740.0011 E. W./7–1645

No. 893
The Representative on the Allied Commission on Reparations (Pauley) to the Secretary of State

My Dear Mr. Secretary: Because reparations must include all transfers of property within the whole of the German Reich as its boundaries existed at the end of the year 1937, the relationship between reparations and ceded German territory has been given considerable study by our delegation.

Upon this subject, I attach a memorandum embodying four provisions which I strongly recommend be included as a part of any agreement entered into by the United States confirming the ceding of any portion of Germany to other nations.


Edwin W. Pauley

Memorandum by the United States Section, Allied Commission on Reparations1

Re: Relationship between Reparations and ceded German territory

As a part of any agreement confirming the ceding of any portion of Germany as its boundaries existed at the end of 1937, it shall be provided that:

Any property or current production available for removal from any ceded territory shall be first utilized within Germany to whatever extent occupation authorities require to avoid the necessity of imports into Germany;
Thereafter, the value or proceeds of any property or current production from any ceded territory available for delivery outside of Germany shall be first used to pay for approved imports into Germany;
If sufficient funds are available to pay for all such approved imports, the proceeds or value of any assets delivered from any ceded territory shall be treated as a reparations deliveries [delivery] to such nation or nations and in such amounts as may be designated by the Allied Commission on Reparations, or a permanent Reparations Agency to be created;
The value of all property remaining within the boundaries of any territory ceded to any other nation shall be counted as reparations. To the extent that the current production of any such property is required to be delivered for reparations, or, to defray the cost of approved imports into Germany, an appropriate adjustment in the value of such property shall be made.

  1. Authorship not indicated. This paper was used in the Pauley-Monckton meeting of July 15. See vol. i, document No. 380.