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1 M I E A T? Y A H 0E 3TE S Corrgimi c a tod to the- Councl 1 and 1,'ombors ox the League 3/ p 9 AP t * no 1 Q A L» * O i-» m i. i O JL /» X T T i ttt.' n *7 T-T * n i T n TTi U U jj!.» -! 1 Uj.'] i. Ggnova. Juno 12th, IS 24 <2 A ' V? T 5 A X T T T i j - c L O j _ l v L e tte r dated June 7th, 1924, from the Chairman o f the Governing Commission concerning a p e t i t i o n from c e r ta in p o litic a l p a r tie s,:ita reg ard to t iv.- fin a n c ia l s itu a tio n in the T e rrito ry. ( 1 ) TTnrPr'* T3V rnit -i P "X ' rp ' P V JTWT: * ^ T l< v x _ ii J l _i. n _ u j ^ _.. _L jl* i» x V- i,l'«. J The oecrotary-o -onjral has the honour to forw ard, fo r the in fo rm atio n of the Council and the Members o f the League, the fo lio Yd ng l e t t e r from the Chairman o f the Governing Commission to the ^ e c re te ry -G o n e ra l: Saarbrticl:, June 7 th, Sir, In a l e t t e r dated March 4 th I had the honour to forward to you a memorandum from c e r t a i n p o l i t i c a l p a r tie s in the Saar T e rrito ry, e n t i t l e d "The e f f e c ts of the d e p re c ia tio n of the franc on the economic l i f e of the Saar T e r r ito r y ". This memorandum had not been sen t by i t s s ig n a to rie s to the Governing Commission u n t i l March 3rd. As the Council o f Council Document 0.125(1} M I,
2 *2 - the League of H âtions was m eeting on Her oh 10th, I f a it bound to forw ard the memorandum w ithout delay to tho S e c r e ta r ia t o f tho League o f n a tio n s. In my l e t t e r of March 4-th I p o in ted out th a t, as the memorandum had reached me so l a t e, I could not make any observations on b e h a lf of tho Governing Commission, but 7?ould inform you of i t s views a t a l a t e r date. In v irtu e o f a d e cisio n reached by the Council of tho League of n a tio n s on May 15th, 1920, p e titio n s from the in h a b ita n ts o f the Saar T e rr ito ry to the Council of tho League of n a tio n s must be forwarded by the Governing Commission w ith or w ithout comment. But the whole argument o f the memorandum, and tho conclusions reached th e re in, were based upon tho p o sitio n of the currency market a t the time when the memorandum was drawn up. A l i t t l e l a t o r th a t p o s itio n had e n tir e ly changed. As tho circum stances which gave * rise to the memorandum have ceased to e x is t, any comment upon i t may.seem su p e rflu o u s. Tho Governing Commission ex p lain ed in tho g re a te s t d e ta il the p re ssin g c o n sid e ra tio n s which had caused i t to make the French fran c tho sole currency in the Saar T errito ry. A re s o lu tio n adopted by tho Council of the Leaguo on July 7th, 1925, s ta te s th a t,tthe Council appreciates th e economic c o n sid e ra tio n s which have led
3 the Commiseion to in tro d u ce th p O 1 v f>n U. " U. X,'ir''Y V.L-iX* * ^ Tr -L î y\ 11 f V '- i * V p ij Cv r rt--l I The Governing Commission vjould p o in t out th a t, i f the franc had n o t been introduced, the s^ar T e rrito ry would have su ffe re d even more c r u e lly than Germany from th: d e p re c ia tio n o f the mark, which f e l l to an u n p a ra lle le d e x te n t during the summer and autumn of IS23, a i t e r the in tro d u c tio n c f the franc in to the Saar. M oreover, i t cannot be supposed th a t the Saar T e rr ito ry would have deriv ed any b e n e fit from the currency refoim c a r rie d out in Germany in December l a s t, because the Rontonmark is e s s e n t i a l l y an in te r n a l German currency. ITor could the Governing Commission have e s ta b lis h e d a d i s t i n c t gold currency fo r the T e rr ito ry ; for the lim ite d d u ra tio n of the Governing Commission s p o v e rs, and i t s p o s itio n as tru ste e and not ovrner of the S ta te p ro p erty, would have rendered the estab lish m en t o f such a currency exceedingly d i f f i c u l t, i f not im possible. fu rth e rm o re, the in tro d u c tio n o f a gold currency would not have ended the dual currency system from which the Saar T e rrito ry has beon s u f f e rin g fo r more than th re e y ears. In any c a s e, th e re is a clause in the Peace Treaty v&ich p rev en ts th e su p p ressio n of the French fran c in the T e rr ito ry ; and t h is clau se cannot be evaded. From «hat has alrea d y been s a id i t is c le a r th a t, had not the Governing Commission do aid ed to introduce the French
4 franc as the sole le g a l currency in the T e rrito ry, the paper m art v/ould s t i l l have e x iste d th ere side by side with the French franc, but w ith o u t the support of the new and sounder cu rren c ie s ( the most re p re s e n ta tiv e of which is the Rentenmark) which have enabled the c irc u la tio n of the paper mark in Germany to r e ta in some degree of meaning and value The memorandum under c o n sid e ra tio n emphasises the unfortunate e f f e c ts cn the economic l i f e o f the T e rrito ry of the d e p re c ia tio n of the French franc a t th e end o f 1923 and during the f i r s t q u a rte r o f The Governing Commission in no way m inim ises these e f f e c t s, to which indeed it re fe rre d in i t s l a s t p e rio d ic a l re p o rt. n e v e rth e le s s, i t i s n o t ad m issible to draw a p a r a lle l between th e p o s itio n o f the French fran c a t the beginning of March 1924 and th a t o f th e mark on June 1 st, 1923, on which date the cu rren cy reform was put in to o p eratio n in the Saar T e rrito ry. On June 1 s t, 19^3, the mark had fallen f a r below 100,000th of i t s value whereas even a t the lowest ra te s recorded in March 1324 the French franc s t i l l retained more than 1 / 5 th of i t s v a lu e. The very persons who complain of the Governing Commissions in tro d u cin g the franc regarded th e suppression of the mark in A p ril and May 19^3 as prem ature. Since l a s t March, as has a lre a d y been observed, the situation has com pletely changed. At th e p resen t moment, while th e Saar B asin is confronted w ith c e rta in économie d iffic u ltie s which w ill bo re fe rre d to in the Governing Commission's n ext p e r io d ic a l re p o rt, these d i f f i c u l t i e s are
5 5 - largely a t tr ib u ta b le to the shortage of orders doe to the rise In the franc In A p ril and the f i r s t ten days o f May. The Governing Commission is devoting i t s constant a tte n tio n to these d i f f i c u l t i e s ard to the b est o f i t s y ende^v o.rin,- to lessen them; and however serious they may be, th e f a c t renains th a t unemployment is now inconsiderable in the Saar T errito ^'r + v> + + ana th a t tne c re d it c r is is, troublesome though i t m-a ho v ^ ma- bti. is much le s s serious than in Germany. Bo one w ill deny th a t the s t a b i l i t y o f the fechange i a an e s s e n tia l f a c to r a f fe c tin g a l l norm al economic l i f o. U nfortunately i t i3 n o t in the power of th e Governing Com- nission to ensure th a t s t a b i l i t y in th e Saar T e rrito ry ; but the Commission l s convinced th a t th e a ctio n which i t has taken m regard to th e cu rren cy q u estio n was the w ise st a c tio n which could have been taken in the b est I n te r e s ts o f th e Saar T erritory having regard to i t s s itu a tio n in law and in f a c t. fsigned) y. RaULr.
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