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

CFM Files: Lot M–88: Box 121: File—Occupation Statute, Cables: Telegram

The United States Military Governor for Germany (Clay) to the Department of the Army

secret
priority

[Berlin,] 3 October 1948.

CC–6171. To Dept of Army for Chief of Staff for CSCAD from CINCEUR sgd Clay. Reur W–90212.¹ Our proposal as to draft charter has been painstakingly developed reflect agreement reached at London² without imposing further restrictions. We regret delay in submission to you. Text follows:

Charter of the International Authority for the Ruhr³

i. declaration of purposes

Whereas permanent international security and the general economic recovery of Europe require that the coal, coke and steel resources of the Ruhr shall not in the future be used for the purpose of aggression, but shall be dedicated to the ends of enduring peace and that in furtherance of their common political and economic well-being, the countries of Europe cooperating in the common economic good shall, without discrimination, hereafter be guaranteed access to said resources.

Now Therefore, to accomplish the purposes of the foregoing declaration and to carry out the provisions of the London Agreements, the Govts of the United States, the United Kingdom, the Republic of France and the Govts of the Netherlands, Belgium and Luxembourg (hereinafter referred to as the “Signatory Governments”), solemnly declare and mutually agree that control of the coal, coke and steel resources of the Ruhr shall be exercised by an international body whose composition, rights, powers and obligations shall be as hereinafter provided.

ii. organization and membership

1. There is hereby established an agency to be known as the International Authority for the Ruhr (hereinafter referred to as “the Authority”) consisting of seven (7) members, six of whom shall severally be designated by the Signatory Govts. The seventh member shall represent the interests of Germany and shall be appointed as hereinafter provided.

2. The German member of the Authority shall initially be designated by the Signatory Govts who share the responsibility for the economic administration of that part of Germany which includes the Ruhr (hereinafter referred to as the “Occupying Powers concerned”). Such designation shall be after consultation with the responsible German authorities. As and when a provisional Government is established for that part of Germany which includes the Ruhr (hereinafter referred to as “the German Govt”), such German Govt shall have the right to confirm the representative selected by the Occupying Powers concerned, or at its option to appoint some other representative.

iii. determinations of the authority

1. All determinations and decisions of the Authority shall be reached by a numerical majority of the aggregate of votes allotted to its several members.

2. The voting rights of the several members of the Authority shall be as follows:

United States:	three (3) votes
United Kingdom:	three (3) votes
France:	three (3) votes
Germany:	three (3) votes
The Netherlands:	one (1) vote
Belgium:	one (1) vote
Luxembourg:	one (1) vote

3. Unless and until the Signatory Govts agree otherwise, the votes allotted to Germany shall be trusteed with and shall be cast by, the Occupying Powers concerned.

4. Anything herein to the contrary notwithstanding, Germany shall not be entitled to vote on any question or matter involving:

a. Her default or alleged default in the performance of any obligations hereafter imposed upon her pursuant to the terms hereof.

b. The supply of coal, coke and steel products to any German industry which is or may hereafter be prohibited or limited in the interests of disarmament or security.

iv. functions of the authority

The functions of the Authority, which shall be implemented as specifically set forth in Article V hereof, shall be as follows:

1. Allocations of Coal, Coke and Steel The Authority shall make the division, as between German consumption and export, of coal, coke and steel from the Ruhr. Such division shall:

a. be subject to the provisions of any pertinent existing or future agreements among the Signatory Powers, with respect to the allocation of coal, coke and steel.

b. take due regard of the essential needs of Germany to achieve the reestablishment of a reasonable standard of living on a self-sufficiency basis.

c. Be consistent with the programs approved by the Organization for European Economic Cooperation, for the recovery of the participating countries thereof.

2. Uneconomic Practices The Authority shall ensure that the German Authorities do not institute, carry out or permit artificial measures or discriminatory practices which would distort the movement of Ruhr coal, coke and steel in international trade, except for such measures of protection as may be approved by the Authority.

3. Protection of Foreign Interests Within the framework of existing or future agreements among the Signatory Governments, the Authority shall bring to the attention of the Military Governors of the Occupying Powers concerned measures which would ensure protection for coal, coke and steel enterprises in the Ruhr which involve foreign interests.

4. Information and Investigations In order to carry out its fuctions under this Article IV hereof, the Authority is empowered:

a. to request and receive such regular and special reports on production, distribution and consumption of Ruhr coal, coke and steel as may be necessary or appropriate.

b. to verify the information so received or otherwise at its disposal by enquiries on the spot and by the subpoena and examination of witnesses.

c. to call for information about supplies of coal, coke and steel from sources other than the Ruhr.

v. implementation of functions

1. During the Control Period During the period (hereinafter referred to as the Control Period) in which the Occupying Powers concerned exercise ultimate authority over that portion of Germany which includes the Ruhr, the determinations and findings of the Authority shall be transmitted to the Military Governors of the Occupying Powers concerned for implementation. During the Control Period the Authority will look to the Military Governors of the Occupying Powers concerned to effect compliance on the part of the German Govt with the determinations of the Authority. During said period, the provisions of Article VII hereof shall not be applicable and may not be invoked by the Authority.

Said Military Governors shall under the provisions of the London Agreements, retain and maintain adequate control over the management of the coal and coke industry of the Ruhr, and will, during the Control Period, or until such earlier time as may be agreed upon among the Signatory Govts, maintain or cause to be maintained that degree of control in respect of the coal, coke and steel industries of the Ruhr as may be necessary or appropriate fully to effectuate the determinations of the Authority.

2. After the Control Period As and when the Military Governors of the Occupying Powers concerned have relinquished ultimate authority and control over the coal, coke and steel industries of the Ruhr, the implementation of the functions of the Authority as set forth in Article IV hereof shall cease to be the responsibility of the Military Governors of the Occupying Powers concerned and shall become the responsibility of the German Govt. The German Govt shall be required to maintain such controls as may be imposed upon it and as may be necessary for such implementation, unless a relaxation or modification thereof is approved by the Authority.

vi. control of prohibited or limited industries

The Signatory Governments mutually agree that the disarmament and demilitarization of Germany, particularly in respect of the industrial potential of the Ruhr, is a matter of paramount concern to them and accordingly:

1. During the Control Period, the Authority will look to the Military Governors of the Occupying Powers concerned to retain and maintain such powers and controls as may be necessary to enforce the disarmament of Germany, including the power to control the supply of coal, coke and steel from the Ruhr to any industries which, in the interests of security, may be prohibited or limited pursuant to the terms of any existing security or disarmament agreements among the Signatory Governments or any future international agreement of like character to which said Signatory Governments may become parties.

2. At or prior to the expiration of the Control Period, the powers and controls referred to in Section 1 of this Article VI shall be transferred by the Military Governors of the Occupying Powers concerned to such International Security organizations as may be designated pursuant to the terms of the Peace Settlement or in default of such designations, to such security agency as the Signatory Powers may agree to establish for the purpose of implementing any security or disarmament agreements with respect to Germany to which they may then be parties.

vii. defaults and remedies

1. Anticipatory Default Should the German Govt fail to implement any determination of the Authority duly made pursuant to the provisions hereof, the Authority may, after a majority vote of the representatives of the Signatory Governments thereon, call the attention of the German Govt to such failure by service of notice thereof in writing upon the German member of the Authority. Such notice shall afford the German Govt a reasonable time within which to correct such failure, or in the alternative, to appear before the representatives of the Signatory Governments on the Authority and show cause why it should not be declared in default in its obligations hereunder.

2. Declaration of Default In the event of wilful refusal on the part of the German Govt to carry out the determinations of the Authority hereunder, or in the event of its continued failure so to do after receiving notice of said failure as provided in Section 1 of this Article VII, the representatives of the Signatory Governments, by a majority vote, may declare the German Govt to be in default in its obligations hereunder.

3. Procedure on Default In the event that a default is declared as herein provided, written notice thereof accompanied by a bill of particulars with respect to said default, shall be transmitted by the Authority to the Signatory Governments. Such notice shall include the Authority’s recommendations as to the necessary and appropriate enforcement measures to be applied in the premises.

The German Govt shall have the right voluntarily to cure any default hereunder at any time prior to the institution of enforcement measures.

viii. provisions for legislation

It is understood and agreed that the Military Governors of the Occupying Powers concerned will enact, or cause to be enacted, in that part of Germany which includes the Ruhr, such legislation as in their opinion will be necessary or appropriate to carry out the provisions of this Charter.

ix. administration

1. Effective Date This Charter shall come into effect_____________.

2. Domicile The Authority shall be domiciled and its principal place of business shall be in the city ______________ Land Nord-Rhein-Westphalia.

3. Organization and By-Laws The Authority shall fix its by-laws, its rules of conduct, the pattern and size of its organization as well as its internal and external administrative procedures.

4. Chairmanship During the Control Period, the Chairmanship of the Authority shall be rotated {Semi-annually Quarterly Monthly} among the representatives of the Authority of the Occupying Powers concerned. Thereafter it shall be rotated among the representatives of all the Signatory Governments.

5. Meetings Stated meetings of the Authority shall be held monthly at its principal place of business. Special meetings of the Authority may be convened by the Chairmen upon such notice as the by-laws of the Authority may prescribe. The Authority shall keep minutes of its meetings and shall maintain a register of its determinations.

6. Executive Action The Authority shall act in an executive capacity through its Chairman. Between meetings of the Authority, its business shall be carried on by an Executive Director, selected by the representatives of the Signatory Governments, and an appropriate staff. The Executive Director shall be administratively responsible to the Chairman of the Authority.

7. Budget The Authority shall, within thirty days of its first meeting, determine its initial budget and shall thereafter determine its annual budget at least ninety days in advance of each ensuing fiscal year.

8. Costs Each Signatory Government shall be individually responsible for compensating its representative. Aside from this, the cost of the operation and maintenance of the Authority shall be borne by the Signatory Governments and Germany, in direct proportion to their respective voting power as set forth in Article III hereof. Contributions shall be deposited into the Treasury of the Authority on call of its Controller at such times and in such currencies as the Authority may determine.

9. Duration This Charter shall continue in force and effect until amended, modified or rescinded by the Signatory Powers.

In Witness Whereof the undersigned have hereunto affixed their hands and seals under the authority of their respective governments this day of October, Nineteen Hundred and Forty-Eight in the City of ____________

United States	The Netherlands
United Kingdom	Belgium
Republic of France	Luxembourg

I note State message to Harriman⁴ speaks of “convention” and you refer to “statute”, whereas Annex C to London talks provides for “agreement”. In our opinion, the basic agreement can best be set forth in a charter of the Ruhr Authority, and we are unable to see justification for adoption of a statute.

Do not understand statement “London agreement leaves unclear whether Germans are initially to make allocations, etc”. Annex C,⁵ para 5, could hardly be more explicit, and we have never had any doubt that the recommendation of allocation between export and internal use was a function of the Authority alone. On the other hand, we never conceived that the Authority would have anything to say about use made of internal allocations except in regard to limited and prohibited industries, as provided in para 9b of Annex C.

I feel that negotiation of Ruhr agreement will be difficult and devious, and consider it of great importance that our representative not only be completely briefed but be of sufficient stature to ensure proper defense of our position. We shall, of course, be prepared to assist him in every way. Would appreciate being kept informed of development of your thinking, and of your reaction to our draft charter.

[

Clay

]

1. Not printed.
2. Documents. TRI/16 (Final), May 26 and TRI/23 (Final), May 26, pp. 285 and 290.
3. An earlier version of this draft charter consisted of two documents: a draft charter and a draft directive by the Military Governors, both dated September 19. Copies of these two draft documents were transmitted to the Department under cover of a brief letter from Ambassador Murphy to Assistant Secretary of State Saltzman, dated September 30, none printed. (CFM Files, Lot M–88, Box 133, File—Ruhr Authority, volume i )
4. Telegram 3652, September 15, to Paris, supra.
5. For document TRI/16 (Final), May 26 (Annex C to the Report of the London Conference on Germany) see p. 285.