Foreign Relations of the United States, 1948, Germany and Austria, Volume II

740.00119 Council/5–1948: Telegram

The Ambassador in the United Kingdom (Douglas) to the Secretary of State

secret
us urgent

London, May 19, 1948—7 p. m.

2163. Delsec 1741. Given below is text of proposal put forward by USDel in tripartite meeting on reparations yesterday afternoon in effort to adapt British proposal¹ to major requirements of US position. US proposal made prior receipt Department’s cable 1781, May 17, and UK and French delegations showed willingness accept US proposal. USDel considers these most favorable terms attainable and urgently requests authority conclude agreement on this basis if possible. Recognize possible conflict with Department’s instructions prohibiting any negotiations with Soviets regarding reparations outside ACA but wish point out that Department’s proposal this point could be construed as pressure by Western powers for revival of quadripartite machinery concerning which we had understood US would not take initiative. Following is text:

1. The three commanders-in-chief will, immediately after this proposal is approved by their governments, proceed with allocation of reparations equipment in three western zones in interests of ERP and to bring reparations program to speedy conclusion.

(1) 25 percent of all equipment in each broad industrial category declared for reparations will be provisionally selected and held for future delivery to USSR.

(2) The three currently advise Soviet commander-in-chief (a) that three governments have instructed their respective commanders-in-chief in Germany to make available to IARA the 75 percent share of German reparations to which IARA members are entitled, and to set aside in Germany for future disposition amount of equipment corresponding to what USSR would have received under quadripartite allocations; (b) of list of equipment set aside for USSR and that the 15 percent share of reparations to which USSR would have been entitled on basis of reciprocal deliveries against Soviet undertaking to supply to western zone commanders reciprocal deliveries to equivalent value over reasonable period of time corresponding to delivery of capital plant (it is understood that deliveries to USSR will exclude any items of equipment prohibited from export to USSR and its satellites by policies of any of three governments; when such items are excluded, substitution of other items will be made to fullest extent feasible); and (c) that remaining 10 percent share of reparations will be withheld pending fulfillment by Soviet authorities of Soviet obligations under Potsdam Agreement.

2. In making the informal tripartite allocations, three commanders-in-chief will take note of French and Anglo-American reparations lists. All equipment enumerated on these lists except that which three Allied governments concerned may wish to exclude temporarily pending final agreement upon recommendations made by US Government will be allocated as soon as possible.

3. The Inter-Allied Reparations Agency will be requested to sub-allocate within 50 days such equipment as may be allocated to it.

4. The three commanders-in-chief will cause to be quickly dismantled all equipment which may be allocated to IARA within their respective zones. Equipment provisionally allocated to USSR may be dismantled or left standing at administrative convenience of commanders-in-chief concerned pending agreement with Soviet element as to its disposal.

5. The three commanders-in-chief will enforce whatever priority in allocation of materials or services may be necessary to smooth and speedy execution of reparations programmes in the three western zones.

6. The three commanders-in-chief will accept suballocations made by Inter-Allied Reparations Agency, and will be responsible for delivery to recipient countries.

7. Consideration will be given to means, compatible with terms of Paris Act on reparations, of preventing allocation or delivery to Albania, Czechoslovakia, and Yugoslavia of items referred to in subparagraph (2) of paragraph 1 above.

Sent Department 2163; repeated USPolAd Berlin 135; Brussels for Dorr 78.

Douglas

1. In his telegram 2104, Delsec 1735, May 13, from London, not printed. Ambassador Douglas transmitted the gist of a paper, circulated that day by the British Delegation at the London Conference on Germany, setting forth a proposed procedure for dealing with future allocations and deliveries of reparations. The paper presented in detail some of the proposals reported upon in telegram 1987, Delsec 1722, May 7, from London, p. 228. (740.00119 Council/5–1348) In telegram 1781, Secdel 1578, May 17, to London, not printed, the Department offered detailed commentary on the British proposal (740.00119 Council/5–1748).