740.00119 EW/7–945

No. 372
The British Embassy to the Department of State 1

Ref: 1608/–/45


On June 27th Mr. Pauley communicated to Sir Walter Monckton in Moscow a paraphrase of a telegram to the State Department2 describing the communication he had sent to his representative at Frankfurt and to the Commander of the United States zone in Germany on the subject of the withdrawal from Germany of art objects, other property and supplies. Mr. Pauley suggested that similar instructions should be sent to Field Marshal Montgomery.

His Majesty’s Government in the United Kingdom would have been glad to have been given an opportunity to comment on this matter before action was taken. The subject is one on which it is most desirable to work out a policy common to all four zones, particularly in view of the wider aim to secure the treatment of Germany as an economic unit.
As action has been taken and in order to give effect to Mr. Pauley’s suggestion, His Majesty’s Government desire to reach agreement with the United States Government on the policy to be adopted in the United States and British zones, on the understanding that the arrangements made and the policy covering interim deliveries from [Page 533] Germany shall be discussed at the earliest possible date at the Allied Control Commission and that pending such discussion the Commanders-in-Chief of the British, United States and French zones should exchange information and co-ordinate action with regard to the movement of goods from Germany. This, it is suggested, should be done through the agency of the newly created Combined Resources and Allocation Board.
A statement of the views of His Majesty’s Government on this matter, (excluding the movement of goods or property for purposes of restitution), are contained in the enclosure. This statement has been sent to Sir Walter Monckton with instructions to discuss it with Mr. Pauley and to ascertain from him whether he is prepared to modify the instructions which he has issued so as to bring them more into line with the arrangements proposed by His Majesty’s Government for the British zone.
It is the belief of His Majesty’s Government that it is essential to inform the Soviet Government of these arrangements and the reason why they have been made and to leave the Soviet Government in no doubt of their limited scope and interim nature. Sir Walter Monckton has therefore been instructed also to propose to Mr. Pauley that, after agreement has been reached on the instructions for the British and American zones and after they have been issued to Field Marshal Montgomery and the United States Commander-in-Chief, they should jointly explain to Monsieur Maisky the nature of these arrangements for interim deliveries. Monsieur Maisky could be told that the two Governments have felt bound to take this action in view of the crying needs of the European Allies and that they will take the earliest opportunity of informing the Allied Control Commission and of securing its concurrence. The two Governments appreciate that the Soviet Commander-in-Chief may wish to take comparable action in the Soviet zone. If so, they very much hope that in respect of any exports therefrom the principle of accountability agreed between the two Governments would be preserved.
It will be noted from the final paragraph of the enclosure that His Majesty’s Government intend to send to Sir Walter Monckton a separate statement of their views on the interim movement of goods or property for purposes of restitution.

The arrangements here outlined would apply only to deliveries of goods from Germany on supply grounds. They should be regarded as interim and will no doubt be replaced by other arrangements when [Page 534] the Allied Control machinery comes into full operation, when reparation policy is decided and when the organization of the Emergency Economic Committee, Europe, is further developed and its relations in [to?] the Control Powers further defined.

His Majesty’s Government would be prepared to authorize Field Marshal Montgomery at his discretion to permit the export from the British zone of occupation to Allied countries of Western Europe of commodities essential to their economic life. The extent of Field Marshal Montgomery’s discretion in this matter would be limited by the following conditions:
as a general rule exports should for the present be limited in kind to raw materials and consumer goods and exports of capital equipment should not be permitted save in exceptional circumstances and after prior reference to His Majesty’s Government;
exports of a type which have been agreed as likely to prejudice the work of the Reparation Commission or reparation settlement should not be permitted;
in considering whether a given export should be permitted, the Control authorities will have regard to whether the export would necessitate the subsequent import of goods into Germany;
the Allied Government receiving such an export from the British zone would, before being permitted to take delivery, be required to accept accountability for them in due course under whatever scheme may be agreed and to recognize that they have received them without prejudice to the question whether they shall be considered to be reparation [,] restitution or exports for which payment must be made in acceptable currencies;
demands by Allied countries and availabilities for export in the British zone should be considered so far as possible in collaboration with the Control Authorities in the French and American zones, so that a consistent and co-ordinated policy should be followed in the three zones.
Field Marshal Montgomery would be authorized to grant priority for the export from the British zone of material immediately required for the direct war effort of the Allied Nations against Japan.
Field Marshal Montgomery would keep Sir Walter Monckton informed of the exports which he had permitted; and would designate a member of the British element of the Allied Control Commission to maintain liaison with him. Inter-zonal co-ordination would presumably be maintained by the newly created Combined Resources and Allocation Board.
A scheme whereby information about requirements and availabilities could be exchanged between the E. E. C. E. and the Commanders-in-Chief of the British, United States and French zones has been approved by the E. E. C. E. and it is hoped that it will shortly be put into operation. Information obtained under this scheme may be of use to the Commanders-in-Chief in determining priorities. His [Page 535] Majesty’s Government now propose to inform the E. E. C. E. that further definition of its functions in relation to German exports must await a clarification of reparation and restitution policy and full establishment of Allied Control machinery in Germany; but that in the meantime some movement of goods from the British zone would be permitted. His Majesty’s Government would hope that the United States representative on the E. E. C. E. would make a similar statement about the United States zone.
His Majesty’s Government’s views upon interim movement of goods or property in the way of restitution and not on grounds of supply will be contained in a separate statement.3
  1. The original of this aide-mémoire bears the following manuscript notation: “Note: Instructions referred to in this Aide-Mémoire were communicated to Sir Walter Monckton on July 6”.
  2. See document No. 360.
  3. Not printed.