740.00119 EW/9–1445
The United States Representative on the Allied Commission on Reparations (Pauley) to the Secretary of State
My Dear Mr. Secretary: On April 27 the President addressed to me the following letter:
“My dear Mr. Pauley: I hereby designate you to act as my personal representative, with the rank of Ambassador, to represent and assist me in exploring, developing and negotiating the formulae and methods for exacting reparations from the aggressor nations in the current war.
“In this matter, you will represent me in dealing with the other interested nations.
[Page 1291]“At the Crimea Conference, it was agreed that Germany would be obliged to the greatest extent possible to make reparations in kind for the damage caused by her to the Allied countries. It was further agreed that a commission would be established to consider the question of the extent and methods for collecting such reparations.
“I wish you also to represent the United States and me personally as a member of that commission.
“In all matters within your jurisdiction you will report to me personally and directly.
“May I express my gratification at your willingness to assume this important but arduous mission.
“Very sincerely yours,
Harry S. Truman”
Although German reparations will continue to be a problem for the United States and the world for years to come, I believe that insofar as my part of the job is concerned I have completed my task, namely, that of representing and assisting the President in exploring, developing, and negotiating the formulae and methods for exacting reparations from Germany.
The bulk of my staff handling German reparations have already been released. I am preparing for submission to the President and to you an orderly history of my mission, together with the documents involved, in such shape as to be of the greatest value to the Department.35 In the meantime I would greatly appreciate it if I could get a concurrence from the State Department to the “Memorandum on the Provisions of the Berlin Protocol Relating to Reparations”36 which was submitted to your department some time ago. As I have already indicated in previous communications, I feel that it is important in the interests of the program that these guiding instructions for General Clay be completed as soon as possible.
In continuing the work on German reparations, certain matters will require your early attention. These include:
(1) Shares of Other Nations
As you know, invitations to fifteen claimant nations were sent out through the Department on August 28 in accordance with the agreement between the United Kingdom, the United States, and France. The task remaining in determining the shares of these other nations is thus the analysis of the data submitted by these countries, the development of a preliminary table of percentages, and, finally, the holding of an international conference for the purpose of reaching an agreement on percentage shares. You will wish to consider inviting the Soviet Union as an observer at this conference.
[Page 1292](2) Creation of a Permanent Reparations Agency
It has already been agreed that an Allied Reparations Agency will be required as part of the administrative structure for reparations. It is proposed that such an agency shall include representatives of all the chief claimant nations and that it shall have its permanent seat in Germany, possibly in Berlin, where it can work intimately with the Zone Commanders and the Control Council. The chief functions of the permanent Reparations Agency would be to allocate specific plants, properties, and commodities to specific claimants and to settle disputes with reference to such allocations.
(3) United States Reparations Claims
The Government of the United States in common with all other nations will be required to prepare a tabulation as a justification for its reparations claim. The United States claim should be prepared by the State Department with such aid as it may wish to secure from the War, Navy, and Treasury Departments, and other affected agencies.
The purpose of the United States justification of reparations claims is to furnish the material which will be required both to substantiate the United States demand for a share of reparations and to form the basis for determining a general formula for proposed application to all of the governments involved.
(4) United States Requirements
The Government of the United States must be prepared in the near future to indicate specifically what types of commodities and what types of assets it will demand from Germany on reparations account. Now that the war with Japan also is concluded, the American requirements are greatly different than they were in May when a canvass was made of the United States demands as seen by the Commerce Department, the Foreign Economic Administration, the War Production Board, the War Department, the Navy Department, the War Food Administration, etc.
(5) Current Deliveries as Reparations
The problem of current deliveries as reparations is one which cannot be settled until the Control Council has announced the results of its program for German deindustrialization and until the outlines of the export-import program for Germany are in hand. As soon as these two programs are available it will be necessary to decide whether current production will be available to pay reparations and if such production is available it will be necessary to decide over what period of years production for reparations account will be required.
Although my duties in connection with German reparations have been fulfilled, under the terms of my appointment by the President it is also my responsibility to represent and assist him in exploring, developing, and negotiating the formulae and methods for exacting reparations from Japan. In order for me to carry out this task, it will be necessary for me to have all information available to the [Page 1293] government on this subject and the attitude of the State Department. I would, therefore, appreciate the Department’s furnishing me as quickly as possible with the information and data available to it and to other agencies of the government with respect to this matter; and a statement of the views of the Department.
In my conversation with the President this morning, he is most desirous that I proceed with this work and complete it at the earliest possible moment. This will, of course, involve a trip to the Pacific areas involved in the near future.38
Sincerely yours,
- This history, entitled “A Report on German Reparations to the President of the United States, February to September 1945”, was forwarded to President Truman with an accompanying letter from Messrs. Pauley and Lubin dated September 20, 1945. The Report as such has not been published, although part V is printed in Conference of Berlin (Potsdam), vol. ii, p. 940.↩
- This memorandum, not printed, comprised Appendix 30 to the Pauley-Lubin Report.↩
- On September 24 Assistant Secretary of State Clayton sent a letter of reply, stating that Ambassador Pauley’s understanding on the completion of his task in the exploration, development, and negotiation of the German reparation plan accorded with the Department’s views; the Department would also select a deputy to serve for Mr. Pauley in further matters dealing with German reparations (740.00119 EW/9–1445).↩