511.00/5–2152: Telegram

No. 40
The United States High Commissioner for Germany (McCloy) to the Department of State1

secret priority

2967. For Kellermann. Public affairs guidance No. 174.2

Contractual Agreements.

This guidance is not intended to provide an exhaustive report on contents and background of contractual agreements. It is, rather a summation of political considerations and aims which should be useful in dealing with German newspaper reports and with texts of conventions upon their publication at time of signature. Further background and summaries of terms and contents of conventions will be issued at time of signature.

In dealing with discussion of contracts, foll points should be observed by US media and liaison officers.

1. Contracts and other agreements concluded at same time, EDC and agreements on its relationship with NATO, must be considered together. They constitute an entity which is designed to liquidate many outstanding problems created by the war and the occupation and at same time to achieve German partnership entirely, [and?] are of an unprecedented character. They end controls of occupation before conclusion of final peace settlement. They create an association which has been worked out in exhaustive negotiations on basis of equality and which, in effect, goes beyond scope of traditional alliance. It is the purpose of this association, which includes all major western nations, to insure the political freedom and economic well-being of participating nations and, through their joint defensive efforts, the peace and security of our world. It is, in effect, an alliance for peace.

2. The terms of this association, which define the role and obligations of member nations and, through contractual agreements, of Germany, naturally result from these overall aims as well as from requirements of world situation in light of present Soviet menace. It is this menace which creates special problems in case of Germany. [Page 82]Many normal provisions of a peace settlement, such as final determination of Germany’s borders, must remain in abeyance. Other provisions, going beyond those of peace treaty and in fact constituting close alliance, have become essential to security and well-being of the country. From these problems result a number of agreements concluded between German Federal Republic and western powers simultaneously with transfer of authority over German domestic and external affairs to Federal Republic. German Govt, in particular, agrees to retention of special rights by western allies relating to stationing of armed forces in Germany and protection of their security, to Berlin and to Germany as a whole, including unification of Germany and a peace settlement.

While Federal Republic must abstain from any action prejudicing these rights and agree to facilitate the exercise thereof by three powers, the latter, in return, undertake to consult Federal Republic in respect of their implementation.

The retention of the Allied position in Berlin and presence of western troops on territory of Federal Republic constitute only existing safeguards for freedom of West Berlin and for security of German people. These authorities, in combination with equally-retained authority of western powers with regard to unification of Germany, also safeguard right of western powers vis-à-vis Soviet Union to insist on unification of a free and democratic Germany in a final peace settlement. The retention of these rights was never a matter of controversy. It was agreed upon as necessary to protect interests of Germany and to advance common purposes of association of which Federal Republic will be an equal part.

It is in spirit and in peaceful purpose of this association that western powers agree that unified Germany and freely-negotiated peace settlement for whole of Germany will be considered essential aims of their common policy with German Federal Republic. In event of unification of Germany, draft agreement, as it now stands, provides for review by four govts and for adjustment of these conventions by agreement. Under this provision, terms of agreement shall be reviewed at the request of one of the four states in event of German unification, creation of European federation, or any other occurrence which four states jointly recognize to be of fundamental significance. The parties shall then open negotiations with a view to modifying agreements to extent necessary to take into account changes that have occurred in the situation.

3. The stationing of western armed forces in Germany and German participation in western defense raise a number of problems with regard to security, facilities and financing. Necessary provisions have been made in emergency clause of “agreement on general relations” and in conventions concerning the “rights and [Page 83]obligations of foreign forces,” and on “economic and financial participation of Federal Republic in western defense.”3

Most of problems concerning building of facilities, requisitioning, relationship with population, etc. are similar to problems met by American troops in other countries of Western Europe. Naturally, their solutions will be similar though not necessarily identical. The exposed position of country makes necessary stationing of larger numbers of troops in Germany than in other countries. These contingents, which at present contribute to Germany’s only defense, are in fact operational rather than garrison troops. They require training facilities, secure line of communication and, in case of need, adequate freedom of action. These are met by above-mentioned conventions and emergency clause in general agreement.

The construction of facilities for western forces requires sizeable expenses during the first year of new association. Obviously, spending on the establishment of German contingents will hit its full stride only at a later time.

It is fortunate and equitable that a sizeable part of German contribution to joint defense establishment can be applied to needs of western protective forces in Germany during initial period. All participants must bear heavy military burdens and Germany is just being asked to contribute her commensurate share, which has been determined by same criteria and considerations applied to other nations for the common effort.

4. A large number of transitional provisions had to be agreed upon and have been embodied in a convention. These cover such topics as deconcentration and decartelization, internal and external restitution, compensation of victims of Nazi persecution, care for displaced persons and refugees, reparations, foreign interests in Germany, and civil aviation. Most of these subjects have been the object of occupation programs. It is in line with purpose of conventions that implementation, administration and adaption of these policies is now transferred to German Federal Govt.

With this end in view, provisions are made for continued validity of Allied legislation, subject to a right of the German authorities to amend, repeal or deprive it of effect. This right is limited only where its exercise would prejudice rights of three powers under general convention, or on matters where contracting parties have decided otherwise, for some particular reason. For example, AHC laws 27 and 35 are maintained in force until deconcentration of [Page 84]coal, iron and steel industries and of I.G. Farben group are completed. Provision is also made for terminating occupation courts having criminal and civil jurisdiction, and for continued validity of judgments given by them.

Some of these policies have been controversial and subject to criticism from German quarters. Nevertheless, they have become reality of German public life, in addition to constituting essential aims of western powers in Germany. It would be just as unrealistic now to expect Western powers to disavow these interests as it would be unpsychological and unfair to expect the Germans to accept limitations of their authority not in agreement with the spirit and purpose of alliance for peace. Psychological requirements for the success of this alliance must be taken into account on both sides, and all govts have to consider parliaments and public opinion of their respective countries.

5. This is particularly true in connection with problem of carrying out sentences and deciding on future fate of war criminals. If Germany finds it difficult to carry out sentences passed by foreign courts, it has not always been understood in German circles that attacks on the legality and fairness of Allied justice are unacceptable to Allied nations and will not facilitate the solution of this controversial matter. The establishment of a joint German western clemency board appears to provide an equitable instrument for handling this issue.

6. The reparations problem is a typical case where it would have been impossible to reach a final settlement now. Many countries other than three powers who took part in war against Germany and whose rights would have to be considered in final peace settlement are not a party to the present agreements. In preserving legal status quo and thereby rights of western powers, section on reparations in contractual agreements serves the purpose of strengthening western bargaining position and thereby protecting German interest vis-à-vis claims which may be advanced by Soviet Union in future settlement. As a matter of fact, there is very imporant provision which is final and not subject to revision at peace settlement, namely an agreement by three powers that they will at no time assert any claim against the current production of Federal Govt on matter of former German external assets, three powers have assumed responsibilities under international agreements, notably agreement on reparations concluded in Paris on January 24, 1946,4 which preclude the three powers from agreeing to the unlimited [Page 85]right of Federal Republic to negotiate with other countries concerning foreign assets. Nevertheless, there is a provision permitting extensive freedom of negotiation with former enemies of Germany which were not signatories of Paris agreement, and there is some freedom to negotiate with signatories.

7. General convention provides for establishment of an arbitration tribunal to settle disputes arising from conflicting interpretations of conventions. Tribunal is composed of nine members selected from highest judges and most eminent jurists. Three members are appointed by Federal Republic; three by three powers; and three others, called neutral members, by agreement between three powers and Federal Republic and may not be members of any of the four signatory states. The nine members elect a president from the neutral members for a term of two years.

8. Provisions have also been made to regulate and assure facilities for embassies and consulates which, after revocation of occupation statute and abolition of high commission, will conduct the relations of the western powers with Federal Republic. These missions will have similar duties and privileges as have diplomatic and consular missions to other states.

9. It is obvious that different kinds of provisions and obligations have had to be established for participating countries. These countries find themselves confronted by a common danger. However, their situations are different. This, in turn, creates different needs and different opportunities for actions and contributions. Equality cannot be found in identical action and obligations vis-à-vis non-identical needs and situation. This is basically true for the different contributions of all members of the western community. Equality is to be found in the conclusion and implementation on an equal basis of agreements on the different obligations required for the achievement of the common good.

10. It should be recognized that the concept of sovereignty in twentieth century is not analogous to that of traditional definition. In these days of international cooperation, nations are called upon to relinquish parts of their sovereignty in the common interest (UN, NATO, EDC). It should be kept in mind that all alliances limit the freedom of decision of the participating powers and place certain obligations upon them and, thereby, constitute factual limitation to sovereignty. The limitations in the case of the German Federal Republic are based on a joint appraisal by German and western statesmen of the situation in which Germany finds herself and have been freely agreed upon by all parties. The obligations placed by the peace alliance on the other members of the EDC and of NATO i.e. the contribution of European national forces to a European army under a single command and, in case of US, agreement [Page 86]to keep American troops stationed in Europe, are of an equally unprecedented nature. These contributions must be understood in the light of the common danger and of the great opportunity which the alliance offers to all nations for the insurance of peace and well-being on the basis of mutual aid and cooperation.

  1. Transmitted in two sections.
  2. Public affairs guidance telegrams were sent from Bonn on a regular basis to give background on events in Germany.
  3. For texts of the Convention on General Relations between the Three Powers and the Federal Republic of Germany, the Convention on the Rights and Obligations of Foreign Forces and their Members in the Federal Republic of Germany, and the Finance Convention, see Documents 50 ff.
  4. For text of the Paris reparations agreement, see Treaties and Other International Acts Series (TIAS) No. 1655.