740.00119 Council/4–147: Telegram
President Truman to the Secretary of State at Moscow3
urgent
763. Secdel 1409. For the Secretary from the President (Eyes only).
I have given careful consideration to Delsec 1375,4 which I have read [Page 302] in the light of the excellent exposition embodied in Delsec 1374.5 With respect to your proposed instructions to the US Delegation, I think it may be helpful for me to stress several points which loom up large at this distance and which I am certain you have already considered.
As your draft instructions make clear, you have in contemplation the desirability of a sufficient increase in the level of industry to assist in economic recovery and to provide sufficient exports to bring about a balance of payments. In view of the importance of accomplishing this objective, I assume that it is not the intention of your instructions to indicate that acceptance of the four-power treaty principle is a condition precedent to appropriate upward revision of the level of industry agreement although, of course, the weight to be accorded to the economic disarmament factors in a new level of industry would depend to some extent upon achieving security through the device of four-power treaty.
My primary concern, which I have no doubt you share, relates to the possible consequences of our agreeing to study factors relevant to a plan involving reparations from current production. If, as appears to be the case, your appraisal of the situation has led you to the conclusion that the time has come for us to express our willingness to explore the practical limitations and form of a current production reparations program, I think you will agree that it is of decisive importance that several basic conditions be clearly expressed and understood:
- (1)
- No reparations from current production will be permitted which would diminish the availability of exports, proceeds from which must be utilized in the first instance to pay for essential imports, including the reimbursement of the US and UK for advances already made to Germany.
- (2)
- No reparations from current production will be permitted which will divert coal or raw materials from essential uses in other countries or needed for the basic economy of Germany.
- (3)
- The USSR has already obtained a large amount of reparations from its zone of Germany and a small amount by plant removals from the west. Most other United Nations have obtained relatively little in reparations from Germany. It seems to me that it would be unfair for the USSR to receive reparations out of current production from Germany until other countries have obtained, prior to delivery to the Soviet Union, a quantity of reparations bearing some reasonably proportionate relationship to amounts already received by the USSR. This would not necessarily exclude the possibility that, after a balance of payments was achieved or in sight, consideration might be given to the availability of reparations from current production to the USSR as well as to other claimants on a proportionate basis [Page 303] to be determined later. I think that it should be made clear in this connection that we would want to fix a limit as to amount and time in which current production might be available for this purpose.
It seems to me that these conditions are fair and equitable. It may be, however, that in the light of your discussions at Moscow you feel that there are countervailing considerations which we should take into account. In that event, I should welcome your comments.
- This message was prepared in the Department of State, was signed by the President, and was transmitted to Moscow by the Acting Secretary of State through the Department’s telegraphic facilities.↩
- Ante, p. 298.↩
- The telegram under reference here, dated March 31, is not printed. It transmitted the text of Secretary Marshall’s statement to the Council of Foreign Ministers on March 31 on the need for German economic unity. For the summary of that statement, see telegram 1122, Delsec 1376, March 31, from Moscow, p. 299.↩