840.50/12–145: Telegram

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

12592. Sal 26.

Following paper will be reported to EECE on 13 December by Subcommittee on Enemy Exports and is transmitted to you for your advance information.
  • (I) At the 12th meeting of the Emergency Economic Committee for Europe held on 1st November representatives of a number of member countries expressed their anxiety about the difficulties in trading with Germany under the existing financial arrangements. The various problems raised were referred to the Enemy Exports Subcommittee for further discussion. The Subcommittee, after discussion, has prepared the following statement in an attempt to set forth concisely the present German trade situation and the financial regulations issued to meet it.
  • (II) The effect on the E.E.C.E. countries. It is difficult to forecast with any certainty the pattern of German trade over the next few years. However, it now appears probable that for the year 1946 there will be not only a deficit on the current trading account (more imports will be required than can be paid for by exports) but also a “dollar” deficit. Even if all exports from Germany were paid for in full in dollars there would still be insufficient dollars to pay for the essential imports required from the dollar area. In order to prevent Germany from becoming a financial liability to the countries responsible for the control of Germany, it was stated in the Potsdam Declaration that “In working out the economic balance of Germany the necessary means must be provided to pay for imports approved by the Control Council in Germany. The proceeds of exports from current production and stocks shall be available in the first place for payment for such imports,”92 In view of the requirement for paying for imports with the proceeds of export and of the fact that a large proportion of the imports can be procured only in the dollar area, the American and British Governments have found it necessary to issue parallel notes requiring payment for all exports from Germany other than exports of capital equipment available as reparations or looted property subject to restitution. For the time being payment is required to be made in dollars but it is specifically stated that in special cases it may later prove possible to arrange for payment in some other currencies acceptable to the Control Council. It is understood that the French Government will shortly make a similar declaration.
  • (III) The trade situation summarized above and the financial regulations issued by the American and British Governments to meet it have made it difficult for the Allied countries of Europe to import from Germany the goods they urgently require; most countries have [Page 1114] a shortage of dollars. This means that these countries are not able to buy from Germany goods which are available and which they would purchase if they now had sufficient dollars. Or if they pay dollars for essential goods available in Germany these countries have to forego goods from other sources which are needed for their reconstruction and rehabilitation. Furthermore, it may mean that in order to avoid having to use dollars from other sources in order to buy German goods, countries which are short of dollars will [apparent garble] to sell to Germany goods which they would normally sell elsewhere in order to procure the necessary purchasing powder there. Some countries are not only short of dollars but also of goods. For them the present regulations virtually preclude the import of any goods from Germany.
  • (IV) It is clearly in the interest of all countries requiring goods from Germany that the method of payment be made as easy as possible. Given the immediate necessity of meeting the situation outlined in section II above, and even within the principles which underlie the present financial negotiations, there are some steps which might be taken to alleviate the present difficulties. A further paper concerning the steps suggested for dealing with the problems set forth here will be prepared at the earliest possible date.
Various suggestions to facilitate payments arising from German trade have been advanced by Norway, Netherlands and other EECE countries not represented among controlling powers. Subcommittee on Enemy Exports has agreed US and French request to defer consideration of suggestions concerning foreign exchange until foregoing statement of problem had been referred to governments of the controlling powers for comment.

Repeated to Berlin for Fred Winant93 as 340.

  1. Foreign Relations, The Conference of Berlin (The Potsdam Conference), 1945, vol. ii, p. 1505.
  2. In the office of the United States Political Adviser for Germany.