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

740.00119 E.W./12–1345: Telegram

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

Paris, December 13, 1945—midnight.
[Received December 15—4:30 p.m.]

7160. From Angell No. 152. Rueff has orally accepted US and UK proposal of French quotas of 22 percent in plant and ships and 16 percent in other forms of reparation on basis set forth in paragraph 3 of my 130, Dec 8.⁵³ Basis set forth in paragraphs 5 to 7 of mytel 130, abandoned by mutual consent after expression of disapproval of Rueff.

At heads of delegation meeting today Rueff on behalf of three sponsoring powers introduced first draft of Final Act and proposed table of reparations share in categories A and B for countries at Conference. Prior to introduction of table of shares Rueff made prepared statement (1) mentioning Yalta criteria⁵⁴ for receipts of reparation; (2) outlining in general terms the measurable and immeasurable factors which had been taken into consideration in arriving at proposed shares; (3) US surrender of large portion of share in industrial plants as contribution to reconstruction of Europe; (4) fact that shares for countries closer to Japan represented only German portion of their overall war effort.

Conference schedule is to read Final Act, complete discussion the week of points [of weak points?] still unsettled, discuss shares Monday,⁵⁵ prepare definitive version of Final Act Tuesday and sign Wednesday table of shares submitted to Conference as follows: (note fact that designations of A and B shares have been interchanged):

Country (Pays)	Category A	Category B
Albania	0.05	0.1
US of America	28.00	12.0
Australia	0.7	0.9
Belgium	2.7	3.7
Canada	3.5	4.7
Denmark	0.25	0.3
Egypt	0.05	0.1
France	16.0	22.0
United Kingdom	28.0	28.0
Greece	2.7	3.7
India	2.0	2.7
Luxembourg	0.15	0.2
Norway	1.3	1.8
New Zealand	0.4	0.5
Netherlands	3.9	5.3
Czechoslovakia	3.0	4.1
South Africa	0.7	0.9
Yugoslavia	6.6	9.0
Total	100.0	100.0

Draft of Final Act submitted included provisions set forth below, in addition to certain provisions covered by my previous telegrams:

“Table of Contents. Conference Recommendation.

Agreement on reparation from Germany, on the establishment of an inter-Allied reparation agency, and on the restitution of monetary gold.

Preamble

Part I. Reparation from Germany

1. Shares in reparation.

2. Settlement of wartime claims against Germany.

3. General principles for the allocation of plant and equipment.

4. General principles for the allocation of ships

5. German external assets

6. Captured supplies

7. Non-repatriable persons

Part II. Inter-Allied Reparation Agency

Part III. Restitution of monetary gold. Entry into force. Signatures, to cover colonies, et cetera.

Annexes

I. Interpretative recommendations

II. Unanimous resolutions by the Conference

1. On German external assets in the neutral countries.

2. On gold transfers to the neutral countries.

III. Resolutions by certain delegations

1. Resolution on the subject of restitution

1a. Further resolution on restitution.

2. Resolution on reparation from existing stocks and current production.

3. Resolution on the subject of the property in Germany of a United Nation or its nationals.

4. Resolution on captured war material.

Part I

1. Shares in reparation.

A. German reparation shall be divided into the following categories:

• Category A, which shall include all forms of German reparation except those listed in Category B.
• Category B, which shall include industrial and other capital equipment removed from Germany, and ships.

B. Each signatory Govt shall be entitled to the percentage share of the total value of Category A and the percentage share of the total value of Category B set out for that Govt in the attached table of shares.

C. Subject to the provisions of paragraph D, each signatory Govt shall be entitled to receive its share of ships determined in accordance with section 4 below, provided that its receipts of ships do not exceed in value its share in Category B as a whole; and each signatory Govt shall also be entitled to its Category A percentage share in German assets in countries which remained neutral in the war against Germany. The distribution among the signatory Govts of forms of German reparation other than ships and German assets in countries which remained neutral in the war against Germany shall be guided by the principles set forth in section 3 below.

D. If a signatory Govt receives more than its percentage share of certain types of assets in either Category A or Category B, its receipts of other types of assets in that category shall be reduced so as to ensure that it shall not receive more than its share in that category as a whole.

E. No signatory Govt shall receive more than its percentage share of either Category A or Category B as a whole by surrendering any part of its percentage share of the other category, except that with respect to German assets within its own jurisdiction, any signatory Govt shall be permitted to charge any excess of such assets over its A category percentage share of total German assets in United Nations either to its receipts in Category A or to its receipts in Category B.

F. The Inter-Allied Separation Agency, to be established in accordance with Part II of this agreement, shall charge the reparation account of each signatory Govt for the German assets within that Govt’s jurisdiction over a period of five years. The charges at the date of the entry into force of this agreement shall be not less than 20% of the net value of such assets (as defined in section 5 below) as then estimated, at the beginning of the second year thereafter not less than 25% of the balance as then estimated, at the beginning of the third year not less than 33⅓% of the balance as then estimated, at the beginning of the fourth year not less than 50% of the balance as then estimated, at the beginning of the fifth year not less than 90% of the balance as then estimated, and at the end of the fifth year the entire remainder.

G. The following exceptions to paragraphs D and E above shall apply in the case of a signatory Govt whose share in Category B is less than its share in Category A:

(I) Receipts of ships by such Government shall not reduce its percentage share in other types of assets in Category B except to the extent that such receipts exceed the value obtained when that Govt’s Category A percentage is applied to the total value of ships.

(II) Any excess of German assets within the jurisdiction of such Government over its Category A percentage share of German assets in the United Nations shall be charged first to the additional share in Category B to which that Govt would be entitled if its share in Category B were determined by applying its Category A percentage to the forms of German reparation in Category B.

H. If any signatory Govt renounces its share or part of its shares in German reparation as set out in the attached table of shares, or withdraws from the Inter-Allied Separation Agency at a time when all or part of its shares in German reparation remain unsatisfied, the shares or part thereof thus renounced or remaining shall be distributed ratably among the other signatory Governments.

At second meeting today Canada surrendered ratable share received from United States renunciation of B quota and surrendered in addition same proportion of B quota as we surrendered. Canadian B quota of 4.7 in above table of shares thus reduced to 1.5 and placed at disposition of three inviting powers.

Only adverse reactions to shares received so far are from Egyptian and Danish delegates, whose complaints we are not disposed to view seriously, and from Belgian delegate. Means are being explored to give Belgian satisfaction. Will keep Dept advised. [Angell.]

Caffery

53. See telegram 7075, December 8, 2 p.m., from Paris, p. 1448.
54. See Conferences at Malta and Yalta, pp. 978, 982.
55. December 17, 1945.