Office of the Historian

740.00119 EW/10–1344: Telegram

The Secretary of State to the Ambassador in the Soviet Union (Harriman)

Washington, October 14, 1944—midnight.

2438. Reurtel 3930, of October 13 and Depstel 2437, of October 14. Before the receipt of your telegram on the Hungarian Armistice Terms the Department was preparing to instruct you to present an aide-mémoire to Molotov with regard to the Rumanian Armistice Terms which would have read in part as follows:

“It is the view of the U.S. Government that because of the interest which all the Allies have in the reparation recoverable from each enemy country and because of the economic interrelationships of the reparation paying and receiving countries, the reparation settlements with all enemy countries should be decided jointly after discussion and deliberation by the United States, United Kingdom, Soviet Union and other interested countries rather than unilaterally and should be treated as related parts of one broad problem.”

In your negotiations on the Hungarian Armistice Terms you should strongly oppose the reparations clause in its present form. Such opposition should be based primarily on the general grounds set forth in the above quotation and on the following considerations:

1.
As previously indicated to you, the Department believes it undesirable to attempt to fix the amount of reparations in the terms of surrender. In the case of Hungary an attempt to set a definite amount is even less defensible than in the case of Rumania where specific areas of Russia were occupied by Rumanian forces.
2.
The amount of reparations suggested by the Russians is in our opinion clearly excessive, both from the point of view of Hungarian capacity to pay and the point of view of legitimate Russian claims on Hungary. Collection by Russia of the amount demanded might have the effect of making impossible the satisfaction of claims of other United Nations which may conceivably exceed justifiable Russian reparations claims against Hungary.
3.
The Russian public opinion argument stressed so heavily in the discussion of Rumanian terms would appear to be much weaker in its application to Hungary in view of the great differences in the character and scope of the military operations of Hungary in Russian territory.
4.
The Department is not opposed to the payment of reparations. It believes, however, that these payments should consist of goods to be used directly in reconstruction in the recipient countries and should not be effected in ways which would unduly prejudice the resumption of normal commercial relations in accordance with the international economic policies of this government. For example, the Department [Page 909] does not believe that goods received as reparations payments should be re-exported. The nature and amount of the Russian demands may be in conflict with the above-mentioned principles.
5.
While we have not yet seen the Hungarian Armistice Terms the reparation clauses of the Rumanian Armistice Terms are so vague and general, apart from the fixing of the specific amount, that it is impossible to evaluate adequately their consequences or to understand the policies and procedures which the Soviet Government intends to follow in their implementation. This is one of the principal reasons we believe that the Armistice Terms should do little more than establish the principle that Hungary should agree to pay such reparations as the United Nations may subsequently require.

The Department would appreciate any information or opinions you may have with regard to any ulterior economic motives which may explain in part the reparation policies which the Soviet Government is pursuing with respect to satellite countries.

Sent to Moscow repeated to London.34

Hull
  1. Repeated as telegram 8528.↩