740.00119 EW/11–2645: Telegram
The Secretary of State to the Ambassador in France (Caffery)
5511. For Angell No. 40 from Byrnes. Dept has had long discussions with General Clay on reparation problems and is sending to you by air pouch copy of memo of conversation of Nov 3,57 Dept has discussed with Clay question of tasks of Allied Commission on Reparations in relation to Allied Control Council. Gen Clay has expressed view that ACC has, on representations of previous US representative on ACR, been given task of implementing reparation agreement and policies contained in Potsdam Protocol. Clay feels that last two substantive pghs of your letter of instructions58 create in effect a double set of operating mechanisms covering same field and covering operations as well as policies and that this double coverage makes impossible the adequate fulfillment of task previously assigned to ACC. He also feels that discussion in Paris in tripartite meeting of matters which are to be raised at a later state at quadripartite meetings in Berlin is not good procedure and is not consistent with the attempt to work out quadriparite government in Germany.
Dept feels that you will recognize desirability of not negotiating in Paris on such matters as restitution (except with respect to gold) which have been referred to the ACC. The question of gold has of [Page 1418] course been put on a tripartite basis by Russian acknowledgment of lack of interest and there is no objection to discussion of this matter in Paris.
In view of fact that ACC has responsibilities for carrying out reparations agreement under policies provided by ACR and that certain of such policies are provided in Potsdam Protocol, and with view toward providing satisfactory basis for working relations between you and Clay, Dept proposes to amend last two substantive paragraphs in your letter of instructions so as to read as follows:
Begin paraphrase: “It will be your responsibility at the quadripartite meetings in Berlin of the Allied Commission on Reparation to discuss and to present the US views on such policy questions as may arise, either with respect to interpretation of the Berlin Protocol or with respect to policy matters not treated in the Protocol. Such questions as labor reparations, the source of reciprocal deliveries called for from the USSR under the protocol, etc, will, as policy matters not handled in the Potsdam Protocol, be discussed by you in the ACR. In addition, you should, as the US representative, be ready to discuss in the Commission any questions of policy or policy interpretation of the Potsdam Protocol which may be referred to the Commission by the ACC or by any of the participating governments. It is anticipated also that you and your staff will hold yourselves ready to discuss with the American member of the ACC such questions affecting reparation policy or operations as he or his staff may raise with you or your staff.
The ACR should provide to the ACC any policies and principles required for a reparations plan. Such policy guidance may be given either at the request of the ACC or upon the initiative of the ACR. In order to coordinate the US position on overall reparations policy which you may assume in ACR and the position with respect to plans for removal of industrial equipment which the US representative may take in ACC, it is the desire of your govt that close liaison be maintained between you and the US representative in ACC, which desire will also be transmitted to the US representative on ACC. Overall policies affecting reparations will of course be reviewed in the Dept of State and will be taken up with you as well as with the US member on the ACC.” End paraphrase.
Clay has expressed his complete confidence in your ability and in his being able to cooperate closely with you on all matters. However he and War Dept are anxious that no possibility should exist of dual responsibility in this field and that responsibilities should be fixed in accordance with above statement. It is believed that above does not substantially affect your duties as previously intended in your letter of instructions although language is less broad and not subject to inference that you would in fact review all actions of ACC.
This cable being transmitted for comment to Gen Clay. Please cable your reactions. Dept is extremely anxious that workable arrangement, on both your side and on side of Generals Clay and Eisenhower, be [Page 1419] worked out and believes that above formulation will be adequate for this purpose.