740.00119 Control
(Germany)/7–2345: Telegram
No. 880
The Deputy to the Assistant
Secretary of State for Economic Affairs (
Thorp
) to the Assistant
Secretary of State (
Clayton
)1
secret
[
Washington
,] July 25
[1945.]
121. For Clayton from
Thorp.
Dept and CAD representatives met last Friday with British on
German supply problems. At time of receipt of your
Victory
215,2 we were in
process of clearing British telegram to London reporting U. S.
views expressed at that meeting, which favored zonal approach to
procurement and financing. In view of your reference in
Victory
215 to “combined handling and
financing for the three western zones”, we sought to hold up
British telegram pending consultation with you but British are
anxious to acquaint London with views expressed here in order
that their people at the Conference may be properly briefed on
them. We have therefore agreed to telegram going forward with
appropriate reservations concerning informal nature of the
proposals. CAD supports the
proposals and has so advised General Hilldring. The pertinent portion of the
British telegram will read approximately as follows:
- “4. The following principles were put forward by
the Americans. (a) Zonal
estimates to be coordinated in CRAB on basis of agreed
interim policies covering consumption standards and
levels of industrial activity. Subject to general
guidance agreement should be left to zone
commanders, who should so far as possible use CRAB as an informal
instrument for obtaining such agreement. Object is
to avoid any appearance of establishing without
consultation with the Russians policies which might
be or appear to be permanent. (b) Deficiencies in one zone to be met as far
as practicable by surpluses from other zones, (c) Zonal programmes of
requirements for imports to be submitted
simultaneously to Combined Boards by the Governments
of the occupying powers separately from any other
programmes, (d) Instructions
to be issued to Combined Boards and any other
interested Governmental agencies in U. S. A. and U.
K. to ensure equal priorities for programmes of all
zones, (e) Zone Commanders to
have the right to agree as to diversion of supplies
from one zone to another in case of
emergency.
- 5. Actual procedure which Americans contemplate
can best be described under three heads, (a) Procedure inside Germany
(para 6 below), (b) Procedure
outside Germany (para 7 below), (c) Financial arrangements (Para 8
below).
- 6. For procedure inside Germany CRAB should be used
acting as specified in
Mel
891 of 30
June.3
- 7. Procedure outside Germany would be as follows.
Import programmes for three zones after agreement in
CRAB would be
submitted through zone commanders to respective
Governments (with copies to other zone commanders
for transmission to their Governments). Governments
would put programmes through their representatives
in Washington to combined boards (presumably after
exclusion of non- RCL items which would be procured
independently by respective Governments). These
programmes would be considered simultaneously by
Combined Boards subject naturally to necessity for
action on other programmes if any programme were
unduly delayed. Combined Boards would be directed to
give equal priority to all zonal programmes in
making allocations. After allocations were made
arrangements for procurement and shipment would be
responsibility of respective Governments acting
through their own agencies.
- 8. As regards finance Americans are strongly of
opinion that only practicable arrangement is that
each country should bear initial financing of
procurement for its own zone. This would apply to
the French as well as ourselves and to American
supplies from U. K. as well as to British supplies
from U. S. A. There are two main reasons for this
view. First the financing by the U. S. A. of
supplies from the U. S. A. for the British and
French Zones would inevitably necessitate screening
by the War
Department in Washington of the programme for the
British and French Zones. This would stultify or
duplicate one of the functions which it is intended
CRAB should
perform. It would also in American view increase
difficulties of development into quadripartite
arrangement since it would in effect transfer to
Washington the whole function of approval and
control of supplies for Germany. Secondly, War Department have no
funds beyond a very limited period to finance
supplies for British or French zones and after that
limited period (which is almost
covered by requirements already stated by
SHAEF up to
November arrivals and in part already approved and
allocated by CCAC)
neither War
Dept. nor any other
U. S. Department has funds for this interim
financing.
- Any proceeds of current exports from Germany would
in the American view be made available as a pool out
of which repayment would be made to the three
(ultimately the four) governments in proportion to
the interim financing burden assumed by each.
Americans agree that the task of repaying out of
Germany’s total resources those who have provided
the interim finance of imports should be the joint
responsibility of the controlling powers.
- 9. This telegram has been seen by State Dept. and War
Dept.”
The formulation of these proposals was governed in considerable
part by desire to set up interim tripartite machinery which
would be [Page 817] readily
expansible to a quadripartite basis.
Victory
215 appears
to diminish the importance of this consideration but does not
incline us to revise our conclusions.
