Foreign Relations of the United States: Diplomatic Papers, The Conference of Berlin (The Potsdam Conference), 1945, Volume I

711.51/7–445

No. 365
The Secretary of War (Stimson) to the Under Secretary of State (Grew)¹

[Extracts]²

secret

Washington, July 4, 1945.

My Dear Mr. Secretary: I have carefully considered the many points which you raised in your letter of 8 June 1945³ with respect to conditions in Western Europe. I share your concern over what I think we all recognize to be a distressing situation.

I recognize the importance of all of the points which you raise and assure you that the War Department, in its appropriate sphere will cooperate in carrying out such policy as our government may establish. I feel, however, that many of the points you raise fall outside of the policy enunciated in the President’s letter of 21 May 1945⁴ to which you refer. The policy conveyed to the War Department by the President in his letter was that after prompt termination of military responsibility for the provision of civilian supplies in liberated areas the Army should assist the national governments involved to the extent the military situation permits, which assistance should include the transfer of military supplies in excess of essential military requirements to the extent legally permissible. Many of the questions which you raise such as the determination of this government’s lend lease policy, the establishment of a reparations policy, and the policy of our government with respect to the provision of supplies to and the handling of exports from Germany seem clearly to fall outside the President’s letter. As, however, I recognize fully the importance of the questions which you raise I will attempt to treat with them in the order in which they were submitted:

. . . . . . .

4. Your letter poses the question as to whether it would be possible to return to the allied countries in Europe their own railroad cars and locomotives found in Germany. Up until the present time the military necessities of the situation in Europe have required that the military authorities operate all railroad power and rolling stock in Northwest Europe, without regard to the country of ownership, in a transportation pool. Only by this method has the limited amount of equipment available been found sufficient to meet military requirements. As operations have now terminated and as it is reasonable to expect that conditions in Germany will become more stabilized as time goes on, it should be possible, so far as military considerations are concerned, to gradually return to our Allies their cars and locomotives, where identification of the country of ownership is possible.

The fundamental problem raised by your question, however, is whether or not such restitution is consistent with this government’s reparations policy. The War Department has received informal advice from the State Department staff that the government’s policy was against recognition of an automatic right to restitution of the character under discussion and that it was desired that the return of property of this character found in Germany, even though capable of identification as to its national source, would be a matter of discussion in connection with reparations decisions. I would very much appreciate your definitive advice on this subject.

5. In this paragraph your letter raises the whole problem of interim reparations. I feel strongly that the War Department should not determine the reparations policy to be followed in the administration of military government in Germany. In my opinion such policy should not be the subject of military decision but should be established by the appropriate policy making agencies of the government and transmitted to the War Department for administration.

In your letter you pose several alternate methods of dealing with the reparations problem in the interim before the Reparations Commission begins to operate. In this situation any affirmative action by the War Department would of necessity result in determination by it in this policy field where, in my opinion, it is inappropriate for the War Department to function. If the State Department will transmit to the War Department a definite policy to be followed in the administration of Germany with respect to reparations pending action by the Reparations Commission, the War Department will gladly endeavor to carry out such a policy.

6. In this paragraph of your letter you raise again the two questions of the extent of supplies which will be imported to Germany from overseas and the program of exports from Germany which will be undertaken. I believe that my views on these two questions have been covered in the previous discussion.

Sincerely yours,

Henry L Stimson

1. Actually addressed to the Acting Secretary of State, but Grew was only Under Secretary on the date of signature.
2. For other extracts from this letter, see document No. 427.

3. The pertinent passages of Grew’s letter of June 8 read as follows (file No. 711.51/6–845):

   “I am deeply concerned over conditions in Western Europe and the possibility that serious disorders may develop during the coming months. If the people of that area, particularly those in France, have to face another winter without heat or without adequate food and clothing, I can foresee disturbances of such serious consequence as not only to involve conflict with our troops, but to imperil gravely our long-term interests. The outlook at best is a gloomy one. It is already aggravated by repatriated prisoners of war and deportees who, on returning, expect more in the way of food, clothing and employment than can be provided.

   “As I know that you are aware of the situation and of its implications, I am taking the liberty of seeking your assistance on the following points, which I believe are in line with the policy enunciated in the President’s letter to you of May 21, 1945.

   . . . . . . .

   “4. Another factor of importance to be considered in connection with this general matter is that of rail transportation. From fragmentary information, it would appear possible that the Germans have withdrawn into Germany a substantial amount of rolling stock from Allied countries, and that, despite war damage, their position in this respect is much more comfortable than that of our Western European Allies. If such should prove to be the case, would it not be possible to return to those Allies at least their own cars and locomotives found in Germany?

   “5. I understand that the U. S. and British military authorities in Germany have uncovered certain stocks of raw materials and industrial equipment which are of important interest to the liberated countries of Western Europe in their present economic straits. I realize that the disposition of such German materials and equipment involves the question of reparations. On the other hand, the need for certain of them is so great at the present time that I do not feel it would be appropriate to await action by the Reparations Commission before putting the materials to use. Adequate records, however, should be kept by SHAEF of any such deliveries in order that they may be taken appropriately into account in the later determinations of the Reparations Commission.

   “I accordingly urge that an allocations committee be set up immediately and that General Eisenhower be instructed to interpret liberally his outstanding directive on this subject. Pending the working out of more definitive machinery, I feel that such a committee should be set up within SHAEF, with a high ranking SHAEF officer as chairman. …

   . . . . . . .

   “6. There is no longer disagreement concerning the need for assuring such essential economic rehabilitation in Germany as is necessary to the fulfillment of the purposes of occupation. We will doubtless have to ship some supplies into Germany from overseas. Also, the military will doubtless move into Germany certain types of equipment, such as cranes and other harbor and engineering facilities, which are now serving and are vitally needed by our Allies. In order that our Allies may recognize that our action in these respects is directly related to their own economic interests, an adequate program of exports from Germany, to be undertaken at once, is of crucial importance, and should be given clear priority over the satisfaction of needs within Germany. In the absence of clear and continuing guidance from Washington on this point, I fear that there would be an inevitable tendency for the occupying authorities in the field to become chiefly absorbed in meeting the needs of the area for which they have a direct responsibility.”

4. Not printed.