The Acting Secretary of State to the Secretary of State, at Paris73
2300. For Secretary from Hilldring.74 To be delivered to the Secretary by 9:00 am Tues morn.75 Gen Clay in teletype conversation today with Dept and War Dept states he will raise with you problem of Fr Saar coal mines proposal described in our 2109 to Paris of May 4.76 We agree this is a matter for your judgment in light of general position at present conference.
Dept has taken position that Fr willingness to invest capital and technical resources in Saar coal mines on condition that resulting increase in production be treated as Fr production was compatible with our pursuit centralized administrative agencies in Germany, and that US should support this proposal with other occupying powers. In this, Dept has been affected by likelihood ultimate separation of Saar. Clay, on other hand, evidently desires avoid any action which would in his judgment weaken US position on central German agencies at this time.77
Depts basic position was determined by real political and economic advantages to France and Western Europe of increased coal production resulting from this proposal; and we presumed Clay’s basic objection would be met if the French Saar coal proposal is accepted at the CFM on a quadripartite basis.
Dept is impressed with fol factors in connection Fr proposal:
- Methods proposed by Fr have produced very large increase in coal production in France; and their application in Saar would serve to relieve, over six month period, western Europe coal bottleneck;
- Further Fr industrial revival appears absolutely dependent on increased coal imports, current Fr coal production being above 1938 level;
- Stagnation or decline in Fr industrial production would have undesirable political effects in France from US point of view;
- Brit appear to be moving very slowly in Ruhr with respect to coal production measures of type recommended by Fr and US experts (Boyd,78 Forester79);
- Fr actively resent efforts to exploit control over their coal supply to force alteration in their German policy; and in fact desire to avoid such leverage in future is a principal factor helping determine their attitude towards Rhineland-Ruhr. Dept is doubtful that economic pressure on French, retarding rate of economic recovery, will prove successful in altering their basic national policies in favor US views.
Dept fully in accord with Clay that Fr should pay for German coal exports, and that settlement of outstanding Ger policy issues in which Fr have dissident views is highly desirable, so that full Fr adherence to Potsdam may be obtained.
Would you inform Dept outcome your discussion with Clay in this matter. [Hilldring.]
- Secretary of State Byrnes was in Paris for the meeting of the Council of Foreign Ministers.↩
- Assistant Secretary of State John H. Hilldring.↩
- May 14.↩
- Not printed. The French had proposed that, without prejudice to the ultimate disposition of the Saar, they be allowed to apply their methods to increase the coal production of that area on the understanding that the increase above the January 1946 level go directly to them. (862.6362/5–446)↩
- For documentation concerning centralized agencies, see pp. 701–754, passim.↩
- Col. James Boyd, Chief of the Industry Branch, Economic Division, OMGUS.↩
- Max Forester,’ Head of the Coal Section, OMGUS.↩