Truman Papers

No. 883
The Secretary of State and the Secretary of War (Stimson) to the President

Memorandum for the President German Interim Financing

1.
On July 5, 1945, the Secretary of State transmitted to you a memorandum on German interim financing2 which outlined agreement which exists among the Department of State, the Treasury Department, the War Department and the Foreign Economic Administration regarding proposals which should be made to the British, the French, and the Soviets with respect to procurement and interim financing of essential imports. The principles contained in this memorandum are embodied in the position which the American and British representatives are supporting in this present conference.3
2.
The memorandum of July 5 also recommends that the War Department should assume procurement and initial financial responsibility with respect to all imports into Germany for which the Government of the United States assumes responsibility, and to the United States’ share of any combined financing which may be undertaken in concert with the other occupying powers. A copy of this memorandum is attached.
3.
The War Department is prepared to accept such responsibility if you so direct.
4.
The War Department under present arrangements will be able to finance all food imports into Germany for whatever zone through October loadings.
5.
Testimony before Congress indicated that funds made available for the War Department would not be used for maintenance of zones other than the United States, except for a brief turnover period not extending beyond the current calendar year.
6.
With respect to any period of time or any zone, the funds which the War Department has received from the Congress for the present fiscal year are restricted to the prevention of disease and starvation.
7.
There is attached a proposed letter of instructions4 from you to the Secretary of War specifying the objectives for the attainment of which the War Department should assume the necessary import procurement and financing responsibility. These objectives are based on the economic principles to govern the treatment of Germany approved in the present conference. Such letter would serve as a basis for requesting appropriations of the Congress in the event that it should be found necessary to obtain additional appropriations for these purposes.
James F Byrnes

Secretary of State
For the Secretary of War[:]
John J McCloy

Assistant Secretary of War
  1. This memorandum was undoubtedly signed between July 25, the date of Stimson’s departure from Babelsberg, and July 29, the date on which Truman acted on the letter of instructions mentioned in paragraph 7 of the memorandum (see document No. 884).
  2. document No. 346, printed in vol. i .
  3. In an earlier draft of this memorandum, dated July 21, prepared for signature by Byrnes and Stimson (file No. 800.515/7–2145), there is the following additional clause at the end of this sentence: “and which have been transmitted by the Economic Sub-Committee to the Foreign Ministers for decision.”
  4. Not attached. For the letter as signed, see document No. 884.