Telegram from Walter Bedell Smith to the Department of State

INCOMING TELEGRAM DEPARTMENT OF STATE-DIVISION OF COMMUNICATIONS AND RECORDS TELEGRAPH BRANCH E. O. 11652, Sec. 3(E) and S(D) or (E) DECLASSIFIED Bv Dept. NLT- HC NARS Date 7-14-75 of State letter, Aug. 9, 1973 D Action: EUR Info: Control 266 S/S U-E Rec'à April 1, 1947 A-H 5:31 p.m. DC/R LOG FROM: Moscow TO: Secretary of State NO: 1143, April 1, 11 p.m. THEMIN US URGENT . ARCHIVES 'NATIONAL RECORDS SERVICE' AMD DELSEC 1379. FOR THE PRESIDENT VANDENBERG, CONNALLY AND ACHESON FROM MARSHALL, First restricted GFM meeting, 1 April. At the restricted meeting this afternoon, I stated that neither Potsdam not the subsequently agreed level of industry envisaged reparations from current production and if Mr. Molotov was insisting upon an increase over Potsdam reparations by this means, I could not consider it. However, I continued, any substantial increase in the level of German industry would inevitably reduce the plants available for reparations removals under Potsdam. If all Mr. Molotov had in mind was compensation for such reductions, the US delegation would be willing without commitment to have experts study the matter, but it should be realized that the British delegation had stated it could not consider any reparations from current production at this time and was urging only the im- plementation of Potsdam. Molotov, while agreeing that the consideration of level of industry and reparations was basic, would not agree that reparations from current production constituted an alteration of Potsdam, nor did he agree that the necessary increase in level of pro- duction would mean a reduction in the number of plants earmarked for reparations removals. He made it plain that in his opinion reparations from current production in no way INFORMATION COPY