862.60/7–2447
The Assistant Secretary of State ( Hilldring ) to the Secretary of State
Subject: Suggested Position in Discussion40 with the Secretary of War Concerning Relationship of German Level of Industry Agreement with Marshall Plan.
With the concurrence of the War Department, we have advised Bidault that in order to give time for a full consideration of the views of the French Government concerning the future level of industry in the bizonal area of Germany, the U.S. Government will suspend further announcement upon the proposal for the revised level of industry until the French Government has had a reasonable opportunity to discuss the matter with the U.S. and U.K. Governments. It is important now (1) to develop a fixed U.S. Governmental position regarding the relationship between the German level of industry plan and the general problems of European reconstruction which will evolve out of the Paris conference and the Marshall Plan and (2) to decide upon the appropriate method of consultation with the French Government pursuant to your commitment to Bidault.
In your discussion with the Secretary of War concerning the first problem, it is suggested that you discuss the following points:
- a.
- The Department of State has now been able to obtain informal assurance from the French Government of adherence to the bizonal fusion. It is expected that this action will take place in November of this year.
- b.
- The Department has succeeded in obtaining from Mr. Bevin agreement to “put in cold storage” the question of socialization of the Ruhr-Aachen coal industry.
Both of these commitments are, of course, of direct and substantial benefit to our military government objectives in Germany. The French [Page 1005] commitment to join the fusion climaxes a protracted and patient effort on our part. There should be no doubt in the mind of the Secretary of War or his associates that the Department of State possesses an awareness of and a vital interest in the problems faced by our military authorities in Germany.
With respect to the Level of Industry Agreement negotiated by Generals Clay and Robertson, although the Department has not yet received its text, it is satisfied that the Agreement is wholly consistent with the guidance previously furnished to General Clay and has no present doubts concerning its validity. The Department has every confidence in the Agreement and will be prepared to defend it with the utmost vigor against suggestions for modification. At the same time, the Department believes that the U.S. Government cannot with propriety, particularly with regard to the basic security interest of this country in the success of an integrated plan for European recovery, decide at this moment that no conceivably meritorious suggestion for modification of the Level of Industry Agreement may be presented as a result of the work of the Paris Conference. The Department’s view is one of elementary prudence. It reflects neither criticism of the Agreement nor doubts as to its soundness. It is based upon the position that the recovery of Europe and the recovery of Germany are two aspects of one problem and that a sound German economy cannot survive in a prostrate Europe any more than that European reconstruction can be achieved without a stable, democratic Germany.
Suggestions concerning methods of consultation with the French Government are embodied in a separate memorandum being prepared by the Office of European Affairs.41