396.1–ISG/2–851: Telegram
The Secretary of State to the United States Delegation at the Intergovernmental Study Group on Germany, at London1
Tosig 403. There follows agreed position to be taken by USDel re scope of claims settlement plan:
USDel shld explore feasibility of broadening present scope of settlement plan to provide for fullest possible final disposition of all outstanding claims against Germany and Gers. Exploration shld be directed to determining whether broadening plan wld unduly retard requirements for accelerated procedure resulting from Brussels decisions, wld impair present econ and polit objectives of plan, or wld endanger objectives being sought under Brussels decisions. Settlement of scope proposed, to be effective, will require agreement by practically all nations outside Soviet orbit with substantial claims againt Germany. Only practical method of seeking such agreement will be through gen claims conference of such countries as all other methods too cumbersome and too slow to meet requirements of situation. Basic dangers in such conference are it may:
- a)
- unduly delay reaching any settlement;
- b)
- get out of hand re World War II claims.
Dangers could be minimized if Occupying Powers and Benelux reach firm agreement on how all classes of claims shld be settled in advance.
As basis for conducting exploration whether such agreement possible, the fol positions shld be taken re manner in which specific classes of claims included in gen settlement shld be disposed of.
I. World War I Debts
A. Reparation Annuities under Hague Plan.
These claims shld be waived.
B. BIS Mark Holdings on Reparations Accounts.
These claims shld be cancelled. Final position not yet established on Reichsbank holding of BIS shares.
C. US Treasury Holdings of Reich Bonds for Mixed Claims, Commission Awards and Occupation Costs.
Dept has proposed to Treasury that these bonds be cancelled only if A and B agreed. Final position will be established after receipt Treasury views. No position has been formulated if Brit-Fr agreement to waiver of reparations annuities conditioned on cancellation [Page 1353] Allied World War I debts to US. Pls advise if exploratory talks indicate such condition likely.
II. Claims Arising During World War II
A. Claims specified in Para A, Art 2 of Paris Reparations Agreement.2
Any reserved rights re these claims under Para B, Art II, of the agreement shld be waived by signatory countries. Nan signatory belligerents shld waive all claims of types specified in Para A Art II.
B. Claims Specified in Para C (ii) and (iii), Art 2 of Paris Reparations Agreement.
To extent these claims are not disposed of by HICOM action prior to estab of settlement plan, they shld be left to free negot between FedRep and govts concerned subj to qualification that any Deutsche Mark holdings resulting from such settlements be subjected to the requirements re DM holdings specified in IV(B).
C. Non-contractual Claims Against Ger Natls Arising in Occupied Areas (e.g. Fr Maladmin Suits etc.).
These claims shld be waived or, if waiver unattainable, provision for reasonable settlement in plan, possibly by moderate lump-sum settlements.
D. Contractual Claims Against Ger Natls Arising in Occupied Areas Which Were Not Discharged Under Clearing Agreements.
Provision shld be made for settlement under plan.
E. Unpaid Clearing Balances Due Neutrals for Trade During World War II.
These balances shld be waived.
F. Claims of Neutral Govts Arising During World War II and Non-Contractual War-Connected Claims of their Natls.
These claims shld be waived.
G. Contractual Claims of Neutral Natls Not Discharged Under Clearing Agreements.
These claims shld be settled under plan.
III. External Occupation Costs, Post-World War II
Seek agreement to waive these claims.
IV. Pre-War Debts of Germany and Gers
A. Pre-War External Debt.
Included in plan.
[Page 1354]B. Fon-held Pre-War Internal Debts.
Seek agreement that DM holdings arising from settlement of such debts be subjected to requirements governing Marks derived from Mark settlement of external debts. Re fon-held internal Reich debt, seek agreement assumption by FedRep of such debt matter for Ger decision, but if such assumption transpires then resultant Mark holdings to be subjected to same requirement for other fon-held internal debt.
Request your views whether option provided under V(C) shld be afforded to external holdings this category of debt especially re possible effect on tentative ceiling for servicing debts.
C. Fon-held Pre-War Debts not Strictly Classifiable as External.
Seek determination on case by case exam under controlling principle that debts whose convertibility is guaranteed under internatl agreement be treated as external and all other as internal, former to be handled under IV(A), latter under IV(B).
D. Fon-held Pre-War Non-Contractual Claims.
DM holdings resulting from settlement of such claims shld be subjected to same requirements as DM holdings under IV(B).
V. Post-World War II Claims
A. Govtl Debt in Respect of Post-War Econ Assistance.
See Tosig [409?].3
B. External Claims Arising Subsequent to May 8, 1945 from Commercial Transactions Essential to Econ Recovery of the FedRep.
Such claims shld be excluded from and have priority in settlement over any claims for which settlement is provided in plan.
[Page 1355]C. Externally-held Deutsche Mark Balances Accruing under Restitution, Gen Claims Legis, Pre-settlement Conversion of External Debts, Claims Awards of Occupation Authorities and any Prior Claims Settlements Agreed by, Approved by or Non-disapproved by Occupation Authorities.
Such balances shld be made subj to same requirements as DM holdings under IV(B), except holders thereof be allowed option of converting holdings under settlement plan into long-term external obligations.
D. All Other Externally-Held DM Claims.
These shld be excluded from plan and settled in accordance Ger law. To protect position of external holdings of DMS included in plan commitment be obtained from FedRep that it will afford no less favorable treatment at any time to DM holdings included under plan, but not converted into long-term external obligations, than to externally-held DM claims excluded from plan.
VI. Special Categories
A. Pre-War Claims Against Gers or Ger Entities Not Subj in Whole or in Part to Jurisdiction of FedRep.
These shld be deferred until a peace settlement.
B. 1. Claims of Those Govts Except Claims Under V(B) or V(D) Which do not Enter into an Internatl Agreement Which Provides for an Agreed Settlement of Claims Against Germany and Which Recognizes FedRep as Only Legitimate Govt of Ger People.
2. Claims of Natls of any Such Govt with Above Exception.
Such claims shld be barred from settlement until and unless such Govt becomes party to agreement.
Agreement shld also be sought that settlement of any class of claims whose disposition is not provided for in plan shld be postponed until a peace settlement. If appears unlikely agreement can be reached on all such recommendations, request report on extent to which agreement appears possible and recommendations as to course to be followed.4
- Repeated to Frankfurt and Paris.↩
- For the text of the Final Act of the Paris Conference on Reparation, December 22, 1945, see Department of State Bulletin, January 27, 1946, p. 121.↩
-
On February 9 the Department of State informed its delegation at the ISG that it had “encountered extreme reluctance within Govt to agree on instrs re treatment of claims for post-war Govtl econ assistance,” due to the unsettled question of financing NATO troops in Germany. If this question were not present, the instruction would be:
“Settlement of claims of Occ Powers against Germany on acct of postwar econ assistance shld be included in settlement plan for Ger debts, but shld also be related to appropriate decisions reached with regard to Germany’s contribution to common defense and to other agreed governmental purposes. The terms of settlement of these postwar claims shld in gen be as follows:
- A. The amt of claims shld be written down.
- B. As far as any part of claims is payable in fon exchange, such payments might be on easier terms than the terms applicable to prewar debts, but the plan might contain a local currency option with provision for accelerated payments with regard to postwar intergovernmental claims.
- C. The remaining amount of claims shld be payable in marks which cld be used only for agreed governmental purposes, such as defense expenditures, within agreed limits.” Tosig 409, to London, February 9 (396.1–ISG/2–951).
- The U.S. Delegation replied that there was some indication the British were “coming around to the view that comprehensive settlement may be necessary,” but that the French were “certainly not this far along in their thinking.” The delegation indicated that it would probably take up with the Department of State certain questions raised in this telegram and answer in due course the others. (396.1–ISG/2–1251)↩