662A 00/1–352

No. 2
Memorandum by the Director of the Bureau of German Affairs (Byroade) to the Secretary of State1

secret

Subject: Current Status of Negotiations for Contractual Relationship with Germany

The attached telegram was received today from Mr. McCloy. It contains an account of progress in the negotiations for the contractual arrangements with the Federal Republic (No. 943, January 3 from Bonn2). The message is long and detailed, but I think the following points will be of interest to you:

Mr. McCloy offers a “reasonable hope” that, with the possible exception of some portions of the Agreement on Financial Contribution, the remaining conventions can be finished in time for the next NATO meeting.3 The Germans are anxious to complete the agreements by that date, but the British appear to have lost some of their sense of urgency, and Mr. McCloy suggests that it might be helpful to ask Mr. Churchill to instruct the British High Commissioner to press ahead all along the line.

Charter of the Arbitration Tribunal. The latest draft shows substantial Allied-German agreement on all except a few issues. There is no indication that these will present any exceptional difficulty.

Agreement on Acts and Interests of the Three Powers. This agreement covers a number of unrelated subjects, some of which have nearly been completed and some of which require further negotiation. [Page 3]The greatest difficulties with the Germans are in the fields of deconcentration, composition of the supreme restitution court, reparation, and foreign interests. It is, however, the American opinion that the entire agreement can be completed by the end of this month; the British and French informally estimate that completion is possible by February 10.

Agreement on Status of Forces. The greater part of this agreement (quantitatively speaking) has been settled, but several major questions are still outstanding; one of these is the status of dependents, with special reference to their subjection to German criminal jurisdiction. Mr. McCloy believes the core of controversial issues will be ready for direct discussion with Adenauer in the week of January 14.

Agreement on Rights of the Forces. This agreement has to do with the rights of the forces with respect to accommodations, facilities, etc. The German comments are expected today, and no particular difficulties are anticipated, with the exception of the problem of allocating radio frequencies.

Agreement on Financial Contribution. A report on this subject is expected shortly.

Security Safeguards. This subject has been discussed by Schuman and Adenauer. They have not reached a conclusion, but believe they can work out a solution which will be acceptable to them and also to the British and ourselves. According to Hallstein, the issue is largely a formal one, since the Germans do not intend to produce any of the weapons now under discussion. It is understood that the French will instruct their High Commissioner to continue the conversations with the Chancellor, keeping the British and American High Commissioners informed. Mr. McCloy proposes to encourage these discussions and intervene only at a later stage if circumstances require.

  1. The source text bears the handwritten notation “Sec saw”.
  2. No copy of telegram 943 was found attached to the source text; however telegram 943 is printed in Foreign Relations, 1951, vol. iii, Part 2, p. 1614.
  3. For documentation on the Ninth Session of the North Atlantic Council at Lisbon in February 1952, see vol. v, Part 1, pp. 107 ff.