740.00119 EW/10–1749: Telegram

The Ambassador in the United Kingdom (Douglas) to the Secretary of State

top secret

4163. Kirkpatrick called Holmes and Massigli Foreign Office today on Bevin’s instructions to express latter’s concern over suggestion that German reparations might be paid from current production. He cited Adenauer’s letter number 2 (Bonn’s number 18 to Department of October 131) and INS despatch on interview with McCloy on October 8 in which he is quoted as saying: “I am confident we can secure an effective agreement from them including payment of reparations from the Ruhr production and the setting up of an effective international control board with real teeth.”

Kirkpatrick said that Bevin was disturbed by these suggestions on both political and economic grounds. He pointed out that we had continuously criticized the USSR for taking reparations from current production and also pointed out ill effects of reparations from this source following World War II. He expressed the fear that if German production were to be allowed to increase sufficiently to permit reparations payment such increase would produce German demands for higher share of ECA aid and that commercial and financial relationships of Western Europe would be seriously upset. Kirkpatrick asked that these considerations be communicated to our governments.

Massigli said that as far as he knew the French were opposed to payment of reparations from current production. Holmes stated that he had reported his remarks to Kirkpatrick (Embtel 4066 October 102) expressing the opinion that McCloy had been misquoted concerning this matter. Holmes gave it as his personal opinion that the United States would not be in favor of reparations from current [Page 614] production as in light of the US subsidy of the Western Germany economy this would result in the US paying of German reparations,3

Sent Washington 4163, repeated Frankfort 128 for McCloy, Paris 787.

  1. Not printed; regarding Adenauer’s second letter to the Allied High Commissioners, see the editorial note, supra.
  2. Not printed.
  3. On October 18, Hubert Penson of the British Embassy discussed the McCloy interview, at the request of his government, with Geoffrey Lewis, the Acting Assistant Chief of the Division of German Economic Affairs. He was assured that the United States remained opposed to any form of reparations from current production and that, as the Department of State understood the matter, McCloy had been inaccurately quoted in the article. (Memorandum of Conversation, October 18, not printed, 740.00119 EW/10–1849)