740.00119 Potsdam/7–2345

No. 839
United States Delegation Working Paper 1

Use of American Property for Satellite Reparations or “War Booty”

1. The burden of reparation (and “war booty” by broad Soviet definition) should not fall on American nationals.

2. The Soviet Government should make such adjustments in its reparations demands and its economic and trade relationships to insure that the burden of reparation not be shifted to American nationals because of the inability of the satellite to make adequate, effective, and prompt compensation for loss of American property.

3. Capital Equipment. We object to its being removed as reparation, “war booty”, or under any other guise. Loss would accrue to American nationals as a result of destruction of plants and the consequent loss of markets and trading connections. Seizure of American property makes impossible the fulfillment by satellite of its obligation under the armistice to restore intact the rights and interests of the U. S. and its nationals.

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The United States looks to the U. S. S. R. for the return of any equipment already removed and no further removals. Where such equipment will not or cannot be returned by the U. S. S. R., the U. S. will demand of satellite adequate, effective and prompt compensation to American nationals, and that such compensation have priority equal to that of the reparations payment.

These principles apply to all property wholly or substantially owned by American nationals, or to property wholly or substantially owned by Allied nationals in which Americans have an interest. While the U. S. may not be in a position to oppose removals of property in [which] the American as well as the entire Allied interest is less than substantial, adequate, effective, and prompt compensation must nevertheless be made.

4. Current Production—While U. S. cannot oppose reparation out of current production of American investments, the satellite must provide immediate and adequate compensation to the American nationals including sufficient foreign exchange or products so that Americans can ultimately recover reasonable foreign currency expenditures and transfer a reasonable return on their investment. Such compensation must also have equal priority with reparations.

2. [5.] U. S. S. R. should agree not to include [conclude] treaties, agreements or arrangements which give to the U. S. S. R. an exclusive or monopolistic position in the trade, raw materials, or industry of these countries, or which deny to American nationals access, on equal terms, to such trade, raw materials and industry; and appropriately to modify existing arrangements which have that effect.

  1. The source copy bears the following manuscript notation by Mosely: “Collado July 22, 1945 Potsdam”.