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

740.00119 Control (Germany)/11–1048

The Acting Secretary of State to the Ambassador in the United Kingdom (Douglas)¹

secret

[Washington,] November 10, 1948.

No. 459.

Sir: Reference is made to the Department’s telegram Number 3969 of October 15, 1948² requesting you to serve as the principal representative of the United States at the discussions which are to take place in London in early November to draft a detailed agreement setting up an International Authority for the Ruhr. As you know, in discussions at London earlier this year, an agreement was reached by the United States, Great Britain and France, in consultation with Belgium, Luxembourg and the Netherlands, on the principles which should govern the creation of an International Authority for the Ruhr. The discussions which are now to take place have for their purpose the drafting in proper technical form of an agreement based upon the principles set forth in Annex C of the London Agreement, subject to the various points of clarification included in Annex D of the Agreement.³

2. Annex D of the London Agreement provides that the Governments of the Netherlands, Belgium and Luxembourg shall be fully associated with the preparation of the detailed agreement. The United States Government understands that this means they will participate fully in the forthcoming discussions, without prejudice to the right of the Governments of the United States, Great Britain and France as powers in occupation of the Western Zones of Germany, to make such decisions finally as they may deem appropriate in the light of their special responsibilities as occupying powers.

3. Although the London recommendations were accepted by the French Government, in communicating its acceptance to the Governments of the United States and the United Kingdom the French Government stated it had been instructed by the French National Assembly to reaffirm the French position as to the necessity of internationalizing the mines and basic industries of the Ruhr.⁴ In the light of recent diplomatic correspondence between this Government and the French Government, it is apparent that the French representative at the forthcoming discussions will seek agreement to a revision of the London Agreement of a character which would provide for international ownership and management of the coal and coke resources and steel plants of the Ruhr area. As you know, the United States Government has consistently opposed the vesting in an international body of ownership or management functions with respect to the Ruhr industries. This Government considers that any such arrangement would be unworkable. This matter was discussed in considerable detail in the earlier London discussions and has been discussed on various other occasions. The United States Government believes that the various considerations relating to it have been fully brought out in the past. If the representatives of the French Government request a change in the provisions of the London Agreement along the lines suggested above during the forthcoming discussions, you should make clear that the United States Government is unwilling to consider any change in the basic principles incorporated in the portion of the London Agreement dealing with the Ruhr and considers the meeting to be solely for the purpose of drawing up a detailed agreement on the basis of these principles, as was agreed in paragraph 12 of Annex C of the Agreement.

The French representative may also raise for discussion the effect on the question of the ultimate ownership of Ruhr industries of the plan developed by Military Government in the bizonal area of Germany for the reorganization of German coal, iron and steel industries. You will receive separate instructions⁵ on how to deal with this issue.

The French representative may also propose that the Ruhr Authority be given power to make allocations of coal, coke and steel to industries within Germany. You should likewise oppose such a proposal as being outside the terms of the London Agreement.

4. The Ruhr control has security implications in denying to Germany the possibility of using exclusive jurisdiction over the resources of the Ruhr area as a means of reviving German aggressive powers or of imposing German economic domination on other countries. The United States wishes to see the project developed not only from this negative viewpoint but as a positive part of the program for European economic recovery and as a step toward the larger degree of Western European cooperation and economic integration which it is one of the objectives of the Recovery Program to foster. While the United States Government looks to the Organization for European Economic Cooperation as the major instrumentality for achieving this objective, it would like to see some provision included in the Ruhr agreement which might be used as a basis for the eventual development of the Ruhr control into a broader approach to the problem of assuring effective utilization of the Ruhr resources, as well as other related resources of Western Europe, for the common good. You will be furnished later with a suggested draft of such a provision.

Although the United States recognizes that the necessity for the establishment of such a control has stemmed from the importance of the Ruhr industrial complex as a base for aggression, it feels that arrangements for the future should not be considered a punitive measure. It believes that the success of any continued arrangement of this character must depend in the long run on a substantial measure of German cooperation, and that the agreement must be so drawn as to encourage such cooperation.

5. It is the desire of the United States Government that the arrangements for the control of the Ruhr be such as to carry out effectively the principles of the London Agreement. The establishment of international control over the resources of an area such as the Ruhr constitutes a novel experiment in international relationships. The Ruhr control owes its existence to security considerations and is made possible by the ability of the Allies to impose it on Germany. While it has therefore limited direct applicability to other problems of access to basic materials, the body of experience developed by the Authority might be of value in dealing with other situations where a concentration of resources could be developed by common action for the common good of the nations dependent on such resources.

6. The discussions which are to take place in London should result in the preparation of a text of a draft agreement which will be submitted to the six Governments with a recommendation that they approve its signature. The Department assumes that one of the Governments participating in the discussions, presumably the British Government, will be asked to assume responsibility for making the necessary arrangements for the signature of the agreement. As you know, under the London Agreement, the International Authority must begin the exercise of its functions prior to the creation of a provisional German government. The United States Government would not wish to have the creation of a provisional German government deferred as a result of delays in connection with the preparation of a Ruhr agreement and attaches importance, therefore, to the speedy conclusion of the drafting of the agreement and its approval and signature by the Governments concerned.

Insofar as the United States is concerned, the present plan is not to submit the agreement to the Senate for advice and consent to ratification in accordance with treaty-making procedure, but to conclude it under the President’s executive powers. For this reason, the United States Government would not wish to have incorporated in the agreement provisions of a character which would be inappropriate for an executive agreement. It is not believed that the United States position on this point should give rise to particular difficulties in the negotiation of the agreement. Most of the matters which would be inappropriate for inclusion in an executive agreement would relate to the period after a peace settlement and cannot be finally resolved at the present time.

7. The arrangements for the control of the Ruhr included in the London Agreement are of continuing character and are designed so that they could extend into the period after a German peace settlement is concluded. At the same time, it must be recognized that the occupying Powers assumed their authority in Germany on behalf of the interests of the United Nations as a whole and that the three Powers do not have the power to bind the other countries at war with Germany with respect to the provisions of a peace settlement. In order to cover this point, the agreement on the Ruhr should provide that the arrangement should continue until the peace settlement and thereafter as provided in the peace settlement.

8. In connection with the discussion of the Berlin case in the Security Council, the United States has stated its willingness under certain conditions to take part in a CFM meeting on Germany. If any such meeting were to take place after the Ruhr Authority agreement had gone into effect, the Western occupying powers must be in a position to negotiate on matters which might touch the Ruhr. If the Ruhr Authority agreement could be modified or terminated only with the consent of the Benelux countries, the occupying powers would have limited their freedom of negotiation. In this connection it should be noted that Annex C of the London Agreement is in form an agreement between the occupying powers “after consultation” with the Benelux Governments and Annex D provides merely that the Benelux countries “shall be fully associated with the preparation” of the definitive agreement. There is no formal commitment that their status should be the same as that of the occupying powers. In addition, as was stated in the Communiqué of June 7, 1948⁶ published at the conclusion of the London discussions, the recommendations reached at the London meeting did not preclude eventual Four Power agreement on the German problem. Accordingly, it is the United States position that the agreement (1) should be subject to amendment only with the consent of all signatories (including the Benelux countries) but (2) should be subject to termination by the occupying powers after consultation with the other signatories, i.e., the Benelux countries.

9. While it is necessary to preserve the power to make changes in the arrangement in the peace settlement and while the freedom of action of the Occupying Powers in any Four Power discussion must be preserved, it is the intention of the United States to support, both in any Four Power discussions which may take place regarding Germany and in the wider discussions which would be involved in the preparation of a German peace settlement, the basic principles of the arrangement for the control of the Ruhr included in the London Agreement. You are authorized to state this position and, if necessary, to confirm it in writing. You should make clear in so doing that the United States does not regard the three Occupying Powers as obligated to insist in any Four Power or broader discussions upon the adoption in all its details of the arrangements agreed by the six powers for the control of the Ruhr.

10. For your confidential information, the trend of thinking within the Department is that, in the context of a quadripartite settlement of the German problem, membership of the Ruhr Authority should probably be confined, after the relinquishment of Allied supreme authority in Germany, to France, the Benelux countries, Great Britain and Germany. Under these conditions both the United States and the Soviet Union would be excluded. This is not, however, a firm Department position. Any proposal of this kind would, of course, be discussed with the British and French Governments before it was suggested at a quadripartite meeting. It is not believed that this line of thinking need affect the drafting of the Ruhr agreement on the basis of the London discussions provided the provision discussed above regarding termination by the three Occupying Powers is included.

11. It is possible that before discussions of the text of the Ruhr agreement are completed, a quadripartite meeting on German problems might be convened. The six Powers have already indicated publicly that the London Agreement does not stand in the way of quadripartite agreement, and, in general, it is the view of this Government that the implementation of the London Agreement should proceed promptly. However, some embarrassment might be involved to the Western Powers if a six-power meeting on the Ruhr without Soviet participation were being carried on at the same time that the Ruhr and other problems were being discussed in the Council of Foreign Ministers. If the problem should arise, it will have to be dealt with in the light of the circumstances prevailing at the time, but it is possible that this Government would wish to have the discussions of the Ruhr meeting recess during the continuation of any quadripartite discussions of Germany.

12. It is believed that the following will probably be the principal points which will arise in connection with the drafting of the Ruhr agreement:

[Here follow sub-sections dealing with the following points: original signatories to the Agreement, accession by other countries, purpose of the Agreement, definition of the Ruhr, products subject to control, standards governing the operation of the Ruhr Authority, representation on the Authority, staff of the Authority, administrative costs, rights reserved to the Military Government, sanctions, and functions of the Authority with respect to property.]

13. Although it is not directly a part of the task to be accomplished at the forthcoming discussions, it is believed that informal discussions might well take place with a view to commencing the organization of the Ruhr Authority. In this connection, there are several points on which discussions can usefully be held coincidentally with the drafting of the agreement. These are (1) the designation of an executive secretary of the Authority; (2) the possibility of an advance to the Authority by the signatory Governments of working funds, pending the establishment of a budget; and (3) the extent to which the assistance of Military Government in Germany will be required to enable the Authority to find suitable quarters and other facilities, and quarters for its staff. With regard to the second point, you will be advised further as to the extent, if any, to which the United States could make some advance on its contribution to the budgetary cost of the Authority.

14. There are being furnished to you separately for your possible use during the negotiations, a draft of an agreement to establish the International Authority for the Ruhr, which has been prepared in the Department, together with memoranda commenting on various problems which arise in the drafting or which may arise otherwise during the course of the discussions.⁷

15. It has not been possible to reach a full coordination of views on the subjects dealt with in this instruction with the United States Military Governor in Germany. You should, during the course of the discussions, consult with the United States Military Governor in Germany on important matters affecting Military Government. General Clay has been asked to provide you with one or more advisers to assist you during the course of the negotiations, and you will, in the normal course, receive his views through them. For your information, there is attached as Enclosure No. 3 a letter of November 5, 1948 from the Chief of the Civil Affairs Division of the Department of Army which indicates that that Department has authorized General Clay to take initial responsibility on this subject.⁸ If, in your judgment, any suggestions regarding the draft agreement made by the Office of Military Government conflict with these inductions, you should submit them to the Department, together with your recommendations, for resolution in Washington.

The Economic Cooperation Administration has, at the Department’s request, designated Mr. Saul Nelson to act as an adviser to you for so long as is necessary. He will arrive in London approximately November 27.

Very truly yours,

For the Acting Secretary of State:

Paul H. Nitze

1. This instruction was prepared in draft by Wayne Jackson, Jacques Reinstein, Ben Brown, and Daniel Margolies of the Department of State and embodied the conclusions reached by the Informal Working Group on the International Control of the Ruhr. It was circulated by the Informal Working Group to interested offices of the Department of State as document ICR D–26, November 4, for comment and revision and was subsequently discussed with Ambassador Douglas, who was in Washington briefly on consultation.
2. Not printed.
3. Annex C of the Report of the London Conference on Germany, June 1, 1948 (p. 309) is the same as document TRI/16 (Final), May 26, p. 285. Annex D is the same as document TRI/23 (Final), May 26, p. 290.
4. Regarding the French note of June 19 under reference here, see the editorial note, p. 337.
5. Telegram 4277, ToRuhr 2, November 10, to London, not printed.
6. Ante, p. 313.
7. The draft agreement promised here was subsequently transmitted to London as an enclosure to instruction 467, November 15, neither printed (740.00119 Control (Germany)/11–1548). Regarding this draft and its relationship to the draft agreement circulated to London Conference on the Ruhr as document RC/3, November 12 (p. 484), see footnote 1 to the last-named document.
8. The letter under reference here is not printed.