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TOP SECRET - 76 - Potsdam The first-charge principle was considered initially by the Economic Sub-Committee at Potsdam. The sub-committee deliberated for several days without reaching agreement. The American and British representatives proposed including in the section on Economic Principles the following compre- hensive statement regarding the import program and the first-charge principle: "The Control Council shall formulate as soon as possible a program of minimum required imports for Germany as a whole. Such a program shall include provision for equitable inter- zonal distribution of supplies available within Germany so as to minimize the net deficit for, and imports into, Germany as a whole. Responsi- bility for the procurement and financing of approved imports for Germany as a whole shall be shared on a basis to be negotiated in the Control Council. Reimbursement for all net advances made for approved imports into Germany shall be a first charge against the proceeds of both exports of capital equipment and of current production and stocks of goods from Germany. "1 It will be noted that this went even further than previous proposals, for it sought to make the first- charge principle apply not only to the proceeds from the export of current production and stocks, but also to the proceeds from the export of capital equipment as well. In other words, nearly all types of repara- tions would be subject to the first-charge principle. The Soviet member of the Economic Sub-Committee did not accept the American-British proposal and expressed the view that "reparations deliveries should have priority and that imports into Germany should, if necessary, 1 Economic Sub-Committee (Potsdam) "Report to the Foreign Secretaries" , July 20, 1945. (collado Papers, No. . 5.) TOP SECRET

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    "ocrText": "TOP SECRET\n- 76 -\nPotsdam\nThe first-charge principle was considered\ninitially by the Economic Sub-Committee at Potsdam.\nThe sub-committee deliberated for several days\nwithout reaching agreement. The American and\nBritish representatives proposed including in the\nsection on Economic Principles the following compre-\nhensive statement regarding the import program and\nthe first-charge principle:\n\"The Control Council shall formulate as\nsoon as possible a program of minimum required\nimports for Germany as a whole. Such a program\nshall include provision for equitable inter-\nzonal distribution of supplies available within\nGermany so as to minimize the net deficit for,\nand imports into, Germany as a whole. Responsi-\nbility for the procurement and financing of\napproved imports for Germany as a whole shall\nbe shared on a basis to be negotiated in the\nControl Council. Reimbursement for all net\nadvances made for approved imports into\nGermany shall be a first charge against the\nproceeds of both exports of capital equipment\nand of current production and stocks of goods\nfrom Germany. \"1\nIt will be noted that this went even further than\nprevious proposals, for it sought to make the first-\ncharge principle apply not only to the proceeds from\nthe export of current production and stocks, but also\nto the proceeds from the export of capital equipment\nas well. In other words, nearly all types of repara-\ntions would be subject to the first-charge principle.\nThe Soviet member of the Economic Sub-Committee\ndid not accept the American-British proposal and\nexpressed the view that \"reparations deliveries should\nhave priority and that imports into Germany should, if\nnecessary,\n1\nEconomic Sub-Committee (Potsdam) \"Report to the\nForeign Secretaries\" , July 20, 1945. (collado Papers,\nNo. . 5.)\nTOP SECRET"
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