost the United States
to lay these articles down in Italy. This account approximated
5,000,000 lire.

The balance of the Italian account consisted of items for miscel-
laneous material supplied to our troops, railroad transportation for
troops, and supplies, and the sum paid Italy for indemnifying
America against the claims of Italian nationals. There were a small
number of R. R. & C. claims remaining undisposed of, and a number
of cases which we were unable to settle directly with the claimants on
account of disagreement as to liability or the amount which should
be paid. Italy assumed all these outstanding claims for 180,000 lire
(less than $15,000, at current rate of exchange when the contract was
signed), which is regarded as an extremely satisfactory settlement
in the interest of the United States War Department.

The American claims against Italy, amounting to 4,669,974.71 lire,
were allowed in their entirety by Italy.

The only Italian item arising in Europe left unsettled by this con-
tract is the American claim against Italy for copper ingots, shipped
to Italy for the electrification of the Modane Railroad, amounting
approximately to $207,975. This claim was held in abeyance pending
a decision of the Inter-allied Reparations Commission, to whom it
was referred on the suggestion of Gen. Bliss for decision, on the
question of the distribution of the expenses for such electrification
and what countries should pay for such improvement.

LUXEMBOURG CLAIMS.

Incidental to the advance and withdrawal of our Army of Occu-
pation, a large number of claims arose in the Grand Duchy of Lux-
embourg. Many of these were presented by nationals and were dis-
posed of by the Renting. Requisition, and Claims Service. Others,
presented by the Luxembourg government, cover the use, occupation,
and damage to buildings, highways, and other public property.
The railroads of Luxembourg presented claims covering services ren-
dered in the transportation of our troops. All of these claims (not
disposed of by the Renting, Requisition, and Claims Service) aggre-
gate approximately 3,000,000 francs.

Certain German war material taken by our Army of Occupation
in Luxembourg, in the course of its advance, has already been dis-
183176—20 6

82 UNITED STATES LIQUIDATION COMMISSION.

posed of. This Commission has asserted, in behalf of the Imited
States, ownership of German-built railroad tracks located in Luxem-
bourg and reduced to possession by our Army of Occupation in the
course of its advance. This Commissit)n has proposed to the Luxem-
bourg authorities that the United States will sell and deliver to it
all of its interest in these railroad tracks, in full satisfaction of all
claims which the Grand Duchy of Luxembourg may have against
the United States, of every nature whatsoever, and the undertaking
on the part of the Gr9,nd Duchy to indemnify and save harmless the
United States against all claims ^^hich the railroads and nationals of
Luxembourg may have against the United States. It is believed
that the settlement will be reached on the basis proposed.

CONCLUSION.

Some conception of the Commission's task can be formed from {a)
the statement of amounts involved in the settlements negotiated and
actually consummated by and under the direction of the Commission
of mutual accounts and claims between the United States War De-
partment, on the one part, and the Allied Governments and their
nationals, on the other part (which settlements were, where possible,
consummated through set-offs without cash payments), and (b) the
amount of sales of property made by the Commission, as follows :

Amounts involved in settlements : ^^

Settlements with France $748,392,004.82

Settlements with Great Britain 112, 996. 912. 16

Settlements with Belgium 2.279,827.12

Settlements with Italy 12, 620, 173. 75

Settlements with individuals, associations,

an<l others 17.427,175.41

Total amount involved in settlements __ 893. 716. 093. 26
A.m<)unts of sales : ■"*

Bulk sale to France $400,000,000.00

Other sales, stated in dollars 377,905,193.23

Other sales, stated in francs and converted __ 45, 018, 032. 59

Total amount of all .sales 822, 923, 225. 82

The Commission w^as created February 11. 1919. The two remain-
ing commissioners are tendering their resignations on this the 31st
day of May, 1920. The total expenses incurred and disbursements

*^ These figures are approximate but are understated, inasmuch as many claims with-
drawn, I'educed, or disallowed are not included.

*« All conversions into dollars, for the purpose of this statement, have been made at
the normal rate of exchange.

UNITED STATES LIQUIDATION COMMISSION. 83

made by the Commission aggregate $222,883.17/' These expendi-
tures are a trifle less than thirteen one-hundred-thousandths
(0.()()()13) of the amounts involved in settlements made and sales
negotiated by the Commission.

Respectfully submitted,

Edwin B. Parker,
Ghainnmi^ United States LlquidoMon C om/niission —

War Department.
Washington, D. C, May 31^ 1920.

*' See Appendix XXXVI for statement of expenses and disbursements of tlie United
States Liquidation Commission — War Department from date of organization, February
11, 1919, to May 31, 1920, inclusive.

APPENDIX

TO THE

REPORT OF THE UNITED STATES

LIQUIDATION COMMISSION

WAR DEPARTMENT

EDWIN B. PARKER. Chairmaij

CONTENTS.

Page.

I. Acts of Congress approved May 10, 1918, and July '.), 1918 89

II. Section ,3 of Act of Congress approved March 2, 1919 90

III. General Orders, No. 24, War Department, February 11, 1919__- 90

IV. Genei-al Orders, No. 40, War Department, March 19, 1919 92

V. General Orders. No. 18, headquarters S. O. S., A. E. F., April

1. 1919 93

VI. The categories 95

VII. Categorical summary of inventories of American Expeditionary

Forces' property 1^0

VIII. Categorical recai)itnlation of American Expeditionary Forces"

property in France 101

IX. Form of receipt given by French 103

X. Bulk sale contract to France, August 1, 1919 103

XI. Letter from Mr. Hoover to Judge Parker 111

XII. Liberated nations and their commercial organizations 113

XIII. Sales of animals in American Expeditionary Forces 113

XIV. Sales Charts I, II, and III 114

XV. Contract with Kingdom of Belgium- 118

XVI. Sale of motor stocks in (Jermany 122

XVII. Installations in England 130

XVIII. British artillery settlement 131

XIX. Australian wool settlement 130

XX. Chateauroux tank plant settlement, August 8, 1919 13G

XXI. Final contract of settlement of Chateauroux tank project,

October 4. 1919 138

XXII. Extract from Cuthell-Inverforth agreement of May 10. 1919, in

re liberty motors 142

XXITI. Settlement of British interest claim 143

XXIV. Liquidation of nitrate pool 14-)

XXV. Dispositi(m of private claims 150

XXVI. Disposition of French-American artillery imder Stettinins-

Louclieur arrangement 150

XXVII. French artillery and ammunition agreement, August 28, 1919-_ 151

XXVIII. French air-service settlement, November 8, 1919 15ti

XXIX. French railroad transportation seftlement, October 1, 1919 15 ■

XXX. Port dues settlenwut with France, October 1, 1919 16'".

XXXI. Settlement with France of European accounts. Novembei- 20,

1919 lti5

XXXII. General settlement with France, November 25, 1919 172

XXXIII. Renting. Requisition, and Claims settlement with France, De-

cember 1, 1919 1T9

XXXIV. Cuthell-Brofferio agreement with Italy, August 13, 1919 182

XXXV. General settlement with Italy, February 18, 1920 185

XXXVI. Statement of expenditures 191

APPENDIXES.

APPENDIX I.

Act of Con(U<es.s, Appkoved May 10, 1918.

An act authorizing the President during the existing emergency to sell supplies, materials,
equipment, or other property, heretofore or hereafter purchased, acquired, or manufac-
tured by the United States, in connection with, or incidental to, the prosecution of
the war.

Be it enacted by the Senate and House of Representatives of the United States
of America in Congress assembled, That during the existing emergency the
President be, and he hereby is, authorized, in liis discretion, and upon such
terms as he shall deem expedient, througli the Itead of any executive depart-
ment, to sell any supplies, materials, equipment, or other property heretofore
or hereafter purchased, acquired, or manufactured by the United States in
connection with, or incidental to, the prosecution of the war, to any person,
partnership, association, or corporation, or to any foreign State or Government
engaged in war against any Government with which the United States is at
war ; and any moneys received by the United States as the proceeds of any such
sale shall be covered into the Treasury of the United States and a full report
of the same shall be forthwith submitted to Congress.

Extract from Act of Congress Approved July 9, 1918.
Sale of war supplies : That the President be, and he hereby is, authorized,
through the head of any executive department, to sell, upon such terms as the
head of such department shall deem expedient, to any person, partnership, asso-
ciation, corporation, or any other department of the Government, or to any
foreign State or Government, engaged in war against any Government with
which the United States is at war, any war supplies, material and equipment,
and any by-products thereof, and any building, plant, or factory, acquired since
April sixth, nineteen hundred and seventeen, including the lands upon which
the plant or factory may be situated, for the production of such war supplies,
materials, and equipment which, during the present emergency, may have or
may hereafter be purchased, acquired, or manufactured by the United States :
Provided further, That sales of guns and ammunition made under the au-
thority contained in this or any other act shall be limited to sales to other
departments of the Government and to foreign States or Governments engaged
in war against any Government with which the United States is at war, and
to members of the National Rifle Association and of other recognized associa-
tions organized in the United States for the encouragement of small-arms tar-
get practice: Provided further. That a detailed report shall be made to Con-
gress on the first day of each regular session of the sales of any war supplies,
material, lands, factories, or buildings, and equipment made under the author-
ity contained in this or any other Act, except sales made to any foreign State
or Government engaged in war against any Government with which the United

90 unitp:d states liquidation coMMissiolsr.

states is at wiw, sliowiiis the character of the .irticles sold, to whom sold, the
price received therefor, and the purpose for which sold : Provided, That any
moneys received by the United States as the proceeds of any such sale shall be
deposited to the credit of that appropriation out of which was paid the cost
to the Government of the property thus sold, and the same shall immediately
become available for the purposes named in the original appropriation.

APPENDIX II.

Section 3 of the Act of Congress Approved March 2, 1919.

That the Secretary of War, through such agency as he may designate or
establish is empowered, upon such terms as he or it may determine to be in the
interest of the United States, to make equitable and fair adjustments and agree-
ments, upon the termination or in settlement or readjustment of agreements
or arrangements entered into with any foreign Government or Governments
or nationals thereof, prior to November twelfth, nineteen liundred and eighteen,
for the furnishing to the American Expeditionary Forces or otherwise, for war
purposes, of supplies, materials, facilities, services or the use of property, or
for the furnishing of any thereof by the United States to any foreign Govern-
ment or Governments whether or not such agreements or arrangemeiUs have
been entered into in accordance with applicable statutory provisions ; and the
other provisions of this act shall not be applicable to such adjustments.

APPENDIX III.

Generai. Orders. | . War Department,

No. 24. I Washhif/to)}. Fehiuanj 11, lUW.

united states liqT'Idatton commission — WAR department.

1. The term " war " as used herein shall be taken to mean the present war
between the United States of America and the nations associated with it on
the one part and the Imperial German Government and its allies on the other
part. The term " United States " as used herein shall be taken to mean the
United States of America.

2. In order to facilitate the speedy disposition of all claims of every char-
acter between the United States on the one part and the nations associated with
it in the war and their nationals on the other part, growing out of or in any-
wise connected with the war; and in order to promptly dispose of all property
or interest in property of whatsoever kind or nature belonging to the United
States, acquired, constructed or manufactured in connection with or incidental
to the war and now located beyond its territorial limits ; and in order that the
interests of the United States and its said a.ssociates shall be mutually sul)-
served ; by direction of the President there is hereliy created and constituted
a "United States Liquidation Commission — War Department," as the central
agency to supervise and direct the disposition of all such claims and property,
clothed with the broad powers, charged with the duties and constituted as here-
inafter prescribed, to be exercised in cooperation with the connnander in chief
of the American Expeditionary Forces.

UNITED STATES LIQUIDATION COMMISSION. 91

S. Tlie said CoiiiinissHMi sliall possess the following powers:
{(i) To (leteriuiiie, adjust, modify, coniproniise, and settle all contracts, obli-
gations, conuiiitnients. claims, or demands of every nature whatsoever within
the jurisdiction of the War Department (1 ) between the United States and any
foreign State or Government or the nationals thereof; or (2) asserted by the
United States agjiiust any foreign State or (iovernment or the nationals thereof;
or (3) asserted by any foreign State or (xovernment or the nationals thereof
against the United States; provided such contracts, obligations, commitments,
claims, or demands arise out of, are connected with or incident to the participa-
tion of the Ignited States in the war.

(b) To sell or otherwise dispose of, upon such terms as it shall determine, any
property of whatsoever kind or nature acquired, constructed or manufactured
by the United States in connection with, oi- incidental to, the participation of
the United States in the war, and now located beyond the territorial limits of
the United States and its possessions.

(c) To employ and tix the compensation of such secretaries, counsel, agents,
factors, and employees as it shall deem necessary for the proper exercise of its
powers and the performance of its duties.

(d) To adopt rules and regulations governing its procedure and the conduct
of its l)usiness.

(e.) To establish and maintain offices at such place or places as it may deem
expedient and necessary for tlie proper performance of its duties.

(/') To exercise all other powers necessary or incidental to the proper per-
formance of its duties as herein defined.

4. Payments of money to the United States made pursuant to the Commis-
sion's action shall be transferred to appropriate officials of the War Department,
or of the American Expeditionary Forces, by whom the same shall be covered
into the Treasury or deposited to the credit of appropriations as required by
law or regulation.

5. The Connuission shall cause to be kept a full and complete record of all
its proceedings, a copy of which shall be transmitted to the Secretary of War
each month, together with such other reports as the Secretary of War may from
time to time prescribe or as may be prescribed by applicable provisions of
statutes.

6. The act of the majority of the members of the Commission, when in session
as such, shall be deemed to l»e the act of the Commission, or, when not in ses-
sion, if such action is jissented to in writing by a majority of the members of
the Con}mission, it shall be deemed to be the act of the Commission.

7. The powers hereby conferred and the duties hereby prescribed nuiy be
exercised and performed by the Connuission either directly or through existing
or hereafter created agencies of the American Expeditionary Forces or of the
War Department of the United States or through agencies created by the Com-
mission. All existing agencies performing any of the duties and exercising any
of the powMi-s herein dealt with shall, unless otherwise directed by the Commis-
sion, ctintiinie to function as heretofore. While the Commission shall have com-
plete and exclusive jurisdiction and control over the activities of all such
agencies with respect to the subject matter hereof, it is not required to function
directly in relation to such matters, activities, and transactions as in its opinion
should be dealt with by such agencies.

8. The American Expeditionary Forces and all other agencies of the War
Department will furnish the Commission such reports and information as it
may request, and upon its request furnish it with such officers, personnel, trans-
portation and other facilities as it may require.

92 UNITED STATES LIQUIDATION COMMISSION.

9. The findings and decisions of the Conmiissic.n shall be final and con-
clusive as to all matters within its jurisdiction.

10. Until further ordered the Commission shall be composed of tour mem-
bers, as follows: Edwin li. Parker (chairman), Brig. Gen. Charles G. Dawes,
H. H. Johnson, Henry F. Mollis. Additions may be made or vacancies filled
by appointment by tlie Secretary of War.

By order of the Secretary of War :

Peyton C. March,

General, Chief of Staff.
Oflicial :

P. C. Harris,

The Adjutant General.

APPENDIX IV.

General Okdeks. | War Department,

No. 40. j ■ Washington, March 19, 1919.

operation of UNirED STATES LIQUIDATION COMMISSION AND WAR DEPARTMENT

CLAIMS BOARD.

General Order No. 33. War Department, 1919, is rescinded and the following
substituted therefor :

(1) The United States Liquidation Commission — War Department constituted
by General Order No. 24, War Department, 1919, is hereby designated and estab-
lished as the agency througli whicli shall be exercised the powers conferred
upon tlie Secretary of War by section 3 of the act entitled "An act to provide
relief in cases of contracts connected with the prosecution of tlie war, and for
other purposes,'' approved March 2, 1919, excepting powers with relation to
agreements and arrangements upon the termination or in settlement of or
readjustment of agreements or arrangements to be performed in tlie Dominion
of Canada and entered into with nationals of any Government foreign to the
United States of America. Section 3 of the act reads as follows : "The Secre-
tary of W^ar, through such agency as he may designate or establish, is em-
powered, upon such terms as he or it may determine to be in the interest of the
United States, to make equitable and fair adjustments and agreements, upon
the termination or in settlement of or readjustment of agreements, or arrange-
ments entered into with any foreign Government or Governments or nationals
thereof, prior to November 12, 1918, for the furnishing to the American Expedi-
tionary Forces, or otherwise, for war purposes, of supplies, materials, facilities,
service or the use of property, or for the furnishing of any thereof by the United
States to any foreign Government or Governments, whether or not such agree-
ment or arrangement has been entered into in accordance with applicable statu-
tory provisions ; and the other provisions of this act shall not be applicable to
such adjustments."

(2) Tlie Imperial Munitions Board, constituted and appointed by authority
of the British Ministry of Munitions, acting in conjuncton with two ofiicers
of the United States Army, who shall be appointed and known as Canadian
contract assessors, is hereby authorized and empowered to exercise, and is
designated and established as the agency through which shall be exercised,
in tlie name of the Secretary of War and by his authority, the powers con-
ferred upon the Secretary of War by the act of Congress entitled " An act
to provide relief in cases of contracts connected with the prosecution of the

UNITED STATES LIQUIDATION COMMISSION. 93

war, and for other purposes," approved March 2, 1919, in so far as the exercise
of such powers relates to agreements, express or implied, and arrangements,
which were entered into through the agency of the Imperial Munitions Board
and were to be performed within the Dominion of Canada. All agreements,
adjustments, and awards which shall be made under the authority conferred
by this section shall be made in writing, signed in the name of said Imperial
Munitions Board by a member or members thereof designated by said board
and by one of the aforesaid Canadian contract assessors.

(3) The War Department Claims Board, constituted by the War Department
Circular No. 26, dated January 20, 1919, is authorized and directed to exer-
cise, and is hereby designated and established as the agency through which
shall be exercised, in the name of the Secretary ,of War and by his authority,
all powers and duties conferred upon the Secretary of War by the act of
Congress entitled " An act to provide relief in cases of contracts connected
with the prosecution of the war, and for other purposes," approved March 2,
1919, except in so far as the right to exercise the powers conferred under said
act has been otherwise authorized and delegated under paragraphs 1 and
2 of this order the said duties and powers may be performed and exercised
by the War Department Claims Board or by any regular or special member
or members thereof who may, from time to time, act under the authority and
direction of the War Department Claims Board. For the expeditious perform-
ance of its duties, the War Department Claims Board is authorized to make
such use as it may find desirable, of the Board of Contracts and Adjustments,
the War Department Board of Appraisers, and any other agency or agencies
of the War Department.

(4) Lieut. Col. H. G. Albee, Engineers, and Maj. Sidney R. Underwood,
Ordnance, are hereby designated and appointed Canadian contract assessors
and authorized and instructed to exercise, in conjunction with the Imperial
Munitions Board, the powers and duties provided for in paragraph 2 hereof.

By order of the Secretary of War :

Peyton C. Maech,

General, Chief of Staff.
Official :

P. C. Harris,

The Adjutant General.

APPENDIX V.

Genkral Orders,

No. 18.

American Expeditionary Forces,
Headquarters, Services of Supply,

France, April 1. 1919.
1. Under the provisions of G. O. 24, W. D., c. s., and G. O. No. 40, c. s., supple-
mentary thereto, the United States Liquidation Commission — War Depart-
ment (hereinafter designated " Commission ")— is designated as the central
agency to supervise and direct the disposition of —

(a) All claims of every character between the United States on the one
part and any foreign State or Government and their nationals on the other
part, growing out of or in anywise connected with the war ; and

(ft) All surplus property or interest in such property of whatsoever kind
or nature belonging to the United States, acquired, constructed, or manu-
factured in connection with, or incidental to, the war and now located beyond
its territorial limits.

94 UNITED STATES LIQUIDATION COMMISSION.

It is not the purpose of the Commission to create an organization to super-
sede existing agencies of the A. E. F.. which are discharging in whole or in
part the duties falling within the jurisdiction of the Commission, but rather
to supervise and direct such activities of existing agencies, and act thro-ugh
and in cooperation with them.

2. The following method of procedure has been adopted hy the Connnission
and the conniianding general. S. O. S., and is published for the guidance of
all concerned :

(A) The Connnission will, from time to time, establish and define the policies
to be pursued in the adjustment of claims and in the disposition of property,
and acquaint the interested agencies of the S. O. S. therewith. It will negotiate
directly or through such agencies as it may from time to time designate, with
ministers or other agencies of other Governments, authorized to treat with
respect to the settlement of claims or the purchase or sale of property. It
will, from time to time, instruct the several agencies of the S. O. S. with
respect to prices, terms of payment, and generally as to the sales and dis-
position of property. It will prescribe rules to be pursued in the preparation
and settlement of claims within the jurisdiction, and will, from time to time,
instruct the several agencies of the S. O. S. with respect to the settlement of
such claims and the sales of property by them.

(K) The officers of the various services of the S. O. S. will collect complete
data with respect to all claims which fall within the jurisdiction of the Com-
mission and in which such services are concerned and will ( unless expressly
instructed to the contrary by the Commission) tentatively negotiate a settle-
ment of such claims, subject to the approval of the Commission; submitting
such claims, when fully developed, with a recommendation for settlement and
the reas<»ns therefor, through the finance officer to the Commission, for action.
Acting under instructions of the Commission, the officers of the various services
of the S. O. S. will disburse the necessary funds in the payment of claims ap-
proved by the Commission, under the rules and regulations of the Treasury
Department and of their respective departments.

(C) The finance officer, under the direction of the Commission, will co-
ordinate the activities of the several services in the collection of complete data
pertaining to claims within the jurisdiction of the Commission, and will
present the data in such form as may be prescribed by the Connnission, for its
action.

(D) The ofiicers of the various services will receive, store, and care for all
property of the United States. As soon as any such property is, in their opinion,
available for sale they will so report to the commanding general, S. O. S.,
and, when such report is approved by him, will notify the general sales agent
of its jivailability for sale, giving him such information with regard thereto
as he may require. They will furnish necessary information to prospective
buyers and exhibit to them the property for sale to the end that it may be
advantageously disposed of. They will, under the directions of the Commis-
sion and of the general sales agent, negotiate sales, reporting same to the gen-
eral sales agent. They will prepare for delivery or shipment the property sold
or otherwise disposed of, and deliver it to the purchaser or to a transporta-
tion agency in accordance with the terms of the sale. They will, under the
directions of the general sales agent, locate markets for sales. They will re-
ceive moneys to be paid for the property and will deposit and account for
same according to the rules of the Treasury Department and of their re-
spective departments. They will account for property disposed of in ac-
cordance with the established rules of their respective departments.

UNITED STATES LIQUIDATION COMMISSION. 95

(E) In the absence of express directions by tbe Coniniission to the contrary,
all sales will be made by or under the direction of the general sales agent of the
S. O. S., who will have agents at various places in Europe, and will locate and
develop markets for all classes of pr(»perty that may be offered for sale. Re-
ports with reference to all classes of property of the A. E. F., available for sale,
will l»e made to the general sales agent and by him communicated to the Com-
mission. He will properly advertise all sales and take measures to prevent
competitive selling by the several services. He will, under the general super-
vision of the ('(mimission. conduct preliminary negotiations with probaI)le
buyers, giving them such inf()rnmti(Mi as they may require to enable them to
submit offers of purchase; and will consummate sales under the general direc-
tion of the Commission.

(F) Communications between the Commission and the various services of
the S. O. S. shall either pass through the appropriate representative of the
commanding general. S. O. S. or, if the communication is direct, such repre-
sentative shall be advised thereof. The appropriate representative in all mat-
ters of claims shall be the finance officer ; in all matters of sale, he shall be the
general sales agent. The finance officer and the general sales agent shall cir-
culate among all interested departments or agencies of the S. O. S. for their
guidance, all important rulings, decisions, or statements of ])o]icy of the Commi.s-
sion, having a general application.

(G) This order does not affect the payment of debts for services performed
or property delivered, nor, until further orders of the Commission, shall any-
thing herein contained affect the powers and functions of the R. R. & C. Service,
which shall continue in effect under existing orders or under such subsequent
orders as may hereafter be issued by the commander-in-chief or by the com-
manding general, S. O. S.

(H) Any power or authority herein assigned to the general sales agent, the
finance officer, or tlie chiefs of services, or to their subordinates, may be ex-
tended, withdrawn or modified at will by the Commission, or exercised directly
by it, when, in its judgment, such action is desirable. The powers and authority
as regards sales, granted herein to the Services or their representatives, may be
exercised by the general sales agent, when, in his opinion, the best interests of
the Government will be served thereby,

3. All orders or parts of orders in conflict with the above instructions are
hereby revoked,

4, Section I, General Orders, No. o9, S. O. S., A. E. F. (1918), is revoked and
the Advisory Liquidation Board therein provided for is dissolved.

By connnand of Maj. Gen. Harbord :

W. D. Connor, Chief of Staff.
Official :

L. H. Bash, Adjutant General.

APPENDIX VI.

The Categories.

Clothing and textiles :

A. Cotton and woolen materials, raw and fabricated.

B. Clothing, caps, boots, wearing apparel, and insignia.

C. Blankets, mattresses, pillows, and bedding.

D. Carpets, rugs, linoleum, and draperies.

E. Tents, tarpaulins, and tent accessories.

F. Jute, bagging, sacks, and burlap.

96 u:nited states liquidation commission.

II. Subsistence supplies :

A. Flour.

B. Fresh, smoked, and cured meats.

C. Fresh fruits and vegetables.

D. Canned goods.

E. Other food supplies.

F. Tobacco, cigarettes, cigars, and smokers' articles.

G. Hay, feed, and other forage.
H. Coal and coke.

I. Other fuel.

III. Kitchen utensils and household furnishings :

A. Kitchen and dining-room furniture.

B. Cooking stoves and appliances.

C. Heating stoves and appliances.

D. Household and cooking utensils.

E. Tableware and cutlery.

F. Miscellaneous house and camp articles and supplies.

G. Beds, cots, and other furniture.

IV. Machinery, metals, tools, and hardware :

A. Steam engines, boilers, and parts.

B. Air-compressor parts.

C. Refrigerating machinery and supplies.

D. Machines, tools, and other power machinery and parts.

E. Other shop and foundry equipment.

F. Gas and gasoline engines and parts.

G. Construction contractors' machinery and plants.
I. Metals, raw and fabricated.

L. Pipe and pipe fittings.

M. Wire rope and guy wire.

N. Small tools and machines.

O. Nails, bolts, screws, rivets, nuts, and washers.

P. Locks, hinges, and other building hardware.

Q. Lamps and lanterns and parts.

R. Picks and shovels.

S. Blacksmith tools.

T. Belting and packing.

U. Hemp, rope, cordage, and twine.

V. Tanks, cans, and buckets (metal).

W. Safes and steel cabinets.

X. Pumps and water-supply apparatus.

Y. Miscellaneous materials and supplies.

Z. Horseshoes and nails.
AA. Agricultural implements, machinery, and appliances.
BB. Hose, nozzles, couplings, and fastenings.

V. Building materials :

A. Cement.

B. Lime.

C. Sand, gravel, and crushed rock.

D. Brick and tile.

E. Roofing materials.

F. Window glass.

G. Other materials.

UNITED STATES LIQUIDATION COMMISSION. 97

VI. Lumber aud other forest products:

A. Rough and milled lumber.

B. Ties.

D. Piling.

E. Telephone and telegraph poles.

F. Bridge timbers.

G. Stake and fence posts.
H. Trench framing timbers.
J. Brackets and cross arms.
K. Other wood products.

VII. Railway and dock equipment:

A. Locomotive and cars.

B. Locomotive cranes.

C. Work equipment (miscellaneous).

D. Rail.

E. Frogs and switches.

F. Other track material.

G. Hoisting and conveying machinery.
H. Other railroad and dock equipment.
J. Floating equipment.

VIII. Transport equipment :

A. Automobiles and motor trucks.

B. Tires and tubes.

C. Automobile parts.

D. Automobile accessories and tools.

E. Bicycles and motor cycles and supplies.

F. Horses and mules.

G. Harness and saddlery,

H. Wagons, carts and trailers.

J. Wagon accessories and miscellaneous supplies.

IX. Hospital and toilet supplies and chemicals :

A. Drugs and medicines (Medical Department).

B. Surgical instruments (Medical Department).

C. Hospital apparatus and supplies (Medical Department).

D. Chemicals and disinfectants.

E. Soaps and other toilet articles and preparations.

F. Ordnance and Gas Service chemicals,

X. Photographic, measuring, and musical instruments :

A. Cameras.

B. X-rays and supplies.

E. Photographic material and supplies.

F. Surveying instruments and compasses.
H. Field glasses and telescopes.

I. Drafting instruments.
J. Clocks and watches.
K. Other instruments and supplies.
L. Musical instruments.
XL Electrical equipment and supplies.

A. Dynamos.

B. Generator sets.

C. Motors,

D. Transformers.
183176—20 7

98 UNITED STATES LIQUIDATION COMMISSION.

XI. Electrical equipment and supplies — Continued.

E. Interior wiring supplies.

F. Switchboards and accessories.

G. Line materials and supplies.

H. Copper and iron wire and cable. ^

I. Batteries, bells, buzzers, and push buttons.

J. Insulating materials.

K. Telephone and telegraph equipment and accessories.

L. Electric lamps.

M. Other apparatus and equipments.

N. Wireless apparatus and equipments.

XII. Oils, gasoline, and paints:

A. Gasoline.

B. Other fuel oils.

C. Lubricating oils.

D. Lubricating greases.

E. Linseed oil.

F. Turpentine.

G. Color materials and mixed paints.
H. White and red lead.

K. Vai'uishes and shellacs.

L. Painters' tools and supplies.

XIII. Ordnance and gas equipment and supplies :

A. Guns and accessories.

B. Gun carriages and caissons.

C. Rifles and pistols.

D. Ammunition.

E. Target supplies.

F. Gas masks and other protecting devices.

G. Flame throwers, hand grenades, and gas bombs.
H. Other equipment and supplies.

XIV. Blasting apparatus and supplies:

A. Dynamite.

B. Powder.

C. Blasting appliances and accessories.

XV. Printing plant and supplies:

A. Printing presses and appliances.

B. Paper cutters, rulers, and folders.

C. Printers' inks.

D. Type.

E. Printing paper.

F. Other printing-office supplies.

XVI. Office fixtures, stationery, and supplies:

A. Office furniture and fixtures.

B. Pencils, pens, and ink.

C. Paper and envelopes.

D. Carbon paper.

E. Typewriters and supplies.

F. Drafting-room material.

G. Blackboard and chalk.
H. Miscellaneous supplies.
I. Blank and ruled books.

J. Calculating and numbering machines.
K. Duplicating machines and supplies.
L. Rubber stamps and pads.

UNITED STATES LIQUIDATION COMMISSION. 99

XVII. Hides and leather:

A. Hides.

B. Leatlier.

C. Leather articles.

XVIII. Air Service apparatus and equipment:

A. Aeroplanes and appliances.

B. Balloons and appliances.

C. Hangars and sheds.

D. Aeronautical textbooks and publications.

E. Other apparatus and supplies.

100

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APPENDIX IX.

103

Form of " Receipt " Given by French in Taking Over United States Stocks

Before the Sale.

(place.)

(LOCAEITE.)

1. Be it known that on this

day of , 1919, the War

Department of the United States of
America has delivered to tlie Govern-
ment of France the property described
and the location of which is men-
tioned or fixed in the attached in-
ventory, marked for identification
" Exhibit A," the bottom of eacli slieet
being initialed by the undersigned
American and French officers, and
made a part hereof.

2. From and after the date hereof
the Frencli Government will hold the
said property for, but without expense
to, the United States of America, sub-
ject to the directions of the United
States Liquidation Commission, War
Department, pending negotiations be-
tween the said Commission and repre-
sentatives of the French Government
for its purchase by the French Gov-
ernment.

For the War Department of tlie
United States of America.

(American Officer)
For the Republic of France.

(French Officer.)

1. U est reconnu que ce jour

de 1919, le Department

de la Guerre des Etats-Unis d'Ame-
rique a delivre an Gouvernement Fran-
cais la proprigte decrite et dont la lo-
cation est mentionnee oil fixee dans
I'inventaire ci-joint, marque pour iden-
tification " Piece A," le bas de chaque
page portant les initiales des officiers
Americains et Frangais soussignes, et
formant partie de ce recu.

2. D'a partir de la date ici portee, la
Gouvernement Fran<jais retiendra la
dite propi§te pour le Gouvernement
des fitats-Unis d'Amerique, mais sans
frais pour lui, soumis aux instructions
de la Commission de Liquidation des
iStats-Unis, Department de la Guerre,
en attendant des negociations entre le
dite Commission et les representants
du Gouvernement Frangais pour
I'achat de cette propri^te par le Gou-
vernement Frangais.

Pour le Department de la Guerre
des Etats-Unis d'Amerique.

Par

(Officier Americain.)
Pour la Republique Frangais.

Par

(Officier Frangais.)

APPENDIX X.

(1) Contract of Sale, United States to France,
The Bulk Sale to France.

August 1, 1919—

This contract entered into this first
day of August A. D. 1919 by and be-
tween the United States of America
(hereinafter called America), acting
through the United States Liquidation
Commission — War Department, of the
one part; and the Republic of France
(hereinafter called France), acting

Entre les Etats-Unis d'Amerique
(ci-apres denommee Amerique) et par
I'intermediaire de la United States
Liquidation Commission, War Depart-
ment, d'une part, et la Republique
Francaise (ci-apres denommee France)
et par I'intermediaire de M. le Sous-
Secretaire d'Etat aux Finances d'autre

104

UNITED STATES LIQUIDATION COMMISSION.

through Le Sous-Secretaire d'Etat aux
Finances, of the other part, wit-
nesseth :

That whereas, America is the owner
of certain property now located iu
France which was imported into, ac-
quired or constructed in France since
April 6, 1917, by the War Department
of the United States of America (here-
inafter called War Department) ; and

Whereas, it is deemed advantageous
to both Governments that America sell
and France purchase said property;

Now therefore, in consideration of
the premises and for the other consid-
erations herein stated, it is mutually
agreed, as follows :

part, il a ete conclu a la date du 1"
Aout 1919 le contrat suivant :

Etant donne que I'Amerique possede
en France une certaine quautite de
biens en exeedent qui out ete importes,
achetes ou construits en France depuis
le 6 Avril 1917 par le Department de la
Guerre des Etats - Unis d'Amerique
(ci-apres denomme; War Department),
et etant donne qu'il est juge avanta-
geux pour les deux Gouvernements
que I'Amerique vende et que la France
achete les dits biens, la convention sui-
vante a ete agrees d'un commun accord
en egard aux considerations ci-dessus
et aux considerations exposees dans le
present document :

ABTICLE ONE.

Description of property. — America
agrees to and does hereby sell to
France without warranty of quantity,
quality or condition, and subject to the
reservations, exceptions and conditions
hereinafter set forth, and France
agrees to and does hereby purchase
from America, all of the property now
located in France and now owned by
the War Department, described as fol-
lows :

a. All of the buildings, structures,
docljs, warehouses, telephone and tele-
graph lines, railroads and other instal-
lations of every kind and character
constructed or acquired in France since
April 6, 1917, together with the leases,
appurtenances and equipment apper-
taining thereto ; and

b. All of the movable property, con-
sisting of material, equipment and sup-
plies imported into or acquired in
France since April 6, 1917.

ABTICLE I.

Description du materiel. — L'Amer-
ique consent a veudre et vend effective-
ment a la France par le present acte
sans guarantie de quantite, de qualite,
ou d'etat actuel et sous reserve des
exceptions et des conditions enoncees
ci-apres et la France accepte d'acheter
effectivement par le present acte a
I'Amerique tous les biens actuellement
situes en France et appartenant au
War Department dont la description
suit:

a. Tous les batiments, constructions,
docks, magasins, lignes telephoniques
et telegraphiques, lignes de chemins de
fer et autre installations de tout genre
et de tout nature construits ou acquis
en France depuis le 6 Avril 1917, en
meme temps que les baux, les depend-
ances et amenagements y correspond-
ant.

b. Tous les biens mobiliers consist-
ant en materiels, equipements et ap-
provisionnements importes ou achetes
en France depuis le 6 Avril 1917,

ARTICLE TWO.

Exceptions and reservations. —
America reserves from the property
described in Article One hereof (which
is sold subject to the following ex-
ceptions and conditions) property as
follows :

ABTICLE II.

Exceptions et reserves. — L'Amerique
excepte des biens decrits dans I'Article,
ci-dessu, (lesquels sont vendus sous les
reserves et conditions indiquees ci-
apres), ceux de ces biens dont la de-
scription suit :

UNITED STATES LIQUIDATION COMMISSION.

105

a. All animals.

b. Uudelivered material, equipment
and supplies which America has
already sold or contracted to sell (1)
to other nations, (2) to relief asso-
ciations or organizations, (3) to
Spanish Company for export to
and distribution in Spain, and
(4) to an English syndicate of
motor transport of English manufac-
ture only, for return to and distribu-
tion in England, all aggregating in
selling value approximately Seventy-
seven Million, Two-hundred and
Sixty-five Thousand, Five-hundred and
Ninety-seven Dollars and Eighty-three
cents ($77,265,597.83) ;

c. Equipment, material and supplies
forming a part of the equipment of
the individual soldier or of the mili-
tary units which have been or may be
hereafter withdrawn from Prance for
return to the United States :

d. Material, equipment and supplies
now in France needed by America and
already ordered returned to America
for the ufee of the War Department,
of the estimated cost value of fifteen
million dollars ($15,000,000.00).

e. Subsistence and supplies neces-
sary to meet the requirements of the
American Expeditionary Forces and
other War Department organizations
so long as they are in France, which
subsistence and supplies are now
located both in depots and points other
than depots ; such stocks now in
depots being of the estimated cost
value of Four Million Dollars
($4,000,000.00) ; and

f. Medical, surgical and hospital
supplies and supplementary and die-
tary foodstuffs needed in the treat-
ment of the sick and injured, reserved
for the use of the American Red Cross

a. Tous les animaux,

b. Les materiels, equipements, ap-
provisionnements que I'Amerique a
deja vendus ou qu'elle s'est engagee a
vendre, mais qu'elle n'a pas encore
livres (1) a d'autres Etats (2) a des
associations ou organizations chari-
tables (3) a une Compagnie Espagnole
aux fins d'exportation et de distribution
en Espagne, et (4) a un syndicat Ang-
lais, en ce qui concerne du materiel
automobile, uniquement de fabrication
Anglaise, materiel destine a etre rem-
ports et distribue en Angleterre, la
valeur marchande de tout ce qui
est indique ci-dessus s'elevant ap-
proximativement a Soixante dix-sept
millions, deux cent soixante cinq
mille, cinq cent quatre vingt-dix
sept dollars quatre vingt trois cents
($77,265,597.83).

c. L'Equipement, le materiel et les
approvisionements qui font partie de
I'equipement individuel de riiomme ou
des unites militaires qui ont ete ou
seront retires de France pour retour-
ner aux Etats-Unis.

d. Les materiels, equipments et
approvisionnements actuellement en
France necessaires a I'Amerique et qui
d'apres des instructions precedement
recues doivent etre expedies aux Etats-
Unis pour I'usage du War Department
et dont L'estimation au prix de revient
s'eleve a quinze millions de dollars
($15,000,000.00).

e. Les fournitures et approvisionne-
ments necessaires pour subvenir aux
besoins des Forces Expeditionnaires
Americaines et des autres organisa-
tions dependant du War Department
tant qu'elles resteront en France,
fournitures et approvisionnements qui
sont actuellement situes dans des
depots et dans des points autres que
les depots ; le total des approvisionne-
ments dans les depots etant estime, au
prix de rivient a quatre millions de
dollars ($4,000,000.00) ; et

f. Les approvisionnements medicaux,
chirurgicaux et hospitallers ainsi que
les denrees alimentaires de regime
necessaires dans le traitement des
malades et blesses, reserves pour I'usage

106

UNITED STATES LIQUIDATION COMMISSION.

in connection witli its activities in
Eui'ope, of the estimated cost value of
ten million dollars ($10,000,000.00).
Should the Secretary of War of the
United States of America, or his
authorized representative, hereafter
request that France re-sell to America
additional property of similar nature
for the use of the American Red
Cross, then in such event France
agrees to re-sell same to America so
long as it is held by France unsold,
delivering it to the American Red
Cross at the same price at which
France has valued such property in
making this purchase, so that the re-
sale shall be at cost to France without
profit. America agrees to give France
credit on the bonds, hereinafter men-
tioned, for any property so re-sold.

de la Croix-Rouge Americaine pour son
oeuvre en Europe, dont I'ensemble est
evalue, au prix de revient, a 10 mil-
lions de dollars ($10,000,000.00). Si
le Secretaire d'Etat a la Guerre des
Etats-Unis d'Amerique ou son Repre-
sentant autorise demandait dans la
suite a la France de lui revendre pour
I'usage de la Croix Rouge Americaine
un surplus d'Approvisionnements du
meme genre, la France consent dans ce
cas a revendre ces approvisionnements
aussi long temps qu'elle les conservera
invendus, en les livrant a la Croix-
Rouge Americaine au meme prix que
la France I'a estime en effectuant son
achat, de telle sorte que la revente
sera faite par la France au prix cou-
tant sans benefice. L'Amerique est
d'accord pour crediter la France sur
les obligations dont il est question plus
loin pour tout le materiel revendu de
la sorte.

ARTICLE THREE.

ARTICLE III.

Conskleration.

Prix et enffagcments specianx.

a. Bonds. — In addition to the other
considerations herein enumerated,
France agrees to pay for the above
described property the sum of four
hundred million dollars ($400,000,000)
to be evidenced by bonds of the Re-
public of France, dated August 1. 1919,
bearing interest from August 1, 1920,
at the rate of five per centum (5%)
per annum, interest payable in equal
semi-annual installments on February
1st and August 1st in each year, said
bonds maturing ten (10) yeai's after
date, both principal and interest pay-
able in dollars to the United States of
America, or ijs assigns, at Washing-
ton, D. C, in gold coin ; or, at the elec-
tion of America, payable in francs of
the Republic of France at the cable
buying rate as fixed by the Federal
Reserve Bank of New York on the
New York market at noon of the due
date thereof. Said bonds shall be in
such form and of such denominations
as may be prescribed by agreement be-

a. Obligations. — En plus des autres
engagements enumeres ici, la France
consent a payer pour le materiel de-
crit plus haut, la somme de quatre
cents millions de dollars ($400,000,-
000.00) representes par des obliga-
tions de la Republique Francaise, en
date du ler Aout 1919. portant interet
du ler Aout 1920 au taux de cinq pour
cent (5%) I'an, Interets payable en
paiements a termes semestriels et
egaux, le ler Fevrier et le ler Aout de
chaque anne, les dites obligations ar-
rivant a amortissement dix (10) ans
apres la date d'emisslon, le capital et
les interets payables en dollars aux
Etats-Unis d'Amerique ou a ceux qu'ils
designeront a Washington, District of
Columbia, en monnaie d'or, ou au choix
de I'Amerique, payables en francs de la
Republique Francaise au taux d'achat
fixe par cable par la Federal Reserve
Bank de New York, sur le marche
de New York, a midi de la date
d'e.s-.*!cheance. Les dites obligations

UNITED STATES LIQUIDATION COMMISSION.

107

tween the Treasury Departments of
America and of France, and shall be
delivered within ninety (90) days
from August 1st, 1919.

b. Claims and rentals. — France as-
sumes the payment of all rentals
which shall accrue subsequent to
August 1st, 1919, on account of the
occupancy of the installations of ev-
ery character purchased by it from
America. All requisition, damage and
restoration claims of every nature
whatsoever connected with or growing
out of the use and occupation of said
Installations have already been taken
into account by France in estimating
the utilization value of .said installa-
tions, and deduction has been made
accordingly from the purchase price
mentioned in subdivision " a" of this
Article Three hereof; and France as-
sumes the payment of and agrees to
hold America harmless against all
such claims.

c. Waiver of claims. — France waives
all claims of every nature which it has
or may have against America for Na-
tional taxes on account of the importa-
tion of or transactions in relation to
property heretofore imported or ac-
quired by America in France since
April 6th, 1917.

seront emises dans la forme et sous la
denomination qui sera prescrite d'ac-
cord entre les Ministres des Finances
des Gouvernements Americain et Fran-
cais. L'emission des obligations aura
lieu dans les quatre-vingt-dix (90)
jours a partir de la date du ler
Aout 1919.

b. Reclamations et locations. — La
France prendra a sa charge le paie-
ment a partir de la date du ler Aout
1919, de tons les loyers d'occupation
d'installations de toute nature qu'elle
achete aux Etats-Unis d'Amerique.
Tous rais de requisitions, de dom-
mages et de remise en etat de toute
nature qui peuvent etre dus pour
I'usage et I'occupation de ces installa-
tions, ont ete deja pris en considera-
tion par la France dans I'estimation
qu'elle a faite de la valeur d'utilisa-
tion des dites installations et une de-
duction correspondante a ete operee
sur le prix d'aehat mentioune dans la
sub-division " a " de I'Art. Ill ci-
dessus ; En consequence la France
rendre a sa charge le paiement de ces
frais et s'en gage a ce qu'aucune re-
clamation ne soit faite a I'Amerique a
leur sujet.

c. Renoncement aux Reclaniatioihs. —
La France renonce a toutes reclama-
tions de toute nature qu'elle a ou peut
avoir contre I'Amerique pour des
taxes d'Etat provenant d'importations
ou de transactions relatives aux biens
jusqu'ici importes ou achetes par
PAmerique en France, depuis le 6
Avril, 1917.

ARTICLE FOUR.

ARTICLE IV.

Title and possession. — a. Title to the
property hereinbefore mentioned, sold
by America to France, shall pass to
France upon the signing of this con-
tract. Delivery of possession shall be-
gin immediately and shall be com-
pleted within thirty days from August
1st, 1919. So long as said property is
in the possession of America it shall
be held at the joint risk of America and
France ; provided, however, that the

Titre et possession. — a). La pro-
priete des biens vendus par le present
acte sera transferee a la France par la
signature de ce contrat. La prise de
possession commencera immediate-
ment, et devra etre terminee dans les
trente (30) jours a partir du ler Aout
1919. Aussi longtemps que ces biens
seront conserves par I'Amerique, il le
seront aux risques communs de
I'Amerique et de la France, pourvu

108

UNITED STATES LIQUIDATION COMMISSION.

risk to America sliall terminate abso-
lutely with August 31st, 1919, whether
delivery has at that time been taken
by France or not. At the time of de-
livery of possession a receipt in sub-
stantially the following form shall be
signed by representatives of the re-
spective Governments :

"Be it known that on this

day of , 1919, the United

States of America, War Department,
has delivered to the accredited repre-
sentative of the Republic of France,
on authority of the United States
Liquidation Commission — War Depart-
ment, all the property, both fixed and
movable, belonging to the United
States of America, War Department,
embraced or located in installation,
depot or park known as De-
partment Project No.

as shown on the Jadwin Report of In-
stallation, page — .

" Executed in parts, each hav-
ing the full force and effect of an
original."

b. France hereby grants to America,
rent free, the temporary use of such
installations and moveables purchased
by France in accordjance ^ith the
terms of this contract as may be re-
quired by the American Expeditionary
Forces and other War Department Or-
ganizations so long as they are in
France or as may be necessary to
complete the liquidation of the affairs
of the War Department; provided,
however, that so long as such installa-
tions and movables are retained by
America for its use under the terms of
this subdivision " b " of Article Four
hereof, they shall be held at the risk of
America.

In witness whereof, on the day and
year first above written, this contract
has been executed in four parts, each
having the full force and effect of an
original, by the United States of
America, acting through the United
States Liquidation Commission— War

toutefois que le risque supporte par
I'Amerique se termine d'une maniere
absolue au 31 Aout 1919, que la prise
de possession ait ete, a cette date,
operee ou non par la France. Au mo-
ment de la prise de posession un recu
dans la forme suivante sera signe par
les Representants des Gouvernements
interesses :

" Qu'il soit connu que le jour

de 1919, les Etats-Unis

d'Amerique, Ministere de la Guerre, out
remis au Representant accredite de la
Republique Francaise, sur ordre de la
Conniiission de Liquidation des Etats-
Unis, Minisfere de la Guerre, tout le
materiel, fixe et transportable, apperte-
nant aus E'tats-Unis d'Amerique, De-
partment de la Guerre, compris ou
situe dans I'installation, le depot ou

le par connu sous le nom de

Department Project No.

comme indique sur le Rapport de
Jadwin des Installations, page — .

" Execute en exemplaires

chacun ayant pleine vigueur et force
d'original."

b. ) La France consent par le present
contrat a accorder a I'Amerique, sans
paiement de loyer, I'usage de telle par-
tie des installations et des bieus mau-
bles achetes par la France suivant les
termes de ce contrat, qui pourra etre
necessaire aux Forces Expedition-
naires Americaines et autres Services
du War Department et sera demandee
par eux, aussi longtemps que cela sera
juge necessaire pour terminer la liqui-
dation des affaires du War Depart-
ment ; a condition toutefois qu'aussi
longtemps que ces installations et ma-
teriels seront conserves par I'Amerique
pour son usage, suivant les termes de
la subdivision " b " de TAx't. IV ci-
dessus, ils le seront aux risques de
I'Amerique.

En foi de quoi, a la date de I'anne
indiquee ci-dessus, entete ce contrat a
ete dresse en quatre exemplaires, pour
valoir chacun d'eux comme original
par les Etats-Unis d'Amerique, agis-
sant par I'intermediaire de la Commis-
sion de Liquidation des Etats-Unis,

UNITED STATES LIQUIDATION COMMISSION. 109

Department, Edwin B. Parker, Chair- Miuistere de la Guerre, Edwin B.
man ; and by tlie Republic of France, Parker, President ; et par la Repub-
acting through le Sous-Secretaire lique Francaise, agissant par I'inter-
d'Etat aux Finances, Paul Morel. mediaire du Sous-Secretaire d'Etat aus

Finances, Paul Morel,

United States of America,
By E. B. Pakker,
Chairman, United States Liquidation Commission — War Department.

Republic of France.
By P. Morel,
Le Sous-Secretaire d'Etat aux Finances.

(2) The Ratification of the Bulk Sale Contract.

Republic of France, Law of the 21st October, 1919.

Law ratifying the agreement entered into August 1, 1919, between the United
States of America and the French Republic for the sale of American stocks.

The Senate and the Chamber of Deputies have adopted,

The President of the Republic promulgates the law, whereof the terms
follow :

Sole Article : The agreement entered into August 1, 1919, between the United
States of America and the Republic of France for the purchase by France of
the surplus property imported, purchased, or constructed in France since April
6, 1917, by the War Department of the United States of America, is hereby
voted.

The present law considered and adopted by the Senate and by the Chamber
of Deputies shall be executed as a law of the State.

Done at Paris, 21 October, 1919 :

By the President of the Republic : .

The President of the Council, Minister of War,

Georges Clemenceau.

The Minister of Finance :

L. L. Klotz.

Note. — A further law provides for a separate accounting in disposing of these
stocks; and after the deduction of direct expenses, a turning of the proceeds
into a special fund for the payment of principal and interest on the purchase
debt.

(3) Letter of Transmittal of Contract, Parker to Morel, August 4, 1919.

Subject : Sale of property by the United States War Department to the Govern-
ment of France.

M. Paul Morel,

Le Sous-Secretaire d'Etat aux Finances, Paris, France.
My Dear Monsieur Morel : Complying with my promise to you made in con-
ference had in your office Friday afternoon, August 1, I now have pleasure in
handing you herewith draft of contract to be entered into between the United
States of America on the one part, and the Republic of France on the other part,

110 UNITED STATES LIQUIDATION COMMISSION.

for the sale of property by the War Department of the United States to the
Government of France.

You will note that the contract follows very closely the language of your
memorandum, which I received on August 1, and which was in response to my
letter of July 25. There are a few provisions, such as that dealing with
" Waiver of claims," constituting subdivision " c " of Article Three, not em-
bodied in your memorandum, but which you will find covered in the corre-
spondence leading up to this agreement and which I am sure are clearly under-
stood between us.

AVe both agree that it is desirable to keep this formal contract as simple as
practicable and not encumber it with details, and to tliat end I am not under-
taking to embody in the contract the following :

1. The estimated selling value of the undelivered material, equipment, and
supplies which America has sold or contracted to sell, aggregating approxi-
mately $77,265,297.83, is estimated to approximate 75 per cent of the cost price
as stated on the American inventories, and these materials, equipment, and sup-
plies, based on sucli values, are distributed between the several inventoried
categories, substantially as follows:

Category 1 .$20, 207, 704. 75

Category 2 35, 402, 769. 36

Category 4 1, 742, 860. 00

Category 7 2, 113, 750. 00

Category 8 9, 722, 763. 72

Category 9 4, 637, 500. 00

Category 12 285,000.00

Category 13 3, 153, 250. 00

Total 77, 265, .597. 83

2. It is, of course, understood that upon the taking over of installations
France will grant, rent free, to America or purcliasers from it the temporary
use for a reasonable time of such installations as may be necessary for ware-
house and storage space for material, equipment, and supplies reserved from
the sale to France and mentioned in Article Two of the agreement dated August
1, 1919. If you desire to set a time limit on such use, I suggest October 1, 1919.

3. We will, of cour.se, keep accurate account of all deliveries made on unful-
filled contracts on and after July 25, the date on which I sent you statement
of estimated selling value of undelivered material. Conversely, should we
import into France any material, equipment, or supplies on or after that date,
they will not be included in the bulk sale to France,

4. In the settlement between our two Governments for artillery and ammuni-
tion purchased by America from France an agreement has been reached by
which America obligates itself to pay France a very large sum. A considerable
number of these artillery units are only now being delivered, and some of them
are yet to be finished and delivered. We are anxious to take delivery and return
these ordnance supplies and equipment to tlie United States at the earliest possi-
ble moment. It is, of course, understood that these artillei'y units which France
is selling to America are not included in the bulk sale to the French or in the
material, equipment, and supplies reserved for return by America to the United
States estimated in the contract at $15,000,000. I simply mention this here out
of abimdance of caution to avoid any possible misunderstanding in the future.

5. You may treat this letter as supplementary to and explanatory of the
formal agreement, and upon its acceptance by you it will bind both parties
thereto.

UNITED STATES LIQUIDATION COMMISSION. Ill

I presume it is desirable tliat the contract should be written in both French
and English in parallel columns, and if this is agreeable to you I will have it
prepared accordingly.

I am sure that you will agree with me that i-t is desirable that the contract
should be promptly executed, and to that end I hold myself in readiness to
meet with you at any time to-day or to-morrow.
Yours very sincerely,

(Signed) Edwin B. Parker,

Chairman, United States Liquidation Commission — War Department.

(4) Sl'PPLEMENT TO LETTER OF TRANSMITTAL, AUGUST 11, 1919.

Subject : Sale of property by the United States AVar Department to the Govern-
ment of France.

M. Paul Morel,

Le Sous-Sec7-etaire d'Etat aiix Finances, Paris, France.

My Dear Monsielr Morel : In the conference had with you on the afternoon
of August 7 you stated that the terras set forth in my letter to you of August 4,
supplementary to and explanatory of the formal agreement, bearing date of
August 1, 1919, Avere acceptable to you with the following changes :

(a) At the end of and as a part of paragraph (1), page 2, there should be
added the following:

" The material, equipment, and supplies necessary to complete the contracts of
sale mentioned shall be for each category selected as follows : If the materials
are classified according to condition as new, good, worn, much worn, etc., the
selection will be made for each category, and for each class in that category,
in the proportion in which the various classes enter into the category. If the
materials of a category are not classified, the selection shall be an average of
the qualities in such category."

(h) At the end of paragraph 3 change the period to a semicolon, and add
the words :

" Provided America will not import into France any surplus War Department
material, equipment, or supplies for sale in France, without first giving to
France an opportunity to purchase same."

Will you please treat this letter as supplementary to my letter to you of
August 4, above mentioned?
Yours very sincerely,

(Signed) Edwin B. Parker,

Chairman, United States Liquidation Commission — War Department.

APPENDIX XL

1. Letter from Mr. Hoover to Judge Parker.

Supreme Economic Council, Food Section,

March 11, 1919.
Chairman United States Liqltidation Commission — War Department,

Paris, France.
Dear Judge Pabker : The clothing relief to tlie liberated countries of Europe
is just as important as food relief, and we have already made considerable pur-
chases from the Army for Belgium and northern France, and have even bought
and shipped from the United States. The prices, however, on the Army mate-

112 UNITED STATES LIQUIDATION COMMISSION.

rials have been extremely high — higher than from the trade — and would only
be accepted under force majeure. The Governments who buy them necessarily
have to re-sell to their public and they are very wary as to buying in considera-
able amounts at the present prices, as private firms, which are rapidly re-open-
ing, are able to place similar goods at lower pi'ices. If, on the other hand, rea-
sonable prices can be made and credits given, we can go a long ways toward
relieving the Army of its clothing and we could also relieve it of a large amount
of iron rations. The Army have a number of " Lake " boats, from 2,000 to 3,000
tons carrying capacity, at present in the coal trade, which they are now ready
to relinquish to return to the States. If they would undertake to load a cargo
of these boats with clothing supplies at reasonable prices for each, Roumania,
Greater Serbia, Poland, and a further cargo of iron rations for Poland, we
could dispose of this material for you at once. We have a general contractoral
arrangement with these Governments by which they accept our invoices for such
cargoes, provided we are willing to say that they are reasonable prices, and
will undertake to give any sort of obligation that we may call foi'. None of
these Governments, of course, have any money, and if the Army will take a 12-
month's treasury bill in each case the whole matter could be put in hand and
carried through instantly, provided always that the prices are reasonable. I
understand that the treasury prefers to make advances to these countries with
which they are to pay for these materials. This is, however, only a question
of inversion of finance, but I mention it as I understand it is their desire.
Yours faithfully,

Heebebt Hoover.

2. Lettepv fkom the President to Judge Parker.

The President of the United States of America,

Paris, 24 March, 1919.

My Dear Judge Parker : Mr. Hoover has represented to me the critical cloth-
ing conditions in the liberated countries. He has also presented to me the fact
that the War Department is possessed of enormous stocks, not only of new
clothing but of renovated materials. It must be obvious that these renovated
materials can have but little value in the world markets and that the unused
materials, purchased and manufactured under war conditions, will soon be
heavily depreciated by the return of commerce to more normal prices. It
would appear, therefore, that it is desirable to liquidate these stocks at the
earliest possible moment.

It would appear that but little market could be found for such large quan-
tities of clothing and shoes and similar articles, except through some such relief
agency as that conducted by Mr. Hoover and, to some extent, this agency may
be of value in the distribution of the unused material. The sympathetic interest
which the American people must have in the alleviation of misery amongst the
liberated people should lead us to entertain the most sympathetic view as to
prices and terms upon which this uiaterial is disposed of to them. I would be
glad, therefore, if the Commission could accept as its guiding principle in these
negotiations the fact that it is not only securing a rapid liquidation of materials
that may otherwise prove practically unsalable, but also that it has an oppor-
tunity to perform a fine human service by approaching the matter in the most
sympathetic mind, and I would be glad if the Commission could see its way to
very largely accept INIr. Hoover's views as to the terms upon which dealings
should be undertaken with the liberated peoples.

Faithfully yours, Woodrow AVilson.

UNITED STATES LIQUIDATIOIST COMMISSIOIT.
3. Letter feom Judge Parker to the President.

113

Paris, March 25, 1919.
My Dear Mr. President : It will be the pleasure as well as the duty of this
'Commission to pursue the course outlined in your letter of March 24 addressed
to me, in disposing, with Mr. Hoover's assistance, of salvaged wearing apparel
^nd other materials and supplies of which the liberated countries are sorely
In need.

Tours respectfully, Edwin B. Parker, Chairman.

The President,

12, Place des Etats Vnis, Paris, France.

APPENDIX XII.

The Liberated Nations and Their Commercial Organizations.

Poland — Polish Relief and Supply Corporation.

Czechoslovakia — Czechoslovakia Relief Corporation.

Roumania — The Government.

Kingdom of Serbs, Croats, and Slovenes — The Government.

Esthonia — Revalis.

Ukrainia — Ukrailian.

Latvia — Central Union Consums.

Xiithuania — Vilnis.

APPENDIX XIII.

United States Liquidation Commission — W. D.,

Office of General Sales Agent,

Washington, D. C, May 27, 1920.

TVIemorandum to U. S. Liquidation Commission — W. D.

1. The following statement shows status of sales of animals in A.

E. F.

Purchaser.

Quantity.

Total.

French individuals

German individuals

Bavarian Syndicate

Czechoslovakia ^

Polish Relief and Supply Corporation

French Government

Belgian G overnment

Grand total

69,769

33,717

13,039

5,900

58,984

490

181,909

§13,903,346.41

7,243,983.77

2,293,300.43

3,870.10

1,662,000.00

10,928,714.85

97,849.46

35,133,065.02

E. P. Orton,
Major, Cavalry, General Sales Agent.

183176—20-

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118 UNITED STATES LIQUIDATION COMMISSION.

APPENDIX XV.

Contract foe Liquidation of Claims Between United States of America and
the go^'ernment of the kingdom of belgium,

This contract entered into tliis seventh day of Novem-ber, one thousand nine
hundred and nineteen, by and between the United States of America (herein-
after called the United States), acting through the United States Liquidation
Commission — War Department, of the first part, and the Government of the
Kingdom of Belgium (hereinafter called Belgium), acting through the minister
of finance, of the second part WITNESSETH :

That whereas Belgium has furnished the armed forces of the United States
with rail and water transport, the use of locomotives, railway material, and
other merchandise and services for the use of the American forces in Europe ;

And whereas the private railroad companies in Belgium have furnished
certain railroad transportation to the armed forces of the United States, which
all parties desire to include in this settlement ;

And whereas the Belgian railroads have presented certain ordres de transport
signed by American officers which the United States believes should be paid by
Great Britain under a capitation agreement concerning American troops serving
with the British Armies ;

And whereas the Belgian railroads have received from the French railroads
certain bills for supplies furnished to Belgian locomotives rented to the Ameri-
can forces, which charges the United States believes are not properly payable
by Belgium ;

And whereas the amount of the indebtedness of the United States to Belgium
by reason of the materials and services referred to in the foregoing paragraphs
is difficult of exact determination on account of war conditions ;

And tvhereas the United States has sold to Belgium certain merchandise and
has performed for Belgium certain services aggregating approximately thirty
million dollars (30,000,000.00 dollars) ;

And whereas by a contract dated March first, A. D. one thousand nine hun-
dred and nineteen, Belgium agreed to give and the United States agreed to
accept in payment for purchases to the aggregate amount of twenty-four
million dollars ($24,000,000.00) treasury bills of the Belgian Government,
payable not later than April tenth, A. D. one thousand nine hundred and twenty-
two, and secured by a first lien on the portion of the German war indemnity
payable to Belgium, as more particularly stated in said agreement;

And iDhereas by a certain other agreement dated August fifth, A. D. one
thousand nine hundred and nineteen, Belgium agreed to give and the United
States agreed to accept in payment for sales of subsistence stores, which sales
aggregate eight million three hundred and ninety-two thousand ninety-seven
dollars fifty-seven cents ($8,392,097.57) notes of the Belgian Government payable
on or before August fifth, A. D. one thousand nine hundred and twenty-two, as
more particularly stated in said agreement ;

And whereas by a certain other agreement dated August twenty-first, A. D.
one thousand nine hundred and nineteen, Belgium agreed to give and the United
States agreed to accept in payment for sales of office fittings at Antwerp, which
sales aggregate one hundred and ninety-six thousand four hundred and eighty-
three dollars fifty-seven cents ($196,483.57), notes of the Belgian Government
payable on or before August twenty-first, A. D. one thousand nine hundred and
twenty-two, as more particularly stated in said agreement ;

And tvhereas all parties hereto desire to adjust any and all claims and de-
mauds of every kind, nature, and description existing between them up to and

UNITED STATES LIQUIDATION COMMISSIOIT. 119

including tlie ttiirty-first day of October, A. D. one thousand nine hundred and
nineteen :

Noio therefore, in consideration of the premises and tlie other considerations
herein stated, it is agreed as follows :

Aeticle One. Belgium agrees to deliver forthwith to the financial requisition
officer, Paris, or to such other officer as shall be fully designated to receive the
same, treasury bills or notes to the amount of eighteen million five hundred and
seventy-four thousand one hundred and thirty-nine dollars seventy-nine cents
($18,574,139.79), as provided in said agreement of March first, A. D. one thou-
sand nine hundred and nineteen, and further treasury bills or notes to the
amount of eight million three hundred and ninety-two thousand ninety-seven
dollars fifty-seven cents ($8,392,097.57), as provided in said agreement of
August fifth, A. D. one thousand nine hundred and nineteen, and further treas-
ury bills or notes to the amount of one hundred and ninety-six thousand four
hundred and eighty-three dollars fifty-seven cents ($196,^83.57), as provided in
said agreement of August twenty-first, A. D. one thousand nine hundred and
nineteen. All of said obligations shall be in form satisfactory to the Treasurer
of the United States and in accordance with the provisions of the several agree-
ments above referred to, provided nevertheless that for convenience the parties
shall be at liberty to make such changes in the form of said obligations in-
cluding dates for payment of principal and interest as may be mutually agreed
upon, and including such adjustments as are necessary to arrive at round sums
for the amounts of said obligations.

Aeticle Two. In addition to the foregoing payments Belgium releases the
United States from any and all debts, claims, and liabilities whether in con-
tract or tort which Belgium now has or may have by reason of any act done
or engagement entered into on or before the thirty-first day of October, A. D.
one thousand nine hundred and nineteen, for materials or services furnished
to or damage done by the American forces in Europe except as hereafter stated.
In this release are included all claims for transportation furnished to the
American Red Cross, the American Young Men's Christian Association, the
American Young Women's Christian Association, the Knights of Columbus, the
Jewish Welfare Board, and the American Salvation Army.

Aeticle Thbee. The United States hereby accepts the foregoing obUgations
and release as full payment for all indebtedness existing between Belgium and
the American forces in Europe, and hereby releases Belgium from any and all
debts, claims, and liabilities, whether in contract or tort, which the United
States now has or may have by reason of any act done or engagement entered
into on or before the thirty-first day of October, A. D. one thousand nine hun-
dred and nineteen, for materials and services furnished by or damage done to
the American forces in Europe except as hereinafter stated.

Aeticle Foxxr. It is expressly understood that the releases contained in
Articles Two and Three above do not apply to contracts and other obligations
entered into, or incurred in the United States, including an advance of money
by the Belgian Government to the credit of Lieutenant James Pede, Quarter-
master Corps, on or about July four, one thousand nine hundred and nineteen,
but cover only transactions between the parties hereto entered into or occurring
in Europe, including all claims for the cargoes of the steamships Aul)urn and
Aledo. Neither party hereto will present or prosecute any claim against the
other for any such transaction occurring on or before October thirty-first, one
thousand nine hundred and nineteen, except as hereinafter provided.

Aeticle Five. From the releases contained in Articles Two and Three above
are hereby excepted the following obligations arising out of transactions prioi
to October thirty-first, A. D. one thousand nine hundred and nineteen.

120 UNITED STATES LIQUIDATION COMMISSION.

A. The obligation of the Belgian Government to furnish and pay the treasury-
bills or notes stated in Article One hereof.

B. The United States will guarantee the payment to Belgium of the ordres de
transport signed by American officers, which it contends are px'operly payable
by Great Britain, provided neviertheless that the total amount guaranteed shall
in no event exceed the sum of thirty thousand francs (30,000.00 frs.).

C. The United States will re-pay to Belgium whatever sum it may be obliged
to pay the French railroads for the supplies furnished to Belgian locomotives
rented to the American forces, not exceeding in the aggregate the sum of
twenty-five thousand francs (frs. 25,000.00), provided that a claim for the sum
so expended is presented within six months from the date of this instrument.

Article Six. For the considerations above named Belgium agrees to save
the United States harmless from any and all claims of whatever nature against
the United States or members of its military or naval forces on the part of any
railway company within the limits of the Kingdom of Belgium, whether such
railway company is the property of the Belgian Government or not; and also
against all claims on the part of any person or corporation furnishing services
to the American Army at Antwerp under the authority of the Ministre des
Chemins de Fer, Marine, Postes et Telegraphes.

Aeticle Seven. Belgium further agrees to furnish to the military and naval
forces of the United States during the term of three years from the date of
these presents, railway transportation in Belgium for persons and property at
rates not exceeding those which may at the time be In force for the trans-
portation of persons and property of the Belgian Army.

Article Eight. Any sums of money which may be payable by the United
States to Belgium by reason of items B and C of Article Five hereof may at
the option of the United States be paid in cash or by the cancellation of an
equivalent amount of principal of the obligations mentioned in Article One
hereof.

Article Nine. Whereas Belgium contends that all debts contracted by her
up to November eleventh, A. D. one thousand nine hundred and eighteen, are
on the same footing as loans, as far as concerns the application of article two
hundred and thirty-two of the treaty of peace between the Allied and Asso-
ciated Powers and Germany concluded at Versailles, and of a letter of six-
teenth June, A. D. one thousand nine hundred and nineteen, from Messrs.
Clemenceau, Woodrow Wilson, and Lloyd-George to M. Hymans, minister of
foreign affairs of Belgium.

It is understood and agreed that the total debts of Belgium contracted for
services and materials furnished up to November eleventh, A. D. one thousand
nine hundred and eighteen, which ai*e included in this settlement amount to
four million five hundred and seventy-five thousand one hundred and thirty-
three francs fifty centimes (frs. 4,575,133.50) and that nothing herein contained
shall prejudice any action that the Government of the United States may take
under or by virtue of said treaty and letter.

In witness whereof on the day and year first above written this instrument
has been executed in four duplicate originals by the United States of America
through the chairman of the United States Liquidation Commission — War De-
partment, and by the Government of the Kingdom of Belgium through the
minister of finance.

(Signed) Leon Delacy,

Ministre des Finances.
Edwin B. Parker,
Chairman, United States Liquidation Commission — War Department.

Signed by both parties in presence of Frederic Gilbert Bauer, Lieut. Col., J. A.

UNITED STATES LIQUIDATION COMMISSION.

121

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The balance due the U. S. is $27, 094, 195. 22

And francs 373,465.42 at 5.45 as per bill of sale 68, 525. 71

Total 27, 162, 720. 93

For which Belgium in final contract of November 7, 1919, fur-
nishes treasury bills or notes —

Applying on sales contract of Mar. 1, 1919 18, 574, 139. 79

Applying on sales contract of Aug. 5, 1919 8, 392, 097. 57

Applying on sales contract of Aug. 21, 1919 196, 483. 57

27, 162, 720. 93
An item of £1,160.00 for transportation of Belgian personnel from England
to France on American vessels is not included hereon. The Belgians have
accepted this account and order for its payment by draft on London in pounds
sterling has been issued, but through delay on part of Belgian treasury de-
partment draft has not yet been delivered. It will be delivered in Brussels
this week. [Delivered. See cable 1337, Noble to Parker, par. 3.]

The undersigned have examined the foregoing account on the part of the
U. S. Liquidation Commission — War Department and the Government of the
Kingdom of Belgium and find same to be correct both as to debits and credits.
For the U. S. Liquidation Commission — War Department:

(Signed) Frederic Gilbert Bauer,

Lieut. Col., Chief Finance Officer.
For the Government of the Kingdom of Belgium:

(Signed) N. Warn ant, Capitaine.

APPENDIX XVI.

(1) Contract Between United States of America and Owen Clegg, James
Todd, Lt. Col. George W. Parkinson, Arthur Huntley Walker, Soci^Tf;
Anonyme Darracq, a. Darracq & Company (1905) Ltd., Clement Talbot,
Ltd., October 1, 1919.

This contract entered into this first day of October, A. D. 1919, by and be-
tween the United States of America (hereinafter called America), acting
through the United States Liquidation Commission — War Department, of the
one part, and Owen Clegg, James Todd, Lt. Col. George W. Parkinson, Arthur
Huntley Walker, Societe Anonyme Darracq, a corporation organized under the
laws of France; A. Darracq & Company (1905) Ltd., a corporation organized
under the laws of Great Britain, and Clement Talbot, Ltd., a corporation or-
ganized under the laws of Great Britain (hereinafter called the purchasers), of
the other part, witnesseth :

That for the consideration hereinafter mentioned, the parties agree as fol-
lows:

Article One. Property and supplies sold. — America agrees to and does
hereby sell to the purchasers without warranty of quantity, quality or condi-
tion, and the purchasers agree to and do hereby purchase from America all of
the surplus motor vehicles, motor property, immobile equipment, spare parts,
supplies, oils, gasoline, kerosene, grease, carbide, drums, bidons, etc., of the
American Forces in Germany substantially as listed on a schedule hereto at-
tached as part hereof, the same consisting of an index summary and sheets
numbered from 1 to 15 inclusive, marked " Exhibit A " hereto attached as part
hereof (except the property described in subdivisions I) and c of Article Four

UNITED STATES LIQUIDATION COMMISSION. 123

hereof), together with all of the motor transport equipment located in Motor
Reception Park No. 1 at Sinzig, Germany, in Motor Reception Park No. 3 at
Coblenz-Neuendorf and Coblenz-Lutzel, Germany, and in Motor Reception Park
No. 4 at Bitbiirg, Germany, whether the same is or is not listed on Exhibit A,
and America will not, without the purchasers' consent, increase or decrease the
amount of motor transport equipment contained in said motor reception parks
on September 19, 1919.

Article Two. Title. — Title to the supplies and property hereby sold shall pass
to the purchasers upon the signing of this agreement.

Aeticle Three. Purchase price and terms of payment. — The purchase price
shall be three million two hundred and fifty thousand pounds sterling
(£3,250,000), payable in the following installments on the following dates:

October 1, 1919. Twenty thousand pounds £20,000

October 11, 1919. One hundred thousand pounds 100, 000

November 1, 1919. Two hundred five thousand pounds 205, 000

December 1, 1919. Two hundred fifty thousand pounds 250, 000

January 1, 1920. Six hundred sixty-eight thousand seven hundred

fifty pounds 668, 750

February 1, 1920. Six hundred sixty-eight thousand seven hundred

fifty pounds 668, 750

March 1, 1920. Six hundred sixty-eight thousand seven hundred fifty

pounds 668, 750

April 1, 1920. Six hundred sixty-eight thousand seven hundred fifty

pounds 668, 750

3, 250, 000

The first payment of twenty thousand pounds (£20,000) has been made and
America acknowledges the receipt thereof. All payments after the first pay-
ment of twenty thousand pounds (£20,000) shall be made to the chief quarter-
master of the American forces in Germany, now stationed at Coblenz, through
the general sales agent, American forces in Germany, or, at the election of the
War Department of America, at such bank or trust company in London, Eng-
land, or Paris, France, as the said War Department may designate.

Article Four. Shortages or excesses of property or supplies sold. — A check
shall be made by the representatives of the parties before November 7th, 1919,
of the property and supplies hereby sold.

In the event that such check should disclose that there are substantially
lesser or greater quantities of any of the property and materials sold than
the quantities thereof listed in Exhibit A, the "prices" of the property or
materials short and of the property and materials in excess shall be deter-
mined in the following manner, and the net difference between the total
" prices " gf all of the property or material short and the total " prices " of
all of the property or materials in excess shall be deducted from the purchase
price provided in Article Three, if such net difference discloses a net shortage
and shall be added thereto if such net difEerence shows a net excess.

(a) The "prices" of the property or materials described in Exhibit A, and
of similar property and materials, are agreed to be (but solely for the purposes
of this article and for the purposes of subdivision (d) of Article Five hereof)
the following:

Of the motor vehicles and equipment listed at pages 1 to 12, inclusive, of
Exhibit A the "price" of each unit is 35^ per centum of the unit resulting
value thereof, as set forth in Exhibit A, ascertained as to each article by
dividing the " resulting value " of such articles by the number thereof, as
shown on said pages of said Exhibit A. Provided, however, that the value

124 UNITED STATES LIQUIDATION COMMISSION.

of the E and F class vehicles referred to in subdivision (&) of this Article
shall be ascertained and credited as provided in said subdivision.

Of the gasoline, oil, etc., listed on page 15 of Exhibit A, the " price " of each
unit is the unit cost thereof as set forth on said page of said Exhibit A.

Of the immobile equipment and hand tools in M. T. C. Overhaul Park,
Coblenz, Germany, and of the spare parts in spare parts depot, Coblenz, Ger-
many, listed oh pages 13 and 14 of said Exhibit A, the " price " of each unit
is the unit resulting value thereof ascertained as hereinbefore provided, from
inventories which the general sales agent, American forces in Germany, has
on hand and will submit to the purchasers.

Of the solid tires, casings, tubes, rims, and tire carriers in spare-parts
depot, Coblenz, Germany, listed on page 14 of Exhibit A, the " price " of each
unit is the unit resulting value thereof, ascertained as hereinbefore provided,
from the " resulting values " and " numbers " set forth on said page 14 of
Exhibit A.

(b) There are excepted from this sale such E and F class vehicles listed on
Exhibit A as America may require for repair of vehicles now in use by the
American forces in Germany, and shall have removed from said motor re-
ception parks before October 5, 1919, and the purchasers shall be credited on
account of the purchase price provided in Article Three hereof an amount equal
to 35^ per centum of the imit resulting value of said E and F vehicles so
excepted, as shown in said Exhibit A, multiplied by the number of imits
thereof.

(c) There are also excepted from this sale the seven 25-kilowatt generator
sets installed in the shop at Coblenz-Lutzel, and the purchasers shall be
credited therefor on account of the purchase price provided in Article Three
hereof an amount equal to the full unit resulting value thereof, multiplied
by the number of units thereof; but the purchasers shall have the right to
use these generator sets in connection with the operation of the I'epair shop
for such time as they desire, but not beyond the time that the American
forces in Germany remain in military possession of said repair shops.

(ri) The amounts to be credited or debited, as provided In this article, on
account of the purchase price provided in Article Three, shall be credited or deb-
ited, as the case may be, on account of the last instalment of said purchase price.

(e) On or before November 7, 1919, the adjustment of the purchase price
provded by this article shall be made on behalf of the purchasers by said
Lt. Col. George W. Parkinson, or such other person as the purchasers shall
designate in writing, and, on belialf of America, by the general sales agent,
American forces in Germany, and a written statement of the result of said ad-
justment in six duplicate originals signed by them, shall, on or before said
date, be made, and one copy thereof shall be annexed to each copy of this con-
tract as part thereof, and shall have the same force and effect as though the
same had been executed by the parties hereto as part hereof.

Article Five. Security. — As security for the performance by the purchasers
of their obligations under this agreement they have redelivered to America,
which acknowledged the receipt thereof, all of the property and supplies hereby
sold to them, to have and to hold the same in pledge in accordance with the
following terms and conditions :

(a) America shall hold said property, at the sole risk of the purchasers, and
after November 1, 1919, will be obligated only to furnish such guards, for a
period of not exceeding one year from October 1, 1919, as may be necessary
in the judgment of the commanding general, American forces in Germany, to
give military protection thereto. The expenses of America for the use of the
land and buildings on or in which said property, after November 1, 1919, shall

UNITED STATES LIQUIDATION COMMISSION. 125

be situated, shall be paid by the purchasers. If after November 1, 1920, any
of the property hereby sold shall remain in the possession of America, America
may remove and store the same for, in the name of, and for the account and
at the risk of the purchasers, and the cost of said removal shall be repaid by
the purchasers to America and shall constitute a lien on said property, and
the cost of the storage thereof sball constitute a lien thereon in favor of the
person, firm, or corporation undertaking the storage thereof.

(b) In the event of default by the purchasers in the payment of the instal-
ments of the purchase price amounting to three hundred and five thousand
pounds (£305,000) payable October 11th and November 1, 1919, or in the pay-
ment of the instalment of the purchase price amounting to two hundred and
fifty thousand pounds (£2.50,000) payable December 1, 1919, America may, after
giving ten days' written notice thereof to the purchasers in the manner herein-
after provided, without resort to judicial proceedings or otherwise, declare
this agreement to be canceled, and thereupon, this agreement shall be canceled,
and all of the property and supplies hereby sold by America to the purchasers
shall revert to and become the absolute property of America, and the sums paid
by the purchasers to America prior to such cancellations shall be retained by
America as liquidated damages for breach of this contract, and the parties
hereby agree that said sums, in said event, would fairly represent the amount
of damages that would be sustained by America on account of said breach.

(c) In the event of the default by the purchasers in the payment of any of
the installments of the purchase price or in the payment of any other sums
payable by the purchasers to America under this agreement, America may
declare the entire unpaid balance of the purchase price, or any part thereof,
immediately due and payable, and, thereupon, the same shall be due and pay-
able, and America may, after giving ten days' written notice thereof to the
purchasers in the manner hereinafter provided, without judicial proceedings of
any kind, sell at public or private sale, in bulk or in installments, and from time
to time, at such price or prices as America, in her sple discretion may deem to
be reasonable under the circumstances, any or all of the property hereby
pledged, and shall apply the net proceeds thereof after deducting the expenses
of sale and delivery, to the payment of the amount due to America under this
agreement, and shall pay over the balance thereof, if any, to the purchasers.

If after any sale as aforesaid there then should remain unpaid any balance
payable under this agreement by the purchasers to America, the purchasers
shall, jointly and severally, be liable for the payment thereof to America, and
if there then should remain in America's possession any of the property hereby
pledged the same shall remain subject to the lien of said pledge and may be
sold as hereinbefore provided and the proceeds applied as hereinbefore provided.

(d) After the payment by the purchasers of the installments of twenty thou-
sand pounds (£20,000) payable Ocober 1, 1919, and of the two installments of
one hundred thousand pounds (£100,000) October 11th, 1919, and two hundred
five thousand pounds (£205,000) November 1st, 1919, the purchasers may, from
time to time, and upon paying to America additional amounts equal to the
"prices" thereof ascertained as provided in subdivision (a) of Article Four
hereof, and upon giving proper receipts therefor, take possession of any of the
px'operty or supplies hereby pledged ; and the payments made as aforesaid shall
be credited on account of the installments of the purchase price payable as pro-
vided in Article Three (adjusted as provided in Article Four hereof) and there,
upon said property and supplies so delivered shall be free from the lien of this
pledge.

When the aggregate amount of all of the sums paid by the purchasers to
America, under this agreement, shall equal the entire amount payable by the

126 UNITED STATES LIQUIDATION COMMISSION.

purchasers to America thereunder, all of the remaining property and supplies
hereby sold shall be released from the lien of this pledge and shall be forthwith
delivered to the purchasers.

Abticle Six. Miscellaneous provisions. — The purchasers may from time to
time repair and improve motor vehicles and- equipment in the Overhaul Park,
Coblenz, Germany, sold under this agreement.

Article Seven. The obligations of the purchasers under this agreement shall
be joint and several.

Article Eight. This contract shall be interpreted in accordance with the laws
of America as the same prevail in the District of Columbia.

Article Nine. The purchasers designate their office in Coblenz or Coblenz-
Lutzel as a place where America may deliver any written notice provided for by
this agreement or otherwise, and it shall also constitute a delivery of any such
notice when the same has been deposited in the German or French mails,
registered, postage prepaid, in an envelope addressed to Soci^te Anonyme
Darracq, at 33 Quai du General Gallieni, Surennes, France.

Article Ten. The Quartermaster's Corps of the American forces in Germany
shall sell to the personnel employed by the purchasers to handle the motor
equipment, on orders signed by the purchasers or their authorized representa-
tives, commissary food supplies at the prices charged therefor to civilian em-
ployees of the American forces in Germany, provided said food supplies are used
solely for the subsistence of said personnel and for no other purpose.

Article Eleven. America will not permit within the area of Germany subject
to its military control any tax or duty to be imposed or collected by Germany
on account of the importation into Germany of any of the property or supplies
hereby sold or on account of the exportation thereof by the purchasers from
Germany.

Article Twelve. The purchasers will not sell in France any of the property
purchased without first procuring the consent in writing of M. Paul Morel, le
Sous-Secretaire d'Etat aux Finances, or of some other authorized representative
of the French Government.

Article Thirteen. The commanding officer of the American forces in Ger-
many will issue such passes or permits as may be necessary for the personnel
employed by the purchasers to handle said motor equipment so that said per-
sonnel and persons negotiating with the said purchasers can enter and leave the
occupied territory without hindrance or delay at all times.

Article Fourteen. So long as the American forces in Germany shall be
entitled by requisition or lease to use the motor parks, grounds, and group of
buildings known as the " Overhaul Park and Annex, Coblenz-Lutzel," but not
longer than may be necessary for the purchasers to repair and ship the motor
transport vehicles hereby sold, and in no event later than October 1, 1920,
unless the commanding general, American forces, extend said period, the pur-
chasers may use said grounds and buildings for the purpose of housing the per-
sonnel necessary to handle said property or for other necessary purposes con-
nected with the carrying out of this agreement. The cost to America for the
use and occupation of said grounds and buildings, while used as aforesaid by
the purchasers, shall be reimbursed to America by the purchasers.

Article Fifteen. Each of the purchasers severally irrevocably constitutes and
appoints the consul general and the vice consul of Great Britain at New York
City, New York, and their successors, and each of them, his or its attorney in
fact with full power for him or it and in the name, place, and stead of him or
it, to receive or accept service of judicial process in any action, suit, or pro-
ceeding which America may bring against him or it on account of this agree-
ment, or for the enforcement of the obligations thereof.

UNITED STATES LIQUIDATION COMMISSION. 127

Article Sixteen. The general sales agent, American forces in Germany, or
his successor, or such other person as the War Department of America may
designate to the purchasers in writing, shall be the representative of America
through whom shall be transmitted all reports, notices, or other communica-
tions relating to this agreement which the purchasers may desire to deliver or
communicate to America.

In witness whereof, on the day and year first above written, this contract
has been executed in six parts, each having the full force and effect of an
original, by the United States of America, acting through the United States
Liquidation Commission — War Department, Edwin B. Parker, chairman, of the
one part; and by Owen Clegg; James Todd; Lt. Col. George W. Parkinson;
Arthur Huntley Walker ; Societe Anonyme Darracq, acting through Owen Clegg,
duly authorized thereto; A. Darracq & Company (1905), Ltd., acting through
A. Huntley Walker and James Todd, duly authorized thereto ; and by Clement
Talbot, Ltd., acting through A. Huntley Walker, duly authorized thereto, on
the other part.

United States of America,
By Edwin B. Parker,
Chairman, United States Liquidation Commission — War Department.

Owen Clegg.
James Todd.

G. W. Parkinson, Lt. Col.
Arthur Huntley Walker.
SociliTfi Anonyme Darracq,
By Owen Clegg,

Managing Director.
A. Darracq & Company (1905), Ltd.,
By A. Huntley Walker, James Todd.

Clement Talbot, Ltd.,
By A. Huntley Walker.
Witness as to Edwin B. Parker, Owen Clegg, James Todd, Lt. Col. George W.
Parkinson, Arthur Huntley Walker.

(Signed.) Edward T. Noble.

(2) Contract Between United States of America and Owen Clegg et al..

Dated December 3, 1919, Supplementary to Contract Dated October 1,

1919.

Contract between United States of America and Owen Clegg et al., dated
December 3, 1919, supplementary to contract dated October 1, 1919.

Whereas, heretofore, to wit, on the 1st day of October, A. D. 1919, a contract
(hereinafter called "Original contract") was entered into between the United
States of America (therein and hereinafter designated "America") on the
one part, and Owen Clegg and others (therein designated "Purchasers" and
hereinafter, together with The Motor Organizations, Limited, designated " Pur-
chasers ") on the other part, a copy of which said original contract (omitting the
exhibits thereto) is hereunto attached and made a part hereof, marked for
identification " Exhibit A " ; and

Whereas, the said The Motor Organizations, Limited, a corporation incorpo-
rated and existing under and by virtue of the laws of Great Britain, of which
Sir Percival Perry, James Todd, and Col. B. J. H. Fitzgerald are directors,
has acquired an interest in and assumed obligations arising under the said
original contract; and

Mniereas it has been found impracticable to complete the checking of the
properties acquired by the purchasers under the terms of the said original con-

128 UNITED STATES LIQUIDATION COMMISSION.

tract and make the adjustments and state an account on or before November 7,
1919, as stipulated for in Article Four of the original contract ; and

Whereas the purchasers have made the payments stipulated for in Article
Three of the said original contract, which payments so made aggregate in
amount £325,000, leaving a balance due by the purchasers to America of
£2,925.000 (subject to additions or deductions in accordance with the pro-
visions of Article Four of the original contract) ; and

Whereas the purchasers desire an extension of time and a readjustment of
the dates of payment of such balance ; and

Whereas Sir Percival Perry has assumed the active executive management
of The IMotor Organizations, Limited, and as such is in charge of conditioning
and marketing the property acquired by the purchasers under the terms of the
said original contract:

NoiD, therefore, in consideration of the premises and of the mutual under-
takings herein mentioned, it is agreed between the parties hereto that the
original contract shall be and it is hereby modified and amended in the follow-
ing respects :

Section 1. The Motor Organizations, Limited, joins herein for the pui'pose
of assuming, and does in all things assume, jointly and severally with the
other purchasers, the obligations and undertakings arising under the said
original contract and this supplement thereto, without, however, in any wise
or to any extent releasing or modifying the joint and several obligations of the
purchasers named in the said original contract.

Section 2. Sir Percival Perry joins herein for the purpose of agreeing,
jointly and severally, with the other purchasers, and does hereby agree, jointly
and severally, with the other purchasers, that so long as the purchase price,
or any part of it, remains unpaid, he will (unless released from this obligation
by America) be and remain the active and directing executive in control of
and in active charge of the conditioning and marketing of the property
acquired by the purchasers under the said original contract and any and all
amendments thereto.

Section 3. The time for checking the said property, making the adjust-
ments and stating the account, as provided by Article Four of the said
original contract, shall be extended, and is hereby extended from November 7,
1919, to January 15, 1920. It is further agreed between the parties hereto
that in making the said check, adjustments and statement of account America
shall be represented by Lieutenant Colonel T. H. Kruttschnitt, and the
purchasers shall be represented by Lieutenant Colonel G. W. Parkinson (or in
the event of his inability or refusal to act, then by Sir Percival Perry) ; and in
the event of their disagreement with respect to the classification or quantity of
the equipment or supplies, or any other matter arising in connection with the
said checking, adjustments, and the statement of an account, as' provided for in
the said Article Four of the said original contract, then in such event the de-
cision of Lieutenant Colonel T. H. Kruttschnitt shall be final.

Section 4. The purchasers shall immediately on the signing of this contract
deposit in the Guaranty Trust Co. of New York (Pai-is Branch) the sum of
two hundred fifty thousand pounds (£250,000) in the name of Lieutenant
Colonel T. H. Kruttschnitt, A. M. C, trustee, and the purchasers may draw
upon said amount by checks countersigned by said trustee to defray the ex-
penses of repairing, improving, and selling the property purchased under this
contract; provided that at any time Lieutenant Colonel T. H. Kruttschnitt
may require the purchasers to reinstate within ten days the original amount
deposited if in his opinion or in the opinion of the War Department of the
United States such reinstatement is necessary to the interests of the United
States, and that upon ten days' written notice to the purchasers said trustee

UNITED STATES LIQUIDATION COMMISSION. 129

may withdraw the entire amount of £250,000 to the credit of the United States
on account of the purchase price of this contract; provided, further, that on
July 1, 1920, any remaining balance of the two hundred fifty thousand pounds
will be applied upon the payment due on that date, as provided for in section 5.
Section 5. The purchase price now i-emaininfr unpaid, namely, £2,925,000
(subject to additions or deductions, in accordance with the provisions of Article
Four of the original contract and the provisions of this supplemental contract),
shall be paid in three equal installments, the first maturing July 1, 1920, the
second maturing December 1, 1920, and the third maturing April 1, 1921. The
purchasers jointly and severally agree to pay, on the entire balance of said
purchase price remaining unpaid on April 1, 1920. interest from said date
until paid at the rate of five per centum (5%) per annum: the provisions of
the original contract with respect to the payment of the principal to govern also
the payment of said interest.

Section 6. Save as herein modified or amended, the said original contract
shall be and it is hereby in all things continued in effect, ratified, confirmed,
and reaffirmed.

In witness whereof, on the day and year first above written, this contract
has been executed in six parts, each having the full force and effect of an
original, by the United States of America, acting through the United States
Liquidation Commission — War Department. Edwin B. Parker, chairman, of
the one part; and by Owen Clegg, James Todd, and George W. Parkin.son (lieu-
tenant colonel); Arthur Huntley Walker; Societe Anonyme Darracq, acting
through Owen Clegg, duly authorized tliereto; A Darracq & Company (1905),
Ltd., acting through A. Huntlpy Walker and James Todd, duly authorized
thereto; Clement Talbot, Ltd., acting through A. Huntley Walker, duly au-
thorized thereto; by Sir Percival Perry individually, and by The Motor Or-
ganizations. Limited, acting through James Todd and Sir Percival Perry, Colonel
Brinsley John Hamilton Fitzgerald, duly authorized thereto, on the other part.

United States of America,
By Edwin B. Parker,
Chairman, United States Liquidation Commission — ^Var Department.
Owen Clegg.
James Todd.

G. W. Parkinson, Lt. Col.
Arthur Huntley Walker.
Societe Anonyme Darracq,
By Owen Clegg, Managing Director.

A. Darracq & Company (1905), Ltd.,
By A. Huntley Walker.
James Todd.
Clement Talbot, Ltd.,
By A. Huntley Walker.
Percival Perry.

The Motor Organizations, Limited,
By .James Todd.
Percival Perry.

Col. Brinsley John Hamilton Fitzgerald.
Witness as to Edwin B. Parker :

Edward T. Noble.
Witness as to all the signatures of G. W. Parkinson, A. Huntley Walker, Owen
Clegg, and James Todd :

.7. H. Watson, 150 Neir Bond St., Loudon, Secretary.
183176—20 9

130

UNITED STATES LIQUIDATION COMMISSION.

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UNITED STATES LIQUIDATION COMMISSION. 131

APPENDIX XVIII.

(1) Final Contract of Settlement.
british artillery and artillery ammunition convention. dated august

0, 1919.

Agreement between the Government of His Britannic Majesty and the Govern-
ment of the United States with respect to artillery and artillery ammunition.

DEFINITIONS.

The term " Great Britain," as used herein, shall be taken to mean the Gov-
ernment of His Britannic Majesty. The term " United States," as used herein,
shall be taken to mean the Government of the United States of America. The
term " Artillery," as used herein, shall be taken to mean artillery of all natures
and calibers, including components, equipment, and spare parts, unless otherwise
specified. The term " ammunition," as used herein, shall be taken to mean artil-
lery ammunition of all natures and calibers referred to in the agreement, in-
cluding components, unless otherwise specified.

From time to time, prior to October 19th, 1918, the United States placed
orders with or entered into contracts with Great Britain, by which Great Britain
agreed to manufacture, or caused to be manufactured and delivered to United
States, certain artillery and ammunition of the natures and the calibers here-
inafter mentioned. All such agreements were merged into and superseded by
that certain agreement entered into between the United States and Great
Britain on the 19th day of October, 1918, as evidenced by a letter from Edward
R. Stettinius, special representative of the Secretary of War of the United
States of America to the ministry of munitions of war. London, England, and
the indorsement of acceptance thereon by Winston S. Churchill, minister of
munitions, acting on behalf of His Britannic Majesty's Government, which
letter and acceptance, together with Schedules I, II, and III, accompanying
and forming a part thereof, are hereunto attached, made a part hereof, and
marked for identification " Exhibit A." Schedules I and II thereof set forth the
definitive orders placed under the aforesaid agreement.

In due time the United States notified Great Britain that it would not exer-
cise its option to purchase the artillery specified in Schedule III of the said
letter of October 19, 1918. Following the signing of the armistice of November
11, 1918, and on or about November 14, 191S, the United States notified Great
Britain to suspend all further deliveries of artillery and ammunition provided
for by the aforementioned contract of October 19, 1918.

The parties hereto now desire, as far as practicable, to relieve the United
States from its obligation to accept and pay for the artillery and ammunition,
covered by the said contract of October 19, 1918, in so far as this can be accom-
plished without loss to Great Britain, and so to readjust the calibers, types,
and natures of said artillery and ammunition to be taken and paid for by the
United States as will best meet its needs under changed conditions.

132

UNITED STATES LIQUIDATION COMMISSION.
AGREEMENT.

Now, therefore, in consideration of tlie facts as embraced in tlie foregoing
recitals, and of tbe respective undertakings of tlie contracting Governments,-
parties liereto, it is mutually agreed as follows :

Article I. Great Britain will deliver to the United States, and the United
States will take artillery and artillery ammunition as follows, and pay to Great
Britain the cost thereof, to Great Britain being a total of £6,637,598.

It is understood and agreed between the contracting parties that this amount,
as set forth in detail below, represents as nearly as possible the cost of articles
to be supplied under this agreement, without further discussion or determina-
tion of prices.

GUN EQUIPMENTS.

Nature.

8-inch howitzer, Mark VII

8-ineh howitzer, Mark VI

6-iiich gim, Mark XIX

6-inch gim bodies complete with breech mechanisms
60-pounder gun

Cost per
unit.

£6,295
6,390
6,374
2,060
5,210

Number
of imits.

84
64

100
50

200

GUN AMMUNITION.

8-inch high explosive

6-inch gun high explosive. .

Shrapnel

60-pounder high explosive .

Shrapnel

High explosive

Shrapnel

Total

Grand total.

£13.10.0
9. 15.
10. 5.0
6. 0.0
6. 3.4
5. 5.0
5. 10.

1 170, 000
1 25,000

1 25, 000

2 33, 500
2 33,500
1 6b, 500
1 66, 500

Total
value.

£528, 780
408, 960
637, 400
103, 000

1,042,000

2, 720, 140

£2, 295, 000
243, 750
256, 250
201,000
206, 583
349. 125
365, 750

3,917,458
6, 637, 598

Component.

2 Complete rounds.

Of the 200 60-pounder guns embraced in the foregoing schedule Great Britain
may, at its election, furnish sixty (60) partly worn guns, in which event it
will without further expense to the United States deliver with each partly
worn gun a new tube for relining same. The said tubes shall be rough bored
and furnished on the outside for shrinkage.

The terra "complete rounds" as used in the foregoing schedule (and else-
where in this contract) shall be taken to mean shells fully assembled, loaded
(or filled), fuzed (or with fuzes packed separately, following the standard
practice for safety in shipment and storage) and ready for use, together with
the propellant and primer. The term " components " as used in the foregoing
schedule (and elsewhere in this contract) shall be taken to mean that all of
the parts of the shell shall be complete in themselves, ready for assembling
and loading (or tilling) but unassembled, and the shells unloaded (or un-
filled) ; the propellant and components of the explosive charges will be de-
delivered in bulk in satisfactory containers, and the cartridge bags and primers,
fuzes, and other components will be delivered separately.

The condition of the artillery material to be delivered under this contract
will be as follows :

(a) Except as otherwise specified all material to be new or relined guns
with no firing except the normal proof firing and carriages either new or

UNITED STATES LIQUIDATION COMMISSION. 133

repaired. The new and relined guns and the new and overhauled and repaired
carriages will have gone through and passed the standard British inspection
for material to be passed into service.

(ft) 8" hoiv-itsef, Mark VII. — Approximately 30 of these will be new — that is,
the guns will be new or relined, liaving been fired only the usual number of
proof I'ounds. The carriages will be new or thoroughly overhauled and re-
paired. The balance of these howitzers will have been fired a limited number
of rounds, in no case more than 1,000, and it will be understood that no
howitzers will be accepted which show more wear than the normal wear for
1,000 full rounds. The carriages will be new or entirely overhauled and re-
paired.

(c) 8" howitzer, Mark VI. — These will all be what British term " new' ma-
terial " — that is, guns either new or relined, fired only the usual number of proof
rounds. Carriages either new or entirely overhauled and repaired.

(d) 6" guns, Mark XIX. — Same remarks as for 8" howitzers, Mark VI.

(e) 60-poitnder guns. — 140 of these guns and carriages will be new — that is,
guns will be new or relined and fired only the usual number of proof rounds.
Carriages either new or entirely overhauled and repaired. The additional 60
60-pounder guns will be partly worn ; as many as possible will be less than
50% worn. Carriages will either be new or entirely overhauled and repaired.

Article II. Tlie United States agrees to deliver and Great Britain agrees to
accept ninety thousand (90,000) complete rounds of 9.2" howitzer ammunition,
lieretofore manufactured by Great Britain, now owned by the United States
and in the hands of the American Expeditionary Forces, in France.

Article III. In consideration for the undertaking on the part of the United
States, set forth in Article II hereof, Great Britain agrees to deliver, and the
United States agrees to accept in addition to the ammunition specified in
Article I.

(a) Fifty thousand (50,000) rounds (components) H. E. shells for 60-pounder
guns.

(b) Two hundred and sixty thousand (260,000) rounds (components) of
shrapnel for 60-pounder guns.

It is understood, however, that the figure of the 90,000 complete rounds of
9.2" howitzer ammunition referred to in Article II is approximate only, and
that the number may run somewhat more or less than 90,000 rounds.

Akticle IV. The 67,000 complete rounds of artillery ammunition for 60-
pounder guns referred to in Article I shall be delivered by Great \Britain at
Calais, France, and shall there be placed by Great Britain free of charge to the
United States upon vessels designated by the United States, the United States
accepts responsibility for an accident or explosion occurring in the course of
loading on the said designated vessels.

The artillery units and remaining artillery ammunition referred to in Articles
I and III shall be delivered by Great Britain at a port or ports to be agreed in
Great Britain <with the exception of explosives, which shall be delivered at
Liverpool, except 873 short tons of cordite, which shall be delivered free on
rail at I'Assomption, Canada, and 402 short tons of nitrocellulose, which shall be
delivered free on rail at Upton's Pit, Canada) and shall there be placed by
the United States upon vessels designated by them.

But if later the situation should arise that the United States have not
sufficient personnel to carry out this work, the material shall be placed by
Great Britain upon ships to be designated by the United States.

During the period in which the United States has the necessary organization
at the port of delivery, the United States shall bear all the costs of off-loading

134 UNITED STATES LIQUIDATION COMMISSION.

from railway trucks and loading on to the ship and during the period when
Great Britain undertakes the loading of the ship, Great Britain in its turn shall
bear these charges.

From time of delivery in truck at the port or rail, as the case may be, the
United States accepts responsibility for any* accident or explosion occurring
from the said material. Great Britain accepts responsibility for any accident
or explosion occurring from said material imtil it is delivered at the port or
rail and, during the period, if any, when Great Britain undertakes the loading
under par. 3 of this article until it is delivered into ships.

The 90,000 complete rounds of 9.2" howitzer ammunition referred to in
Article II shall be delivered by the United States to Great Britain on vessels
at a port or ports of Great Britain to be agreed, and there unloaded from the
vessels by Great Britain, and Great Britain accepts liability for any accident
or explosion occurring in the course of unloading at the port of delivery.

Article V. Each four of the artillery units referred to in Article I shall
comprise the equipment and store prescribed for a battery of four pieces in
the equipment lists annexed hereto, marked for identification, Exhibits " B,"
" C," " D," and " E."

Article VI. Payment for the artillery and ammunition specified in Article
I hereof shall be made as follows : Ninety per centum of the contract price
thereof shall be payable to Great Britain upon the execution of this contract,
payment of a bill for this proportionate amount having been authorized by the
United States Liquidation Commission. War Department, as payment on ac-
count and in advance of deliveries and five per centum thereof shall be pay-
able upon the completion of deliveries of the ammunition and of the artillery,
equipments, and stores specified in Exhibits " B," " C," " D," and " E," hereto
annexed, except the stores described in these exhibits as " spares," and five per
centum thereof upon completion of all deliveries due under Article I of the
contract.

Article VII. In addition to the normal equipment of these batteries, as
specified in Article V, Great Britain agrees to deliver, and the United States
agrees to accept and pay for the additional spare parts for these gun equip-
ments shown on list hereto attached and marked for identification Exhibit " F."

The United States agrees to pay to Great Britain (in addition to the total
sum of £6,637,598 referred to in Article I), upon delivery of these additional
spare parts, the unit prices as set forth on this list, which represent the cost
of these articles without profit to Great Britain. Where prices are not specified
in the list the prices to be paid shall be sums representing cost of the articles
without profit to Great Britain.

Article VIII. The obligations arising under this agreement shall completely
and in all things supersede those arising under the aforementioned contract
of October 19, 1918, and all other agreements heretofore made, binding the
United States to accept from Great Britain and pay for artillery or artillery
annnunition : Provided, hoiDcver, the United States shall not be relieved of its
obligation to pay for all artillery components, spare parts and ammunition,
heretofore delivered to it by Great Britain prior to November 14. 1918, or that
were in the course of delivery on that date and were actually delivered prior
to January 1st, 1919, and for which it has not yet paid.

Abticle IX. Great Britain agrees and obligates itself (so long as it may
continue to produce the same) at cost to It, to supply the United States with
spare parts and materials or components required by the United States from
time to time for the maintenance of the artillery delivered by Great Britain to,
and paid by, the United States in pursuance of the terms hereof.

UNITED STATES LIQUIDATION COMMISSION. 135

Article IX. Great Britain agrees and obligates itself to supply the United
States with two complete sets of prints, sufficiently translucent to have blue
prints made therefrom, of all general and detailed drawings of the artillery and
ammunition to be delivered hereunder, including drawings of all tools and ac-
cessories, sights and accessory vehicles, to be delivered with the foregoing
artillery and ammunition.

The United States agrees and obligates itself not to publish the said prints
and to treat as confidential any prints which are so marked.

In witness whereof, the undersigned have subscribed these presents upon
behalf of their respective Governments, as of this, the 9th day of August,

A. D. 1919.

(Sgd.) E. D. Bkicker,

Colonel, Ordnance Department, for Chief of Ordnance,

War Department, United States of America.

(Sgd.) A. Watson,

Representative of Minister of

Munitions of Great Britain.

Witness :

(Sgd.) R. E. KiMBAUL,

Lt. Col., Ord. Dept.

United States Liquidation Commission,
War Department. -
(Sgd.) Edwin B. Parker, Chairman.

Approved :

(2) CovEiiiNG Letter on Artillery and Ammunition Settlement— Judge

Parker to Mr. Latton.

August 9, 1919.
Sub.iect : Settlement of claim of Great Britain against the United States War
Department for artillery and ammunition.

Mr. W. T. Layton.

Ministry of Munitions, London, England.
My Dear Mr. Layton : In connection with the execution of the contract dated
August 9th, signed by Mr. Watson representing Great Britain, and by Colonel
Bri'cker representing the War Department of the United States, evidencing the
full and complete settlement of all claims of Great Britain against the War
Department of the United States, involving undertakings on the part of Great
Britain to furnish to the United States War Department artillery and ammu-
nition, it is understood :

1. This contract as executed evidences a full, complete, unqualified, and
unconditional settlement of the matters therein dealt with.

2. It now develops, however, that Great Britain may not be able to furnish
out' of stock all of the spare parts called for by the contract for some of the
8-inch howitzers, not exceeding 61 in number, and Great Britain contends that,
as the schedule of units to be delivered by Great Britain to the United States
was changed at the request of, and for the benefit of the United States, Great
Britain should not now be required to incur additional expense to manufacture
these spare parts for the benefit of the United States; and you suggest that
if the cost to Great Britain of producing the spare parts in question should
exceed 50,000 pounds, such excess cost should be equally divided between Great
Britain and the United States.

3. In behalf of the United States I decline to commit the United States to
pay any part of this possible excess cost, but agree that when the facts are

136 UNITED STATES LIQUIDATION COMMISSION.

fully developed, and you are in a position to advise to what extent, if at all,
it is necessary for Great Britain to manufacture additional spare parts in
order to comply with the contract, your proposition will then be further exam-
ined and considered by the representatives of the United State.s, without com-
mitment, however, to modify the contract in any particular.

4. Without committing the United States to the recognition thereof, it is
also understood that Great Britain is not foreclosed by this contract to pre-
sent her claim, if any she has, for interest or for excess value, if any, of ma-
terial obtained for the replacement of British material used in the manufac-
ture of artillery and ammunition described in said contract.
Yours very sincerely,

(Sgd.) Edwin B. Parker, Chairriian.

Mr. Laj'ton acknowledged the receipt of the above letter on August 13. 1919,

APPENDIX XIX.

Atjstrauan Wool Settlement.
(Par. 6. Cuthell-Inverforth agreement of May 10, 1919.)

The United States agrees to pay for the wool purchased from Great Britain
under the contract of October 1, 1917, on the basis of the civil issue price, less
two and one-half pence (2id.), in accordance with the bills already rendered,
covering approximately 247,000 bales. The United States also agrees to pay
the bills rendered by Great Britain for storage and insurance in Australia and
for intei'est on delayed payments under this contract, amounting approximately
to $850,000, and the United States agrees to waive all claims to a military
rebate on the entire 247,000 bales or any portion thereof.

The United States Government agrees to pay for the 115,000 bales already
shipped under contract of November 7, 1918, on the basis of the civil issue price,
less two and one-half pence (2M.), in accordance with the bills already ren-
dered, and agrees to pay the one penny per pound premium- for selection, as
set forth in the contract, waiving any question as to whether this selection was
obtained. There shall be no claim for interest or storage made against the
United States covering any of the wool undelivered under this contract by
Great Britain.

Great Britain agrees to cancel without cost to the United States all obligations
on its part to take delivery of the undelivered portion of the wool covered by
said contract of November 7, 1918, the total of which amounts approximately
to 210,000 bales. The contract with regard to such 210.000 bales of wool is
hereby agreed to be null and void.

APPENDIX XX.

Chatealt?oux Tank Plant Settlement (August 8, 1919).

Agreement between the Government of His Britannic Majesty and the Govern-
ment of the United States of America with respect to the Chateauroux tank
project.

UNITED STATES LIQUIDATION COMMISSION. 137

DEFINITIONS.

The term " Great Britain " as lierein used means tlie Government of His
Britannic Majesty. Tlie term " United States " as herein used means tlie
Government of the United States of America. The term " Chateauroux plant "
as lierein used sliall be taken to mean the projected w^ork of construction to be
undertaken in France pursuant to the contract between the United States and
Great Britain, such contract being dated January 22, 1918, a copy of tlie same
being hereto attached, marked Exhibit " A," and such term shall be deemed to
include all matters and acts to be done or performed by either Government
under such contract, other than the manufacture of components for tanks pro-
vided for by subdivision 2 of paragraph 1 of the said contract, and the replace-
ment of steel as provided for by paragraph 6 of said contract.

RECITALS.

By reason of the armistice the necessity for carrying out the contract between
the parties dated January 22. 1918, Exhibit " A " having terminated and the
work of erecting and equipping Chateauroux plant having, by mutual agreement,
been discontinued, and there existing against the French Republic (hereinafter
called France) an equitable claim on account of the allotment to it of 750 of
the tanks allotted to Great Britain and 150 of the tanks allotted to the United
States under said contract, and Prance having tentatively agreed to purchase
fi'om Great Britain and the United States the Chateauroux plant and to pay
therefor and in consideration of the aforesaid equitable claim the sum of twenty
million francs, and the parties hereto desiring to adjust and settle their re-
spective interests in said consideration and to liquidate, adjust, and settle the
matters covered by said contract of .January 22, 1918, agree as follows :

AGREEMENT.

Article I. The expenditures of the parties incurred in carrying out said
contract of January 22nd, 1918. other than these contracted for pursuant to sub-
division 2, paragraph 1 thereof, shall be divided equally between the parties.

Article II. The work of liquidation, including the sale of property and the
settlement of all claims of contractors or third parties not already concluded,
shall be conducted by Great Britain. To the end that the liquidation may
be carried out to the best advantage, further expenditures may, if necessary,
be authorized by Great Britain, materials may be accepted, indemnity under
existing contracts and subcontracts paid, land purchased, and other acts deemed
essential to the best interests of the respective Governments and the proper
liquidation and preservation of the assets may be done and performed.

Article III. An account shall be taken every six -months of all moneys paid
out and expended by the respective Governments in pursuance of the contract,
including settlements and indemnities paid in contemplation of the abandonment
of the project, and each Government shall pay to the other whatever balance
may be due from it as shown by such account ; provided, however, that ex-
penditures made by either Government pursuant to the provisions of sub-
division 2 of paragraph 1 of the contract shall not be included. It is further
agreed that expenditures made by either Government pursuant to the provi-
sions of subdivision 2 of paragraph 1 of the contracts are declared equal and
are set off, the one against the other. Each Government shall retain title to
all material manufactured by it pursuant to the provisions of subdivision 2

138 UISriTED STATES LIQUIDATION COMMISSION".

of paragraph 1 of said contract, and neither Government shall make any claim
for reimbursement on account of expenditures made by it pursuant to the
provisions of subdivisions 2 of paragraph 1, nor are such expenditures to be in
any manner taken into. account in settling the obligations of the parties pur-
suant to this agreement.

Article IV. The commission created by the agreement of January 22nd,
1918, consisting of Lieutenant Colonel A. G. Stern, Q. M. C, and Major .T. A.
Drain, U. S. R., is hereby dissolved.

Article V. The obligations devolving upon the United States by virtue of
paragraph 6 of the contract of January 22, 1918, are hereby discharged, and
the rights created thereby in favor of Great Britain are waived and relifi-
quished by the Government of Great Britain.

Article VI. The factory built pursuant to said contract of January 22, 1918,
shall be sold to France pursuant to the agreement heretofore tentatively agreed
upon whereby France is to pay as the purchase price thereof and in considera-
tion of the equitable claim heretofore referred to the sum of twenty million
francs, and said sum shall .be divided between the parties hereto in the pro-
portion of seventy per centum thereof to Great Britain and thirty per centum
thereof to the United States.

In witness whereof the undersigned have subscribed these presents on behalf
of their respective Governments as of the 8th day of August, nineteen hundred
and nineteen.

(Signed) A. Watson,

Representative of the Minister of Supplies of His Britannic Majesty.

Edwin B. Parker,
Chairman of the United States Liquidation Commission,

War Department of the United States Government.

APPENDIX XXI.

(1) Final Contract of Settlement of the Chateauroux Tank Project

(Oct. 4, 1919).

Agreement between His Britannic Majesty's Government and the United
States of America in final settlement of the Chateauroux tank project.

This agreement is supplemental to the agreement dated August 8, 1919,
signed by A. Watson on behalf of His Britannic Majesty's Government and
Edwin B. Parker on behalf of the United States of America, and supersedes
the same in so far as anything herein contained may be inconsistent therewith.

In consideration of the mutual agreements herein contained, it is agreed as
follows :

Article I. Promptly upon receipt of the twenty million francs (frs. 20,000,-
000) mentioned in Article VI of said agreement of August 8, 1919, above de-
scribed, Great Britain or the Anglo-American Commission, as the case may be,
shall pay six million francs (frs. 6,000,000) thereof to the United States.
Against receipt of said six million francs (frs. 6,000,000) the United States
shall pay the ministry of munitions of His Britannic Majesty's Government the
sum of fifty-four thousand and ninety-five pounds sterling (£54,095). Such
payment by the United States shall be full performance of Article I of said
agreement of August 8, 1919, and together with such payment by Great
Britain shall constitute a full and final settlement of the affairs of the Anglo-
American Commission and of the Chateauroux tank project and of all interest

UNITED STATES LIQUIDATION COMMISSION. 139

and liability of every nature of the United States in respect thereto, except as
to the item " hidden loss on steel " hereinafter mentionetl.

Article II. It is agreed that the statement designated " Schedule I " hereto
attached and made a part hereof, together with all items and amounts therein
contained except said item " hidden loss on steel." shall be considered a final
and conclusive statement of the affairs of the Anglo-American Commission.

Abticle III. Neither Government shall present against the other any further
claim in respect to the above described tank project except " hidden loss on
steel " as hereafter provided. In the event that upon liquidation, by the Anglo-
American Commission, or by Great Britain, of any further assets which accrue
to Great Britain, a sum is I'ealized in excess of any estimate contained in said
Schedule I, such excess shall be retained by Great Britain. All liabilities of
said Anglo-American Commission, or of Great Britain, in respect to said tank
pro.iect, whether as set forth in Schedule I, or in excess of, or apart from,
any liability therein stated, shall be borne by Great Britain without any re-
course whatever against the United States. The United States shall retain
without accountability to Great Britain any sum hereafter realized by it upon
any assets or claim within its control, and shall not present any further claim
against the Anglo-American Commission.

Article IV. Great Britain has presented a claim against the Anglo-American
Commission covering " hidden loss on steel," which is referred to in said
Schedule I hereof. It is agreed that this item shall be omitted from the final
settlement provided in this agreement and shall be included in the claim which
Great Britain is making against the United States for " excess costs " of steel,
and shall be settled on the same basis as said excess costs claim, excepting that
Great Britain shall be entitled to receive from the United States only fifty per
cent (50%) of the amount, if any, of "hidden loss on steel" as it may be
determined in respect to the steel which has been supplied by Great Britain to
the Anglo-American Commission. The United States does not, either directly
or inferentially, admit by tlie execution of this agreement any liability in
respect to said item " hidden loss on steel " as contained in the claim presented
by Great Britain.

Article V. This agreement shall be void and of no effect, and said agreement
of August 8, 1919, above referred to, shall remain in full force and effect, in the
event that the twenty million francs (frs. 20,000,000) mentioned in Article VI
of said agreement of August 8, 3919, and referred to in Article I hereof, is not
paid as in said Article VI pi-ovided.

In witness whereof this agreement has been executed in four parts, each
having the full force and effect of the original, by His Britannic Majesty's Gov-
ernment acting through F. W. Phillips, on behalf of the ministry of munitions,
and by the United States of America, acting through the Liquidation Com-
mission — War Department, Edwin B. Parker, chairman, this fourth day of
October, 1919.

His Britannic Majesty's Government,
By F. W. Phillips,

On Behalf of the Ministry of Munitions.
United States of America,
By Edwin B. Parker,

Chairman of the United States
Liquidation Commission — War Department.

140

UNITED STATES LIQUIDATION COMMISSION.

Schedule I. — Anglo-Americmi Commission {tanks), cost of factory and general

expenses.

PAYMENTS, JULY 31, 1919.

Cash payments to date : Francs.

Factory construction 15, 611> 584. 04

Factory operation, etc 2, 690, 831. 02

General administration 809, 807. 35

Liquidation expenses 201, 726. 00

Cancellation of orders 8,072.80

Estimated further cash payments :
To contractors —

Balance of commission and pending
claims in England, say £20,000, @ 32

to 1

Sundries —

Balance payable for material supplied
through Great Britain (M. of M.) and
cancellation of orders, less credits, say

£4,000, @ 32 to 1

Liquidation expenses, London office, say

£1,000, @ 32 to 1

Miscellaneous bills and claims in France,
say

Due to British ministry of munitions:
Hidden loss on steel.^

Freight on construction material

Interest on advances calculated to May 31st,
1919

Francs.
19, 322, 021. 21

640, 000. 00

128, 000. 00

32, 000. 00

350, 000. 00

£48, 094
25, 190

510, 000. 00

Due to U. S. A. :

Francs.

Power plant, Chateauroux 686,757.26

Track, Neuvy-Pailloux 593, 296. 96

Sundries supplied to A. A. C 166, 928. 84

1, 446, 983. 06
Less sundries supplied by A. A. C 111,967.37

73, 284 ]
, 32 to 1 I 2, 345, 088. 00

1, 335, 015. 69

24, 152, 124. 90

' Not included in this statement, as the United States does not admit it as claimed.
This item is to be taken up in the British " excess cost " claim, as provided in the agree-
ment covering this settlement and is to be borne by the United States and Great Britain
in equal shares, to the amount, if any, allowed upon the determination of the " excess
costs " claim.

ITNITED STATES LIQUIDATION COMMISSIOIT. 141

U. S. LIQUIDATION.

Francs.
Half loss as above 11,781,024.93

Less —

Payment to Great Britain £300,000 on May Francs.

12, 1919, @ 29.05 8,715,000.00

Material supplied by U. S. A 1, 335, 015. 69

10, 050, 015. 69

Balance due to Great Britain 1, 731, 009. 24

Balance due to Great Britain in sterling, @ 32 to 1 £54, 095. 00

RECEIPTS, .JULY 31, 1919.

Cash receipts to date:

Interest from banks 9, 293. 40

Realization of assets 180, 281. 65

189, 575. 05

Estimated further cash receipts :

Interest from banks, say 500. 00

Realization of assets (sale of miscellaneous
material in C. S. D. stores in England),
say £12,500, @ 32 to 1 400,000.00

400, 500. 00

Approximate net cost :

U. S. A., 50% equals . 11, 781, 024. 93

British, 50% equals 11,781,024.92

23, 5G2, 049. 85

24, 152, 124. 90

GREAT BRITAIN LIQUIDATION.

Half loss as above 11,781,024.92

Payments to July 31st, 1919 (less receipts) 19,132,446.16

Estimated further payments (less receipts) 749, 500. 00

Freight and interest 2,345,088.00

22, 227, 034. 16

Less £300,000 from U. S. A 8, 715, 000. 00

— ■■ 13, 512, 034. 16

Balance due from U. S. A 1,731,009.24

Certified correct :

' P. W. Phillips, FifMncial Liquidator.

<2) Tripartite Memorandum in Settlement of the Chateauboux Tank

Pro.tect (Oct. 9, 1919).

Ministeke De La Reconstitution Industrielle :

At the request of the Inter-Allied Committee at Versailles the Governments
of Great Britain and of the United States of America undertook, in 1918, the
manufacture of Ajiglo-American tanks known under the name of " Liberty," the
component parts of which were furnished by the said Governments and were to

142 UNITED STATES LIQUIDATION COMMISSION.

be assembled in France in a plant constructed by these Governments at Neuvy-
Pailloux, near Chateauroux.

Subsequent to negotiations, which arose after the armistice between the
Ministere de la Reconstitution Industrielle, Monsieur Loucheur, representing
France ; Mr. W. Layton, delegate of the British Minister of Munitions, repre-
senting the British Government; and Mr. Edwin B. Parker, chairman of the
Liquidation Commission, representing the Government of the United States of
America, the liquidation of the expenses in connection with the manufacture
of " Liberty " tanks was settled as follows, subject to the subsequent ratification
by the French Chambers of the credit demanded with this in view :

On the 170 millions, which represent the total of the expenses incurred by
the Governments of Great Britain and of the United Sates, for the manufacture
of these tanks, the French Government agrees to the sum of 20 millions.
Furthermore, it is stipulated that the French Government will relieve the Gov-
ernments of Great Britain and the United States of all payments and obliga-
tions resulting from the purchase, occupation, and use of the land connected with
the construction of the Neuvy-Pailloux plant.

On the other hand, the Governments of Great Britain and of the United
States give to the French Government in full ownership the buildings and rail-
way tracks built at Neuvy-Pailloux, as well as all the material of all kinds
which are in the plant and the surrounding land.

The credits necessary to the execution of this agreement having been granted
by the finance law of September 30th, 1919, the above agreement becomes
definite.

The Sous Secretaire d'Etat de I'Administration de la Guerre will decide on
the way in which the sum of 20 millions, mentioned above, will be paid.

Paris, October 9, 1919.

( Signed ) Loucheur. Labkami.

; Morel. C. C. Bakeie.

Edwin B. Parker. F. W. Phillips.

APPENDIX XXII.

Extract from Cuthell-Inverforth Agreement of May 10, 1919.

3. liberty motors and proper proportion of sets of spare parts.

The Bureau of Aircraft Production of the War Department of the United
States of America shall deliver a number of Liberty motors which, together
with the Liberty motors delivered to date, shall equal 2,252. Such delivery shall
be at the option of the United States, either at seaport in the United States, or
from stocks of the American Expeditionary Forces in France. It shall render
a bill for the sum of $16,589,718.90. Against this bill there shall be credited
cash payments made to date of $2,625,000, leaving a balance due of $13,964,-
718.90. Such bill shall be accompanied by a short statement to the effect that
for the pnrposp of the settlement of this bill the total cost (excluding strictly
military charges) of materials, plant, tools, and all other elements, is fixed
at $153,515,619. The United States has made an allowance of $2,700,000 on
account of labor expenditures subsequent to the armistice. The balance charge-
able to Liberty motor construction for the purposes of fixing the costs of
Liberty motors to Great Britain is fixed at $150,815,619. It is also agreed
that the total production of Liberty motors for the purpose of the settlement
between the parties hereto is 20,478. Great Britain has purchased and will take

UNITED STATES LIQUIDATION COMMISSION. 143

a number of motors equal to eleven per cent (11%) of the total production, or
2,252. Great Britain shall also pay eleven per cent (11%) of all cost of such
production, or $16,589,718.90. The United States shall, with each motor and
with each group of motors, ship the same proportionate number of sets of
spares which it shipped under the contract for 980 motors, dated July 11, 1918.

APPENDIX XXIII.

Agkeement in Settlement of the British Interest Claim
(Oct. 20, 1919).

Agreement between His Britannic Majesty's Government and the United
States of America with respect to interest charges.

DEFINITIONS.

The term " Great Britain " as herein used means His Britannic Majesty's
Government. The term "United States" as herein used means the Govern-
ment of the United States of America. The term " War " as herein used
means the war between the United States and the nations associated with it
on the one part and the Imperial German Government and its allies on the
other part.

RECITALS.

In connection with the prosecution of the war and matters arising there-
from. Great Britain has invested or otherwise disbursed large sums of money
which are properly chargeable against the United States. Great Britain has
felt that some reimbursement to it should be made by the United States be-
cause of the considerable periods of time elapsing between the dates of such
investments or disbursements and the times of reimbursement thereof to Great
Britain by the United States, and has put forward a claim for interest on
all proper bills rendered by it against the United States. The United States
has made similar investments and disbursements which are properly charge-
able against Great Britain and has presented a claim for interest on bills
rendered by it similar to any interest on bills rendered by Great Britain.

The parties hereto desire to settle and adjust all claims between the War
Department of the United States and Great Britain, or their respective agencies
or representatives, for interest, or other compensation on account of delay,
or lapse of time, in the rendering or in the payment of bills, statements or
invoices, or delay, or lapse of time, in the reimbursement of capital expendi-
tures, connected with the prosecution of the war.

Now, therefore, it is agreed :

Article I. For the purposes of this agreement and the settlement of the
claims intended to be settled and adjusted hereby, and for no other purpose,
the statement designated " Schedule I," hereto attached and made a part
hereof, together with all items and amounts therein contained, shall be a final
and conclusive statement of each and every matter referred to therein.

Article II. The United States shall pay to Great Britain the sum of seven
hundred and ninety-seven thousand eight hundred and fifty-four pounds eleven
shillings and twopence (£797,854 lis. 2d.) set forth in said Schedule I, being the
interest computed at the rate of five per cent (5%) per annum for a period of
3| months upon the net balance between the aggregate amounts, respectively, of
all bills of every nature rendered in the United States, Great Britain, France, or
elsewhere, by each of said Governments against the other, prior to August 1,

144 UNITED STATES LIQUIDATION COMMISSION.

1919, iu respect to transactions arising out of, connected witli, or incident
to the prosecution of tlae war, except (1) the ti'ansfer to the United States
of certain property acquired by Great Britain from the Westinghouse Electric
and Manufactui-ing Company ; (2) matters (particularly ocean transportation
of cargo and troops) within the jurisdiction of the ministry of shipping of
Great Britain, other than such matters as may be covered by an item or
items of said Schedule I; (3) matters more particularly within the purview
of other departments of the United States other than the War Department,
including all loans from the United States to Great Britain; and (4) obli-
gations between the United States and the Dominion of Canada. This agree-
ment shall not be interpreted to prejudice or affect in any way whatsoever
any of the matters referred to in the four above-mentioned exceptions, either
as to a settlement of any of them, or of interest in respect to any of them,
or otherwise.

Article III. Great Britain does hereby release and discharge the United
States — and the United States does hereby release and discharge Great Britain —
from all obligations, commitments, claims, or demands whatsoever which Great
Britain has against the United States or the United States has against Great
Britain, as the case may be, or which either may hereafter have, in respect to
interest upon bills, statements, or invoices, compensation for delays in rendering
or in paying the same, reimbursement of costs incurred by reason of such delays,
or compensation for the use of money or credits or for capital expenditures ; in
any wise pertaining to transactions arising out of, connected with, or incident to
the prosecution of the war, and covered by bills rendered prior to August 1,
]919, irrespective of whether stated or referred to in said Schedule I; except
the matters designated (1), (2), (3), and (4) herein above in Article II hereof
referred to.

Article IV. On all proper bills referred to in said Schedule I which are still
outstanding on October 1, 1919, interest shall accrue at the rate of five per cent
(5%) per annum from October 1, 1919. In respect to all proper bills connected
with the prosecution of the war, other than those pertaining to the above-men-
tioned matters, designated (1), (2), (3), and (4) in Article II hereof, rendered
on or after August 1, 1919, each Government shall compute the amount thereof
outstanding at the end of each calendar month, and all such bills then out-
standing which were rendered prior to the first of said calendar month, except
bills concerning which some other arrangement has been made in respect to
interest or in lieu thereof, shall bear interest from the first day of the succeed-
ing calendar month until payment of such bill, at the rate of five per cent (5%)
per annum. Accrued interest shall not be added to the amount of any bill so
as to result in the compounding of interest in any manner. The payment of
interest as herein provided shall be full satisfaction of all claims and demands
whatsoever for interest upon bills, statements, or invoices, or compensation
for delays in rendering or in paying the same, or reimbursement of costs in-
curred by reason of such delays, or compensation for the use of money or credits
or for capital expenditures, in any wise pertaining to the transaction for which
the bills, upon which such interest has been paid, shall have been rendered.
No bill shall be considered as a proper bill hereunder until rendered in finally
correct form.

In witness whereof this agreement has been executed in four parts, each
having the full force and effect of an original, by His Britannic Majesty's
Government, acting through A. Watson, representative of the minister of
munitions, and by the United States of America, acting through the Liquidation

UNITED STATES LIQUIDATION COMMISSION.

145

Commission, War Department, Edwin B. Parker, chairman, this twentieth day
of October, 1919.
Witness :

RuFus J. Teimble.

His Britannic Majesty's Government,
By A. Watson,

Representative of the Minister of Munitions.
Witness :

RuFUS J. Trimble.

United States of America,
By Edwin B. Parker,
Chairman of the United States Liquidation Commission — War Department.

Schedule I. — Interest statement — Summary of tills rendered prior to

July 31, 1919.

Amount.

Pounds.

Dollars.

Francs.

•Great Britain:

Departmental (bills rendered in Great Britain)—

17,943,203.16.4

674,021.16.5

1,568,405.15.9

11,822.2.7

13,565,761.3.11

12,731,260.2.0

326,398.3.3

78, 871. 17. 5

58,341.5.0

153,585.17.10

262, 066. 19. 5

29,908,931.30

Post office

47, .373, 758. 19. 11

9, 000, 000. 0.

213,426.0.0

Total

.56,587,185.8.11
1,500,000.0.0

29.908,931.30

Net total, British

55,087,185.8.11

29,908.931.30

United States:

Bills rendered in U. S. A

45,494,345.36
128, 497. 09

Bills rendered in France

Bills rendered in Great Britain

3, 846. 10.
173, 1.54. 17. 10

3,162,530.18

Net total, American

Balances:

British

US .

177,001.7.10

45, 622, 840. 45

3,182,530.18

54,910,184.1.1

15,713,909.15
£3,741,406. 18. 10

3,182,530.18

($4.20 and frs. 30 to £1)

3, 847, 491. 5. 8

£106,084.6.10

51,062,692.15.5
797, 854. 11. 2

APPENDIX XXIV.

Liquidation of the Nitrate Pool
(Sept. 15, 1919).

Agreement between His Britannic Majesty's Government and the United
States of America with respect to the Nitrate Pool.
183176—20 10

146 UNITED STATES LIQUIDATION COMMISSION.

DEFINITIONS.

The term " Great Britain " as herein used means His Britannic Majesty's
Government. The term " United States " as herein used means the Govern-
ment of the United States of America. The term " Nitrate " as herein used
means refined nitrate of soda. The term " Pool " as herein used shall be
taken to mean the arrangement between Great Britain and the United States
entered into in the latter part of 1918, pursuant to which the stoclis of nitrate
of the two Governments, to the extent that they constituted a surplus in excess
of their respective internal requirements, were considered as belonging to a
common pool, and pursuant to which each Government's transactions there-
after, in regard to such surplus stoclis, were considered to be on behalf of such
pool. A ton in this agreement means a long ton consisting of 2,240 pounds. A
quintal means the ordinary Chilean quintal of which there are twenty-two to
the ton of 2,240 pounds.

RECITALS.

Various misunderstandings have arisen as to the nature, force, and effect
of the pool and each of the above-named Governments has put forward certain
claims in respect thereto. There is now no useful function for the pool to con-
tinue to perform and the parties hereto desire to settle and adjust all the
aforesaid claims, to equitably apportion between the two Governments the re-
maining nitrate stocks of the pool, and to finally liquidate and settle the pool,
its obligations, profits or losses, and all matters pertaining thereto.

, AGREEMENT.

Now therefore, in consideration of the mutual agreements herein contained
it is agreed as follows :

Article I. The contributions of nitrate by said Governments to the pool are
fixed at the following approximate quantities :

Tons.

His Britannic Majesty's Government 436, 300

United States of America 156,776

Total pool contributions 593, 076

The unsold balance of nitrate remaining in the pool at the date hereof, is ap-
proximately 225,155 tons as more fully set forth in Schedule I hereto attached
and made a part hereof. For the purposes of the liquidation of the pool the
foregoing figures and schedule may be clianged by mutual agreement to con-
form to the facts, as they subsequently may be determined to be, without
otherwise affecting the terms of this agreement.

Article II. The above-described unsold balance shall be divided between the
two Governments in shares in the proportions that their respective tonnage
contributions to the pool are to the total pool contributions. The nitrate so ap-
portioned to the United States shall be made up of the nitrate stocks in the
United States, and in Canada respectively, together with such American pur-
chased stocks in Chile as shall be mutually agreed upon in an amount suf-
ficient to complete its said share. The nitrate so apportioned to Great Britain
shall be made up of the nitrate stocks in the United Kingdom, and the British
purchased nitrate stocks in Chile, together with the balance of the American
purchased nitrate stocks in Chile.

UNITED STATES LIQUIDATION COMMISSION. 147

Article III. The United States shall pay to the pool, by means of a debit
to it in the settlement of the pool's accounts, eight shillings and sixpence
(8/6d.) per quintal for the stocks now in the United States and Canada, plus
an ocean freight charge of $17.50 per ton and a sum equal to the commercial
marine insurance charges for the shipment of such nitrate from Chile to its
present location at rates existing on September 15, 1919. Great Britain
shall pay to the pool, by means of a similar debit, eight shillings and sixpence
(8/6d.) per quintal f. a. s. for the stocks located in Chile; and eight shillings
and sixpence (8/6d.) per quintal for the stocks now lying in the United King-
dom, plus an ocean freight charge of 140 shillings per ton and a similar marine
insurance charge. Some portions of the nitrate stocks may be " ordinary "
instead of " refined " and if so shall be taken by the United States and Great
Britain as part of their respective shares in proportions to be agreed upon
at a reduction in the price above mentioned of 4 pence per quintal, and such
fact shall not otherwise afEect the terms of this agreement.

Article IV. Upon the execution of this agreement title to the stocks now
lying in the United Kingdom, United States, and Canada, respectively, shall
pass to the respective Governments entitled thereto, as herein provided, as of
September 15, 1910, and title to the stocks in Chile shall so pass when the
allocation of the various parcels has been agreed upon as provided in Article
II hereof. Delivery of the nitrate shall be taken in each case where it lies
save that the nitrate in Chile shall be put free alongside at the expense of
the pool. Each of said Governments may dispose of any or all of its share
of stocks immediately upon the execution of this agreement and may advance
any sums that may be necessary to accomplish delivery thereof. Such ad-
vances shall be a charge against the pool in so far as they are made to meet
a pool liability herein provided.

Article V. Great Britain shall pay or reimburse the United States the costs
of breaking the stocks in Canada sufHcient for bagging and the costs of re-
bagging the same where necessary (other than the cost of the bags). The
cost of the bags so used shall be borne by the United States. Neither the
costs of breaking and bagging nor the cost of the bags shall be a charge
against the pool.

Article VI. After the 15th of September, 1919, the nitrate shall be at the
risk and all charges save as provided in Article V hereof and such as may be
necessary to put the nitrate in a deliverable condition shall be for the account
of the Government which acquires the particular stock as herein provided. All
charges and costs which have been properly paid or incurred in connection
with the acquisition, custody, or disposal of the total stocks of the pool up to
and including the 15th day of September, 1919, shall be regarded as having
been paid or incurred for the account of the pool. Such charges and costs
shall include the purchase price of the pool nitrate, freight or other trans-
portation charges, handling, insurance, storage, other carrying charges, and
brokerage, in respect thereto, together with all other expense which has arisen
from the purchase, disposal, or custody, or transportation thereof, including any
administrative expenses and similar charges which are attributable solely to
the pool. All costs paid in dollars by the United States prior to November
11. 1918, in respect to nitrate turned over to the pool by it shall be converted
to a sterling basis at a rate of exchange of 4.76, subsequent payments of dol-
lars by the United States on behalf of the pool shall be credited to the United
States at the rate of exchange ruling at the date the particular payment shall
have been made. All advances by either Government on account of the pool
shall bear interest at the rate of five per cent (5%) per anninn. In respect
to advances made prior to the 11th day of November, 1918, interest shall accrue

148 UNITED STATES LIQUIDATIOI^ COMMISSION.

from that date, and in respect to subsequent advances, from the date of the
advance, and run to and including the 15th day of September, 1919. Such
interest shall be included as a cost on account of the pool. The proceeds of
all sales made on account of the pool shall be credited to it and interest at
said rate shall be credited thereon from the date of sale to the 15th day of
September, 1919. Any advances made by either Government after the 15th
day of September, 1919, in the payment of any obligation which arose on ac-
count of the pool prior to said date, shall bear interest at the aforesaid rate
from the date of such advance until the reimbursement thereof by the pool.
Article VII. The profits or losses of the pool, as the case may be, shall be
determined as expeditiously as possible as of the 15th day of September, 1919,
including in such determination the transactions for the liquidation of the Pool
herein provided. Such profits or losses shall be divided between, or borne by,
Great Britain and the United States in the proportions provided in Article II
hereof for the apportionment of the nitrate stocks of the pool.

Article VIII. The United States shall not dispose of any part of its share of
the nitrate stocks of the pool in the United Kingdom or in the Dominions of
the British Empire, except that it may sell in Canada an amount equal to its
Canadian stocks, and Great Britain shall not dispose of any part of its share in
the United States or its possessions or territories. Each Government shall
secure a stipulation from the purchaser from it that such purchaser and pur-
chasers in turn from it shall be bound by the same restrictions as the selling
Government.

Akticle IX. The general custom of trade shall apply to the transactions
forming the subject of this agreement except where special provi.sion is ex-
pressly made herein.

In witness whereof, this agreement has been executed in four parts, each
having the full force and effect of the original, by His Britannic Majesty's
Government, acting through the minister of munitions, and by the United
States of America, acting through the United States Liquidation Commission —
War Department, Edwin B. Parker, chairman, as of the 15th day of September,
A. D. 1919.
Witness :

Rurtrs J. Trimble.

His Britannic Ma.jesty's Go^'ERNMENT,
By Henry Howard Piggott,
For and on Behalf of the Minister of Munitions, Assistant Secretary.
Witness :

RUFUS J. Trimbi^.

United States of America,
By Edwin B. Parker,

Chairman of the United States Liqui-
dation Commission — War Department.

(Copy.)

Ministry of Munitions of War,
Surplus Government Property Disposal Board,

Explosives and Chemicals Section,
Storey's Gate, Westminster, S. W. 1, 10th November, 1919.
Dear Sir : I am sorry that it has not been possible for me to write you earlier
putting on record the arrangements that were made at our interview on 5th
November.

UNITED STATES LIQUIDATION COMMISSION. 149

The contributions of nitrate set out in Article I of the agreement were modi-
fied by the addition of 328 tons to the British figure and 620 tons to the U. S. A.
figure ; the revised figures being as follows :

Tons.

His Britannic Majesty's Government 436, 628

U. S. A. Government 157,396

Total pool contributions 594, 024

The figures in Schedule I were further revised to read as follows :
Great Britain : Tons.

Stocks in Chile 2, 050

Stocks in U. K 58,468

Stocks in Canada ■— 16, 598

77, 116

America: ■■*'

Stocks in Chile 120, 681

Stocks in America 28, 376

149, 057

226, 173
A fresh calculation was made showing the proportions of unsold stocks to be
as follows :

His Britannic Majesty's Government : Tons.

Stocks in U. K 58,468

British stocks in Chile 2, 050

U. S. A. stocks in Chile 105, 727

166, 245

U. S. A. Government:

Stocks in Chile 14, 954

Stocks in U. S. A 28, 376

Stocks in Canada 16, 598

59,928

It was understood that you were agreeing these figures by cablegram, and I
hope to receive your confirmation at a very early date.
Yours faithfully,

{Signed) H. S. Mingabd.

Schedule I. — Unsold balance remaining in 'pool at 15 Sept., 1919.

Great Britain : Tons.

Stocks in Chile 2, 050

Stocks in U. K 58, 468

Stocks in Canada 16, 200

76, 718

America :

Stocks in Chile 120, 222

Stocks in America 28, 215

148, 437
225, 155

The above figures are approximate only.

150

UNITED STATES LIQUIDATION" COMMISSION.

APPENDIX XXV.

Authorisations to Pay Claims.

Num-
ber of
claims.

Arising in—

Kind of money.

Amount
claimed by
claimant.

Amount
allowed by
Commission.

328

France

French francs

76,949,049.35

3, 553, 399. 22

391, 252. 40

40,991.00

1,650.35

370,793/1/4

32,037,529.20

Switzerland

Swiss francs

2,034,096.60
286, 602. 40

Spain

Spanish pesetas

France .

Swedish kroner. . .

37,199.00

England

American dollars

1,650.35

England

English pounds

364,449/17/10

446

Note. — Does not include claims of foreign Governments.

Claims Disallowjsd by Commission.

Num-
ber of
claims.

Arising in —

Kind of money.

Amount
claimed by
claimant.

France

Spain

England

Switzerland
England

French francs . .
Spanish pesetas
Swedish kroner

Swiss francs

English pounds

3,583,698.63

90,000.64

19,374.71

109,076.76

952/0/0

APPENDIX XXVI.

Fkench-American Artilleky Under Stettinius-Loucheur Arrangement.

< 1 ) artillery components to be delivered to FRANCE BY THE UNITED STATES.

(a) 75-mm. material:

100 roughly machined recuperator forgings monthly, September, 1918,

to June, 1919.
250 assembled carriages, without recuperators and without sights, prior

to December 31, 1918.
150 assembled carriages monthly, without recuperators and without

sights, January to June, 1919.
2,880 carriage limbers, i

6,000 caissons, i prior to December 31, 1918.

8,640 caisson limbers, ]
A total of 2,640 additional caissons from January to June, 1919.

(b) 155-mm. Schneider howitzer material:

76 finished recuperators during September, 1918.

810 finished recuperators between October 1 and December 31, 1918.

200 finished recuperators between January 1 and May 1, 1919.

622 finished howitzers during September, 1918.

210 finished howitzers between October 1 and December 31, 1918.

300 finished howitzers between January 1 and May 1, 1919.

386 finished limbers to December 31, 1918.

746 finished carriage limbers between January 1 and May 1, 1919.

3,396 caissons prior to December 31, 1918.

UNITED STATES LIQUIDATION COMMISSION". 151

<c) 155-mm. G. P. F. material:

50 finished guns and carriages without recuperators, prior to December

31, 1918.
400 roughly machined recuperator forgings prior to June 30, 1919, of

which 60 had been floated prior to September 12, 1918; subsequent

deliveries to be at rate of 40 per month.
300 carriage limbers prior to December 31, 1918.

(2) GUNS TO I5E DELIVEKED BY PRANCE TO THE UNITED STATES.

{«) 75-mm. guns complete with 1 limber and 1 caisson:

September 288

October, |

November, \ per mouth 300

December, 1

From January 1, 1919, to June 30, 1919, per month 350

( h ) 155-mm. liowitzers :

To January 1, 1919, per month 140

From January 1, 1919, per month 160

October 40

November 40

December 45

From January 1, 1919, per month 45

(d) In addition the French to deliver all the materials and parts of materials

necessary for the maintenance of batteries in service, observing tlie
co-efficients for maintenance employed in the French Army.

APPENDIX XXVII.

(1) French Artillery and Ammunition Agreement
(Aug. 28, 1919).

Agreement between the Government of tlie United States and the Govern-
ment of France, concerning the final settlement of tlie supplying of artillery
and ammunition, undertaken by France on behalf of the United States up
to the date of the armistice of November 11th, 1918, and other matters.

Preamble. — At the signature of the armistice of November 11th, 1918, tlie
French Government had accepted orders for a large amount of ammunition and
artillery materiel to be delivered to the United States Government, which
were then in course of execution ; and certain negotiations had also been en-
tered into, relative to the furnishing of certain additional artillery materiel
for which no final agreement had been reached and for which the United States
Government had not yet placed formal orders. The United States Government,
on its part, had supplied to the Frencli Government 550 155-mm. howitzers,
intended to be used in the compo«-;ition of the materials to be transferred to
the United States.

The French Government had also agreed to machine for the United States
400 rough cradles for 155-inm. G. P. F. guns, of which 110 had been delivered
by the United States and 00 were in process of machining on November
11th. 1918.

152 UNITED STATES LIQUIDATION COMMISSION.

A verbal agreement (confirmed by letters of December 7th, 1918, from Mr.
Loucheur, of December 7tli, 1918, from Mr. Stettinius, and of December 20tli,
1918, and January 3rd, 1919, from Col. Mercier was i-eached between the
Ministre de I'Armament, representing the French Government, and Mr.
Stettinius, special representative of the United States Government, concern-
ing the final settlement of the orders for artillery materials and ammunition
undertaken by France on behalf of the United States and other matters ; and
this agreement is now drawn up in the final form, as follows :

Between the United States Government, represented by E. D. Bricker,
Colonel, Ordnance Department, United States, on behalf of the Chief of
Ordnance of the United States Army, duly appointed, and the French Govern-
ment, represented by M. le G6n#ral Maurin, Direeteur de I'Artillerie, duly
appointed, is agreed as follows :

Art I. General provisions. — (o) All materials and accessories, ammunition or
ammunition components, delivered by the Government of France and accepted
by the American Armies or delivered by the United States Government and
accepted by the French Armies, up to November 11th, 1918, inclusive, shall
remain the property of the accepting Government and shall be paid for at the
prices previously agreed to for items of the same model belonging to the
same or previous orders.

(&) Save the exceptions provided for in the present covenant and excepting
all material delivered and accepted on or before November 11th, 1918 ; all orders
accepted by the French Government for the United States Ordnance Depart-
ment covering artillery mat§riels, ammunition, accessories, and spare parts, and
all orders for projectiles finished or unfinished, placed for or by the French
Government in America with the United States Ordnance Department up to
November 11th, 1918, inclusive, are hereby cancelled by mutual agreement. No
indemnity of any kind whatsoever shall be paid by the United States Govern-
ment or by the French Government for the cancellation of these orders.

(c) All ammunition and ammunition components of American make, not
specified in Art. I, par. (a) above, existing in the depots of French general
reserve storehouses (Entrepots de Reserve Gengrale Francais) shall be removed
and put at the disposal of the United States.

Likewise all ammunition of French make now in the said storehouses, not
specified in Art. I, par. (a) above, shall be kept by the French Government.

(d) The United States Government has previously delivered to the French
Government 550 155-m/m howitzers finished with breech mechanism; 275 of
these guns shall be satisfactorily assembled to the carriages belonging to the
700 materiels of this type specified in Art. II, par. (&), in place of the same
number of similar howitzers of French manufacture. Their value (reckoned
at frs. 23,466 each, which is the cost price of identical material of French
make), i. e., a total of frs. 6,453,150, shall be deducted from the total price of
155-m/m howitzer materiels transferred.

The other 275 howitzers remain the property of the United States. It is
stated by the French Government that one of these burst during the regulation
firing tests, because of weakness developed by these tests; a report will be
furnished by the French Government certifying to these facts. The remaining
274 howitzers shall be delivered to the Ordnance Department and shipped to
America at the expense of the United States Government.

(e) The United States Government has delivered to the French Government
110 155-m/m G. P. F, rough cradle forgings, being part of an order for 400
rough forgings; 60 of these cradles, being at the present time in course of
machining, shall be entirely completed by France and delivered to the United
States. The settlement will be the subject of an agreement when the costs of

UNITED STATES LIQUIDATION COMMISSION. 153

the service rendered shall have been determined ; the sum to be paid shall be
the actual cost price to the French Government.

The 50 rough forgings remaining shall be delivered to the Ordnance Depart-
ment for return to the United States at the expense of the United States Govern-
ment. The 290 forgings not yet delivered shall not be shipped to France.

Art. II. Materiel to be supplied. — The French Government undertakes to
supply to the United States Governniert, which accepts and undertakes to pay
for the following materiel :

(a) 944 75-m/m gun materiels, model 1897, with limbers.

(b) 700 155-m/m howitzer materiels, model 1917, Schneider design, with
limbers.

(d) Collection of additional parts as hei-einafter specified.

Art. III. Composition of the materiel to be delivered. — The articles included
in the composition of the materiels and collections mentioned in Art. II are
enumerated in the tables number 1 to 7, attached to and forming a part of
this contract.

Abt. IV. Conditions of acceptance and delivery. — The above-mentioned ma-
teriels, of the types in use in the French Army and complying with the regula-
tion technical requirements of acceptance provided for their manufacture, shall
be delivered at such places in France as shall be indicated by the chief ordnance
officer, A. E. F., by April 1, 1919, or at later dates, when the United States
authorities are prepared to accept delivery.

Abt. V. Prices and conditions relative to same. — The transfer prices of above-
mentioned materiels (Art. II) are fixed as follows:

Francs.

(a) 312 75-m/m materiels with limbers, at frs. 30,080 the unit

(Table No. 1) 9,384,960

(b) 632 75-m/m gun materiels with limbers, at frs. 30,018 the

unit (Table No. 2) 18,971,376

(d) 700 155-m/ni howitzer materiels with limbers, model 1917,

at frs. 89,000 the unit (Table No. 4) 62,300,000

(e) 198 155-m/ni G. P. F. materiels with limbers, at frs. 145,850

the unit (Table No. 5) 28,878,300

if) Set of additional articles, spare parts, etc., for 155-m/m

howitzers (Table No. 6) 2, 524, 445. 40

(g) Sets of additional articles and spare parts, etc., for 155-m/m

G. P. F. (Table No. 7) 1,453,456.05

Total •- 123, 955, 037. 45

To be deducted, the value of 275 155-m/m guns (see Art. I,
par. id)) 6,453,150

Total 117, 501,887. 45

The total value of the transfer granted amounts to the sum of one hundred
seventeen million five hundred and one thousand eight hundred eighty-seven
francs forty-five centimes.

These prices represent, as far as it has been possible to reckon them, the
actual cost prices to the French Government without profit.

They include all royalties and premiums for the use of patents or secret
processes, which may affect the use of any part of the material transferred.

154 UNITED STATES LIQUIDATION COMMISSION.

The French Government agrees to protect the United States against all obli-
gations and all claims for royalties or other rights resulting from the use of
the material transferred with the exception of the following reservation :

Whereas valid patent rights may exist concerning this material, rights
which have never been published and which are still kept secret in virtue of the
stipulations of the law of April 12th, 1916; and whereas, furthermore, legal
claims may be made in the future; and whereas the French Government may
be obliged, in order to give satisfaction to such claims, to make payments which
will thus increase the present cost price of the transferred patented elements ; it
is therefore agreed that if, subsequent to the signing of the present covenant,
the French Government should be legally forced to pay, for any part of the
material transferred to the United States by the present covenant, aa in-
demnity in the form of a royalty to the proprietor of a patent now held secret
by virtue of the above-mentioned law, the United States will, in such case, in-
demnify the French Government for the additional expenses by paying, in
addition to the transfer price, a sum, the ratio of which to the whole amount
paid by the French Government will be equal to the ratio of the number of
patented articles transferred to the United States to the whole number of such
articles manufactured by or for the French Government.

These provisions apply only to transfers referred to in the present covenant
and do not modify any conditions or clauses to the contrary which may have
been provided for in other covenants already made between the Governments.

Abt. VI. Payments. — After presentation and examination of the proper re-
ceipts and vouchers, the American Government will make settlement, as to the
indebtedness created by this contract, in such manner as shall be in use for such
.settlements between the two Governments at the date of the settlement.

In conformity with the. American law neither any member or delegate of the
American Congress, nor any person belonging to or employed in the military
services of the United States shall be admitted to any share in this contract,
nor to obtain any profit from it.

In conformity with the French law, the amount of the transfer belongs in
full to the French treasury ; neither any commission nor any sum of any kind
can be given, no matter under what form, to anybody whomsoever.

Made out in six copies, at Paris, on the 28th day of August, 1919.

Name and capacity of the representative of the French Government :

L. Maurin.

Name and capacity of the representative of the American Government :

E. D. Bricker,
Colonel, Ordnance Department, for Chief of Ordnance,

War Department, United States of America.

Witness :

F. A. Pattison,

Major, Ord. Dept.

Approved : United States Liquidation Com-
mission — War Department,
Edwin B. Parker, Chairman.

UNITED STATES LIQUIDATION COMMISSION.

155

(2) Supplement to French Artillery and Ammunition Contract (Dated

Nov. 20, 1919).

This contract, entered into this 20th
day of November, 1919, by and be-
tween the United States of America
(hereinafter called "America"), act-
ing throngh the United States Liqui-
dation Commission — War Department,
Edwin B. Parker, chairman, of the one
part, and the Republic of France (here-
inafter called "France"), acting
through M. le General Maurin, direc-
teur de I'artillerie, of the other part,
wituesseth :

That whereas on the 28th day of
August, 1919, the parties hereto en-
tered into an agreement " concerning
the final settlement of tlie orders for
artillery materials and ammunition
undertaken by France on behalf of the
United States and other matters " ;
and

Whereas subdivision (e) of Art. I
of the said contract of August 28, 1919,
{irovides in part as follows :

"(e) The United States Government
has delivered to the French Govern-
ment 110 1.55-m/m G. P. F. rough
cradle forgings, being part of an order
for 400 rough forgings. Sixty of these
cradles, being at the present time in
course of machining, shall be entirely
completed by France and delivered to
the United States. The settlement will
be the svibject of an agreement when
the costs of the service rendered shall
have been determined ; the sum to be
paid shall be the actual cost price to
the French Government " ; and

Whereas the work of machining the
said 60 cradles has now been completed
by the French Government and the ac-
tual cost thereof is frs. 861,000 ;

Now, therefore; in consideration of
the premises, it is agreed between the
parties hereto that America shall pay
to France the said sum of frs. 861,000,
the payment of which is hereby ad-
mitted and acknowledged by France in
full and final payment and settlement

Ce contrat, redige le 20 Novembre
1919, a ete etabli par et entre la Gou-
vernement des Etats Unis (appele ci-
apres "Amerique") Represente par la
Commission de Liquidation des Etats-
Unis du Departement de la Guerre,
Edwin B. Parker, President, d'une
part; et la Republique Francaise (ap-
pelee ci-apres "France"), representee
par M. le General Maurin, Directeur
de I'Artillerie, d'autre part ;

Etant donne que le 28 Aout 1919 les
parties ont conclu un accord concer-
naut le reglement final des ordres pour
le materiel d'artillerie, les munitions
et autres materiels entrepris par la
France pour le compte des Etats-
Unis ; et

Etant donne qu'au paragraphe
(e) de I'Art. I du dit Contrat du
28 Aout 1919 il est meutionne ce qui
suit :

"(e) Le Gouvernement des Etats-
Unis a delivre au Gouvernement Fran-
cais 110 ebauches de glissieres pour
canons de 155-m/m G. P. F. faisant
partie d'une commande de 400
ebauches. 60 de ces glissieres etant
actuellement en cours d'usinage seront
entierement finies par la France et
livrees aux Etats-Unis. Le reglement
fera I'objet d'un accord lorsque le cout
du travail execute aura ete determine ;
la somme a payer sera le prix de re-
vient pour le Gouvernement Fran-
cais ; " et

Etant donne que le travail de fini-
tion des 60 glissieres sus-indiquees est
maintenant complement termine par le
Qouvernement Francais et que le cout
du travail s'eleve a 861,000;

En consequence, etant donne ce qui
precede, il a ete convenu entre les par-
ties sus-indiquees que 1' Amerique
paiera a la France la dite somme de
861.000 Frs. Ce paiement est de ce
fait admis et reconnu par la France
comme reglement total et definitif de

156

UNITED STATES LIQUIDATION COMMISSION.

of the balance due France under the
said subdivision (e) of Art. I of the
said contract of August 28tli, 1919.

In witness wliereof, on tlie day and
year first above written, this contract
has been executed in six parts, each
having the full foi-ce and effect of an
original, by the United States of Amer-
ica, acting through the United States
Liquidation Commission — War Depart-
ment. Edwin B. Parker, chairman,
and by the Republic of France, acting
through M. le General Maurin, di-
recteur de I'artillerie.

United States of America,
By Edwin B. Parker,

Chairman United States
Liqtiidation Commission —
War Department.
Republic of France,
By L. Maurin,

Directeur de VArtillerie.

la balance due a la France aux termes
du dit paragraphe (e) de I'Art. I du
dit Contrat du 28 Aout 1919.

En foi de quoi, le jour et I'aunee
precites. ce Contrat a ete redige en six
exemplaires, chacun d'eux ayant la
meme valeur et effet qu'un original,
par les Etats-Unis d'Amerique, repre-
sentes par la Commission de Liquida-
tion des Etats-Unis, Departement de la
Guerre, Edwin B. Parker, President,
et par la Republique Francaise, repre-
sentee par M. le General Maurin, Di-
recteur de I'Artillerie.

Etats-Unis D'Amerique,
Par Edwin B. Parker,
President de la Commission de Liqui-
dation des Etats-Unis du Departe-
ment de la Guerre.

Republique Francaise,
Par L. Maurin,

Directeur de VArtillerie.

APPENDIX XXVIII.

French Air Service Settlement of November 8, 1919.

Memorandum of settlement between
the respective Air Services of the
United States of America and the Re-
public of France dated November 8,
1919.

Whereas in the general settlement
heretofore negotiated between the Air
Service of the War Department of the
United States of America (hereinaf-
ter called "America") and the Air
Service of the Republic of France
(hereinafter called " France"), France
was entitled to receive some American
Liberty motors and spares of the value
of sixteen million eight hundred and
five thousand five hundred dollars
(.$16,80.5,500) which have been retained
by America and America was entitled
to receive airplanes and airplane ma-
terials of French manufacture of the
value of ninety-eight million three hun-
dred forty-four thousand and fourteen

Memorandum de Reglement entre les
Services A6ronautiques respectifs des
Etats-Unis d'Amerique et la Republique
Francaise en date du 8 Novembre 1919.

Etant donne que dans le r&glement
general en discussion jusqu'a ce jour
entre I'Air Service du War Departe-
ment des Etats-Unis d'Amerique (ci-
apres d^nommS "Amerique") et la Di-
rection de I'A^ronautique de la Repu-
blique Francaise (ci-apres d§nomm§e
"France"), la France etait en droit
de recevoir des moteurs Liberty et
pieces de rechange d'une valeur de
seize millions huit cent cinq mille cinq
cents (16,805,500) dollars qui ont et6
retenus par 1' Amerique et que 1' Ameri-
que etait en droit de recevoir des avions
et du materiel aeronautique provenant
des usines francaises d'une valeur de
quatre vingt dix huit millions trois

UNITED STATES LIQUIDATION COMMISSION.

157

(frs. 98,344,014) francs which have
been retained by France.

Now, therefore, it is agreed :

That America shall retain the Lib-
erty motors and spares above men-
tioned of the value of sixteen million
eight hundred and five thousand
five hundred ($16,805,500) dollars, the
French bills for which against America,
stated in dollars and converted into
francs at the rate of 5.8523 francs for
one dollar, aggregate in amount
ninety-eight million three hundred fifty
thousand eight hundred and twenty-
seven francs (98,350,827 frs.).

That France shall retain the air-
planes and airplane materials of French
manufacture above mentioned of the
value of ninety-eight million three
hundred forty-four thousand and four-
teen (98,344,014) francs.

It is further agreed that said bills
of America against France, when so
converted, shall be offset against said
bills of France against America leav-
ing a balance due France of six thou-
sand eight hundred thirteen frs.
(6,813), for which amount France shall
receive credit in the settlement of ac-
counts between America and France
whereupon the said bills of America
against France and the said bills of
France against America shall be can-
celled as fully satisfied.

Attached hereto and marked for iden-
tification " Exhibit A" is the final state-
ment of account between the United
States of America and the Republic of
France in connection with the general
settlement for airplanes and motors
from which it appears (a) that the
total credit due America by France is
twenty-one million two hundred sev-
enty-two thousand two hundred fifty
dollars (.$21,272,250) and (b) the total
credit due by America is one hundred
sixty-seven million seven hundred
eigthy thousand sixty-six (167,780,066)
francs plus one million eight hundred

cent quarante quatre mille quatorze
(98,344,014) francs qui ont et§ retenus
par la France.

II est en consequence aujourd'hui
entendu :

(1) Que I'Amerique retiendra les
moteurs Liberty et pieces de rechange
ci-dessus mentionnes d'une valeur de
seize millions huit cent cinq mille cinq
cents (16,805,-500) dollars dont les
factures francaises sur I'Amerique
etablies en dollars et converties en
francs au taux de 5.8523 francs pour
un dollar s'41event a un total de quatre
vingt dix huit millions trois cents
einquante mille huit cent vingt sept
(98,350,827) francs.

(2) Que la France retiendra les
avions et le materiel aeronautique pro-
venant des usines francaises ci-dessus
mentiounees d'une valeur de quatre
vingt dix huit millions trois cent
quarante quatre mille quatorze (98,-
344,014) francs.

(3) II est de plus entendu que les
dites factures de I'Amerique sur la
France, apr§s cete conversion, seront
balancees avec les dites factures de la
France sur I'Amerique laissant un
produit dQ jl la France de six mille huit
cent treize (6,813) francs, somme pour
laquelle la France sera creditge sans
le rdglement de comptes entre I'Ameri-
que et la France sur quoi les dites
factures de I'AmSrique sur la France et
de la France sur I'Amerique seront
anuulees comme completement reglfies.

(4) Ci-joint et intitule " Tableau A"
se trouve I'gtat final de compte entre
les Etats-Unis d'Am^rique et la R6iju-
blique Francaise se relatif aux regle-
ments des avions et moteurs duquel
^tat il appert (a) que la somme totale
due a I'Amerique par la France est de
ving et un millions deux cent soixante
douze mille deux cent einquante
(21,272,250) dollars, et (b) que la
somme totale due k la France par
I'Amerique est de cent soixante sept
millions sept cent quatre vingt mille
soixante six (167,780,066) frs. plus un
million huit cent quatre vingt neuf

158

UNITED STATES LIQUIDATION COMMISSION.

eighty-nine tliousand four hundred and
three and 60/100 ($1,889,403.60) dol-
lars.

It is agreed by both parties hereto
that the said statement is correct and
shall form the basis of stating a final
account in the general settlement now
being negotiated between France and
America, so far as concerns the Air
Service transactions between France
and America here referred to.

United States of America,
By Edwin B. Parker,
Chairman, United States Liquida-
tion Commission — War Department.

mille quatre cent trois dollars et
soixante cents (1,889,403.60 dollars).

U est entendu entre les deux parties
en cause que ledit 6tat est correct et
sera la base de I'^tablissement du
compte final dans le reglement g6n6ral
actuellement en cours de negociation
entre la France et I'Am^rique en ce qui
regarde les transactions susvisSes entre
les Services A^ronautiques Francais et
Americains.

Republique Francaise,

Approuv6 le 10 Novembre 1919.

Le President du Conseil Ministre de
la Guerre.

Direction de I'Agronautique :

(Signed) M. Duval.

"Exhibit A." — United States Liquidation Commission — War Department.

Statement of acco-unt between the United States of America and the Republic
of Franee in connection with general settlement for airplanes and motors.

Amount in
francs.

Amount in
dollars.

Charges against France:

21,272,250.00

Total credit due United States from France

21,272,250 00

Credits due France:

Airplanes and motors in process of construction at date Francs.
of armistice 120, 859, 450. 00

163,757,544.00

3,910,217.00

105,492.00
6,813.00

Cancellation indemnities for airplanes and motors 14, 710, 537. 00

Spare parts in process of construction 19, 962, 553. 00

Cancellation indemnity for spares 8, 225, 004. 00

Total 163,757,544.00

Miscellaneous materiel in process of manufacture . 3, 496, 628. 00

Cancellation indemnities account of miscellaneous materiel 413, 589. 00

Total 3,910,217.00

Cost of delivery by aerial route of 596 airplanes @ fr. 177.00
each 105, 492. 00

Credit due France under exchange of Liberty motors for
French airplanes and materiel ...

Payments made on account of motors and spares that were
hot credited against charge of $21,272,250.00 included in
Cuthell agreement:

April, 1919, frs. 9,641,406.26® 5.80 $1,662,311.43

May, 1919, frs. 1,349,347.12 @ 6.05 . . 223,032.58

July, 1919, frs. 26,184..37 @ 6.45 4,059.59

frs. 11,016,937.75 1,889,403.60

1,889,403.60

Total credit due France from the United States

167,780,066.00

1,889,403.60

UNITED STATES LIQUIDATION COMMISSION.

159

" Tableau A."- — Commission de Liquidation Ameeicaine — War Department.

Etai (In conipte entre les Etats-Unis d'Amerique et la Rcpublique Francaise
relatif au reglement general pour Ics avians et moteurs.

Montant en
francs.

Montant en
dollars.

Dette de la France:

Moteurs Liberty et pieces de reehanges, accord Cuthell du 29 mai 1919.

Cr^lit total dti par la France aux Etats-Unis

Sommes dues a la France:

Avions et moteurs en cours de construction a la date Francs.

de 1 'armistice 120, 859, 450. 00

Indemnite de resiliation pour avions et moteurs 14, 710, 537. 00

Pieces de rechanges en cours de construction 19, 962, 553. 00

Indemnite de resiliation pour les pieces de rechanges . . 8, 225, 004. 00

21, 272, 250. 00

21,272,250.00

Total 163, 757, .544. 00

Materiel divers en cours de fabrication 3, 496, 628. 00

Indemnite de resiliation pour le materiel divers 413,589.00

Total 3, 910, 217. 00

Collt de la livraison par voie de I'air de 596 avions: 177

francs pour chacun 105, 492. 00

Somme due k la France en vertu de 1 'T'change de moteurs

Liberty contre du materiel aeronautique frangais

Paiements effectues sm- le compte moteurs Liberty et
pieces de rechange qui n'ont pas ete deduits du
prix total de 21,272,250 dollars inclus dans I'accord
Cuthell:

Avril 1919, frs. 9,641,406. 26 au taux de 5. 80 $1,662,311.43

Mai 1919, frs. 1,349,347. 12 au taux de 6.05 223,032.58

Juil. 1919, frs. 26, 184. 37 au taux de 6.45 4,059.55

frs. 11,016,937.75
Somme totale due k la France par les Etats-Unis.

1,889,403.60

163, 757, .544. 00

3,910,217.00

105,492.00
6. 813.00

167, 780, 066. 00

1,889,403.60

APPENDIX XXIX.

Contract Between United States of America and Republic of France for the
Settlement of Railroad Transportation and Other Claims, October 1, 1919.

This conti-act entered into this first
day of October, A. D. 1919, by and be-
tween the United States of America
(hereinafter called America), acting
through the United States Liquidation
Commission — War Department, of the
one part ; and the Republic of France
(hereinafter called France), acting
through le Miuistre des Travaux Pub-
lics des Transports et de la Marine
Marchande, of the other part ; Wit-
nesseth :

Entre les Etats-Unis d'Amerique (ci-
apr^s dgnommes Amerique), repre-
sents par la Commission de Liquida-
tion des Etats-Unis — War Department
d'une part ; et la Republique Francaise
(ci-aprgs denommee France), repre-
sentee par Monsieur la Ministre des
Travaux Publics des Transports et de
la Marine Marchande d'autre part; la
Convention suivante a ete passee el la
date du 1° Octobre, 1919;

Recitals.

Expose.

That whereas America upon its en-
try into the war on April 6th, 1917,
aranged with Prance to provide and
to cause the French railroads to pro-
vide, during the presence in France of

Etant donne que I'Amgrique, au
moment de son entree en guerre le 6
Avril 1917, a convenu avec la France
que celle-ci pourvoierait ou ferait
pourvoir par les R^seaux Francais,

160

UNITED STATES LIQUIDATION COMMISSION.

the American forces, transportation
for the personnel, animals, and freight
of said forces at rates not to exceed
those to be paid by France for similar
services; and France has provided or
caused to be provided said transporta-
tion ; and

Whereas in connection with rail-
road transportation in France the re-
spective parties and the French rail-
roads furnished or caused to be fur-
nished to one another the use of cer-
tain terminal facilities at docks and
elsewhere, also locomotives, cars, ma-
chine shop and other equipment, the
services of certain personnel, and they
provided to one another certain sup-
plies and materials, and performed for
one another certain services, the com-
pensation for which remains to be set-
tled and adjusted ; and

Whereas there exist various claims
in France by eaeh of the parties
against the other, and by the French
railroads against America and by
America against the French railroads,
arising out of losses of or damages to
freight and damages to railway prop-
erty ; and

Whereas the parties desire to ad-
just any and all claims and demands
of every kind, nature, and description
whatsoever of France or of the French
railroads against America, and any
and all claims of every kind, nature,
and description whatsoever of Amer-
ica against France or against the
French railroads arising out of the
transactions referred to in the fore-
going recitals, and all claims of the
French Navigation Office, up to and in-
cluding September 30, 1919 ; and

Whereas the parties desire to re-
adjust said arrangement entered into
upon America's entry into the war for
the transportation over the French rail-
roads of the personnel, animals, and

pendant la presence des troupes Ameir^-
caines, aux transports de personnel,
animaux et materiel des dites forces a
des tarifs ne devant pas exc6der ceux
payes par la France pour des services
semblables. Etant donne que la
France a pourvu aux transports sus-
vis6s,

Vu que, en ce qui concerne les trans-
ports sur les R^seaux Francais, les par-
ties respectives et les Reseaux Fran-
cais ont fourni, ou fait fournir les
uns aux autres I'usage de certaines
installations, soit aux ports, soit en
d'autres points des dits Reseaux, de
locomotives, wagons, ateliers et autres
materiels, ainsl que les services de cer-
tains personnels ; qu'ils se sont foup-
uis reciproquement certains ravitaille-
meuts et materiels, et se sont rendus
mutuellement certains services dont la
compensation reste a etablir et a liqui-
der ;

Etant donne, qu'il existe des recla-
mations diverses en France de chacune
des parties contre I'autre, et des Re-
"seaux Francais contre I'Amerique, et
de I'Amerique contre les Reseaux
Francais, reclamation dues a des
pertes ou a des dommages au materiel
♦ransporte et k des dommages k des pro-
priet^s des dits RSseaux de Chemin de
Fer;

Etant donn^ que les parties d^sirent
regler chacune et toutes reclamations
de tout espece, nature et genre, de
France ou des Reseaux Francais contre
rAm^rique et toutes reclamations de
toute espece. nature et genre de
I'Amerique contre la France ou les Re-
seaux Francais, reclamations relatives
aux questions exposSes dans les Ar-
ticles suivants, et toutes reclamations
de rOffice Francais de la Navigation,
toutes ces reclamations coucernant la
pgriode s'etendant jusqu'au 30 Sep-
tembre, 1919, inclus ;

Etant donne que les parties desirent
remettre au point I'arrangement con-
clu au moment de I'entree en guerre
de I'Amerique pour le transport sur les
Rgseaux Francais du personnel, ani-

UNITED STATES LIQUIDATION COMMISSION.

161

freight of the American forces, in so far
as it covers the period on and after
October 1, 1919, until Deceml)er 31,
1919, inclusive:

Now, tlierefore, in cousi<leratiou of
the premises and for the other consid-
erations herein stated, it is agreed as
follows :

Akticle One. Agreement. — America
will pay to France the sum of four
luuulred and thirty-four million, nine
hundred and eighty-five thousand
three hundred and eighty-nine and
73/100 (434.985,389.73) francs.

Akticle Two. America waives any
and all claims which it may or might
have against France on account of or
arising from any and all of the trans-
actions referred to in the recitals of
this contract up to and including Sep-
tember 30. 1919.

Article Three. America assigns to
France any and all claims which
America may or might have against
the French railroads on account of or
arising from any and all of the trans-
actions referred to in the i*ecitals of
this contract up to and including Sep-
tember 30th, 1919, and will, accord-
ingly, hand to France such statements
of account as may permit France to
make such claims against the French
railroads.

Article Four. France waives and
will save America harmless from any
and all claims which France or the
French railroads may or might have
against America on account of or aris-
ing from any and all of the transac-
tions referred to in the recitals of this
contract, and all claims of the French
Navigation Office, up to and including
September 30, 1919.

Article Five. On and after October
1. 1919, and until December 31. 1919.
France will furnish or cause the
French railroads to furnish transpor-
tation over the French railroads for
the personnel, animals, and freight
of said forces at the same rates at
183176—20 11

maux et materiel des Forces Ameri-
caines, en taiit qu'il couvre la periode
s'gtendant du 1'''" Octobre 1919, inclus,
au 31 Decembre 1919. inclus.

La convention suivante a 6t4 agree
d'un commun accord eu egard aux con-
siderations ci-dessus et ci-apres ex-
posees :

Article I. Accord. — L'Amerique re-
connait devoir a la France la somme de
quatre cent trente-quatre millions, neuf
cent quatre-vingt cinq inille, trois cent
quatre-vingt neuf francs, 73 centimes
(434,985,889.73).

Article II. — L'Amerique renonce a
chacune et toutes reclamations qu'elle
a, ou pourrait avoir contre la France,
causees par ou provenant de chacune
et toutes les questions mentionnees
dans la teneur de la presente conven-
tion .insqu'au 30 Septembre 1919 inclus.

Article III. — L'Amerique transfere
a la France tous les droits sans excep-
tion qu'elle pent ou pourrait avoir
contre les Reseaux Francais a cause
ou du fait d'une ou quelconque des
questions mentionnees dans I'expose de
la presente convention jusque et y
compris le 30 Septembre 1919, et remet-
tra en consequence a la France les
pieces de comptabilite qui lui per-
mettent de formuler des declamations
contre les Reseaux Francais.

Article IV.— La France renonce a
et decharge I'Amerique de, chacune et
toutes reclamations que la France ou
les Reseaux Francais ont ou auraient
contre I'Amerique ^ cause, ou du fait
de chacune et toutes questions men-
tionnees dans I'exposg de la presente
convention, ainsi que les reclamations
de rOffice Francais de la Navigation,
toutes ces reclamations pour la pe-
riode s'etendant jusqu'au 30 Septembre,
1919 inclus.

Article V. — A partir du 1 er Octobr.'
1919 et jusqu'au 31 Decembre 1919, la
France assurera le transport sur le
r^seau ferre francais du personnel,
animaux et marchandises des Forces
Amgricaines au meme tarif et sous les
memos conditions qui seront appliques

162

UNITED STATES LIQUIDATION COMMISSION.

which and ou the same terms and con-
siderations under which said railroads
shall, during the same period, furnish
transportation for the personnel, ani-
mals and freight of the French Army.
In witness whereof, on the daj- and
year tirst above written, this contract
has been executed in four parts, each
liaving the full force and effect of an
original, by the United States of
America, acting through the United
States Liquidation Commission — War
Department, Edwin B. Parker, chair-
man ; and by the Republic of France,
acting through le INIiuistre des Tra-
vaux Publics, des Transports et de la
Marine Marchande.

United States of America,
K.V Edwin B. Parker,

Chnirman, l)dted states
Liquidation Commission —
War Department.
Repurlic of France,
By A. Claveitxe, ,

Ministre des Travaux,
Publics des Trunsports et
de la marine Marchwnde.

1 October, 1919.
M. le Ministre des Travaux I'ublics

des Transports et de la Marine

Marchande, Paris.

It is understood that the term
"' American forces " as used in the con-
tract between America and France
dated October 1, 1919, for the settle-
ment of transportation matters, up to
and including September 30, 1919, in-
cludes the American land and naval
forces and all affiliated organizations
(like the Y. M. C. A., American Red
Cross, Salvation Army, .Jewish "Wel-
fare League, etc.) and that this settle-
ment covers all claims arising out of
transportation furnished on Ordres de
Transport issued by American author-
ity ; but, in waiving the claims referred
to in Article Two of said contract
America does not undertake to waive
any claims which the American Red
Cross may have arising out of trans-
portation furnished to it on Ordres de
Transport issued by the French Army,
but oiilv ehiinis arising out of trans-

pendant la meme i:)eriode aux trans-
ports militaires francais.

En foi de quoi, le jour et I'annes ci-
dessus, la presente convention a ete
faite en quatre expeditions, chacune
ayant la valeur et I'elfet d'un original,
par les Etats-Unis d"Ameri(iue agissant
par I'intermediaire de la Commission de
Liquidation des Etats-Unis, Ministere
de la Guerre, Edwin B. Parker, presi-
<lent ; et par la Republique Fi'ancaise,
agissant par rintermediaire du Minis-
tre des Travaux Pul)lics des Trans-
ports et de la Marine Marchande.
Etats-Unis d'Amerique,
Par Edwin B. Parker,
Le President de la Commission de
Liquidation des Etats-Unis, Minis-
tere de la Guerre.

Republique Francaise,
Par A. Claveille,
Le Ministre des Travaux Publics
des Tra)ispo)ts et de la Marine
Marclunidc.

1" Octobre 1919.
Monsieur le Ministre des Travaux

Publics des Transports et de la

Marine Marchande, Paris,

II est entendu que le terme " Forces
Americaines." tel qu'il est employe
dans la convention entre I'Amerique et
la France en date due l*"" Octobre
1919, pour le reglement des affaires
de transport jusqu'au 30 Septembre
1919 inclus, comprend les Forces
Americaines de terre et de mer et
toutes les organisations affiliees (comme
le Y. M. C. A., la Croix-Rouge Amei'i-
caine, I'Armee du Salut, le Welfare
League Israelite, etc.) et que ce regle-
ment couvre toutes reclamations cau-
sees par les transports fournis sur or-
dre de transport etablis par I'Autorite
Americaine ; mais en ecai'tant les
reclamations dont il est question dans
I'article II dudit contrat, TAmerique
n'entreprend pas d'ecarter les reclama-
tions que la Croix Rouge Americaine
aurait a formuler en raison de trans-
ports k elle ; fournis sur ordres de

UNITED STATES LIQUIDATION COMMISSION.

163

portatioii under Ordres de Transport
issued h\ the A. E. F.

(Signed) Edwin B. Parker,

Chairman, T\ S. Liquidation
('ommissiou—War Department.
Accepted : Paris, 1 October, 1919.
(Sisined) A. Claveille,
Lc Miuistre des Travau.v
I'liliJics f/fs- Transports
ct de. la Marine Marchande.

ti'iinsjtort etablis par I'Arniee Fran-
caise, mais seulenient les reclamations
causees par les transports par ordres
<le transport etablis par I'A. E. F.
(Si.siiied) EuwiN B. Parker,

Prrsidoit, Coinniission de Liquida-
tion U. S., Ministcre de la Guerre.

Accept^: Paris, 1*"" Octobre 1919.
(Signe) A. Claveille,

Le Ministre des Traraux Pvljlie'i
den Transports et de la Marine
Marchande.

APPENDIX XXX.

Contract Between United States of America and Republic of France.
October 1, 1919 — Port Dues Settlement.

This cuntract. entered into this tirst
day of October. A. D. 1919. by and be-
tween the United States of America
(hereinafter called America), acting
through the United States Liquidation
('(unniission — War Department, of the
one part ; and the Republic of France
(hereinafter called France), acting
through le Ministre des Travaux Pub-
lics des Transports et de la Marinb
Mcrchande. of the other part ; wit-
nesseth :

Recitals.

Tb.at irlicrctts, vessels operating in
the service of or transporting persons
or property for America liave, under
an arrangement entered into between
France and the American Expedition-
ary Forces, used the ports of France
since America's entry into tlie war on
April 6th. 1917, and will use said ports
until the total evacuation of France
by tile American Forces ; and

^^'ln'rra■s. claims b.ave been and are
being made in connection with the use
of said ports by said vessels, espe-
cially im account of the nonpayment of
l)ort dues (taxe de peage), and on ac-
count of the expenses incurred in rais-
ing rlie water level at St. Nazaire; and

Wltcreay. the parties desire to settle
and adjust all of said claims of every
nature whatsoever now existing and to

Entre le Gouvernement des Etats-
Unis d'Amerique (ci-apres denommes
Amerique) represente par la Commis-
sion de Liquidation du Departement de
la Guerre des Etats-Unis d'une part,
et le Gouvernement de la Republique
Frangaise (ci-apres denomniee France)
represente par M. le Ministre des
Travaux Publics des Transports et de
la Marine Marchande d'autre part, il a
ete conclu. a la date du 1 Octobre,
1919, le contrat suivant :

Expose.

Etant donne que les navires, au
service de I'Amerique, ou transportant
du personnel ou des marchandises pour
son conipte, d'apres une convention
etablie entre la France et les. Forces
Expeditionnaires Americaines, ont uti-
lise les ports frangais depuis I'entree
en guerre de I'Amerique, le 6 Avril
1917, et les utiliseront encore jusqu'a
1 "evacuation totale de la France par les
Forces Americaines,

Etant donne que des reclamations
out ete faites et le sont encore, au
sujet de I'usage des dits ports par les
dits navires, particulierement a cause
du non paienient des taxes de peage
et au sujet des depenses occasionnees
par le relevement du plan d'eau de St.
Nazaire.

Etant donne que les hautes parties
contractantes desirant determiner et
liquider toutes les reclamations telles

164

UNITED STATES LIQUIDATI0:N^ COMMISSIOK",

readjust said arrangemeut iu so far as
it concerns the period from the pres-
ent date until the total evacuation of
France by the American Forces ;

Now, therefore, in consideration of
the premises and for the other consid-
ei-ations hei'ein stated, it is agreed as
follows :

Articie One. Aiireeinent. — America
will pay to France the sum of three mil-
lion {3,0(»0.0()0) francs.

Akticle Two. France waives and
will save America and said vessels,
their owners, charterers or masters,
harndess from any and all claims which
France, or tlie chambers of commerce,
or the municipalities of said ports, or
any one whosoever, may have, on ac-
count of the use of said ports by said
vessels, from the entry of America into
the war until the date hereof, for port
dui>s ( taxe de peage) , or for expenses in
raising the water level at St. Nazaire
or elsewhere, or for any other port
facility or service afforded to said ves-
sels, sare only the special charges for
pilotage, for the occupation of hangars,
for the use of cranes, and for similar
special facilities and services (herein-
after designated "special services")
for which America has been paying
currently and will continue to pay
when and as rendered.

Article Three. France agrees that
such vessels may. from the present date
until the total evacuation of France
by the American forces, use said ports
witliout paying for said use during
said period any of said port dues ( taxe
de i>eage), and without paying any of
the expenses for raising the water level
at St. Nazaire or elsewhere, and with-
out paying for any other port facility
or service afforded to such vessels
(save only said special services), and
will save America and such vessels,
their owners, charterers, and masters.

qu'elles existent a I'heure actuelle et
incurporer dans la presente convention
tnui'.s celles qui s'api)liquent a la pe-
riode s'etendant depuis ce jour jusqu'a
Tevacuation totale de la France par
les I^^orces Americaines ;

La convention suiyante a ete passee,
par applications des considerations ci-
(lessus et suivant les dispositions con-
tenues dans le present document :

Article 1. Accord. — I'A m e r i q u e
paiera a la France la somme de trois
million de francs (3.000,000).

Article II. La France exonore
I'Amerique et les dits navires, ainsi
que leurs proprietaires, locataires ou
capitaines, de toutes les reclamations
que le Gouvernement Fraucais, ou les
chambres de conunerce, ou les muni-
cipalites des dits ports, ou n'importe
(]uelles autres autorites, peuvent faire
vnloir, au sujet de I'usage des dits
ports par les dits navires, depuis I'en-
tree en guerre de I'Amerique jusqu'a la
date ci-dessus indiquee soit pour des
taxes de peage ou des depenses oc-
casionriees par le relevement du plan
d'eau de Saint-Nazaire ou autres ports,
S()it pour tons autres services rendu s
aux dits navires dans un port quel-
conque ; exception est faite seulement
pour les frais speciaux de pilotage,
d'occupation de hangars, d'usage de
grues et pour les avantages et services
speciaux de meme nature (frais, avan-
tages et services designes sous le
uom ci-apres, de " Services speciaux " )
pour lesquels I'Amerique a pave et
continuera de payer au fur et a
mesure.

Article III. — La France admet que
les dits navires pourront, a partir de
cette date jusqu'a I'evacuation totale
de la France par les Forces Ameri-
caines, utiliser les dits ports sans avoir
a payer, pendant la dite periode, au-
cune des taxes de peage, ni aucune des
depenses de relevement du plan d'eau
de St. Nazaire ou d'autres ports, ni
aucun autre service rendu aux dits
navires dans un port quelconque (ex-
cepte seulement s'il s'agit des Services
dits Speciaux) et elle exonerera par
suite I'Amerique et les dits navires.

UNITED STATES LIQUIDATION COMMISSION.

165

harmless from any and all claims on ac-
count of all of the foregoing', save only
claims on account of the said special
services.

In witness whereof, on the day and
year hrst above written, this contract
has been executed in four parts, each
having the full force and effect of an
original, by the United States of
America, acting through tlie United
States Liquidation Connnission — War
Department, Edwin B. Parker, chair-
man ; and by the Republic of France,
acting through le Ministre des Travaux
Publics des Transports et de la Marine
Marchande.

United States of Ajierica,
By Edwin B. Parker,
Chairiiidii. f'liited istateff Liquidation
Com in is.sion — War Department.

Repvblic of France,

A. Claveille,

Le Ministre dea Travaux

Publics des Transports

et de la Marine Ma?-chande.

aiusi que leurs proprietaires, locataires
et capitaines, de toutes reclamations,
conformement aux indications ci-des-
sus, a I'exceptiou seuleraent des recla-
mations concernant les Services dits
Speciaux.

En foi de quoi et a la date ci-dessus
indiquee le present contrat a ete dresse
en quatre exemplaires, pour valoir
chacun d'eux comme original, par le
Gouvernement des Etats-Unis d'Ame-
rique agissant par I'iutermediaire du
President de la Commission de Liqui-
dation du Ministere de la Guerre des
Etats-Unis, Edwin B. Parker, et par
le Gouvernement de la Kepublique
Francaise agissant par I'intermediaire
de Monsieur le Ministre des Travaux
I'ublics des Transports et de la Marine
Marchande.

Etats-Unis d'Amerique,
Par Edwin B. Parker,

President dela Commission
de Liquidation du Departe-
ment de la Ouerre des
Etats-Unis.

Republique Francaise,
Par A. Claveili.e,

Le Ministre des Travaux
Publics des Transports et
de la Marine Marchande.

APPENDIX XXXI.

Contract Between United States of America and Republic of France
Evidencing General Settlement of All Mutual Accounts, Claims, and
Demands Arising in Europe, November 20, 1919.

This contract entered into this 20th
day of November, A. D. 1919, by and
between the United States of America
(hei'einafter called "America"), act-
ing through the United States Liqui-
dation Commission — War Department,
Edwin B. Parker, chairman, of the
one part, and the Republic of France
(hereinafter called "France") acting
through the Controleur de I'Adminis-
tration de I'Armee Edouard Boulanger,
under reserve of the approval of the
interested ministers, of the other part,
vvitnesseth :

Genera I considerations.

That ichcreas, between the 6th day
of April. 1917, and the 20th day of

Le present contrat redige le 20 No-
vembre 1919 a ete etabli par et entre:

Le Gouvernement des Etats-Unis
(appele ci-apres Amerique) represente
par la Commission de Liquidation des
Etats-Unis du Departement de la
Guerre, Edwin B. Parker, president,
d'une part, et la Republique Francaise
(appelee ci-apres France) representee
par M. le Controleur de 1^''^ Classe de
I'Administration de TArmee, Boulan-
ger, agissant, sous reserve de I'Appro-
bation des Ministres interesses, d'autre
part.

Considerations generales.

Etant donne qu'entre le 6 Avril 1917
et le 20 Aout 1919, (periode denoramee

166

UNITED STATES LIQUIDATION COMMISSION.

August, 1919 (hereinafter designated
"War period") tlie War Department
of tlie United States of America and
tlie American Expeditionary Forces on
tlie one part (Iiereinafter called " War
Department") and the Republic of
France, on the other part, had numer-
ous transactions between each other
connected with or incidental to the
conduct of the wai- in the prosecution
of which the parties were associated ;
and

Whereas America, for said War De-
partment, and Prance desire, with re-
spect to such of the said transactions
as occurred in Europe, to make full,
final and complete settlement of all
bills, accounts, claims, obligations, de-
mands, rights and causes of action of
every nature whatsoever, whether
growing out of the delivery of or con-
tract for the delivery of material, sup-
plies or equipment or for services ren-
dered, or contracted to be rendered,
or for the occupation and use of
all public properties of France of the
domain of the State and all damages
thereto, initiated or otherwise aris-
ing or accruing during the said war
period, said settlement to he herein-
after designated as a " European set-
tlement " ; and

Wlicreas the said European settle-
ment " relates wholly and solely to the
transactions concerning which the pro-
cedure was established by mutual
agreements by the following instruc-
tions :

Instruction No. 4 of .January 17,
1918, of the Office General des Rela-
tions Franco-Americaines ;

Instruction No. 4 bis of October 28,
1918, of the Commi.ssariat General des
Affaires de Guerre Franco-Ameri-
caines ;

Instruction No. 1.5 of October 2,
1918, issued by the Commissariat Gen-
eral des Aftaires de Guerre Franco-
Americaines ;

Copy of these instructions are an-
nexed hereto and marked for identi-
fication Exhibit A.

ci-apres " I'eriode de (4uerre"), le De-
partement de la (Juerre des Etats-Unis
d'Amerique ainsi que les Foi'ces Ex-
peditionnaires Americaines (denonunes
ci-apres " Departement de la Guerre")
d'uue part, et la Republique Francaise,
d'autre part, out eu entre eux de nom-
breuses transactions liees plus ou
moins incidentment a la conduite de la
Guerre pour la poursuite de laquelle
les deux parties s'etaient associees ;

Etant donne que I'Amerique. pour le
dit Departement de la (Juerre, et la
France desirent etablir nn reglement
entier, definitif et complet. en raisou
(les transactions meutionnees ci-apres
qui .se sont poursuivies en Europe, de
toutes les factures, comptes, reclama-
tions, obligations, demandes. droits et
motifs d'actions de quelque nature que
ce soit, qui proviennent de la livraison
ou (le contra ts pour la livraison du ma-
teriel. approvisi(Junements ou equipe-
ments, ou pour services rendus ou de-
vant etre rendus suivant contrat, ou
pour I'occupation et usage de toutes les
]>roprietes publiques de la France du
I)oniaine de I'Etat et tons dommages
qui ]»ourraient y avoir ete faits, ou
engendres d'une autre maniere, surve-
nant ou s'nugmentant pendant la dite
l)erio(le de (Juerre. le dit reglement
devant etre ci-aiu-es designe sous le
nom de " Reglement Europeen."

Etant entendu que le dit " Regle-
ment Europeen " s'etend en totalite et
uniquement aux transactions dont la
procedure a ete etablie d'un commun
accord par les instructions ci-apres:

Xo. 4. (hi IT .Janvier 1918 de rOffice
General des Relations Franco-Ameri-
caines :

No. 4 bis du 28 Oetobre 1918. du
Connnissariat General des Affaires de
Guerre Franco-Americaines ;

No. l."i du 2 <)ctol)re 1918, due Com-
missariat General des Affaires de
Guerre Franco-Americaines ;

r)esquel!es instructions un exem-
plaire est annexe au present contrat
(annexe C).

UNITED STATES LIQUIDATION" COMMISSION.

167

Now, therefore, in consideration of
the premises and for the other con-
siderations herein stated, it is mutually
agreed between the parties hereto as
follows :

Article I. The total of all amounts
to the credit of France against the
said War Department a^gre^ates one
billion nine hundred tifty-seven million
seven hundred fifty-nine thousand one
hundred and thirteen francs forty-one
centimes (frs. 1,957,759,118.41) plus
five million four hundred twenty-two
thousand seven hundred and six and
15/100 ($5,422,706.15) dollars.

Article II. The total of all amounts
to the credit of America for the said
War Department against France ag-
gregates four hundred and sixty-nine
million one hundred and forty thousand
and eighty-five francs eighty-nine cen-
times (frs. 469,140,085.89), plus twenty-
one million eight hundred fifty-nine
thousand six hundred sixty and 20/100
($21,8.59,660.20) dollars.

Article III. All bills, accounts,
claims, obligations, and demands of
every nature whatsoever in respect of
the aforesaid transactions between the
said War Department on the one part
and the Republic of France on the other
part, which said transactions arose or
accrued in Europe prior to August 20,
1919, and which are not embraced in
this European settlement, shall be for-
ever barred and shall not be asserted
by one of the p;\rties hereto against
the other.

Article IV. It is further agreed be-
tween the parties hereto as follows:

(«) In this European .settlement
America has agreed to transfer and
pay to France, in specie, the sum of
0,986,.500.43 Swiss francs now on de-
posit at Berne, Switzerland, to the
credit of the financial requisition offi-
cer. American forces in France, in con-
sideration for which France has
agreed to give and has given America
credit in French francs at an exchange

En consequence, etant donne ce qui
precede et etant donne les autres con-
siderations ci-incluses. 11 est decide d'un
commun accord ce qui suit entre les
dites parties :

Article I. Le montant total des cre-
ances de la France sur le dit Departe-
ment de (Uierre {\k^ii Etats-Unis se
montent a un millard neuf cents cin-
quante sept millions sept cent cin-
(}uante neuf mille cent treize francs et
quarante et un centimes (frs. 1.957,-
7.59,11.3.41 plus cinq millions (juatre
cent vingt-deux mille sept cent six dol-
lars et quinze cents (.$5,422,706.15).

Article II. Le montant total des
creances de I'Amerique pour le dit
Departeiuent de la Guerre sur la
France se montent a quatre soixante-
neuf millions cent quarante mille
quatre-vingt cinq francs et quatre-
vingt neuf centimes (frs. 469,140.-
085.89) plus vingt et un millions huit
cent cinquante neuf mille six cent
soixante dollars et vingt cents ($21,-
859,660.20).

Article III. Toutes les factures,
comptes. reclamations et demandes, de
quelque nature que ce soit, en ce qui
concerne les transactions mention-
uees ci-dessus enti'e le dit Departe-
iuent de la Guerre <les Etats-Unis, et
!a Kepublique Francaise et afferentesa
des livraisons effectuees ou a des serv-
ices rendus en Europe anterieurement
an 20 Aout 1919 et qui ne sont pas
centenues dans ce "Reglement Euro-
peen" seront considerees comme fore-
closes definitivement et ne pourront
plus etre representees par Tune des
parties contre I'autre.

Article IY. En autre il est convenu
ce qui suit entre les parties :

( a ) Dans ce " Reglement Euro-
peen." TAmerique a convenu de trans-
ferer et de payer a la France, en
especes. la somme de six millions
neuf cent quatre vingt six mille cinq
cents francs suisses quarante-trois
(6.986..500.43) deposse maintenant a
Berne (Suisse) an credit du "Finan-
cial Requisition Officer " des Forces
Americaines en France, pour lequel la

168

UNITED STATES LIQUIDATION COMMISSION.

value of 1.1625; that is to say, in the
sum of 8,121,806.75 French francs.

France has agreed and does hereby
agree that in the event the bahance in
the general settlement now being nego-
tiated between France and America
should be in favor of America, then
in such event the said sum of 8,-
121.806.75 French francs will be
jH-omptly repaid to America in cash.

{bf< America heretofore seized, as a
prize of war, 2.614.30 metric tons of
coal and thereafter delivered same to
France, charging same against France
in the coal exchange account in the
sum of fifty-four thousand seven hun-
dred fifty-three dollars ten cents ($54,-
7.53.10). A question has arisen as to
whether or not this coal was enemy
war material, and this question has
been referred to the Franco-Beige
Commission de Recuperation. Should
this commission decide that said coal
was not enemy war material, then in
such event America agrees to pay
France the amount charged for the
said coal, namely, $54,753.10.

(c) Certain aircraft material of the
value of sixty-four thousand four hun-
dred eighteen francs nine centimes
ifrs. 64,418.09) furnished by the
" Tardieu Mission " of the French
Government to the said War Depart-
ment has been by the said War De-
partment returned to the French Com-
mission and is now held by it in
America as the property of the French
Government. Without obligating it-
self to purchase same, America agrees
to cause an investigation to be
promptly made and if it finds it can
use the said material to advantage, it
will take delivery of and pay for same
at a price to be fixed by agreement be-
tween the two Governments.

France a accepte de donner et a ouvert
a I'Amerique un credit en francs fran-
caise au taux du change de 1.1625
d'est-a-flre un montant de huit millions
cent vingt et un milJe huit cent six
francs francais soixante quinze,
(8,121,806.75).

La France a accepte et accepte par la
presente, dans le cas ou la balance du
reglement general en cours de negocia-
tion entre la P^rance et I'Amerique se-
rait en favour de I'Amerique, que,
diiiis ce cas. lu dite somme de
8,121,806.75 francs francais serait rem-
boursees sans delai a I'Amerique en
especes.

(h) I'Amerique a saisi comme prises
de guerre, 2.614.300 tonnes metriques
de charbon, qu'elle a, par la suite, de-
livrees a la France.' Ce charbon a ete
porte au debit de la France dans le
eompte d'echange des charbons pour
la somme de cinquante quatre mille
sept cent cinquante trois dollars dix
cents (.$54,753.10). Une question s'est
elevee sur le point de savoir si ce
chai-bon etait ou non du materiel en-
nemi de guerre et cette question a ete
soumise a la Commission de Recupera-
tion Fi-anco-Belge. Si la Commission
decidait que le dit charbon n'etait pas
du materiel ennemi de guerre, dans ce
cas I'Amerique accepterait de payer a
la France la somme qui lui a ete debi-
tee pour ce charbon, c'est-a-dire :
54,753.10 dollars.

(c) Un certain nombre de materiel
d'aviation d'une valeur de soixante
quatre mille quatre cent dix huit frs.
neuf (frs. 64,418.09), foui-ni par la
Mission Tardieu du Gouvernement
Francais au dit Departement de la
Guerre, a ete rendu par ce dit Departe-
ment de la Guerre a la Mission Fran-
eaise et est maintenant garde par
cette derniere en Amerique comme pro-
priete du Gouvernement Francais.
Sans prendre I'obligation de acheter
ce materiel, I'Amerique accept de pro-
voquer sans delai des etudes dans le
but de savoir si ce matgriel peut etre
utilis^e avantageusement par elle et
dans ce cas elle en prendra possession
et elle la paiera a un prix a etablir

UNITED STATES LIQUIDATION COMMISSION.

169

(f?) Under the contract entered into
between America and France dated
August 28, 1919, dealing with artillery
and ammunition. France agreed to
supply America with materials as fol-
lows :

1. 944 75-ni/m gun materials, model
1897, with limbers.

2. 700 155-m/m howitzer materials,
model 1917. Schneider design, with
limbers.

3. 198 155-m/ni G. P. F. materials,
with limbers.

4. Collection of additional parts, as
in said contract more specifically de-
scrilied.

The amount due by America under
the terms of the said contract of Au-
gust 28. 1919, has been taken into ac-
count in computing the amounts to the
credit of France mentioned in Article
I hereof The delivery of materials
which France contracted to deliver
under the terms of said contract has
not yet been completed, and nothing
herein contained shall release France
from its obligation to promptly com-
plete such deliveries.

In witness whereof on the day and
year first above^written, this contract
has been executed in four parts, each
having the full force and effect of an
original, by the United States of
America, acting through the United
States Liquidation Commission — War
Department, Edwin B. Parker, chair-
man, of the one part, and by the Re-
public of France, acting through the
Controleur de I'Administration da
I'Armee, Edouard Boulanger, acting
under reserve of the approval of the
interested ministers, of the other part.

United States of America.
By Edwin B. Pakkek,

Chairman, United States
Liquidation Commission —
War Department.
Republic of France,
By L. Boulanger,
Controleur de l' Administration
de I'Armee.

apres entente entre les deux Gouverne-
ments.

id) Aux termes du contrat etabli
entre I'Amerique et la France, en daie
du 28 Aout 1919, au sujet de I'Artil-
lerie et des Munitions, la France s'est
engagee a fournir a I'Amerique les ma-
teriels suivantes :

1. 944 materiel de 75, modele 1897
avec avant-train.

2. 700 materiel de 155 court, modele
1917 Schneider avec avant-train.

3. 198 materiel de 155 G. P. F. avec
avant-train.

4. Collections de pieces de rechange
comme il est indique en detail dans le
contrat susviee.

La somme due par I'Amerique aux
termes du dit Contrat du 2.8 Aout 1919
a ete incluse dans I'etablissement an
montant du credit de la France fi-
gurant a I'Article I ci-dessus. Les ma-
teriels que la France s'est engagee a
fournir aux termes du dit Contrat n'ont
pas encore ete fournis entierement ; il
est entendue que le present contrat
n'a pas pour effet de decharger la
France de son obligation de satisfaire
rapidement a ces cessions.

En foi de quoi, le jour et I'annee
precites, le present contrat a ete redige
en quatre exemplaires, chacun d'eux
ayant la meme valeur et effet qu'un
original, par les Etats-Unis d'Amerique,
representes par la Commission de
Liquidation des Etats-Unis, Departe-
ment de la Guerre, Edwin B. Parker,
president, d'une part, et par la Re-
publique Francaise, representee par M.
le Controleur de lere Classe de I'Ad-
ministration de I'Armee Boulanger,
agissant sous reserve de 1' approbation
des Ministres interesses, d'autre part.
Etats-Unis D'Amerique,

Par Edwin B. Parker,
President, Commission de Liquidation

des Etats-Unis, Department de la

Ouerre.

Republique Francaise,
Par L. Boulanger,
Controleur de V Administration de

VArmee.

170

UNITED STATES LIQUIDATION COMMISSION.

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APPENDIX XXXII.

C0:vTRACT FOR THE (JENERAL SETTTJ-:M

America and Republic of

This i-ontract, entered into this 25tli
(lay of November, A. D. 1919, by and
between the United States of America
(hereinafter called "America") act-
ing through the United States Liquida-
tion Commission — War Department,
P'dwin B. Parker, chairman, on the one
part, and the Republic of France (here-
inafter called "France"), acting
through le Sous-Secretaire d'Etat aux
Finances, Paul Morel, on the other part,
witnesseth :

That irheieiis, between the 6th day
of April, 1917, and the 20th day of
August, 1919 (hereinafter designated
"War period"), the War Department
of the United States of America and
the American Expeditionary Forces,
on the one part (hereinafter called
"War Department") and the Republic
of France, on the other part, had nu-
merous transactions between each other
connected with or incidental to the
conduct of the war in the prosecution
of which the parties were associated ;
and

Whereas America, for the said War
Department, and France desire to make
a full, final, and complete settlement
in respect to the transactions afore-
said of all bills, accounts, claims, obli-
gations, demands, rights, and causes of
action of every nature whatsoever,
whether growing out of the delivery
of or contracts for the delivery of ma-
terial, supplies, or equipment, or for
services rendered or contracted to be
rendered, or for the occupation and
use of all public properties of France
and all damages thereto, initiated or
otherwise arising or accruing during
the said war period, said settlement to
be hereinafter designated as " General
settlement " ; and

M'hercas the parties hereto, in ar-
riving at such general settlement, have

ent Between the United States of
France, Noveaiber 25, 1919.

fe contrat redige le 25 Novembre
1919 a ete etabli par et entre le Gou-
vernement des Etats-Unis (appele ci-
apres Amerique) represente par la
(^'ommission de Liquidation des Etats-
Unis du Deiiartement de la Guerre,
Edwin B. I'arker, President, d'une
part; et la Republique Fningaise (ap-
pelee ci-apres France) representee par
M. le SdUs-Secretaii-e d'Etat aux Fi-
nances, I'aul Morel, d'autre part;

Etant donne qu'entre le 6 Avril 1917
et le 20 Aoiit 1919, (denomme ci-apres
"Periode de Guerre"), le Departement
de la Guerre des Etats-Unis d'Ameri-
(jue, ainsi que les Forces Expedition-
naires Aniericaines (denommes ci-
apres "Departement de hi Guerre")
d'une part,et la Republique Frangaise,
d'autre part, ont eu entre eux de nom-
breuses transactions iiees plus ou moins
incidenrment a la conduite de la Guerre
pour la poursuite de laquelle les deux
parties s'etaient associees ; et

Etant donne que 1" Amerique, pour le
dit Departement de la Guerre, et la
P'rance deslrent etablir un reglemeut
entier, delinitif et complet, en raison
des transactions mentionnees ci-dessus,
de toutes les factures, comptes, recla-
mations, ol)ligations, demandes, droits
et motifs d'actions de quelle que na-
ture que ce solt, qui proviennent de la
livraison ou de contrats pour la livrai-
son du materiel, approvisionnements ou
equipements, ou pour services rendus
on devant etre rendus suivant contrat,
tai pour I'occupation et I'usage de
toutes les proprietes publiques du do-
maine de I'Etat Frangais et tons
dommages qui pourraient y avoir ete
faits ou engendres, ou d'une autre
maniere s'elevant ou s'accumulaut
pendant la d'ite Periode de Guerre, le
dit reglement devant etre designe sous
le nom de "Reglement General" ; et

Etant donne que les parties ci-dessus
designees en arrivant k ce reglement

UNITED STATES LIQUIDATIOJST COMMISSION.

17;

agreed that in respect to the trans-
actions aforesaid the total of all franc
credits due each party shows a net
balance due France of one billion four
hundred eighty -eight million six hun-
dred nineteen thousand and twenty-
seven francs and tifty-two centimes
(frs. 1,488,619,027.52), and the total
of all dollar credits due each party
shows a net balance due America of one
hundred seventy-seven million one
hundred forty-nine thousand eight
hundred and sixty-six and 86/100
(.$177,149,866.86) dollars;

Now, therefore, in consideration of
(he premises and of the agreement on
the part of America to pay France the
said sum of one billion four hundred
eighty-eight million six hundred and
nineteen thousand and twenty-seven
francs and fifty-two centimes (frs.
l,4iSS,619,027.52) and the agreement on
the part of France to pay America the
said sum of one hundred seventy-seven
million one hundred forty-nine thous-
and eight hundred sixty-six and 86/100
(. 1^177,149,866.86) dollars, it is mutu-
;!lly agreed between the parties hereto
as follows :

Article I. The Republic of France
does hereby fully, completely, and in
all things, release and discharge the
United States of America, and the
United States of America does hereby
fully, completely, and in all things, re-
lease and discharge the Republic of
France in respect of the transactions
aforesaid, from all bills, accounts,
claims, obligations, demands, rights,
causes of action, suits, and contro-
versies of every nature whatsoever
which either party uow has against the
other, or which may hereafter arise,
whether hy reason of or in anywise
incident to or growing out of the de-
livery or contract for the delivery of
materials, supplies or equipment, or
for services rendered, or contracted to
be rendered, or for the occupation and
use of all public properties of France
and all damages thereto or otherwise

general ont decide qu'en raison des
transactions designees plus haut la
somme de tons les credits en Francs
dus a chaque purtie tail ressortir tuie
balance nette en faveur de la France
de un milliard quatre cents quatre-
vingt-huit million six cent dix-ueut
mille vingt-sept francs et cinquante-
deux centimes (frs. 1,488.619.027.52)
et la somme de tons les credits en
dollars dus a chaque partie fait res-
sortir line balance nette en faveur de
TAmerique de cent soixante-dix-sept
million cent quarante-neuf mille liuit
cent soixante-six dollars et quatre-
vingt-six cents (dollars 177,149.866.86) ;

En consequence, etant donne ce qtii
precede, et etant donne Tacceptation de
la part de I'Amerique tie payer a la
France la dite somme de uu milliard
quatre cents quatre-vingt-huit million
six cent dix-neuf mille, vingt-sept
francs et cinqtiante-detix centimes (frs.
1.488,619.027.52) et Facceptation de la
France de payer a rAmeritiue la dite
sonnne de cent soixante-tlix-sept mil-
lion cent quarante-neuf mille huit cent
soixante-six dollars et quatre-vingt-six
cents (dollars 177.149,866.86), il est
decide d'un commun accord ce qtii suit
entre les dites parties :

Article I. Par ces presentes, la Re-
publique Francaise libere et decharge
tout a fait, completemeut et en toutes
manieres les Etats-Unis d'Amerique et
les Etats-Unis d'Amerique liberent, de-
cliargent tout -a fait, completemeut et
en toutes manieres la Republique Fran-
caise, en raison des transactions men-
tionnees ci-dessus. de toutes les fac-
tures, comptes, reclamations, obliga-
tions, demandes, droits, motifs d'ac-
tinns. poursuites et controverses de
toute nature, aussi bien ceux que I'une
et I'autre partie a I'heure actuelle a
faire valoir I'une contre I'autre, que
ceux qui pen vent s'elever par la suite
soit en raison de, soit touchant de
quelle que maniere que ce soit a, soit
provenaut de la livraison on de con-
trats pour la livraison de materiel, ap-
provisionnements on equipements, ou
pour services rendus ou devant etre

174

UNITED STATES LIQUIDATION COMMISSION.

initiated, arising or aociuing during
the said war period between rlie said
War Department on the one part and
the Kepublic of France im the other
part.

Article II. Nothing hereinbefore
contained shall be held or construed to
in anywise annul, alter, modify, or
affect the obligations of P^rance held
by America or the obligations of either
party hereto arising out of the follow
ing special contracts or agreements
namely :

(«) The contract between Americn
and France, dated August 1st, 1919,"
whereby America sold and France pur-
chased certain properties therein re-
ferred to, France agreeing t(» pay
therefor the sum of four hundred mil-
lion (.$400,000,000) dollars with inter-
est thereon, at the time and under the
terms mentioned therein ;

(h) The contract between America
and France for the settlement of rail-
road transportation and other claims,
dated October 1st, 1919, in which
America agrees to pay France the sum
of four hundred thirty-four million nine
hundred eighty-five thousand three hun-
dred eight-nine and 73/100 (frs. 434.-
98."5,389.T3) francs;

(c) The contract between America
and France for the settlement of all
port dues and similar claims, dated
October 1st, 1919, in which America
agrees to pay France the sum of three
million (frs. 3.000.000) francs;

{(I) All contracts, agreements or ar-
rangements entered into between Amer-
ica and France for or in connection
with sales made by America to France
in tlie United States since November
11th, 1918.

rendus par suite tie contrats ou pour
Foccupatiou et I'usage de toutes pro-
pri^tes publiques du domaine de I'Etat
Fraucaise et tons dommages qui pour-
raient y avuir ete faits ou eugendres
ou d'une autre nmni^re s'elevant ou
s'accumulant durant la dite I'eriode
de Guerre entre le dit Departement de
la (iuerre d'une part, et la Kepuldique
Fraucaise d'autre part.

Article II. Rien de ce tpii est cou-
tenu ci-dessus ne doit etre retenu ou
interpi-ete de facon a annuler, alterer
ou nioditier ou affecter en quelle que
maniere que ce soit les obligations de
la France envers I'Amerique ou les
(tbligations de Tune et I'autre partie ci-
contre provenant des contrats ou ac-
cords speciaux ((ui suivent, a savoir :

(a) Le Contrat entre I'Amerique et la
France, en date ilu I'"" Aout 1919, par
lequel I'Amerique a vendu et la France
a achete certaines proprietes aux-
quelles il est fait allusion dans le Con-
trat en question, la France consentant
a payer par la meme la somme de
quatre cents millions de dollars avec
I'interet a I'epoque et sous les condi-
tions mentionnes dans le Contrat en
question.

ft) Le Contrat entre I'Amerique et la
France pour le reglement des trans-
ports par chemin de fer et d'autres
reclamations, en date du l'' Octobre
1919, par lequel I'Amerique consent a
payer a la France la somme de quatre
cent trente quatre millions neuf cent
quatre-vingt cinq mille trois cent
<niatre-vingt neuf francs et 73 centimes
(434,985,389.73) frs.

c) Le Contrat entre I'Anierique et la
France pour le reglement de toutes les
taxes de peage et des reclamations de
meme nature, en date du 1"'' Octobre
1919. par lequel I'Amerique consent a
payer h la France la somme de trois
millions de francs (3,000,000.00) frs.

(}) Tons contrats, accords ou ententes
passes entre rAmerique et la France
pour ou relativement a des ventes
faites par I'Amerique a la France aux
Etats-Unis deiaiis le 11 Novembre
1918.

UNITED STATES LIQUIDATION COMMISSION.

175

Article III. This contract shall not
operate as a release or nioditicution of
or in any wise alTect whatever claim
France may now have against America
ufiiwing out of services rendered by
France to America during the war
jieriod in C(mnection with the ocean
Transii<ii-t;ition of American troojis.

Article IV. This contract shall not
be construed to relate to or in any wise
aflfect claims or demands howsoever
arising between the nationals of either
country, on the one part, and the
parties hereto, or either of them, or
their nationals, on the other part.
Neither shall it in any wise atfect
transactions pertaining to any depart-
ment or departments, agency or agen-
cies of the Government of the United
States of America other than the said
War Department and all of the agen-
cies of the said AVar Department and
the American Army and all of its
branches and agencies.

In witness whereof, on the day and
year lirst above written, this contract
has been executed in four parts, each
having the full force and effect of an
original, by the United States of Amer-
ica, acting through the United States
Liquidation Connnission — War Depart-
ment, Edwin B. Parker, chairman, and
by the Republic of France, acting
through le Sous-Secretaire d'Etat aux
Finances, Paul Morel.

United States of America,
By Edwin B, Parker,
Chaiiiiian, rnited States Liquidation
Coin in ission — Mn r Depo rtinent.

IvEPUBLic OF France,
By P. Morel,
Lc Sous-Secretairr d'Etat aux Finan-
ces.

Article III. Ce Contrat n'aura pas
pouvoir d'annuler, moditier ou affecter
de quelle que nianieve que ce soit toutes
reclamations que la France pourrait
avoir 3, I'heure actuelle a faire valoir
contre I'Amerique et provenant des
services rendus par la France eI I'Aine-
rique pendant la Periode de Guerre et
ayant trait aux transports des troupes
ainericaines sur I'Ocean.

Article IV. Ce Contrat ne doit etre
interprete comme se rapportant d'une
maniere quelconque ou aftectaut de
(|uelle que maniere que ce soit les I'e-
claniations ou demandes de toute
nature, s'elevant entre les nationaux
de I'un et I'autre Pays, d'une part, et
les parties ci-incluses ou I'une d'elles,
ou leurs Nationaux, d'autre part. Ce
Contrat concerne uniquement le De-
partement de la Guerre et toutes les
Agences du dit Departement de la
Guerre, I'Armee Americane et toutes ses
branches et Agences, mais ne concerne
nul lenient un autre ou plusieurs autres
Departements du Gouveriiement des
Etats-Unis d'Am^rique ainsi que leur
Agence et leurs Agences.

En foi de quoi, le jour et I'annee au
debut precites, ce Contrat a ete redige
en quatre exemplaires, cliacun d'eux
ayant la meme valeur et effet qu'un
original, par les Etats-Unis d'Ameri-
que, representes par la Commission de
Liquidation des Etats-Unis, Departe-
ment de la Guerre, Edwin B. Parker,
President, et par la Republique Fran-
caise, representee par M. le Sous-Se-
ci-etaire d'Etat aux Finances, Paul
Morel.

Etats-Unis d'Amerique,
Par Edwin B. Parker,

President, Commission de

Liquidation des Etats-Unis —

Departmeiht de la Guerre.

Republique Francaise,

Par P. Morel.

^ous-Secretaire d'Etat aur Einancrs.

176

UNITED STATES LIQUIDATION COMMISSION".

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179

APPENDIX XXXIII.

French Contract of Indemmty for Torts, Workmen's Compensation, Rents,

AND Requisitions.

This coHtract, entered into this first
day of December, A. D. 1919, by and
between the United States of America
(hereinafter called "America"), act-
ing through the United States Liquida-
tion ('omniission — War Department,
Edwin B. Parker, eliairman, of the one
part, and the Republic of France
( hereinafter called " France " ) , acting
through Edouard Ignace, le Sous-Sec-
letaire d'Etat de la Justice Militaire
au Minist^re de la Guerre, of the other
I)art, witnesseth :

That irliereas, between the 6th day
of April, 1917, and the 31st day of
December, 1919 (hereinafter desig-
nated "War period"') the War De-
partment of the United States and
members of its military forces, in-
cluding the American Expeditionary
F<jrces and the American Forces
in France (all hereinafter referred to
as "American Military Forces")
have, as incidental to or as connected
with the conduct of the war in the
prosecution of which the parties here-
to were associated, occupied and used
real property, appropriated and used
personal property, damaged real and
personal property, and damaged indi-
viduals resulting in their injury or
death ; all of which said occupancies,
appropriations, uses, and damages oc-
curred or shall occur in France during
the said War period ; and

H7(c/-er/.s America has maintaine<l
representatives in France for more
than a year after the signing of the
Armistice for the purpose of receiving
Investigatint;'. and settling all claims
hied or lodged against it; and

Wherea.s. the work of these repre-
.sentatives has been practically com-
pleted in so far as the receipt, inves-
tigation, anfl consideration of all such
claims is concerned; and

Ce contrat redige le 1""" Decembre 1919
a et6 gtabli par et entre le Gouverne-
ment des Etats-Unis (appele ci-apres
" Amerique " ) represents par la Com-
mission de Liquidation des Etats-Unis
du Dgpartement de la Guerre, Edwin
B. Parker, president, d'une part ; et la
Republique Francaise, (appelSe ci-^
apres " France " ) representee par M.
Edouard Ignace, Sous - Secretaire
d'Etat de la Justice Militaire au Mi-
nistere de la Guerre, d'autre part ;

Etant donne qu'entre le 6 Avril 1917
et le 31 Decembre 1919 (denomme ci-
apres " PSriode de Guerre " ) le D^
partement de la Guerre des Etats-Unis
I'Amerique et le personnel faisant
partie de ses Forces Militaires, y com-
pris les Forces Expgditionnaires Ame-
ricaines et les Forces Americaines en
France (tous ci-apres designSs sous le
nom de " Forces Militaires Ameri-
caines") ont, d'une facon plus ou
moins directement liSs a la conduite
de la guerre, pour la poursuite de la-
quelle les deux parties s'^taient asso-
ci§es, occupe et utilise des immeubles,
se sont approprie et ont utilise des
biens niobiliers, ont deteriore des im-
meubles et des biens mobiliers et ont
porte prejudice k des individus en leur
causant soit des blessnres. soit la
mort ; et etant donne que tous les dits
occupations, appropriations, utilisa-
tions et dominages ont' eus lieu ou
auront lieu en France pendant la dite
periode de Guerre ; et

Etant donne que I'Amerique a main-
tenu des representants en France
pendant plus d'une annee apres la
signature de I'Armistice dans le but de
recevoir, d'enqueter et de regler toutes
les reclamations presentees ou deposees
contre elle ; et

Etant donne que le travail de ces
i-epi-esentants a ete pratiquement com-
plete autant que la reception. I'enquete
et toutes considerations relatives a ces
reclamations I'ont permis ; et

180

(JNITED STATES LIQUIDATION" COMMISSION.

Whereas P^rauee has agreed, for the
(L'ousideratioiis herein set forth, to
substitute itself for America in refer-
ence to, and guarantees the latter
^a^gauist, all unsettled claims, and also
those concerning which offers of set-
tlement have not been accepted, aris-
ing or accruing during the War period,
save those specificallj- excepted in
Article II hereof;

Now, therefore, in consideration of
the premises, it is mutually agreed be-
tween the parties hereto as follows :

Article I. France herel).v substitutes
itself for America in reference to, and
guarantees the latter against, all
claims, demands, obligations, rights,
actions, suits, and controversies of
every nature, arising in France during
the said war period, which any inhabi-
tant or any person subject to the sov-
ereignty of France, or any organiza-
tion, association or corporation, com-
mune or department of France may
now have or which may hereafter ac-
crue, for damage to, use or loss of
property, or injuries to or death of
persons, caused by or resulting from
acts or omissions of members of the
American IMilitary Forces, or of any
one connected therewith (not includ-
ing members of the American welfare
organizations) during the said war
period, particularly the following :

(a) All claims which America is
authorized to pay to the inhabitants of
France under an act of America's Con-
gress approved April 18, 1918, entitled
"An act to give indenmity for damages
idealised by American forces abroad."

{})) All claims, whether caused by
acts or omissions of members of the
American Military Forces, or any
other persons, arising from injury to
or death of civilian employees and la-
borers of America, excepting claims of
the nationals of America (workmen's
compensation cases).

(r) All claims for the occupation
and use of real property, damages

Etant donne que la France a con-
sent! pour les considerations men-
tionnees ci-dessous a se substituer et
par suite k garantir TAmerique contre
toutes reclamations non reglees ou dont
les oft'res de reglement u'auront pas
ete acceptees. s'elevant ou s'accumu-
lant durant la periode de Guerre, a
I'exception de eel les nientionees il
I'Article II suivant ;

En consequence, etant donne ce qui
precede, il est decide d'un commun ac-
cord ce qui suit entre les dites par-
ties.

Article I. La E'rance .se substitue
par les presentes a I'Amerique et la
garantit contre toutes reclamations,
demandes. obligations, droits, actions,
poursuites et controverses de toute
nature eleves en France pendant la
dite periode de Guerre, que tout habi-
tant ou tout ressortissant Frangais ou
toute autre personne morale, connnune
on departement de France peut encore
avoir a presenter ou qui pourrait par
la suite etre presente pour dommages,
usage ou perte de biens ; ou donunages
aux personnes par suite de ))lessures
ou deces causes par, on resultant,
d'actes ou negligences des Membres des
Forces Militaires Americaines ou qui-
conque y a ete rattache (a I'exclusion
(les ]\Ieml)res des CEuvres de Bien-
faisance Americaines) pendant la dite
periode de Guerre, c'est k dire:

(a) Toutes reclamations que I'Ame-
riqiie est autorises a payer aux habi-
tants de France \)nr TActe du C'ongres
Americain approuve le 18 Avril 1918
et intitule "Acte pour douner une in-
denmite pour dommages causes par les
Forces Americaines ji I'Exterieur.'"

(b) Toutes reclamations qu'elles
previennent d'acte ou de negligence des
Membres des Forces Mllitaire-s. Ameri-
caines ou toute autre personne et ayant
pour causes les blessures ou la mort
occasionges a des employes et ouvriers
civils de I'Armee Americaine a I'excep-
tion des reclamatitms des nationaux
Americains (Accidents du Travail).

UNITED STATES LIQUIDATION COMMISSION.

181

tliereto, and restoration expenses, re-
sulting;- from the oocuparion in any
manner whatsoever of said real prop-
erty by the American IMilitary Forces.
( (J ) All claims resulting from requi-
sitions, formal or informal, for the
appi'opriations. use, damage, or de-
struction of personal pr^iierty.

Article II. It i-s e.vijresuJij under-
■■<too(l ami agreed, Iioicever, that the
following claims are excepted from the
operation of this agreement, and that
France does not assume or agree to
pay -the following :

(a) All claims against America aris-
ing from lireach of contracts for the
manufacture or furnishing of supplies,
materials, or equipments, or for the
rendition of services ; except, however,
all leases and contracts for the occupa-
tion of property.

( h ) All claims cognizable under the
general Admiralty law, that is to say,
claims by or against vessels of Amer-
ica.

Article III. America agrees to pay,
in cash, the sum of twelve million (frs.
12.000,000) francs (hereinafter desig-
nated " Minimum payment "). If upon
the 31st day of December, 1923, the
aggregate of all payments made by
France to claimants on account of the
claims assumed by it exceeds said min-
imum payment, then in such event
America agrees, on demand, to then
luiy to France such excess, provided,
however, that such additional payment
by America sliall in no event exceed
the sum of six million (frs. 6,000,000)
francs.

Article IV. It is further agreed that
the 12,000.CHX) francs mentioned in Art.
Ill hereof as the minimum payment
will be added to the indebtedness in
francs which America has acknowl-
edged as due to France by contract
dated November 25th, 1919. The
method of payment of said 12,000,000
francs will be arranged at the same
time a'; the method of payment of the
sums mentioned in said contract of No-

dommages y relatifs et depenses de
remise en etat quand 11 y a eu occupa-
tion par les Forces Militaires Ameri-
caines a quelque titre que ce soit.

('/) Toutes reclamations pour re-
quisitions ( i-egulieres on non ) pour ai>
propriation, usage, degats ou destruc-
tion (Us biens mobiliers.

Article II. // est ed-presseiiient rt-
coiniii et caiireiiK, eependant, que ley:-
reclamations suivantes sont exceptees
des clauses de ce contrat et que la
France ne prend pas en charge et ne
consent pas k payer ce qui suit ;

('/) Toutes reclamations contre
I'Amerique qui sont la consequence des
ruptures de contrat pour la fabrication
ou la fourniture d'approvisionnements,
materiel ou equipement ou pour services
rendus, et a I'exclusion des baux et
contrats de location.

(6) Toutes les reclamations qui
tombent sous le coup de Loi Ge-
nerale d'Amiraute, c'est a dire, les
reclamations pour ou contre les vais-
seaux de I'Amerique.

Article III. L'Amerique, accepte de
payer en especes, la soinme de douze
millions fra«cs (frs. 12,000.000) (ci-
apres designee comme "Paiement mini-
mum"). Si le 31 Decembre 1923 le to-
tal de tons les paiements afCectufe par
la France aux reclamants sur les recla-
mations prises en cUiarge par elle depas-
sait le paiement minimum sus-indique,
dans ce cas I'Amerique accepte de payer
a la France sur sa demande les sommes
eu excedent. Sous reserve, eependant,
que ce paiement additionel fait par
I'Amerique ne devra en aucun cas de-
passer la somme de six millions francs
(frs. 6.000.000).

Article IV. II est de plus entendii
que les douze millions de francs in-
diques comme prix minimum dans I'Ar-
ticle ci-dessus seront ajoutes a la
dette en francs que I'Amerique a re-
connu avoir contrate vis & vis de Ici
France par le contrat du 25 Novembre
1919. Le modalites de paiement de
ces douze millions de francs seront
done reglees en meme temps que les
modalites de paiement des sommes in-

182

UNITED STATES LIQUIDATION COMMISSION.

veinber 25rli, 1919. This method and
the rate of exchauge for the con version
of francs into dollars, and dollars into
francs, will be made the sul)ject of an
agreement to be entered into in the
future, following- the negotiations
which are now in progress on. this sub-
ject l)etween the representatives of the
two Go\erninents.

Article V. America agrees to leave
in France until December 31. 1923, ac-
cessible at all times to the authorized
representatives of France, all records,
reports, and correspondence of every
mature whatsoever pertaining to claims
assumed by France hereunder, and
claims of like nature which have here-
tofore been settled and disposed of ))y
America, for the use of France in con-
sidering and dealing with all pending
claims or claims that may hereafter be
presented.

In witness whereof, on the day and
year first above written, this contract
has been executed in four parts, each
having the full force and effect of an
original by the United States of
America, acting through the United
States Liquidation Commission — War
Department, ]E'dwin B. Parker, chair-
man, and by the Republic of France,
acting through M. Edouard Ignace, le
Sous-Secretaire d'Etat de la Justice
iMilitaire an Ministere de la Guerre.

United States of America,
By Edwin B. Parker,
Chairman, United States Liqiii>J(iti()>i
Conimifsion — TT'or Deixiitiiient.

Republic of E'rance.
By Edouard Ignace,
Sous-Secretaire d'Etat de la Justice
itilitalrc au^IiniMerede la Guerre.

diquees dans le Contrat du 2.1 du Novem-
bre. ces niudalites et le taux du change
pour la conversion des francs en dol-
lar's et reciproquenient devant faire
rol)jet (Tun accord ulterieur faisant
suite aux nggociatinns (jui se poursui-
vent a ce sujet entre ies representants
des deux (Jouvernements.

Article Y. I/Amerique accepte de
laisser en France jusqu'au 31 Decem-
bre 1923 a, la disposition fl tout mo-
ment des representants autorises de
la France toutes les archives, rapports
et correspondances de toute nature re-
latifs aux reclamations prises en
charge par la France par les preseutes,
et relatifs aux reclamations similaires
qui ont ete jusqu'ici reglees par I'Amg-
riqne, pour les besoins de la France
a fin (.le considerer et regler toutes les
reclamations maintenant en instance
ou les reclamations qui pourraieut etre
presentees posterieurement.

En foi de quoi, le .iour et I'an au
debut precites ce contrat a ete redige
en quatre exemplaire, chacun d'eux
ayant la meme valeur et effet qu'un
original, par les Etats-Uni d'Am^ri-
que, representes par lo Commission de
Liquidation des Etats-Unis du D6-
partement de la Guerre, Edwin B.
Parker, President, et iiar la Repu-
blique Francaise, representee par INT.
Edouard Ignace, Sous-secretaire d'Etat
de la .Justice :\Iilit:iire au ]\Iinistere de
la Guerre.

EtATS-UnLS D'AilERIQUE,

Par Edwin B. Parker,
Presidott, Coin mission dc Liquidation
des Etats-I'nix. Department de la
Guerre.

Repc'klique Francaise.
Par Edouard Ignace,
Sous-Secretaire d'Etat de la Justice
Ulilitairc au ilinistere de la Guerre.

APPENDIX XXXIV.

cuthell-brofferio agreement.

This agreement, made and entered into this 13th day of August, A. D. 1919,
by and between Comm. Gran Croce Federico Brofferio, Consigliere di Stat<\
and duly authorized representative of the under secretary of the treasury

UNITED STATES LIQUIDATION COMMISSION. 183

for the liquidation of the tirins and luuuitions and the aeronautical depart-
ments, and duly authorized representative of the Interministerial Committee
of the Royal Italian Government for the readjustment of tlie industries of
the war, and Mr. Chester W. Cuthell, special representative of the Secretary
of War of the United States of America, witnesseth :

Whereas the War Department of the United States has requested that it
be reimbursed by Italy for moneys paid out and indebtedness incurred by
it in behalf of Italy botli under formal contracts for the delivery of war
materials to Italy at cost and under informal arrangements made to supply
such war materials needed by Italy in the prosecution of the war but not
required after the armistice, the nature and amounts of such claims of the
War Department being set forth in the letters addressed to Conmiandatore
Brofferio by Mr. Cuthell, under date of April 26. 1919, and by JNIr. Ray, as-
sistant to Mr. Cuthell, under date of July 11, 1919 ; and

Whereas Commandatore Brofferio and Chester W. Cuthell, being charged
by their respective Governments to determine the amounts due from Italy to
the War Department of the United States and the settlement to be made
therefor, in respect to the matters hereinafter set forth, have made the fol-
lowing agreement for settlement and liquidation thereof :

Noir. therefore, in consideration of the premises and of the importance of
avoiding misunderstandings and delays in the adjustment of war-time trans-
actions, the parties hereto, acting for and in behalf of their respective Gov-
ernments and the departments thereof concerned with the transactions herein
referred to, do agree as follows :

The amounts due and payable by Italy to the War Department in respect
to picric acid (not delivered), spruce and tir, and nitrocellulose powder are
as follows :

Picric acid $4, 000, 000

Spruce and fir 1, 7(X>, 0(X)

Nitrocellulose powder 250, 000

5, 950, 000
The War Department will make to Italy an allowance of seven hundred
afty thousand dollars ($750,000.00) to be applied upon said sum of five million
nine hundred fifty thousand dollars ($5,950,000.00), making the balance due
thereon five million two hundred thousand dollars ($5,200,000.00).

II-

The War Department will waive and cancel its claims against Italy for four
million thirty-eight thousand dollars ($4,038,000.00) for trinitrotoluol, for one
iiiijlion three hundred twenty-three thousand dollars ($1,323,000.00) for Cotton
linters.

III.

Italy hereby cancels and releases any and all claims arising from facts and
involving principles similar to these upon which the claims above referred to
are based which Italy has or may have against the War Department, includ-
ing, among others, claims to be reimbursed for expenditures made for exten-
sions of plants for tlie manufacture of airplanes, hydroplanes, automobiles, and

184 UNITED STATES LIQUIDATION COMMISSION.

other war materials in Italy, for losses sustained hy Italy upon raw materials
accumulated for such manufacture, and for excess of actual costs of materials
supplied to the War Dei)artment over the amounts for which such materials
have been invoiced to the War Department. All pi'operty, equipment, raw
materials, and finished products acquired by Italy in respect to the claims
hereby waived by it shall be and remain the sole pi'operty of Italy. Com-
mandatore Brofferio states that the claims hereby waived by Italy exceed one
million dollars ($1,000,000.00) in amouiij:. iNIr. Ray states that he does not
know f»f the existence of any claims of the War Department against Italy
other than those set forth in this agreement which arise from facts or Involve
principles similar to those upon which the claims referred to in this agreenient
are based.

IV.

The following claims of the War Department against Italy are balances due
for the cost of conunodities delivered to Italy, concerning which Conmiandatore
Brofferio states that he has not sufiicient information to justify the inclusion
of any particular amounts therefor in this agreement :

Picric acid excess raw material cost .$319, 000

Ammonium nitrate 156,6.56

Overcoats 147, 789

Dixie magnetos 47, 175

Liberty motors 26,728

Invoices therefor have been presented to the Italian ^Military Mission in the
United States, but the War Department records show that payment thereof
has not yet been made. Commandatore Brofferio has been informed that the
invoice for Liberty motors, above referred to, has been paid. If they have not
been paid the invoices for these commodities shall, in the usual course, be
paid by the Italian Military Mission at Washington, D. C, as and when .such
invoices shall have been duly audited by it. Directions to this effect shall be
foi'warded to the Italian Military Mission immediately.

The War Department has rendered to the Italian Military Mission in the
United States invoices in the svuu of one hundred eighty-four thousand eighty
dollars ($184,080.00), for copper ingots shipped to Italy in connection with the
electrification of the Modane Railway. These invoices liave not been paid.
The question of who shall pay for that improvement is before the Supreme
Interallied Authorities. This agreement shall not affect in any way the rights
of Italy or the War Department in respect to payment for said copper. It is
convenient that settlement for said copper shall await the decision of the
Supreme War Council or other competent authority and be made in accordance
therewith.

It is understood and agreed that the figures herein above set forth in para-
graphs 1 and 2 are based in part upon estimates and that this settlement is
made arbitrarily in the interests of both Governments. No further accounting
shall be retiuested by either in respect thereto, either as to salvage values or
otherwise. All property, equipment, raw material, and finished products ac-
quired by the United States in the transactions from which such claims arise
shall be and remain the sole property of the United States.

UNITED STATES LIQUIDATION COMMISSION.
VI.

185

The purpose of this agreement is the cleterininatiou of the amounts now due
from Italy in connection witli the supply of war materials requested in behalf
of the Italian Army for the prosecution of the war. The question of
whether payment of the amount of five million two hundred thousand dollars
($5,200,000.00) set forth in paragraph 1 can be made by credits from the United
States is solely within the jurisdiction of the Treasury Departments of the two
countries.

In witness whereof, the parties hereto have liereunto set their hands upon
duplicate originals, the day and year first above written.

(Signed) Federico Beofferio,

Comm. Gr. Cr. Authorised Representative of the In-
terministerial Committee of the Italian Government
for the Readjustment of the Industries of War.
(Signed) Chester W. Cuthell,

Special Representative of the Secretary of War of the
United States of America.

By .loHN H. Ray, .Ir., Assistant.

In presence of:
(Signed)
(Signed)

F. C. Weems.

F. ViMERCAETI.

APPENDIX XXXV.

(iENEKAL Settlement Between United States of America a.\u Kingdom of
Italy. February 18, 1920.

This contract entered into this ISth
day of February, 1920, by and between
the United States of America (herein-
after called "America") acting through
the United States Liquidation Com-
mission — War Department, Edwin B.
Parker, chairman (by Harry T. Klein,
special representative), of the one part;
and the Kingdom of Italy (hereinafter
called "Italy"), acting through Gen-
eral Angelo Modena for the Ministry
of War, representing also the former
ministry of arms and ammunitions, and
the other ministries of the Kingdom of
Italy, according to the delegation re-
ceived from the council of ministers,
of the other part, witnesseth :

That, whereas, between the 6th day
of April, 1917, and the 31st day of De-
cember, 1919 (hereinafter designated
war period), the War Department of
the United States of America and the
American Expeditionary Forces on the
one part (hereinafter called War De-

Col presente contratto stipulato 11
16mo PVbbraio 1920 da e tra gli Stati
Uniti di America (dora innanzi chis-
mati "America") rappresentati dalla
Connnissione di Liquidazione degli
Stati Uniti, Dipartimento della Guerra,
di cui e presidente il Sig. Edwin B.
Parker, per mezzo del Sig. Harry T.
Klein, " Delegato Speciale " da un
lato, e il Regno d' Italia (d' ora in-
nanzi chiamato "Italia"), rappresen-
tato dal Generale Angelo Modena per
il Ministero della Guerra, in rappre-
sentanza anche dell' ex-]Ministero Armi
e Munizioni e degli alti'i Ministeri del
Regno d' Italia, giusta delegazione
avuta dal Consiglio dei Ministri, dall'
altro lato, si stipula :

Considerato che tra il 6 Aprile 1917
e il 31 Dicembre 1919 (da qui innanzi
chiamato " Periodo di guerra") il Di-
partimento della Guerra degli Stati
Uniti di America e le Forze Spedizio-
narie Americano da un lato (di qui
innanzi chiamati " Dipartimento della

186

UNITED STATES LIQUIDATION COMMISSION.

partiiient) and the Ministry of War,
tlie former ministry of arms and am-
munition of Italy, and the Italian
Army (hereinafter called Ministry of
^^':li•) on the other part, had numerous
transactions between each other con-
nected with or incidental to the con-
duct of the war in the prosecution of
which the parties were associated ; and
Whereas America and Italy desire,
with respect to such transactions as
occurred in Fi-ance. Italy, and regions
adjoiniiiiT Italy, to make a full, final,
and complete settlement of all bills, ac-
counts, claims, obligations, demands,
rigiits, and causes of action of every
nature whatsoever, whether growing
out of the delivery of or contracts for
the delivery of materials, supplies, or
equipment ; or for services rendered
or contracted to be rendered ; or for
the occupation and use of all public
properties of Italy, and all damai^es
thereto : or otherwise, initiated, aris-
ing or accruing during the said v.ar
period, said settlement to be herein-
after designated as general settlement ;
and

Whereas, the nulitary forces of
America have, as incidental to or con-
nected with the conduct of the war, oc-
cupied and used real property, ap-
propriated and used personal property,
damaged real and personal property,
and damaged individuals, resulting in
their injury or death ; all of which said
occupancies, appropriations, uses, and
damages occurred during the said war
period^and for which Italy has agreed
to substitute herself for America and
guarantee America against all such
unsettled claims, for the consideration
hereinafter set forth ; and

Whereas, the parties hereto in ar-
riving at such general settlement have
agreed that in i-espect to the transac-
tions aforesaid, there is due by Italy to
America the sum of four million six
hundred sixty-nine thousand nine hun-
dred and seventy-four lire and seventy-

(rueri-a") e il Ministero della Guerra,
i' ex Ministero della Armi e Munizioni
dell" Italia e I'Esercito Italiano (d' ora
innanzi chiamati " Ministero della
Guei'ia "') dair altro lato. eberro nu-
meroso transasioni tra di loro, con-
nesse o dipendenti dalla condotta della
guerra. nella prosecuzione della quale
le due parti erano associate; o

Considerato che 1' America e 1' Italia
desiderano, rispetto a tutte le transa-
zioni che ebbero luego in Francia,
Italia e regioni finitime all' Italia, di
fniv un totale, finale e completo rego-
Inniento di ttitte le fatture, conti. le-
clami, obbligazioni, demande, diritti e
cause di azione, di ogni e qualziasl
natura, sia sergenti dalla consegna o da
contra tti per la consegna di materiale,
forniture o equipaggiamento, a per
spr\izi resi o contrattati perche fos-
ser(< resi. o per la occupazione e uso
dl ogni propriety pubblica d' Italia,
e tntti i danni inerenti, sia in altro
modo ; iniziati, sorti o derivanti du-
rante il detto " Periodo di guerra,"
dovendo tale regolamento d' ora in-
nanzi essere designate come " Regola-
mento Generale " ; o

Considerato che le forze militari
deir America hanno in conseguenza e
in dipendenza della condotta della
guerra occupato o usato proprieta
imniobiiiari, preso possesso e usato di
projjrieta mobiliari, dannoggiato pro-
prieta imn!o])ilinri e mobiliari, e cau-
sato danni a individui. che risultarouo
in ferite o morte dei niedesimi ; tutte
le quali occupazioni, preso dl possesso.
usi e danni sono accorsi durante il
detto " Periodo di guerra", e per cui 1'
Italia ha conveiuito di sostituirsi all'
America a garantire la stessa contro
tutti i detti non ancora regolati re-
clami alle condizioni qui sotto indi-
cate; e

Considerato che le parti in parola
nel giungere a tale Ilegolamento gene-
rale hanno convenuto che per rispetto
alle transazioni s^mmenzionate risulta
un debito dell' Italia verso 1' America
di (puittro milioni sei cento sessanta
nove inila nove cento settanta quattro

UNITED STATES LIQUIDATION COMMISSION".

187

one centimes (lire 4.669,974.71), and
tliere is due by America to Italy the
sum of thirty-three million seven hun-
dred seventy-six thousand five hundred
twenty-one lire and forty-four centimes
(lire 33,776.521.44). and that there is
therefore a net balance of twenty-nine
million one hundred six thousand five
hundred forty-six lire and seventy-five
centimes (lire 29,106,546.75) due Italy,
accordii!g to the liquidation account at-
tached to this agreement.

A^oit\ therefore, in consideration of
the pi'emises, it is mutually agreed be-
tween the parties hereto as follows :

Article 1. America agrees to pay in
cash to Italy through the Ministry of
War the said bahuice of twenty-nine
million one hundred six thousand five
hundred forty-six lire and seventy-five
centimes (lire 29.106,546.75) witlun a
month from the signature of the pres-
ent agreement.

Article 2. Italy does hereby fully,
completely and in all thing.'* release
and discharge America, and America
does hereby fully, completely and in all
things, release, and discharge Italy, in
respect to all of said transactions afore-
said arising in France, Italy and
regions adjoining Italy, from all bills,
accounts, claims, obligations, demands,
rights, causes of action, suits, and con-
troversies of every nature whatsoever,
which either party now has against the
other, or which may hereafter arise,
whether by reason of or in any wise
incident to or growing out of the de-
livery of or contracts for the delivery
of materials, supplies, or equipment, or
for services rendered or contracted to
be rendered, or for the occupation and
use of all public properties of Italy,
and damages thereto, or otherwise,
initiated, arising, or accruing in France,
Italy, and regions adjoining Italy dur-
ing the said war period between the
War Department on the one part and
the Mini.stry of War, repre.senting also
the other ministries, on tlie other.

lire e settanta uno centesimi (lire
4,669,974.71) ed un del>ito dell' America
a favore dell' Italia di trenta tre niilioni
sette cento settanta sei niila cincjiie
cento venti una lire e quaranta quat-
tro centesinn' (33.776.521.44) ; e percio
una difterenza attlva a favore dell'
Italia di venti nove niilioni cento sei
mila cinque cento quaranta sei lire e
settanta cinque centesimi (lire 29.106,-
546.75) come da conto di liquidazione
che si allega al pvesente contratto.

In vista di quanto sopra si e con-
venuto tra le due parti cpianto segue:

Akticolo 1. L' America s" inipegna
di pagare in contanti all' Italia e per
essa al Ministero della Ouen-a la detta
somma di venti n(tve niilioni cento sei
mila cinqtie cento quaranta sei lire e
settanta cinque centesimi (lire 29.106.-
546.75) enti'e an mese dalla firnia
della presente Couvenzione.

Articolo 2. Ij'Italia col presente con-
trato totalmente e completamente c
sotto ogni punto di vista libei'a v
scarica 1' America, e l' America co!
presente contratto totalmente e coiii-
plttamente e sotto ogni punto di vista
libera e scarica 1' Italia, per rispetto a
tutte le stunmenzionate transazioni
che ebbero luogo in Francia. Italia e
region! fiinitime all' Italia, da ogni fat-
tura. conto, reclaino, olibligazione. do-
manda, diritto. causa di azit)ne. pro-
ces.so (J controversio di qualsiasi natura
che ognuna delle due parti ha ora
contro r altra. o ciic jiuo sorgere in
seguito : sia cnusati. sia in qualsivo-
glia modo risultanti o derivanti dalia
consegna o dai contratti di consegna
di materiali, furniture o equipaggia-
menti, o da servizi resi o contrattati
perche fossei'o resi, o dall" occupa-
zione e uso di qualsiasi ptibblica pro-
priety in Italia, e danni inerenti, o
in altro inodo : iniziati, sorti o deri-
vanti in Francia. Italia e regioni fini-
tinie air Italia durante il detto Perir-
do di guerra tra il Dip;irtimento delhi
Guerra da un lato e il ^Ministero della
Guerra, in rappresentanza anche degli
altri ]Ministeri, dall" altro lato.

188

UNITED STATES LIQUIDATION COMMISSION.

Article 8. Italy does liereliy agree
to incleinnify and save America harm-
less, and does hereliy fully, completely,
and in all things release and discharge
America from all claims, demands, ob-
ligaticms, liabilities, suits, and contro-
versies of every kind and nature aris-
ing in France, Italy, and regions ad-
joining Italy during said war jieriod,
wliich any inhabitant of Italy or any
jierson suliject to the sovereignty of
Italy, or any organization, association,
or corporation, c<mimuMe, or Province
of Italy may non- have; or which may
!>ereafter accrue, for damage to. use,
rccupation, or lo.ss of property, real or
personal ; or injuries to or death of
persons, c:tused by or resulting from
acts or omissions of the American Mili-
tary Forces, or of anyone connected
therewith, and which have not already
been paid directly by America.

Article 4. Nothing hereinbefore con-
tained shall be held or construed to in
any wise annul, alter, modify, or affect
the formal obligations of Italy held by
Amei-ica ( which do not concern the
items included in the accounts hereto
unnexed) ; or the obligations of either
j-arty arising out of contracts, agree-
ments, or arrangements entered into be-
tween said parties in America, or to in
:uiy wise affect any matters now pend-
ing in America between said parties.
This agreement does not in any way
alter or affect the contract made be-
tween Federico Brofferio, representing
Italy, and Chester W. Cuthell, repre-
senting AmeriCii, dated August 13, 1919,
nor the contract made between Comm.
Arrigo Oullini, representing Italy, and
Major W. S. Franklin, representing
An)erica, dated March 16, 1919, relative
to the transportation of American
troops from Italy and Marseille to
America. The claim of America
against Italy for copper ingots shipped
to Italy for the electrification of the
]Modane Railroad is not covered by
this general settlement, said claim be-
i!!g held in abeyance pending a de-
cision of the Inter-Allied Reparation

Articolo III. L'ltalia col presente
contratto si obbliga a sostituirsi all'
America garantendola totalmente, com-
plettunento e sotto ogni punto di vista
Ilvoi-andola e scaricandola riguardo a
tutti i i-eclami, demande, obbligazioni,
(leliiti. processi e controver.sia di ogni
genero e natura sorgenti in Francia,
Italia e regioni tinitinie all' Italia du-
rante il detto Periodo di guerra, die
qualunque abitante d' Italia, o qualun-
Que persona soggetta alia soln-anita
d' Italia, o qualunque organizzazione,
associazione, corporazione, Comune o
Provincia d' Italia sellevi o possa solle-
vare piu tardi per danni. iiso, occupa-
zione o perdita di proprieta iminobi-
liare, o mobiliare o ferite o morte di
persone causate o risultanti da atti o
oraissioni delle forzo militari ameri-
cane o di chiunque connesso colle
medesime, che non siano gia stati pa-
gati direttamente dall' America.

Articolo IV. Nulla di quanto e con-
tenuto nol presente contratto dovra es-
sere ritenuto o interpretato por aiinul-
lare, alterare, moditicare o influire in
alcun modo sulle obbligazioni formali
deir Italia nelle mani dell' America
(che non riguardino le partite comprose
nel conto allegato) o sulle obbligazioni
di anibo le parte sorgenti da contratti,
accord! o regolamenti stipulati tra le
due parti in America; o por esercitare
qualsiasi eftetto sulle question! ora
pendent! in America tra le due parti
summenzionate. Questa convenzione
non riguarda o altera in alcun modo
11 contratto stipulate tra il Sr. Fede-
rico Brofferio in rappresentanza dell'
Italia e il Sr. Chester W. Cuthell in
rappresentanza dell' America, in data
13 Agosto 1919, e nemmano quelle
stipulato fra il Sr. Connn. Arrigo Gul-
lini in rappresentanza dell' Italia e il
Sr. Maggiore W. S. Franklin in rap-
presentanza deir America, in data 16
Marzo 1919, relativo al trasporto delle
truppe americane dall' Italia e da
Marsiglia in America. II reclame dell'
America contro l'ltalia per verghe di
rame spedite in Italia per I'elettrifi-
cazione della ferrovia di Modane non

UNITED STATES LIQUIDATIOlSr COMMISSIOK".

189

Commission on tlie qnestion as to who
shonld pay for said improvement.

Article 5. Tliis contract shall not
be construed to i-elate to or in any-
wise affect transactions pertaining to
any department or departments,
aueiicy or agencies, of the United
States of America other than said
War Department, and all of the
agencies of said War Department and
the Amei'ican Armv and all of its
braiiclies and aaencies.

In witness whereof on the day and
year first above written this contract
has been executed in four parts, each
having the full force and etfect of an
original, by America acting through
the United States Liquidation Com-
mission — War Department. Edwin B.
Parker, chairman (by Harry T. Klein,
special representative), and by Italy.
acting throiigh (4enei'al Angelo Mo-
dena. for the ilinistry of War. and
also for the former ministry of arms
and anummitiou and the other minis-
tries.

United States of America.
For United states Liquidation
Commission — War Department.
Edivin B. Parker, Chairman.

By Harry T. Klein.

Sped a 1 Represen tati re.
Kingdom of Italy.

For the Ministry of War and
also Representing tiie Other
Ministries.
By Axoei.o IModena,

Maioi- General.

e coperto dal presente Regolamento
Generale tale reclamo dovendo essere
tenuto in sospezo in attesa di una de-
cisione della Commissione interalleata
delle riparazioni suUa questione; Chi
deve pagare per tale miglioramento.

Articolo V. Questo contratto non
potra essere interpretato come rife-
rentesi o in qualsiasi modo riguardante
transazioni concernenti qnalsia.si Di-
partiniento o Dipartimenti. Rappre-
sentanza o Kappresentanze degli Stati
Uniti di America all' infuori del detto
Dipartimento della Gnerra o tutte le
Kappresentanze del modesimo Diparti-
mento della Gnerra e I'Esercito Ameri-
cano e tutti i suoi rami e Kappresen-
tanze.

In testimonianza di quanto sopra,
nel giorno o anno scritti in principio,
it presente contratto e stato redatto in
qnattro copie. ciascuha avente la
plena forza e I'effetto di un originale,
dair America, rappresentata dalla
Connnissione di Liquidazione degli
Stati Uniti. Dipartimento della Gner-
ra, di cui e Presidente 11 Sr. Edwin B.
Parker, in persona del Sr. Harry T.
Klein. Delegato Speciale. e dall' Italia,
rappresentata dal Generale Angel"
Modena. pel Ministeru della Gnerra e
anche per V ex-Ministero Armi e Mu-
nizioni e per gli altri Ministeri.
Stati Uniti di America,
Par la Conrnrissione de Li(}iiid<t-
sione degli Stati Uniti — Departi-
mento della Gnerra. Ed win B.
Parker, Presidente.
Per Harry T. Klein.

Delagato Speeiale.
Regno d'Italia.
Pel Ministero della Gnerra in rap-
presentanza anche degli altri }[i-
nisteri.
Per Angelo Modena.

Magoiorc Generate.

190

UNITED STATES LIQUIDATION COMMISSION.

Statement of uccuunts of the Italian and Aincricaa Uocernnicnts for general

settlement.

ITALIAN ACCOUNTS.

AMERICAN ACCOUNTS.

Railway tiansportation ac-
count

M i s c e 11a -

n e o u s

material

< to have

been

paid for

in cash) L3, 823, 429f50
Less bills

tor Sig-

n a 1

C o r p s

for labor

and ma-

t erial,

d i s a 1 -

lowed __ 8,076.47

Lire.
1, 166, 512. 40

l.ite.

Q. M-. Corps bills, $41,374.04 ;
rate of exchange 13 lire
to $1 537, 862. 52

Medical Corps bills, fr.
1,514,191.71 ; rate of ex-
change 1.20 lire to 1 fr__ 1,817,030.05

Transportation Corps bills 2, 128, 700. 00

Q. M. Corps bills against
Italian officers' mess, Lyon,
France 77,497.14

Q. M. Corps bills for miscel-
laneous material 108, 885. 00

Subsistence stores and
olh(T material to have
l)een returned in kind,
$382, 802. 03 ; rate of ex-
change 13 lire to $1

Aviation account (see
proces verbal of Decem-
ber 10, 1919)

Artillery account, gold fr.
2, 705, 398. 40 ; rate of
exchange 2.0526 lire to
1 gold franc

R. R. & C. account

American Relief Adminis-
tration account

3, 815, 353. 03

4, 976, 426. 39
18, 073, 348. 17

5, 553, 100. 75
180, 000. 00

11, 780. 70

Gross amount 33,776,521.44

Gross amount 4. 669, 974. 71

RECAPITULATION.

Lire.

Gross auioiiiit due Italy 33,776,521.44

(iross amount due America 4,669,974.71

Net amount due Italy , 29, 106. .546. 75

This statement is in absolute agreement with the statement presented by the Italian
office charged with making general settlement for Italy.

(Signed) Victor A. Libretti,

2nd Lieut., Q. M. Corps, U. S. .inny.

Washington, D. C. May 25th, 1020.
^Memorandum to be attached to all copies of statement of accounts of Italian
and American Governments for general settlement, being basis of the general
settlement of February 18th. 1920 (to be attached to all copies of contract in
files).

1. In the column of credits to the American account in the attached gen-
eral statement of accounts of the Italian and American (xovernments, item
number 1. entitled " Q. M. C. bills," amounting to .$41,374.04, should read,
"American bills, in dollars." and includes the following:

(1) Motor Transport Corps bills, in dollars, against the

Italian (Government .$120. 35

(2) Ordnance Corps bills, in dollars, against the Italian

Government 3, 511. 35

(3) Quartermaster Corps bills, in dollars, against the

Italian Government 37. 742^ 34

Total 41, 374. 04

UNITED STATES LIQUIDATION COMMISSION. 191

2. Item number 2, entitled " Medical Corps hills," amounting to frs. 1. 514,191. 71,
should read. "American hills in francs," and includes the following:

Frs.

(1) Medical Corps bills in francs against the Italian

Government 264, 279. r.O

(2) Ordnance Corps bills in francs against the

Italian Government 1,249,702.21

(3) Quartermaster Corps bills in francs against the

Italian Government 210.00

Total 1, 514, 191. 71

3. Item ninnber 3, entitled " Tran.sportation Corps bills," amounting to lire
2,128,700.00, should read, " Motor Transport Corps bills."

Louis Broido.

APPENDIX XXXVI.

United States Liquidation Commission — Wak Department,
statement of expenditures from date of organization, february 11, 1919, to

MAY 31, 1920.

Salaries of Commissioners $31,449.97

Foreign per diem allowance of Commissioners 13,529.13

Salaries of civilian employees 85,949.77

Foreign per diem allowance of civilian employees 63, 419, 44

Foreign per diem allowance and expenses of military personnel 15,046. 86

Office supplies, printing, etc 1,701.72

Loss on exchange 11. 706. 28

Total 222, 803. 17

H 98 834

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