840.50 Recovery/9–748
The Secretary of State to the British Secretary of State for Foreign Affairs (Bevin)1
I refer to your recent note2 on the examination of plants in Germany scheduled for reparations as proposed by Mr. Hoffman, which has been given me by Sir Oliver.
I appreciate the importance of the several considerations brought out in your note. Their importance has been a strong influence in determining our policy with regard to reparations. In particular, I realize the danger that reparations might be exceedingly difficult to revive should dismantling come to a halt during the period Mr. Hoffman’s Committee is reviewing the situation. We £hall do everything we possibly can to have the new survey made as speedily as possible and to obtain the release of plants as the study progresses [Page 809] so that dismantling will not come completely to a halt. I entirely agree with you that no irrevocable steps should be taken regarding the further limitation of reparations without the fullest consultation between our Governments and the French.
Beyond this we cannot go at this time. Because of our very large expenditures directly for the support of Germany and for the European Recovery Program, there is a strong feeling among our people and particularly in Congress that we should not agree to the removal of plants from Germany which, if left in operation there, would reduce our total financial burden under the European Recovery Program. This feeling has been expressed in the Economic Cooperation Act.
Admittedly, much time has been taken up in the initial examination of the plants scheduled for reparations. We had hoped that this examination would yield a basis on which to proceed. If we had adopted the recommendations resulting from that examination, however, we should have had to request you to agree to a very large increase in the German level of industry. We consider that the facts supporting those recommendations do not warrant our doing so and overriding the many other considerations outlined in your note, in particular the political and security aspects. It is our intention that any request for retention of plants in Germany made of you shall be based upon adequate technical evidence that any such plants could make an important contribution to European recovery if retained in Germany.
On the other hand, members of Congressional appropriations committees have clearly indicated to Mr. Hoffman that future appropriations for European recovery will be made only after Mr. Hoffman has demonstrated that he has adequately examined the potential usefulness in Germany of plants scheduled for reparations and has requested me to obtain consent from you and the French to retain in Germany such of those plants as can better contribute to the European Recovery Program if left in Germany. This he is required to do by Section 115 (f) of the Act which is quoted as follows:
“The Administrator will request the Secretary of State to obtain the agreement of those countries concerned that such capital equipment as is scheduled for removal as reparations from the three western zones of Germany be retained in Germany if such retention will most effectively serve the purposes of the European Recovery Program.”
I am entirely in agreement with Mr. Hoffman as to the necessity for his examination of the plants. We agree further that the points emphasized in your note make it essential that the examination be completed with the utmost speed. Mr. Hoffman has indicated that to this end he has already revised his plans to take maximum advantage of the facilities and data available to the zonal authorities.
[Page 810]In view of the foregoing 1 strongly urge that you accept as of paramount importance the request which this Government has made to permit this further reexamination of the plants in the British Zone, approximately 176, which have not yet been released from consideration. In order that these plants may not be dissipated, I also request that dismantling, allocation and shipment of these plants be suspended temporarily during the period of the examination. A list of the affected plants is being furnished to the British Embassy here.
I suggest the possibility that dismantling of those plants not affected by the review of the ECA Committee be so scheduled as to obtain maximum continuity of dismantling operations during the period of the examination.
In view of our recognition of the security problems which are inherent in a halt in dismantling, it is my judgment that the Combined Chiefs could not add anything now to evaluation of this aspect of the matter.
The second matter in which I ask your cooperation is in connection with the work required for the reexamination. While many of the data already assembled here can be of use in the further examination proposed by Mr. Hoffman, he considers it imperative, in discharging his responsibility to Congress, to obtain additional information. It is earnestly hoped that its collection and evaluation will not require more than ninety days, provided they can be started as soon as possible. To the extent that your representatives in the British Zone in Germany can make available their assistance, the time required for the reexamination can be very materially shortened.