Evening star., 1946-07-24
US. May Tie Up Soviet
Reparations 10 Offset
Grabs in Manchuria
By Gornett D. Homer

American officials are thinking
about withholding promised
German reparations deliveries to
Russia to help make up for the
Soviet's ingle-handed stripping
of Manchurian industry.
This was disclosed late yesterday
by Edwin w. Pauley, President Tru-
mans personal representative on
reparations, who said no decision
has been reached.
Mr.. Pauley estimated that more
than $4,000, ,0OO, 900 worth of Man.
churian industry has been incapaci-
tated by Russian removals of key
equipment, upsetting for at least
generation the lives and welfare of
90O. 900, 900 people in the Far East
who should have benefited by these
plants"
Reports en- Tour.
His disclosures made at news
conference after he reported to the
President on his recent 1900 mile
tour Of Manchuria, Korea and
Europe, came as other officials said
the United States will oppose an
expected Russian demand for a
share in reparations from Japan.
Mr.. Pauley reported indications
that the Russians intend to stay In
the northern part of Korea now
occupied by Soviet forces. He said
substantial number of Russian
wives and children have been moved
in. and there are many evidences Of
the attainment of the maximum
possible luxury by occupying officials.
In contrast to Manchuria, which
Russia turned back to China after a
short occupation. he said there has
been no substantial removal Of in
dustrial equipment from the Soviet
zone in Korea. Many Korean in
dustries are operating full blast
under Russian supervision, he said.
He emphasized, however, that the
iron barrier" between the Russian
and American occupation zones in
Korea must be dissolved and free
commerce re-established' In order
for the country Ito be ready to go
industrially."
Mr.. Pauley admitted that a de-
cision to cut OF reparations deliv-
cries to Russia from the American
occupation zone in Germany might
involve renunciation of the Potsdam
agreement, and said the United
States will sacrifice a lot" to per-
petuate 1t.
He pointed out. however. that the
reparations program under the Pots
dam agreement already is being
held up because of the reluctance
of certain countries" to treat Ger
many as an economic unit as also
agreed at Potsdam.
| Until occupation zone commanders
are certain whether the economic
unity program is going to be carried
out or whether each zone must be
run as an independent economy
they cannot determine how much
equipment can be removed for rep
arations as surplus, he said.
Expressing hope that mo one
nation or group of nations will force
a remuneration Of the Potsdan
agreement" he said the United
States will not renounce any par,
Of it unless forced to do so by other
nations abrogation OF it."
Mr.. Pauley warned against re
peating the tragic blunders of World
War I" when for the sake of repara :
tions from current production the
Allies financed the rebuilding of the
German war machine He said Rus
sia's demand for $4,000 900 900 rep
arations from Germany was one OF
the factors he had in mind in this
connection.
I'VE must see to it," Mr.. Pauley
declared, that the nations OF the
world do not play the fatal game of
power politics with Germany and
place her in the position where she
can offer the might of Europe to
the highest bidder
His report was the first direct
American evidence on Russian
wrecking OF Manchurian industry
which was widely reported in the
press last winter. The United
States asked Moscow for an explain
alton then, and received unsatisfac-
tory replies to the effect that Russia
considered any japanese equipment
as war booty.
This Government insists that
japanese equipment in areas for
merly occupied by Japan, like Man
churia and Korea, be left there for
the reparations account of the vic
tim countries.
Certain Industries stripped"
BY and large" Mr.. Pauley said
his mission found certain industries
in Manchuria stripped of every
thing that would be useable to the
Russians-or to anybody" He spe-
cif1cally mentioned power steel, min
ing, hydrogenation and other man
ufacturing plants as systematically
stripped"
While most of the equipment re-