action which might conflict with decision of Reparation Commission on these vessels. COLBY 862.85/1234 : Telegram The Ambassador in France (Wallace) to the Secretary of State PARIS, September 21, 1920—6 p.m. 1736. B-261. For the Department and Davis. Reference your B-111 our B-248.43 1st. Following from Greene in London: "No new information available from Peruvian experts. Peru has no losses for which ton for ton reparation can be given. Therefore good Peruvian title to ship depends on proper government action in detaining the ship or putting into effect Wilson-Lloyd George Agreement with Peru a party to same. I personally believe Peru will eventually get the ship. This is also British opinion but is not based on fact." 2d. For your information. There are indications that British and probably others have given up hope of ever taking over German steamers seized by various South American powers. Believe they are resigned these countries holding what they have and eventually establishing ownership one way or another. They expect however compensation for excess over losses by some scheme following WilsonLloyd George Agreement. This view is not based upon any definite admission or statement but comes from casual conversations and observation of day to day developments. 3d. In any case position of South American countries with regard to ownership probably not definitely established until possibilities under Wilson-Lloyd George Agreement made clear following our action on that document. Meantime there has always been objection any assumption ownership or right of sale by any South American country until cases are finally decided. 4th. Foregoing gives you all facts at our disposal. . . . Boyden. WALLACE 862.85/1224: Telegram The Secretary of State to the Ambassador in France (Wallace) WASHINGTON, October 1, 1920-7 p.m. 1528. Boyden B-133. 44 Your B-248, Department's B-92,45 and B-111.** For your information Shipping Board gives further information that Callao chartered at eight and a quarter dollars per ton before the armistice to continue until peace with Germany. This rate very excessive and cannot be changed until peace between United States and Germany. In addition $600,000 spent on reconditioning ship. Peru now offers to sell the ship at a price which would enable Shipping Board to recover money spent on repairs; and to permit a substantial offset as an allowance for excessive charter hire collected. In addition Peru offers to guarantee title and is now insisting on definite reply from Shipping Board. Shipping Board especially desires to purchase ship in order to cease payment of excessive charter hire. They argue that if Peru guarantees title as proposed it will not be necessary for United States to support Peru's claim to title. Such a plan somewhat similar in effect to that suggested in paragraph 3 your B-248, but would effect immediate settlement of charter hire difficulties. Department does not desire to place itself in awkward position with the Commission but it is rather difficult under existing conditions to refuse Shipping Board's request. Please cable your views and if you think it advisable you might consult your associates, pointing out difficulties of the present situation. COLBY 862.85/1253 The Secretary of State to the United States Shipping Board WASHINGTON, October 22, 1920. GENTLEMEN: Referring to previous correspondence concerning the S.S. Callao, the Department encloses for your information a copy of a telegram of October 13, from Mr. Boyden.1o Your attention is called to the statement in the first paragraph of Mr. Boyden's telegram that it would help greatly if the proposed guarantee by Peru is "so worded as to indicate the definite intention on the part of United States not to interfere in case claims made by the Allies, something which could be quoted if question arises." This suggestion meets with the Department's approval and accords with the recent conversation with your Mr. Wood in which he was informed that the Department was of the opinion that under the Treaty of Versailles the final disposition of the Callao and the other ex-German vessels taken over by Peru was apparently a matter to be determined by the Reparation Commission, I am [etc.] For the Secretary of State: ALVEY A. ADEE Second Assistant Secretary 40 Not printed. 862.85/1253: Telegram The Acting Secretary of State to the Ambassador in France (Wallace) WASHINGTON, October 30, 1920-6 p.m. 1596. Your 1804, October 13. Department's B-150. For Boyden. Your B-279.46 1. For your information. By agreement of October 23 between Emergency Fleet Corporation and Peru contract for charter of exGerman Peruvian ships terminated, and Callao purchased by Corporation. Purchase price deposited in trust until Reparations Commission shall determine right, title and interest of Peru in Callao. If title is not sustained, sum with interest to be returned to Shipping Board. Peru agrees to use utmost efforts to secure relinquishment by Reparation Commission, or those whom it represents, of any claim to the title to vessel. Peru also transfers to Corporation all her right, title and interest to steamers Pisco, Luxor and Salaverry, now in use of French Government. 2. Peruvian Ambassador wishes your confidential opinion as to whether advisable for Peruvian Naval Attaché at Washington to proceed to Paris at this time for purpose of presenting claims of Peru to steamer Callao, and other ex-German ships, before Reparations Commission.47 DAVIS TANK SHIPS OF THE DEUTSCH-AMERIKANISCHE PETROLEUM GESELLSCHAFT Claim by the Standard Oil Company of New Jersey to Beneficial Ownership— Provisional Exemption of the Tankers from Allocation among the Associated Powers; Cancelation of the Exemption by the Supreme Council-Refusal by the United States Shipping Board to Release the "Imperator" and Seven Other German Ships Pending a Decision on the Tankers;, Release of the Eight German Ships-Proposals for a Provisional Allocation of the Tankers-Agreement of June 7, 1920, between the Reparation Commission and the United States 362.115 St 21/55: Telegram The Secretary of State to the Ambassador in France (Sharp) WASHINGTON, August 13, 1919-5 p.m. 9028. Department is informed by Standard Oil Company of New Jersey that nine tank steamers now lying in German ports which 40 Not printed. 47 According to a telegram of July 15, 1921, from Boyden (file no. 862.85/ 1348), the Reparation Commission decided on July 12, 1921, that these ships taken over by Peru were not on January 10, 1920, German ships and that therefore they were not ceded to the Allied and Associated Powers under annex III, part VIII, Treaty of Versailles. are registered in the name of the Deutsch-Amerikanische Petroleum Gesellschaft, a German subsidiary of the Standard Oil Company, will be immediately used by the Standard Oil Company in transporting oil from United States to Germany. To this there appears to be no valid objection, but in order that you may be prepared to meet any questions which may be raised the following situation with regard to tankers is given you. Total capitalization of German subsidiary company is 60,000,000 marks consisting of 9,000,000 marks of shares, 21,000,000 marks of share warrants and 30,000,000 marks of debentures practically all owned by Standard Oil. In February 1917 Standard sold shares which carry voting power and control to certain German subjects who had been identified with German company's management, lest ships and other property of company might if war ensued be seized and sold by Germany as American owned and controlled property. Purchaser pledged for payment American securities then in United States of far less value. United States Alien Property Custodian seized pledged securities holding sale was invalid, that no debt existed and shares still belong to American company which it is stated in any event continued to own 85 per cent interest. Ships and other property in German jurisdiction were not appropriated by Germany. The tankers in question have not been allocated to any of the Allied or Associated Powers, being expressly exempted by the Brussels Agreement of March 14, 1919.48 The Peace Treaty has been ratified by Germany and the blockade raised and trade relations between United States and Germany resumed. It therefore seems unobjectionable that these tankers though under German flag should go to sea with their own crews and engage in commerce. Under Treaty of Peace Germany is to deliver certain categories of ships to Reparation Commission. Reserving any other questions the delivery is in no event required to be made until two months after Treaty comes into force and this delivery is not delivery of hulls assembled in one place but is delivery of documents of title. The American interest in the German company has heretofore been diplomatically protected by this Government and was expressly recognized by Great Britain and France in 1914 and 1915 in acquiescing in transfer of a number of tankers registered in the name of the German company to the Standard Company and the American flag.49 The principle of equitable ownership thus applied greatly enured to advantage of Allied Powers in preserving supremacy at sea in preventing formation in neutral countries of companies with German capital to send ships to sea in German interests under neutral flags. Same principle is recognized in Peace Treaty in 49 Not printed . See Foreign Relations, 1914, supp., pp. 485 ff, and 1915, supp., pp. 674 ff. reparation clauses Annex II paragraph 20 which provides that Reparations Commission shall have due regard for any legal or equitable interests of nationals of Allied or Associated or neutral Powers in connection with shipping. Where "property, rights and interests" of nationals of Allied or Associated Powers have been subjected to exceptional war measures and measures of transfer in Germany Article 297 (A) of Treaty provides that when liquidation has not been completed such measures shall be immediately dropped and property, rights and interests restored to their owners who shall enjoy full rights therein in accordance with Article 298 which stipulates for enjoyment in same measure as before the war. Evidently where property, rights and interests have not been subjected to such measures the Treaty does not take from the owners what Germany has not attempted to seize. Article 297 (F) recognizes principle of restoration of property in specie wherever possible. Standard Oil Company of New Jersey in meeting Allied war needs lost during the war by enemy action 10 ships under American flag aggregating 76,674 tons deadweight. Nine of these were tankers aggregating 69,144 tons which exceeds by 16,000 tons the aggregate tonnage of tankers now at Hamburg. In March last Standard Oil, on hearing a rumor that the French Government intended to claim the tankers as part of its individual indemnity, filed with this Department a written protest against supposition that property rights of an ally and friend, which had escaped enemy appropriation, might be appropriated for the benefit of another ally and friend. The matter was supposed to be have been dropped, but in a debate in French Chamber of Deputies on July 2d, the Minister of Public Works declared the Government intended to make every effort to get the tankers, and reference was also made to the proposed State Monopoly in France of the purchase and importation of Refined Oil and Gasoline, and of the importance to the Government of constituting a petroleum fleet. Please give copy to Under Secretary Polk for his information. Identical instructions cabled to London. LANSING 362.115 St 21/60: Telegram The Acting Secretary of State to the Commission to Negotiate Peace WASHINGTON, September 16, 1919-8 p.m. 3151. Referring to question of sailing of D.A.P.G. tank steamer[s] from Hamburg to New York, Navy Department, September 4, cabled its representative to direct Admiral McCully, representing United |