I shall appreciate your reviewing this proposed communication to Mr.
Maisky. If you think it
advisable, I would be happy to have the letter prepared for your
signature and addressed to Mr. Molotov.
[Enclosure 2]
The Representative on the Allied Commission
on Reparations (Pauley) to the Chairman of the Allied Commission on
Reparations (Maisky)3
[Babelsberg,] July 27,
1945.
My Dear Mr. Maisky: In my letter to you of July
3rd, I called your attention to the fact that although we had
been in Moscow some twenty-two days, we had received from the
Soviet Government neither a presentation of the Soviet “plan” of
reparations nor any figures in support of the amount of
reparations which was agreed at the Crimea Conference4
should be the subject of discussion at our meeting in
Moscow.
In the foregoing letter, I pointed particularly to this meeting
of the Big Three, and recalled our understanding, reached the
day after the arrival of the British delegation in Moscow, that
it was our joint responsibility to present a definitive
reparation program at this meeting of the heads of Government.
In addition to reaching an agreement on the fundamental
principles of a reparations plan, I urged that we define
“reparations”, “restitution”, and “war booty”, in order to make
definite and certain the subject matter upon which a reparations
program could be predicated. This latter problem of definition
appeared to me then, and even more so now, to be an elementary
and obvious first step.
As you know, we discussed and agreed on seven of eight general
principles which the United States Delegation proposed should
guide the formation and administration of a reparations plan for
Germany as a whole. It was understood, of course, throughout all
our discussions that for the purpose of reparations Germany
included all of the territory lying within the boundary of the
old German Reich.
Both we and the British submitted proposed definitions of
“restitution”. You agreed at a meeting of the Steering Committee
that you would present a definition of “war booty” or “war
trophies”. After countless delays and postponements, no Soviet
definition of “war booty” or “war trophies” was forthcoming.
When we arrived here at the Big Three Conference, we had
received from the Soviets neither an explanation of their
proposed “plan” of reparations nor any figures supporting their
proposed amount of reparations, nor a
[Page 895]
definition of “war booty” without which it
will be impossible to ascertain what should be available for
reparations, or how fairly to divide among claimant nations what
is removed.
Upon our arrival in Berlin, the United States Delegation sought
to facilitate the necessary definition of the subject matter of
reparations by submitting to the Soviet and British Delegations,
proposed definitions, not only of “war booty”, but of
“restitution” and “reparations” as well. These proposed
definitions were as follows:
[Here follow the definitions contained in attachment 2 to document No. 894.]
Here in Berlin, it has been impossible not to observe that
extensive removals of capital equipment of all kinds have been
made by the Soviet Government both from the American zone of
occupation prior to our occupation, and from the Soviet zone.
The removals from the Soviet zone are continuing on a comparable
scale and include equipment from many peace-time industries
essential both for the maintenance of a minimum subsistence in
Germany and to provide for necessary imports and recurrent
reparations. Even American owned equipment of this character has
been removed.
Since all of these removals are taking place before any
reparations agreement has been reached, we can only conclude
that the equipment removed is either being taken as “war
trophies” or that the Soviet Government has concluded that the
reparations program can best be conducted on a zonal basis,
rather than by treating Germany as a single economic unit as was
discussed in Moscow. As you know, we have consistently
maintained that the economy of Germany, in which reparations
necessarily plays an important part, could be more
satisfactorily administered by treating Germany as an economic
unit. This principle was set forth in one of the seven
principles to which the Soviet Government agreed in Moscow.5
It has now been made clear both to the Big Three and the Foreign
Ministers that with the acquiescence of the Soviet Union, Poland
has been permitted to occupy and take over all of German Silesia
lying east of the Oder–Neisse River[s] together with a
substantial part of East Prussia. Representatives of the Soviet
Union have stated that no Germans remain in these areas and take
the position that this area belongs exclusively to the Poles.
This means that the large potential surpluses of agricultural
products and important minerals and other raw materials produced
in these areas of pre-war Germany will no longer be available to
balance the German economy. This renders it impossible for zones
other than the one occupied by the Soviet Government to balance
their economy even on a bare subsistence level without large
imports of foods, and other raw materials.
[Page 896]
In the circumstances, both the British and U. S. Governments have
been and will be compelled to import into Germany these large
quantities of food, and other supplies. The Soviet Government
both in our meetings at Moscow and here at this conference has
consistently refused to accept that part of the final proposed
principle of a reparations plan underlined6 below:
“After payment of reparations, enough
resources must be left to enable the German people to
subsist without external assistance. In working out the
economic balance of Germany, the necessary means must be
provided for payment of imports approved by the
Government concerned before reparation
deliveries are made.”
The Soviet representatives have maintained that reparation
deliveries shall have priority over payment for even approved
and necessary imports made into Germany by the Allied
Governments. This simply means that those Allied Governments
which are compelled to ship food and other necessary supplies
into Germany without compensation will in effect be advancing
funds to provide for deliveries of reparations from Germany. To
this neither the United States, nor, as we understand it, the
United Kingdom can subscribe. The Soviet position would prevent
our receiving compensation for the vast supplies now necessary
to maintain our respective zones. Thus we would repeat one of
the worst mistakes made after the first World War.
The United States has therefore been placed in the position where
it must deal with reparations along the same lines as have, in
fact, been initiated by the Soviet Government. It was for this
reason that we have submitted (two days ago) a further proposal
which formally recognizes that removals will be conducted on a
zonal basis.7 This we regard as
regrettable, but inescapable, in view of the unilateral actions
taken by the Soviet Government.
Our proposal need not interfere with the efforts of the Control
Council to work out other economic and political problems for
Germany as a unit. Likewise, it need not interfere with your
securing heavy equipment from western Germany as reparations in
return for deliveries of needed equipment and supplies from
eastern Germany both on reparations account and to lighten the
import burdens which have been placed upon those powers
occupying western Germany.
[Page 897]
I trust that you will understand the spirit in which this letter
is written. I am sure that we both realize that removals of
necessary peacetime equipment from Germany render it most
difficult to deal with reparations and the payment for necessary
imports. Let me assure you again that we share your views as to
the necessity for removing German war potential.
Sincerely yours,
