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

740.00119 EW/9–445

The Ambassador in the Soviet Union (Harrimcm) to the Secretary of State

Moscow, September 4, 1945—4 p.m.
[Received September 4—3:15 p.m.]

3160. From Draper for Pauley and Clayton.

1. Reparations, (a) Control Council agreement on letter to Reparations Commission has not broken deadlock. (b) At meeting last night, Novikov still insisted strongly Reparations Commission prepare plan which understand means standard of living and level of industry with application to many industrial categories. He stated Soviet plan would be presented Commission 5th September, (c) Waley and I strongly pressed for Council determination character and amount of equipment for reparations. Rueff supported but indicated willingness to compromise. I stated I was prepared to receive Soviet plan and refer to U.S. side of Council for study. No indication Novikov will change position which he stated was Soviet Govt position, (d) In informal discussion today with Waley and Rueff, both advanced desirability some compromise solution. Waley apparently has authority from his Govt to agree to joint determination both plan and character and amount of equipment by Commission and Council provided Soviets agree that the work be done in Berlin, but contemplating possibility formal meeting of Commission in Moscow to give final Commission approval, (e) Proposing leave Moscow Friday.¹⁸ If no solution reached, there is likelihood that one of the members of the Commission may refer problem to Council Foreign Ministers London next week¹⁹ for settlement, and I suggest delegation be prepared to deal with question. Novikov, Waley and Eueff all will be there. (f) Unless instructed otherwise, I will continue to take position that the Control Council under the Potsdam Agreement is charged with the responsibility of determining the character and amount under policies fixed by the Reparations Commission and that the plan referred to in paragraph 11²⁰ was in effect the Reparations Agreement expressed in section IV of the Berlin Agreement. Also, that I am not prepared to discuss the merits of the Soviet plan here but will refer to the US member of the Control Council for study. I see nothing but confusion and divided responsibility ahead if the compromise is accepted. Ambassador Harriman concurs.

2. Restitution. Soviet member indicated restitution not part of Soviet reparation plan and preferred restitution discussion be in Control Council or alternatively Council of Foreign Ministers or diplomatic channels. French desire question discussed here. British willing. I took no position, being without instructions. Please advise your reaction British draft²¹ if you desire discussions here, as French may be able persuade Nbvikov to consider question.

3. Inter-Allied Separations Agency, (a) Novikov stated that the Separations Commission should allocate plants determined to be available for removal to the Soviets on the one hand, and to the other 3 powers on the other hand. The Soviets would then make their own arrangements with Poland, and the other 3 powers should similarly make their arrangements with other Allies entitled to reparations. (b) Soviets are not interested in membership on any reparations agency including the smaller powers, nor a membership on any three power agency to determine percentages for division of the 75% of removals, although might be willing to sit on latter board as observer if pressed, (c) Above proposal would mean that Separations Commission in allocating plants would have to represent the interests of smaller nation claimants. British and French appear inclined to accept this arrangement which appears reasonably workable. Have you any objection? (d) In informal discussions today, Waley suggested prompt organization Inter-Allied Separations Agency, starting with 3 representatives to form organization committee, US, British and French, with a permanent Secretary General and 2 Deputies. He further suggested Secretary General be British in view most of removals from British zone, with US and French Deputies. Recommend that Pauley designate 2 individuals to come to London or Paris from Washington prepared to act as US member of organization committee and Deputy Secretary General, respectively. These individuals should be fully informed of views concerning organization proposal previously submitted by British. Please cable any comment British proposal.

4. Sending copy this cable General Clay and request you submit to him any instructions or comment to me.

Sent Dept, repeated Berlin for Clay as 69. [Draper.]

Harriman

18. September 7.
19. For documentation on the First Session of the Council of Foreign Ministers, held in London, September 11–October 2, 1945, see vol. ii, pp. 99 ff.
20. Reference is to paragraph 11 of section III of the Report on the Tripartite Conference of Berlin; see Conference of Berlin (Potsdam), vol. ii, p. 1504.
21. Supra.