740.00119 Council/12–947: Telegram
The Acting Secretary of State to the Secretary of State, at London
Telmar 58. For Secretary Marshall from Lovett. Re Martel 52, December 9.31 All statements to Congress re appropriations for Germany, including Royall’s yesterday, have asserted intention of requiring repayment as first charge. It is expected that aid to Germany under ERP will not be grant but will be a claim against German economy to be settled from excess of exports or in peace treaty. Some repayment may be possible, particularly because of absence of German foreign debt, assuming no other claims are given priority. However, more important is value of this claim in treaty negotiations as basis for keeping other claims down.
Germany was enemy and we cannot make grants while using loan procedure with former allies. We would have difficulty justifying appropriations for Germany if result was to make jjossible payment current reparations to Russia.
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