Pauley Files

No. 1047
The Representative on the Allied Commission on Reparations (Pauley) to the Secretary of State1

My Dear Mr. Secretary: In calculating the food supplies from the official statistical records we find that taking all kinds of food together there was a total deficiency (grain, meats, fats, etc.) in 1936 for Germany, as constituted in 1937 of 5,700,000 tons. However, in the zone now occupied by the USSR there was a surplus of 2,650,000 tons. This meant a net deficiency in the western zones occupied by the US, UK and France (including Berlin) of 8,350,000 tons.

The present situation differs from that before the war in three major respects:

(a)
The efficiency of collections from the farms will probably be greatly reduced. We estimate a drop of 25% below prewar normal for the next year or two.
(b)
The food consumption standard of urban consumers will be reduced. We estimate that average consumption should be about 2,300 calories per day which was the average urban civilian diet in Germany in 1943–44.
(c)
In view of world shortages of meats, fats and oils and other quality foods, the bulk of German caloric deficiencies will have to be made good by grain imports.

We estimate that the amount of grain which Germany as a whole will have to import annually during the next year or two to offset her deficit of all foods will be about 4,400,000 tons, worth 565,000,000 Reichsmarks. In contrast, the Russian zone should probably show a food surplus of 1,200,000 tons in grain equivalent; valued at 150,000,000 Reichsmarks. The zones occupied by the US, UK and France (including Berlin), on the other hand, will have to import about 5,600,000 tons of grain to meet their total food deficiencies. The value of this grain would be about 715,000,000 Reichsmarks.

In addition to the surplus of grains in the USSR zone noted above, past experience shows there is good reason to believe that there will [Page 1031]be a surplus of other types of commodities. The following figures show net shipments out of the USSR zone in metric tons for 1936:

Brown coal 3,492,000
Potash fertilizer 1,182,000
Pit props 448,000
Clay products 1,258,000

In discussing this problem with Mr. Molotov may I suggest that you call to his attention the following important argument, namely: It is proposed that 12½% (10% British proposal—12½% compromise) of all equipment removed from the western zones should go to the USSR.2 This is a net and free delivery to Russia from Germany. On the other hand the food which Russia would send into our zone, or to the Control Council from eastern Germany, under our proposal would be paid for in Reichsmarks. In other words this food would be of no direct cost or expense to the Russian Government if produced in Germany. The 12½% of removables that would thus be turned over to USSR in return for food and other goods would, in final analysis, cost the Russians nothing.

Sincerely yours,

Edwin W. Pauley
  1. Printed from a carbon copy on which there is an uncertified typed signature.
  2. See ante, pp. 475, 892.