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

740.00119 EW/8–1845: Telegram

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

Washington, August 18, 1945—noon.

294. Personal for Pauley. I have consulted the President, the Secretary of the Treasury and others in regard to the recommendation contained in your telegram of August 5⁷⁴ (from Berlin via War) that the United States retain a lien on gold looted by Germany from occupied countries in Europe until past and prospective claims of the United States against such countries are settled.⁷⁵ I have also noted that your telegram of August 13 (No. 2881 from Moscow) renews this recommendation on looted gold in somewhat different form and includes a recommendation for imposing similar conditions on the restitution of looted securities.

We have given the problem much thought and careful study in the light of the following factors:

(a) The United States has no moral or legal basis for laying claim to or attaching this or any other gold belonging to foreign countries in settlement of past or prospective debts;

(b) The United States is bound by its adherences, given without reservation, to the United Nations’ declaration with respect to Axis acts of dispossession of January 5, 1943;⁷⁶ the gold declaration of February 22, 1944;⁷⁷ Bretton Woods resolution VI;⁷⁸ and resolution VI [?] of the Conference on Problems of War and Peace held at Mexico City.⁷⁹ In these declarations, which were sponsored by the United States and to which the United States invited the signatures of other nations, the United States is solemnly pledged to support the restitution of looted property;

(c) An attempt by the United States to lay claim to gold belonging to countries with which it maintains friendly relations would seriously prejudice those relations. Particularly is this the case since the United States now owns the greater share of the world stock on monetary gold.

The position of the United States therefore, which you should express in your dealings with your colleagues on the Allied Commission on Reparations, is that gold captured by US forces, as well as gold captured by other Allied forces, should in principle be restored to the countries from which it was looted without reservation, condition, or encumbrance. This Government recognizes, however, that German disposition of some looted gold, and the impossibility of identifying the origin of other gold, require for the sake of equity a modification of the simple principle of restitution of identifiable looted objects to the jurisdiction from which they were removed by Germany. The necessity for such modification and the content of paragraph 10 of the Reparations section of the Berlin Protocol⁸⁰ have resulted in the advocacy by the United States of the policy of pooling all gold found in Germany and Austria by Allied troops (British, American, French and Soviet) into a common pot. This gold would then be divided among countries which can establish the fact of German looting of gold from their jurisdiction, other than USSR, in proportion to their established losses.

“Concerning the restitution of the gold, my views have already been stated. I believe it to be inadvisable to make restitution until subsequent to the general decisions on reparation and until restitution has been mutually agreed to by all nations who claim reparations or restitution. This matter is being currently taken up with the British, the French, and with Clay.” (740.00119 EW/8–2045)

This Government is similarly committed to a policy of restitution of securities looted by Germany from occupied countries of Europe, without reservation, condition or encumbrance. To the extent that the jurisdiction from which some securities have been removed cannot be established, an equitable principle of distribution must be devised among the UK, USSR, US and France to achieve rough justice in dividing these securities among the countries from which they were looted.

This Government is anxious that steps should be taken at the earliest possible date to restore gold and securities, as well as other types of property, to the countries from which they were removed by Germany. I would appreciate learning from you whether you consider it likely that negotiations with your colleagues on the Allied Commission on Reparations are likely to lead to early agreement on principles and procedure. If so, you are authorized to propose to your colleagues a formulation of the gold-pot policy and of the principle of restitution of securities described above. The Department is considering certain aspects of the gold-pot policy on which agreement would have to be reached: (1) the scope of the treasure to be included in the pot, e.g. whether SS accumulations of precious metals from concentration camps, monetary silver, etc. should be lumped with monetary gold; (2) the eligibility of Austria, Italy and the satellites as claimants on the gold-pot, and whether their treatment should be identical with that of liberated countries; (3) how looted gold which Germany illegally sold during the course of the war should be recovered and whether recoveries of such gold should be added to the pot. If you consider that the Reparations Commission can usefully attempt to deal with this problem, the Department will communicate its views on these points to you.

I am well aware of the difficulties confronting you, however, and if in view of the Soviet position reported in your no. 2881 you do not believe that the Reparations Commission will be able to dispose of the question of restitution of gold and securities please let me know so that we may examine the possibility of settling these matters through other channels of negotiation with the occupying powers, or by unilateral settlement for the US zone of occupation.

Sent to USPolAd, Berlin as 294, repeated to London for Clayton as 6974, repeated to Paris as 3879.

Byrnes

74. 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.
75. A paraphase of Mr. Pauley’s message to the Secretary of State contained in War Department telegram VX 31504, August 18, from Berlin, offered the following further comments on the gold restitution question: “In connection with message number 8243 [ Conference of Berlin (Potsdam), vol. ii, p. 937] to you from Clayton there can be no doubt but that it was planned that all rights to any gold in either the western zones or in their own zone would be renounced by the Soviet Government. The increased percentages of deliveries alloted to them in the western zones was the consideration governing this decision. The ability to collect it is, of course, a different problem.
76. For text, see Foreign Relations, 1943, vol. i, p. 443.
77. Ibid., 1944, vol. ii, p. 213; also printed in 9 Federal Register 2096.
78. For text, see Proceedings and Documents of the United Nations Monetary and Financial Conference (Washington, Government Printing Office, 1948), p. 939. For documentation on the Bretton Woods Conference, July 1–22, 1944, see Foreign Relations, 1944, vol. ii, pp. 106 ff.
79. For documentation on this Conference, see vol. ix, pp. 1 ff. Reference to resolution VI is presumably in error; resolutions XVIII and XIX dealt with control of enemy property. For texts, see Final Act of the Inter-American Conference on Problems of War and Peace, Mexico City, February–March, (Washington, Pan American Union, 1945) p. 55.
80. Conference of Berlin (Potsdam), vol. ii, p. 1487.