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

862.6362/9–2247

Memorandum by Kenyon G. Bolton of the Division of International Conferences⁸⁷

[Extracts]

[Washington,] September 22, 1947.

Subject: Report—Anglo-American Conversations Regarding German Coal Production, Washington, D.C., August 12–September 10, 1947.

The subject conversations convened in the Division of International Conferences’ Suite at 10:30 a.m., August 12, the date and scope having previously been agreed upon by the two Governments concerned. It took three weeks to arrive at such an agreement because of dickerings about what the agenda should include. The United States insisted that the conversations be limited to topics directly related to coal.

The British, on the other hand, maintained that such talks would amount to discussing the problem in a vacuum. They believed that any decisions such as increasing food rations for the underfed miners or buying new coal machinery eventually will involve financial matters which in turn bring up Britain’s worsening dollar shortage.

This was countered with claims that prolonged argument over such controversial questions as socialization of the Ruhr mines would delay hopes of increasing vitally needed coal production and might catch Europe short of fuel again this winter.

Both Governments agree that more German coal is urgently needed to revive European industries. They differ on how the Ruhr Valley coal funds should be administered, however. The British insist that the Ruhr fields be nationalized; the United States holds they would operate more efficiently if German executives and miners with “knowhow” were returned to the job.

France interfered as much as possible before the plenary meeting ‘because she wanted a “say” in the Ruhr questions. She objected to the Anglo-American desires for an increase in German steel production, fearing this would be a first step in rebuilding Germany’s military potential. France has been assured by Secretary Marshall that the French will be consulted before any decision is reached. The Paris Government was not represented at the subject conversations.

No agenda had been agreed upon since both Governments decided to keep the conversations as informal as possible, with emphasis on results instead of protocol. There are certain specific problems which kept coming up. They included:

(1) Inability to maintain the special 4,000-calorie daily food ration awarded German miners;

(2) Transportation breakdowns in Germany and elsewhere;

(3) Poor living quarters for miners and their families;

(4) The necessity for revising management of the mines;

(5) Lack of modern mining equipment.

Forty-seven United States representatives from the Treasury, Commerce, Agriculture, Interior, State and War Departments attended the August 12 opening session. Eighteen British representatives were present.

the following is a list of participants at the opening session

united kingdom

Chairman:

• Sir William Strang, Political Adviser to the Commander in Chief, Germany

Delegates:

• Sir Mark Turner, Economic Adviser on German Economic Matters to the Foreign Office
• D. L. Anderson, Vice-President, Economic Subcommission of the Control Commission for Germany (British Element)
• F. H. Harrison, Chief of Fuel and Power Division of the Control Commission for Germany (British Element)
• H. E. Collins, Senior Director of the Production Branch of the North German Coal Control
• A. G. Gilchrist, Foreign Office, Secretary of the Delegation
• J. H. Penson, British Embassy

. . . . . . . . . . . . . .

united states

Chairman:

• Willard L. Thorp, Assistant Secretary of State for Economic Affairs

Delegates:

• Kenneth C. Royall, Secretary of War
• Major General W. H. Draper, Economic Adviser to the Commander in Chief, European Command
• Charles E. Saltzman, Assistant Secretary of State for Occupied Areas (Designate)
• Max Forester, Chief, Coal Section of Economics Division, European Command
• C. Tyler Wood, Deputy to the Assistant Secretary of State for Economic Affairs
• James A. Stillwell, Special Assistant to the Under Secretary of State for Economic Affairs

. . . . . . . . . . . . . .

congressional representation

A member of the United States Congress requested representation on the United States delegation. The request was received only two days before the arrival of the British delegation from London. Because of this fact, it was felt that to have Congressional representation at the conversations would place the British delegation in an embarrassing, unbalanced and difficult position. An explanation of this was written to the Congressional member, and he was informed that information and reports of the conversations would be available to him.

meetings

Following the August 12 opening session at 1778 Pennsylvania Avenue, all meetings were held in the New and Old State Buildings and at the Pentagon. There were many Executive Sessions and a goodly number of small working group discussions. Progress in all groups was very slow, and there was throughout a note of stubbornness and withholding.

. . . . . . . . . . . . . .

results of the conversations

After weeks of discussion an agreement was arrived at with the signing of the report on September 10 at 12:20 by Sir William Strang and Mr. Willard L. Thorp.⁸⁸ The report and recommendations contained only the vaguest reference to the controversial question of ownership of the Ruhr mines and this Government’s insistence that British socialization schemes be shelved as long as coal production remained a problem.

The Ruhr’s coal mines will be returned to German management and administration as part of the agreement to boost output. The agreement recommends to the two governments that a German Coal Management be established as quickly as possible in the hope that German miners will produce more coal if they are working under German direction.

The new management will be responsible to the American and British governments for the efficient operation of the industry, and will be supervised by a joint American-British Control Group acting for the military commanders. This will give the United States for the first time an equal share in the over-all direction of Ruhr coal mining.

Not only will Germans have direct responsibility for managing their mines, but a new department, equivalent to a ministry of coal, will be set up in the German Bizonal Economic Council to administer the Mining Industry. The change in management and control is only one of many recommendations made by the experts, all of them aimed at getting more Ruhr coal out of the ground and making more of it available for German and European recovery.

The recommendations show clearly, however, that no simple magic formula could be found to produce more coal. Food, transport, housing and a host of related questions were considered by the negotiators, but many of them were left for later settlement.

The conversations recommended, for example, that larger stocks of food be built up and left in the large cities and the mining towns than elsewhere in the combined zones. It also insisted that the present rations be met functually [sic] with gradual increases provided first of all in the cities, where the people cannot get as much “off-ration” fruit and vegetables as in the farming areas.

The conversations also recommended much stricter penalties and inspection of the farming areas to compel farmers to send their food to the cities.

“We have considered”, the report says, “how far German production could be increased by the introduction into the Ruhr of American mining machinery. After taking expert advice we have reached the conclusion that, having regard to the natural conditions in the Ruhr coal field, the methods so successfully employed in the mining of coal in the United States are not immediately applicable.”

However, the report urged that American coal experts make an engineering study of the Ruhr mines as soon as possible, in the hope that American technical experience might be useful in the Ruhr at some later time.

The conversations did not pretend to reach a decision on the issue of nationalization versus private ownership in the Ruhr mines. The recent United States directive to General Clay,⁸⁹ the United States Commander, instructed him not to interfere with socialization if the Germans showed by democratic methods that they wanted it. It left him free, however, to preach the advantages of free enterprise, which he has been instructed to do vigorously during the past year.

This formula may be the basis of eventual American-British agreement at what are called “higher-levels”. In other words, the two governments may agree not to obstruct socialization if the Germans want it, although the British propaganda agencies in Germany might urge a socialist solution and the Americans the reverse.

Considerable numbers of recommendations were made by the conversations in addition to those mentioned. They are too numerous to mention, but to summarize the talks briefly, the conversations urged both zone commanders to work out a long-term program for rehabilitating the German coal industry; to start a detailed study of the transport problem in the bizonal area; to consider an immediate increase in coal prices, and to make greater use of German resources for recovery.

The conversations were in the form of recommendations submitted to the respective governments and there is no reason why they should not be given effect as soon as possible. Actually, the program will be turned over to the respective zone commanders for early execution.

87. Bolton served as the Coordinating Secretary of the United States Delegation to the subject conversations.
88. See ante, p. 959.
89. The reference here is presumably to the Directive to the Commander in Chief of United States Forces of Occupation Regarding the Military Government of Germany, J.C.S. 1779, July 11, 1947, Germany 1947–1949, pp. 34–41.