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

740.00119 EW/8–2048

Directive to the United States Military Governor for Germany (Clay)¹

secret

Washington, [undated.]

Subject of this directive is external restitution from Germany.

1. This directive is issued to you as Commanding General of the United States Forces of Occupation and as Military Governor in Germany. It amplifies paragraph 17 a of JCS 1779/1 (SWNCC 327/4)² and supersedes WX 85965, November 1945, as amended (SWNCC 204/2),³ and WX 99226, March 1946, as amended (SWNCC 204/5).⁴ Paragraph two sets forth the basic policies of this Government which affect external restitution. Paragraphs three et seq. represent specific instructions based upon these basic policies.

2. You will be governed by the following basic policies of your Government in completing the program of restitution from Germany:

a. (1) Policy of fulfilling international obligations and respecting property rights.

(2) Policy of giving economic and political assistance to countries participating in the European Recovery Program.

(3) Policy of protecting the cultural heritage of all nations.

b. (1) Policy of denying certain types of products to countries in the Soviet orbit.

(2) Policy of meeting essential requirements of the minimum German economy.

(3) Policy of avoiding the restitution of property to the Soviet Union or a Soviet satellite which is claimed independently by a non-national or a refugee national of the claimant government.

(4) Policy of bringing the entire restitution program to a conclusion as soon as is feasible.

3. Policies 2 a (1) and 2 a (2), separately or together, will prevail over policy 2 b (2) unless the property is required for the German economy with great urgency, comparable, e.g., with the need to retain rolling stock.

4. With reference to policy 2 b (1) you will from time to time be given guidance as to the products which this government desires to deny to the economy of the Soviet Union and its satellites. You will suspend restitution of such products from Germany even if they appear subject to restitution by international agreement under policy 2 a (1). You will also suspend restitution in all cases where there is a conflict between the urgent requirements of the German economy as indicated in 2 b (2) and international obligation as stated in 2 a (1) and also when there is a conflict between the policy in 2 a (1) and 2 b (3). You should report action taken under this paragraph together with the grounds therefor.

5. You should, where possible, avoid informing the representatives of any claimant country that a claim has been deferred or rejected on the grounds set forth in paragraph 2 b (1), (2), or (3) above. In such cases other legal or procedural grounds should, if possible, be stated. You should consult your Government before making any overt refusal to execute an agreement to which the United States is a party.

6. The legal bases for restitution to the United Nations are the agreements of the Allied Control Authority, so long as they are considered to be in force. Property removed from a United Nation in the course of a transaction essentially commercial in character is not considered to be subject to restitution under such agreements.

7. The legal bases for restitution to Italy, Rumania, Hungary, and Bulgaria are the relevant provisions of the Treaties of Peace with those countries. In the absence of Control Council decision implementing the treaties, you will proceed with restitution to those countries as provided in this directive. You will bear in mind that property which is lawfully owned by a national of Italy, Rumania, Hungary, or Bulgaria, which is determined to be not subject to restitution under paragraph two of the relevant article of the peace treaty, falls under paragraph one of such article.

8. You will make restitution to Austria of property removed from Austria after 12 March 1938 upon the same terms as are set forth in the relevant articles of the treaties of peace referred to in paragraph seven of this directive. You will coordinate restitution to Austria with the U.S. High Commissioner so that, at his discretion, and within the means available to him, products, subject to policy stated in paragraph 2 b (1), may be denied entry into Soviet occupied areas.

9. You will make restitution to Finland in the same manner as if the United States were a signatory of the treaty of peace executed by that country.

10. You will make restitution to Italy, Rumania, Hungary, Bulgaria, Austria, and Finland of property removed from these countries under circumstances which do not fall within the terms of the treaties of peace or of paragraphs eight and nine of this directive where to do so appears equitable and follows from application of the policies set forth in paragraphs two, three and four of this directive. In particular, and without limiting the generality of the foregoing, you will make restitution to Italy, so long as it is a participant in the European Recovery Program, of property removed from that country, as set forth in Article 77 of the Italian Peace Treaty, after July 23, 1943, including property removed by or under the authority of the so-called Republican Fascist Government.

11. You will report to this Government, with your recommendations, the facts with respect to any property which appears to have been removed from Albania by the Germans by force or duress.

12. The disposition of property removed from Latvia, Esthonia, and Lithuania is subject to later decision, except for ships which are disposable under TMMC agreement (see WX 84577, 16 April 1946⁵). The Soviet Union is not recognized as a proper restitution claimant for property removed from those countries.

13. The restitution of railway rolling stock and of inland waterway craft will be governed by special arrangements with the claimant governments. The disposition of looted gold, currencies, and securities will be made pursuant to separate instructions.

14. Confirming ourad August WX 86914, you are authorized to announce 31 December 1948 as target date for terminating restitution deliveries, subject to conditions cited in urad July CC 5324.⁶

1. The source text was transmitted to Assistant Secretary of State Saltzman by Under Secretary of the Army Draper under cover of a letter dated August 20, not printed. In his letter, Draper proposed that this directive be communicated to General Clay as the agreed United States policy as regards restitution from Germany to those United Nations that had been occupied by Germany. In a reply dated August 25, not printed, Wisner reported Department of State concurrence with this directive (740.00119 EW/8–2048). The Civil Affairs Division, Department of the Army, transmitted the draft directive to General Clay on August 28 in message Warx 88362. The Joint Chiefs of Staff in message Warx 89109 of September 13 confirmed the text of the draft directive and declared it to be in effect.

   This directive had originally been drafted in the Department of State and had been circulated to the State–Army–Navy–Air Force Coordinating Committee as document SANACC 204/33, May 7, 1948, not printed. The revised terms of reference of SANACC, as approved by the National Security Council on August 18, 1948, provided that SANACC would no longer be used to coordinate occupied areas matters, and that such matters would instead become the responsibility of the State and Army Departments.

2. See “Directive to Commander in Chief of United States Forces of Occupation Regarding the Military Government of Germany,” Germany 1947–1949, p. 34. In that publication the directive, dated July 11, 1947, is incorrectly designated JCS 1779,” rather than JCS 1779/1.
3. Foreign Relations, 1945, vol. iii, p. 1427.
4. Not printed; for the substance of the JCS directive under reference here, see the circular telegram of March 16, 1946, Foreign Relations, 1946, vol. v, p. 525.
5. The message under reference here is not printed. For the text of the Report of the Tripartite Merchant Marine Commission (TMMC), December 7, 1945, see Foreign Relations, 1945, vol. iii, p. 1513.
6. Neither of the messages under reference in this paragraph is printed.