Department of State Minutes
The Secretary said that he had expressed the views of the United States on the subject of reparations from Germany to Mr. Molotov this morning and had subsequently informed Mr. Eden of this talk.2 He said it would not, therefore, be necessary for him to repeat all that he had said but he merely wished to state that in our view it was difficult to reconcile certain positions of the Soviet Government with the principle of an overall plan of reparation. He said that since Mr. Maisky was here he would like to have confirmation or clarification of the Soviet definition of “war booty”. As it had been reported to him by the American representative on the Separations Committee it covered all supplies and equipment, including plants and other materials.3[Page 296]
Mr. Molotov then handed in what he said was the true definition from the Soviet point of view of “war booty”. (Annex 14)
The Secretary then said he would like to ask Mr. Molotov a question not in any attitude of hostility but with the simple desire of ascertaining the facts in the situation, and that was, whether it was true that the Soviet authorities had taken large quantities of equipment and materials out of their zone. He said that they had even heard that household equipment, such as plumbing, silver, furniture, etc. had also been removed.
Mr. Molotov replied that “Yes, this was the case,” that a certain quantity of property had been removed. He said that if this was what was worrying the Secretary that they agree to deduct from their reparation plans a suitable figure to cover removals already made. He said in this connection it should be borne in mind that the Soviet Union had suffered direct losses of many billions of dollars. He offered to knock off 300 million for miscellaneous removals.
The Secretary said that every country had suffered in this war, that the United States had spent 400 billion dollars so far in the war and its national debt had risen to 250 billion dollars, but we were not talking about that and he felt it was idle to discuss it on that basis.
Mr. Molotov said that they would be prepared to reduce their claims from 10 billion5 to 9 billion in order to cover removals already made and thus dispose of the question.
The Secretary said that according to our estimates approximately 50% of the present wealth of Germany lay in the Soviet zone.6
Mr. Molotov said that that was not their figure.
The Secretary then said that our figures did not agree and it would be difficult to establish agreed figures on this subject.
There was some discussion between Mr. Maisky and Ambassador Pauley as to the figures of German resources in the Soviet zone.
Mr. Molotov then remarked that having agreed to give Poland compensation in the west7 he could not believe that at Yalta any of us had had in our minds to strip the territory of everything in reparations before turning it over to the Poles. He felt that such a step would be impossible. He added, however, that it was possible to consider the equipment and materials in the area as Poland’s share of reparations.
Mr. Eden then remarked that since this territory was to go to Poland only at the time of the peace treaty, until that time it should be considered part of Germany for the purposes of economics.[Page 297]
Mr. Molotov said that he had meant that the treatment of the part to go to Poland must of necessity be considered differently; he did not mean that it should be entirely excluded from consideration.
Mr. Eden said that a part of the question was that during the period of occupation we had a problem of feeding and retaining approximately the same number of Germans, but under the Soviet suggestions on conditions which would cut off the source or a large part of the source from which this same population formerly drew its sustenance.
The Secretary then remarked that even if the Soviet plan was put at 9 billion, thus making the total 18 billion, it was still a mystery to him where any such amount of reparations was to come from.
Mr. Molotov remarked that this had been the figure accepted as the basis for discussion at Yalta.8
The Secretary replied that since then our armies have invaded Germany and have destroyed literally billions of dollars worth of property and that this would inevitably alter the situation. He added that we were faced with a terrible problem with regard to feeding the German population in our zone, that we had 800,000 more people in our zone [sector] in Berlin than had lived there before and approximately 4 million more in our zone as a whole. He said that counting fifty cents per day per person it would cost the United States in the first year some billion and a half dollars to maintain this excess population. They would, of course, work but they would work for the production of reparations for others and that was what we could not agree to. He said under the suggestion he had made this morning, that if each country should take reparations from its own zone, it would be possible to exchange goods between the zones. In this manner the Soviet Union would get its share from its own zone and the United States and Great Britain from theirs and would be able to take care of the needs of France, Belgium, Holland, etc. He repeated that according to our figures, approximately 50% of German resources were in the Soviet zone, 30% in the British and 20% in the American and French zones combined.
Mr. Molotov then inquired what about the Ruhr; that the Soviet Union desired in the form of reparations certain industrial equipment and machines from the Ruhr. He said they would be prepared to reduce their reparation figure even to 8½ or 8 billion, but they must insist on a fixed amount, say two billion, from the Ruhr. He said they could agree to no plan which did not contain such a provision.
Mr. Eden remarked that they were thinking of the immediate problem which faced them this winter, which was either to have wholesale starvation in their zone or to pay for the necessary imports, [Page 298] since it was apparent from the discussion that the Soviets were unwilling to turn over food and coal from the zone which they wished to give to Poland.
Mr. Molotov said this was a question that could be discussed.
The Secretary remarked that he was worried that quarrels would develop between the Soviet, British and American Governments over these matters since there would obviously be a disposition on the part of the Soviet authorities to question the need for imports which would reduce the amount available for reparations from the western zones.
Mr. Molotov in conclusion repeated his willingness to reduce their figure but repeated Soviet insistence on a fixed quantity of reparations from the Ruhr. He reiterated his belief that agreement could be reached. He inquired as to what was to be the future status of the Ruhr, whether it was to be internationalized or not.
Both Mr. Eden and The Secretary said that this was another subject of great political importance, but that they were thinking now of the immediate situation confronting the United States and Great Britain in their tasks of occupying Germany.
- See ante, pp. 274–275.↩
- See document No. 904, post, and footnotes 1 and 2 thereto.↩
- No document annexed. Since a “second” Soviet definition of war booty (document No. 939, post) was presented on July 27, the paper presented by Molotov on July 23 was presumably the definition submitted by Maisky to the Economic Subcommittee on July 21 (document No. 904, post).↩
- See document No. 1416, post, section v; cf. document No. 920, post.↩
- See document No. 930, post, attachment 1.↩
- For the Yalta agreement referred to, see document No. 1417, post, section vi.↩
- See document No. 1416, post, section v.↩