Paris Peace Conf. 180.0501/24

Supreme Economic Council: Twenty-fourth Meeting Held at the Ministry of Commerce [on 23d June, 1919, at 10 a. m.]

The Supreme Economic Council held its Twenty-fourth Meeting on Monday, 23rd June, 1919 at 10 a. m. under the Chairmanship of Monsieur Clémentel.

The Associated Governments were represented as follows:

The Minutes of the Twenty-third Meeting were approved. 225. Recommendations Made to the Council of Heads of States.

A letter from Sir Maurice Hankey dated 17th June (199) embodying decisions reached by the Council of Heads of States regarding:

(a) The Blockade of Hungary and Bolshevist Russia (See Minutes 195 [196] and 203);

(6) the proposed agreement by Austria as regards trade with Hungary and Germany (See Minute 195);

was submitted.

As regards (b) it was reported that the Council of Heads of States had now accepted the proposals put forward by the Council and had instructed the Drafting Committee to take the action necessary in accordance with their decision.

The above information was noted and it was agreed that the Blockade Section should be notified thereof, and should be authorised to take such action in connection with both the above matters as they considered necessary.

226. Trade Between German Austria and Hungary.

A note from the American Delegates (200) was considered regarding the desirability of permitting such concessions in connection with the present prohibition of trade between German-Austria and Hungary as might be considered essential to the economic life and political stability of German Austria.

The French Delegates stated that no instructions had been sent by the French Government with a view to enforcing a complete prohibition of trade between German-Austria and Hungary.

It was agreed that the Vienna Commission should be informed that they have power to sanction the continuance of the ordinary small frontier traffic in goods between Austria and Hungary, but that any proposals for large exchange of commodities or for transfer of gold or securities should be referred to the Supreme Economic Council for instructions.

227. Seizure of Austrian Gold and Securities.

A Note from the French Delegates dated 21st June (201) covering a telegram from the Austrian Minister for Foreign Affairs to the French Diplomatic Mission at Vienna dated 7th June (202) reporting the seizure by Hungarians from Austro-Hungarian Banks in Budapest of 15 million kronen in gold and 10 million kronen in bank notes was submitted.

The Italian Delegates made the following statement:

1. In May last, when it was anticipated that a stable Government would be established in Hungary almost immediately, preliminary negotiations took place, with the full knowledge of the Food Section, for the delivery of foodstuffs from Italy to Hungary as soon as economic and political stability were restored.

2. Sums to the value of three million gold crowns and 15 million of paper money were subsequently deposited at Vienna by a Hungarian Syndicate as security solely for the foodstuffs to be supplied to Hungary by an Italian Syndicate.

3. In view of the fact that a stable Government has not yet been established in Hungary and the blockade is not, therefore, removed, no transactions have yet been completed and no shipments of foodstuffs have been made.

4. Since the contracts have not been completed the gold still in the possession of the Italian Representatives at Vienna can be disposed of in accordance with instructions to be agreed upon by the Allied and Associated Governments.

It was agreed:

(a) that the information given above should be reported to the Finance Section who should be instructed to determine what action should be taken in the matter;

(b) that the German-Austrian Government should be informed of the position as outlined above and of the action taken by the council.

228. Removal of Gold and Securities in German-Austrian Banks.

The British Delegate on the Finance Section reported that a telegram had been received from the British representative in Vienna recommending that the money and securities needed to pay for food supplied by the Allies to Austria should be removed from Vienna in case of eventualities and stating that this could readily be arranged.

It was agreed:

(a) that a telegram should be sent to the Financial Mission in Vienna in the following sense:-

1. that with the assent of the Austrian Government, arrangements should be made with the Italian Armistice Commission for the removal to Italian territory of gold coin (but not paper money) and foreign securities available for this purpose within the limits of the amount required to pay for food supplied to Austria by the Allies.

2. that if the Austrian Government ask for the removal to Italy of other gold and securities also, to be held at the disposal of the Austrian Government or the Austro-Hungarian Bank at Vienna, the necessary steps should be taken to comply with this request.

(b) that similar instructions should be given to the Italian Armistice Commission.

(c) that of the gold and securities removed to Italy for the payment of foodstuffs, one-third should be held at the disposal of each of the three Governments concerned, viz. France, Italy and the United Kingdom.

(d) that the Blockade Commission in Vienna should be informed of the above decisions.

229. Reported Violation of Blockade of Hungary.

With reference to Minutes 205 and 214 the Italian Delegates stated that in accordance with instructions given by Baron Sonnino a most rigorous enquiry had been made regarding the reported passage of war materials from the Adriatic to Bolshevik Hungary and that the Italian Supreme Military Command and dependent Commands had stated that no shipments had taken place with their authority or knowledge.

It was possible, however, that some war materials might have been introduced through private Austrian interests and further enquiries regarding this were being made. It was hoped, therefore, that it would be possible to make a further report at the next Meeting of the Council.

The American Delegates reported, in this connection, that according to information they had received, a number of trucks containing nitrates had been despatched from Trieste as part of Relief Trains for Vienna and had subsequently been passed through into Hungary.

Further, it appeared that for some weeks past the Italian Railway Officials had refused to allow the American officials of the Relief Mission at Trieste access to the railroad yards with the result that the American officials had been unable to check the contents of relief trains despatched to Vienna.

The Italian Delegates undertook to arrange that a careful military enquiry regarding this report should be conducted immediately. 230. Export of Coal, Petrol and Oil From Poland to Austria.

The British Delegates reported receipt of information to the effect that the Polish Government had refused to export to Austria coal, petrol and oil under the Agreement recently signed and that if this decision were adhered to the lighting in Vienna must be shut down.

The American Delegates reported that the Czecho-Slovak Government expressed their intention of discontinuing the execution of their agreement to send gas coal to Vienna if the Austrian Government refused to supply war materials for which the Czecho-Slovaks were urgently in need.

It was agreed:

(a) that the Governments of Poland and Czecho-Slovakia should be notified that in the view of the Allied and Associated Governments it is undesirable that any of the Services for the supply of essential commodities to German-Austria from those countries should be suspended during the negotiations in connection with the Austrian Peace Treaty.

(b) that the German-Austrian Government should be requested to do all in their power to ensure that the war materials required by the Czecho-Slovak and Polish Governments should be forthcoming. 231. Control of Traffic on the Danube.

A Note from the Director-General of Relief dated 20th June (203) was submitted, embodying resolutions adopted by the Inter-Allied Danube River Commission at a Meeting on 1st June recommending that all floating craft and equipment other than naval craft and boats and equipment belonging to the European Commission of the Danube should remain under the control of the Inter-Allied Danube River Commission until its final disposition in conformity with the provisions of the Treaties of Peace.

It was agreed that the resolutions should be deferred for further consideration at the next Meeting of the Council if necessary, and that, in the meanwhile, the Communications Section should examine the points raised therein.

232. Locomotives and Cars for Lithuania.

A letter was submitted by the American Delegation dated 16th June (204) regarding the supply through the American Liquidation Board of locomotives and cars for Lithuania.

It was agreed to refer the letter to the Communications Section with instructions to consider in consultation with the Finance Section, what steps should be taken to arrange that sufficient locomotives and cars and other railway material will be available in the Baltic Provinces generally to ensure that the adequate and prompt distribution of foodstuffs for relief purposes will be maintained.

233. Use of Enemy Tonnage.

(a) A Report from the Freight Committee of the Food Section dated 6th June (205) regarding the position and employment of enemy tonnage as on 31st May was submitted for the information of the Council.

The Chairman drew the attention of the Council to Annex V. of the report regarding freight rates on food supplied to Germany in German bottoms.

The Director-General of Relief stated that as regards foodstuffs supplied by the American Relief Administration to Germany the point alluded to in Annex V does not arise. He explained that in the account kept for the supply of German food any saving because of the difference between the Shipping Board rates, upon which prices are based, and the rates charged by the Allied Maritime Transport Executive for deliveries in German bottoms is credited to the Germans and increases to that extent funds available for purchases of food by the Germans,

The French and British Delegates stated that in quoting c. i. f. prices for the sale of foodstuffs to Germany Blue Book rates of freight were always used.

It was agreed that the matter should be referred to the Food Section who should notify the Allied Maritime Transport Executive of the action taken by the Section.

(b) the Italian Delegates referred to the probability of a surplus of enemy tonnage being available for purposes other than relief in the near future and requested that the Supreme Economic Council should recommend to the Allied Maritime Transport Executive that the possibility of using some of these boats for the transport of coal to Italy should be considered.

The French Delegates requested that if such a recommendation were being made the French coal situation should receive consideration at the same time.

The following resolution was adopted, the French Delegates making a reservation on behalf of M. Loucheur :

"The Council requests the Allied Maritime Transport Executive to consider as a question of urgency the employment of the possible surplus of ex-enemy tonnage above food needs having due regard to the coal situation in Italy".