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

CFM Files: Lot M–88: Box 133: File—Ruhr Authority, Vol. I: Telegram

The Military Attaché in the United Kingdom ( Leonard ) to the Department of the Army

secret
priority

London , 12 November 1948.

74227. From MilAttaché London England sgd Leonard fr F S [G] Hannaman to Dept of Army Wash DC for Draper. Have discussed with State representatives and Ambassador Douglas draft Ruhr agreement¹ and draft instructions prepared by State² but not yet coordinated with Army. There are four points which we consider of major importance.

1. State draft adheres to general form of annex C and is a mélange of instructions to the Ruhr authority and to the Military Governors, which we consider undesirable. OMGUS draft³ attempted avoid this difficulty by eliminating any instruction to Military Governors and using such language as “The authority will look to the Military Governors for implementation of its decisions”. British draft⁴ attempts somewhat less successfully we feel, to do the same thing. OMGUS believes its approach would give the [best solution], provided the concomitant weakening of MG undertakings does not cause the French to take fright. As an alternative; (there could be two documents, one a charter for the authority and the other a directive to the MG. We consider this alternative less desirable and decided against it when preparing OMGUS draft.
In presenting State draft to conference, it is planned to make a specific reserve as to the ultimate form of the agreement/charter, so that we are not committed from the start to the mélange.

2. State draft provides governments shall be members of authority instead of “Representative of occupying powers” as agreed in Annex C. This in itself would probably be of no substantial importance were it not for clearly expressed intent of State draft instructions to have US representative be appointed by Washington for purpose of coordinating various US interests in European political and economic fields, and at the same time to have special Military Government representatives to cast the German vote. See comments our CC 6626⁵ on this point. Both Clay and Douglas recall that at London meetings it was understood that MG would provide US representative on authority and we are at a loss to understand why this change is made or how anyone could expect the US position to be effective on the authority if one US representative is responsible directly to Washington and the other to Washington via Berlin. Do not believe we need further emphasize importance we attach to this point.

3. Appointment of German representative. See our CC 6626, State draft adheres to language of annex C, and delegation has no instructions to alter, although they and Douglas see force of our argument that our language will be of great political and psychological value in Germany and should make possible a more willing and cooperative attitude by Germany than if we hold out no real hope that Germans will be able to name their own representative. If we stick to present state language we do not feel it likely that French will ever be willing to liberalize, so for the moment this paragraph is being cut out of the draft until further instructions are received from Washington.

4. The proposed annex to the agreement regarding relationship of MG–OEEC and the authority is wholly unrealistic to OMGUS, and we strongly urge that it be dropped in its entirety. The authority would be placed in a position where it passed upon the decisions of the Military Governors and dictated the position to be taken by the Bizone representatives on OEEC. To all intents and purposes it would directly control the economic life of the Bizone.

We see no need of any such provisions. The OEEC, on which authority members are represented, will determine whether or not the Bizone programs are acceptable and the authority, as provided in annex C, will then implement such programs by its allocations. To give the authority the right to determine what program Bizone may submit to OEEC is to violate spirit and probably letter of Bizonal undertakings under ECA bilateral agreement and OEEC convention. [If this is done, it completely destroys our rights in financial and economic fields under fusion agreement and makes it virtually impossible for Military Government to be responsible for economic development during period of US financial support.⁶]

In view of fact State draft completely ignores previous OMGUS comments on this point, trust you will take up promptly with State.⁷ Meanwhile, it has been agreed here not to mention proposed Annex to the meeting. Wilkinson leaving London today. Hannaman remaining. Please cable your comments soonest to CINCEUR Berlin and also CINCEUR Frankfurt Military Post.

[

Hannaman

]

1. The U.S. draft agreement on international authority for the Ruhr, circulated to the London Conference on the Ruhr as document RC/3, November 12, p. 484, conforms closely to a draft agreement prepared in Washington by the Informal Working Group on the International Control of the Ruhr. Regarding the relationship between document RC/2 and the draft agreement prepared in Washington, see footnote 1 to the former paper.
2. See instruction 459, November 10, to London, p. 465.
3. See message CC–6171, October 3, from General Clay, p. 449.
4. Document RC/1, November 11, not printed.
5. OMGUS message CC–6626, November 5, from Berlin, not printed.
6. The bracketed sentence was added to this message as a result of message CC–6714, November 13, from General Clay in Berlin, not printed (CFM Files, Lot M–88, Box 133, File—Ruhr Authority, volume i ).
7. Department of the Army message Warx–92574, November 15, to General Clay at Berlin, not printed, stated that the Department of State and the Department of the Army had agreed that a resolution of OEEC problem should await the arrival in London of Saul Nelson who would serve as ECA adviser to Ambassador Douglas for the London Conference on the Ruhr. (CFM Files, Lot M–88, Box 133, File—Ruhr Authority, volume i )