396.1–ISG/2–2251: Telegram

The United States Delegation at the Intergovernmental Study Group on Germany to the Secretary of State 1

confidential

Sigto 462. Draft of an instruction from the three governments to their High Commissioners.

We have considered the draft statement about German indebtedness put forward by Dr. Adenauer2 and have certain comments to make on it. We recognize that it is most important to reply to Dr. Adenauer as quickly as possible and that we should avoid so far as we can suggestion amendments to the draft text which will oblige the Federal Chancellor to reopen discussions with the Bundestag committee and risk the raising of new points by the Germans which would entail further delay. Although there are number of points in the German draft which we do not regard as entirely satisfactory we have kept to minimum the number of amendments.

2. The three governments are willing to accept the German letter subject to three changes which involve points of substance on which we believe it should not be difficult to get German agreement and subject to there being included in the Allied reply a clarification of certain implications in the German letter which are unacceptable.

3. The points on which the text of the German letter must be changed are as follows (the references are to the paragraphs in our comments on the German draft—see Sigto 4633):

Reference to participation of debtors and creditors in the settlement (paragraph f).

Reference to commercial debts. (Paragraph g(i)).

Reference to losses since May 8, 1945 date (paragraph h(i)).

4. The points on which clarification will be included in the Allied letter are:

Status of post war trade debts (paragraph c).

Concept of overall rather than bilateral settlement (paragraph d(i) and j).

Arbitration (paragraph d(ii)).

5. There is also the omission of any expression of a desire to pay (paragraph k).

6. Certain points of translation are also noted (see paragraphs b(ii), g(ii), h(ii)).

7. It is proposed that the German letter should be sent to the Allied High Commissioners by the Federal Chancellor in reply to the letter [Page 1424] of the Allied High Commission of 23 October.4 Despite the length of time that has elapsed we think that it would, nevertheless, be valuable for the letter of 23 October to be published, but that the words in the last paragraph: “in the terms of the annex attached to this letter” and the annex itself should be suppressed. We assume this will be possible to arrange. Subject to these amendments the letter of 23 October would stand.

8. There should emerge from the correspondence an agreement on debts between the Federal Republic and the three governments. This agreement would result from the Chancellor’s letter and the reply of the Allied High Commissioners. The High Commission letter of 23 October would serve as a record of the views of the three governments but would not be part of the agreement.

9. To achieve the agreement in proper form between the Federal Republic arid the three governments represented by their respective High Commissioners the following action is needed:

(a)
Certain minor drafting changes should be made in the German letter, see paragraphs b(i) and (e);
(b)
The Allied reply should confirm the German understanding in regard to paragraph 2 of Article I of the German text and the whole of Article III;
(c)
The Allied reply should state that the Chancellor’s letter and the Allied reply place on record an agreement on debts between the governments;
(d)
The Allied letters should be signed by each of the three High Commissioners on behalf of his government;
(e)
Each of the letters constituting the agreement should be prepared in the three languages and each version shall be equally authentic. They should all bear the same date.

10. Our comments on the German draft and a draft of a reply to be sent when the revised German text is received follow. (See Sigto 463 and 464.5)

  1. Repeated to Frankfurt and Paris.
  2. Text transmitted in telegram 549, February 17, p. 1418.
  3. Infra.
  4. For text, see Foreign Relations, 1950, vol. iv, p. 767.
  5. Infra.