396.1–ISG/2–2251: Telegram
The United States Delegation at the Intergovernmental Study Group on Germany to the Secretary of State 1
Sigto 464. Suggested reply by HICOM to German letter.
In reply to your letter of (blank) on the subject of German indebtedness we have the honour, on behalf of the Governments of the United States of America, the United Kingdom and France, to acknowledge the undertakings of the Federal Government in regard to the responsibility of the Federal Republic for the pre-war external debts of the German Reich and for the debt arising out of the economic assistance furnished to Germany by the three governments since 8 May, 1945.
With regard to the priority accorded to the obligations arising from the post-war economic assistance we are authorized to state that the three governments would not propose to exercise this priority in such a way as to restrict settlement of foreign-held claims arising out of trade subsequent to 8 May, 1945, essential to the economic recovery of the Federal Republic.
[Page 1428]With regard to the question of an arbitration clause in agreements covering the debts for post-war economic assistance, the three governments will be prepared, when negotiating such agreements, to consider whether it would be useful to include an arbitration clause to deal with any matters which might be appropriately settled by such a procedure.
We further have the honour on behalf of the three governments to confirm the understandings of the Federal Government as set forth in the second paragraph of Article I and in Article III of Your Excellency’s letter. They are now engaged in preparing proposals for the working out of settlement arrangements; these will provide for the participation of foreign creditors, German debtors, and the governments concerned including Federal Government. The proposals will be designed to arrive at an orderly overall settlement of pre-war claims against Germany and German debtors and of the debt arising out of the post-war economic assistance, which would be fair and equitable to all the interests affected, including those of Federal Government. It is the intention that the resulting settlement should be embodied in a multilateral agreement; any bilateral agreements that may be considered to be necessary would be concluded within the framework of the settlement plan. As soon as their proposals are ready the three governments will communicate them to the Federal Government and to other interested governments and will discuss with them these proposals and the procedure to be adopted for dealing with the subject.
We have the honour to state that our three governments regard Your Excellency’s letter under reference and this letter as placing on record an agreement between the Governments of the US, UK, and France, on the one hand and the Government of the Federal Republic on the other, concerning the questions of German indebtedness covered in these letters. These letters are prepared in English, French and German, each text being equally authentic.2