740.00119 EW/7–745: Telegram

No. 370
The Representative on the Allied Commission on Reparations (Pauley) to the Secretary of State 1
top secret

2466. Top secret to the Secretary from Pauley.

Further to my 2418, July 5.2

Now that you have become active in your new and important responsibility I wish to acquaint you with certain reparations problems here in order to have the fullest possible benefit of your thinking prior to and at the conference.

The inclusion of France in the reparations discussions here though urged by the Brit and supported by myself and Harriman is not acceptable to the Soviets. Maisky stands on the Crimea protocol. Since this question arose basically out of the Crimean agreement of the Big Three it is obvious that the question cannot be conclusively resolved at any lower level than the Big Three.
The attempt of the Soviets to place a total dollar value on reparations leads I fear into the very difficulty that President Roosevelt foresaw at Crimea, namely that it will appear to the Amer people that again reparations are to be paid in money and not in [Page 531] things. It is my belief that reparations should first be assessed and exacted on things[—] particularly plants and equipment to disarm and deindustrialize Germany—and only secondarily should money values be placed upon the things taken.
Despite the above fundamental problems I have proposed to the Allied Commission on Reparations here and have consent of all reps that we prepare as much of a definitive program as possible for presentation to the heads of the three Govts at the forthcoming conference as follows:
Arrive at an agreement between the Big Three as to the relative proportions, expressed in percentages rather than money, to which, as between themselves, each is entitled from such reparations as shall be determined to be available for these powers;
Agree on principles and procedures whereby the percentages of other claimant nations may be determined;
Define “reparation”, “restitution” and “war booty” and provide a speedy program of interim reparations for all countries entitled thereto; and
That agreement either be reached upon the three foregoing points or that the points of disagreement be stipulated in either case for presentation to the heads of the three Govts at the conference for decision.

Upon a proposed percentage formula relating to point number a above I cabled the Secretary (see my 2165, June 193) and have Acting Secretary’s 1488, July 24 in reply and further cabled you (see my 2418, July 5). It would be helpful if you would secure and read these cables which will define my attitude and as well show one major point of possible difference between myself and your predecessors on policy. You will observe particularly objectives in the proposed formula are:

To avoid fixing the percentage of any other nation in advance of a review of its claim;
To place the burden upon all of the Three Powers for proper allocation of reparations due other nations;
To maintain unity of the Big Three.

I consider it most important that the agenda of the coming conference provide for consideration of these reparation matters as well as the question of the inclusion of France. You would favor me greatly if you would see that these matters are given a high place on the agenda as they are questions of high policy which must be determined.

  1. Sent over the signature of Harriman. Sent to Washington; relayed to Byrnes, then at sea, in telegram No. 9 of July 9 (file No. 740.00119 (Potsdam)/8–645).
  2. Document No. 366.
  3. Document No. 356.
  4. Document No. 363.