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

740.00119 EW/5–345: Telegram

The Chargé in the Soviet Union (Kennan) to the Secretary of State

Moscow, May 3, 1945—1 p.m.
[Received May 3—12:05 p.m.]

1448. I note from a recent information telegram that a new directive on German reparations is being completed. The following tentative conclusions on Russian attitude toward reparations, based on what we have seen thus far of Soviet practices in general and reparations practices in particular may be useful to the Department in this connection. They are, of course, open to revision in the light of subsequent experience; and they refer to probable actual Soviet practices rather than what the Russians may be induced to agree to on paper.

1 By the time any reparations settlement can be arrived at a considerable portion of existing German assets will already have been removed from the Soviet zone in the guise of war trophies or otherwise. All available evidence from the Balkan countries and from areas already occupied by the Russians in Germany plainly shows that the Soviet Government intends to proceed unilaterally regardless of existence or non-existence of a reparations agreement in removing industrial plants, equipment and materials in enemy countries to which it has access and which it feels might be useful to the economy of the Soviet Union or satellite areas.

2 We will probably never be able to obtain really detailed or reliable information concerning these removals. Soviet reluctance to disclose information regarding economic operations by Soviet authorities is rooted in both tradition and policy and has been amply apparent both in the experience of this Embassy and in the discussions for the establishment of various inter-Allied economic controls in Europe. Attempts by the Commission to determine or control Soviet actions in the Soviet zone of occupation will probably meet with opposition and suspicion on the Russian side. Supervisory activities by representatives of the Commission in the Soviet zone, if permitted at all, will be obstructed and such representatives will not readily be granted freedom of movement and access to information.

3 The Russians will consent to make available reparations deliveries from their zone to Western countries only, if at all, on a strictly quid pro quo basis. They will regard the Reparations Commission primarily as an agency for strengthening Soviet economy at the expense of defeated enemy countries. They will insist that the sacrifices of the Soviet Union and Soviet satellite countries in eastern Europe have far outweighed those of the Western countries. They will probably take the position that the Commission should concentrate on the question of how to make available deliveries from the Western zones to Eastern Europe. Unless the latter are withheld as a bargaining lever the Russians will probably balk at agreeing to any important deliveries from their zone.

4 If counter deliveries are worked out on this basis the Russians will demand a considerable disproportion in their favor. This again will be based on the thesis of greater sacrifice of the Eastern European countries.

5 The Russians may be expected to accept enthusiastically the principle of dismantling German industrial equipment since that is one of their basic war aims. They will not await a reparations settlement before taking steps in this direction in their own zone and will not readily submit, at a later date, to guidance from any Reparations Commission in this respect. A good deal of the industrial plant in the Soviet zone which has not been destroyed during the war may prove to have been already dismantled by the time a permanent reparations body begins to function. Again there may be difficulties in getting accurate information on this subject. It is possible that the Russians make here a sharp distinction—and demand that the Separations Commission do likewise—between the areas which have already been allotted to Poland by the Soviet authorities and the remaining territory of Germany.⁷¹

6 The Russians can hardly be expected to accept our thesis that reparations should be derived principally from German assets existing at the termination of hostilities. They have made clear their determination that the standard of living in defeated countries is not to surpass that of the victors. Since it will not be possible for years to raise the Soviet standard of living to that of central Europe, the implementation of this policy will mean the imposition of heavy tribute, open or disguised, both during and after the period of Soviet occupation.

Sent Department as 1448, repeated to Paris for Murphy⁷² as 95.

Kennan

71. See telegrams 1251 and 1252, April 18, and 1467, May 4, from Moscow, vol. v, pp. 229, 231, and 277, respectively.
72. Ambassador Robert D. Murphy, United States Political Adviser for Germany (USPolAd) whose offices were located at Versailles.