6 DECEMBER 1919, Page 1

The Supreme Council of the Allies at Paris is understood

to have decided that the remaining German warships and the sub- marines are to be broken up, excepting some cruisers and destroyers which are to be allotted to France and Italy. The French and Italian shipyards, unlike ours, were used mainly for repair work and not for new construction during the war, so that the two countries may legitimately claim some of the smaller German ships. To the Allies' demand for compensa- tion for the battleships scuttled by Admiral von Reuter at Scapa the German Government have returned a positive refusal. They repudiate all responsibility for the Admiral's action, refuse to surrender 400,000 tons of dredgers and floating docks by way of recompense, and irrelevantly suggest arbitration at the Hague. As the Peace Treaty will not be ratified and put into force until Germany agrees to the Allies' terms, the German prisoners in France will remain in captivity.