740.00119 EW/8–1648

Memorandum of Conversation, by the Under Secretary of State (Lovett)

Participants: U—Mr. Lovett
O—Mr. Hemmendinger
ECA—Mr. Hoffman
Mr. Bruce

Mr. Hoffman referred to the keen interest the committees of the Congress, in particular Mr. Taber and Senator Bridges, were manifesting in the retention in Germany of plants scheduled for dismantling. Mr. Hoffman further referred to the letter which had just been written to him by the Secretary transmitting the letter of the five Secretaries to the President, requesting that the release of the 160 plants be dealt with as a matter of priority.1 He said that he was anxious to do this and to get on with the program generally, but that the heat from the Congress made it impossible for him to release the 160 plants without being responsible himself for the conduct of an investigation. He asked, therefore, if Mr. Lovett could agree that Mr. Hoffman appoint a group of leading industrialists—he mentioned specifically Mr. Humphrey and Mr. Budd—to look into the matter and advise him, He further proposed that they might have the use of a group of expert consultants such as Overseas Consultants Inc. The object of this proposal, he said, was to find some buffer between him and the Congress to justify a decision which would be workable.

[Page 793]

Mr. Lovett said that he thoroughly understood the reasons for the suggestion and that he thought something of the sort was probably necessary. Mr. Hemmendinger suggested that Overseas Consultants Inc. would be considered by European countries to be already committed on reparations questions, and that the suggestion for a further technical study would be very badly received by the French and British who would point out that we had just made a technical study, and that they had agreed to such a study under the understanding that it would result in the deletion of a limited number of plants. Mr. Bevin in particular would be sure to be very angry. Mr. Lovett emphasized to Mr. Hoffman that the use of Overseas Consultants Inc. might be undesirable for the reasons just stated. Mr. Hoffman said that others could doubtless be obtained, and that Overseas Consultants Inc. had been referred to only by way of illustration. Mr. Lovett said that he did not feel that the reaction of the French and British was a determinative factor, however, because they would understand that the Administrator had to discharge his responsibilities under the statute. Mr. Bruce suggested that they already had some inkling that the Administrator was confronted with a report of recommending the retention of 323 plants, and that they would understand that he had to do something to deal with it.

Mr. Hemmendinger pointed out that the reasons for reparations were largely political, emotional and historical, that it might be necessary to take the lightning some time, and that perhaps it would be done without a new inquiry. Mr. Lovett felt that Mr. Hoffman needed the assistance of impartial consultants in order to answer Congressional critics, however.

Mr. Hemmendinger informed Mr. Lovett that Mr. Steelman had stated this morning that the President wished to discuss the matter with the Secretary of State at noon today before the five Secretaries’ letter to the President was released to the Congress. In view of that, Mr. Lovett went immediately to the Secretary in order to inform him of Mr. Hoffman’s proposal before the discussion with the President. Mr. Lovett told Mr. Hoffman that he agreed that the step was proper and that there was no objection to Mr. Hoffman proceeding to invite Mr. Humphrey and Mr. Budd to Washington to discuss it.

[Robert A.] L[ovett]
  1. Under Secretary of State Lovett’s letter of August 13 to Hoffman, under reference here, is not printed (740.00119 EW/8–1348).