REPARATIONS-PARIS CONFERENCE

I returned from Paris on the 5th instant after attending the
Reparations Conference on the 25th November to 4th December. I
stayed rather longer than I intended since it was anticipated that
the table of quotas proposed for each country would be laid on the
table at the end of last week. However, the item, German External
Assets, proved a difficult one and a final solution had not been
agreed to when I left. Other items discussed included restitution,
shipping, monetary gold held by Germany, and the draft
constitution of the inter-Allied Reparations Agency which it has
been decided will be set up in Brussels. No doubt Dr. Walker will
have given you the necessary information concerning it.

I propose to deal in this memorandum with the situation so far as
it concerns Australia when the Reparations Agency has been
established. As you are aware it will consist of the Assembly and
a Secretariat consisting of a Secretary-General (Sutton from the
British Foreign Office) and two assistants with technical heads of
sections of which cabled advice has been sent to Australia.

It is our considered opinion that Australia's quota will be
relatively small and it is almost certain that for many of the
items we shall have competition from other countries, power plant
for example.

In the case of conflicting claims, the Assembly will give a
ruling. It is provided that if a country disagrees with the ruling
of the Assembly, it may refer the matter to an arbitrator,
selected from among other delegates, whose decision will be final.

Incidentally there is a strong desire to avoid arbitration. The
provision for a single arbitrator replaces the Committee of five,
which it was agreed was not workable and this solution has given
satisfaction to all parties.

It will be realised, therefore, that there are two matters which
require urgent consideration and attention in Australia, namely
(1) that the requirements should be arranged in order of priority,
and (2) that the strongest reasons possible should be available to
the Australian delegate on the Reparations Assembly as to why
Australia needs a particular plant for equipment. In my opinion,
these matters should receive urgent consideration with a view to
supplying the necessary information as soon as possible. I have no
definite information as to when the Assembly will be ready to
operate in Brussels. As a rough estimate it may be during the
latter part of January. In the meantime we are attempting to
prepare a consolidated list of Australian requirements which are
known here to date and will forward it to Australia within the
next few days.

It is the general opinion in Paris that the Conference there will
not complete its work until the week ending 15th December at the
earliest. I think that it is an optimistic view.

I have discussed this problem with Messrs. Gresford [1] [and]
Coulson [2], who agree with my interpretation of the situation as
it will be when I.A.R.A. is established.

I have not discussed this matter fully with Dr. Walker but a copy
of this memo is being for-warded to him to enable him to make any
observations he wishes.

J. R. COCHRANE