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J. 333305-M NO-State
Galley
206
UNCORRECTED GALLEY PROOF
period should be short: if possible five years, and in any event not over
ten.
c) Reparation should be payable predominantly "in kind.' Labor
services within reasonable limits should not be opposed provided a
distinction is made in the treatment accorded to formerly active
Nazis and politically passive Germans, respectively.
d) The principal basis of apportionment should be damage to non-
military property exclusive of current output. A supplementary
basis, admissible only at a lower weighting, should be occupation costs.
The reparation settlement should be considered as clearing finally all
claims against Germany arising out of the war.
e) Germany should be obliged to restitute all identifiable stolen
property. Gold and unique objects (but not other property) should
be replaced with equivalents from German stocks if lost or destroyed.
f) United Nations should have the option of retaining and disposing
of German property within their territories, the proceeds to be applied
against reparation claims.
REPARATION AND RESTITUTION Policy TOWARD GERMANY
JANUARY 16, 1945.
1. Nature of American Interest
It is dangerous to assume, because the reparation claims of this
country are likely to be very small, that we have little interest in the
subject of reparation. Not only can an ill-conceived reparation
policy give rise to mischievous consequences in itself but, what is
even more important, it may jeopardize the achievement of the
political and economic objectives of this country vis-à-vis Germany.
For these reasons the reparation settlement with Germany is an issue
of major importance to the United States.
Accordingly, the guiding principle of U. S. policy in regard to
reparation should be that the reparation claims of our Allies should be
supported only if, and to the extent that, such claims do not conflict
with the other elements of the settlement with Germany. Reparation
policies must conform and be subordinate to the security and economic
measures adopted with respect to Germany; these measures should
not be modified or weakened to enable Germany to pay more
reparation.
Conceived thus as a "residual", the reparation program will be
determined, in its main outlines, by prior decisions with regard to
industrial controls, export restrictions, territorial adjustments, etc.
which may be imposed on Germany. For example, if chief reliance
for economic security is placed on selective prohibitions and controls,
Germany may be able (barring extreme war damage) to deliver a
large volume of reparation goods out of current production. If, on
the other hand, large sections of German industry are to be perma-
nently dismantled, the bulk of reparation payments would necessarily
take the form of transfers of existing German capital equipment, rather
than of current output, and the total volume of reparation deliveries
is likely to be comparatively small. Similarly, restriction of exports
for commercial reasons, or important transfers of territory, would
likewise affect the amount and form of reparation.
The following recommendations with regard to reparation are
intended to be consistent with the proposals of the State Department
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"ocrText": "J. 333305-M NO-State\nGalley\n206\nUNCORRECTED GALLEY PROOF\nperiod should be short: if possible five years, and in any event not over\nten.\nc) Reparation should be payable predominantly \"in kind.' Labor\nservices within reasonable limits should not be opposed provided a\ndistinction is made in the treatment accorded to formerly active\nNazis and politically passive Germans, respectively.\nd) The principal basis of apportionment should be damage to non-\nmilitary property exclusive of current output. A supplementary\nbasis, admissible only at a lower weighting, should be occupation costs.\nThe reparation settlement should be considered as clearing finally all\nclaims against Germany arising out of the war.\ne) Germany should be obliged to restitute all identifiable stolen\nproperty. Gold and unique objects (but not other property) should\nbe replaced with equivalents from German stocks if lost or destroyed.\nf) United Nations should have the option of retaining and disposing\nof German property within their territories, the proceeds to be applied\nagainst reparation claims.\nREPARATION AND RESTITUTION Policy TOWARD GERMANY\nJANUARY 16, 1945.\n1. Nature of American Interest\nIt is dangerous to assume, because the reparation claims of this\ncountry are likely to be very small, that we have little interest in the\nsubject of reparation. Not only can an ill-conceived reparation\npolicy give rise to mischievous consequences in itself but, what is\neven more important, it may jeopardize the achievement of the\npolitical and economic objectives of this country vis-à-vis Germany.\nFor these reasons the reparation settlement with Germany is an issue\nof major importance to the United States.\nAccordingly, the guiding principle of U. S. policy in regard to\nreparation should be that the reparation claims of our Allies should be\nsupported only if, and to the extent that, such claims do not conflict\nwith the other elements of the settlement with Germany. Reparation\npolicies must conform and be subordinate to the security and economic\nmeasures adopted with respect to Germany; these measures should\nnot be modified or weakened to enable Germany to pay more\nreparation.\nConceived thus as a \"residual\", the reparation program will be\ndetermined, in its main outlines, by prior decisions with regard to\nindustrial controls, export restrictions, territorial adjustments, etc.\nwhich may be imposed on Germany. For example, if chief reliance\nfor economic security is placed on selective prohibitions and controls,\nGermany may be able (barring extreme war damage) to deliver a\nlarge volume of reparation goods out of current production. If, on\nthe other hand, large sections of German industry are to be perma-\nnently dismantled, the bulk of reparation payments would necessarily\ntake the form of transfers of existing German capital equipment, rather\nthan of current output, and the total volume of reparation deliveries\nis likely to be comparatively small. Similarly, restriction of exports\nfor commercial reasons, or important transfers of territory, would\nlikewise affect the amount and form of reparation.\nThe following recommendations with regard to reparation are\nintended to be consistent with the proposals of the State Department"
}