Office of the Historian

740.00119 EW/11–3045: Telegram

The Ambassador in France (Caffery) to the Secretary of State

Paris, November 30, 1945—midnight.
[Received December 2—11:12 a.m.]

6913. From Angell No. 100. A final meeting held November 27 on economic aspects Ruhr-Rhineland separation. Present for France, Alphand, Couve de Murville, Rueff.

a.
US conferees expressed concern over effect of separation on rump Germany. Particular attention was called to apparent French error in supposing rump Germany would be food surplus area rather than serious deficit area as US estimates suggest. Point was also made that reparation removal program would require radical revision. Difficult to envisage any substantial removals from rump Germany. Removals from Ruhr also might need reduction because of necessity to procure by foreign exports or domestic production goods and services formerly procured in Germany.
b.
Alphand replied that French view of effect of separation was less pessimistic. It appeared clear however French conferees are prepared to give more serious attention to these problems in future.
c.
French conferees were asked whether they had considered attainment of security objectives in western Germany by measures involving less drastic economic rupture. Alphand appeared to consider present French proposals on economic side essential to success of plan. Couve de Murville gave impression that substantial modification present [Page 913] proposals was possible in direction of maintaining economic bonds between western and central Germany. US conferees explained that such modification would necessarily involve customs and monetary questions and also extremely difficult problems of management of Ruhr industries.

2. Following general points are made in connection with technical discussions.

a.
Technical conversations with French experts have resulted in no further elucidation of their views beyond points included above and in earlier messages. French analysis of economic effects on rump Germany and of economic problems of independent Ruhr has not proceeded as far as existing Washington studies. French do not appear to be prepared at present time to go deeply into economic aspects of subject. Hence, we intend to discontinue further discussion unless otherwise directed.
b.
In our view, greatest difficulties caused by plan are effects of separation on standard of living, and possible capital removals from rump Germany. On assumption that commodity exports from rump Germany to outside world (including separated areas) continue on pre-war basis, we estimate probable foreign trade deficit between RM 1.0 and 1.5 billion after allowing for maximum reduction of imports of textiles, coal and food. Deficit would be increased by RM 1.1 billion were Germany deprived of plant and equipment required to produce exports of chemicals and machinery at 1936 level. On the other hand, were exports of these commodities allowed there probably could be little or no removal of plants in these industries.
c.
On assumption that commodity exports from rump Germany continue on pre-war basis, basic difficulty in balancing rump Germany’s foreign balance is loss of invisible exports to Ruhr–Rhineland. This suggested that an alternative plan for Ruhr–Rhineland to meet French objectives and avoid foreign balance difficulty would need to be sought along lines of permanent occupation and economic management without disturbing fiscal, customs, monetary and financial ties with rest of Germany.
d.
We urge that any further negotiations on subject of Ruhr–Rhineland be held at earliest possible moment since it is possible to envisage satisfactory determination of extent and character of capital removals without decision on disposition of these territories.
e.
We suggest initiation of general study of effect of separation on removals possible from Ruhr, Rhineland and rump Germany respectively with special attention to foreign trade aspects.

Repeated to USPolAd as 231 for Murphy as from Angell No. 21. [Angell.]

Caffery