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

740.00119 EW/9–248: Telegram

The Secretary of State to the Embassy in the United Kingdom ¹

secret

Washington, September 3, 1948—6 p. m.

3504. Re Embtels 3920² and 3949.³ Following developments on reparations since Deptel 3408,⁴ sent Paris as 3335, Berlin as 1532.

1. Br Emb Wash has indicated that Hoffman’s announcement Aug 26 received with great concern by Br Gov, and on instructions has inquired State if action concurred in by State and to be regarded as action this Gov. Affirmative answer made. Br Emb indicated that full statement position Br Gov being prepared for presentation Sec State.

2. No reaction from French Gov presumably by reason Cabinet changes, Berard of Fr Emb presented general Fr views on reparations to ECA Industrial Advisory Committee Aug 31. They appear to have made considerable impression. So far Br Gov has not permitted any Washington representative to appear, but we hope it will do so as we believe exposition to Committee of Br views by Br Amb would be informative both ways and might tend reduce Br FonOff tension this subject.

3. Clay’s cable CC 5729,⁵ reptd by Murphy as 2187, read to Hoffman and Committee Aug 31. Com considered seriously and at its request Army now exploring with Clay possibility obtaining desired info on each plant thru authorities each Mil Gov. Now planning send only small group about six engineers Germany to collect info available through Clay and to make spot checks. Check sheet desired info for each plant being drafted.

4. Wolf of Steel Mission summarized its report,⁶ not yet printed, to Com Aug 31. Com considered so important that study full report will be made before any decision to request surveys of steel plants. Wolf emphasized’ that steel recovery Germany possible only with Br and Fr cooperation.

5. Com appears to be impressed by relevancy European political aspects of problem and has discussed possibilities some more rapid decision. Has concluded however, that it must have full info each plant or else neither it nor Hoffman will be able justify its conclusions to Congress and public. There is no present indication Corns recommendation release any plant assigned it for examination can be acted on before end year.

6. Next meeting Com probably next week. Hoffman will give it your tels 3920 and 3949. By that time Br may have made known their position, and it will be possible make better judgment whether there remains any chance quick decision on substantial number plants.

7. Agitation issue in press is unfortunate from standpoint overall relations between US and UK, but see no way make (reassuring statement pending presentation Br position and further action by Hoffman and Com. However, we believe that if Br and Fr public reaction better understood here, it will tend to counter growing public hostility here to reparations.

8. Above for your info and such use as you find appropriate. Will continue deal with Br and Fr Emb Wash and do not expect you assume burden this negotiation.

Marshall

1. This telegram was sent to Paris for Caffery and Harriman as 3445 and to Berlin for Murphy and Clay as 1578.
2. Supra.
3. Not printed. In it Ambassador Douglas reported that the adverse British press reaction to Secretary Marshall’s September 1 statement on reparations (see the editorial note, supra) was possibly the first of a gathering storm. Douglas asked for guidance as to what might be said in London to cushion the shock to opinion in Britain and in Europe caused by the Secretary’s statement. (740.00119 EW/9–248)
4. August 26, p. 796.
5. August 28, p. 798.
6. During May and June 1948, George W. Wolf and a group of his associates conducted a preliminary survey of the status of the German steel industry. The survey was carried out under the auspices of the Office of Military Government in Germany (OMGUS), the Economic Cooperation Administration, and the Joint Congressional Committee on Foreign Economic Cooperation. The Wolf Mission submitted a report and recommendations to its three sponsors on August 14, 1948. The Mission recommended a moratorium on further dismantlement and shipments of any and all steel making facilities from Germany until a complete review could be made of the dismantling program.