740.00119 (Potsdam)/7–2445

No. 841
Proposal by the British Delegation1

Removal of Allied Industrial Equipment Especially in Roumania

Note by the Secretary of State for Foreign Affairs

Our case can, I think, be stated simply as follows.

There are only two articles in the Roumanian Armistice under which property can be removed from Roumania.

One of these is Article 11 which provides for the payment of reparations. The Soviet Government do not claim that the oil equipment was removed under this Article, but that it was taken as booty.

The second is Article 7, which provides that the Roumanian Government should hand over as “trophies” war material of Germany and her Satellites located on Roumanian territory. (It is clear from Article 1 that Satellites here exclude Roumania).

It is clear therefore that the only property which can be claimed as booty is German property or the property of another Satellite of Germany.

The question is whether any of the property now in question is German property. The Soviet Delegation have not claimed that any equipment acquired by Allied nationals before the war can be regarded as German property and I cannot understand why this property has not been returned at once without further argument.

The more difficult case is that of property acquired by the companies during the war when they were under German management. But even this is clear if we examine it carefully. The companies at the time when they were seized by the Germans had certain assets (money, equipment, oil concessions). When under German management, they parted with some of these assets (money or oil) and received from [Page 744] Germany other assets in return (equipment). Thus the equipment was indubitably the property of the company at the time of liberation.

If any British company had on its premises property which clearly belonged to Germany and had merely been deposited there for custody, its removal as booty would of course be justified.

As a means of settling this question I now propose that the ownership of the disputed property should be subject to impartial and expert investigation. This might be entrusted to a Committee of three allied nationals drawn from States not interested in this dispute. If the property is found to belong to Germany, we would agree that it should be retained by the Russians. If it is found to belong to one of the British companies the property should be returned by the Soviet Government or compensation paid to the company.

  1. Submitted at the Seventh Meeting of the Foreign Ministers, July 24. See ante, p. 328. This paper was apparently designated by the British Delegation as P. (Terminal) 40 (see post, p. 745), although this number does not appear on the source copy.