Memorandum of Telephone Conversation, by the Deputy Director of the Office of German Economic Affairs (Margolies)
Subject: Israeli Note Concerning Reparation Claims Against Germany
Mr. Waldo inquired as to the status of the reply to the Israeli note1 on the subject of reparation claims against Germany. He said that a representative of the Israeli Embassy was expected in his office that afternoon and he anticipated an inquiry as to when a reply might be expected.
I told Mr. Waldo that GER had sent out a memorandum to the Bureaus of the Department soliciting their views as to how the note might be answered, insofar as it affected their interests. I said that after the Department’s position had been worked out, GER would forward a proposed reply to the Intergovernmental Study Group at London to be coordinated there in substance with replies being prepared [Page 605] by, the French and British, as is being done in connection with the first Israeli note concerning restitution and looted property.
Mr. Waldo asked whether I had any views as to the possibility of the Israeli Government obtaining satisfaction of its claims against Germany.
I said that my personal reaction was that it was extremely unlikely that the three Powers would agree to support the Israeli claim for reparation. I said that to do so would open up the possibility of the revival of all sorts of other claims against Germany for reparation from other sources. I also said that it seemed to me that since the U.S. would have to finance the payment of the claims in any event, it would be preferable to make payments directly to the beneficiary countries instead of indirectly through Germany, if we felt such claims should be made.
On the second point, Mr. Waldo said that in the case of Israel this was not the case. There would be a definite political advantage to making a contribution to the Israeli economy indirectly through Germany rather than directly. Direct contributions gave rise to requests from neighboring Arab states. Mr. Waldo said his views, of course, were also preliminary, and did not necessarily reflect the position of his bureau.
Mr. Waldo said that they had before them a request from Israel for economic aid and that before they could answer that request they needed to figure out what might happen in regard to reparations. He said he would like to have a meeting with GER on this point. I suggested that he call Mr. Kiefer and discuss it with him, and said that I thought that such a meeting might perhaps be chaired by Mr. Lewis who had been closely following the Israeli problem.2