740.00119 Council/12–1047: Telegram
The United States Delegation at the Council of Foreign Ministers to President Truman, the Acting Secretary of State, and Others
urgent
6421. Delsec 1538. For the President, Vandenberg, Connally, Eaton, Bloom and Lovett. Fourteenth CFM meeting, December 10, Molotov presiding. The exchange of views on economic principles for Germany was continued.
Molotov agreed with Bevin and Marshall that sums advanced by the controlling powers to pay for required imports for the German people should be repaid by the Germans and would be a first charge on Germany’s foreign exchange resources after its essential needs have been met.37
Molotov agreed with Marshall and Bevin that external occupation costs should be regarded as debts due from Germany to the controlling powers but he did not favor the repayment of these debts prior to the repayment of the advances made by the controlling powers to pay for imports required by the German people during the occupation period.38 Bevin and Marshall insisted on maintaining prior payment of advances for imports. Bidault indicated he would accept any agreement on this question acceptable to the other Ministers. The question was passed over when no agreement was reached. Marshall and Bevin agreed that until Germany has attained a balanced economy and paid the occupation costs, it should not be called upon to make any reparation deliveries from current production or stocks.39 Molotov asked that this suggestion be considered when the Ministers discuss reparations. Marshall reaffirmed his opposition to the payment by Germany of reparations from current production. He said the US is not prepared to agree to any program of reparations from current production as a price for the unification of Germany. He asked the Council to decide that from January 1948 nothing shall be taken out of Germany except for fair economic value in money or goods which can be immediately used to sustain the German economy. The CFM decision would stand until further action by the Council or pursuant to a peace treaty but would not apply to agreed reparation deliveries in capital goods. He asked Molotov to reply immediately but Molotov declined until the Council considered the question of reparations.40 Bevin said he could [Page 763] not agree to the payment of reparations from current German production taking priority over repayment of money already spent by the occupying powers in Germany since the end of the war to keep Germans from starving.
The Council postponed further discussion of this question until German reparations are discussed.
Bevin, Marshall and Bidault accepted a proposal41 that the acquisition of any interest in an enterprise in Germany by any foreign power or its nationals after May 8, 1945, shall only be valid if approved by the Allied Control Council. Molotov proposed two amendments, both of which were rejected by Bevin, and no agreement was reached.
Differences also arose over a clause42 placing under German law all property, rights and interests in Germany owned or acquired by a foreign power or its nationals and requiring that these properties remain a part of the economic resources of Germany. Molotov maintained his objection to the second part of this clause despite Bevin’s strong support of it.
Marshall suggested that a UK proposal43 concerning a future financial reform program for Germany be replaced by a CFM decision to adopt financial reforms for Germany by March 1948 and to implement them immediately thereafter. He said a reform program was necessary to the economic rehabilitation of Germany. Bidault supported Marshall’s proposal and Molotov supported the British plan. Bevin said he would accept the Marshall proposal to speed up German financial reforms but Molotov saw in the US proposal a way of permitting unilateral action which he accused the US of planning to take. Marshall categorically denied Molotov’s intimation that the US had decided to issue new German currency in its zone. He said his amendment aimed at bringing about as quickly as possible financial reform for all of Germany.
The Council accepted in principle a clause44 instructing the appropriate German authorities to draft for the approval of the Control Council proposals in regard to the breaking up of concentrations of German economic power provided the proposals adopted represent the free choice of the German people.
Bidault, Molotov and Marshall accepted a French proposal45 to reinforce Allied control thru the Control Council over (1) the distribution of coal, power and steel and their utilization in Germany and (2) the amount of exports of German products of key importance to European [Page 764] recovery such as coal and coke. Further discussion of this proposal was postponed until tomorrow when Bevin reserved his position.
Repeated Moscow, Paris, Berlin, Vienna, Rome.
- Under discussion at this point was document CFM(47) (L)7, November 27, 1947, paragraph 20, pp. 779, 786.↩
- ibid. , paragraph 21.↩
- Under discussion was ibid. , paragraph 22.↩
- For the text of the Secretary of State’s statement summarized here, see Germany 1947–1949, pp. 410–411 or Department of State Bulletin, December 21, 1947, pp. 1204–1205.↩
- CFM(47) (L)7, paragraph 23.↩
- Ibid., paragraph 24.↩
- Ibid., paragraph 25.↩
- Ibid., paragraph 26.↩
- For the text of the French proposal under reference, see footnote 87 to CFM(47) (L)7, p. 787.↩