862.6362/8–1848

Agreed Paper by the Bipartite Board56

secret
BIB/P(47)79

German Coal Organization

1.
US/UK Military Governments have decided that the time has come to hand over the responsibility for coal production to German hands. In pursuance of this decision the following arrangements shall be made forthwith and shall be brought into operation on August 1st.57
2.
The German Executive Administration of Economics will set up a Department, one of the main responsibilities of which will be to undertake the functions normally exercised by a Government Department in respect to the coal industry. These functions, in broad terms, will cover the following responsibilities:
a.
Safety Regulations and Mines Inspectorate.
b.
Consideration of problems of government finance and subsidies.
c.
Consideration of labour matters in the coal industry from the governmental standpoint.
d.
Consideration of housing policy for the coal industry.
e.
Initiation of ordinances and regulations affecting the coal industry.
Coal allocations, subject to export and other allocations directed by Military Government, will be the responsibility of the Executive Administration for Economics, in accordance with the coal allocation policy.
The Executive Administration for Economics may set up an Advisory Committee to advise the Department. The Department will exercise the normal Civil Service functions appropriate as between Government and industry.
3.
There will be set up for the management of the coal industry, as an interim measure, a German Coal Management. The German Coal Management will be responsible to the US/UK Military Governments for the efficient and effective operation of the coal industry under the ordinances and regulations of the Economic Council which have been [Page 941]approved by US/UK Military Governments. The German Coal Management will be headed by a General Director selected for his administrative experience and ability. He will be assisted by a number of Directors of Departments, each of whom will be chosen for his technical ability and experience from the coal industry.
4.
The General Director will be appointed by US/UK Military Government, in consultation with whom he will select the Directors of Departments. In no circumstances will political considerations be permitted to influence the appointment either of the General Director himself or his Directors of Departments. It is vital in the interests of the industry that persons selected for these important posts should command the confidence of management and workers in the industry by reason of their experience, efficiency and character. The General Director will establish and will call upon from time to time for counsel and advice an Employee-Management Advisory Committee.
5.
The German Coal Management will contain the following chief Departments.
a.
Production
b.
Safety, Engineering and Planning
c.
Distribution and Sales
d.
Mining Supplies and Procurement
e.
Mine Housing, Incentives and Welfare
f.
Labour Relations
g.
Finance, Accounting and Statistics
h.
Public Relations
6.
The General Director and his organization shall have authority:
a.
To manage the industry through individual mine managements directed through district organizations.
b.
To ensure the efficiency of mine and district managements including the appointment and removal of key personnel.
c.
To take all measures necessary to maintain and utilize the resources of the industry and to improve its efficiency and to develop its facilities.
d.
To supervise the financial position of the industry and to exercise such borrowing powers as are approved by the appropriate authorities.
e.
To supervise all coal distribution and selling policy. Export sales shall be subject to:
1.
Directives by US/UK Authorities, including allocations of ECO or its successor body.
2.
Export receipts being paid to the appropriate foreign exchange accounts.
f.
To deal with governmental and other authorities for allocations of mining supplies, consumer goods and building materials for industrial and housing purposes.
g.
To carry out, in cooperation with the appropriate governmental authorities, recruiting campaigns for additional manpower. To supervise all matters pertaining to relations of management with labour in the industry and including wage administration, labour supply, general social and welfare questions and the carrying out of safety regulations within the industry.
7.
There will be associated with the German Coal Management a US/UK Control Group, which will transmit to the General Director export and other appropriate directives on behalf of US/UK Military Government.
8.
Contracts with key personnel should be of a character which would attract the best possible personnel in the interests of German and European economic recovery.
9.
Increased coal production is of first importance to the recovery of a reasonable economic status for Germany, and in their own interests the Germans are being given responsibility for the operation of the industry, in order to return it as quickly as possible to pre-war production levels. The General Director and the Directors of Departments will obviously be the key to the success or failure of German Management.
10.
The status of mine properties under Military Government Law No. 52 remains unchanged. To safeguard the interest of foreign nationals owning not less than a 51 percent beneficial interest in any coal mining property, but without prejudice to the objective of maximizing coal production, such owners will be allowed, if they so desire, to appoint representatives to their properties. These appointments will be subject to the approval of the United States-United Kingdom Control Group and will be conditional upon the owners of the properties concerned agreeing that their representatives will be subject to any regulations that may be laid down by the German Coal Management or the United States-United Kingdom Control Group for the operation of the coal mines as a whole and that the appointment of such representatives shall not confer upon them powers which will in any way infringe upon the authority of the German Management or of the United States-United Kingdom Control Group.58
  1. This paper had been originally approved at the Fourteenth (Extraordinary) Meeting of the Bipartite Board on July 16, 1947. The paper subsequently came under consideration during the conversations between American and British officials, August 12–September 10, 1947, in Washington, on questions related to Ruhr coal production. In the course of these conversations, a revision in paragraph 10 of this paper was approved. The source text, which was circulated during the American-British conversations as document AGC/11/Rev/3, Gen/1/3, August 28, 1947, incorporates the revised paragraph. The original text of paragraph 10 is indicated in footnote 58 below.
  2. The arrangements for the transfer of responsibility for coal production to German hands were not effected until November 1947; see editorial note, p. 976.
  3. Prior to the revision approved during the American-British coal conversations in Washington, this paragraph read as follows:

    “10. The status of mine properties under Military Government Law No. 52 remains unchanged. A member of the US/UK Control Group with appropriate liaison staff will be designated to safeguard the interest of foreign owners.”

    For the text of Military Government Law No. 52 under reference here, concerned with the blocking and control of property within the occupied territory, see Military Government Gazette, United States Zone of Germany, Issue A, 1 June 1946, p. 24.