740.00119 EW/12–645: Telegram
The Acting Secretary of State to the Ambassador in France (Caffery)
5875. For Angell No. 86. Dept has heretofore interpreted Soviet gold renunciation at Potsdam61 as covering all gold found by Allied forces in Greater Germany. Question whether Hungarian gold should be in pot has therefore been regarded one for settlement without reference to Soviet Govt. Upon reexamination of question (Reurtel 7026 Dec 6 from Angell No. 123) whether Soviet renunciation in fact covers gold found in Austria, Dept feels that Soviets are in position to advance strong argument re their continued interest in Hungarian gold. Context of statement re Soviet renunciation of claims to gold is reparations section of Potsdam Protocol throughout which term “Germany” can have relevance only to Germany of pre-1938 borders.
Dept feels it advisable therefore to avoid discussion at Paris whether Potsdam covers gold found in Austria and to adopt suggestion that Hungarian gold be reserved in toto for the present and that, if future developments permit, portion of Hungarian gold could later be distributed among pot participants. If participants desire, conference recommendation on monetary gold could include specific reservation by pot participants to share in any future distribution of Hungarian gold that may be made available for this purpose. Apart from question whether Soviets renounced claims to gold uncovered in Austria, Dept appreciates that Hungarian gold was removed to Austria by officials of former Hungarian Govt and of Hungarian National [Page 1471] Bank and taken into custody by U.S. forces, not actually looted by Germany.
Since further debate on possible Soviet interest in gold found in Austria should be avoided, it would be preferable also to omit in conference recommendation textual reference to gold found in Austria. Dept appreciates such reference was inserted at its suggestion (Deptel 5534, Nov 27, for Angell, No. 54) made largely with an eye to inclusion of Hungarian gold and that you may find it difficult now to propose omission of this reference. However, deletion may be proposed on ground that such reference unnecessary if Hungarian gold not initially included in pot. Dept also aware that gold other than Hungarian was found in Austria by U.S. forces, although it has no info re value of such finds. However, Dept feels that no further differentiation should be made of gold now at Frankfort. Reservation of Hungarian gold may avoid discussion of this point.
Argument regarding identifiability Ital gold should be avoided since identifiability not relevant to gold pot operation and info available to Dept on gold shipped by Reichsbank to Merkers and transmitted to you by air pouch indicates that Italian gold may constitute largest portion of Merkers gold identifiable.