FOR RELIEF IN BELGIUM
CHAPTER IV, continued
3. Allied Decision to Subsidize Relief. February 1915
On his way back to London Hoover had many conferences in Brussels with members of the Commission and the Comité National, and with Governor-General von Bissing. He discussed with Francqui the financial situation, and went over with him a plan of floating a relief loan in America to be launched should the Allied Governments refuse to subsidize the Commission. In an interview with the Governor-General, Hoover attempted to settle various matters which were giving trouble, such as passes for the delegates of the Commission.(96) As far as guarantees were concerned, von Bissing assured Hoover that the General Government would faithfully adhere to all the engagements which they had undertaken. While Hoover returned to London without the full measure of concessions that he had asked, he had yet secured from the highest German authority a clear and definite confirmation of the various guarantees already given and had succeeded in getting assurances which, in the last resort, might at least prolong the feeding of Belgium.
It was a week after Hoover's return before Sir Edward Grey issued his statement that, since the Germans "refused to consider the cessation of their pecuniary exactions" in Belgium, his Government must decline to grant a direct subvention to the Commission. In the meantime, Lloyd George, who had been won over to the support of the relief during the earlier exchange negotiations, placed Hoover's arguments before the Cabinet. The whole-hearted support of the Chancellor of the Exchequer and other ministerial friends of the Commission's work carried the day. It was decided to recommend to the French Government a budgetary allowance for the Belgian Government which included £1,000,000 per month for "Mr. Hoover's fund." This did not constitute a direct subvention to the relief, but, as far as the C.R.B. was concerned, it amounted to the same thing.
DOCUMENT NO. 143
FRANCQUI TO HOOVER, regarding the difficulties of the German proposals for financing relief
BRUSSELS, 16 February 1915
MY DEAR HOOVER:
It was only today that I had occasion to meet Dr. Schacht, who was attended by Messrs. Kaufmann and Somary. Mr. von Lumm was absent. The conversation was very indefinite, that is to say, nothing precise resulted from it. We talked about conversations which you had had with various German people, of the situation of the Treasury, of our Committee, etc.
I did not fail to lay stress upon the very great difficulties which we were about to encounter if means were not found for us to procure the necessary resources to meet the alimentary needs of the Belgian population. We successively considered the opening of credits with the Belgian banks, which should be represented by promises to pay, backed by German banks established in New York; then also an interior loan which should be guaranteed by one institution or another; and finally came to the last scheme which you discussed at the time of your visit to Germany, to wit, the constitution of a special body which should issue bonds guaranteed by the Belgian Government as well as by the Belgian provinces, to be duly authorized to that end by the German authorities.
I also brought to the attention of these gentlemen the fact that if this last scheme was to be carried out, it was indispensable that we should be authorized to inscribe upon the bonds issued that the German Government formally undertakes, until such bonds are completely redeemed, not to requisition any alimentary commodity, whether derived from cultivation in Belgium or from importations carried out under the auspices of the C.R.B.
These gentlemen asked me why I laid stress upon this point, as they could not see any reason why such a declaration should appear upon the bonds. I immediately replied that it was indispensable that we should be able to inform definitely the persons to whom we might appeal as to the maximum amount of the needs of our Comité for each month; and that merely for the cereals, beans, peas, etc., imported, this maximum would attain a monthly sum of Frs. 40,000,000. I added that, if a formal declaration on the lines indicated above was not made by the German Government, it would be impossible for us to fix the said maximum, seeing that by requisitioning in Belgium all the cattle, all commodities other than those necessary to the making of bread, as well as all harvests garnered in the month of August next, this maximum might one day attain 80 or 90 million francs per month.
One of these gentlemen immediately understood me, and it was finally decided that the matter should be referred to Berlin, with the certainty of obtaining an authorization to give such an undertaking.
Subsequently these gentlemen told me that they believed it advisable, before commencing the execution of a program like that mentioned above, that a new endeavor should be made with the Belgian and English Governments, with a view to obtaining the financial co-operation necessary to the smooth running of our business. They insisted that negotiations should be undertaken in this direction, at the same time asking me to go and see you in a fortnight's time so that we might together go to Havre to make a last effort. They added that, with a view to not annoying Havre, it was perhaps advisable that you should not tell anybody of the plan which had been put forward. They advised me to telegraph you in this sense and I thought it well to comply with this desire. I therefore cabled you as follows through our Rotterdam office: "Think indispensable tell nobody of our idea issue bonds for Relief Commission until advised by us." As I mentioned at the beginning of this letter, my conversation with Dr. Schacht was of a most indefinite nature. They seemed to have no precise instructions, although each one was anxious as to the situation which would be brought about if we did not succeed in procuring the necessary resources.
We separated after promising to meet again in a fortnight as soon as an answer had been received from Berlin to the question which I laid down regarding the undertaking to be taken by the German Government not to requisition any further commodities whatsoever until the complete reimbursement of the loan we were to eventually float abroad.
I should be greatly obliged if you would ask (or cause to be asked by one of our friends) these gentlemen at Havre what they consider it advisable for us to do; and after having received their opinion, please let me know your opinion, so that I may act here in accordance with it.
After having received a reply from Havre, and if you consider there is any urgency, you might telegraph me what you require.
Your very devoted
(Signed) EMILE FRANCQUI
DOCUMENT NO. 144
GREY TO HOOVER, reviewing the negotiations with the Germans and stating that as a result of the German position the plan of a direct subvention from the British Government must remain in abeyance
FOREIGN OFFICE, LONDON
22 February 1915
DEAR MR. HOOVER:
Your return from Germany, and the information you have given me as to the result of your journey, afford me an opportunity to sum up the negotiations which have passed between the Commission for Relief in Belgium and His Majesty's Government, in reply to the various letters you have written me.
When the work of the Commission was originally set on foot through the efforts of the United States and Spanish Ambassadors in London on behalf of the Belgian Government, His Majesty's Government agreed that all the food supplied from neutral countries through the Commission should pass into Belgium without interruption, for distribution to the Belgian people under the guarantees given by the German Government to the Commission. His Majesty's Government also contributed £100,000 to the funds of the Commission and this sum has been supplemented by grants in money and kind from Canada, Australia, New Zealand. We have also been able to extend facilities which ensured your shipping reaching Rotterdam, and in certain instances to relax in your favour our prohibitions affecting exports of food and transfers of money. Military considerations might be held to render such action on our part inadvisable, but it appeared to us necessary in the circumstances to disregard such considerations.
You represented to us, however, that such grants were quite inadequate to your needs, since your expenditure on foodstuffs, distributed in pure charity alone, amounted to between £400,000 and £500,000 monthly. You therefore asked for a monthly subvention from His Majesty's Government to supplement the very generous private contributions which you were receiving from the American public.
We did not see our way to accede to your request, and indeed for some time we regarded the whole project of the distribution of food in Belgium with some doubt, in view of the action of the German authorities. While respecting the food actually imported by you, they did not until December accede to your representations regarding the cessation of requisitions for the use of the German army of the supplies of native food remaining available for the civil population of Belgium; and they even carried away cattle and cereals from Belgium into Germany itself. They also levied large monetary contributions upon the cities and communes in Belgium, and these exactions have now culminated in the levy of a sum of 40,000,000 francs a month from the whole country. It was evident that if, under such conditions, the British Government undertook through your Commission to supply money or food to the Belgian population, the only result would be an equivalent diminution of the food and supplies already there. The British Government, in fact, would have been facilitating the feeding, and paying for the maintenance, of the German army. Under these conditions, therefore, it was impossible for His Majesty's Government to make a direct grant to the Commission.
Eventually, however, His Majesty's Government recognised that the work of the Commission was directed on sound lines to supply the urgent needs of the Belgian people, and had the less doubt on this point in view of the additional guarantees obtained by you in December from the German Government that at least all kinds of foodstuffs which would need to be replaced by the Commission should be free from all requisition, and in view of the assurances you were able to give His Majesty's Government that the foodstuffs imported by you had not been interfered with by the German troops. Further, I was able to inform you last month that His Majesty's Government would grant the Commission a monthly subvention to enable it to carry on its work, on condition that the German Government would undertake to cease all requisitions of food of any kind, and all levies and contributions of any kind whatever in Belgium, with the exception, of course, of such taxation of the people as is admitted under the Hague Convention.
At your request, this offer was not made public at the time, but you were authorised to inform the German Government of it. I now understand that during your recent visit to Berlin you informed the German Government of the exact position of affairs but that, while they consented to stop all requisitions of food in the Zone of Occupation east of Ghent, they refused to consider the cessation of their pecuniary exactions, and especially the levy of 40,000,000 francs a month, which they apparently intend to continue.
Solely on account of this attitude on the part of the German Government, the proposed arrangement between His Majesty's Government and the Commission must be regarded as having broken down. We shall of course maintain our general favourable attitude towards your work, and our offer of financial support will remain open in the event of the German Government receding from their present position in regard to their levies in Belgium, but for the moment the idea of a direct subvention out of Government funds toward the charitable work of the Commission must remain in abeyance.
I cannot conclude this letter without expressing our appreciation of the generosity of the American people and the admirable organisation established by the Commission, which have alone made this work possible. The people of this country will, I am sure, recognise in your work a prominent example of the qualities of efficiency and public spirit which distinguish the many neutral services rendered by Americans in Europe at the present time.
Yours very truly
(Signed) E. GREY
DOCUMENT NO. 145
by HOOVER, of a conversation with LLOYD GEORGE and VAN DE VYVERE concerning the financial situation of Belgian relief and the present state of negotiations
LONDON, 17 February 1915
I received notice to call upon Mr. Lloyd George at 3:30 and found there Mr. Van de Vyvere, the Belgian Minister of Finance, and Count de Lalaing, the Belgian Ambassador.
Mr. Lloyd George stated that there would be a cabinet meeting on Thursday at twelve o'clock, in which the question of feeding the Belgians would come up for general review. He stated that Messrs. Churchill and Kitchener were very much opposed, on military grounds, to a continuance of our work; that his own views had been greatly altered by his discussions and correspondence with me, and that he found himself able to support us unqualifiedly in our humanitarian task. He asked me how much foodstuff had been subscribed from America. I told him out of approximately £5,000,000 worth of food delivered and in transit, £1,000,000, was composed of American gifts; that we had had gifts from other quarters, British Colonies, etc. He asked how much money we had had from the British Government up to date, and I told him £100,000; and Mr. Van de Vyvere explained that we had £2,000,000 from him. He reviewed some arrangements with the Belgians, mentioning £300,000 in payment of Belgian railway workmen. I told him I knew nothing about the transaction at all; that from my point of view I received a million pounds a month from the Belgians to purchase food with and transmit it to Belgium, and to account therefor, and that as to what internal arrangements were made I was not interested so long as I got the million pounds a month; and that I would, in fact, prefer to have as little to do with such arrangements as possible; that my whole approach to the problem was from a humanitarian point of view, and that I must argue the whole matter on that footing. Mr. Lloyd George asked me to review to him---in order to refresh his mind---some arguments which I had placed before him previously, as he wished to repeat them to his colleagues. He asked that I give him a memorandum, and asked how quickly I could get it; to which I replied that I could have it ready at half-past six. He stated that I should make it as vigorous and as strong as possible, and to approach the subject as though our work were about to be suppressed, and to put any arguments in which would meet such a proposal. I then returned to the office and we prepared the following memorandum:
DOCUMENT NO. 146
HOOVER TO LLOYD GEORGE, reviewing financial and other aspects of relief, and urging the necessity of British support
LONDON, 17 February 1915
The Right Hon. David Lloyd George
Chancellor of the Exchequer
As to your request that I should send you a memorandum on the matters affecting the provisioning of the civil population of Belgium.
1. Except for the breadstuffs imported by this Commission there is not one ounce of bread in Belgium today. The 7,000,000 people there are at present receiving the small allowance of 250 grams of flour per them per capita, necessitating the importing of approximately between 65,000 and 70,000 tons of wheat per month. In addition to this the native supplies of potatoes and meat are showing signs of rapid exhaustion, and measures must be taken to supplement the bread supply which we are now providing. Of the 7,000,000 population about 1,500,000 are at present entirely destitute and are being wholly supported by this Commission, and before the next harvest over 2,500,000 people will have to be supported. Foodstuffs are sold to those who can still pay, and payment is received in Belgian paper money, that being the only currency in the country. These foodstuffs are sold at a small profit in order to compel the more well-to-do population to assist in the support of the destitute. The moneys received from these sales are used to purchase supplementary food in the shape of potatoes and soup-materials for the destitute. The cost of feeding the destitute averages about 12 francs per capita per month, and therefore now aggregates between £500,000 and £600,000 per month. If it were possible to secure exchange in Belgium for the paper which we receive, our budget would balance except for the above expenditure on benevolent account. On the other hand, the export of this paper money to London is useless and infeasible, and hitherto it has been distributed to the communes to pay communal salaries and other services, and the equivalent amounts have been supplied by the Belgian Government on this side. One may, however, entirely disregard these internal sales operations, as they do not represent the gold necessary to purchase foodstuffs, which will now be a rising amount of from £1,000,000 to £1,500,000 per month.
2. Under the agreements entered into between this Commission and the German Government there has never been any interference with the foodstuffs introduced by us. We can account to the satisfaction of any auditor for every sack of wheat from the time it leaves Rotterdam until it reaches the Belgian civil consumer, and in fact so rigorous has been our attitude on this matter that the Germans have acceded to our demand for a restitution to us from military stores for amounts equivalent to those consumed by billeted troops and by officers and men eating in public restaurants. Early in our work we undertook negotiations with the Germans to bring to an end the requisitioning of native foodstuffs, and at the end of December we reached an agreement with regard to the Occupation Zone (which comprises the most of Belgium), and since that date there have been no requisitions of native food whatever in that zone with the exceptions of one or two minor instances which were corrected upon our complaint. During my recent visit to Berlin I made arrangements for the extension of this agreement to cover, so far as practicable from a military point of view, the "operation" zone, which comprises the country westward of Ghent; and in any event, we are sending but little foodstuffs into that territory.
3. The question as to whether the Germans would themselves out of their own provisions feed the people of Belgium is one upon which I am, from the result of my observations and discussions during my recent visit to Berlin, perfectly clear and confirmed. I attach hereto a memorandum expressing the German official view of this question. I put it forward without comment as to its proper character but only as showing the feeling which permeates the entire German official mind on this question; and with this, to them, moral justification of their attitude, it seems to me hopeless to expect this service.
Of more importance than this, however, is the fact that Germany is already short of food supplies and the Germans high and low emphatically state that they will not starve their own people in order to feed the enemy population.
4. I cannot too strongly affirm that unless foodstuffs are introduced into Belgium from foreign sources, the decimation of this population will begin within thirty days. Already the population is restive enough and is being held in check by the influence of the communal authorities and members of these committees through their insistence that the food supply will stop instantly there is any disorder in the country. Futile as it might be, such disorder will certainly arise and long before a famine has decimated the people of Belgium; and the women and children will have been slaughtered as the result of the futile outbreaks of violence.
5. The British people entered upon this the greatest war of their history for the sole purpose of maintaining the Belgian people and their national integrity. It would be a cynical thing if the land of Belgium were discovered at the completion of this task to be but an empty husk! Compared to the cost, either from a military or a financial point of view, it is not worth taking the risk that this should happen.
This cost from a military point of view can be measured in the days by which this war will be extended, because the monetary outlay of supplying food to these people is negligible beside the vast sums otherwise involved; the extension of the war through the importation from abroad to the Belgian civil population of 70,000 to 80,000 tons of breadstuff per month can amount to a lengthening of this conflict but by a few days, even assuming that the Germans would supply this bread. From an economic point of view the war will be won not by compelling the Germans to give up 6 per cent of their breadstuffs to the Belgians, but by the pressure on the other 94 per cent (that being about the ratio between the respective consumers). On the other side of the balance sheet, the Belgians are on strike; their attitude keeps a considerable number of Germans off the fighting line; their passive resistance in refusing to work arsenals and machine-shops and railways is a service to the Allies which probably accounts, when interpreted into days, to something greater than the other side of the ledger will show. Assuming that the Germans should in the last resort change their minds and feed the desperate and starving population, they certainly would only do so upon receiving in return the services of this population. Nothing can alter .the fact that these people---your allies---will starve or be slaughtered in thousands unless support is given; and to my mind no pleas based on military exigency can divest any of the belligerents of the moral responsibility for which they will be held responsible in history as the result of such a tragedy.
6. In the matter of public sentiment in the neutral world, I can only speak for my own country. In the ordinary course it views European struggles with a practical evenly divided opinion; but in this struggle the English people have won the undoubted sympathy of 95 per cent of my countrymen, because of Belgium, and their belief that the English people are fighting for the restoration of the liberties of this people. My countrymen, greatly affected by the situation of this civil population, have come forward and continue to come forward with a generosity unprecedented in the history of relief work; and I cannot too strongly emphasize the fact that should this relief work fail to receive the sympathy and support of the English people, it would have a most serious bearing on the whole attitude of public sentiment in the United States.
7. It is not, however, at all on the above grounds that I plead the cause of the Belgian people, men, women, and children; it is on the ground of broad humanity, for which the British people have ever stood, even at their own cost; and this---one of the most critical occasions in the history of your people---is one in which we are certain there will be no failure in their magnanimity.
(Signed) HERBERT HOOVER
DOCUMENT NO. 147
by HOOVER, of a conversation with LLOYD GEORGE and VAN DE VYVERE, in which Lloyd George announced the decision of the British Government to furnish a budgetary allowance to the Belgian Government for relief
LONDON, 18 February 1915
Had a meeting with Mr. Lloyd George at the Treasury together with Mr. Van de Vyvere and Colonel Hunsiker. Mr. Lloyd George informed us that the British Government had decided to recommend to the French Government a budgetary allowance for the Belgian Government which included £1,000,000 per month for "Mr. Hoover's fund," but that out of this £1,000,000 per month the salaries of the railway employees in Belgium must be paid. After some discussion between Mr. Van de Vyvere and Mr. Lloyd George I gathered that the subsidy would be fixed until the end of June.
I asked Mr. Lloyd George if he had received my memorandum of the previous day and if it was of the character which he desired. He said that it was perfect except in one particular, i.e., that military observations from laymen always infuriated military men and that he had therefore used the document in the Cabinet meeting and presented to them all the points except those of military order. I told him that their decision had taken a load off our hearts, and he replied: "You have made a good fight and deserve to win out."
4. Income and Expenditures. March 1915-March 1917
In addition to its benevolent resources the Commission in the first four months of its existence, i.e., to February 1915, secured £3,600,000 in various ways. This sum included the original £100,000 granted by the British Government in November 1914 and £600,000 advanced by Belgian bankers out of funds held abroad by them. The advances came from the Belgian Government at Havre in December 1914 to February 1915. The successful outcome of Hoover's negotiations for a formal arrangement of regular monthly subsidies resulted in a monthly income to the Commission of Frs. 12,500,000 from the French Treasury and £500,000 from the British Treasury beginning with March 1915, both as loans to the Belgian Government for relief in Belgium. As is described in chapter vi the Commission extended its operations to include Northern France as soon as finances were arranged in April 1915. For this purpose the Commission secured Frs. 25,000,000 in April 1915 and Frs. 12,500,000 each month beginning with May. These sums were advanced out of a sum set aside by the French Treasury and were paid over to the C.R.B. by the Belgian Treasury. Beginning with March 1915, therefore, the Commission received monthly subsidies of the equivalent of approximately $5,000,000 and $2,500,000 for Belgian and French relief respectively, but with no guarantee that these advances would extend beyond June 1915, the beginning of the new harvest. For a few months at any rate the Commission was assured of a substantial portion of its financial requirements. On the other hand, charitable collections so generous in the first few months were now comparatively small and the exchange transactions fell far below expectations. The result was that the Commission still found it impossible in the spring and summer of 1915 to meet the increasing needs of the Belgians. The first step, however, was to secure the continuance of subsidies, inadequate though they were. Hoover's successful negotiations with the Germans for the protection of the harvests as described in chapter viii were responsible for the continuance of subsidies from June onwards. Early in the spring of 1915 he proposed a plan of revival of industry in Belgium which among other benefits was designed to make the Commission in part self-supporting. These negotiations as described in chapter ix were difficult, prolonged, and finally unsuccessful.
During all of 1915 and into 1916 the Commission continued to plead its poverty. In September 1915 the monthly subsidy for French relief was increased to Frs. 20,000,000, i.e., about $3,500,000; but government support for the Belgian program remained at the $5,000,000 set in March 1915 until late in the fall of 1916. This was due to the attitude of the Germans, their attempts to control the relief distribution organization in Belgium, and the counter demands of the Allies for more inclusive guarantees regarding Belgian native produce.(97) The reorganization and strengthening of its Department of Inspection and Control(98) went a long way toward softening the Allies' attitude toward the Commission. In November 1916 the French and British increased the monthly subsidies to Frs. 18,750,000 and £750,000 for Belgium, and in September 1916 the French increased the subsidy for Northern France to Frs. 35,000,000. For the winter of 1916-17 the C.R.B., therefore, received each month from the Allies the equivalent of about $7,000,000 for Belgium and $6,000,000 for Northern France.
DOCUMENT NO. 148
HOOVER TO MINISTER HYMANS, asserting need of additional subsidies if relief is to be continued on present scale
LONDON, 24 August 1916
His Excellency Paul Humans
The Belgian Legation, London
DEAR MR. HYMANS:
As I told you a few days ago, we have been endeavoring to secure that Mr. Francqui should come to England to take up with us the whole question of future finance for the Relief. As I have had no word as to whether he is coming it is imperative that I raise the question without further delay.
The position is simply that the realized value of the present subsidy of the Belgian Government is £950,000 a month, whereas, with the extraordinary rise in food prices the past few months, our authorized import program is going to cost over £1,700,000 per month; and in addition to this the Belgian people, as you know, are in need of and are asking for an additional expansion in imports which will cost a further £300,000 per month. In other words, we are in imperative need of a secured income of £2,000,000 per month, or the doubling of our present subsidy. The income from charity is erratic and uncertain. After the fall elections we may perhaps, by increase of our American receipts, reach a total of say £100,000 a month; and our commercial exchange brings us in £25,000 to £30,000 per month, the whole of which is simply a margin of security.
The following table shows the present cost of the program permitted by the Allied Governments:
|Commodity||Quarterly quantities authorized by Allied Governments (Tons)||Cost per ton (Belgium)||Total cost per quarter|
|Beans and peas||9,000a||30||270,000|
Cost per month
The following table shows the total cost of our deliveries into Belgium during the quarter ending July 25th:
|Commodity||Quarterly quantities authorized by Allied Governments (Tons)||Quantity delivered (Tons)||Expenditures|
|Peas and beans||9,000a||2,615||80,804|
Cost per month
It will be seen from this table that we did not deliver the full program in some particulars during this quarter, but with the shipping which we now have we shall, during the third quarter of the year, be able to deliver practically the whole program, and we hope to continue it.
I may mention that the rise which has taken place in the cost of wheat during the last few weeks, due to the shortage in the American harvest, has increased the cost of the Belgian program by no less than £270,000 for this item alone, and the rise in the price of wheat has caused a rise to some extent in all subsidiary cereals. We shall be able to continue the program only until the end of September, and we are able to do this simply by virtue of under-deliveries owing to short tonnage during the past winter, during which period we were able to save something out of our income.
I do not at the present moment raise any question as to ways and means with regard to finance, as I think this matter should be first considered by the Belgian Government, except that I must point out the extreme urgency of the matter.
(Signed) HERBERT HOOVER
DOCUMENT NO. 149
BRITISH FOREIGN OFFICE TO HOOVER, stating approval of increase in subsidy for Belgian relief to £1,500,000 monthly
FOREIGN OFFICE, LONDON
27 October 1916
C. Hoover, Esq., London
I am now able to inform you that the Cabinet have decided to approve an increase in the subsidy for Belgian relief to £1,500,000(99) per month.
Yours very truly
(Signed) A. W. LIDDERDALE
DOCUMENT NO. 150
GREY TO PAGE AND MERRY DEL VAL, declaring that the increased subsidy is conditioned on the participation of the C.R.B. in both the guarantees for the protection of and methods of control of Belgian relief activities
FOREIGN OFFICE, LONDON
7 November 1916
MY DEAR AMBASSADOR:
1. As Your Excellency is aware, the question of an increase in the subsidy granted by the Allied Governments to the Commission for Relief in Belgium through the Belgian Government has recently been under consideration and His Majesty's Government have agreed to this increase. In connection with this question, however, His Majesty's Government have had carefully to consider the question of the disposal in Belgium of the moneys arising from the sale of foodstuffs there, and they have only decided to approve the continuance of the subsidy and its increase to a higher figure subject to the following condition:
"That the profits of any sale in occupied territory of foodstuffs bought by the Commission for Relief in Belgium shall not be appropriated to bodies or organizations in such territory which are not covered by the guarantees given by the German Government to the Commission for Relief in Belgium and accepted by His Majesty's Government as the basis for the continuance of the Commission's work."
2. This condition is one to which His Majesty's Government attach the greatest importance, and they desire that all the appropriations made by the Relief Commission in occupied territory should be narrowly scrutinised with a view to ensure that the guarantees of the German Government do, in fact, apply to them in particular. It is hardly necessary to point out that it is an essential point in these guarantees that they are given to the Commission for Relief in Belgium, a neutral body whose independent position enables it to enter into definite contractual relations with the belligerent Governments, and not merely to the Comité National or to other bodies which do not enjoy a similar independence. Consequently, no object or organisation can be regarded as properly protected by the guarantees unless the neutral Commission is a party to all agreements and regulations affecting such object or organisation and is also a party to its management and control.
Believe me, My dear Ambassador,
(Signed) E. GREY
His Excellency the Honorable W. H. Page
&C., &c., &c.
(Identical letter sent to H. E. Señor Don Alfonso Merry del Val]
DOCUMENT NO. 151
POLAND TO VAN DE VYVERE, respecting the financial difficulties of the C.R.B. and the causes
LONDON, 27 January 1917
His Excellency Monsieur A. Van de Vyvere, Havre
I beg to acknowledge receipt of your letter of January 23d.
As you anticipated, we have received the sum of Frs. 12,500,000 of the French share of the January subsidy on the old basis.
We note that you hope to adjust the question of the increased subvention on the French account for the months of November, December, and January, and that against this sum you expect the return of the advance of the sum amounting to approximately Frs. 10,000,000. Within the next few days I expect to forward you a statement of the serious financial situation which is confronting the Commission and the necessity for the immediate increase of the funds available for expenditure by the Commission monthly to approximately £700,000, or, alternatively, the immediate reduction in the Belgian program of imports of something over one-third.
The above situation is the result, first, of the sum necessary to pay for the increased program which was approved, effective in October, not having been provided; and, second, because of the startling increase in the cost of all food products within the last few months.
With assurances of the highest consideration, I beg to remain,
(Signed) W. B. POLAND,
DOCUMENT NO. 152
Letter and statement,
POLAND TO PERCY, stating that monthly subsidies must be increased by one million pounds sterling or the import program be reduced by two-fifths
LONDON, 29 January 1917
Lord Eustace Percy
Foreign Office, London
DEAR LORD EUSTACE:
I beg to hand you a statement of the financial situation of the Commission for Relief in Belgium as of the 25th January 1917, showing, on the basis of the present approved program, the monthly deficit between the cost of imports into Belgium and our average income.
You will see that decision must be made immediately between two alternatives:
a) Either the monthly subventions must be increased by about £1,000,000, or
b) We must immediately reduce the value of our imports into Belgium approximately two-fifths.
This decision must rest with the Allied Governments---we realize how momentous it will be for the people of Belgium.
We should not be carrying out our responsibilities if we failed to give you our judgment on the present food situation of your Allies. Attached hereto is a table showing the per capita per day ration to the whole population, based on the present authorized monthly program of imports and the native food supply.
You will see that this provides for the whole population:
|Per capita per day||Grams total||Grams proteins||Grams fats||Grams carbohy-drates||Utilized calories|
It is most difficult to obtain satisfactory figures as to the total native food supplies, but our estimate for Belgium cannot be seriously in error, as wheat, on which we have reliable data, forms about half of the value of the native products.
The ration of the British Isles is estimated at not less than 4,000 calories per capita per day, and the minimum upon which a population may maintain its physical standard under a condition of light work, is generally agreed to be not less than 2,000 calories.
The grave responsibility confronting the Allied Governments, therefore, should it be decided to reduce our imports 40 per cent, will be apparent, as it would leave these people with a per capita ration of but about 1,400 calories per day.
With all the earnestness which over two years of service may entitle us to express, we beg, on behalf of the Belgian people, that this alternative be not chosen.
On the contrary, in accord with our chairman, I ask that the subsidies of the Commission be sufficiently increased to allow us to continue our present imports, based on the minimum program which you have approved.
(Signed) W. B. POLAND
A Statement of the Commission for Relief in Belgium, London, of the current monthly income and requirements as of the 25th January 1917, based on the authorized program, showing the necessity for either an increase of subsidies or a radical reduction of the food imports into Belgium
On the 7th October 1916 Mr. Hoover, Chairman of the Commission, forwarded to the Foreign Office a report of the food position in Belgium, with recommendations as to the absolute minimum food program which must be provided. This included an estimate of the approximate monthly cost. A request was made that the additional monthly quantities specified should be approved for importation and that there should be provided the additional funds necessary to cover the difference between the monthly income at that time and the monthly cost of the new program.
At that time our monthly income for Belgium was about 1,000,000. The total cost of the increased program at prices then existing was £2,070,000, with the prospect of larger charitable donations; it was estimated that an increase of subsidies of £900,000 was necessary.
On October 25th we were advised by Sir Eyre Crowe that the recommended increased program had been approved.
On October 30th notification was received that the British Cabinet had approved increasing the subsidy to the Commission to a total of £1,500,000. At the existing rate of commercial exchange this involved an effective increase in subsidy of £467,000 in place of the £900,000 which had been asked for. This therefore contemplated necessarily a monthly deficit on the basis of the approved program of £433,000.
(It is to be noted in this connection that we have for the months of November, December, and January, received the British portion of the increased subsidy mentioned in the communication of October 30th, but up to the present time we have not received the increased portion of the subsidy from French sources.)
I attach a table which shows the conditions in September (before the new program went into effect) as to quantities, delivery prices, and total cost; the increase in cost of the September program if purchased at January prices; the increase of unit prices, etc.; and the cost of the present authorized program at present prices.
From this you will see that the unit costs of commodities purchased for delivery in September, compared with the current prices as of January 25th, show an increase of 33% per cent.
Had the September program (before the authorized increase was made) been purchased at the present January 25th prices, it would have cost £2,025,000, or an increase over the September cost of delivery of £510,000.
It will be seen that this January program, upon which our present imports are based, at the prices now obtaining, requires, a monthly outlay of £2,516,000.
Our monthly income is now approximately as follows:
|Received through the Belgian Government:|
|.....a) From British sources||£750,000|
|.....b) From French sources (increased ........subvention of October 30th assumed in ........force)||675,000|
|Received from Commercial Exchange, public subscriptions, etc.||100,000|
|Cost of January program||£2,515,000|
The Commission has been carrying the monthly deficit by drawing upon its working capital in the hope that the necessary increase in subsidy could be arranged. We have depleted this working capital to such a point that our whole credit and operations will be endangered if this depletion is carried further.
One of two alternatives is immediately before us: either our subsidies must be increased, through the proceeds of the proposed relief loan or otherwise, approximately £1,000,000 beyond the provision of the letter of the Foreign Office of October 30th, 1916, or we must cut down our program of imports into Belgium sufficiently to reduce the monthly cost by two-fifths.
(Signed) W. B. POLAND
Fig. 5a. Hoover's Memoranda, 11-12 February 1915, of conferences with German officials in Brussels. (see page 243).
Fig. 5b. Hoover's Memoranda, 11-12 February 1915, of conferences with German officials in Brussels. (see page 243).
DOCUMENT NO. 153
Extract of letter,
POLAND TO HOOVER, concerning financial position and referring to steps taken to increase subsidies
LONDON, 2 March 1917
H. C. Hoover, Esq.
MY DEAR HOOVER:
Finances. I attach herewith a statement showing the approximate financial situation to date. Lord Eustace Percy is now having an interview with Mr. Bonar Law concerning increases and the provisions necessary. I have told him that if they will give us bank guarantees in the United Kingdom for £1,200,000 we shall be able to go on for another month, during which period increases in our subsidies may be arranged. Mr. Chevrillon fears that from no lack of desire but from necessity it will be most difficult to obtain increases on the part of the French Government. Lord Eustace asked whether there was any hope of the United States Government offering to assume part of the cost of ravitaillement. I told him that as Congress adjourns within a couple of days I should think not, but in the event of an extra session I thought there would be a good chance of favorable action, with you in the country to urge it, taking the place for the time of a bond issue.
I was most anxious to have the benefit of Mr. Chevrillon's counsel during this critical time, and he was good enough to come over last Monday. I hope he will remain for some time.
(Signed) W. B. POLAND
DOCUMENT NO. 154
POLAND TO PERCY, stating financial position for April 1917, and new subsidies required
LONDON, 28 March 1917
Lord Eustace Percy
The Foreign Office, London
DEAR LORD EUSTACE:
On the 10th February I sent you a statement of the financial situation of the Commission referred to the 1st of February. After the break of diplomatic relations the conditions rapidly changed and under date February 26th I sent you a memorandum showing position for the month of March.
I send you now a similar memorandum as of March 27th, for the month of April 1917.
You will note that there is little change from the situation for March. In order to protect our commitments in London, Rotterdam, Paris, and Scandinavia subsequent to April 30th, to the extent of 40 per cent, the least amount consistent with sound business methods, we still need a confirmed bank credit with the Banque Belge, of £1,325,000.
The above makes no provision for replacing the supplies which we have failed to deliver during the last two months because of the interruption of the service by the Germans. The reason that our cash resources have remained practically in statu quo since February 1st is of course due to the fact that we have not been able to send in some 180,000 tons of food.
(Signed) W. B. POLAND
Above statement forwarded to:
Monsieur Hymans, Belgian Minister
Monsieur Carton de Wiart
5. The Relief Loan Plan. October 1916-February 1917
Without relaxing his pressure on the Allied Governments to increase subventions for the Commission, Hoover in October 1916 revived the relief loan(100) proposal first brought forward in the spring of 1915. As the following documents show, the negotiations covering this new effort to break the financial deadlock made slow progress and were abandoned in February 1917 when the Germans launched their unrestricted U-boat campaign. The question of finances for relief was overshadowed by the larger question of whether the Commission could continue at all.(101)
DOCUMENT NO. 155
HOOVER TO HONNOLD (NEW YORK), on need of funds and possibilities of relief loan in the United States
LONDON, 5 October 1916
RELIEF COMMISSION, NEW YORK
Financial position of relief particularly Northern France has become extremely grave. Would like have early telegraphic views our New York colleagues on probable success issue short term notes for relief purposes Northern France. An American Security Company to be created which would issue three-year 5 per cent notes at par secured upon municipal and communal obligations of Northern communes, which would be obtained in same manner as we now operate. Margin of these obligations could be deposited from those we already have in hand. French Government to guarantee entire issue in addition. Whole proceeds to be used by Commission feed occupied French civilians. Loan could be formulated with every sentimental emphasis. Seems to us widespread sympathy for French people humanitarian character of loan would enlist wide clientele not available war loans and proposal of these people borrow money with which to live instead of charity would strike imagination American people. Provision dealers should also help. If we could raise about hundred million dollars for Northern France spread over twelve months and if expenditure under the trust were made retrospective to September 1st, could indirectly greatly assist Belgian position as we could transfer our current income since September 1 to Belgian purposes. Seems to us all our committees could be used to push issue and we earnestly hope for your most valuable consideration and advice at earliest moment.
DOCUMENT NO. 156
HONNOLD TO HOOVER, reporting likelihood of failure of relief loan because of other European loans about to be offered in American market
NEW YORK, 8 October 1916
Proposition receiving earnest consideration notwithstanding your suggestion comes at most inopportune time inasmuch as market is flooded with foreign offerings and negotiations for further large loans are pending. However, it may be possible to meet in some degree your wishes, but if so it will probably be for smaller amount and on less favorable terms. We will not remit our efforts and will keep you posted but our feeling is that American absorption of European loans will soon reach point of saturation even when a particularly strong element of sympathy enters. Suggest you confer with H. P. Davison, who is now in London.
DOCUMENT NO. 157
HOOVER TO HONNOLD, urging the loan scheme and reporting offers of co-operation of bankers
LONDON, 15 October 1916
RELIEF COMMISSION, NEW YORK
It is our idea that a loan to be called the American Relief Commission Loan should on sentimental and national grounds receive the support of the whole American banking community, who should donate their services free even to include underwriting if it should be considered desirable to underwrite. In this form it should not conflict with any other finance and would represent a truly American backing to America's greatest philanthropic effort. Have seen Morgan and Davison, both of whom evince great interest. They have discussed matter with Government and will discuss matter with you on Davison's return.
DOCUMENT NO. 158
Extract of telegram,
HOOVER TO CHEVRILLON, reporting agreement of American bankers to undertake the relief loan without charge
LONDON, 26 December 1916
Have today received following telegram from New York:
"Bankers ready to act on loan soon as formal request received. They reiterate transaction will be undertaken without expense to Relief, this being their Christmas expression of appreciation to you."
It seems to me if British and French Governments in agreement, that the Belgian Government should be approached as soon as possible. It seems to me desirable that the matter should be closed up as quickly as possible. The bankers include Morgans, Guaranty Trust, and all other important groups, who are acting entirely out of good feeling; and I would suggest that Treasury here should be authorized by both French and Belgian Governments to settle whole details with Morgan's firm in London, unless your side can send someone here to fix matter up definitely. I am anxious to go to America at the earliest moment to assist in this issue from a sentimental point of view and to attend to other important matters concerning the relief. I have a request to come to Washington to discuss certain matters and am wanted there by January 15th.
DOCUMENT NO. 159
HOOVER TO VAN DE VYVERE, describing the status of relief loan negotiations and requesting him to intervene with the French and British Governments to advance the matter
LONDON, 9 January 1917
His Excellency, Monsieur A. Van de Vyvere
Minister of Finance, Havre
DEAR MR. VAN DE VYVERE:
Some two months ago we were asked by the French officials to undertake negotiations for a loan in America for the support of the relief in Northern France, to be assured upon municipal obligations from that territory, with the guarantee of the French Government. A great deal of negotiation has taken place between myself and the American bankers, as represented by a committee in New York which embraces practically the whole of the banking strength of the United States. Finally, on the 24th December I was advised by them that they considered that to make a successful loan for relief purposes it would have to be issued on behalf of the Belgian, French, and British Governments jointly. They considered that such a loan could be made without security and probably for $150,000,000 and as a contribution toward the relief; and as a compliment personal to myself, they offered to undertake the issue of the loan without any charge whatever. It was understood that the loan would be for a short time, but neither the rate of interest nor the period has yet been suggested.
I laid the position immediately before the French Government, suggesting that they should take the matter up with yourselves and the British Government, and I asked Mr. Francqui and Mr. Sengier to inform you fully of the position, and they inform me that you are fully agreeable in principle. I had so confidently expected that the matter would have been brought officially to your attention that I had taken passage on the steamer leaving last Saturday, with the anticipation that matters would be so advanced that I could proceed to New York, it being the unanimous desire of the American bankers that I should be there to formulate the propaganda in the matter.
It appears that the French Government has taken the matter up with the British Government, but some difference of opinion apparently at the same time exists between them as to the relation of this loan to other arrangements between the French and British governments, and so the matter is dragging very badly.
I am rather anxious at the present moment, as the opportunity has been created and the high level of sentiment which exists at the present moment toward Belgium in the United States should be taken advantage of without further delay; and furthermore as Mr. Sengier informs me you are despaired of further increasing our subsidies beyond £1,500,000 a month. You know the cost of the present program is close on £2,100,000 and unless we can see some daylight I see no alternative but to reduce the food supply by the end of this month.
This loan would be a solution to the situation, and I am wondering whether or not you could not intervene to advance the matter.
The American groups ask that they should be formally requested by the Allied Governments to undertake this loan, and they have appointed Messrs. Morgan, Grenfell & Co. to negotiate on behalf of all of them, and these formalities are necessary to get the matter in motion. The loan is to be issued with the endorsement of the Commission for Relief, to be undertaken by the American bankers without charge, and to appeal to that section of the American public which will not subscribe for war loans. It is therefore necessary to agree on a formula as to the purpose and method of spending the money; and I propose the following, which meets the acceptance of our New York colleagues:
"The object of the loan is to provide continued financial support to the Commission for Relief in Belgium, for the relief of the civil population in the occupied territories of Belgium and Northern France. The proceeds of the loan are to be deposited with the bankers of the Governments and retained by them solely for the purposes set out below, and are to be drawn upon by the Commission in monthly sums sufficient to cover the monthly food imports authorized by the Allied Governments. The proceeds of the loan are in the first instance to be expended for the ravitaillement of the civil population and the support of the destitute in the occupied territories by and under the direction of the Commission for Relief in Belgium, and the Commission shall continue as heretofore to be administered by a neutral Chairman appointed with the approval of the American Ambassadors and Ministers in Europe and by Directors appointed by the Chairman. If peace should intervene leaving an unexpended balance, such balance shall be released to the French and Belgian Governments to be expended upon the economic rehabilitations of the civil population. The loan shall be called the Relief Commission Loan."
The interrelations between the three Governments are of course not a matter which concerns the bankers or myself. I would suggest to you, however, that the actual cost of the relief as between the two countries is 40 per cent to the French and 60 per cent to the Belgians. This may form for you an idea as to the relative basis of repayment. The formula which I have set out above, you will see, provides for the expenditure of the loan on the basis of the commodities authorized, which would enable us to take whatever is necessary with rising and falling prices.
There appear to me to be many advantages in doing this operation, and doing it quickly, for, aside from the above objects, it is an effective guarantee of the continuity of the Relief, as it would be difficult to terminate such a relation set up between the American people and the Belgian people. It also would appear to me to be an advantage to the credit of the Belgian Government to be a party to a successful loan. Furthermore, the loan, if successful, will enable us to stop public appeals for charity and substitute the dignity of a well credited borrower therefor.
I am very anxious to get off for America on Saturday the 13th, at least, leaving the position such that it may be signed up and ordered by telegraph by the time I should arrive in New York, as my colleagues are very insistent that we must strike the iron while it is hot.
(Signed) HERBERT HOOVER
DOCUMENT NO. 160
POLAND TO HOOVER (NEW YORK), on progress of Allied approval of loan
LONDON, 20 January 1917
RELIEF COMMISSION, NEW YORK
Accord between governments regarding Commission loan progressing, but no further action likely until time appears to bankers favorable for launching a new loan. In view of uncertainty it appears to us advisable approach governments here concerning immediate increase subsidies. Do you approve?
DOCUMENT NO. 161
POLAND TO HOOVER, reporting failure of British Government to act on matter of the relief loan
LONDON, 11 February 1917
HOOVER, NEW YORK Confidential
So far find it impossible obtain any definite information from Government here as to loan. Are continually put off. Am again representing imperative that definite advice be given us at once. Are you in favor of issuing ultimatum that unless definite statement of some sort be made to us immediately the Relief will definitely and permanently withdraw from any connection with loan?
Expect forward New York $9,500,000 from income February, instead $7,000,000, and in addition am asking British Government forward $5,700,000 to fully protect New York liabilities and in addition to establish British guaranteed confirmed credit with Banque Belge, London, for £1,370,000 to cover overdrafts and partially cover European liabilities.
DOCUMENT NO. 162
HOOVER TO POLAND, directing that loan matter not be pushed until issues raised by the unrestricted submarine campaign be settled
NEW YORK, 14 February 1917
RELIEF COMMISSION, LONDON
Please allow loan matter to lie entirely quiescent until we have solved our two great problems of a shipping lane to Rotterdam and the re-establishment of a neutral body to take over the distribution. In any event it would be impossible for us to put out the loan until the relief has been re-established. If the relief is re-established, the bankers here are confident of their ability to issue the loan without difficulty. In the meantime we will be glad to receive all the cash you can forward to this end.
6. The United States Government and Relief Finance. April 1917-March 1919
The severance of diplomatic relations with Germany by the United States and the subsequent declaration of war had important consequences for the Commission. The first effects concerned the functions of the C.R.B. in Belgium. These are discussed in chapter xii. Of only less importance were the effects in financial arrangements. Since 1914 the American Government had given diplomatic support to the Commission abroad and official backing in the United States as the only agency authorized to carry charitable aid to the Belgians through the blockade. None of the Commission's funds, however, had come from the United States Treasury, but with America in the war the Commission turned to Washington for financial support. One of the first of America's war measures was the establishment of large credits in favor of the Allies, whose enormous war expenditures had brought them to a desperate financial situation. The Commission saw to it that in connection with these war credits there was specific provision for Belgian and French relief. Thus there were relief loans to Belgium and France out of which $7,500,000 and $5,000,000 monthly were to be advanced to the Commission for its program in Belgium and Northern France. Up to the time these credits became available the British and French treasuries had turned over to the Commission approximately $270,000,000.
DOCUMENT NO. 163
C.R.B. NEW YORK TO HOOVER,(102) advising probable Congressional action respecting Allied credits
NEW YORK, 26 March 1917
RELIEF COMMISSION, LONDON
Inform Hoover with minimum delay as follows:
It is not improbable President in message to Congress April 2d will recommend large credit to Allies, possibly billion dollars. If this is done, think may be able to have him specifically recommend that certain amount, say one to two hundred million be earmarked for Belgian relief, also possibly recommend that, say two million be specially voted as gift to cover Commission's expenses. Please cable earliest possible your views, also whether Belgian Government would welcome such a loan. If we are to proceed with the matter, please send suitable cables urging same which can be used in lobbying and have similar cables sent from Belgian Government.
DOCUMENT NO. 164
PRESIDENT'S ADVISORY COMMITTEE OF THE C.R.B.(103) TO PRESIDENT WILSON, requesting that part of the proposed credit to the Allies be allocated for relief work in Belgium and France
29 March 1917
To the President
The White House Washington, D.C.
Your Committee, appointed to co-operate with the Commission for Relief in Belgium, have the honor to submit for your consideration the following suggestions:
First: There is a prevailing report current in the press of the country that in the event of the United States entering into the war with Germany a credit of large magnitude will be created for the benefit of some or all of the Allied Governments. We suggest that in case this be done a portion of the credit so offered be specifically allocated by previous agreement with the borrowers for expenditure by our Commission in the relief work now carried on in the occupied areas of Belgium and Northern France. Such a course would have, as it seems to us, several advantages: It would inure directly to the benefit of the Allies because to that extent it would relieve them of the monthly payments they are themselves making for the same purpose; at the same time it would give to this country an appropriate share in the responsibility and burden of financing a work which has been carried on, though unofficially, in the name of the United States.
It is not our opinion or desire that the advances thus made should be permitted to replace or diminish private relief. If the contemplated advance, as we assume it may be, is made in a form to carry with it financial assistance to the recipient on terms more beneficial than an current in the market, the corresponding burden to this country thus assumed might be distributed to private subscribers, who would then be afforded an opportunity to help pro tanto in the support of Belgium. In any event we propose to continue our efforts to stimulate charitable gifts.
The following particulars as to our needs and resources are submitted for your guidance:
|The foodstuffs we are permitted to deliver into Belgium and Northern France call for a monthly expenditure (mainly in American purchases) of about||$18,000,000|
|Our monthly receipts from the Governments of Great Britain and France for account of Belgium are||$7,000,000|
|Our monthly receipts from the Government of France for account of Northern France are||6,000,000||13,000,000|
|Leaving to be provided through benevolence||$ 5,000,000|
As a matter of fact our receipts from benevolence have averaged less than $1,000,000 per month, America's contributions averaging only about $300,000 per month; consequently, we have never been able, and are not now able, to provide, for these 10,000,000 people even the meager ration authorized by the Allied Governments.
Our second suggestion is that a recommendation should be made by the President to Congress for an appropriation of $2,000,000 as a gift to cover the working expenses of the Commission from its inception to the end of the current year. This represents less than five-eighths of one per cent of the moneys handled by the Commission, a fact of striking significance, reflecting, as it does, not only the ability with which its affairs have been administered, but also the value of the voluntary services rendered by those responsible. Up to the present such expenses have been met out of the funds provided by the Allied Governments. This has always been a matter of chagrin to Mr. Hoover and the members of the Commission, and it would lift a burden from their hearts if they could feel that the services they have administered in the name of America and for which they have been overwhelmed with expressions of gratitude, has indeed been rendered by America free of expense to the recipients.
(Signed) A. J. HEMPHILL
Chairman of Advisory Committee(104)
DOCUMENT NO. 165
HONNOLD TO HOOVER, stating probable manner in which Allied credits will be passed and asking Hoover to Secure assurances from Belgian and French Governments that they desire credits for the Commission
LONDON, 15 April 1917
RELIEF COMMISSION, LONDON
Credit for Allies will probably pass House today in blanket form and Senate before middle next week. Allocation will be left to President, who anxious to provide specifically for Commission say one year's requirements or one hundred fifty millions. Cannot do this, however, unless you assure us that governments concerned so desire. Without such assurances our requirements will be merged in general credits to governments concerned and Commission will continue to draw its support from them as in the past. Very anxious to have assurance asked for before middle next week as seeing McAdoo with Bertron soon as bill passed. If you are able to arrange have you any suggestions as to how money should be paid to us and whether directly or through French and Belgian financial agents.
Think you will agree that it is in interest of governments concerned to have Commission's needs specifically allocated, since apart from other considerations it is not improbable that sooner or later the resulting loans will be cancelled. Furthermore additional and perhaps more substantial assistance will be more certainly assured for the future if America be allowed to commit herself now in a way to our support. Since present bill provides credits only for Europe, it will be necessary to pass special bill to cover expenses. This is agreed to in principle, but am asked to submit substantiating figures when in Washington next week. Kindly cable soon as possible more or less itemized statement past expenditure and estimate for future.
DOCUMENT NO. 166
DE FLEURIAU TO HOOVER, quoting approval of French Government to American credits for the Commission
LONDON, 16 April 1917
DEAR MR. HOOVER:
I have communicated to Mr. Ribot the substance of your letter of yesterday concerning the kind intention of the President Wilson to provide for the financial needs of the Commission for Relief if the interested Governments agreed to that proposal. I am now authorized to express to you the agreement of the French Government and I think advisable to quote the terms of the telegram of Mr. Ribot:
"J'approuve en ce qui concerne le Gouvernement français et le ravitaillement des régions françaises envahies l'ouverture de crédits que M. le Président Wilson se propose de faire à la Commission for Relief in Belgium and Northern France, et qui témoigne une fois de plus de la sympathie montrée par les Etats-Unis à cette oeuvre si essentiellement humanitaire. Comme l'a indiqué M. Hoover, dès que la question de principe aura été réglée, nous étudierons de concert les points de détail et d'exécution.
Please excuse the informality of that paper and believe me
(Signed) A. de FLEURIAU
DOCUMENT NO. 167
HOOVER TO C.R.B. (NEW YORK), reporting Belgian suggestion that sufficient of American loan to Allies be allocated to relief to permit discontinuance of benevolent appeals
LONDON, 18 April 1917
RELIEF COMMISSION, NEW YORK
Belgian Government officially state that they would be very grateful if American Government would earmark from proposed forthcoming advances to Allies a sufficient sum to cover the whole cost of relief and it should be sufficiently large to cover the whole of Commission's requirements, thus eliminating external benevolent appeals. They have advised Minister in Washington. Owing to the very necessary restriction in shipping and general food difficulties, we have reduced Belgian and French program to the absolute minimum on which they can subsist by drawing on their resources of cattle, et cetera, and the total cost on the reduced basis will work out at about thirteen million dollars per month. Taking into account cash we have in hand, earmarking 150 million dollars would be sufficient to carry us over twelve months.
DOCUMENT NO. 168
HOOVER TO CONGRESSMAN FLOOD, withdrawing the Commission's request that the Government make special appropriation to cover administration expenses of the Commission in view of the loan of $75,000,000 agreed upon 24 April 1917
WASHINGTON, 19 May 1917
DEAR MR. FLOOD:
I have been thinking about the request which the Commission for Relief in Belgium has made for a special appropriation to cover the expense of the work of the Commission during the last two and one-half years. You are no doubt aware that the Government has agreed on a loan of $75,000,000 to France and Belgium to cover the needs of the Commission for the present.
The idea at the bottom of the original request, which was made before the recent loan was agreed to, was to obtain some Government support of the financial needs of the Commission, and to secure a certain measure of Government connection with an approval of the work to reinforce its position in Europe. Now that the Government has done so much more in recognition of the Relief work by granting. the special loan to cover the needs of the work for the next six months, it seems to me unnecessary for us to ask for any further recognition or aid. As we have been compelled to resell a large quantity of foodstuffs bought but which we were unable to ship due to the suspension of our operations for a period at the outset of the submarine war, we have made a considerable profit on these goods, against which we can debit the Commission's overhead costs, and thus not be forced to take them from the credits established by charitable gifts or subsidies from our Allies.
If this suggestion meets with your approval, I shall be glad to be understood as withdrawing our request for a special appropriation for expense.
Very truly yours
(Signed) HERBERT HOOVER
The first monthly subsidy from the United States Treasury for Belgium became available in May 1917 and for Northern France the following month, and with these advances the customary subventions from Allied sources ceased. This discontinuance of Allied advances caused the Commission a temporary embarrassment, as the American subsidies were available only for expenditure in the United States, while the Commission had European disbursements for freights and purchases amounting to around $5,000,000 a month. It required some time to reorganize charters and contracts so that the maximum obligations could be liquidated in America, and to arrange for funds for the necessary European expenses. During this period the Commission utilized charitable funds and certain balances which remained from previous Allied subsidies. Moreover, during a few months of 1917 the German U-boat blockade was so tight that the Commission was able to deliver only a small percentage of its program. Cargoes of perishable supplies had to be diverted and sold, and hence during these months the Commission "saved" certain sums because of the interruption in its operations. When the Germans finally agreed to establish a safe lane for relief vessels, the flow of importation began on a somewhat restricted scale but at a cost far in excess of previous months as a result of the rise in freights and the prices of foodstuffs. By October 1917 all the Commission's funds which were free for expenditure in Europe were exhausted.
DOCUMENT NO. 169
FOREIGN OFFICE TO POLAND, asking the C.R.B. to refund the unexpended balance of sums received from British credits
FOREIGN OFFICE, LONDON
5 July 1917
Commission for Relief in Belgium, London
I am directed by Lord Robert Cecil to acknowledge the receipt of your letter of the 21st ultimo, in which you state that the French and British subsidies for April and May have been paid over to the Commission but that the whole amount received has not been expended.
2. I am to observe that sums actually spent after the end of May 1917 would appear to give rise to a claim against the Government of the United States of America. I am therefore to request that you will arrange to refund the unexpended balance, as on the 1st ultimo, of sums which the Commission has received from British credits.
I am, Sir,
Your obedient, humble Servant
(Signed) MAURICE DE BUNSEN
DOCUMENT NO. 170
POLAND TO BRITISH UNDER-SECRETARY OF STATE, pointing out that to refund the unexpended balance as requested would necessitate the liquidation of C.R.B. affairs
LONDON, 13 July 1917
The Under-Secretary of State,
Replying to your letter of the 5th of July in regard to claims against the Government of the United States, the position of the British Government in this matter is not quite clear to me. There is of course no distinction in our accounts between funds received from the British or French Governments for the ravitaillement of Belgium. Our subsidies, as you are aware, have always been made to us through the Belgian Government. It was our understanding merely that the United States Government had agreed to make it possible for the Belgian. Government to place a loan in the United States and had agreed to furnish $45,000,000 at the rate of $7,500,000 per month if necessary for six months in order to provide the Belgian Government with sufficient funds to carry on the ravitaillement in place of the subsidies which had previously been supplied by the British and French Governments. This, however, is a part of the transaction with which we have nothing to do in our accounts and upon which we are only unofficially advised. Our monthly transactions vary from £2,000,000 to £3,000,000, and our contingent liabilities usually are about £8,000,000 to £9,000,000. To obtain the unexpended balances on hand at any time, it would of course be necessary to close our accounts and completely liquidate our affairs, which would require considerable time.
It was our understanding that there was to be no liquidation of the affairs of the C.R.B. but that the regular procedure would be carried on as usual with money supplied to us as usual by the Belgian Government.
Since we are unadvised in regard to this, will it be possible for you to furnish us with the agreements upon which the claim against the United States is based, whereupon we will immediately refer the matter to Washington and endeavor to have it put in order.
(Signed) W. B. POLAND
Director for Europe
DOCUMENT NO. 171
HOOVER TO POLAND, Stating that American Government loans to belligerents must be spent in the United States and urging that British and French Governments continue to finance European purchases of C.R.B.
WASHINGTON, 30 October 1917
COMMISSION FOR RELIEF IN BELGIUM, LONDON
With respect to your various telegrams on expenditures to be made in Europe, we agree it is absolutely vital to continue purchases in Holland and in England. Our only concern is to secure the necessary funds in Europe. There is no reason why European Governments should not renew advances to the Belgian Government for relief purposes. The terms of American loan do not permit remittance of these moneys abroad, and any method as to guarantees or payment to the Wheat Executive are simply evasions of the American law on this subject and we cannot in any particular participate in them. In a broad way the remittance of money to Europe for this purpose would simply mean reduction of funds available for Allied purpose in the United States and in no way assists the general situation. I am asking Mr. Lansing to take the matter up formally with the various governments concerned; in meantime I see no reason why Belgian Government should not itself guarantee Banque Belge the necessary overdraft which you require. We are in entire sympathy with purchase of clothing, but it all comes under the same heading. We are not dealing with a sentimental situation but with a simple war necessity; no one can accuse this Government of failing to take its proper part in the whole war situation and you need have no fears in this direction. An appeal had been made to the President by the King of the Belgians, to which the President has replied that the American Government will give every assistance for expenditures in the United States, but he asks the King of the Belgians to interest himself in securing the provision of the necessary funds from the European governments concerned to carry on European expenditures of Commission.
DOCUMENT NO. 172
ALBERT, KING OF THE BELGIANS, TO PRESIDENT WILSON, urging additional American finance and ships for Belgian relief
18 October 1917
HIS EXCELLENCY MR. WOODROW WILSON,
President of the United States of America, Washington
During more than three years the American Commission for Relief under Mr. Hoover's able leadership has achieved with marked success and under the most trying circumstances the task of supplying the Belgian nation with the bare necessities of life. Moreover, Your Excellency's Government has lately assumed the burden of financing the Commission. Those unmistakable marks of sympathy make me feel confident that whatever the difficulties may be, the United States will never allow their noble work to be jeopardized. However, since several months the imports of foodstuffs have been inadequate and the last reports which reach me from the invaded territory are such that I consider it my duty to make a personal appeal to your intervention. The Belgian population is confronted not only with hardship and suffering but with actual famine; the death rate is steadily increasing. Infantile mortality is appalling. Tuberculosis is spreading and threatening the future of the race. Only by immediate and energetic action can the lives of many of my unhappy people be saved during the impending winter. My Government has put all available ships at the disposal of the Commission and is unable to provide for more. For the additional transports as well as for cargoes and financial means Belgium must rely entirely upon the United States. I do not doubt but your Excellency will give to Mr. Hoover full power to meet the present emergency with adequate measures, and in such conditions we are confident that Mr. Hoover will assure the success of the great task he has nobly assumed in the name of the American nation.
DOCUMENT NO. 173
FRENCH MINISTER OF FINANCE TO FRENCH AMBASSADOR AT LONDON, asking that British Government agree to French and Belgian financing of European expenses of C.R.B.
PARIS, 25 November 1917
TO THE FRENCH AMBASSADOR, LONDON
From the Minister of Finance
I had a conversation on Friday with Mr. Van de Vyvere, Belgian Minister of Finance, on the subject of the credits necessary to enable the C.R.B. to meet its expenses in America and Europe.
1. The monthly credits opened for account of the C.R.B. in the United States are to be increased from 12 1/2 million dollars to 15 million dollars---6 million as France's share and 9 million as Belgium's. The American Government have given their consent to this increase, on the condition that the Belgian and French Governments guarantee to provide for the European expenses of the C.R.B.
2. I gave this guarantee as far as I was concerned, and asked our delegates to notify Washington and make arrangements with the Federal Treasury to increase our monthly contribution from 5 to 6 million dollars. To enable the Belgian Government to give a similar guarantee, which they are willing to do, the adherence of the British Government is indispensable. It has been agreed with Mr. Van de Vyvere that joint action should be taken by the French and Belgian Governments to obtain the consent of the British Government. After you have consulted the Belgian Minister, who is to receive instructions to act in concert with you, I would ask you to state the following proposition:
The French Government will undertake to provide for a third of the monthly expenditures for relief---i.e., the fraction corresponding to the needs of the French population; the other two-thirds---about £1,500,000---to be taken by the Belgian Government from the joint advance made to them by the British and French Governments. It is important to obtain the consent of the British Government to this arrangement.
But the authorization given to the Belgian Government to effect this transaction will only result in distributing the burden of the credits destined for the European expenses of the C.R.B., which expenditures are almost equally divided between England, Holland, and the Scandinavian countries. If the British Treasury is opposed, as I have reason to believe, to the employment of pounds sterling for payments of the two last categories, the only way open to the C.R.B. would be to obtain credit openings in its name in Holland and in the Scandinavian countries. In view of the negotiations which the C.R.B. will enter into, I have agreed to give the French Government's guarantee, and I have every reason to hope that the British Government will give theirs.
At no time since the First Battle of the Marne were the Allies nearer defeat than during the summer and fall of 1917. The German U-boat campaign did enormous damage to shipping on which the Allied cause was so dependent. On land the ambitious Nivelle offensive in April ended in disaster and was followed by mutinies in the French Army. The collapse of Kerensky's final drive in Galicia in July signalized the end of Russia as a military factor in the war. In late October occurred the battle of Caporetto where Italy suffered the worst defeat of the war. Except in finance, which was more important than is often recognized, the weight of American assistance had not begun to be felt.
These months were a correspondingly difficult time for the Commission. In addition to the critical shortage of shipping there was a short crop in America and the further complication of a near breakdown of railroad transportation. The occupied territories of Belgium and Northern France had been on short rations from the first of the year, and the Commission was helpless to augment its importations to relieve the growing distress. There was, in fact, no single problem of finance, of shipping, of supplies, but a general problem of relief in which all these elements were involved. During most of this critical period Hoover was in America organizing the production and conservation of food supplies on which the Allies---and the relief of Belgium and France---depended. In addition to these heavy responsibilities he continued as active Chairman of the C.R.B. and with the shifting of the center of gravity in economic war matters from England to America he continued to conduct the important negotiations concerning these matters.(106)
The United States Government pursued a generous policy toward the relief within the restrictions of the Congressional enactment. At Hoover's request the United States Treasury in November 1917 increased its monthly subventions to $9,000,000 for Belgium and $6,000,000 for Northern France. There was no increase in this amount until November 1918, when the monthly subvention for Belgium was raised to $20,000,000 for rehabilitation. There was no increase in the advances to France, and relief subventions to both were discontinued in March 1919 when relief purchases ceased and the Commission began liquidation.(107)
The following documents deal largely with the successful efforts of W. B. Poland, the European Director of the Commission, to secure the necessary funds from the Allied Treasuries for the Commission's European disbursements. Poland secured, first, certain advances which enabled the Commission to liquidate the overdrafts in London banks which it had been forced to make in order to keep the stream of supplies moving. This matter of European finance---like that of shipping---was put on a more satisfactory basis when, as a result of Poland's energetic representations to the newly formed Allied Supreme War Council, the Entente Powers adopted the principle that Belgian relief was a "war measure" and entitled to equal priority in the matter of finance and ships with other war activities.(108) This arrangement, however, deprived the Commission of some of its independence in Europe, for thereafter its program of ships and of food had to be passed on by the Allied Maritime Transport Council (A.M.T.C.)(109) and the Commission Internationale de Ravitaillement (C.I.R.).(110)
This method of procedure(111) went into effect in January 1918, and from that time on the Commission liquidated its European costs through the British Ministries of Shipping and Food and the Admiralty. Relations with the A.M.T.C. and the C.I.R. were uniformly satisfactory.
DOCUMENT NO. 174
POLAND TO PRIME MINISTER LLOYD GEORGE, asking for a decision from the British Government to guarantee, with France, the European expenses of the C.R.B. to prevent the breakdown of the relief work
LONDON, 21 December 1917
To the Right Honorable David Lloyd George, Prime Minister
In the early days of the Commission for Relief in Belgium, now nearly three years ago, the scope of the work, the method of operation, and the safeguards in the form of German undertakings surrounding the ravitaillement of the populations of the invaded territories of Belgium and the North of France were carefully explained to you. We realized that your support of the work was absolutely essential to its continuance. You gave this support and have continued to give it, sometimes under adverse criticism.
A new and critical situation in respect of this work has now arisen, due to the inaction of the British Government, which, failing action on the part of the officers of the Foreign Office or the Treasury, we are now forced to bring to you.
During the early months of the brutal submarine campaign it was impossible for us to import anything approaching the proper ration for the 9,500,000 people for whose care we became the agents of the Governments and peoples of Belgium, France, Great Britain, and the United States.
On the basis of restricted imports the limited subsidies at our disposal sufficed for a number of months, although toward the end, with a deficit of nearly £1,000,000 per month.
In October, owing to the enormous increase in prices and to the fact that we are at last able to forward something approaching an adequate ration, the cost of the program of imports which after the most rigid inspection had been approved by the British Foreign Office and the French Government as absolutely necessary to maintain national life, was found to reach the figure of £5,500,000 per month, or $26,000,000.
On October 20th, a memorandum was despatched by the Commission to the Governments of Great Britain, Belgium, and France, setting forth the whole situation as to food, ships, and finance, and request was made that adequate funds be immediately provided.
After numerous negotiations, the United States declared that it would provide in the form of loans $15,000,000 per month for expenditure in the United States provided France and Great Britain would guarantee the European expenditures of the Relief, amounting to $11,000,000.
At a meeting on November 25th, the French Government agreed to carry:
a) The whole European cost of the ravitaillement of the French population.
b) One-half of European cost of the ravitaillement of the Belgian population, provided England would carry the other half. It was requested that the Belgian Government be allowed to allocate to the Relief the necessary funds out of the joint loan of Frs. 500,000,000 made by France and Great Britain to Belgium.
c) In order to overcome the very difficult situation regarding Guilder exchange and to furnish the Commission with the 6,000,000 guilders required for its monthly operations in Holland, the French Government authorized the Director of the Commission to effect a benevolent loan in Holland to the amount of 60,000,000 guilders, for which it agreed to deposit French Bons du Trésor and requested England to give a like authorization and to agree to participate in the deposit of collateral.
This proposal was forwarded through the French Ambassador to he British Government.
Up to the present time, no answer has been received by the French Government, nor has the Commission for Relief been given any decision or any assistance by the British Government in the financing of this work. We have presented to both the Foreign Office and to the Treasury complete expositions of our financial situation and definite statements of what was required to keep the work of relief going.
Briefly, the situation is as follows:
In Holland we require from 6,000,000 to 7,000,000 florins per month for the payment of certain freights and insurances which cannot be paid elsewhere; for the unloading and despatch from Holland to Belgium and France of the cargoes imported; to pay for the purchases of from 5,000 to 10,000 tons of native Dutch produce which otherwise would have to be purchased overseas. Our funds in Holland will only carry this work to the 1st of January, after which date the relief of the invaded territories must absolutely cease, unless new credits are provided.
In the United Kingdom we have been carrying on operations only through the courtesy of the Banque Belge in granting us an unsecured overdraft, which overdraft must be repaid on January 1st. This overdraft now amounts to approximately £500,000 and will amount to £800,000 by December 31st.
We have requested of the Foreign Office the following action by the British Government:
1. That there be deposited at once in Holland to the credit of the Commission for Relief the sum of 6,000,000 florins.
2. That the British Government deposit in sterling, in London, to the credit of the Commission for Relief, the sum of £2,500,000 to meet the overdraft at the Banque Belge and to finance our operations for the month of January.
Failing such action being taken immediately, the Relief must cease.
I beg to call your attention to what we believe to be facts in regard to the relief, that is, that if ever the people of the invaded territories and likewise the people of France and the United States, and to a certain extent the people of England, come to know that the Allies have abandoned to starvation the 9,500,000 of their own people, the war will cease. The twenty-nine deputies of the North of France, the most influential in the French Assembly, are determined that their population shall be fed. They are able to combine at any moment with the Pacifist and Socialist elements in France, and can, overnight, cause the downfall of any French Ministry which fails to declare the protection of the invaded regions part of their fundamental policy.
Through its representatives, the population of Belgium can exert a powerful force in the same direction, not only in France, but on its own army. There is no doubt that the recent conditions of semi-starvation which existed in the occupied territories drove some hundreds of thousands of excellent workmen and workwomen into the employ of the Germans, either in Belgium, Northern France, or in Germany, and this released to the front line trenches equivalent numbers of German soldiers. The correctness of this general estimate of the strategic and military aspect of the relief is assented to and concurred in unofficially by officers of the French Government. We should like an opportunity of discussing it with you.
The present situation of the Relief is absolutely critical and unless the British Government acts within the next few days this organization will be bankrupt and discredited, not only in the commercial sense but as to the reputation of its executives, who, depending upon the action of the British Government, have guaranteed to the Banque Belge protection of the overdraft.
Having apparently failed in bringing this situation to the realization of any of the officials of the British Government, as a last resort we are appealing to your sense of justice and humanity and military expediency, in which we have the most absolute confidence. I desire greatly to be accorded the privilege of an interview, in order to present this situation briefly, and have taken the liberty of thus addressing you at the suggestion of our Ambassador, Mr. Page.
(Signed) W. B. POLAND
Director of Europe
DOCUMENT NO. 175
BANQUE BELGE POUR L'ÉTRANGER, LONDON, TO THE COMMISSION, requesting reimbursement of overdraft
LONDON, 22 December 1917
Commission for Relief in Belgium, London
We are in receipt of your letter of the 21st instant, and note that the overdraft you may require in the next few days may have to be increased to £600,000 or £700,000, to be repaid out of a remittance you expect.
As already explained such large overdrafts are not usually convenient at the end of the year when banks are making up accounts and calling in loans, and we trust that you may be in a position to reimburse the overdraft before the close of the year.
We are, dear Sirs,
BANQUE BELGE POUR L'ÉTRANGER
DOCUMENT NO. 176
POLAND TO LLOYD GEORGE, stating that unless Allies agree as to financing C.R.B. European expenses it will be necessary to halt relief after 1 January 1918
LONDON, 27 December 1917
THE RIGHT HONOURABLE DAVID LLOYD GEORGE, PRIME MINISTER
Following my communication to you of the twenty-first, as we have been advised of no action and as our funds were exhausted we were forced to stop all purchases of food in Holland and the United Kingdom which amount to about twenty-eight thousand tons per month. The French Government this afternoon have generously agreed to provide us with a temporary advance of one million pounds but this will only satisfy our overdraft and carry us until just over January first after which time unless the Allies are able to reach an understanding in regard to financing the work in Europe we shall be obliged to announce to the world that because of lack of funds we are no longer able to provide food for these people. I trust that before this grave action is forced on us you will grant us the opportunity which I have requested of presenting the case to you in person.
Director for Europe
Commission Relief in Belgium
DOCUMENT NO. 177
LLOYD GEORGE TO POLAND, referring him to the Treasury and the Foreign Office
TREASURY, 1 January 1918
W. B. POLAND, ESQ.,
3 London Wall Buildings, E.C.
Matter referred to in telegram of the 27th December has been referred to Chancellor of Exchequer and the Foreign Office for decision. Please communicate with them.
DOCUMENT NO. 178
POLAND TO LORD ROBERT CECIL, referring to the above telegram and asking for a decision
LONDON, 1 January 1918
Lord Robert Cecil,
The Foreign Office
DEAR LORD ROBERT CECIL:
I have received today a telegram from Mr. Lloyd George, stating that the question of finances for the relief of the occupied territories of Belgium and France has been referred to the Foreign Office and the Treasury and requesting that I communicate with you and the Chancellor of the Exchequer. As I advised at the recent meeting on December 29th, the Relief has already had to be stopped in Holland as to purchases of food and in the United Kingdom as to purchases of both food and the terribly needed supply of clothing, and although we have had, indirectly, advice that the Treasury intend to cover our present overdraft with the Banque Belge, no credits have actually been given us nor has any arrangement been made for the further carrying on of the work. In accordance then, with the indications of the Prime Minister's telegram, will you not be good enough to advise what steps may be taken to bring the question to a definite conclusion.
(Signed) W. B. POLAND
Director for Europe
DOCUMENT NO. 179
FINANCIAL AGENT OF FRENCH GOVERNMENT, LONDON, TO POLAND, advising that the funds at his disposal do not permit the payment to the Commission of $1,000,000 as authorized by his Government
LONDON, 28 December 1917
DEAR MR. POLAND:
After having received your letter of the 17th instant, I saw Monsieur Chevrillon, to whom I explained verbally the difficulties which prevented my giving satisfaction to your demand. I expected to meet him again but was not able to get in touch with him.
In spite of my lively desire to help you under these terrible circumstances, and in spite of receiving the authorization given to me by Monsieur the Financial Minister to pay you £1,000,000 (one million pounds), to my great regret I find it impossible to advance to you even for two or three days the sum which is necessary to you. The end of the year is indeed burdened with such heavy payments that cannot be deferred and which will leave no margin to the sums at my disposal.
Believe me, dear Mr. Poland, with many regrets, and my distinguished sentiments,
(Signed) F. AVENOL
DOCUMENT NO. 180
BRITISH TREASURY TO THE BELGIAN MINISTER IN LONDON, stating that £750,000(112) has been set aside for the use of the Commission
TREASURY CHAMBERS, LONDON
2 January 1918
To His Excellency Baron Moncheur,
Belgian Minister in London
In reply to your letter of the 31st ultimo (No. 11366), 1 am directed by the Lords Commissioners of His Majesty's Treasury to inform you that They are causing the sum of £750,000 to be transferred to the credit of the account of the Belgian Government at the Bank of England on the 2d inst.
I am to explain that Their Lordships have not hitherto had direct financial relations with the Commission for Relief in Belgium; any sums which the Commission has received from British funds have been advanced by Their Lordships as part of Their loans to the Belgian Government who have in turn made payments to the Commission. My Lords would prefer to continue this arrangement and They have therefore given directions for the above sum to be transferred to the credit of your Government instead of the Commission for Relief in Belgium as requested by you.
Your obedient Servant
(Signed) JOHN BRADBURY
DOCUMENT NO. 181
Extract of letter,
POLAND TO HOOVER, concerning the financial embarrassment of the Commission in Europe and informing him that the Foreign Office was at that moment reconsidering the whole matter
LONDON, 2 January 1918
Herbert Hoover, Washington
MY DEAR MR. HOOVER:
I am sending you attached financial correspondence which may be of interest and value to you in keeping you thoroughly posted as to just what we have been doing over here. This begins where our last communication ended and carries up to date. The extraordinary situation through which we have been going is perfectly harrowing and we are never quite sure whether we ought to continue our attitude of courtesy or kick and cuff. However, we are keeping in touch with Mr. Page on the general lines and believe that up to the present time it has been proper to be somewhat restrained in our attitude, recognizing the enormous difficulties that all governments have to face in these times; but I must say that almost all the sweet Christian spirit has been lost by representatives of the Commission in London, and we believe that forbearance has nearly ceased to be a virtue. In reply to a demand for a personal interview with Lord Robert Cecil, today his secretary advised that the Foreign Office was again considering the whole position and would probably call upon me for an interview later in the day. Before this letter has reached you, undoubtedly the matter will have been settled in some way .....
(Signed) W. B. POLAND
DOCUMENT NO. 182
from FRENCH AMBASSADOR TO POLAND, giving agreement of British, French, and Belgian Governments regarding the handling of C.R.B. European purchases and expenditures
LONDON, 5 January 1918
The French Government has just informed Mr. Paul Cambon that in the course of a meeting held in Paris the 2d January, Mr. Bonar Law, Mr. Van de Vyvere, and Mr. Sergent, after having examined how the C.R.B. could be put in a position to pay the expenses in Europe, agreed on the following arrangement:
The amount of the European expenses, the monthly amount of which is limited provisionally to the maximum of one million five hundred thousand pounds, will be borne as to one-third by the French Government. The other two-thirds will be advanced in equal parts to the Belgian Government by each of the Governments British and French.
The contract of expenses will be centralized in the Commission de Ravitaillement, London. The expenses approved by the representatives of the French and English Treasuries alone will be provided from the advances of the two Governments. These approvals will be subordinated to the observation of the following conditions:
1. No purchase of raw materials or goods which it is possible to procure in the United States will be provided for from the above indicated advances;
2. Authorization for purchase in neutral countries where the exchange is difficult will not necessarily be accorded and will depend on the financial situation of the moment;
3. The rations of foodstuffs and clothing may be submitted to a revision after arrangement between the French and British Governments, according to circumstances, and following notices which may be given by the Minister of Blockade;
4. To fix the total of purchases, the possibilities of revictualment and tonnage of the Allies as a whole will be taken into account.
The agreement takes effect from January 1918. If it should be proved that the provisional limit of one million five hundred thousand pounds per month is insufficient, the question of the monthly figure will be officially re-examined.
During the meeting there was an exchange of remarks, which should be considered as a complement to this agreement:
It was understood that the C.R.B. should attempt in Holland the realization of a loan destined for the payment of the expenses it incurs there. This negotiation would be independent of that which the Allies are pursuing with a similar object, and would have priority over that of the Allies. The C.R.B. will be authorized in its negotiations to offer the guarantee of the two Governments. Mr. Bonar Law, who, before giving the British guarantee, had expressed the wish that the Government of the United States should add theirs, has withdrawn this previous reservation and has declared himself as disposed to give every facility to the C.R.B. to conclude a loan in Holland.
The French Government would be happy to see the British Government take measures without delay for the putting into execution of this agreement. It would be advisable particularly to authorize the Belgian Government to take from its advances the sum of £500,000 sterling referring to the month of January.
The British Government should also inform Mr. Poland of its favorable views regarding the proposed operation in Holland, concerning which it would be good for the representative of the C.R.B. to immediately commence negotiations. The French Government has already promised its guarantee as far as it is concerned.
DOCUMENT NO. 183
of meeting, MAJOR MONFRIES, THE FINANCIAL SECRETARY OF THE C.I.R [Commission Internationale de Ravitaillement]., AND POLAND AND SHALER OF THE C.R.B., on relations of C.R.B. and C.I.R.
LONDON, 1 February 1918,
The object of the meeting was to clearly define the understanding of the C.I.R. as to the application of the measures of control of C.R.B. operations outlined at the joint meeting, Paris, on January 2d, between representatives of the British Treasury, the French Ministry of Finance, the Belgian Minister of Finance, and Mr. 0. T. Crosby, Assistant Secretary of the United States Treasury.
Operations in the United Kingdom.---Major Monfries stated that the operation would be that, in accordance with the approved programme, requisition would be made on the C.I.R. for such commodities as would be furnished from the United Kingdom. These might cover individual requisitions or monthly programmes. Possibly this might be extended to cover periods of three months. The orders would then be submitted to the various British Heads of Departments, who would fill these orders if practicable or refuse them. In case they were filled, the commodities would be turned over to the Commission at designated points and the various Departments would reimburse themselves by drafts on the Treasury, which would in turn be charged against the monthly subsidies of the Belgian and French Governments in the agreed proportion of approximately one-third to England and two-thirds to France. Statements covering the charges would be submitted to the C.R.B. monthly or from time to time by each of the Departments separately.
Existing contracts would be considered as definite commitments and would be provided for.
Charters.---It is the understanding of the C.I.R. that when neutral charters are offered to the Relief they will be referred to the Inter-Allied Chartering Board(113) (either direct or through the C.I.R.), who in case it is possible to arrange the charters will make to the C.R.B. the proper notification, or otherwise would advise them of the impossibility of making the charters, and in this case would endeavour to make other shipping arrangements. The owners would be paid direct by the Department of Ship Control, who would draw against the Treasury as in case of purchases, submitting to the Commission statements of expense.
It was stated that the Commission would no longer be allowed to arrange for its own Cross-Channel shipments, but such charters would be handled in the same manner as the neutral charters above. Existing charters would be considered as definite commitments, and would be provided for.
London Overhead Administration Disbursements.---It was outlined that a general statement was to be submitted by the Commission to the C.I.R. monthly of C.R.B. financial requirements of this character, whereupon it is the understanding of the C.I.R. that the necessary funds will be put at the disposal of the C.R.B. by the Treasury, probably by credits arranged through the Belgian Government. The disbursements of the C.R.B. to be made in the usual manner.
Operations in Holland---The understanding is that the general programme of purchases and financial requirements for each month will first be approved by being submitted to the C.I.R. After this the operations will be carried out as at present by the Rotterdam office of the C.R.B.
In case it is possible to arrange a Relief Loan all the operations will be exactly as at present within the limits of the authorized monthly program. In case such loan cannot be arranged, the various departments of the British Government must be called upon to arrange guilder credits in order that the operations may continue.
As to the present situation, there being outstanding liabilities in excess of the funds in hand, a general statement is to be at once submitted to the C.I.R., which promises to arrange for funds to meet the commitments and to prevent the interruption of operations without the necessity of overdrafts.
It was understood that a general financial programme for Holland should be submitted monthly. It was stated by the representatives of the C.R.B. that owing to the requirements of their accountancy vs. the Belgian and French Governments, it would be much more desirable to have the same procedure followed that has been in force up to the present time, to wit, that all subsidies should be paid over to the Commission in monthly instalments and as necessary, disbursements should be made to the various departments by the C.R.B. itself. However, the outline of Major Monfries as above would be carefully gone into to see whether under it the C.R.B. will be able to carry out its obligations to the Belgian and French Governments.
DOCUMENT NO. 184
HOOVER TO SECRETARY McADOO, stating increased financial requirements of Commission for rehabilitation of Belgium, of which the President has approved
WASHINGTON, 13 November 1918
Hon. William G. McAdoo,
Secretary of the Treasury
DEAR MR. SECRETARY:
You will please find enclosed herewith copy of the letter of instructions sent to me by the President, and I am informed by him that he has transmitted to the various departments the necessary directions as to solution of this problem. I am addressing you on some matters of organization separately.
In accordance with the approval of the President at today's conference, I beg to confirm that the Treasury will increase advances for food and clothing to the Relief through the Belgian Government up to a maximum of $20,000,000 per month and to make such provisions as would give three months' notice before termination of this arrangement.
The immediate necessities of Belgium in my view are absolutely essential military measures. This population must be maintained or it will become an impediment to future military action by the Allies if this should prove necessary.
The undernourished condition of the population necessitates an immediate increase in its food program, and this is more especially emphasized by the denudation of the country of such stocks of foods as remained in the country from last harvest by the retreating German Army.
In order to provide food there will be required an expenditure of $17,000,000 a month for purchases in the United States, until such a time as conditions return to normal. Further than this, the population has had no textiles for four years except secondhand clothing, and immediate steps must be taken to provide clothing or raw material for its manufacture. In this matter we need to expend a total of about $20,000,000 spread over perhaps three months, and in this we can probably relieve the Quartermaster of certain stores. Altogether, it appears to me that it will be necessary to provide from the United States Government at least a sum of $20,000,000 per month for purchases plus unspent credits in the United States. In addition to this, I am very hopeful of being able to set up credits in New York from Belgian banks to American banks, which will carry on a considerable program of industrial rehabilitation. Such arrangements, however, to be with the approval of the Treasury.
It is impossible for us to proceed with this great program without assurances from the Treasury that it will be supported, for on sudden cessation the population would starve, and we shall be left suddenly with large orders and commitments that cannot be compassed. It would ordinarily require at least three months to make the necessary changes. I realize the pulls on the Treasury at this time and, to some degree, the difficulties under which the Treasury operates; on the other hand, these measures are vital not only to the maintenance of the state of war, but in the continuance of our future policies in Europe. The advances would obviously need to be made to the Belgian Government through the Belgian Minister, and he is presenting a program of this order.
I believe that the Belgian Government should provide for the funds from other quarters for transportation and distribution of this program, and Mr. Davis and I will endeavor to insist upon this provision in Europe.
(Signed) HERBERT HOOVER
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