800.515/6–2845: Telegram

No. 382
The Ambassador in the United Kingdom (Winant) to the Secretary of State ad interim
u. s. urgent

6507. 1. Emb discussed last week with MEWFO all recent telegrams from Dept, Madrid and Paris on Allied claim to ownership and control of Germany’s external assets. ( Safehaven )

2. MEW has now shown us draft of a telegram to Monckton in Moscow (which is being repeated to Washington) and is apparently approved by all Brit interested agencies. MEWFO’s telegram is in reply to certain telegrams from Monckton which apparently indicated that Pauley had suggested either Reparations Commission or ACC make immediate claim to German external assets. Brit added that the telegram to Monckton also included views of Brit govt on all telegrams referred to in pgh 1 above. For confidential information of Dept and Missions, following are points emphasized by MEWFO in our talk and also appear, inter alia, in MEWFO’s draft telegram:

Brit disagree with Dept’s 4828, June 15 to London1 (also sent to Moscow and Paris and rptd to Ankara, Stockholm, Bern, Lisbon and Madrid). They feel since freezing and census of German nongovernmental assets in neutral countries are proceeding sufficiently [Page 556] satisfactorily, no Allied claim to assets should be made at this time; that vesting order by ACC in near future (even if it were prepared to make such order) would create difficult legal position which might involve adverse decisions by neutral govts and neutral courts; any such claim would raise immediate counter claim by neutrals to such German assets; and such claim would inevitably diminish chances of neutrals doing their best to uncover German secreted assets. For these reasons they apparently also do not agree with proposed démarche of [to?] Spain and other European neutrals.
Brit consider Reparations Commission is not appropriate body to claim such assets, especially since France is not represented thereon.
To overcome foregoing difficulties Brit think we should await assumption of active control by ACC of Germany and then after making requisite decrees, operate through a recognized German Govt institution (such as Reichsbank) to claim German nongovernmental assets abroad.
Since requisite Allied personnel is lacking to assume active management and control of German parastatal corporations, appointment of interventors approved by our Missions would be sufficient safeguard against dissipation of German assets. Brit do not see how control by any designated Allied body would meet requirements of active management of even such parastatal corporations, much less, ultimately, of German nongovernmental assets.
Brit feel that approach to Turkey at the same time when approach is being made to neutrals is inadvisable since Turkey is not technically a neutral. They believe approach to Turkey should be deferred to a somewhat later and more appropriate time.
Our govts operating through their Missions as heretofore should continue to deal with neutrals as regards German assets (for the time being at least) until situation is clearer. They feel that at this time the interposition of any specially designated body to deal with neutrals would be a mistake (this telegram sent to Dept as 6507, rptd 224 to Moscow, 409 Paris, 177 Madrid, 141 Lisbon, 200 Bern, 476 Stockholm and 63 Ankara) [.]

2. [3.] We pointed out that foregoing in effect meant Brit opposed any immediate change in existing procedure as regards neutrals and that their views were contrary to those expressed in the telegrams referred to in pgh 1 above. MEWFO agreed that this was the case. We [Page 557] emphasized that this created a situation in the nature of an impasse with resultant obvious acute difficulties.

3. [4.] Brit feel that failure to clear with them before instructing Moscow (in Dept’s 4828, June 15 to London) to proceed has caused them embarrassment and “has rendered a difficult situation more difficult”[.]

  1. On June 15 the following instructions were sent to Winant and Harriman in telegrams numbered 4828 and 1316 respectively (file No. 800.515/6–1545):

    Safehaven . Series of telegrams from Iberian Peninsula indicates grave danger Spain in particular will dissipate German assets, public and private, unless there is early indication ACC will assert its exclusive power to control such assets. This has precipitated problem of creating authority for assuming such control of German external assets. In order to preserve German assets from dissipation by Spanish, it is proposed that US and UK on behalf of occupying powers make joint démarche to Spain pointing out to Span that ACC is expected shortly to issue decree vesting all German assets in Spain and designating as its agents for administration thereof US and UK Embs in Spain on behalf of ACC. This will it is believed forestall Span designs on non-governmental German property in Spain. It is proposed that prior to four power agreement regarding vesting order this Govt and UK should assume active management and control of German official properties in Spain including corporations and other entities owned by former German state. Such properties will be administered in trust by US-UK for ACC. … This action must be taken on security grounds and to avoid dissipation of assets, records, etc.

    “Regarding German private assets, effect of proposed démarche will be to warn Span that status quo must be maintained in anticipation of ACC action. It is proposed that other European neutrals and Turkey be informed simultaneously along similar lines.

    “Moscow is instructed to inform Russians of our proposed action regarding German official properties as defined herein and to seek Soviet concurrence to proposed notes to Span and other countries regarding private properties. Soviet and France should be invited to join approaches to govts with which [they] maintain relation[s]. Missions in London and Paris should obtain agreement of govts to which accredited for participation in co-trusteeship (except in Spain where France unrepresented) over German official assets and to presentation of joint notes regarding private German properties.”