862.60/2–148: Telegram
The United States Political Adviser for Germany ( Murphy ) to the Secretary of State
259. Personal for Saltzman and Hickerson: Re last paragraph Department’s telegram 185, January 31.1
Present status Berlin conversations on Saar and technical questions thereto summarized below. Should be recalled in considering summary that to date UK has been unwilling in Berlin to make specific concessions on these Saar questions (with exception of notification to ECE on coal) until complete Saar settlement is effected.
- (1)
- Three governments have notified ECE on Saar coal.2
- (2)
- Saar trade with Bizonia: question was to fix date for establishing Saar-Bizonia trade on dollar basis. French wanted date retroactive to November 20 which was time of introduction of new currency into Saar. US/UK refused this, stating trade would go on dollar basis as of date to be mutually agreed upon. Otherwise, there would have to be most complicated renegotiation of contracts which neither US nor UK prepared to undertake. DeCarbonnel was to discuss this point in Paris.
- (3)
- Bizonia-French zone trade: French stated not prepared to discuss this matter and wanted limit talks to Saar-Bizonia trade and technical arrangements therefor. However, Clay offered French delegation here to allow French zone pay for Ruhr coal in reichsmarks. If Bizonia had deficit in trade between it and French zone this deficit would be charged against Ruhr coal. Therefore, in effect no dollar deficit could arise against Bizonia. UK strongly opposed this offer and has not changed position yet. British instructions were that Ruhr coal must be [Page 56] included in Bizonia-French zone trade and any deficit against French zone must be covered in dollars or in some other manner acceptable to US/UK. As this was best joint US/UK offer it was communicated to French. US statistics showed that Saar was big moneymaker for French zone and when eliminated French zone exports to Bizonia did not look too good to US. French then returned to Paris to consider Clay offer. However, it must be recalled that UK position was that even joint offer described above was not final until Saar reparation question was settled.
- (4)
- Reparations. French presented estimate of Saar reparations at two percent or 20,000,000 reichsmarks of German total. US–UK held this ridiculous and proposed that total value of French share would be 150,000,000 reichsmarks or about value of steel industry in Saar. This figure would practically eliminate any further French reparation claims. In a working party meeting yesterday French recognized justice of this figure in principle but proposed that it should be reduced by half because actual value of a plant is about twice what is declared to IARA. OMGUS believes that we could probably defend this French proposal and it may be that OMGUS can settle with French somewhere between 70 and 75 million reichsmarks. France would then still have other reparation claims on which it can receive something. OMGUS feels negotiations here may therefore wind up at about 70,000,000 reichsmarks as Saar deduction for overall French reparation claims.3
Just informed by French PolAd here that it is not certain whether DeCarbonnel will return this week or not although working party is continuing its discussions.
My recommendation is that if Department desires this whole Saar settlement to be included in Berlin it will have to bring pressure on UK to change its position as indicated in paragraphs 3 and 4 above. Otherwise it looks as if entire question would have to be taken up in London which indeed may be UK desire. However, I have not received any intimations from British here that they desire to postpone Saar settlement in order to use it as bargaining weapon in connection with Ruhr and other London discussions.
- Not printed; it transmitted the text of the note of January 30 from the Secretary of State to the British Ambassador, p. 49. The telegram also asked for a report on the status of the tripartite conversations on the Saar. (740.00119 Control (Germany)/1–3148)↩
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As a result of discussions during the tripartite Berlin conversations on the Saar, agreement was reached for American, British, and French representatives to the Economic Commission for Europe to present the following communication:
↩“I have the honor to inform you that the Governments of the United States, Great Britain and France have agreed to consider henceforth the coal production of the Saar and France as a common resource.
“Consequently the French Government will in the future present to the Coal Commission of the Economic Commission for Europe requirements and avail: abilities of France and the Saar inclusive, and it will be for the committee to take account of this new situation.
“Therefore, the said Governments have agreed on a plan of delivery of Saar coal to the combined US-UK Zones of Germany and the French Zone including the Saar, which will allow to the other participants of German coal exports an adequate period of time of transition between the old plan of allocation and the new situation mentioned above.” (See telegram 179, January 21, from Berlin: 740.00119 Control (Germany)/1–2148.)
A slightly different version of this communication was sent to the Executive Secretary of the Economic Commission for Europe on January 26, 1948, by the United Kingdom Delegation to the Commission. This latter text was included as Appendix A to the Economic Agreement between the United States, the United Kingdom and France, signed at Berlin, February 20, p. 73.
- Telegram 179, January 21, from Berlin, not printed, reporting on the tripartite Berlin discussions regarding the Saar, indicated that the question of the Saar frontiers had been raised briefly only to be laid aside. The United States representatives stated that the United States considered the Saar prewar frontiers should be maintained but was prepared to accept the current frontiers subject to a final decision by the peace conference. Inasmuch as the British were not authorized to press the matter of the boundaries and since both the United States and British representatives were authorized to proceed without any new agreement on the matter, the Saar boundaries would not be discussed further during the Berlin discussions. (740.00119 Control (Germany)/1–2148)↩