740.00119 Potsdam/7–2345

No. 916
United States Delegation Working Paper 1

U. S. Proposal on Reparations and Related Matters 2

In accordance with the recommendations of the Allied Commission on Reparations, the Governments of the United Kingdom, the United States and the Union of Soviet Socialist Republics have agreed on the following program for the exaction from Germany of reparations and other Allied levies:3

a.
Available reparations shall be divided among claimant nations to the extent that they have borne the burden of the war, have suffered losses, and organized victory over the enemy.
b.
Except as otherwise directed by the Allied Control Council each of the four Powers occupying Germany—the United Kingdom, the United States, the U. S. S. R. and France—may remove or permit to be removed from its zone of occupation capital equipment, current production, and stocks of goods either for its own account or for the account of any other United Nation.4
c.
In exacting removals for reparation and other Allied levies,5 the occupying Powers shall be governed by the following principles:
1.
Removals of property 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.
2.
Removals shall be such as will speed recovery and reconstruction in countries devastated at German hands.
3.
Any program of removals shall be avoided which necessitates external financial assistance or which might, in the opinion of the Government concerned, prejudice the successful execution of the task entrusted to the Armies of Occupation.
4.
To a maximum extent removals shall be taken from the existing national wealth of Germany.
5.
In order to avoid building up German industrial capacity and disturbing the long term stability of the economies of the United Nations, recurrent removals in the form of manufactured products shall be restricted to a minimum.
6.
In justice to the countries occupied by the enemy the amount of removals shall be calculated on the basis that the average living standards in Germany, during the reparations period, shall not exceed the average of the standards of living of all European countries with the exception of the U. K. and U. S. S. R.
7.
After removals are effected enough resources must be left to enable the German people to subsist without external assistance. The necessary means must be set aside for payment for imports approved by the Government concerned before removals of current production and stocks of goods are made.6
8.
Removals of any capital equipment existing on May 10, 1945 shall cease on May 10, 1947.
9.
Removal of stocks of goods and current production shall cease on May 10, 1951.7
d.8
Removals as restitution shall be governed by the following:
1.
Upon application by any Allied Government, restitution may be made of the following categories of property, wherever found, if such property is identifiable and was removed from occupied territory by the enemy by whatever means:
(a)
Heavy industrial and agricultural equipment.
(b)
Machine tools and unique machinery.
(c)
Rolling stock and other railroad or transportation equipment.
(d)
Works of art, religious, historical, educational, or cultural objects, libraries, scientific equipment, and other laboratory or research materials related to organized inquiry into the arts and sciences.
(2)
All questions of restitution shall be dealt with on behalf of the injured property owners by the Allied Nations of which they are citizens, unless such Allied Nation shall make other arrangements with the Allied Nation from whose territories the property was removed.
e.
Appropriate steps shall be taken to exercise control and the power of disposition9 over German owned external assets.

  1. Authorship not indicated.
  2. An earlier draft of this working paper in the Pauley Files, dated July 22, is headed “Proposal on Reparations of the Government of the United States”. The July 22 draft has the following opening paragraph:

    “The Government of the United States proposes that the following agreement be announced concluding the negotiations of the Allied Commission on Reparations:”.

  3. In the draft referred to in the preceding footnote, this paragraph ends as follows: “exaction of reparations from Germany:”.
  4. The draft referred to in footnote 2, ante, has the following additional words at the end of this paragraph: “entitled to reparations”.
  5. In the draft referred to in footnote 2, ante, this paragraph begins as follows: “In effecting removals for reparation and otherwise”.
  6. Parten has changed one copy in the Pauley Files so that the last clause of this sentence reads: “before any removals are made.” A retyped version, also in the Pauley Files and dated July 23, marked “Office Copy Revised”, reads: “before any removals.” In the draft referred to in footnote 2, ante, the last sentence reads: “The necessary means must be provided for payment for imports approved by the Government concerned before removals are made.”
  7. The draft referred to in footnote 2, ante, reads “1952”.
  8. Parten has stricken section d from his copy, and it is omitted in the “Office Copy Revised” mentioned in footnote 6, ante, as well as in the draft referred to in footnote 2, ante.
  9. In the draft referred to in footnote 2, ante, this passage reads: “taken to obtain the power of disposition”.