The Secretary of State to the United States Political Adviser for Germany ( Murphy )

971. Dept anxious to ascertain exact status of discussions regarding establishment and functions of Allied Export-Import Authority and formulation of export-import program referred to in urtel 753, Oct 11. Information also required on steps taken in each zone to implement ACC decision of Sept 20 to require payment for exports from current production and stocks, in particular on prices being charged for exports, amount and foreign exchange composition of payments, if any, collected up to present for exports from each zone, extent of cooperation by French and Russians in implementing scheme and difficulties experienced in carrying out decision.

Dept has given some thought to export policies and procedures and urges you discuss following proposals with General Clay for purpose of transmitting comments to Dept:

In order to stimulate economic recovery outside Germany, in particular in liberated areas and ultimately to increase exports from Germany to a level sufficient for payment of approved essential imports occupying authorities should (a) take active steps to uncover particularly in plants which are or may be declared available for reparation or are likely to remain idle or almost wholly idle for some time, stocks of raw materials, semi-finished and finished goods (excluding industrial equipment made available on reparation account) which are not required in near future for minimum needs in Germany, (b) investigate possibility, taking into account requirements for labor, transport, coal and power involved, of producing and making available for export substantial quantities of potash, salt, timber and any other products of extractive industries which may be obtained in Germany and are required for economic recovery abroad, (c) investigate possibility of reviving selected industries and crafts such as textiles, leather goods, ceramics and toys which in view of demand abroad and required input of raw materials and power might be expected to produce substantial exports, and (d) submit recommendations on (b) and (c) above to govts of occupying powers.
Export authorities in Germany should transmit any information on export availabilities to governments of occupying powers (e.g., [Page 1551] through USPolAd19 to Dept), to military missions of non-occupying powers in Germany, and, through such channels as are available to occupying powers, to AC,20 Austria and such other govts as the export authorities agree should be notified. Governments of occupying powers should be permitted to transmit this information at their individual discretion to any other governments which may be interested in such exports. Same channels should be used for transmitting to export authorities in Germany inquiries from abroad, regarding availability of different types of goods for export. In declaring goods available for export, export authorities in Germany should supply full information on grade, quality, price and conditions of purchase of such goods and make possible, where necessary, inspection of the goods by interested governments or importers accredited by them.
Export authorities in Germany should decide, after consultation with the governments of the occupying powers, whether goods declared available for export should be subject to allocation among claimant countries, in view of the importance of the product to the economies of such countries and prevailing conditions of supply and demand. Whenever it is decided to allocate any particular commodity or product, the export authorities should seek guidance on allocation from a committee consisting of representatives of the staff of the political advisers to the occupying authorities and of the military missions of European United Nations in Germany (i.e. Norway, Denmark, Netherlands, Belgium, Luxembourg, Poland, Czechoslovakia, Yugo, and Greece). The representatives of the occupying powers on this committee should represent or arrange for the representation of the interests of Austria and UNRRA,21 and they should also be free to advance claims to allocation on behalf of any other countries which, according to list above, are not represented on the committee. It should be noted that this arrangement is in substitution for recommendations from EECE22 because above committee would be more representative. Present ECO23 function respecting allocation of coal from Germany should, however, be left undisturbed.
Goods available for export not subject to allocation should be either offered at specific prices and other conditions of purchase or sold at bids which in opinion of export authorities in Germany would provide highest return in terms of approved essential imports into Germany.
Exports to neutrals should be on terms set forth in Depts 701, Oct 22, with modification suggested urtel 1044, Nov 17, to apply until agreement reached on Allied Export-Import Authority and quadripartite export program, and with further modifications designed to make the conditions of payment conform to those outlined in para. 6 below. Dept prepared to seek modification of JCS 1067 in this sense.
Interim arrangement for payment of German exports approved by ACC Sept 20 should be replaced by agreement requiring full payment of all exports from stocks and current production in currencies which can be used to pay for current approved imports into Germany and to reimburse occupying powers (and Canada) for their past outlay on such imports, with proviso that in special cases justified by exceptional supply, transportation or other considerations and by inability of importing country to pay in convertible foreign exchange, payment might be accepted in goods constituting approved imports into Germany or in inconvertible currencies which can be used for purchase of such imports. Such arrangement would necessitate agreement ensuring that there would be no substantial exports of stocks under guise of war booty and that there would be no reparation from current output at least until after prior charge on export proceeds such as payment of approved imports and externally incurred occupation costs were met. On latter point agreement would presumably have to be reached in quadripartite Reparation Commission.24 Meanwhile Dept wishes to ascertain whether in fact Soviet Union is now obtaining stocks of goods and current output from its zone and whether these are regarded as war booty, reparation, or commercial imports from Germany.
Until it becomes possible to establish an exchange rate between the Reichsmark and foreign currencies and admit private importers into Germany, trade transactions between Germany and foreign countries should be handled by official agencies both in Germany and in importing country. Dept is discussing with US Commercial Company arrangements whereby USCC would (a) receive, record and transmit to export authorities in Germany inquiries from US and countries without own channels of communication with Germany regarding availability for export from Germany of various types of products, (b) advise US representative on advisory allocation committee suggested in para 3 as to US claims to any German export product which is subject allocation, and (c) arrange for purchase of any German exports on behalf of US and any countries not represented in Germany for which we may wish to make arrangements.

Dept would appreciate prompt comment on these proposals so that appropriate instructions on export policies might be despatched through War Dept. Such instructions would call for provisional application of policies in US zone pending negotiation of agreement on such or similar policies in ACC in connection with export-import program for Germany as whole.

  1. United States Political Adviser for Germany, Robert Murphy.
  2. Allied Commission.
  3. United Nations Relief and Rehabilitation Administration; for documentation on United States participation in the work of UNRRA, see vol. ii, pp. 958 ff.
  4. Emergency Economic Committee for Europe. For documentation on interest of the United States in the establisment of a European Economic Committee and a European Coal Organization, see vol. ii, pp. 958 ff.
  5. European Coal Organization.
  6. Allied Commission on Reparations; for documentation on this Commission and its role in negotiations on German reparations, see pp. 1169 ff.