336 Hood to Dunk

Memorandum BERLIN, 31 December 1946

With reference to your memorandum ER.46/19/1/2 on the subject of German reparation deliveries to Australia [1], enquiries made in Berlin indicate that the position is now somewhat different from that existing at the time of the resolution of the Assembly of the Allied Reparations Agency quoted in your memorandum.

2. According to the Reparations Deliveries and Restitution Division of the Control Commission, the principal cause of earlier delays in the delivery of reparations allocations was the necessity of obtaining an agreed quadripartite valuation of plants. It is stated, however, that this has now been overcome and that valuation is now ahead of allocations. No further delays should therefore arise on this score.

3. The Reparations Division have stated in reply to representations made on behalf of Australian deliveries that they are well aware of the need for quicker delivery and recognise that the machinery allocations, in particular, to be of any real use should be effected now and not at some indefinite time in the future. Representations to the same effect have been made also by other recipient countries. The Division has therefore undertaken to make every effort to expedite deliveries. The chief difficulty at present is lack of competent labour for the dismantling of plants. A large proportion of the labour used is unskilled and over the useful age limit. Owing to the destruction of factories much of the work has to be carried on in the open and is consequently liable to interruption during periods of severe weather such as has been recently experienced.

4. The actual position regarding Australian deliveries is stated to be that one collection of items has already been despatched [2], a second is now being assembled, while it is hoped that a third will be ready by next April. The Division states however that because of labour difficulties it may not prove possible to keep to this target date.

5. In view of the delays which have already taken place, the Reparations Division stress that countries such as Australia urgently requiring certain special equipment should take advantage of the interim arrangement proposed by the United Kingdom Government for the immediate distribution of plant and equipment from the British zone on a unilateral basis. Some account of this scheme is contained in Berlin Despatch No. 10/46 of 13th December last. [3]

6. In accordance with the terms of your memorandum pressure will continue to be exerted on the authorities here with a view to securing the earliest possible delivery of Australian allocations.

In view of the circumstances mentioned above, however, and especially until the outcome of the new British proposal is known, it is not considered that any useful purpose would be served at this stage by formal representations to the Governments members of the Allied Control Council for Germany.

7. A copy of this memorandum has been sent to Dr. E. R. Walker in Paris.

J. D. L. HOOD Political Adviser

1 Document 304.

2 In early allocations Australia was awarded machine tools, instruments, industrial plant and chemical equipment to an approximate resale value of A900 000.

3 Document 320, paragraph 4.

[AA:A1068, ER47/45/2]