740.00119 EW/3–2548

The Department of State to the French Embassy


Reference is made to the French Embassy’s aides-mémoire of March 12 and March 25, 1948, and to the Department of State’s aide-mémoire of March 17, 1948, concerning the notification to the Inter-Allied Reparation Agency of the charge to be made to the French reparation account in view of the change in the status of the Saar.1

The Embassy’s aides-mémoire have suggested: (a) that the letter of notification agreed upon at Berlin be modified in such a way as to be without prejudice to the question whether the reparation charge on account of the Saar should be debited to Category A or to Category B; and (b) that despatch of the letter be postponed until the results of the re-examination of the dismantling lists from the standpoint of the European Recovery Program have become known.2

Concerning point (a), the Department of State is aware of no new circumstances which have arisen since the agreement reached in Berlin on February 20, 1948, and which would require a revision of the letter. As pointed out in that letter, the charge of 70 million Reichsmarks “has been calculated to include:

“(A) Industrial equipment in the Saar that would have been removed as reparations if the Saar had remained an integral part of the German economy.

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“(B) Industrial equipment additionally retained in western Germany in order to maintain the German economy at the permitted level despite the loss of the Saar.”

It is evident, therefore, that, but for the economic separation of the Saar, the total volume of reparation available to the Inter-Allied Reparation Agency in Category B would have been greater by an amount estimated at 70 million Reichsmarks. This being so, the Department of State remains of the opinion that the entire amount should be charged to Category B.

Concerning point (b), the Department of State considers that, inasmuch as economic separation of the Saar has already been agreed upon, the consequent notification to the Inter-Allied Reparation Agency should be promptly made. The purpose of the re-examination of the dismantling lists now in process is to permit the dismantling program to be carried out as rapidly as possible, subject to the assurance that dismantling will not be detrimental to supplies of critical commodities required for the European Recovery Program. Such assurance is obviously to the best interests of all countries concerned.

In view of the fact, however, that the Assembly of the Inter-Allied Reparation Agency is now in recess until April 27, the Department of State could agree that the despatch of the letter of notification is not of immediate urgency. Should the French Embassy request such action, the Department would be willing to instruct the United States Delegate to the Inter-Allied Reparation Agency to postpone despatch of the letter until the Assembly reconvenes, provided his British colleague is prepared to take similar action.

  1. None of the aide-mémoire under reference here is printed.
  2. The draft letter of notification to the Inter-Allied Reparation Agency under reference here was included as Appendix D to the Economic Agreement between the United States, the United Kingdom and France regarding the Saar, signed in Berlin, February 20, 1948, p. 73.