740.00119 EW/1–1548: Telegram
The United States Military Governor for Germany ( Clay ) to the Department of the Army
priority
CC 2855. Personal from Clay. Dept of Army for CSCAD. Reference WX 93723.1 My comments are as follows:
Reference Paragraph 5A:
The United States has already announced that no further deliveries to USSR are to be made until other agreements of Potsdam become effective, except for advance deliveries and strictly war plants. Therefore, further announcement is unnecessary unless we propose to discontinue deliveries of war plants, which I do not understand to be the intent of your message. I see nothing to gain by stating such suspension will be reconsidered when USSR has paid in reciprocal deliveries. Delay in payment of reciprocal deliveries was not Soviet fault but resulted in long delay in getting requirements from IARA. Soviets are living up to their commitments. Moreover, they have five years in [Page 707] which to pay with reciprocal deliveries for the plants which they have received.
There might be some public value in stating suspension is based in part on unwillingness of USSR to agree that none of the reciprocal deliveries would come from economy of eastern zone of Germany. However, in fact, this does not make sense as it is certainly in the overall interests of western Germany and of IARA to obtain as much as possible of the “reparations” from eastern zone of Germany which would otherwise go to USSR. There would be no effective means of policing compliance with your proposed stipulation regarding effective compensation.
With reference to your Paragraph 5B, I do not believe that cessation of reparations deliveries to Soviet would have any real bearing on position of western powers in Berlin. If USSR has decided it will fight to drive us from Berlin, then we will be driven from Berlin. If we have decided that we will not be driven from Berlin except by force, then we will remain in Berlin regardless of appeasement on the one hand or annoyances on the other. The reality of our position in Berlin depends upon our determination to stay in Berlin unless we are driven out by acts of war.
Reference Paragraph 5C:
If in fact further deliveries under the new level of industry are stopped in the American Zone, I do not see how quadripartite allocations could continue if British and French positions still involve deliveries to USSR. We would be making a gesture only, as relatively few plants are involved in American Zone and in consenting to allocations we would in fact be giving stamp of approval to British and French deliveries. On the other hand, if we voted against allocations we would be exercising veto power which would stop quadripartite action.
Reference Paragraph 5D:
I believe that it would be most undesirable to interrupt completion of advanced and war plant deliveries. Most of the plants are gone and the remainder would be of very little value to anyone else and, moreover, they are part of a commitment which we have made in full knowledge of the failure of USSR to carry out other terms of Potsdam Agreement. There is really no change in the conditions which existed at time we agreed to these deliveries. Moreover, we have accepted some payment in reciprocal deliveries under the contractual arrangement provided for payment for a part of these deliveries.
My views are still as previously expressed:
- (a)
- To complete the delivery of the advance reparations plants and of the strictly war plants already allocated, and to continue the allocation and delivery of the strictly war plants now ready for declaration, [Page 708] (these will be from other zones) including both IARA and USSR. To this I believe we are truly committed, and that a Soviet protest would have justification. I believe that we should proceed to declare and to allocate the remaining plants above the presently established bizonal level of industry, stating in the Quadripartite Control Council at time of allocation that we do not propose to make delivery until other agreements made at Potsdam have become effective. We would then proceed to deliver to IARA but to place items allocated to USSR in storage. Obviously, few deliveries could be made prior to any possible action by Congress which might require the suspension of deliveries. However, it seems most important to obtain at least British, and if possible French, agreement to such a program. Otherwise, unilateral action on our part would have little meaning and while the gesture against USSR would receive public approval, it would be a most unfortunate break in the three power front.