862.60/2–1748: Telegram

The Secretary of State to the Embassy in the United Kingdom


535. For Douglas and Saltzman.1

Cabinet yesterday approved following recommendations re dismantling program:
Brit, French concurrence to be sought at London to continuance deliveries to Soviets only on strict barter basis. Failing such concurrence, position to be reconsidered by Cabinet.
Special group to be appointed by Harriman, Krug, Anderson to consider, with State and Army and in cooperation with technical staffs interested Congressional Committees, whether any plants scheduled for dismantling shld be retained for immediate production critical items. Substitutes to be sought for any plants recommended for retention. Brit, French cooperation such investigation to be sought London. Failing such cooperation, position to be reconsidered by Cabinet.
Reparation program except as affected by above recommendations to be continued unchanged and without delay.
Terms of reference2 of special group under (b) above believed so defined that its activity should produce no major change reparation program. It is hoped final decisions might be reached within 6 to 8 weeks.
In discussions with British and French their agreement should be sought temporary suspension dismantling any plants their zones which are designated by working group, emphasizing that this is without prejudice their right final decision re permanent retention any particular plant. Although working group may suggest categories in which substitutions might be made, zonal Commander will designate any such substitute plants. British and French should be assured that they will be kept fully advised-all stages working group’s discussions and that State and Army representatives will be in position guide these discussions as well as conduct ail necessary contacts with British and French representatives.

  1. Ambassador Douglas was the head of the United States Delegation to the forthcoming London Conference on Germany, and Assistant Secretary Saltzman was a member.
  2. For the text of the terms of reference referred to here, see supra.