Foreign Relations of the United States: Diplomatic Papers, 1945, European Advisory Commission, Austria, Germany, Volume III

740.00119 EW/10–1045

The Secretary of State to the Chargé in the United Kingdom (Gallman)

Washington, October 10, 1945—6 p.m.

8980. For Reinstein. Dept appreciates your exhaustive and informative reports on reparations discussions with British and French.

(1) Regarding time schedule, Dept finds it impossible to make absolutely firm commitments because of great difficulty being encountered in recruiting suitable personnel. However, matter is receiving serious attention and Clayton and Secretary working on the problem. Progress being made and you may receive definite report within few days.

(2) Regarding allocation between USSR–Poland and other claimants (Delsec 111, Para 9³⁹), Dept considers immaterial whether this is done in Allied Control Council or in Reparations Commission. If Allied Control Council allocates, US representative will receive guidance of American delegate to IARA as envisaged in Deptel 8549, Sept 27. In fact, if valuation of equipment takes place in Control Council, allocation in ACR may be preferable since valuation decisions may then be made independently of allocation.

(3) Regarding part of interim deliveries to go to USSR, War Dept in consultation with State has drafted, and by now probably dispatched, a telegram to Eisenhower⁴⁰ instucting him to defer deliveries of available plants to USSR pending, (a) appointment of US member of IARA; (b) receipt by IARA of lists of plants wanted by other countries; (c) resolution of problems of reciprocal deliveries and valuations.

(4) Question of reciprocal deliveries by USSR. Dept would like to see these come from outside eastern zone. However, it regards Waley’s argument (b) (Para 7d, Delsec 107⁴¹) as invalid. Moreover, types of commodities stated in Berlin Protocol suggest deliveries from both inside and outside eastern zone; for example, petroleum, coal, from outside and potash, from inside. While Dept willing to take position that reciprocal deliveries should come from outside eastern zone, it may not be possible to make this position stick.

(5) On restitution, interim directive contained Deptel 8245, Sept. 20, has been submitted to War Dept for transmittal to Eisenhower. Dept still feels strongly that restitution should be handled in Allied Control Council. As viewed here, there should be relatively very few cases of conflicting claims between Governments and most of these should be susceptible to settlement by negotiation between investigatory missions sent into Germany by various claimant countries and respective zone commanders under aegis of Control Council.

(6) Dept agrees with you that US delegation to IARA should be closely tied in with American representative on ACR. Similar to your suggestion, it has been contemplated here that No. 2 man on ACR might serve as US delegate on IARA.

(7) Re Para 8a, Delsec 107. Dept would oppose any allowance being made for production of goods on reparation current account.

Re Para 8b, Dept would oppose any allowance for exports to cover service on pre-war debt.

Re Para 8c, Dept believes problem of labor services will require fuller discussions than that contained in earlier US statements made available to other powers.

Byrnes

39. See telegram 10426, October 6, noon, from London, p. 1332.
40. Reference here is actually to War Department telegram War 73742, October 5, to General Clay, p. 1330.
41. See telegram 10842, October 4, 8 p.m., from London, p. 1324.