740.00119 (Potsdam)/7–3145
No. 900
The Representative on the Allied
Commission on Reparations (Pauley) to the Secretary of
State1
[Babelsberg,] July 18,
1945.
My Dear Mr. Secretary: The attached
memorandum on the relationship between reparations and ceded German
territory embodies what we believe to be certain improvements over a
similar memorandum submitted to you in my letter of July 16th.2
The purpose of this proposal is quite simple. It aims to distribute
reparation burdens as well as benefits among those receiving ceded
German territory. The first three points provide that any exportable
surpluses of commodities from any ceded territory shall be subject
to the following priorities:
- First, Shipment into Germany to such extent as these
commodities are needed to sustain minimum
subsistence.
- Second, To pay for imports into Germany where needed to
sustain minimum subsistence.
- Third, For payment into the general reparation fund to be
allocated among claimant nations.
The fourth and last point provides that the value of capital
equipment and natural resources located in any ceded territory shall
be accounted for as reparations delivered to the receiving
nation.
[Page 843]
Since I understand that the subject of the eastern boundaries of
Germany will be considered at today’s meeting of the beads of the
Governments, I urge that you give this subject your immediate
personal consideration.
Respectfully,
[Attachment]
Memorandum by the United States Section,
Allied Commission on Reparations
Re: Relationship between Reparations and ceded
German territory.
As a part of any treaty recognizing the ceding of any portion of
Germany as its boundaries existed at the end of 1937, it shall
be provided that:
- One.
- Any property or current production available for
removal from any ceded territory shall be first utilized
within Germany to whatever extent occupation authorities
require to avoid the necessity of imports into
Germany.
- Two.
- Thereafter, the value or proceeds of any property or
current production from any ceded territory available
for delivery outside of Germany shall be first used to
pay for approved imports into Germany.
- Three.
- If sufficient funds are available to pay for all such
approved imports, the proceeds or value of any assets
delivered from any ceded territory shall be treated as a
reparations delivery to such nation or nations and in
such amounts as may be designated by the Allied
Commission on Reparations, or a permanent Reparations
Agency to be created.
- Four.
- The value of capital equipment and natural resources
within the boundaries of any territory ceded from
Germany to any other nation shall be accounted for as
reparations. To the extent that the production of such
equipment or resources is pledged for reparations or to
pay for approved imports into Germany, the reparation
value of such equipment and resources shall be
correspondingly decreased.
(Practically, the foregoing obligations may well have to be
funded both in the form of agreements to deliver certain fixed
quantities of coal, zinc, coke, iron, steel, cement, calcinated
soda, etc., for a definite period of years, and by reducing the
amount of reparations which will be delivered to the nation
receiving ceded territory or delivered to another nation for
whose security territory may be ceded.[)]
