800.515/6–845: Telegram

The Acting Secretary of State to the Ambassador in Spain (Armour)

1037. Safehaven. Urtels 1010, May 10, 1223, June 6, 1232, June 8.75 In connection with administration of freezing regulations and related problems, you should be guided by following:

It is proposed that Allied authorities in Germany will vest all German external assets. See Deptel 1015.76 Policy regarding ultimate disposition of these assets will be determined by occupying powers through diplomatic channels or through Allied Control Council or Reparations Commission.77 To end that occupying powers’ freedom of action remain unprejudiced you should see that (a) German assets are maintained and not dissipated in any manner during this interim period; (b) Span[ish] take no action which would prejudice effectiveness of vesting decree or of any action to be taken with respect to disposition of such assets, and that (c) Span take every action to uncover and block German assets to facilitate their ultimate delivery to Allied representatives for disposition.
If Span attempt to dispose of German assets, you should indicate that as subscribers to Bretton Woods Resolution VI they have committed themselves not only to “take measures to prevent the concealment, by fraudulent means or otherwise, of assets belonging to enemy, their leaders, associates, and collaborators” but also to hold these assets in such manner as will “facilitate their ultimate delivery to post-armistice authorities”. Thus, under Resolution and our Safehaven note, their function is merely to immobilize German property until delivery is made to Allied authorities.
You should, if at all possible, prevent Span from intervening or liquidating any firms, urtel 1232 June 8.
In addition, you should under no circumstances encourage Span to vest German interests. You should prevent such action and Span should merely uncover and block German assets pending Allied assumption control over them for final disposition.
Where individuals voluntarily hand over to you assets belonging to Germans, your 1015 May 11,78 you should take those assets in accordance with advice given you in our 836 May 18.79 Span need not be informed unless you deem it expedient and in no case should they be regarding receipt media of exchange. We wish to emphasize again that you should not under any circumstances indicate to Span that disposition of such property will be made in conjunction with them.
You should advise Span that their licensing policy with respect to blocked German assets should be designed to uncover and prohibit disposition or dissipation and concealment of Axis assets. Therefore, licenses should be granted only in cases of extreme hardship and then only after consultation with you and Brit. It is important that operations of Axis owned or Axis controlled enterprises should not result in exportation of assets. Such enterprises must be restricted to domestic operations.
With respect to policy to be followed regarding Axis personnel, you already have been instructed as to removal of personnel from properties you take over. As to other properties you should confine yourself for present to requesting removal of particularly notorious and dangerous individuals who would be apt to cause injury or loss to incipient ACC interests. Repatriation policy still developing.80 Further instructions on control of personnel will be forthcoming.
Once occupying powers have agreed to issuance of vesting decree discussed in Deptel 1015, program based on excellent suggestions in your 1232 as modified by this telegram can be followed. We share your feeling Span control action beyond blocking would result in concealment and dissipation of German assets. Therefore, if Span take any action to prejudice ACC interest as outlined herein and in our 1015, such as vesting, intervention, liquidation, forced sale or similar action, you should, in concert with your Brit colleague, make an immediate approach to Span on highest diplomatic level strongly protesting such action as departure from Bretton Woods Resolution VI [Page 888] and point out such acts would be interpreted as inimical to interests of US and UK as well as the United Nations generally. In cases where intervention or liquidation may already have taken place, you and Brit should insist, as representatives of two principal members of ACC, you have direct interest in any such action and no person should be appointed and no acts taken without your prior consent.81

Repeated to London as 4930, to Lisbon as 962, to Paris as 2834 and to Moscow for Embassy and Pauley81a as 1341.

  1. None printed.
  2. Dated June 15, not printed; it stated that the U.S. Government considered that German state-owned corporations in Spain were subject to the same control by the American and British diplomatic missions as German Embassy buildings. In assuming control of German assets, the missions would be acting as trustees for the Allied Control Authority for Germany. (800.515/6–1545)
  3. Reference is to the Allied Commission on Reparations; for the establishment of this Commission, see Foreign Relations, The Conferences at Malta and Yalta, 1945, pp. 979, 983, For documentation on the Reparations Commission and its role in the German reparations question, see Foreign Relations, 1945, vol. iii, pp. 1169 ff.
  4. Not printed.
  5. Not printed; it informed the Embassy that any German assets offered should be accepted for safekeeping, provided that the Spanish Government was kept informed and that no liability was assumed regarding care of the property or ultimate return to the person depositing it (800.515/5–1145).
  6. For documentation relating to concern of the United States regarding the repatriation of German officials, agents, and other nationals following the end of the war, see vol. iii, pp. 784 ff.
  7. Telegram 1571, July 20, 9 p.m., from Madrid, transmitted the following message to the Department: “We and British are submitting identic formal notes to Foreign Office informing it that powers occupying Germany claim title to control of German-owned or German-controlled assets and requesting that Spanish Govt take no action which would conflict with this control which must be recognized as having come into existence.” (800.515/7–2045)
  8. Edwin W. Pauley, U.S. Representative, Allied Commission on Reparation’s.