740.00119 Control (Germany)/11–1045: Telegram

The Secretary of State to the Ambassador in the United Kingdom (Winant)

9901. Since ACC has now issued external assets vesting decree,37 following model draft note to Swiss ForMin has been prepared which if Brit and French agree would be presented in parallel démarches to other neutrals also by our Missions in these countries:

“I have the honor, under instructions from my Govt, to make the following communication to Your Excellency.

On October 30, the Allied Control Council, representing the four Govts exercising supreme authority in Germany, adopted a Law establishing a German External Property Commission and vesting in this Commission all rights, titles, and interests in or with respect of any property outside Germany owned by German nationals within Germany or by certain German citizens or legal entities outside Germany.

A copy of this Law is enclosed as an annex to this note.

The attention of the Govt of Switz is called to the introductory clause of this Law stating the Council’s determination ‘to assume control of all German assets abroad and to divest the said assets of their German ownership with the intention thereby of promoting international peace and collective security by the elimination of German war potentials.’

My Govt wishes me, further, to make clear its purpose in supporting the program to be administered by the German External Property Commission. The primary objectives are to achieve security by completely eliminating Germany’s economic and financial potential for another war, and to devote these resources to the relief, reparation, and rehabilitation of countries devastated by German aggression. Restoration of the damage done in their territory will substantially depend on the rapidity with which these countries obtain the means of importing goods despite their present unfavorable foreign exchange position. Thus, realization for reparations account of the value of German external assets will largely tend to promote restoration of their trade with Switzerland and thereby Switzerland’s participation in European reconstruction.

[Page 913]

In view of the foregoing, my Govt assumes that the Govt of Switz will give full effect to this decree and cooperate in its implementation.

My Govt is not unmindful of the fact that the control and disposition powers to be exercised by the German External Property Commission raise economic questions of great importance to the Govt of Switz. It is thought desirable that there be worked out in consultation with the Govt of Switz such arrangements consistent with the objectives of the Law, as will avoid economic dislocations and advance our mutual interest in a harmonious solution to this problem.

For these reasons it is proposed that a meeting be held between representatives of the Allied Govts acting on behalf of the Control Council and representatives of the Govt of Switz to reach agreement on the manner in which German property in Switz can best be administered, liquidated or otherwise disposed of. It is suggested that this meeting be held in Washington during the week beginning Jan 10 and in any case not later than Jan 31. The agenda of this meeting would comprise agreement on the disposal of these assets in such a way as to protect Swiss interests as well as those of the Limited Nations (including approval of purchasers, terms of sale, etc.) and on currency or foreign exchange questions arising out of the use for reparations and rehabilitation of the funds so realized. It is also expected that an understanding can be reached on the domestic decrees and orders necessary to achieve our objectives, on the establishment of administrative machinery for full intergovernmental cooperation, and on any other related questions which the Govt of Switz wishes to propose for discussion. An early reply to this invitation would be appreciated.

I understand that the Brit and French Ambassadors are addressing to Your Excellency a communication in similar terms. Accept, etc.”

London and Paris should discuss proposed note with Brit and French Govts, explaining that we feel it avoids raising legal questions, indicates tangible advantages to neutrals are obtainable through their cooperation with us, and while couched in sympathetic terms does not plead or otherwise show weakness. Brit and French notes however need not be identical with ours though they should avoid indicating any substantial difference between Allies. You might remind Brit that Swiss are trying to stir dissension between us and therefore their note should not be susceptible of such exploitation.

In notes to other neutrals dates would of course be changed. Our suggestion is that we negotiate with Swedes first during week beginning Jan 3 and with Spaniards week beginning Jan 17. Negotiations with Portuguese can take place beginning about Jan 24. Please report promptly response of Brit and French Govts and if they agree suggest they inform their missions so that notes can be presented quickly.

Rptd to Paris as 5257 and for info and comment only to Madrid as 1845, to Lisbon as 1768, to Stockholm as 2083 and Bern as 3271.

  1. See footnote 31, p. 908.