Foreign Relations of the United States, Diplomatic Papers, 1945, European Advisory Commission, Austria, Germany, Volume III

740.00119 EW/12–1245: Telegram

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

Paris, December 12, 1945—midnight.
[Received December 13—4:41 a.m.]

7140. From Angell No. 143. Following “Proposed Recommendation on General Principles for Allocations of Plant and Equipment by the Inter-Allied Reparation Agency” was adopted at December 10th meeting.

[“]The Paris Conference on Reparation recommends:

1. That claimants shall endeavor to submit comprehensive programs of requests for related groups of items, rather than submitting requests for isolated items or small groups of items. The work of tie Secretariat will be more effective, the more comprehensive the programs which claimant Govts submit to it.

2. That in the allocation by IARA of items (other than ships) declared available for reparation, the following general principles shall serve as guides.

A. Any item or related group of items in which a claimant country has a substantial pre-war financial interest shall be allocated to that country if it so desires. Where two or more claimants have such substantial interests in a particular item or group of items, the criteria stated below shall guide the allocation.

B. If the allocation between competing claimants is not determined by paragraph A attention shall be given, among other relevant factors, to the following considerations:

I. The urgency of each claimant’s needs for the item or items for rehabilitation or reconstruction purposes, and for the general revitalization of the claimant’s economic life;

II. The extent to which the item or items would replace property which was destroyed, damaged or looted in the war, or which requires replacement because of [excessive] wear in war production, and which is important to the claimant’s economy;

III. The relation of the item or items to the general pattern of the claimant’s pre-war economic life and to programs for its post-war economic adjustment or development;

IV. The requirements of countries whose reparation shares are small but which are in need of certain specific items or categories of items.

C. In making allocations a reasonable balance shall be maintained among the rates at which the reparation shares of the several are satisfied, subject to such temporary exceptions as are justified by the considerations under paragraph (B) (I) above.”

This document was submitted by the United States Delegation. Item 2–B–IV was not initially included. Australian, New Zealand and Indian delegates objected to 2–B–I and II and stated that if these provisions were rigidly applied, non-European countries with small reparation shares might secure practically nothing desired in A category. New Zealand delegates argued that non-European nations with small shares were less able to protect their interests than countries near Germany; also that non-European nations could use only certain particular items of removals and therefore should be given priority. The Conference delegates recognized some validity in these arguments and agreed to insertion of 2–B–IV.

Regret that due to inadvertence this document was not forwarded to the Dept for comment before final consideration and approval by the Conference. Criteria under consideration were mentioned in my telegram from Angell 93, November 29, but Dept’s reply (urtel 5778, December 11) was not received until late on December 12.⁴⁷

Members of the US Delegation feel strongly that IARA needs some guidance on criteria to be followed in making allocations. I wished particularly to secure general acceptance of item 2-A, and to induce constructive thinking in regard to requests for allocations before IARA became active. Unreasonable requests for removals may now have been forestalled by discussion of criteria in the Conference.

I consider, and Phelps fully concurs, that the US position is amply protected by the fact that 12 percent was retained in category A even though Repmem 1⁴⁹ suggested only 10 percent and an even smaller percentage will probably be needed; that priority will be obtained on removals in which the US had a substantial pre-war property interest; and that a reasonable balance must be maintained among the rates at which the reparations shares of the several claimants are satisfied (item 2-C). Furthermore, these specialized or unique items which are most likely to be desired by the US will probably not be those items for which a request can reasonably be justified. [Angell.]

Caffery

47. In this exchange of telegrams, Mr. Angell mentioned the possibility of conflicting claims between the United States and another nation requiring the United States to justify its claims before the IARA in conformity with certain criteria which that body would likely draw up. The Department’s reply stated that the determination of criteria for settling such disputes should be left to IARA. (740.00119 EW/11–2945 and 12–1145)
49. Not printed.