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

740.00119 EW/5–2145: Telegram

The Acting Secretary of State to the Ambassador in France (Caffery)

Washington, May 21, 1945—8 p.m.

2222. For Caffery and Murphy. Pauley, Lubin and a portion of their large staff left Washington on May 20 for short visits in London and Paris and a rapid tour of German industrial areas.¹⁷ They plan to arrive in Moscow during first week of June to begin reparation discussions. In view of Soviet opposition to initial participation of France in reparation discussions (unless Poland and Yugoslavia are also included) we have indicated our willingness to begin such discussion on a tripartite basis with the expectation that the issue of French participation will be given renewed consideration early in these discussions. This matter was discussed with Eden, who agreed that reparation talks should not be further delayed by the disagreement concerning French participation.¹⁸

For your own background following is gist of policy guidance to Pauley: (1) Reparation program should be closely geared to industrial disarmament of Germany and to rehabilitation and development of countries devastated by Germany. (2) To the fullest possible extent reparation should be obtained by removal of capital equipment to Allied countries and from German investments abroad. Removals of existing capital equipment desired by Allied countries should be limited only by the necessity of leaving Germany with enough resources to support herself at a low level without sustained outside relief. (3) Continuing reparation from current production should be held to a minimum and should consist primarily of raw materials such as coal. (4) The first charge on any German exports from current production or from stockpiles should be a sum sufficient to pay for approved, essential imports. (5) Although many points regarding reparation in form of labor services remain unclear, it seems to be agreed that only persons determined to be deserving of punishment should be required to perform compulsory labor outside Germany as part of the reparation program. Labor reparation might also be derived through recruitment of other Germans on a voluntary basis.

With respect to the partly related problem of immediate exports from Germany the Department is of the view that an enlarged program of exports of supplies and equipment urgently needed in liberated areas¹⁹ should be developed as rapidly as possible. In order to expedite such exports, particularly to Western European countries, Department believes that allocation should for the present be handled on some completely informal basis and should not be made to depend upon early organization of allocating machinery under European Economic Committee,²⁰ nor upon rapid development of interim program by the Reparation Commission at Moscow. Possible methods of dealing informally with this problem are now under discussion with War Department here.

Grew

17. In their report on German reparations to President Truman, under date of September 20, covering the period February to September, Messrs. Pauley and Lubin summarized the results of the trip to Germany, May 30–June 5. The British sent four members of their technical staff on reparations to join in the field trip; the Soviet Union did not participate. To study the industrial situation, the staff was divided into six teams, each pursuing a different course, thus enabling the Mission to see virtually all parts of Germany under United States and British occupation. “The field teams,” said the Pauley-Lubin Report, “came back with completely harmonious conclusions on the German economy insofar as reparations are concerned. Though the war damage was recognized as extensive, it was evident that (1) German capacity for war production was still largely intact; (2) extensive removal of plants and machinery were both possible and desirable; and (3) there were also available for shipment as reparations timber and other raw materials but only if transport, food and shelter problems were first met.” (740.00119 EW/9–2045)
18. See telegram 3948, May 18, 8 p.m., to London, p. 1221.
19. For negotiations relating to the provision of civilian supplies for liberated areas in the military and post-military periods, see vol. ii, pp. 1059 ff.
20. For documentation on interest of the United States in the establishment of a European Economic Committee and a European Coal Organization, see ibid., pp. 1411 ff.