740.00119 EW/6–1648: Telegram
The Ambassador in the United Kingdom (Douglas) to the Secretary of State
2645. I have this morning received a letter dated June 15 from Bevin which reads as follows:
“We have now completed our agreed parallel instructions to the three military governors on a revised reparations procedure,1 leaving responsibility to the individual military governors, but providing for close consultation among them. We have done this without having received from the US Government any up-to-date initial list of plants ‘freed’ by the US Cabinet Committee. I therefore feel that I must record the UK position on this subject. What I have to say does not affect the terms of our instructions to the military governors, though it has an important bearing on their execution; and it only repeats what I believe is understood between us already as a result of oral exchanges on the subject.
“The object of the new reparations procedure is to effect the resumption of deliveries to the IARA countries of the bulk of the remaining capital plants on the reparations list under the Anglo-American level of industry plan and in the French zone. In this connection we have agreed on provisional arrangements for dealing with the Soviet share.2 [Page 767] It is, you will appreciate, of the essence of the scheme, as regards both deliveries to IARA and notifications to the Soviet, that there should come forward within a brief period an adequate volume of plants, both by numbers and value, ‘freed’ from examination by the US Cabinet Committee. It has been our understanding, ever since the Technical Mission passed through London on April 9, that the number of plants recommended for retention would be quite small, that no action based on the recommendations of the Cabinet Committee would be taken except by inter-governmental agreement, and that, while we were prepared to favour in principle the retention in Germany of a limited number of plants which might best serve the interests of ERP by remaining there, we should wish to see the size of the list before committing ourselves to the retention of any specific plants. You will realize that our concern over this question was related to the effects of the retention of plants both upon the level of industry plan with its security implications, and upon our reparations policy generally. We also made it clear during the Technical Mission’s visit that we should want to assure ourselves that the possibility of fully utilizing existing capacity in Germany had been taken into account before accepting any recommendations about removals from the reparations list.
“At that time it was confidently expected that the work of the committee would be completed in a matter of weeks (mid-May was mentioned at one stage), and until very recently we have always hoped that the results of its survey would be known before our new policy was put into effect. In this way it would have been possible to take the situation resulting from the work of the committee more explicitly into account in the framing of that policy. As circumstances have compelled us to deal with these questions in the opposite order, I feel bound to make clear our understanding of the position. Stated briefly it is that it will only be possible to carry out the policy which we have now agreed if a very high proportion of the total list of plants (over 900 in all) is ‘freed’ from the Cabinet Committee’s review within a few weeks and if early opportunity is given for quick inter-governmental decisions as to the disposition of the remainder. In my view we shall not be able to go through with our policy unless this is done, in which case the position would have to be reconsidered. May I therefore ask you to do your best to see that these requirements are met?”
The above may be useful to you in talking with members of the Cabinet Committee since it is a clear exposition of the British position.
[Page 768]Sent Department as 2645; repeated Berlin (for Clay and Murphy) as 210; repeated Paris (for Caffery) as 289.
- Regarding the instructions under reference here, see the editorial note, supra.↩
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In telegram 2680, June 17, from London, not printed, Ambassador Douglas reported having received the following letter from Strang, dated June 17, clarifying this sentence:
↩“It has occurred to me that you might like to have some informal amplification of the passage in the Secretary of State’s letter to you of June 15 which refers in passing to the Soviet share of reparations. What he had in mind in referring to provisional arrangements in that sentence was that the arrangements were provisional while we are attempting to arrive at a more permanent arrangement. You will appreciate that the reference to this suggestion was very much abbreviated because it was incidental to the main subject of the letter.” (740.00119 EW/6–1748)