740.00119 (Potsdam)/5–2446

No. 381
Briefing Book Paper
top secret

Control of German External Assets

The United States has recently approached Great Britain, France and the Soviet Union suggesting that the Allied Control Council as the government of Germany should declare that all German external assets, private as well as public, are subject to the Council’s control. German official property, including corporations and other entities which were owned by the Reich, will immediately be taken over by the Missions of the occupying powers in the various neutral countries. This was prompted by an emergency situation in Spain, where there was evidence that the Spanish State might expropriate or purchase for an inadequate figure certain properties belonging to a German government corporation.

The primary purpose for assuming control over German external private assets is economic security. In most of the other American countries the influence of German spearhead firms has been removed as a result of local legislation pursuant to Resolution V of the Meeting of Foreign Ministers held at Rio de Janeiro in 1942.1 In the European neutral countries there has been no comparable local legislation. It is believed that at this date it would be more desirable for the occupying powers to act directly on the basis of successorship to the German State for control purposes rather than to rely upon local legislation. A selective exercise of the power of control is envisaged. Spearheads of German influence and economic aggression should be completely eliminated. Where these spearhead concerns are not essential to the local economy, the elimination of German influence should be by means of complete liquidation of the concern. Where German-controlled companies are essential to the local economy, as in the case of industrial establishments employing large numbers of people, the German control must be transferred to non-German hands. In both instances, the net proceeds could be used for purchasing [Page 555]essential supplies for Germany under the disease and unrest formula or for the satisfaction of reparation claims.

Agreement is expected at a lower level, but it was deemed desirable to prepare this memorandum for the President in the event that difficulties should develop or that the other conferees should bring up the matter.

  1. Text in Department of State Bulletin, vol. vi, p. 124.