Soon after the French settlement was a fact, the Italian Government appointed a commission to treat with the Cuthell Board. The Italian agreement, dated August 13, 1919, admitted an obligation on the part of Italy in the sum of $5,200,000, representing Italian war purchases of picric acid, smokeless powder, airplane lumber, linters, and trinitrotoluol, this agreement not including an admitted obligation of approximately $395,000 for Liberty engines, clothing, and other small items not yet invoiced. Against this obligation Italy presented a claim for $4,053,073 for the overseas transportation of American troops on Italian ships. The Italian Government paid the difference, namely, $1,146,927 to the War Department on September 26, 1919, and also paid the minor claims as they were presented.
Minor claims against the governments of Belgium, Brazil, Canada, Cuba, and Czecho-Slovakia, to the total of $4,709,330.89, were presented by the Cuthell Board and paid by the governments concerned.
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While the Cuthell Board was engaged in rendering the bills to the Allies for supplies purchased by them in America and collecting the money on those bills,—and here let it be said that the collections were greater in aggregate amount than the total sum involved in all the claims for or against the United States prosecuted or resisted by the nation’s official diplomacy from the beginning of our national existence up to the outbreak of the war in Europe; international transactions which included the Louisiana Purchase, the purchase of Alaska, and the purchase of the Canal Zone,—all the while that Mr. Cuthell and his associates were collecting money for Uncle Sam, the United States Liquidation Commission was busy adjusting the fit of the shoe on the old gentleman’s other foot. In other words, the Commission was paying the war bills owed by the United States to the Allies. This was a business equally great and even more important.
There was some question whether the President, with all his war powers, could legally empower boards and commissions to conclude international settlements involving the passing of money, since such power resided only in the State Department, the acts of which had to be ratified by Congress before they were binding upon the United States. The Cuthell Board and the United States Liquidation Commission were actually created in January and February, 1919; but to remove any doubt as to the binding force of their settlements, Congress, on March 2, 1919, passed an act empowering the Secretary of War to settle, through any agency he might set up, all international war claims in which the War Department was involved.
The Secretary of War appointed Mr. Edwin B. Parker chairman of the United States Liquidation Commission. As members he appointed Brigadier General Charles G. Dawes, Mr. Homer H. Johnson, and Hon. Henry F. Hollis. During the active part of the war Judge Parker had held the important post of priorities commissioner of the War Industries Board. General Dawes, in private life a Chicago banker, had been General Purchasing Agent of the A. E. F. In 1920 he sprang into national prominence when, as a witness before a congressional investigating committee, in vigorous and unconventional style he defended the material transactions of the A. E. F. and denounced those critics who, in searching for waste and lavish expenditure, evidently overlooked the fact that the prime purpose of the A. E. F. was to defeat a dangerous enemy on the field of battle. His striking utterances on that occasion did more than reams of printed propaganda to reconcile the American public to the inevitable wastes of the war. President Harding soon afterwards appointed “Hell and Maria” Dawes, as he had come to be known, federal budget commissioner, thus placing him in charge of the most important attempt at economy in national expenditures which the United States had ever made. Mr. Johnson was an able and well-known lawyer of Cleveland. Mr. Hollis was a former United States senator from New Hampshire.
When the Liquidation Commission reached France and organized for work about March 1, 1919, it found the ground well prepared for it. Mr. Edward R. Stettinius, the well-known New York financier, had been sent to France in July, 1918, as a special representative of the Secretary of War to act as a sort of surveyor-general over the war industry resulting from the foreign orders placed by the American Expeditionary Forces. Mr. Stettinius found that a considerable part of the munitions being procured abroad was being produced and delivered under informal and more or less vague agreements and understandings. Before the armistice Mr. Stettinius had done his best to reduce some of the more important of these understandings to the form of written, definite contracts. Promptly after the armistice he took steps to cancel all further production for the Americans and then began the negotiations leading to the settlements. Mr. Stettinius resigned in January, 1919, and the United States Liquidation Commission inherited these various negotiations in the stages at which Mr. Stettinius left them.
Although, as we have said, the characteristic note of our industrial demobilization abroad was outright cancellation of contracts and the payment of indemnities, the policy was not maintained consistently. There were several important exceptions, and one of these was the method adopted in terminating the British manufacture of artillery and shell for the A. E. F. The numerous orders, contracts, and agreements placed and made by the A. E. F. for the delivery of British artillery and ammunition were consolidated, on October 19, 1918, by Mr. Stettinius in conference with Mr. Winston Churchill, then the British Minister of Munitions, into a single formal agreement. In terminating this contract after the armistice Mr. Stettinius assumed that it would be better to accept completed guns and ammunition, even though these might be surplus above the future requirements of the Army, than to pay heavy cancellation indemnities and receive nothing in return. Artillery does not deteriorate rapidly, either materially or in design. The negotiations opened by Mr. Stettinius with the British Government looking to this end were picked up by the Liquidation Commission, which, in March, 1919, reached an agreement with the British that, in lieu of paying any cancellation damages, the United States would accept a limited quantity of matériel completed after the armistice under the American contract.
America accordingly accepted the post-armistice delivery of 498 British-made guns, ranging in model from 60-pounders to 8-inch howitzers, and 420,000 rounds of ammunition for them. For this matériel the American Government paid £6,637,598.
A most interesting negotiation conducted by the Liquidation Commission for the United States was that which wound up the tripartite international project for the construction of 36-ton tanks, better known as the Anglo-American Mark VIII tanks. France was originally a party to this transaction only to the extent of agreeing to provide a site for the assembling plant in France. England and the United States were equal partners in the enterprise, England supplying hulls and guns and America the power and traction. The French, however, were to be permitted to buy tanks at the partnership price; but the French at first did not ask for any, asserting that their own light tank production was sufficient for them.