740.00119 EW/9–2045

No. 975
The Representative on the Allied Commission on Reparations (Pauley) and the Assistant Secretary of State (Clayton) to the Deputy Military Governor, United States Zone in Germany (Clay)1

secret

Memorandum for General Clay

We request that you urge the Control Council to adopt the attached proposed principle on Allied and neutral property in Germany to supplement the economic principles and the reparation agreement approved by the heads of Government.

Edwin W. Pauley
W. L. Clayton
[Attachment]

Proposed Principle on Allied and Neutral Property in Germany

Ownership by nationals of United Nations or neutral nations shall not impede the carrying out of Paragraph 112 of the Agreement on the Political and Economic Principles to Govern the Treatment of Germany in the Initial Control Period.3 Removals from Germany of properties of nationals of United Nations or neutral nations shall be governed by the following:

(a)
Properties of nationals of United Nations.
(i)
Governments of the United Nations shall be invited to submit statements to the Control Council covering the nature and extent of [Page 936]property in Germany of their respective nationals, and Allied representatives shall have facilities and free access to such properties for the purpose of investigating claims and appraising properties.
(ii)
Where practicable and desired by the government of the owner, removals shall be effected without transfer of title.
(iii)
In all other cases, compensation shall be provided by the establishment of Reichsmark deposits to the account of the government of the owners, on the basis of valuations by the Control Council. The country receiving such removed property shall make arrangements, prior to the removals to liquidate such deposit accounts in acceptable foreign exchange in payments spread over a short period of years.
(b)
Properties of nationals of neutral nations
(i)
Governments of neutral nations shall be permitted to file with the Control Council statements covering the nature and extent of property in Germany of their respective nationals. Reichsmarks in the amount of the valuations made by the Control Council shall be deposited to the account of such governments by way of compensation.

  1. Printed from a copy included in the PauleyLubin Report (see document No. 980).
  2. An earlier version of this paper, obviously prepared before the renumbering of the paragraphs containing the economic principles in the Protocol, ends this sentence here with the words “Paragraph 10”. With respect to the renumbering referred to, see document No. 1383, footnote 22.
  3. Document No. 1383, section ii .