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

862.6362/9–1247: Telegram

The Political Adviser for Germany ( Murphy ) to the Acting Secretary of State

secret
urgent

Berlin , September 12, 1947—10 p.m.

3087. Personal for Lovett. Below is text of cable⁷¹ OMGUS to War reporting results Berlin coal discussions.

Three principal points have been covered in tripartite coal talks with agreement on first two. We are able to meet French requirements for coke to their complete satisfaction. We have also reviewed French proposals for withdrawal of Saar coal and consider them acceptable. Concomitant adjustment of sliding scale to reflect such withdrawals similarly agreed. All Saar discussions on hypothetical basis with French readily admitting that no withdrawals would be made until settlement Saar status.

Agreement on coke reads as follows:

• “1. The three delegations considered the requirements of coke exports as submitted by the French delegation and agreed that those requirements were within the capacity of the German coking industry at the levels of production of the coal industry as anticipated in the reply given to the Committee of European Economic Cooperation.
• “2. They recommend that a statement be made to ECO or its successor organization that when the daily gross clean hard coal output of the Ruhr and Aachen reaches 300,000, 330,000, 350,000 and 400,000 tons per day, the bizonal authorities will be able to include within the total export of net merchantable fuel 7.6, 8.4, 9.2 and ten million tons of coke respectively, if in fact this tonnage of coke is required by the member countries of the organization.
• “3. At the same time the members of the organization should be informed that if this proportion of coke is exported to the receiving countries, it will be necessary to alter the proportions of other qualities of fuel made available for export.
• “4. The attention of ECO or its successor organization should be drawn to the fact that the increased proportion of coke exports may tend to accentuate the already apparent transport difficulties owing to the greater bulk of coke as compared with coal.
• “5. In the event that the increased coking program necessary to meet the estimated total coke requirement for both indigenous and export consumption results in the bizonal area being unable to utilize economically the whole production of gas, the export tonnage level shall be adjusted to account for the losses of gas due to such excess coke production caused by export demands.
• “6. Any surplus gas arising from the circumstances referred to in paragraph five above and exported from Germany shall be calculated on an equivalent coal tonnage value and deducted from the German coal deliveries to the nation importing the gas.”

Agreement on Saar hypothesis reads as follows:

• “1. As a hypothesis, which it would be useful to look into without commitment pending discussions at government level, the three delegations examined the French proposals for the gradual removal of Saar production from the German pool.
• “2. It was agreed that the time factor envisaged in the plan appeared a reasonable one from the experts point of view on the assumption that it would come into force before the allocations are adopted for the first quarter of 1948 and did not reach its finality until Ruhr-Aachen output reached 330,000 tons per day, which is the output envisaged during the fourth quarter of 1949 in the replies made by the bizonal authorities to the Committee of European Economic Cooperation.
• “3. The three delegations examined the figures included in the French proposals for the French zone and the Saar internal requirements. The figures show an increase in consumption in the truncated French zone of approximately 20% over the range of the table. The three delegations felt that this was acceptable.
• “4. The French delegation point out that the table has been calculated on the basis that the French zone’s proportion of the net merchantable fuel available to the three western zones is 12.5% as calculated in the table submitted by the British delegation, but that this does not prejudice the possibility of future adjustments.”

Salient portions of Saar tables are (one thousand metric tons):

Ruhr-Aachen Daily Output	Annual Saar Contribution to German Pool	Percent of Bizonal Net Merchantable Production to be Shipped to Export and French Zone
250	5897	22. 4
260	5700	22. 7
270	5058	23. 3
280	4279	24. 1
290	3936	24. 2
300	2980	24. 9
310	2322	25. 5
320	1404	26. 2
330		27. 3

On last point, regarding projection of Moscow sliding scale, after most careful bizonal scrutiny of minimum requirements we reached conclusion that not even present 25% top export rate could be justified during period of Ruhr-Aachen production increase from 330,000 to 400,000 tons daily, if we were to reach full level of industry output when coal production reached 400,000. However, in view of our instructions, we offered to maintain 25% export rate from 330,000 to 440,000 although this means deferring attainment new level of industry until 440,000 ton figure reached, which to all practical purposes would nullify its establishment. We accept that maximum production of 440,000 tons must be reached in Germany for new level of industry to be reached in full, but do not see how we can do any more. We asked French to accept our undertaking (a) not to cut export rate below present top of sliding scale and (b) to reexamine entire position when factors involved can be more accurately assessed.

Sergent expressed satisfaction with friendly manner in which meeting had been conducted but said there would be disappointment over inability to agree on projection of sliding scale at higher percentage. He will go to Paris to discuss situation in detail and expects return here early next week. We made it quite plain that all agreements of conference must be accepted as a whole in satisfaction of French reservations at London, and that while not asking for a public announcement of acceptance of the new level of industry, we would expect no sniping from government quarters. Unless we received such assurances we said we could not undertake to ratify any of the agreements of the conference.

An agreed tripartite announcement was issued this morning as follows:

• “1. The tripartite conference on coal and coke which, as the outcome of the recent London conference has been meeting in Berlin for the past few days, has considered the various aspects of the questions which were referred to it.
• “2. The conclusions reached and matters still pending will require further study and consultation before a final announcement can be made, including reference to the respective governments. It is expected that further meetings of the conference will take place in the coming week.”

French particularly asked that nothing be said to the press beyond this announcement.

Sent Department personal for Lovett as 3087, to London personal for Douglas 333, to Paris personal for Caffery as 408.

Murphy

71. Telegram CC–1572, September 11, 1947, from Clay in Berlin to the War Department (USPolAd Germany 1947 Files: Lot F–80, Box 69, File–863.6 Coal).