'A / j* 7 K, / ' / kJH LEACDE 0 ? NA OSONS. tld agit ial a C.565el928»I,

ml cate d Gone va, ie C-cuncil. November 16th 1928.

£AAB BASI g,

(D SALARIES 03* THE MEMBERS OF THE GOVERNING COMMISSION,

Note "b y tho Secretary^ en or aie

The Secretaiy«-<ïener a 1 has the honour to cornu nicate to the Council ccn fid anti ally a note dated October 27th, 1928 , from the Chaiiman of the Saar Governing Commission with regard to the salaries of the Chairman and members of the Gove rning Commission.

Note concerning the salaries of ths Chairman and the members of the Governing Commission»

The Treaty of Peace of Versailles (Annex - Saar, §17,

3rd paragraph) contains the following provision: ”Tho members of the Governing Commission w ill be entitled to a salary which will be fixed by the Council of ths Leegue of Nations, and charged on the local revenue sn . In execution of this provision, the Council of tha league of Nations, when it dealt with the general organisation of the

Saar Government, decided at it s meeting on February 13th, 1920, as follows: "The original members of the Commission w ill each be entitled fr cm the data of their appointmait to a salary at the rate of 100,000 a year (the President w ill receive in addition "frais de représentation" amounting to 50,000 francs per annum),

which w ill be charged by the Governing Commission on the local revenues of the territory of the Saar Basin ......

(1). See document C »564»M. 180 »1928 .1. T^is decision was incorporated under No* VII in the Instructions of the Council of the League of Nations for the Governing Commission, dated February 13th, 1920. At the time when the Council of tba league of Nations fixed the salaries of the Chairman and members of the Governing

Commission for the Saar Territory at these figures, the economic situation of the Saar Territory bare tbs following characteristics: 1) in principle, the German mark (paper mark) and the French (paper franc), under the Peace Treaty were allowed to cira: late simultaneously in the Saar Territory ; in actual fact ,however, pricee ware exclusively quoted in German marks, the German mark bad already started upon the process of inflation which led to its complete collapse in November 1923, and in fact ( up t i l l January 1923, when a ll prices in the Saar were quoted in francs) holders of francs in the Saar found themselves in the advantageous position, well known to economists, of persons possessing resources in a stable in a country whore the ordinary currency was progressively depreciating. The situation of the should also be considered in relation to gold, as deter mined by the rate of exchange * On March 1st, 1920, 100 French francs ware equal to 36 gold francs. Consequently , the Oh ai man Ts salary (150,000 French francs) was equal to 54,000 gold francs, and the sa la ries of the members of the Governing Coauxission (100,000. i^raach francs) to 36,000 gold francs. At that time, the cost of living index for the Saar Territory was 661 (on the basis of the paper mark), or a gold index of 34 per cent. The situation cculd therefore be considered as favourable. In April 1921, 100 French francs still equalled 36 gold francs; the salaries of the Chairman and members of the Governing Commission therefore represented the same amount in gold francs aa in 1920 • But the vrice index in the Saar had risen considerably:

1123 (paper mark) ; the gold index was 75 per cent. « 3

In April 1922, 3.00 French francs were equal to 47 gold franc s « The Chairman rs salary there for g was equal to 70,000 gold francs and those of the members of the Governing Commission to 47,000 gold francs a The price index in the Saar was 4286 (paper mark basis), the gold indsx 5Q per cent . The situation remained fav ou rah le<, On July 1st, 1623, when the branch franc he came the only legal currency in the Saar Territory, the position was as follows: 100 French francs were equal to SO gold francs. The cost of living index for the Saar was 252 (as compared with 100 in 1914) * calculated in French francs 5. the gold index was therefore he lew the unit (80 per cent) » In April 1924c 100 French francs were s t i l l equal to 30 gold francs. But the cost of living index for the Saar was 352 (in 5‘rench francs) ; the gold index was therefore slight ly higher than the unit (111 per cent). On March 15th, 1924, the Council of the League of Nations., taking into account the new situation, which had obviously not "been foreseen in 1920, as an exceptional measure and in view of the economic situation in the Saar Territory s increased the salaries of the Chair mn and members of the Governing Commission "by 25 per cent for the financial yea? lS24—25o The salaries of the GrOfe ming ^oæmiæioa therefore stood, as follows ; Chairman: 125.C0G * 6 2 ,500 ” 187,500 French francs, or

56 8C00 gold francs; Members : 125,000 French francs, or 3 7,000 gold francs, In April 1925, 100 branch francs were equal to 26 geld francs and the index in the Saar was 433, or in gold 100» The salarias possessed the following gold vajus: 1) Chairman:

48 *000 gold francs, 2) Members 3 32 >000 gold franc s„ The Council of the League of Nations decided on March 13 th , 1925 to maintain the rates fixed in 1924-3 - 4 -

In April 1926, 100 French francs. equalled 17 gold francs. The Chaiman’s salary was equal to 31,00-0 gold fmnos^ those of the members to 21,000 gold francs0 The inde^'vras 510, the gold index being thns be low the unit (SO per ' cent) „ The ^cuncil of the League o f Nations, at it s meeting on Marcia 18th „ 1926, maintained the salary rates fixed in 1924 and 1925» X The Council, however, when it r e caasiüorod the Question at its session in December 1926 , decided to allocate to trie

Chairman and the members of t l 'e - Cove ming Ccmnission a supple» asntary salary of 25,000 French francs cm account of the hi^i

. cost of living in the Saar Territory» This decision was valid for the financial year 1926-27 and gu ppleme-ntad the Council's decision of March 1926. On Apri 1 1st, 1927, therefore, the salaries stood as follows: 1) Chairman : 225,000 French francs, or 45,000 gold f rancg; 2) Members: 150,000 3?ranch francs, or 30,000 gold francs. The index was then 625, equivalent to a gold index of 120 „ This situation has not undergone any substantial change during 1927 and 1928, but certain other considérations present ' themselves: 1) The cost of living in the Saar (gold index 120 in 1927j has risen âigh tly. 2) The French Soveÿnnefat at the end of June 1928 legally stabilised the French "franc, i.e ., at this date it re-established the convertibility into gold of the French franc, based on tho gold standard* but at on e-fifth of the gold franc pre-war value 0 In other words* the French franc now has a fixed and stable gold value, equal to one-fifth of the Swiss fre.no or tho theoretical unit which we have referred to in this note as ths gold franc, 1 sad equal to 5.18 cf The American d o lla r . There seems no doubt rf the success of this operation, which moans that the only legal

. w 5 *• currency in the Saar Tarritoiy has i'rom July 1st, 1928 assaiuvi a sttib la and certain gold value and he a is a constant az»l dof IniTe mafehematicQÎ relation to other conv ort-.îb le or currencies with a solid gold basis* It is th c.f-'ii’cro possible ard nsœssary to compare the salaries of the ne f o of the Governing Commiæion, quoted in this currency with the salaries ouotod in pounds sterling, dollars, Svn.es francs, gold marks „ lut ch flo rin s, «te» Without sa ch comparisons he ing at any given moment invalidated "by tha element of instohility constituted hy an inconvertible currency,

3) The Governing Commission, as a re£3It of agreements with Germany end of the internal requ irements of its own admini­ stration, has had to g ire to its own officials salaries based on the gold nark salaries in Germany, multiplied by the coefficient 5»7, which is veiy near the exchange rate (6 francs for 1 gold mark)o This co-efficient may h av a to be progressively increased In any case, it is a fact that certain high officials of the Governing Commission already w ill receive salaries almost equal to those of German high officials of the same grading and also very nearly equal to the pay of the cambers of the Governing Comm5-ssion; although these salaries are s t i l l lower than the corresponding &arman salaries in gold marfes multiplied by 5.7, they amount to 120*000 fran's end more„ and ara too near to the salaries cf ike numbers of thû G ova rein s Commission»

4) E'Ton the most sansaary compaxison of the salarias of tha Chairmen and members of tha Governing Commission, converted into Swiss francs, with the salaries of the High Commissioner ©f the Seagie of Nations at Donzig, the members cf the Seoi.’stariat of the Xeagce of Nations, the judges cf the International Court at The HagueD etc., would show at once that the Governing Commission - 6 ~ of the Saar Territorv is at present in a vary unf &-sour ah le position,,

The stab ilisation ef the French f r em c and. the re let i va stability ef the indices en eh le the Council of tha Leagpe of Nations to renounce the meths’d of provisional increases and

62036 pviona?. su p p 1 eme nt a ry salaries tnâ to fix a definite scale ©f salaries £ f;r the Bhaiman and members c2 the Governing Commission « A salary ef 180,000 French francs is suggested for the members of the Governing Commission.* 2 he entertainment allowance ef the Chairman should also he incre&sedo

(Signed) E0C« WILT01T,

Saarbruck, October 27th, 192 8*