740.00119 EW/11–1845: Telegram
The Ambassador in France (Caffery) to the Secretary of State
[Received 8:45 p.m.]
6676. From Angell 64. Informal discussion was held with French on November 15 on economic questions related to proposed separation Ruhr-Rhineland from Germany. French Government represented by Alphand, De Courcelle, and others. Present for US were Abramovitz, Howard and Schurr. Memorandum covering conversations will reach you via air pouch.60 For the most part, French exposition follows lines already revealed in reports of Anglo-French conversations. Following points made by Alphand clarify and amplify previous reports:
- 1.
- Areas to be separated, including Saar, Rhineland and Ruhr, should be disconnected from administrative control of ACC61 immediately.
- 2.
- French willing that part of potential Ruhr export surplus be used to help finance necessary imports of rest of Germany during transitional period. Also France proposes that dollars continue to be demanded for sale of part of Ruhr exports. Alphand firm in view, however, that part of Ruhr exports and part of exports of rest of Germany should be transferred on reparation account regardless of existence of foreign trade deficit in rest of Germany. He considers that present arrangement which requires payment for only 80% of value of exports has settled question in principle.
- 3.
- French state unequivocally that scope of capital removals to be made from Ruhr area would continue to be governed by Potsdam formula even if area is internationalized. They are aware of severe [Page 896] economic consequences in area. They would offer employment in French coal mines and other industries to unemployed Ruhr residents. Such employment presumably temporary during French labor shortage, but this point not clear.
- 4.
- French agree that rest of Germany would face severe foreign exchange situation in short and long run. Willing to contribute part of Ruhr foreign exchange surplus to rest of Germany for limited transitional period only. Thereafter rest of Germany forced to make necessary adjustments. French agreed to compare US and French estimates of magnitude potential foreign exchange deficit of rump Germanv at future meeting, probably November 19. [Angell.]