862.60/7–2147

Memorandum of Conversation, by the Secretary of State

Participants: M. Bonnet, the French Ambassador;
The Secretary of State;
Mr. Matthews.

Ambassador Bonnet called this afternoon at his request. He said that he had explained to Mr. Lovett on Friday the great anxiety in [Page 1001] France with regard to recent bi-zonal discussions on Germany.34 Since then, he said, M. Bidault had received my brief message35 and it was appreciated. Aside from the “technical aspects” of the new level of industry proposals, he said, the French Government and public opinion attached the greatest importance to the security problem raised for France. He did not wish to repeat what he had told Mr. Lovett but merely wished to say that much use was being made in France of the belief that the recovery of Germany was being given priority over that of France and other Allies. France did not believe that European steel production should be on the same pattern as before the war. Under the Monnet Plan36 there was provision for a considerable increase in French steel production which France felt should to that extent replace German steel. The French further objected to the proposals for management of the Ruhr coal mines (i.e., turning them back to more direct German operation). M. Bidault felt so strongly that the proposed agreement on the level of industry and any announcement concerning it should be postponed that he was prepared to take a plane for Washington to discuss it.

I told M. Bonnet briefly of the various proposals at Moscow for the increase in the German level of industry where the Soviet Union had suggested a German steel output of 13 million tons. When it became apparent that there could be no agreement on the economic unification of Germany at Moscow Mr. Bevin had suggested the immediate announcement of an increase in the bi-zonal level of industry envisaging a steel output of some 10 million tons. I had felt that this would not be wise at that time and that we did not have enough data to know what the proper level should be. We had therefore agreed that there would be no announcement at Moscow but that we would have our bi-zonal authorities undertake an immediate study with a view to announcing the conclusions within 30 to 60 days. The study proved more complicated than we had anticipated and discussion was consequently long-drawn out. The British and American zonal authorities just happened to reach conclusions at the time of the Paris talks. I said that I could well understand the French worries from the point of view of security in view of the number of times M. Bonnet’s country had been invaded by the Germans and what it had suffered from them. Personally, I did not feel that Germany could be a danger to France for many years to come and I was convinced that the Soviet [Page 1002] Union shared this feeling, otherwise, they would not have proposed a German steel level of 13 million tons. The danger, as I saw it, to France would be a Germany controlled by the Soviet Union with German military potential utilized in alliance with the Soviet. This I thought was the real menace for France since it is clear the Soviet régime wants to use Germany for its own advantages. It is not to France’s interest to have the Soviet dominate Germany.

There was one aspect of the question which perhaps was not fully appreciated in France, I said, namely, the matter of American appropriations for the costs of our occupation in Germany. The War Department is finding it more and more difficult to obtain approval for its appropriations and insists that it is the one which has to carry the battle with Congress. This was not entirely true since I joined in the support of their appropriations and it seemed to me as though I had appeared before about every Committee on the Hill. We have just had news that the appropriations for Germany, Austria, Korea and Japan have been cut by $175,000,000 so that as it stands now we only have enough funds to carry us through March. We cannot count on a deficiency appropriation after that time for we are then charged by Congress with failure to allocate appropriated funds so that they will last for the full year. In addition the British have told us that they are having difficulty holding up their financial end in the bi-zonal area and have indicated that they will not long be able to do so. I thought the French Government should know of these difficulties. The principal objective at the present seems to me to get increased coal production which is the one thing all Europe needs and then to get it properly allocated.

I said there was one aspect of the matter which I did not fully understand and that is why Mr. Bidault wanted publicity concerning the level of industry agreement. I said that now Molotov knows all about the difficulties and would certainly make full use of the public discussion. I supposed Mr. Bidault’s attitude on German industry would help him politically in France.

Mr. Bonnet replied that leaks concerning the impending level of industry agreement had come out first from Germany and coupled with the announcement of our new directive to General Clay had created such agitation in France and had given such ammunition to the Communists that Mr. Bidault felt that he had to make his position clear. He said that his Government could not see the urgency of proceeding with the agreement since German industry will probably not reach the level already accepted by quadripartite agreement for several years. I said that while this was true our people in Germany said that it was important to let the Germans know what plants would [Page 1003] be retained and which ones would be destroyed. Otherwise the uncertainty made it difficult to get them in operation.

The Ambassador said that he had been authorized to tell me that if the CFM meeting in November did not reach quadri-partite agreement, France would be prepared to join her zone to the British-American zones. His Government felt that to raise the level of industry on a bi-zonal basis went beyond zonal authority and was contrary to quadripartite agreements. It could not properly be undertaken prior to the November CFM.

He emphasized France’s willingness to consult on ways and means of increasing coal output and offered to send engineers. He said that France had had some of the same problems in getting production in its own mines where the miners and their families had been underfed as well as in the Saar and he thought France could make a real contribution.

I handed the Ambassador for his information a copy of the attached message sent to Bidault this afternoon.37 He read it and expressed his satisfaction. He said that he knew Mr. Bidault would appreciate our agreement to withhold any further public announcement of the revised bizonal level of industry until the French Government had been consulted.

  1. Under Secretary of State Lovett’s memorandum of his conversation with Ambassador Bonnet on July 18 is not printed (740.00119 Control (Germany)/7–1847).
  2. The reference here is to the Secretary of State’s message of July 18 to Foreign Minister Bidault, the text of which is given in footnote 39, p. 1003.
  3. Plan for French economic reconstruction and modernization, prepared under the general supervision of Jean Monnet and approved by the French Government in January 1947.
  4. For the text of the message under reference, see infra.