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Special Message to the Senate Transmitting Agreements With Germany Relating to the Settlement of Certain Debts and Claims

April 10, 1953

To the Senate of the United States:

I transmit herewith for the consideration of the Senate a copy of each of the following Agreements:

1. Agreement on German External Debts, signed at London on February 27, 1953 by the Federal Republic of Germany, and by the United States and seventeen other creditor countries.

2. Agreement between the United States and the Federal Republic of Germany regarding the Settlement of the Claims of the United States for Postwar Economic Assistance (other than Surplus Property) to Germany, signed at London on February 97, 1953.

3. Agreement between the United States and the Federal Republic of Germany relating to the Indebtedness of Germany for Awards made by the Mixed Claims Commission, United States and Germany, signed at London on February 27, 1953.

4. Agreement between the United States and the Federal Republic of Germany concerning the Validation of German Dollar Bonds, signed at Bonn on April 1, 1953. I request the advice and consent of the Senate to the ratification of these four Agreements.

In addition, I transmit for the information of the Senate two related Agreements between the Federal Republic of Germany and the United States and a report made to me by the Secretary of State covering all six of these Agreements. One of the Agreements is concerned with the settlement of the obligation of the Federal Republic of Germany to the United States for surplus property furnished to Germany. This Agreement was signed at London on February 27, 1953, and was concluded under the authority of the Federal Property and Administrative Services Act of 1949 (P.L. 152-81st Congress). The other Agreement, signed at Bonn on February 27, 1953, is an executive agreement relating to the establishment of procedures for the validation of dollar bonds of German issue.

The arrangements set forth in these several Agreements provide for the orderly settlement of German external debts, including the pre-war debts due mainly to private persons and the claims of the United States Government arising from post-war economic assistance to Germany. On the former of these categories, the effect will be to end the state of default which has existed for about twenty years. The consideration of reparation and other governmental claims arising from World Wars I and II is deferred under the terms of the agreement.

The complex documents transmitted herewith are the result of negotiations, extending over more than two years, in which all of the interests concerned have been represented. In particular, it is to be noted that the settlement terms and procedures for debts due to private creditors were worked out by negotiations between representatives of private creditor interests and of the debtors. In the light of all of the circumstances, it is the view of the Executive Branch of the United States Government that the settlement arrangements, embodied in the Agreement on German External Debts and in the various bilateral agreements, are reasonable, satisfactory and equitable to the interests concerned.

With regard to debts due to private creditors, maturity dates have been extended and the creditors are called upon to accept a reduction in interest arrears and interest rates, but the principal of the debts is unchanged. With regard to the claims for economic assistance given to Germany in the post-war period, for which the United States Government is by far the largest claimant, the settlement is comparable to the terms which other countries have received for similar assistance. On both categories of debt, the German Federal Republic has undertaken to make very considerable payments, but these payments may reasonably be considered within the Federal Republic's capacity to pay. Should the German Federal Republic, however, get into payment difficulties, consultative machinery to deal with the situation is provided for.

The elimination of the German state of default will contribute substantially and directly to the development of normal commercial relationships between the German Federal Republic and the rest of the free world. It will open up the possibilities of new credit, for both short-term trade financing and long-term investment.

These Agreements should be considered by the Senate not only in the light of the direct financial benefits to the United States, but also in relation to the contribution they will make to the achievement of the principal objective of United States policy toward Germany, that of restoring Germany to the position of a responsible nation in the community of free nations.

I recommend, therefore, that the Senate give early and favorable consideration to the Agreement on German External Debts and to the three bilateral agreements between the United States and the Federal Republic of Germany relating, respectively, to the settlement of claims for postwar economic assistance to Germany, to the indebtedness of Germany for the Mixed Claims Commission awards, and to the validation of German dollar bonds, and give its advice and consent to their ratification, in order that the debt settlement arrangements may be made effective as promptly as possible.

DWIGHT D. EISENHOWER

Note: The agreements and related papers are printed in Senate Executive D, E, F, and G (83d Cong., 1st sess.). The four agreements were favorably considered by the Senate on July 13, 1953, and after ratification entered into force September 1953 (4 UST 443 et seq.).

Dwight D. Eisenhower, Special Message to the Senate Transmitting Agreements With Germany Relating to the Settlement of Certain Debts and Claims Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/231619

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