Foreign Relations of the United States, 1947, Council of Foreign Ministers; Germany and Austria, Volume II

740.00119 EW/8–447: Telegram

The United States Delegate to the Inter-Allied Reparation Agency (Dorr) to the Secretary of State ¹⁴

confidential

Brussels, August 4, 1947—5 p.m.

1198. GA from Dorr. Regarding reparation procedures can make following preliminary and tentative comment. Considerable further discussion of specific problems raised by list of availabilities under such revised level of industry plan as ultimately agreed desirable however.

1. So far as plants in US zone concerned and leaving inspection out of current consideration no procedural changes seem necessary at this time. Inventories and valuations of all but a few of plants which would be available for reparation under any conceivable industry level have had quadripartite approval. Informally assured east-west allocation and delivery of inventories to IARA could be accomplished within a month to six weeks after decision on reparation resumption.

2. About 450–500 plants have been inventoried and valued in UK zone. UK authorities thought this would cover majority of plants under industry level plan discussed by US–UK in Berlin but that considerable inventory and valuation work would remain. Informed that no list of plants to be removed under this plan had been prepared by UK and it is not clear to me that there is full coordination between those selecting and those valuing plants.

3. I feel that every effort should be made to provide IARA with data sufficient to enable it to allocate by industries. Such practice desirable not only because it would permit most effective contribution to overall problem of European reconstruction but also because it would largely eliminate such vexing problems as UN bid for equipment July sale, suballocations and attendant shipping difficulties, delays in ultimate liquidation of IARA interests in specific reparation plants. McJunkins US RDR agrees completely. Since plants likely to become available US zone already nearly all inventoried, problem becomes one of coordinating British program. Whitham British RDR agrees in principle and informally indicates willingness consider: (a) Furnishing summary data regarding output plant characteristics, etc., and tentative valuation for plants not yet inventoried (doubtful Russians would agree allocations this basis however); (b) giving priority to inventorying those plants necessary to complete those industry groups most nearly ready for handling as units. Believes nonferrous metals, steel and optical groups could be completed with fair rapidity.

4. I doubt feasibility of formulating concrete changes present procedure until specific list of plant availabilities, date of resumption of reparation removals and question of Russian participation settled. Russian participation will of course mean much less flexibility in departing from present valuation and accounting regulations.

5. Have noted with concern possibility of delay in making non-ferrous plants available even after industry level set. Fact of quadripartite agreement for total prohibition seems no reason why part of industry could not be removed at least as soon as plants from any other industry even though final level uncertain.

6. To secure earliest possible maximum contribution by reparation program to European recovery, believe IARA should be provided with overall minimum list of plants to be available by industries. (If the recently proposed industry level could be taken as an agreed minimum there is no apparent reason why such a list could not be produced immediately.) At same time assembly should request each country to submit its requirements for capital equipment in each industry in which plant is to be made available. Secretariat should prepare analysis industry by industry on basis of general demands submitted which could serve as overall guide to it in preparing allocation programs and to assembly in voting thereon.

7. Procedural questions of joint IARA–ACA interest such as substitution of summary plant descriptions and more thorough inspection for detailed inventory and valuation will be of varying importance depending on time of removals, resumption and upon Russian participation in program.

8. Those handling reparation deliveries in US-UK zones apparently do not anticipate serious difficulties in continuing dismantling despite German protests. British anticipate certain number of strikes but expect to handle these taking position that to confess inability to handle such problems would be tantamount to confession inability to occupy Germany.

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Dorr

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14. Telegram 1147, August 14, to Brussels, for Dorr, not printed, replied to this telegram in part as follows:

    “Your recommendations concerning revision reparation procedures greatly appreciated. Altho appears undesirable make any further direct approach US–UK authorities in Germany at this time, assume you will discuss your proposals in detail with your UK colleague in preparation joint approach at appropriate time.” (740.00119 EW/8–447)