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

740.00119 EW/8–1648

The Cabinet Committee on Reparations to the President ¹

secret

Washington, August 9, 1948.

Dear Mr. President: On February 16, 1948, prior to the enactment of the Economic Cooperation Act of 1948, you requested the Secretaries of Agriculture, Commerce and Interior to nominate representatives to examine with representatives of the State and Army Departments plants scheduled for dismantling in the three Western Zones of Germany and to recommend which of such plants, if any, should be retained because they could if left in Germany make a substantial contribution to the world supply of critical items. In order to assist the study, a Technical Mission was sent to Germany which made a report on July 23, 1948 (attached²) recommending the retention in Germany of 315 plants and 16 part plants, listed in three categories by order of importance. This report is based exclusively on certain technical considerations and does not take into account the political and security considerations which are involved. The conclusions of this report have been considered along with other relevant factors by an ad hoc Committee representing the five Secretaries, to which the Economic Cooperation Administrator has sent an observer. The Committee does not find any assurance in the Technical Mission report that plants recommended therein for retention in Germany can be brought into production during the period of the European Recovery Program.

The ad hoc Committee has made the following four recommendations, which we have approved:

1. That the 163 whole plants and 1 part plant (listed in Annex A³) having the greatest possibility of contributing to European recovery, if brought fully into production in Germany, be referred to the Economic Cooperation Administrator for such further study or other action as he may consider necessary to the discharge of his responsibilities under Section 115(f) of the Economic Cooperation Act. Note: If the French Government confirms its intention to retain any of the 35 whole plants and 14 part plants listed in Annex B,⁴ no further consideration or action by this Government with respect to retention of such plants is required. Any plants in Annex B which are not confirmed by the French Government will be added to Annex A.

2. That the remaining plants recommended for retention by the Technical Mission be released forthwith for removal as reparations in view of the uncertainty that any of these plants could make a substantial contribution to European recovery by retention in Germany and the importance of previous commitments involving prompt reparations deliveries of substantial amounts of equipment.

3. That, in view of the necessity of negotiating with the British and French Governments with respect to plants in their zones of occupation which this Government may consider should be retained in Germany, the report of the Technical Mission not be disclosed to persons outside this Government before completion of the further study of all relevant factors required to support the conclusions to be reached by this Government and discussion of these conclusions with the British and French Governments.

4. That with this report the Secretaries of Agriculture, Commerce and Interior conclude their examination of the reparations program, and that the ad hoc Committee be dissolved.

As stated above, the Economic Cooperation Administrator has been represented by an observer during the study of Technical Mission report and other pertinent factors and is informed of the conclusions and recommendations set forth herein.

Faithfully yours,

• G. C. Marshall
  Secretary of State
• Kenneth Royall
  Secretary of the Army
• J. A. Krug
  Secretary of Interior
• Charles F. Brannan
  Secretary of Agriculture
• Charles Sawyer
  Secretary of Commerce

1. This letter was prepared by the Ad Hoc Committee on Reparation. The circumstances attending the preparation of the letter are discussed in footnote 2 to the memeordum of July 26 from Saltzman to Lovett, supra. It was transmitted to the five secretaries composing the Cabiet Committee oh Reparations on August 9 under cover of a brief transmittal memorandum signed by the five members of the Ad Hoc Committee: Covey T. Oliver, Department of State; Col. Raymond L. Cheseldine, Department of the Army; Norman H. Collisson, Department of the Interior; Thomas Rawlings, Department of Agriculture; and V. Lewis Bassie, Department of Commerce. This letter was not signed by all members of the Cabinet Committee on Reparations until August 13, at which time it was transmitted to President Truman. Secretary of State Marshall signed on August 10. The source text is countersigned “Aug. 16, 1948 Approved Harry Truman” in the President’s own handwriting.
2. For the Report of the Technical Mission, see p. 778.
3. Annex A is not printed.
4. Annex B is not printed.