862.515/8–1145: Telegram
The Secretary of State to the Ambassador in the United Kingdom (Winant)
6784. For Clayton. French Emb has presented another note to Dept62 requesting restitution of Belgian gold which was entrusted to Bank of France in 1940 and which Bank of France was compelled subsequently to surrender to the Germans.63 A similar note was presented in London and probably in Moscow.
[Page 1250]It is evident from this note and previous ones that French feel very strongly on this question.
French propose that we issue instructions to General Eisenhower so that restitution question may be negotiated in Control Council. French are anxious to discuss disposal of gold uncovered in all four zones because they believe part of Belgian gold remained in Berlin and fell into Russian hands.
Telegram from Pauley to President, State, Treasury and FEA, August 5,64 abandons his earlier view that gold captured by US forces should be regarded as war booty but proposes that any scheme for restitution of such gold should include provision that any claims of US against recipient countries, including claims for payment of supplies furnished to them, would become “first lien” on gold returned. Proposal appears to be based on unilateral determination by US of disposition of gold captured by our forces.
Dept considers US mere trustee of gold in Germany and believes unilateral determination of its disposition highly inadvisable. Dept is also strongly of opinion no conditions should be attached to return of gold. Any attempt to satisfy US claims out of looted gold to which despoiled countries have just title would seriously prejudice our relations with these countries. Furthermore, US has no greater legal or moral basis for asserting a lien against such gold than for attaching gold earmarked for foreign account in New York.
As you know Dept favors gold-pot policy under which available gold would be distributed pro rata among claimant countries in accordance with established gold losses. Dept has been anxious to begin negotiations on this policy but has been in doubt as to procedure owing to lack of authoritative interpretation of clause in Terminal agreement65 by which USSR renounced claim to gold captured by “Allied troops” in Germany. We assume from context that Allied troops means those formerly under SHAEF command and not Russian forces. But has USSR renounced interest in disposition to be made of gold captured in West and have UK and US explicitly or implicitly renounced a voice in disposition of gold captured by Russian forces? In the case of German foreign assets the Control Council retains the power of disposition despite the reciprocal renunciations of claims to such assets.
In our view, only if Control Council is empowered to discuss disposition of all gold in Germany, including that captured by Russians, would it be appropriate to instruct General Eisenhower through JCS [Page 1251] to negotiate US proposal in that body. If Soviet has waived voice in disposition of gold captured by SHAEF forces, we would propose to present the agreed US position through diplomatic channels to the British and perhaps the French. French claim to participate in decision of this question appears to us rather tenuous if basis of Terminal bargain was that he who captures gold has right to determine its disposition. Also admission to decision of such an important party at interest raises question of representation by other gold losers.
Dept would appreciate your interpretation of Terminal agreement and your views on Pauley proposals and Department’s suggestions. If you consider it advisable, you might ascertain informally British views as to appropriate status of France in any eventual negotiations.66
Sent to London, repeated to USPolAd, Frankfurt for Despres as Department’s 261.
- Dated August 7, not printed.↩
- See telegram 3630, August 2, 5 p.m., to Paris, p. 1239.↩
- Reference is to a War Department cable which transmitted the text of Mr. Pauley’s letter of August 4 to President Truman; for text of letter, see p. 1240.↩
- “Terminal” was the code name for the Potsdam Conference. The clause referred to is paragraph 10 of section III of the Protocol of Proceedings: for text, see Conference of Berlin (Potsdam), vol. ii, p. 1487.↩
- For the reply to this cable, see telegram 8243, August 14, 8 p.m., from London, Conference of Berlin (Potsdam), vol. ii, p. 937.↩