Foreign Relations of the United States, 1948, Germany and Austria, Volume II

USPolAd Germany Files: 400.a Reparations: Telegram

The Department of the Army to the United States Military Governor for Germany (Clay), at Berlin

secret
priority

[Washington,] April 3, 1948.

WX–98915. From Dept of the Army from CSCAD to CINCEUR. Separations deliveries to Soviet Satellites is subj.

1. Cabinet decided 26 Mar re exports from US to Soviet Bloc to deny export licenses to items where to do so would affect production in key segments of Soviets and Satellite economies.¹ Interdepartmental Committee will prepare analysis of Soviet reqmts from abroad with view to rating them in terms of strategic value to Soviet economy. Program designed to meet 3 main reqmts:

(1) Not destroy east-west trade;

(2) Limit exports of significant items to Soviet Bloc;

(3) Give assurance that US will obtain strategic materials which it wants from Soviet Union.

2. Pending further instruction, apply foregoing decision as guide and suspend reparations deliveries to Soviet Satellites which in your judgment would be of strategic or critical importance in their economies. Further info re strategic items will be furnished you as developed by Interdepartmental Committee.

3. With reference to your inquiry in telecon 12 Mar² we do not have sufficient info here to judge whether or not items remaining to be delivered fall within above policy. If items come within the above delineated policy you are authed [authorized?] to suspend deliveries.

4. Pls advise scheduled reparations deliveries from this and other plants which appear subj to suspension under these instructions with description of equip involved. State needs such info in order to correlate with problems of east-west trade relations in gen and to give info and instructions to US rep IARA.

5. No decision has been made to effect gen suspension of reparations deliveries to Satellites and it is believed that temporary gen suspension might undesirably precipitate this issue with Western European countries, when no agreement with them has been reached even on deliveries to Soviet Union. Very desirable all publicity and, to extent possible, over refusal to deliver be avoided.

6. This cable prepared before recent Berlin events.³ As you know, our entire policy on shpmts to Russia and her Satellites is now under consideration in view of these recent events. However, principles above will be followed until some other decision is reached.

1. Documentation on United States policy regarding trade with the Soviet Union and Eastern Europe is included in volume iv .
2. No record has been found in the files of the Department of State of the trans-Atlantic teletype conference under reference here.
3. The reference here is presumably to the breakdown in the functioning of the agencies of the Allied Control Authority for Germany and the measures by Soviet occupation authorities impeding rail, road, and water traffic into the Western zones of occupation of Berlin. For documentation regarding these matters, see chapter iv.