Lithuanian and Polish aspirations
The German–Lithuanian border had been stable since the Treaty of Melno in 1422. However, northern East Prussia had a significant Lithuanian-speaking population of Prussian Lithuanians or Lietuvninkai and was known as Lithuania Minor. The Klaipėda Region covered 2,848 km2 (1,100 sq mi), which included the Curonian Lagoon of approximately 412 km2 (159 sq mi). According to contemporary statistics by Fred Hermann Deu, 71,156 Germans and 67,259 Prussian Lithuanians lived in the region. The idea of uniting Lithuania Minor with Lithuania surfaced during the Lithuanian National Revival of the late 19th century. It was part of the vision to consolidate all ethnic Lithuanian lands into an independent Lithuania. The activists also eyed Klaipėda (Memel), a major sea port in the Baltic Sea. It would become Lithuania's only deep-water access to the sea and having a port was seen as an economic necessity for self-sustainability. On November 30, 1918, twenty-four Prussian Lithuanian activists signed the Act of Tilsit, expressing their desire to unite Lithuania Minor with Lithuania. Based on these considerations, the Lithuanians petitioned the Allies to attach the whole of Lithuania Minor (not limited to Klaipėda Region) to Lithuania. However, at the time Lithuania was not officially recognized by the western powers and not invited into any post-war conferences.
The Second Polish Republic regarded the Klaipėda Region as possible compensation for Danzig. After World War I, the Polish Corridor provided access to the Baltic Sea, but the Free City of Danzig was not granted to Poland. In early 1919, Roman Dmowski, the Polish representative to the Paris Peace Conference, campaigned for the incorporation of Klaipėda Region into Lithuania, which was then to enter into a union with Poland (see Dmowski's Line and Międzymorze federation). The Polish formula was Klaipėda to Lithuania, Lithuania to Poland. Until the Polish–Lithuanian union could be worked out, Klaipėda was to be placed under the temporary administration of the Allies. While such a union had a historic tradition in the Polish–Lithuanian Commonwealth, Lithuania categorically refused any such proposals. Worsening Polish–Lithuanian relations led to the Polish–Lithuanian War and dispute over the Vilnius Region. However, the union idea was met favorably in Western Europe. In December 1921, Poland sent Marceli Szarota as a new envoy to the region. Due to his initiative, Poland and Klaipėda signed a trade agreement in April 1922. In addition, Poland attempted to establish its economic presence by buying property, establishing business enterprises, and making connections with the port.
Germany after Versailles:
Annexed or transferred to neighboring countries by the treaty, or later via plebiscite and League of Nation action
Influenced by the Polish proposals, the Allies took Klaipėda Region into account when signing the peace treaty with Germany. According to article 28 of the Treaty of Versailles, effective January 10, 1920, lands north of the Neman River were detached from the German Empire and, according to article 99, were placed under a mandate of the League of Nations. The French agreed to become temporary administrators of the region while the British declined. The first French troops, the 21st battalion of Chasseurs Alpins under General Dominique Joseph Odry, arrived on February 10, 1920. The Germans officially handed over the region on February 15. Two days later General Odry established a seven-member Directorate—the main governing institution. After Lithuanian protests, two Prussian Lithuanian representatives were admitted to the Directorate, increasing its size to nine members. On June 8, 1920, France appointed Gabriel Jean Petisné as the head of the civilian administration in the Klaipėda Region. Petisné showed anti-Lithuanian bias and was favorable towards the idea of a free city. General Odry resigned on May 1, 1920, leaving Petisné the highest-ranking official in the region.
French Prime Minister and chairman of the Paris Peace Conference Georges Clemenceau commented that the Klaipėda Region was not attached to Lithuania because it had not yet received de jure recognition. The Lithuanians seized this statement and further campaigned for their rights in the region believing that once they received international recognition, the region should be theirs. As the mediation of the Polish–Lithuanian conflict over the Vilnius Region by the League of Nations was going nowhere, the Klaipėda Region became a major bargaining chip. Already in 1921, implicit "Klaipėda-for-Vilnius" offers were made. In March 1922, the British made a concrete and explicit offer: in exchange for recognition of Polish claims to Vilnius, Lithuania would receive de jure recognition, Klaipėda Region, and economic aid. The Lithuanians rejected the proposal as they were not ready to give up on Vilnius. After the rejection, the French and British attitudes turned against Lithuania and they now favored the free city solution (Freistaat like the Free City of Danzig). Thus the Lithuanians could wait for an unfavorable decision or they could seize the region and present a fait accompli.