862.50/3–146: Telegram

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


560. Our reading of urtel 558 of Feb 19 raises questions about effect of import-export balance agreement in Economic Directorate on first charge principle, especially as it applies to import charges accruing in present period.

[Page 512]

Para 3 urtel appears to allow possibility of situation in which first charge principle will be abandoned. As we understand text in 1949 imports of 1500 million RM (1936 prices) of non-food items will be permitted. Another 1500 million RM might be spent for food imports, but to the extent that food imports cost less balance will be available for externally incurred occupation costs. No reference is made to payment for accrued import costs, which by 1949 will have grown large and will have been largely borne by United States.

Would you clarify agreement in light of first charge principle? War Dept also inquiring directly of OMGUS.51

  1. Telegram 715, March 7, 9 p.m., from Berlin, replied as follows: “At its meeting on March 5, at request of American delegate, the Economic Directorate amended its decision of February 15 to read that, ‘after all imports approved by the Control Council are paid for any portion of that sum (i.e. one and one half billion RM) not needed for food and fodder will be used to pay for costs of occupation,’ etc. War Department being advised by OMGUS.” (862.50/3–746)