740.00119 (Potsdam)/7–3145

No. 902
Report by the Economic Subcommittee

top secret

Report of the Economic Sub-Committee to the Foreign Secretaries

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The Allied Commission on Reparations has agreed on seven basic principles. The Sub-Committee recommend that these principles (Annex 13) should be accepted.

The Allied Commission on Reparations 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.”4

As stated above, the Sub-Committee have been unable to reach agreement on this point.

The Sub-Committee, at the request of the Soviet representative, have postponed discussion of definitions of reparations, restitution and war booty.5

The Sub-Committee were informed that the Allied Commission on Reparations had 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, the texts of which are attached as Annexes III and IV.6

The United States representatives feel7 that the definition of restitution, war booty and reparations are [sic] so interrelated with the formulae for allocation of reparations that agreement must be reached [Page 846] on all of these matters simultaneously. The Sub-Committee therefore make no recommendations on these matters at the present time.

  1. For the other sections of this report, see document No. 863.
  2. So dated in an “Index of Attachments to Summary of the Negotiations in the Economic Sub-Committee” (file No. 740.00119 (Potsdam)/7–3145), but not considered by the Foreign Ministers until July 21. See ante, p. 187.
  3. Annex i is identical with attachment 1 to document No. 894.
  4. The passage here printed in italics was underscored in the original.
  5. This paragraph does not appear in a draft of this report found in Frankfurt USPolAd Files. Instead, there is the following additional sentence at the beginning of the next paragraph: “The Sub-Committee have not up to the present been able to reach agreement on definitions of restitution and war booty.”
  6. Annexes in and iv are identical, respectively, with attachments 3 and 4 to document No. 894.
  7. The draft referred to in footnote 5, ante, reads: “The United States Government feels”.