Pauley Files

No. 954
United States Delegation Working Paper 1

Comments on Paragraphs 3, 5, and 6 of USSR “Proposal for Reparations From Germany” Dated July 29, 19452

The Russian proposal to express capital removals in tons is not practicable and is unacceptable for the following reasons:
Because of their great variety [and]3 the differences in values of industrial machinery and equipment, a tonnage measurement does not and cannot represent either the value or the industrial or military importance of capital assets. Industrial machinery and equipment generally can be measured meaningfully only in terms of productive capacity rather than in terms of weight.
To express reparation obligations in terms of tons alone would lead to proposals for indiscriminate removals of machinery and equipment from plants which operate as industrial units. This would lead either to constant disputes or to purposeless destruction of industrial capacity with the consequent danger that Germany would be unable to meet the requirements of her civilian population or annual reparation deliveries.
To express reparations obligations in tons would be completely unsatisfactory to most receiving countries as a basis for fixing their reparations claims.
The determination of recurring reparations [is impossible?]3 unless there is prior agreement on the amount of capacity to be removed from specified industries.
The only sound basis for the determination of capital removals is agreement on the productive capacity which is to be subject for removal from industries constituting war potentials.
The proposal in Paragraph 6 of the Soviet memorandum is acceptable as a basis for discussion. However, it may be found impossible to make annual deliveries in certain of the products listed.
  1. Authorship not indicated. Cf. document No. 955.
  2. See document No. 953.
  3. These words appear in the corresponding paragraph of document No. 955.
  4. These words appear in the corresponding paragraph of document No. 955.