Received 13 April 1947
F.E.C. 97. Reparations and Peace Settlement.
Reference your 404 of 2nd April.
1. Proposal that reparations be settled at Peace Conference has not met warm reception so far. U.S.A. concedes that this might eventually have to be tried as last resort, but wishes to continue for few more months to attempt settlement within F.E.C. Russian member, speaking personally and without instructions, thinks Soviet will desire reparations settled within F.E.C. if possible.
No country has indicated support for reference of reparations to Peace Conference at this stage.
2. Reference to your paragraph 2, Australia could not maintain that reparations is not within jurisdiction of F.E.C., in view of earlier and frequent insistence to United Kingdom and U.S.A. on settlement within F.E.C. (e.g. your 416 of 16th March, 1946 , and your 14 of 6th January, 1947 ). We have interpreted your 404 to mean that F.E.C. has jurisdiction over reparations, but, if no agreement can be reached owing to voting procedure, F.E.C.
terms of reference did not intend allocation of shares to claimant countries to be determined by interim directives, issued as unilateral act of one country. If agreement cannot be reached in F.E.C. Allied Powers should be associated in decisions in some other way and, therefore, matter should be settled at early Peace Conference.
3. Present status of F.E.C. discussions on reparations is outlined in our F.E.C.98.