740.00119 Control (Germany)/1–1846: Telegram
The United States Political Adviser for Germany (Murphy) to the Acting Secretary of State
[Received January 19—9:40 p.m.]
159. 1. See my 112, January 13, 2 p.m. Agreement on the definition of restitution was finally reached at thirty-second meeting of Coordinating Committee held yesterday [under British] chairmanship, but British member adopted a more intransigent position regarding general level of industry and suggested that this question revealed a fundamental difference of opinion which should be faced as soon as possible.
2. Robertson said he had just returned from a special trip to London and that the statement he was about to make had his Govt’s full authority. He referred to Clay’s remark at the last meeting that the US Delegation’s first commitment was the destruction of German war potential and that it felt no obligation to guarantee a standard of living to Germany beyond trying to achieve a balanced import-export program, but that if such balance could not be reached without leaving war potential, the standard of living would have to be further reduced. Robertson said the British were also determined to destroy war potential but that the interpretations as to its meaning were far apart. The British Govt could not agree to the premise that if starvation, misery and slavery were to result from demilitarization, they would have to be accepted. No civilized nation was entitled to impose such terms and the way to world peace did not lie along this path. Such conditions would create a state of despair and inevitable danger of a future Germany would be a reversal of the progress toward democracy envisaged [Page 487]at Potsdam. German living standard could not be depressed without having a harmful effect on Europe and the rest of the world. The British delegation could never agree to turning Germany into a wilderness. Robertson claimed the British had accepted the steel capacity figure of 7,500,000 tons with the reservation that the overall German economic plan be based on this amount and his delegation knew that no satisfactory plan could be based on the permitted production figure of 5,800,000 tons without transforming Germany into a wilderness. He said that in view of Clay’s statement he believed the differences on German peacetime economy were fundamental and the sooner they reached the Control Council for discussion the better. He indicated, however, that the British would accept a plan for reparations based on the steel agreement provided it would not commit this to a lower figure for long-term German economy.
Clay rejected the imputation that US policy envisaged German starvation and said he had never doubted British good faith in proposing a higher figure for German steel production, which had originally been done by the US delegation itself. His delegation had receded from its first position since [quadri-] partite Govt, like democracy, must work by compromise. The difference between 5,800,000 and 7,500,000 was so small as not to be critical, and the US delegation stood by its understanding that the Coordinating Committee was committed to the figure of 5,800,000 for inclusion in the economic plan.
Sokolovsky stated that a plan based on the figure of 7,500,000 would leave Germany with a heavy industry capable of waging a new war, for which the Soviet delegation could not assume responsibility. He dismissed Robertson’s fears of a “German wilderness” as illusory and as an inacceptable resort to politics. Sokolovsky said he agreed with Clay that the powers had no obligation to feed Germany, which should work and feed itself [on] the basis of the 5,800,000 figure for steel.
Clay then pointed out that if 7,500,000 tons were left as a maximum, Germany could not produce this amount as an average and that it was untenable to base the economy on a figure which will not be fulfilled. He claimed that the norm of 5,800,000 will increase the levels of the lighter industries. Robertson thereupon made the surprising statement that the British had meant that 7,500,000 tons would actually be produced when they had agreed to this figure.
A discussion then took place during which the British suggested that the figure of 7,500,00 be referred to the Economics Directorate as the basis for determining reparation claims against other plants depending on steel. Sokolovsky could not accept this but stated he was agreeable to instructing the Economics Directorate to destroy and declare available for reparation all steel plants in excess of those [Page 488]needed to maintain the productive capacity of 7,500,000. This [proposal was accepted] for immediate implementation and the Coordinating Committee decided to refer the larger question at issue to the Control Council meeting of January 21. Clay and Sokolovsky desired communication to the press of the Coordinating Committee’s current discussion but Robertson requested deferment of publicity pending Control Council action.
3. Coordinating Committee accepted with certain additions Russian counter-proposal on definition of restitution (see my 112, January 13, 2 p.m.). Clear text and summary of discussion furnished in separate telegram.15
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Sent to Dept as 159; repeated to Moscow as 16 and London for personal attention Secretary Byrnes16 as 40.