862.6362/9–547: Telegram

The Political Adviser for Germany (Murphy) to the Ambassador in the United Kingdom (Douglas)

top secret

319. Confirming our telephone conversation,63 Clay wired Draper 3 September substantially as follows on the subject of Saar coal and the forthcoming Berlin meeting on this subject.

At London conference we and the British agreed to meet in Berlin with the French to reconsider the question of coal export from Germany. The French proposed a graduated increase in the percentages included in the Moscow agreement to be extended beyond the limits of the Moscow agreement which stopped at a production figure of 370,000 tons per day. The French claim that their proposal was based on a gradual absorption of Saar coal into the French economy to be replaced in the American and French zones of Germany with Ruhr coal. This will of course reduce the amount of Ruhr coal available for export to other nations. As you know, in the past we have objected to replacement of Saar coal in the American and French zones of Germany by Ruhr coal because it would involve a loss of coal for other European nations and also because this reduction in export would in fact reduce our revenue.

However, in agreeing to the eventual integration of the Saar economy with the French economy we unquestionably accepted the utilization of Saar coal by France as if it were French coal. While we did not fix the date on which such integration would take place, presumably it depended upon quadripartite agreement or else an inability to obtain quadripartite agreement. Facing the fact that this integration is to take place at some time in the future, it may be well to start now with a small token reduction in utilization of Saar coal in Germany to be increased gradually as coal production in the Ruhr increases, with full absorption of the Saar coal into the French economy contemplated when the Ruhr reaches full production of approximately 400,000 tons per day. Our policy must be determined now if the coal [Page 1090] conference to take place here shortly is to be successful. I recommend that we be authorized to negotiate with the French for a gradual absorption of Saar coal into the French economy trying, on our part, not to permit this absorption to begin until production has reached 280,000 tons per day, and holding it to the minimum until Ruhr production begins to approach normal figures. I believe it is desirable to make some concession to the French in this respect but of course not to permit an immediate absorption of Saar coal in view of the serious effect it would have on exports.

The French also desire to be assured a specific percentage of coke in the Ruhr coal allocations. This can be done in part on a ton for ton basis to the extent that the gas resulting from coke production can be utilized in Germany. However, beyond that point it will be necessary to charge seven-tenths of a ton of coke as equivalent to a ton of coal. We do not know as yet what the French demands for coke will be so that we are not at this stage able to determine our ability to meet the French demand in full.

Would appreciate early advice on the premises.

Sent London personal for Douglas as 319, repeated to Department personal for Thorp as 3041.

Murphy
  1. No record of the conversation under reference has been found.