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

862.60/8–647

Memorandum by the Director of the Office of European Affairs (Hickerson) to the Under Secretary of State (Lovett)

[Washington,] August 23, 1947.

Subject: International Control of Ruhr Resources

Discussion:

The problem of dealing with the revival of German industry and its relation to the reconstruction of western Europe has reached a critical stage, both as regards the tripartite talks in London and the general economic recovery plan now under study in Paris. There can be no question that the disposition of the products of the Ruhr is one of the central factors in the preparation of the European program in Paris, not only because of the position taken by the French but because of the legitimate interest of other European nations in the rate of German recovery.

In order to meet the serious situation in Germany and to implement a decision of the US-UK Governments taken during the Moscow Conference, it has been agreed by this Government that the bizonal level of industry plan prepared by the US and UK Zone Commanders should be announced September 1st as soon as the French views have been considered.

Not only is the French Government deeply concerned that the new level of industry means that the industrial revival of Germany is being given priority in European recovery; but similar concern has been expressed in this country and the principal line of attack by the Communists on present US policy is that its principal aim is to rebuild Germany. As a counter-balance to agreeing to a higher level of industry France is seeking assurances that (a) Ruhr industrial capacity will never again be used for military purposes against France, and (b) access by western Europe to the production of the Ruhr will not be subject exclusively to the will of Germany.

Assurances that the US Government is still desirous of dealing with the problem of military security through the controls established under the terms of the Disarmament and Demilitarization Treaty have already been given to the French Government in respect to the first of these points. With respect to the second it has been agreed with the War Department that any specific proposal in this connection should be related to the peace treaty negotiations and not decided in connection with the level of industry talks.

On the other hand, it must be recognized that French cooperation is necessary both with regard to the solution of the German problem as well as with regard to the realization of the Marshall Plan for the economic recovery of Europe. There is a danger that the failure of the US Government to come to an understanding with the French at this time on a general approach to the Ruhr question might result in vocal opposition on the French part to the new level of industry plan and might so weaken the present French Government that a French political crisis could ensue either through the resignation of Bidault or the fall of the Government on this issue. The United States has always expressed a lively understanding of the French concern for security and it must be admitted that there is justice in the French conception of an inter-relation between the level of industry plan and the future of the Ruhr as affecting their security.

Furthermore, it is the considered opinion of Messrs. Clayton, Caffery and Douglas that the United States should at this time recognize the legitimate interest of France and other European countries in the allocation of Ruhr production and give assurances that it will support the inclusion in an international agreement in connection with the peace settlement of articles providing for some measure of international allocation. A more detailed analysis of the French position and proposals in this respect is contained in the attached annex.

In formulating the following recommendations it is appreciated that they are not in line with the views presently held by the War Department which is concerned lest French preoccupation with respect to their own security imperil the economic development in Germany necessary to enable the US to fulfill its responsibilities in this respect and avoid continuing heavy charges. Minimum assurances of the kind set forth are however considered in the interest of United States policy, provide a basis for a real settlement involving the western zones of Germany, and insure that the European recovery program will not be adversely affected by the legitimate concerns of European Powers. It should, of course, be understood that in giving any assurances to the French Government in this connection the United States is not committed to accept a particular method of implementation until the peace treaty goes into effect. This is important since the agreement will not be effective until a much later date at which time the political conditions in France may be very different from today. In guarding against future commitments which might benefit a France which had gone Communist we should however avoid action which increases this possibility. Any hesitancy displayed in discussing our purposes and aims in respect of Germany with other Governments tends to intensify suspicions as to these aims and strengthen the Communist line of attack.

Recommendations:

A decision on this matter is urgent in view of the present stages of the London talks (see London’s telegram no. 4579¹⁰) and is required before further instructions can be sent Douglas. It is recommended that United States policy be clarified in this respect so that the French may be informed during the London talks, that:

(1) The United States Government is prepared to agree in principle with the French and British Governments to support inclusion in an international agreement in connection with the peace settlement of Germany of provisions which would give assurances not only to France but to other European Governments that access by western Europe to the production of the Ruhr would not be subject exclusively to the will of Germany as in the past and,

(2) The United States Government is prepared as soon as the tripartite discussions in London are concluded and the level of industry announced to agree to a further tripartite exploration of the methods by which this assurance may be implemented in the peace treaty. During these discussions sympathetic consideration should be given to the inclusion in the peace treaty of articles providing for the establishment of an international board, of which Germany will be a member, to insure that the distribution of Ruhr output of coal, coke, and steel between German internal consumption and exports will be determined on an equitable basis and that German domestic consumption will be devoted to peaceful purposes only, in accordance with demilitarization and disarmament measures which are agreed in the peace settlement.

[Annex]

Memorandum Prepared in the Department of State¹¹

[Washington, undated.]

In a series of informal talks held at Paris during recent weeks, between Mr. Clayton, Ambassadors Douglas and Caffery on one side and Messrs. Bidault, Monnet, Couve de Murville and Alphand on the other, the French have set forth as their position that they do not want to hold down production in Germany and would not object to the new level of industry plan, providing assurance is obtained that (1) Ruhr resources would not again be used for military purposes against France and (2) access to the products of the Ruhr shall not be at the exclusive will of Germany, as in the past.

To bring about such assurance, M. Bidault proposed the creation of an international board which would allocate the Ruhr production of coal, iron and steel between Germany and other countries. After the peace treaty the board would be composed of representatives of the United States, the United Kingdom, France, Benelux and Germany; prior thereto it was to be composed of the same countries minus Germany. During the talks the French conceded that no special controls were required for the occupation and that their proposal referred to the post-occupation period and should be connected with the peace settlement.

In comparison with the French position at the Moscow Conference, this latest French proposal represents a very considerable concession and endeavor to meet United States views. The French have abandoned their previous demands for the political detachment of the Ruhr from Germany and for the internationalization of the Ruhr area. Furthermore, the French are willing to leave the ownership and administration of the Ruhr industry in German hands and declare no interest in the question whether the Ruhr should be nationalized or not.

The latest British proposal suggests that the coal, iron and steel industries of the Ruhr should be placed under international control with some form of public ownership in order that their resources may be used for the benefit of Europe as a whole, including Germany. The British agree on the necessity for international control, but this in their mind is connected with some form of German public ownership. Specifically, they seem to favor ownership by a German public corporation, with actual management vested in an international board of directors.

It will be recalled that Secretary Marshall stated at Moscow on April 10 as follows: “When Allied Military Government in Germany is terminated and a German government is functioning under a constitution, however, some special provision for the overseeing of Ruhr resources may be advisable”. This statement was made in connection with the general conception that the Ruhr area is only one of the key industrial concentrations of Europe, whose resources should be equitably shared by European countries. It was also stated that Germany should have responsibility for management and operation of Ruhr industries and marketing of their products, and that only if the Germans act contrary to the just interests of the other countries should the matter be referred to an international agency.

It is our understanding that the War Department and OMGUS are opposed to any international controls applicable only to the Ruhr, even in connection with a peace settlement.

In agreement with the War Department, the Department has instructed Ambassador Douglas that the French proposal on the Ruhr cannot be considered during the level of industry talks at London, although we are prepared to discuss it at an appropriate time and give sympathetic consideration to a solution of this problem. We told Clayton and Douglas that United States policy in respect to control of the Ruhr has not yet been resolved.

When Bidault was informed of this essentially negative United States policy, he stated that no French Government, neither the present one nor any succeeding one, could agree to a revised level of industry for Germany, without some assurances as to French security and access by Europe to the products of the Ruhr.

It is believed that the French Government will maintain their position during the London talks and that a serious crisis will be precipitated if we insist on the above negative position.

The present French proposal is believed to be close to United States thinking on the Ruhr problem. It appears that the basic conception behind the American approach to the Ruhr problem at Moscow may be realized, at least in Western Europe, through the Marshall Plan which aims at a coordinated and equitable utilization of key industrial resources in the interest of European economic recovery. The fundamental difference then between the present French Ruhr proposal and the United States position lies in the means for assuring the equitable distribution of Ruhr resources. The French propose positive and direct control through an international allocations board, whereas the United States suggest control by an international agency with jurisdiction to act only upon request and if German administration of the resources fails to meet just requirements of other countries. It is clear that the French and United States proposals have one common objective. They differ only in the method proposed for accomplishing this objective.

Accordingly, the United States and French positions are so close that it should be possible to formulate an agreement in principle which would leave for further settlement the method of accomplishing the common objective. Such an agreement should not commit us to acceptance of any particular method of implementation, particularly since we must be mindful of the fact that the agreement will not come into effect until a much later date, at which time the political conditions of France may be very different from today. Furthermore, it is believed that any international control of the Ruhr alone should be limited in time, on the grounds put forth at the Moscow Conference that it would be impossible to expect a country to develop along democratic lines with a group of deeply interested foreign countries in indefinite control of its prime resources.

10. Supra.
11. The source text indicates that this paper was prepared by Howard Trivers, Division of Central European Affairs; Fritz E. Oppenheimer, Special Assistant to the Legal Adviser for German-Austrian Affairs; and John C. de Wilde, Acting Associate Chief, Division of Occupied-Area Economic Affairs.