The Secretary said he had asked to see Mr. Molotov because he was deeply concerned at the development of the question of reparation from Germany. He said that as Mr. Molotov knew the United States Government had always favored and still favored the adoption of a friendly overall policy for the Three Powers which would treat Germany as an economic whole. He said, however, after listening to the discussions here and hearing the report of the Reparations Committee1 he did not see how certain of the positions taken by the Soviet Government could be reconciled by [with?] the adoption of an overall reparation plan. For example, the question of the transfer now to Polish administration of a large part of 1937 Germany would expose the British and Americans in their zones to serious dangers in connection with an overall reparation plan. Another factor which worked against the overall plan was the definition put in by Mr. Maisky of “war bounty [booty?]”.2 The Secretary said he wished to make it very plain that the United States did not intend to pay out money to finance imports to Germany and thus repeat the experience after the last war when in fact United States funds had been used to pay reparations to others.
Mr. Molotov said he fully understood that point of view and he wished to say that Mr. Maisky had not fully made clear the position of the Soviet Government on the definition of “war bounty [booty?].”
The Secretary continued that he was also very much afraid that the attempt to resolve these conditions in practice would lead to endless quarrels and disagreements between the three countries at a time when unity between them was essential.
Mr. Molotov said he thought that these difficulties could be reconciled here at the Conference and that he intended to put forward at the morning meeting of the Foreign Ministers concrete proposals3 which he hoped would be carefully studied by the British and American Delegations.[Page 275]
The Secretary said that under the circumstances he wondered whether it would not be better to give consideration to the possibility of each country taking reparations from its own zone. For example, according to their estimates, about 50% of the existing wealth of Germany was in the Soviet zone4 and that, therefore, the Soviet Union could receive its share of reparations from its own zone. He added that if they wished to obtain certain equipment or materials from the British or American zones they could do so in exchange for food or coal needed to feed and warm the German population in the west. He added that Marshal Stalin had indicated some such proposal when he had said yesterday that if the British wished to obtain coal from Silesia they could do so by exchanging other goods with the Poles.5 He added that his suggestion for zonal as against overall treatment applied only to reparations but that in other matters, such as currency, transport, etc. Germany would be treated as an economic whole.
Mr. Molotov said he knew that the Marshal strongly favored an overall plan for reparations and he said that they would be quite prepared to consider reducing their reparation claims.
As it was then time for the meeting, it was agreed that if agreeable with Mr. Eden the three Foreign Secretaries would meet informally this afternoon in order to discuss the matter further.
In conclusion, The Secretary repeated that the United States could not agree to anything which would require them to finance the feeding of Germans in their zone so that the latter could work on behalf of reparations for other countries.