Truman Papers

No. 894
Proposal by the United States Delegation 1

German Reparations

Agreed Principles.

The Allied Commission on Reparations has agreed on seven basic principles (text attached).

Principle for Decision.

The Commission has failed to reach agreement on the underscored last clause of an eighth principle:

“After payment of reparations, enough resources must be left to enable the German people to subsist without external assistance. In working out the economic balance of Germany, the necessary means must be provided for payment of imports approved by the governments concerned before reparation deliveries are made from current production or from stocks of goods.” 2

The United States Government fully concurs in these principles and must insist that such necessary imports as are approved by our governments shall constitute a first charge against exports from Germany of current production and stocks of goods. To do otherwise, will lead either to a repetition of our mistakes at the end of the last war, or leave us unable to bring about the desired industrial disarmament of Germany.

Definitions and Allocation of Reparations.

The United States proposes immediate agreement on definitions of restitution, war booty, and reparations (text attached). The Commission has agreed on a formula for allocation of reparations between the U. S. S. R., U. K. and U. S. and a procedure for settling the division of reparations among other countries (texts attached).

The United States Government feels that the definitions of restitution, war booty, and reparations are so interrelated with the formulae for allocation of reparations that agreement must be reached on all of these matters simultaneously.

[Page 833]
[Attachment 1]

Agreed Principles of Reparations

Removals of property for reparations shall be primarily such as to assist in bringing to an end the war-making power of Germany by eliminating that part of Germany’s industrial capacity which constitutes war potential.
Reparations shall be such as will speed recovery and reconstruction in countries devastated at German hands.
For the purposes of making a reparations plan, Germany will be treated as a single economic unit.
Any plan of reparations shall be avoided which necessitates external financial assistance either to enable reparations deliveries to be made or to facilitate economic reconstruction required for reparation purposes, or which might, in the opinion of the Governments concerned, prejudice the successful execution of the task entrusted to the Armies of Occupation.
To a maximum extent reparations shall be taken from existing national wealth of Germany. While for convenience claims may be stated in money, it is necessary to bear in mind that in contrast to reparations after World War I which were assessed and exacted in money, this time reparations will be assessed and exacted in kind in the form of things, such as plants, machines, equipment, stocks, foreign investments, etc.
In order to avoid building up German industrial capacity and disturbing the long term stability of the economies of the United Nations, long run payment of reparations in the form of manufactured products shall be restricted to a minimum.
In justice to those countries occupied by the enemy, reparations shall be calculated upon the basis that the average living standards in Germany during the reparation period shall not exceed the average of the standards of living of European countries. European countries means all European countries excluding U.K. and U.S.S.R.
[Attachment 2]

Proposed Definitions

The United States proposes that:

Restitution shall be confined to identifiable artistic, religious and cultural objects existing at the date of the invasion of the territories from which such objects have been removed, insofar as such objects can be recovered and irrespective of the form of dispossession by which they came into enemy hands. While any nation entitled to reparation may be allowed a prior claim for the return of certain other particular types of identifiable property removed by the enemy, the value of [Page 834] such property, if returned, shall be entered on the reparation account of such nation.
War booty shall be limited to finished equipment and supplies produced for and belonging to the German armed forces exclusive of any facilities used to produce such equipment or supplies.
Except for property transferred as restitution, war booty or exports to pay for approved imports, all property in the territory within the boundaries of the German Reich as it existed on December 31, 1937 shall be subject to reparations.

[Attachment 3]

Agreed in the Allied Commission on Reparations 3

In accordance with the principles established at the Crimean Conference, namely, that the countries entitled to the greatest share of reparations are those which have borne the main burden of the war, have suffered the heaviest losses and have organized victory over the enemy,4 the Allied Commission on Reparations agrees that the total sum of reparations (including both what is received on account of removals from the national wealth of Germany and what is received from annual deliveries after capitulation) will be distributed as follows:

Of the total
U.S.S.R 56%
U. K. 22%
U. S. A. 22%
Total 100%

To meet the validated claims for reparations on the part of the other nations, as determined by mutual agreement of the three powers, each of the three powers will give up from their share in the ratio that each share bears to the total.

[Attachment 4]

Agreed in the Allied Commission on Reparations 3

Procedure for Settling the Division of Reparations Between Countries Other Than the U. K., U. S. A., and U. S. S. R.

1. The Allied Commission on Reparations will send a communication as soon as possible through the Governments of the U. K., U. S. A., and U. S. S. R. inviting all the United Nations that have taken a direct part in the war with Germany to submit within one month to the Allied Commission on Reparations through their Diplomatic Representatives in Moscow, or otherwise, statements showing data [Page 835] for establishing their reparations claims against Germany and the value of German pre-war assets in their territory. The nature of the data to be submitted will be determined subsequently.

2. On receipt of the data the Allied Commission on Reparations will decide as a basis of discussion on a provisional list of countries entitled to receive reparations and also on the percentage to be allotted to each of them.

3. The Allied Commission on Reparations will in such form as is found to be convenient enter into negotiations with the United Nations whose claims to reparations are considered to be well founded with the object of securing their agreement to the percentage of reparations which has been provisionally suggested by the Allied Commission on Reparations.

4. If the said negotiations with the United Nations whose claims to reparations have been recognized are successful the Allied Commission on Reparations through the member Governments will send to these nations a further communication inviting them to take part in a special conference for the conclusion of a general agreement on reparations between the interested nations.

If however the preliminary negotiations prove not sufficiently successful to make it possible to call a conference of this kind the Allied Commission on Reparations will consider afresh in the light of the factual material in its possession the question of the further steps required.

5. A Communication will be sent to the United Nations whose claims to reparations have not been approved informing them of the decision of the Allied Commission on Reparations with an indication of the reasons for that decision.

  1. Annex i to document No. 852, circulated at the First Plenary Meeting, July 17. See ante, p. 52. Although this paper is marked annex i, there is no other annex. Concerning the origin of this document, see document No. 980.
  2. Words in italics were underscored in the original. Cf. vol. i, documents Nos. 375 and 376.
  3. See vol. i, document No. 376.
  4. See document No. 1416, section v.
  5. See vol. i, document No. 376.