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

740.00119 EW/4–545: Telegram

The Ambassador in the United Kingdom (Winant) to the Secretary of State

London, April 5, 1945—7 p.m.
[Received 9:14 p.m.]

3470. For Despres³³ from Knapp.³⁴ Following is summary of British views on work of Reparation Commission elicited in informal conversations with Turner,³⁵ Hall-Patch and Playfair.³⁶

The British think of the Commission as an ad hoc chartering body which within a period of months should draw up a basic reparation program for submission to member governments and then dissolve. They appear to contemplate rather vaguely a permanent commission with much wider alien representation which would consult with the occupation authorities in Germany in the implementation of the program. They regard the Commission’s work as of utmost importance and plan to send a very strong technical mission; for example, both Turner and Playfair will probably go, although they recognize that there will be most pressing demands for their services by London in the coming months during which the control machinery will be set up and commence functioning in Germany. At the same time, the British hope to be able to circumscribe the agenda at Moscow rather closely. In particular, they would prefer to see other basic elements in the economic treatment of Germany, notably policy with respect to economic security, negotiated in London through EAC. They recognize, however, the very great difficulty of so confining the Moscow discussions or alternatively of reconciling and harmonizing separate negotiations in Moscow and in London.

The British are anxious to hear more about the constitution of the United States Mission and Hall-Patch expressed the hope that Mission might travel by way of London and have some preliminary discussions with the British here.

The British are much concerned at the anomalous absence of France from the Commission and appear to hope that something can be done about it, especially in view of the obvious impact upon the reparation program or [of] the French proposals for economic partition in the west.

The British appear to be quite satisfied to accept Russia’s proposal for her share in reparation,³⁷ but seem firmly convinced that the total sum proposed by Russia cannot be extracted within a 10 year period. They are of course particularly critical of the extravagant Russian estimate of the value of capital equipment which might be removed. When this figure has been written down to a fraction of the Russian estimate [apparent omission]. The balance, according to British views, can only be paid by a prostrate Germany within 10 years if a deliberate policy of restoring Germany’s industrial strength is pursued. In short, the British believe that a program of reparation from current output on this scale conflicts with economic security objectives. It appears that British experts, particularly Playfair, drafted a very strong statement on this subject at the time of the Yalta Conference which was approved by the War Cabinet and read out at one of the Yalta sessions by Mr. Churchill.³⁸

The British also point out that until measures of territorial truncation and partition are decided upon it is impossible to judge the burden of a given reparation demand. The judgment described above is based on the assumption that Germany will remain intact, except for East Prussia and Upper Silesia.

The British are much concerned that value of labor services is excluded from the Russian formula. They fear that this exclusion will encourage unbridled demands for German labor.

The British are also at a loss to explain the inclusion in the Yalta protocol of reference to shares in German industry as a medium for reparation.³⁹ They have given considerable study to this proposed solution for reparation and economic security problems and have completely rejected it on grounds familiar to us. Turner suggested the possibility however, that if a definite sum for reparation is fixed and if it proves impracticable to attain this amount over a 10 year period, delivery of some kind of German securities with some provision for amortisation might be called upon as a face saving device to make up the balance.

The reference above to French proposals for economic partition in the west is not meant to imply that the British have any clear idea what these proposals are. Apparently the French have been unable thus far to present a coherent proposal, and the British believe that there is a cleavage of this issue between the French military and French civilian element. [Knapp.]

Winant

33. Emile Despres, Adviser on German Economic Affairs in the Office of Assistant Secretary of State William L. Clayton.
34. J. Burke Knapp, Assistant Adviser, War Areas Economic Division.
35. Mark Turner, Principal Assistant Secretary, Economic Advisory Branch, British Foreign Office.
36. Presumably E. W. Playfair, British Treasury.
37. At the Yalta Conference, the British had opposed stipulation of a definite figure for German reparations; in the Protocol on German Reparation, however, the British Delegation had not registered opposition to the Russian proposal that 50 per cent of German reparations be allocated to the Soviet Union. See Conferences at Malta and Yalta, p. 983.
38. See ibid., p. 902.
39. See ibid., pp. 979, 983.