The Representative on the Allied
Commission on Reparations (Pauley) to the Secretary of
My Dear Mr. Secretary: The attached memorandum on the relationship between reparations and ceded German territory embodies what we believe to be certain improvements over a similar memorandum submitted to you in my letter of July 16th.2
The purpose of this proposal is quite simple. It aims to distribute reparation burdens as well as benefits among those receiving ceded German territory. The first three points provide that any exportable surpluses of commodities from any ceded territory shall be subject to the following priorities:
- First, Shipment into Germany to such extent as these commodities are needed to sustain minimum subsistence.
- Second, To pay for imports into Germany where needed to sustain minimum subsistence.
- Third, For payment into the general reparation fund to be allocated among claimant nations.
The fourth and last point provides that the value of capital equipment and natural resources located in any ceded territory shall be accounted for as reparations delivered to the receiving nation.[Page 843]
Since I understand that the subject of the eastern boundaries of Germany will be considered at today’s meeting of the beads of the Governments, I urge that you give this subject your immediate personal consideration.