Office of the Historian

740.00119 E.W./11–545

The Ambassador in France (Caffery) to the Secretary of State

Paris, November 5, 1945—8 p.m.
[Received November 7—8:05 a.m.]

6420. From Angell No. 29. Russian compensating deliveries for 15% of surplus equipment from Western Zones discussed briefly with Waley and Rueff. I presented tentatively view of Repmem 82 that deliveries should be used entirely for reparations to claimants on Western Zones. Waley view was that western side ACC should use what is necessary to peace-time economy in Western Zones and declare surplus available for reparation. Waley cited British and American -concern over lack of food in Berlin as one of reasons for this provision of Protocol.3 Rueff view not firm.

Subject has been discussed at length within our delegation. Position as stated by Waley with respect to use of compensating deliveries in Western Zones is in my opinion sound for following reasons:

1.
History of provision in Berlin protocol does not support implications of paragraphs 1 and 2 of Repmem 8. President Truman in [Page 1372] report on Berlin Conference described compensating deliveries from Russia as “a means of maintaining a balanced economy in Germany and providing the usual exchange of goods between the eastern part and the western”.4
2.
Direct use of compensating deliveries by western side ACC for peace-time economy in Western Zones provide maximum reduction of supply commitments of western occupying powers without necessitating increase in German exports to offset imports into western zone as suggested in paragraph 3 of Repmem 8. Suggestion that these deliveries be considered as imports would require increased productive capacity in western zone for offsetting exports.

It is also my opinion that portion of compensating deliveries not needed for consumption in Western Zones should be regarded as exports and therefore subject to first charge principle.

I urgently request your instructions on above. [Angell.]

[
Caffery
]
  1. Not printed.↩
  2. See Conference of Berlin (Potsdam), vol. ii, pp. 1485–1486.↩
  3. For text of this radio address, August 9, see Department of State Bulletin, August 12, 1945, p. 208.↩