862.6511/2–846: Telegram

The Secretary of State to the United States Political Adviser for Germany (Murphy)


369. 1) Although we understand compromise method by which steel capacity and production figures were reached and “political” nature of recent Anglo-American exchanges we still have a technical question requiring clarification.

2) Do you interpret the 7.5 millon ton capacity figure to mean sufficient plant and equipment to produce 7.5 million tons under pressure or as “rated capacity” say 10 percent under absolute possibilities? OMGUS Industry Report No. 5 mentions calculating Steel capacity in terms of highest attained output.

3) We wish to know exact technical relationship between 5.8 million ton production figure and 7.5 million ton capacity figure. It does not seem likely that 1.9 [1.7] million tons are the necessary margin between permitted production desired and capacity needed to attain that production with certainty in view of breakdowns, maintenance, repairs, etc.

4) If this is true the 1.9 [1.7] million tons difference contain two types of cushions. A) Capacity needed to attain permitted production regularly. B) Additional capacity which could be used to produce steel in excess of 5.8 million tons per annum.

5) Do you expect this situation will be repeated in each industry or that only cushions of type A above, will be left in other industries?

6) We would appreciate explanation and comments from you, Clay and Angell.