740.00119 EW/1–645: Telegram
The Secretary of State to the Ambassador in the Soviet Union (Harriman)
50. 1. British Embassy has informed Department that British will propose that reparations Article or its Annex clearly state that 1938 prices will be used in pricing reparations deliveries if it is necessary to accept Soviet formula. Department agrees that this would be desirable and unless you perceive objection you may support the British in their attempt to have pricing basis clearly stated.
2. British Embassy further informed Department that British are going “to put on record with Molotov” their view that: (a) Reparations sum should not be fixed in Armistice Terms; and (b) Mention of sum fixed does not prejudice revision if sum proves to exceed Hungary’s capacity to pay. While Department does not object to British action along these lines it prefers that you follow instructions in Department’s telegram 37, January 6, rather than support British approach. Soviet Government is already familiar with our views on (a). If it should not prove necessary to make reservation suggested in paragraph 2 of Department’s 37, the British reservation would not appear particularly useful. If on the other hand a reservation is necessary we prefer the wording we have suggested.