Corrpesondence Between Edwin Pauley and President Harry S. Truman, with Attached Report
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OCR Page 1 of 11THE WHITE HOUSE
WASHINGTON
the
amo JULY
SERVIOR
GOVERS
MEMORANDUM FOR THE PRESIDENT
Hoover and Pauley Recommendations on Germany
The proposals advanced by Mr. Hoover in his third report
("The Necessary Steps for Promotion of German Exports, So as to
Relieve American Taxpayers of the Burden of Relief and for Economic
Recovery of Europe") contemplate a fundamental reversal of American
political and economic policy in Europe and run counter to the inter-
national commitments of this Government undertaken at Quebec,
September 15, 1944, and at Potsdam in 1946. Mr. Hoover would:
1. Abandon the "level of industry" concept involved in
the agreement of March 26, 1946, signed by Russia, Britain, France
and the United States and designed to reduce Germany's economic
power and her wer potential;
2. Permit Germany to retain her heavy industry (other than
exclusively arms plants) and, with it, her economic ascendancy in
Europe and her war potential;
3. Free German industry of controls, except for the
general inspection of a control commission "which will see that she
does no evil in industry";
4. Stop the removal or destruction of German plants (except
direct arms plants);
5. Emasculate the de-Nazification program and the decartel-
lization program, "certain phases of which limit recovery";
6. By implication, confine any future reparations to
current production.
Mr. Hoover urges these steps because: "There is only one
path to recovery in Europe. That is production
The productivity
of Europe cannot be restored without the restoration of Germany a.s
a contributor to that productivity. "
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