Minutes of a Meeting between British and German Representatives, held at 4 P.M., on the 2nd Decemher, 1924, at the Foreign Office, London, for the purpose of signing a Treaty of Commerce and Navigation between Great Britain and Germany.

THE SECRETARY OF STATE FOR FOREIGN AFFAIRS announced that the negotiation of the Treaty of Commerce and Navigation between Great Britain and Germany was now concluded and that the treaty was ready for signature.

THE GERMAN AMBASSADOR, on behalf of the German delegation, drew attention to the terms of Sir Otto Niemeyer's letter to Herr von Schubert of the 28th November, 1924, and desired that a copy thereof should form an annex to the minutes of this meeting.

THE SECRETARY OF STATE FOR FOREIGN AFFAIRS agreed, and stated that the treaty was signed on either side without reservation and upon the understanding that it would not prejudice in any way rights enjoyed under or in virtue of the Treaty of Versailles.

THE GERMAN AMBASSADOR concurred in this view.

The plenipotentiaries (the Secretary of State for Foreign Affairs and Lord D'Abernon for Great Britain, and the German Ambassador and Herr von Schubert for Germany) then proceeded to the signature of the treaty and of the protocol attached thereto, and the proceedings terminated. AUSTEN CHAMBERLAIN. D'ABERNON.

STHAMER.

C. v. SCHUBERT.

ANNEX.

Sir Otto Niemeyer to Herr von Schubert.

Dear Herr von Schubert,

November 28, 1924.

I HAVE now been able to consult the Chancellor of the Exchequer, and am in a position to give to you our reply with regard to the Reparation Recovery Act. In the first place, I can repeat my assurance that we have no desire to retain the Act for its own sake, and that the only object of any stipulations which we may make is to secure that by departing from the procedure under the Act, as it at present exists, the British Government does not lose the share of reparation receipts to which it is entitled.

The difliculty which we see in adopting any procedure on the lines of that suggested in the memorandum which you gave to me yesterday, is that the Reparation Recovery Act has a recognised position, and that we must make sure that if we alter the procedure we do not sacrifice the rights which we enjoy in respect of the Act as it stands, in which form the German Government agreed to facilitate its working by reimbursing the amount of the levy to German exporters by article IX of the Schedule of Payments and by their acceptance of the Dawes plan. We hold, as I told you, that it was the intention of the Dawes Report that the annuities for the first two years should be received in the form of deliveries in kind and local expenditure of the armies of occupation. The Dawes Report explicitly states that where there is reference to deliveries in kind in the report: "We have intended to include therein payments in Germany arising through the operation of the Reparation Recovery Acts." Before, therefore, we could consider any alternative procedure, it would be necessary to ascertain whether the agent-general, the Transfer Committee and the other Governments which signed the London agreements take the view that the annuities for the first two years must be received in deliveries in kind (including payments under the Reparation Recovery Act), and, if so, whether they would take the view that payments under the system which you propose could, for this purpose, be considered as being payments under the Reparation Recovery Act. As I explained to you, the scheme which you propose would necessarily entail the repeal or suspension of the Reparation Recovery Act, and there is, therefore, clearly great doubt how far payments received under an alternative plan would be accepted by all the parties concerned as being subject to the same conditions as payments under the Act as it now exists.

Moreover, under existing inter-Allied agreements our receipts under the Recovery Act are exempt from the charge for Belgian priority and for the United States of America arrears of cost of occupation, and if our position is to be the same under the alternative procedure as under the existing procedure, it would clearly be necessary to obtain an extension of these privileges to our receipts under the new procedure.

It appears to the Chancellor of the Exchequer that the first step must necessarily be to ascertain what view of the matter would be taken by the agent-general, the Transfer Committee and other parties concerned. It rests with the German Government to ascertain whether it will be possible to get the consent of the agent-general and the Transfer Committee to a proposal on the lines put forward or on similar lines which would protect the British rights referred to above, and, at the same time, not involve payments by individual merchants. The British Government cannot give any formal assurance, but they are quite ready to use their good offices to secure such a result.

As soon as the necessary consents have been obtained, the British Government will enter into negotiations with the German Government with

a view to the introduction of the new procedure.

Signed at London, December 2, 1924, with other relevant documents.

[Ratifications exchanged at London, September 8, 1925.]

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