Foreign Relations of the United States, 1947, Council of Foreign Ministers; Germany and Austria, Volume II

862.6362/9–847

Memorandum of Transatlantic Telephone Conversation, by James A. Stillwell, Special Assistant to the Under Secretary of State for Economic Affairs (Clayton)

[Washington,] September 8, 1947.

As a result of Ambassador Douglas’ talk with Mr. Bonesteel⁸⁰ this morning, I called Ambassador Douglas back and talked with him at 1:15 EDT and outlined the U.S. position regarding the Management Plan and the US/UK Control Group as follows:

1. (1) Since the Management Plan⁸¹ was worked out and agreed to by the US/UK Commanders in the Theater over 60 days ago, (2) since Section 3 of the Bizonal Agreement specifically provides for joint control of such economic problems in the field, and (3) since we told the British representatives at the beginning of the Conference August 12 here in Washington that we wished to secure immediate agreement on the Management Plan and the US/UK Control Group and start putting the Management Plan into effect even while the rest of the coal production problem talks continued here, we cannot agree to further delay.

In answer to Mr. Bevin’s position that we should transfer the Management to the Germans first then proceed with the discussion on the amendments to the Fusion Agreement, and only after that discuss the precise composition of the US/UK Control Group, I pointed out (a) that we cannot agree to implementing the Management Plan for even an interim period under the direction of the North German Coal Control, (b) that the British assumption that they would gain some bargaining position by retaining the North German Coal Control until the financial talks begin will react against them, (c) that if there is to be a blow-up concerning the composition of the US/UK Control Group, we prefer to have it now rather than postpone it for the subsequent financial discussions, and (3) that if we are forced to wind up this Coal Conference with no agreed report and recommendations to our Governments, the public reaction will adversely affect the possibility of increasing the U.S. financial burden in Germany.

I pointed out to Ambassador Douglas that we propose to close the coal talks tomorrow either with or without an agreement. With an agreement if (1) the Management Plan is agreed in principle and (2) the US/UK Control Group, either with single or dual chairmanship, is approved for immediate implementation. If single chairmanship is agreed upon it would have to be understood that the chairman would be an American, but that we are perfectly agreeable to have dual chairmanship with responsibilities alternating between the British and U.S. chairman.

2. We propose that we should set a deadline of not more than 3 or 4 days for the Benelux countries to make their views known concerning the Management Plan. After that time we insist that we should instruct the Theater Commanders to start implementing the Management Plan immediately.

3. Under any circumstances we propose to announce agreement in principle on the Management Plan and specific agreement on the US/UK Control Group being put into effect immediately at the close of the Conference tomorrow.

Ambassador Douglas repeated the position and stated that he fully understood and agreed with it, and that he had an appointment with Mr. Bevin within the next fifteen minutes and would plainly state our position to him and notify us of the outcome as soon as possible.⁸²

80. No record has been found of the conversation under reference.
81. Ante, p. 940.

82. In his telegram 4869, September 8, from London, not printed, Ambassador Douglas reported that he had explained the American position to Foreign Secretary Bevin on the basis of this conversation with Stillwell. Douglas’ report read in part as follows:

    “Bevin had first said that he could not agree in detail to the establishment of the US–UK control group. He felt that it was a proposal which had been suddenly sprung on him without adequate information as to its organization or the functions that the individual members would perform. Moreover, he said he felt that it was an evidence of distrust as to his willingness, at a subsequent date, to establish such a group in light of the trends indicated by the negotiations covering the revision of the fusion agreement, and besides, he felt that we were proposing dealing with the Benelux countries, with whom he had to do business continually, in a generally cavalier and abrupt manner.”

    Douglas concluded his report with the judgment that Bevin would agree to the terms of the German coal management plan if more time were given for consultation with France, Belgium, the Netherlands, and Luxembourg. (840.50 Recovery/9–847)