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

740.00119 EW/7–1445

No. 377
United States Delegation Working Paper ¹

[Undated.]

(Draft of Proposed Letter by the President to Generalissimo Stalin and Prime Minister Churchill )

My personal representative on the Allied Commission on Reparations, Ambassador Pauley, has reported the progress made by that commission. He states that two important accomplishments have been made,—namely, that the members of the Commission are agreed:

(1) Upon a 56, 22 and 22 percentage allocation between the USSR, UK and USA, respectively, of whatever amount of reparations may be available to these nations. To meet the validated claims for reparations on the part of other nations, as determined by the mutual agreement of the three powers, each of the three powers will give up from their share in the ratio that each share bears to the total.²

(2) Upon a procedure for settling the division of reparations between countries other than the UK, USA, and USSR, which procedure neither pre-judges the claims of any nation nor attempts to award any fixed percentage of reparations even to any of those represented on the Allied Commission on Reparations.³

I am sure that these two important points of agreement will have your whole-hearted approval as they have mine. Copies of the texts of these points of agreement are attached.⁴

Ambassador Pauley has reported further progress by the Allied Commission on Reparations in reaching almost complete agreement on a series of eight important principles upon which the entire reparations program should be based. These principles I find soundly conceived and evidence a broad understanding on the part of the three great powers in their proposed treatment of the internal economic problems of Germany. Agreement has not yet been reached on the last clause in the last sentence of the final principle. I quote these principles in full, underlining this one last clause which the representatives on the Commission submit to us for decision:⁵

. . . . . . .

I feel sure you will concur in these principles including the underlined clause. The United States must insist that such necessary imports as are approved by our governments shall constitute a first charge against exports from Germany of current production and stocks of goods. To do otherwise, will lead either to a repetition of our mistakes at the end of the last war, or leave us unable to bring about the desired industrial disarmament of Germany.

I am also informed that the commission has discussed war booty and restitution as related to reparations. No common definition of terms has been set down. No definitive plan of reparations can be drawn properly, and no program can be administered uniformly and effectively unless the subject matter of that plan is clearly and definitely agreed upon by our three governments.

The United States proposes that:

1) Restitution shall be confined to identifiable artistic, religious and cultural objects existing at the date of the invasion of the territories from which such objects have been removed, insofar as such objects can be recovered and irrespective of the form of dispossession by which they came into enemy hands. While any nation entitled to reparation may be allowed a prior claim for the return of certain other particular types of identifiable property removed by the enemy, the value of such property, if returned, shall be entered on the reparations account of such nation.

2) War booty shall be limited to finished equipment and supplies produced for and belonging to the German armed forces exclusive of any facilities used to produce such equipment or supplies.

3) Except for transfers of property⁶ as restitution, war booty or exports to pay for approved imports, all transfers from⁷ territory within the boundaries of the German Reich as it existed on December 31, 1937, should be deemed⁸ reparations.⁹

I am confident that you will appreciate the need for resolving these important questions immediately. Otherwise, it will be impossible to implement the reparations program so essential for the removal of German war potential and the reconstruction of the liberated countries of Europe which have suffered so much from German aggression. It is for these reasons that I am presenting our proposed definite answers to these questions for your concurrence at our coming conference.

1. This appears to be a paper prepared by Pauley’s staff at Moscow for use in opening the negotiations at the Conference with respect to reparations. Truman, however, used for this purpose document No. 894, printed in vol. ii . Cf. document No. 214.
2. Cf. attachment 3 to document No. 894.
3. Cf. attachment 4 to document No. 894.
4. No papers found attached to this draft.
5. For the text of the eight principles here omitted, see document No. 367.
6. The words “transfers of property” have been changed by hand to “property transferred”.
7. The words “transfers from” have been changed by hand to “property in the”.
8. The words “should be deemed” have been changed by hand to “shall be subject to”.

9. Cf. the following undated working paper in the Pauley Files, headed “Relation of Reparation Deliveries and Other Property Removals”:

   “All property removed from Germany by any United Nation shall be considered as reparations, unless it falls within one of the following categories:

   • “(1) Exports payable in currencies acceptable to the Allied Commission on Reparations;
   • “(2) War booty; and
   • “(3) Restitutions.”