862.50/3–2746: Telegram
The United States Political Adviser for Germany (Murphy) to the Secretary of State
[Received March 29—5:20 p.m.]
891. See my 729, March 8, 10 p.m., and 844, March 22. Forty-Seventh Coordinating Committee meeting March 26 reached agreement on Level of Industry Plan for postwar Germany. Control Council convened in special meeting immediately thereafter and also approved plan. Tele-conference with Dept March 26 transmitted approximation but not agreed English text of Control Council communiqué.75 Agreement was reached at outset of meeting on sole remaining point of contention, when Soviet proposed following wording to cover review and revision of plan: “Plan is subject to review as may be agreed by the Control Council in the event that the fundamental assumptions of the plan are bound to be changed”. British member thanked his Soviet colleague for proposal and accepted it adding that British delegation considered proposal covered point made in earlier British [Page 534] statement (see my 844, March 22). French member asked Soviet colleague to confirm that proposal meant, among other things, that were there any change in western frontiers of Germany, plan would be subject to revision. Soviet member replied that were a change of that character made by some decision, for example, either by quadripartite governments or at peace conference, he assumed Coordinating Committee members would be informed thereof by their governments and instructed concerning appropriate action. French member accepted this assurance and he and his US colleague agreed the plan.
Meeting also instructed Economic Directorate to prepare detailed plan of industrial equipment subject to be removed as reparation and present it for confirmation to Coordinating Committee at very early date, and informally agreed April 20 as target date. General Clay then read a paper76 which he said might enable the members to determine whether there were still some differences as to the methods of determining necessary capacities of individual industries, and said that it contained principles which if agreed might be used as standard of measurement for determining capacity. In brief, these principles are:
Least efficient plants would remain after reparations, thereby probably bringing about normal decrease in efficiency as years passed; certain number of shifts would be allowed each industry, generally two shifts actually being computed as a production equivalent of only about 1.8; strictly restricted heavy industry to operate usually three but sometimes two shifts; light industry to be encouraged to maintain export-import balance. Except for a few remarks making reserves as to details, other members agreed to General Clay’s principles and meeting decided to instruct Economic Directorate to use them in determining capacity to be left each industry.
Yesterday’s meetings culminated the labor of many months. Having participated throughout and observed the conscientious and able manner in which General Clay and the officers of the Economic Division of OMGUS have handled this complex and difficult job, I respectfully suggest that it would not be amiss—provided the Dept approves the plan now presented—to extend a word of commendation to those officers.77
- For text of the Allied Control Council’s press release containing the Level of Industry Plan, see Department of State Bulletin, April 14, 1946, p. 636.↩
- Not printed.↩
- On April 5, Acting Secretary of State Acheson sent a letter to Secretary of War Patterson extending his congratulations to Generals McNarney and Clay and their staff for their fine work on the Level of Industry Plan; for text, see Department of State Bulletin, April 21, 1946, p. 681.↩