USPolAd Germany Files: 400.a Reparations: Telegram

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

secret
priority

CC–3721. To Dept of the Army for CSCAD Personal for Noce from CINCEUR Signed Clay. Please examine urad WX–989151 which we do not believe provides us any practicable guide to the question of reparations and restitutions deliveries to Soviet Satellites. We are not able to determine the effect of cessation of reparations on East–West Trade but doubt if it has any significance as East–West Trades now are made on the basis of an exchange of goods mutually desired by both parties. We have absolutely no way here to determine what may be significant items. However, we must point out that reparations removals from Germany had solely the purpose of reducing Germany’s war potential and hence all items being delivered for reparations are items found to have war potential. In view of this fact, we could not continue reparations deliveries without providing war potential as, for instance, the Kugelfischer Plant which is a ball bearing plant. While you state that you do not have sufficient info to judge whether the items from this plant should or should not be delivered, it is quite clear to us that there is no more critical war potential plant than one designed to manufacture ball bearings.2

[Page 746]

Moreover, it is impractical for us to attempt to make partial reparations deliveries and suspend deliveries in other instances as the suspension in itself would clearly indicate our intent. We do not believe that there is any answer to this question other than to decide to deliver or not to deliver. You have advised us to avoid publicity and over refusal to deliver. We have been dragging our feet for weeks and, in fact, have ceased to make any actual deliveries. While we have given no publicity to this, it is of course becoming clear to the representatives of the Satellite Powers that we are retarding delivery and we do not see how we can avoid overt refusal for a matter of more than days.

I judge from your telegram that you desire us to make some deliveries. I would appreciate specific advice if this is the case, as deliveries at the present moment have stopped for all practical purposes. However, I believe that we can apply the policy which you outline in making restitution deliveries although this does not appear in your radio. Other than cultural objects, restitutions deliveries to Satellite Powers have been stopped for all practical purposes pending further clarification of policy at home. Are we to interpret your radio as providing policy guidance for restitutions to Satellite countries also?3

[
Clay
]
  1. Ante, p. 743.
  2. Material from the Kugelfischer Ball Bearing plant was scheduled for delivery to Czechoslovakia as reparations. Telegram W–99083, April 7, from the Department of the Army to General Clay in Berlin, not printed, stated that the plant clearly fell within the category whose delivery to the Soviet bloc should be suspended. The telegram added that announcement to the Czechoslovak authorities of the suspension of deliveries should be avoided by whatever means were possible. (USPolAd Germany Files, 1948, 400.a Reparations)
  3. Message CC–3789, April 9, from Deputy Military Governor Hays at Berlin to the Chief of Staff, U.S. Army, not printed, listed the equipment in Western Germany that had been allocated as reparations and remained to be shipped to Albania, Czechoslovakia, and Yugoslavia. The message restated that the reparations removals from Germany had the sole purpose of reducing Germany’s war potential and hence all items being delivered for reparations were items found to have war potential. (USPolAd Germany Files, 400.a Reparations)