862.515/8–545
The United States Representative on the Allied Commission on Reparations (Pauley) to President Truman
My Dear Mr. President: As you know, we have in our possession at Frankfurt over two hundred million dollars worth of gold captured in Germany by the armed forces of the United States.
A considerable portion of this gold can probably be identified as having been removed from various of the liberated countries of Europe.
Although it has not yet been determined what disposition will be made of this gold, at least the following two possibilities will shortly become the subject of active discussion:
- (a)
- Restitution of any identifiable gold to the specific countries from which it was removed.
- (b)
- Regarding the gold (or at least that portion which is identifiable) as a common pot,44 and distributing it equitably among those liberated countries which lost gold as a result of enemy action.
From a strictly legal standpoint, I understand that it would be possible for the United States to regard this gold as war booty. Although I have not been pressing for such a treatment of the gold, I do feel that if such gold, or part thereof, is restored to the liberated countries, whether on a straight restitution basis or under the “common pot” formula, arrangements should be made so that any claims which the United States has against such countries will become in effect a first lien on the gold to be restored. This lien should apply not only to satisfy our existing claims but also to assure payment of obligations which the claimant countries will shortly incur for the import of food and other essential supplies.
This will mean that, while we recognize the paramount right of the liberated countries to the gold, our continued possession of it would be for the purpose of satisfying our claims against such countries and that such possession should not be released until our existing and immediately prospective claims are satisfied.
Respectfully submitted,
- For a definition of the so-called Gold Pot theory, see Conference of Berlin (Potsdam), vol. ii, p. 938, footnote 4.↩