396.1–ISG/3–551: Telegram
The United States Delegation at the Intergovernmental Study Group on Germany to the Secretary of State 1
Sigto 499. This report on Claims Committee discussions in lieu of roundup cable for period February 19–March 2.
Claims Committee worked most of first week on developing coordinated position three governments on German debt undertakings, on which agreement reached in Steering Committee reported in Sigto 461 to 465.2 Committee then returned to work on substantive principles of debt settlement.
In replacement US draft referred Sigto 457,3 repeated Frankfort 851, UK submitted draft of report to governments outlining considerations leading to principles. Draft of principles to follow. In revising UK draft committee sharpened up following issues:
- 1.
- Role of three governments in debt negotiations. UK insists minimization government interference. Principles should be relied on to assure satisfactory outcome. However, UK objects three governments announcing precise principles to negotiating parties especially with regard to modification existing contracts or scaling down of claims. US insisted on precise principles and adequate possibility for three governments to steer course of negotiations. French favor UK position on general grounds but stressed principles should be useful and sided with US on some specific issues.
- 2.
- Interpretation of phrase “should not add appreciably to burden occupying powers” of NY principles. US draft speaks of nominal payments to be permitted while Germany receives aid. UK and French claim “modest” payments must be allowed in interest normalization and to assure acceptance of plan by creditors.
- 3.
- DM settlement. Committee agreed uses and releases of DM resulting from settlement must be controlled. UK claimed creditors must have unlimited right to collect DM for total claims and any individual payments falling due. UK and French insist plan must not permit creditors to collect marks for part payments whenever desired. Creditors must choose once for all whether he wants mark settlement or continues holding foreign currency claim. US also expressed opinion, tacitly agreed to by UK and France, that present voluntary settlement procedure could not continue at side of plan.