740.00119 Control (Germany)/9–2545: Telegram

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

614. I refer to my 569 of September 20, 10 p.m., concerning the sixth meeting of the Control Council, and in particular to the discussion of the proposed law vesting German foreign assets.

The British have prepared a memorandum, classified secret, setting forth their two main legal objections which are: (1) that the Control Council has not been authorized by the four powers so to act; and (2) that the courts of other countries will not recognize the validity of the vesting of title.

The first objection is as follows:

There is only one section of the agreement on control machinery in Germany which might confer this power; namely article 3 (b) [Page 840] subparagraph 2,1 which gives the Council power to reach decisions on the chief economic questions affecting Germany as a whole. The British doubt whether this extends outside of Germany.
Paragraph 18 of section III B of Potsdam Agreement2 is not intended to extend the powers of the Council beyond those already existing and applies only to countries other than the United Nations.

As to the second objection, the British believe: (a) even as to Germans in Germany the vesting law must be shown to be non-confiscatory and as giving adequate compensation, (b) It will not affect real estate, (c) It will not be recognized as to German nationals resident outside Germany, (d) Parts of law providing: for subpoena of witnesses externally; for prosecution of violators outside Germany; and declaring void contradictory non-German law, are clearly invalid.

The British feel that by use of the diplomatic approach, other governments may be persuaded to agree to the provisions which they are not legally bound to recognize. They feel that these agreements should be secured in advance.

As the Department will have noted from my 569 of September 20, 10 p.m., the United States, French and USSR representatives did not concur in the British objections.