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

740.00119 EW/2–1748

Recommendations by the Secretary of State to the President and the Cabinet ¹

secret

[Washington,] February 16, 1948.

The Secretary of State recommends that the President and the Cabinet approve the following proposals:

1. That the Secretaries of Commerce, Interior and Agriculture nominate representatives to examine with representatives of the State and Army Departments, and in cooperation with members of the technical staffs of the interested Congressional committees, the lists of plants scheduled for dismantling in the three Western Zones (800, of which 186 are in the US Zone). The purpose of this examination would be to recommend which plants, if any, on these lists should be retained because they could if left in Germany make a substantial contribution to the world supply of critical items.

2. Subject to the possible recommendations referred to above, the Cabinet should approve the dismantling program as based upon the revised Level of Industry of August 1947.

3. Dismantling of plants in the US Zone will be continued and deliveries of plants will be made from the US Zone to the IARA nations, in accordance with our obligations under the Paris Agreement on Separation of January 24, 1946, after recommendations are received under paragraph 1 above.

4. The Secretary of State’s representative should, at the forthcoming tripartite conference in London, seek the adherence of the British and French Governments to the following course of action:

a. Indefinite suspension of further deliveries to the Soviet Union and Poland; with the possible exception of deliveries which will be compensated for on a current basis (that is, disregarding the five year period for reciprocal payments provided for in the Potsdam, agreement) by reciprocal deliveries of commodities from the Soviets.

b. A prompt re-examination of the lists of plants scheduled for dismantling in their zones.

5. If satisfactory agreements with the British and French, as indicated in sub-paragraphs (a) and (b) of recommendation 4, are not achieved, the Cabinet should consider further the position which the US Government should take.

1. An earlier version of this paper, as prepared by officers of the Department of State, was presented to the Secretary at a briefing session on the morning of February 16. At that time, the Secretary revised the Department draft and made the changes incorporated in the version printed here. The Secretary presented these recommendations to the President and the Cabinet at the Cabinet luncheon on February 16. The copy of this paper included in the London Embassy Files bears the following handwritten endorsement by Secretary Marshall: “President and Cabinet agreed to this—Feb. 16–48. GCM” (London Embassy Files, 1948, File–850 Reparations). Regarding the Cabinet meeting of February 16, see the memorandum of conversation by Wisner, February 17, p. 730.