Pauley Files

No. 953
Proposal by the Soviet Delegation1


Proposal of [on?] Reparations From Germany

Exactions of once-for-all removals from the national wealth of Germany in payment for reparations (plants, shops, equipment, materials, etc.) will be made by each government in its zone of occupation within two years after capitulation.
Removals must be made with a view to the quickest restoration of the economy of those countries which have suffered from German occupation. The necessity of an over-all reduction of the war potential of Germany must also be taken into account.
Because of the enormous losses of the Soviet heavy industry and also because of the small quantity of German enterprises of this kind in the Soviet zone of occupation and because of the insufficiency of the total resources of this zone, the USSR must receive in addition to the removals made in her zone, also from 5½ to 6 million tons on a special list of equipment in complete and workable condition on the reparations account from the Western Zones and predominantly from the Ruhr District. This equipment will be used for the restoration of the various branches of Soviet industry which have suffered from the enemy, and in the first instance for the metallurgical, chemical, and machine building industries. These removals must begin immediately upon the acceptance of this decision and will terminate not later than May 10, 1947. For this purpose a special agency will be created by the Allied Commission on Reparations.
The USSR will also receive corporation shares valued at $500,000,000 of industrial and transport companies which have remained in the Western Zones and which have the greatest significance from the point of view of an over-all reduction of the military potential of Germany.
Exactions of annual deliveries of goods from the current production will not be made on a zone basis but on an over-all German basis. The Allied Commission on Reparations will arrange a general plan for receiving and allocating these deliveries among the nations which have the right to them. The total sum of these deliveries will amount to 8 billion dollars and will be for a period of 10 years. The USSR share in these deliveries will amount to 50% of the total sum.
The following goods will be accepted in the form of possible deliveries; coal, brown coal, metals, metal products, cement, building materials, scrap metal[,] timber, potash, paper, sugar, chemical and glass products, machines, river boats, medical instruments, agricultural products, cattle, etc. As a basis for computation, the 1938 price—valued in dollars—will be accepted with an increase of 10%.
The Allied Commission on Reparations will arrange the plan of allocating the external assets and claims of Germany among the nations which have a right to receive reparations.
In regards to that part of reparations which must be covered by once-for-all removals, the U. S. S. R. will take upon herself, and for her own account, the settlement of the reparations claims of Poland. The United States of America and Great Britain will do the same in regards to France, Yugoslavia, Czechoslovakia, Belgium, Holland and Norway.
  1. This paper is not dated, but it has been tentatively identified as the proposal which Molotov handed to Byrnes on the afternoon of July 30 (see ante, p. 482). It is apparently the paper referred to in documents Nos. 954 and 955 as the Soviet proposal of July 29.