762A.00/3–150
The Chancellor of the Federal Republic of Germany ( Adenauer ) to the Chairman of the Allied High Commission for Germany ( François-Poncet )
Mr. High Commissioner: In reply to your letter of 23 October 1950—AGSec(50)23391—I have the honour to inform you as follows:—
I
The Federal Republic hereby confirms that it is liable for the prewar external debt of the German Reich, including those debts of other corporate bodies subsequently to be declared liabilities of the Reich, as well as for interest and other charges on securities of the Government of Austria to the extent that such interest and charges become due after 12 March 1938 and before 8 May 1945.
The Federal Government understands that in the determination of the manner in which and the extent to which the Federal Republic will fulfil this liability, account will be taken of the general situation of the Federal Republic including, in particular, the effects of the limitations on its territorial jurisdiction and its capacity to pay.
[Page 1436]II
The Federal Government acknowledges hereby in principle the debt arising from the economic assistance furnished to Germany since 8 May, 1945, to the extent to which liability for such debt has not previously been acknowledged in the Agreement on Economic Cooperation concluded on 15 December 1949 between the Federal Republic and the United States of America,2 or for which the Federal Republic has not already taken over responsibility under Article 133 of the Basic Law. The Federal Government is ready to accord the obligations arising from the economic assistance priority over all other foreign claims against Germany or German nationals.
The Federal Government regards it as appropriate to regulate any questions connected with the recognition and settlement of these debts by bilateral agreements with the Governments of the countries which have rendered economic assistance, patterned on the Agreement concluded with the United States of America on 15 December 1949. The Federal Government takes for granted that these agreements will contain an arbitration clause for cases of dispute. The Federal Government is prepared at once to enter into negotiations for the conclusion of such agreements with the Governments concerned.
III
The Federal Government hereby expresses its desire to resume payments on the German external debt. It understands that there is agreement between it and the Governments of France, the United Kingdom of Great Britain and Northern Ireland and the United States of America on the following:—
It is in the interest of the reestablishment of normal economic relations between the Federal Republic and other countries to work out as soon as possible a settlement plan which will govern the settlement of public and private claims against Germany and German nationals.
Interested Governments including the Federal Republic, creditors and debtors shall participate in working out this plan.
The settlement plan shall in particular deal with those claims, the settlement of which would achieve the objective of normalising the economic and financial relations of the Federal Republic with other countries. It will take into account the general economic position of the Federal Republic, notably the increase of its burdens and the reduction in its economic wealth. The general effect of this plan shall neither dislocate the German economy through undesirable effects on the internal financial situation nor unduly drain existing or potential German foreign exchange resources. It shall also not add appreciably to the financial burden of any Occupation Power.
The Governments concerned may obtain expert opinions on all questions arising out of the negotiations on the settlement plan and on the capacity to pay.
[Page 1437]The result of the negotiations shall be set forth in agreements. It is agreed that the plan will be provisional in nature and subject to revision as soon as Germany is reunited and a final peace settlement becomes possible.
I beg your Excellency to accept [etc.]
- For text, see Foreign Relations, 1950, vol. iv, p. 767.↩
- For the text of this agreement, see TIAS No. 2024, or 64 Stat. (pt. 3) B81.↩