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

1195. Reference Department’s cable 971, November 29, 1945, 8 p.m., concerning export-import policy for Germany. Proposals for the establishment of an Allied export-import authority became stalled in the Trade and Commerce Committee and in the Economic Directorate and have now been referred to the Coordinating Committee, where it is hoped at least some discussion can take place. In the meantime, OMGUS Trade and Commerce officials are attempting to work out a system with the British which will allow exports from one zone to be used in a common pool to pay for certain imports into either zone. At the same time, however, American officials are exerting every effort to obtain the establishment of an Allied export-import authority. To date we know of no instances where exports from any of the zones have been paid off in US dollars.

In paragraph 6 the Department refers to exports of stocks under guise of war booty as well as exports for reparations from current output. The Soviets have removed considerable amount of stocks as war booty and according to unofficial but reliable information continue to receive current production of goods such as textiles, presumably as reparations. To our knowledge there is no such thing as commercial German exports to the Soviet. Accordingly, we urge that the Reparations Commission consider as a matter of urgency the establishment of specific arrangements which would require payments for exports on a genuine quadripartite basis.

Information contained in the Department’s cable has been available to officials in OMGUS and their reactions will be cabled as soon as available.