Foreign Relations of the United States, 1948, Germany and Austria, Volume II

740.00119 Council/5–1948: Telegram

The Secretary of State to the Embassy in the United Kingdom

secret
us urgent
niact

Washington, May 20, 1948—8 p. m.

1843. Secdel 1583. Dept appreciates skillful USDel work reflected in proposal reported Delsec 1741, May 19.¹ Subject to following points you are authorized conclude agreement on basis this proposal:

1. Dept is prepared to abandon its previous position that resumption ACA activities generally is a condition precedent to reparation discussions with Sovs, but it understands that after notification to Sovs as indicated para 1 (2) urtel, initiative will be left with Sovs to react to proposals on set aside and reciprocal deliveries.

2. There is a possibility Sov response may include demand for reactivation ACA allocation machinery which we should probably have to discuss. This would delay IARA allocations. Hence Dept considers it essential to ensure that allocations to IARA have become to maximum extent accomplished facts before whole reparation issue becomes involved with resumption ACA activities, which though unlikely must be considered possible. This can best be done by immediate agreement that plants on lists one thru four be allocated by zone commanders.

3. Appears from Delsec 1743, Embstel 2164, May 19² that USDel has misunderstood situation re these lists. Plants listed in Secdel 1577 are plants on lists one thru four as notified Secdel 1576.³ As stated Embstel 1417 [1487?] of Apr 10,⁴ and in minutes of Tech Mission discussions at London these lists were shown to Brit and Fr and produced favorable reaction rather than suspicion. They have also been discussed on several occasions with Brit and Fr in Washington. If no agreement for action on basis these lists, you shld appreciate that no plants can be allocated until further discussion of Tech Mission. It has always been anticipated, and has been so presented to Brit and Fr in Wash, that plants wld be cleared in groups in effort avoid complete stoppage of flow until all plants had been finally considered by Cabinet Group. Hope to have additional lists of plants cleared for allocation in two–three weeks.

4. If 75–25 division plants these lists desired by Brit-Fr, concept of broad industrial category your para 1(1) does not appear wholly applicable and some arbitrary basis division shld be followed in interest of speed.

5. Prohibited list airmailed May 17 as stated Secdel 1575.⁵ If not yet recd advise Niact and list will be telegraphed.

6. We understand from you Clay concurs. On this understanding, Army concurs but (a) points out its belief that exclusion of items of equipment prohibited from export will be very difficult for zone commanders to implement and (b) makes strong recommendation that Soviet be required make reciprocal deliveries already due before any additional capital equipment delivered.

Marshall

1. London telegram 2163, p. 254.
2. Not printed; it reported that British and French representatives were seriously concerned over the uncertainty regarding the contents of the lists of items, shipment of which to the U.S.S.R. and the Soviet satellites would be prohibited. They were also concerned regarding American views on deletions from lists of plants available for reparations. (740.00119 Council/5–1948)
3. Telegram 1749, Secdel 1577, May 14, to London, is not printed. For telegram 1746, Secdel 1576, May 13, to London, see p. 241.
4. Post, p. 746.
5. Not printed.