740.00119 EW/6–748
The Secretary of State to Senator Arthur H. Vandenberg 1
My Dear Senator Vandenberg: I refer to my letter to you of February 4, 1948,2 and the memorandum attached thereto concerning the German Reparations Program.
During recent weeks, as you know, discussions regarding numerous problems common to the occupying powers of the three western zones of Germany have been held at London. While these discussions were in progress the delegates also considered as a separate matter the present status of the German reparations dismantling program and deliveries to the Inter-Allied Reparation Agency countries. Recommendations [Page 760] to the three governments along the lines indicated below have been agreed. Subject to final comments by General Clay, not yet received, it is planned to accept these recommendations on the part of this Government.
First, in view of the inactivity of the Allied Control Authority in Berlin, the commanders of the three western zones, acting after joint consultation, will declare a substantial number of plants available to IARA for distribution.
Second, the zone commanders will exclude from lists of plants declared available those plants which are still under examination by the United States Government with a view to their possible retention in Germany in the interest of the European Recovery Program.
Third, plants and equipment in each broad industrial category, approximating the share of the USSR under the Potsdam protocol, will be provisionally selected and held for possible future delivery to the USSR. Plants and equipment which are thus reserved will be screened to avoid as far as possible the inclusion of items which have an obvious war potential, pending further consideration of the exclusion of items which would be denied under the principle of paragraph 117 D of the Foreign Assistance Act of 1948. It is contemplated that the part of the Soviet share to be delivered to the USSR on a reciprocal basis will only be delivered if the Soviet undertakes and executes an agreed program of reciprocal deliveries of equivalent value. The remainder will be the subject of further discussions.
Fourth, with regard to plants and equipment which may be made available in the future to the Inter-Allied Reparation Agency, consideration will be given to means, compatible with the Paris Agreement on Reparations, of avoiding allocation of equipment to the satellite members of IARA (Albania, Czechoslovakia and Yugoslavia), which allocation would be denied under the principle of paragraph 117 D of the Foreign Assistance Act of 1948.
In connection with the preceding paragraph, the delivery of industrial equipment which has already been allocated by the Inter-Allied Reparation Agency to Albania, Czechoslovakia and Yugoslavia has recently been carefully reviewed by the State and Army Departments, in the light of the international commitments of the United States, the policy of this Government with respect to economic relations with eastern Europe, and the security interests of the United States. In consequence General Clay has been instructed3 to complete deliveries of the equipment, which amounts to approximately 30,000 tons, in the United States Zone previously allocated to these countries. These deliveries will be subject, however, to a recheck by him to take alt reasonable precautions that all equipment especially adapted to the production of war materials is destroyed and that only general purpose equipment is delivered.
[Page 761]In view of the great delicacy of some of the above matters affecting the interests of other powers, I request that the contents of this letter be considered secret for the present.
Secretary Royall has authorized me to express his concurrence in this letter. After clearing informally with your office, I should like to send a copy of this letter to the Chairman of the House Foreign Affairs Committee.
Faithfully yours,
- In a memorandum dated June 4, not printed, the substance of which was discussed with Under Secretary of State Lovett, Assistant Secretary of State Saltzman observed that Secretary of the Army Royall insisted that Congressional leaders be informed before any instructions were sent regarding the approval of the London program on reparations (telegram 2425, June 2, from London, p. 754) and the resumption of restitution deliveries to the Eastern European satellites. Saltzman further observed that the matter was of the utmost urgency inasmuch as the IARA Assembly would shortly convene to consider a Yugoslav protest against the suspension of restitution deliveries. A letter to Senator Vandenberg had been prepared, copies of which would be given to other interested Congressional committees. (740.00119 EW/6–448)↩
- See the editorial note, p. 717.↩
- See the text of message W–8312, June 7. to General Clay as repeated in telegram 867, June 6, to Brussels, supra.↩