862.6511/2–134)6: Telegram

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


444. Reference Department’s 369, February 8. The following represent the views of General Clay, the steel experts of OMGUS, and [Page 501]myself in replying to your inquiry. Angell’s comment will follow in a subsequent message.34 The following presumes also that your reference to 1.9 million tons should read 1.7 million tons.

There is no specific technical relationship between the 7.5 million ton capacity figure and the 5.8 million tons capacity figure and the 5.8 million ton production figure. It was agreed that the capacity figure had to be in excess of annual production to allow them for breakdowns, repairs, etc. However, there is no known method for a mathematical determination of steel capacity. Our proposal for the determination of the 7.5 million ton capacity is to take the maximum operation of each plant left in Germany during its best year. It is recognized that this will sustain annual production of 5.8 million tons with some reserve capacity. However, steel experts state that a mathematical determination of the reserve capacity within this margin is almost impossible as it depends on efficiency of operation of each plant and also as to the size and type of orders received in each plant. It is my belief that efficiency of German steel operations under this low figure will be much higher than in the past, and that a fairly substantial portion of the 1,700,000 tons will be available as reserve capacity.

With respect to allied industries, there is at least on our part no intent to establish a comparable reserve capacity. Basic steel is necessarily a 24-hour a day, 7 days a week production job. However, most of the allied industries using steel may operate either one, two, or three shifts a day. Our proposal is to compute plant capacities within allowable limits on a two-shift a day, 6 days per week production. This would of course permit as much as 25 percent additional capacity in each allied industry by three-shift, 7 days a week operation.

The position of other members of quadripartite Govt with respect to measurement of capacity has not yet been disclosed.

  1. In telegram 541, February 18, 5 p.m., from Berlin (telegram 230 from Angell), Mr. Angell stated his agreement with the views expressed in telegram 444 (862.6511/2–1846).