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

740.00119 EW/9–445

The Acting Secretary of State to the Ambassador in the United Kingdom (Winant)

Washington, September 14, 1945—7 p.m.

8004. For Mosely³¹ and Pincus. Reference is made to Embtel 3160 of Sep 4 to Dept from Moscow and to Deptel of this date sending you Brit Aide-Mémoire of August 31.³²

Please attend meeting at Brit Treasury (Waley’s office?) September 20 11 AM as US representative on organizing committee of Inter-Allied Reparation Agency (IAEA) (Mosely) and Deputy Secretary General pro tern of IAEA (Pincus).

Meeting is for purpose organizing IAEA. As such it should draft proposed invitation for participation in IAEA by various countries (see para. 3 of instructions below), to be approved and issued by three Govts, set in motion arrangements with Allied Control Council (ACC) for seat of Agency, facilities to be granted IAEA by ACC, etc, arrange for time and place of convention of IAEA, etc. Following are Dept’s comments on Brit Aide-Mémoire and instructions to you in representing US at meeting:

1. US shares Brit views with respect to urgency of establishing machinery for allocation of such interim deliveries as ACC may be able to provide and for final deliveries under final reparation plan. US primary interests in organization of IAEA are speedy organization and provision for full participation of smaller claimant countries. If French and Brit representatives are in agreement on some point which does not conform to US views as expressed below and does not affect two major interests of US just noted, you are given latitude to agree. On points substantially affecting these interests of US, where you cannot reach agreement with Brit and French representatives, please ask Dept for instructions.

2. Dept agrees with functions of IAEA as laid down in para. 1 of memo attached to Brit Aide-Mémoire. Most important function of IAEA at present however, is speedy collection of lists of plants and equipment desired as reparation by countries entitled to receive reparation. You should therefore suggest that invitation from US, UK and France to various governments to participate in IAEA should include provision that representatives of countries bring to first meeting of IAEA preliminary lists of types of whole plants, particular plants in western Germany and types of separate industrial machinery and equipment which they would like to receive as reparation from Germany. This provision should make clear that these lists, submitted prior to allocation of percentage shares to reparation from Germany and fixing of total of capital removals from three western zones, are required as basis for allocation of interim deliveries and involve no obligation of IAEA, Reparations Commission or ACC to deliver in accordance with request. Further, it should be made clear that administrative difficulties make it impossible to permit separate national missions to inspect German plants in preparation of such lists.

You should explain to Brit and French representatives that US attaches importance to early gathering and compilation of these lists by IAEA to form a basis for allocation of interim deliveries, to bring other claimants to reparation on a par with USSR which already has submitted such list to ACC (See Deptel 7652 to London of Sept. 6³³), and possibly to aid ACC in preparing its list of capital equipment available for interim deliveries. Dept would hope to have lists received by IAEA in formal session, compiled and submitted to ACC by October 15.

3. It is noted that Egypt and Denmark have been omitted in Brit Aide-Mémoire from list of countries to be invited to participate in IAEA. It is assumed this omission is inadvertent. If not, you should express Dept view that all countries invited to participate in conference to fix shares should participate in IAEA, even if it is believed that their ultimate share in reparation will be very small. Any initial exclusion would be unwarranted as prejudgement of country’s claim. Dept would not object to including Poland. Dept. attaches great importance to invitation to USSE and feels that US, UK and French representatives in Moscow should take occasion of issuance of invitation to express view informally that IAEA is only body which will allocate reparation deliveries from western zones.

4. Provision of one vote for one member is entirely satisfactory to US assuming voting applies to terms of reference, procedures, policy issues, etc. but not to actual allocation of specific plant and equipment which should be handled under some automatic procedure, such as that suggested in paragraph 6 below. It might be useful to add express provision that decision is taken by majority vote of members present, and that if member government is entitled by lot or other arrangement to choice of plant and equipment or to take some other decision by itself under IAEA auspices at particular point in proceedings, failure to be present will lose for such country its voice at that point in proceedings, and will not delay business of other countries.

Dept. does not share Brit concern that controlling Powers may be bound by majority vote to decision they are reluctant to accept. ACC and Zone Commanders have veto power over what is removed and no interest or concern in allocation of property they have decided is removable.

5. Terms of reference of IAEA should be submitted to countries invited to participate as proposal for discussion rather than charter to which adherence is requested. This is probably implicit in Brit proposal. Invitation should also make clear that IAEA is technical agency and should suggest that representatives be technically qualified persons.

6. Dept believes organizing committee and/or secretariat should consider now proposal to be made to first full meeting of IAEA on IAEA machinery for allocation. Some proposal such as selection of an order of choice by lot and exercise of all first choices in order before second choices are made may be appropriate. Problems of valuation should also be explored. Ambassador Pauley has suggested that Soviet proposal of 1938 prices in Germany plus 15 percent (on capital equipment) is manageable,³⁴ and that value should be that in situ, not in receiving country or as junk. Separate valuation procedures probably required for whole plants and collections of assorted machinery.

7. You should not, pending further instructions, discuss problem of whether shares to reparation will apply to total of plant and equipment removals, external assets, war booty capable of civilian use, ships, etc or separate for each category. This question will be discussed by conference of powers to divide shares to reparation in October. Object should be to concentrate primarily at this time on interim deliveries capital equipment.

For Murphy: Please communicate substance of foregoing to General Clay for his information, and ask him whether he can send Dept, Pauley and Mosely and Pincus copy of Soviet list of plants desired from Western Germany as interim deliveries and submitted to ACC.

Ambassador Pauley concurs in the foregoing instructions.

Sent to London as 8004. Eepeated to USPolAd, Berlin for Murphy as 476. Eepeated to Paris as 4334, and Moscow as 2014.

Acheson

31. Philip E. Mosely, Special Assistant to Assistant Secretary of State Dunn, and Political Adviser on the United States Delegation to the First Session of the Council of Foreign Ministers in London.
32. For text of aide-mémoire, see p. 1275; Department’s telegram 8010, September 14, 8 p.m., to London, transmitting abbreviated text, not printed.
33. See telegram 1964 to Moscow, p. 1283.
34. See the letter from Mr. Pauley to General Clay, August 11, p. 1251.