851.504/8–2147: Telegram
The Ambassador in France (Caffery) to the Secretary of State
3382. With reference to conflict between German as opposed to French economic interests in PW repatriation, German labor recruitment and remittance questions reported in Berlin’s 2013, August 20,1 we have repeatedly emphasized in all negotiations these subjects with French, that US must give full consideration to its financial and other commitments in rebuilding a self-supporting German economy, as set forth in revised directive on military government dated July 11, 1947. Primary fact that proceeds derived from remittances must be available to German economy for purchase of imports was clearly stated in our memorandum of July 16, 1947 to French Government setting forth proposals contained in Deptel 2572 of July 11.1 Blocking of proceeds of such remittances until June 30 or December 31, 1948, would not prohibit their becoming available at later date for purchase of imports in accordance our basic principle. Pending establishment of acceptable franc–mark exchange rate, we fully concur that proportionate payment scheme for reasons outlined in paragraph 20, Deptel 2572, appears more desirable than agreeing to partial exchange rate such as proposed by French.
In connection with paragraph 2, Berlin’s 2013, International Committee of Red Cross submitted detailed breakdown of PW repatriations accomplished by French from March through July 1947 (see Embassy’s dispatch 9443, August 14, 1947,1 copy to USPolAd, Frankfurt and Berlin), which totals 103,101. This figure exceeds original French commitment to repatriate 20,000 monthly during initial phase of agreement. We have requested French to supply us with breakdown of eventual destinations in Germany of these former PWs. It is believed number returning to US and British Zones, however, may represent a considerable proportion based on relative populations of zones. A majority’ of these repatriates are reported to be able-bodied workers, a factor which will undoubtedly benefit the bi-zonal economy. Conversely, French state they intend to recruit not more than 20,000 workers from US Zone under pending German recruitment program, the families of all but maximum 10 percent of those departing simultaneously from US Zone for French Zone under terms latest French proposal. Thus the financial consideration involved in this aspect of remittance program is relatively slight for reasons given in paragraph D Department’s 2572, July 11. Exact number of optants with families [Page 639] in US Zone not known, but information from French indicates many prisoners opting to remain in France are doing so because they are without immediate families in Germany and therefore, would not participate in remittance arrangements.
General principles set forth in reference Deptel are believed to represent most equitable solution and best means of securing early implementation of PW repatriation program, although Embassy welcomes of course, within scope of general proposals which we have already put forward to French, suggestions from interested OMGUS officials as to how proposed agreement can be made more satisfactory to them.
For Department’s information, British Embassy Paris states informally British Government desires to conclude as soon as possible an agreement along the lines suggested by French and summarized in my 3326, August 19.2
Sent Department as 3382, repeated Berlin as 313.