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

The United States Military Governor for Germany (Clay) to the Department of the Army 1


CC 6839. From CINCEUR Berlin Germany personal from Clay to Dept of Army Wash DC for CSCAD. I have just seen Paris 5969 to State which contains translation of French Aide-Mémoire on the Ruhr and other German problems.2 In large measure although in more restrained language this Aide-Mémoire confirms Koenig’s position in recent conference previously reported to you at which Koenig stated that French might not accept western German Government because they do not like the present climate.3

The French Aide-Mémoire shows that the Ruhr problem alone is not the disturbing factor but rather German economic recovery as a whole.

While the French Government has officially stated German recovery to be necessary to European recovery, many of its actions within Germany have been to retard such recovery.

As you know, it is my personal view that international ownership of Ruhr could lead to the necessity for forced operation of Ruhr industries. However, I am of the view that international ownership would be less disruptive than foreign control of management which would make it impossible for the responsibility of ownership to be exercised in a normal way.

I think there is some merit in French contention that Government ownership of Ruhr industries would provide too great a centralization of power in Germany. However, I doubt very much if socialization will result as, at least for the present, non-Socialist parties in Germany are in a slight majority. If in fact our established policy to allow the [Page 526] German people to resolve their future economic pattern is to be followed, it would be preferable for any form of national ownership to be at the federal level as it is certainly most undesirable to permit a single state within the Federal Government to have ownership of the industries which control and dominate German economic life.

I think that the French Government’s comments having to do with the prevention of establishment of dangerous and excessive economic concentration in the Ruhr and return of management of Nazi owners are fully prevented in the law establishing the trusteeship arrangement. The whole purpose of the law is to effect a reorganization which will prevent excessive and dangerous economic concentration and which will eliminate the Nazi influence in ownership.

However, I am even more concerned with the French comment that the participation of the representatives of Berlin at Bonn is jeopardizing the conditions for the political reconstruction of Western Germany. We have advised the French that if quadripartite Government exists in Berlin at the time the constitution is approved, it will of course be necessary to disapprove Berlin participation in Western German Government. On the other hand, if Berlin has in fact become a split city, it must be supported by Western Germany and certainly careful consideration must be given under the conditions which exist at the time the constitution is approved to the inclusion of Berlin in Western German Government. It has been made clear here that the French do not really want a united Germany with Berlin as the capital. On the other hand, our policy calls for a united Germany. Certainly, any action on our part which would indicate that we did not want a united Germany would reduce greatly our influence in Western Germany.

The French also point out that there are too many manifestations of a tendency to make Germany again the strongest power in Europe and the center of the economy of the continent. Unquestionably, this results from the recent remarkable upturn in the German economy which has made its recovery real and no longer academic. More than forty million people living in Western Germany having to import at least half of their food requirements can exist only with a substantial industry having a surplus available for export. A self-sustaining Germany is impossible without substantial industry. Obviously, any such industry constitutes a war potential but security must be obtained by rigidly enforced disarmament agreements rather than by suppression of industry which can only result in a deficit economy. A deficit economy would either be borne for many years by the United States or would in itself become a greater war hazard than a self-sustaining economy.

I have considerable sympathy with the French position on reparations and on our continued inability to conclude an agreement for the [Page 527] period of occupation on prohibited and restricted industries. As you know, I have supported the level of industry agreed by the Bizonal area largely because I considered that the limitation of 10,700,000 tons of steel is a commitment made to the French at London. It is true that this limitation was designed to meet Germany’s internal needs and does not allow for any export of steel except in finished products. If the export of steel from Germany is essential to European recovery then in fact this limitation is too rigid as export within the limitation could result only in lengthening the period of financial support by the United States. Nevertheless, our level of industry was calculated with this limitation in mind and purposely no provision was made for steel export.

I was interested to find in Paris that I was charged largely with the effort to raise the steel capacity and to retain additional plants in Germany. While this is not true, I have of course in all my conferences with the French supported the position of our Government that upward changes would have to be made if required in the interest of European recovery. Obviously, we here can enter into no agreements on prohibited and restricted industries until Mr. Hoffman has made his decisions as to what is to be left in Germany and the requisite negotiations for this purpose have been undertaken with the French and British Governments.3

I note that the French Government proposes a joint re-examination at Governmental level of general policy in Germany. This is, of course, not a question on which I should comment. I must point out, however, that there is an increasing conflict in American policy and French policy which leads to almost daily disagreements in our operations in Germany. It is our purpose to re-establish a self-sustaining Germany at the earliest possible date in the belief that such a Germany is essential to a sound European economy and also to obviate the continued need for financial support from the United States. While our efforts to this end have been remarkably successful since currency reform, we are still a long way from a self-sustaining Germany and the United States will be asked for at least two more years and probably longer to support a large annual deficit in Germany’s foreign trade. Our efforts to reduce this period to the minimum are in direct conflict with the French efforts to retard German recovery as much as possible. If we accept the French view, to considerable degree we are increasing our own financial liability in Germany perhaps to the extent that our investment to date would be wasted in its effectiveness to obtain a self-sustaining responsible German Government. On the other hand, as German economy recovers, we will be subject to increasing attack from [Page 528] French politicians reflecting the real and imaginary fears of the French people and of the French Government. I cannot help but feel that this conflict of policy is at a critical stage. With each compromise our efforts at German recovery will be retarded. Without compromise, we will be faced with an intensive French opposition which will result perhaps in developing a real anti-American sentiment in France.

Certainly, there is no easy solution to this problem. I am convinced that German recovery is essential to European recovery and to any real stability in Europe which could make for peace. Nevertheless, if this recovery can only be obtained by the loss of French support, then stability would probably not result either. However, it does seem clear to me that it would be difficult indeed to justify the continued financial support of Germany by the United States if such support is not directed to developing self-sufficiency and responsible government which will eliminate the need of financial support at the earliest possible date.

Perhaps, a security pact will do much to allay French fears. However, the French fears are not entirely directed at physical aggression but also come from the competition which will result from a recovered German economy.

I am attempting only to point up the problem as certainly as recommendations for its solution are beyond my competence. It does seem that it is a problem which must be resolved soon.

  1. In his account of the circumstances and considerations related to the sending of this message, Clay, Decision in Germany, p. 417, states that he received no reply from Washington.
  2. The French Foreign Ministry aide-mémoire of November 19 is not printed, but see the minutes of a Meeting of Foreign Ministers, November 19, p. 517. The telegram under reference is not printed.
  3. See telegram 266, November 17, from Frankfurt, for an account of the meeting of the three Military Governors for Western Germany on November 16, p. 832.
  4. The Administrator of the Economic Cooperation Administration was responsible for a review of those industrial plants in Western Germany scheduled for dismantling and removal as reparations. For documentation on this topic, see pp. 703 ff.