740.00119 Council/4–147: Telegram
The Secretary of State to the Acting Secretary of State
us urgent
1143. Delsec 1379. For the President, Vandenberg, Connally and Acheson from Marshall. First restricted CFM meeting, 1 April.
At the restricted meeting this afternoon, I stated that neither Potsdam nor the subsequently agreed level of industry envisaged reparations from current production and if Mr. Molotov was insisting upon an increase over Potsdam reparations by this means, I could not consider it. However, I continued, any substantial increase in the level of German industry would inevitably reduce the plants available for reparations removals under Potsdam. If all Mr. Molotov had in mind was compensation for such reductions, the US delegation would be willing without commitment to have experts study the matter, but it should be realized that the British delegation had stated it could not consider any reparations from current production at this time and was urging only the implementation of Potsdam.6 Molotov, while agreeing that the consideration of level of industry and reparations was basic, would not agree that reparations from current production constituted an alteration of Potsdam, nor did he agree that the necessary increase in level of production would mean a reduction in the number of plants earmarked for reparations removals. He made it plain that in his opinion reparations from current production in no way interfered with the execution of the removal program and in fact were envisaged at Potsdam. The long and fruitless discussion which followed reduced itself primarily to a debate between Bevin and Molotov as to whether or not Potsdam envisaged reparations from current production.
[Page 304]The meeting led to no conclusion and the issues remain those as set forth in previous meetings. I made it plain that in considering compensation for possible reduction of removable reparations earmarked for allied countries, as a result of any agreed increase in level of production, their value in Germany must be the criterion rather than their value as dismantled reparations.
The basic obstacle confronting us on this question is the Soviet insistence that reparations from current production should be agreed upon, at least in principle, before establishing conditions necessary for obtaining such reparations.
In view of the absence of progress at this closed session, there was no objection to my suggestion that we should tomorrow resume the regular sessions of the council.
- The proposal which Secretary Marshall presented orally at this meeting was subsequently circulated to the Council as document CFM(47) (M)97, April 3, 1947, not printed; for the text of the American proposal, see Germany 1947–1949, p. 410, or Department of State Bulletin, April 13, 1947, pp. 652–653. For Secretary Marshall’s explanation to President Truman of the proposal summarized here, see telegram 1167, Delsec 1385, April 2, from Moscow, p. 306.↩