740.00119 (Potsdam)/7–3145

No. 935
United States Delegation Working Paper1

Memorandum

Forty per cent of all industrial production (manufacturing and mining) is to be found in the Russian zone, although for the most part the industry is of a type which consists of relatively small units, does not involve substantial amounts of fixed capital and should remain in peacetime Germany (textiles, apparel, paper and wood pulp, printing, ceramics and glass, saw mills, etc.). For once-for-all removals the Russian Zone cannot therefore be said to contain over 30% of industrial equipment suitable for reparations and of the kind which the Russians particularly wish.

Hence, let us say that the Russian zone has a once-for-all repatriation [reparation] potential of 30%
It is estimated that [the] Ruhr has 60% of the remaining 70% 42%
Leaving in remainder of U. S., U. K. and French zones 28%
100%
Assuming Russians entitled to receive of all once-for-all reparations 50%
And have available in their zone 30%
[Page 885]It remains that they should get elsewhere of the whole once-for-all removals 20%
As the Ruhr has 42% of the once-for-all removals in Germany, if we give one-half of such removals to Russia as a final settlement of all her claims, this equals 21%
But the Russians would argue they got no current production from the U. S., U. K. and French zones and that this reduces 10½%

As against the above; what I have proposed is:

Assign Russians one-half Ruhr removals, but only 50% of such assignment for reparations and remaining 50% for exchange for goods from their zone—

Thus the amount they get in reparations is reduced by one-half from the above figure and becomes 5¼%
  1. This paper is listed in the “Index of Attachments to Summary of the Negotiations in the Economic Sub-Committee” (file No. 740.00119 (Potsdam)/7–3145) as “Additional Statistical Information by Clayton—July 26, 1945.”