740.00119 Control (Germany)/1–1146: Telegram

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

secret

89. 1. Sixteenth meeting of Control Council held yesterday under British chairmanship was brief but satisfactory and reached agreement on German steel capacity.

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2. Montgomery7 stated that a failure to bridge the difference of 300,000 tons between the Soviet figure of 7,200,000 and the British figure of 7,500,000 would be regarded as a confession of incompetence. He asserted that if the British estimate was wrong it could be corrected by further steel plant reduction, whereas if the Russian estimate proved wrong, no such remedial action was possible in view of plant removals. Sokolovsky said he would make the necessary concession on the understanding that the figure will be subject to review and that Germany would be left with the more out-of-date factories. Expressing thanks to General Clay for his efforts to produce a compromise, Sokolovsky accordingly accepted a steel capacity for Germany of 7,500,000 tons with the promise that it be reviewed from time to time.

3. Mentioning the deadlock on the definition of restitution, the chairman indicated further discussion would serve no useful purpose and suggested report with recommendations be submitted by the respective members to their govts. Koenig8 said France had made its ultimate concession and mentioned his govt’s position was strengthened by the conclusions of the Paris Restitution Conference.9 Sokolovsky asserted that the latest French proposal in no way represented a change in the French point of view but that as a last concession the Soviet Delegation was willing to consider an amendment of the French proposal on the following lines (see my 1338, 27 Dec, 9 p.m.10):

Paragraphs 2 and 3 of the French proposal would be deleted and the following would be substituted in their place:

“Restitution will be limited in the first instance to identifiable goods which existed at the time of occupation of the country and which were taken out of the territory of the country by the enemy by force. Also falling under measures of restitution are identifiable goods produced during the occupation whose acquisition was accomplished by an act of force. All other property removed by the enemy is subject to restitution to the extent consistent with reparation; however, the United Nations retain the right to receive compensation from Germany for these other goods removed as reparation.”

Pgh 4 to remain the same except that the word “such” would be substituted for the phrase “some of these”.

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Paragraphs 6 and 7 to be deleted as not within the Control Council’s competence.

In reply to a question by the French member whether removal by force also meant requisition, Sokolovsky said the intention of his proposal was comprehensive since his suggested pgh 3 mentioned “all other property”. Soviet amendments will be referred to Coordinating Committee for study and for report to next meeting of Control Council.

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Murphy
  1. Field Marshal Viscount Montgomery, Military Governor, British Zone of Occupation in Germany; British member, Allied Control Council for Germany.
  2. Lt. Gen. Marie-Pierre Koenig, Military Governor, French Zone of Occupation in Germany; French member, Allied Control Council for Germany.
  3. For documentation relating to the Paris Conference on Reparation, November 9–December 21, 1945, see Foreign Relations, 1945, vol. iii, pp. 1357 1506, passim.
  4. Not printed; this telegram contained the text of a revised French proposal concerning a definition of restitution (740.00119 Control (Germany)/12–2745).