London Embassy Files: 1948: File–850 Reparations
The British Secretary of State for Foreign Affairs (Bevin) to the Ambassador in the United Kingdom (Douglas)1
Dear Lew: In the course of our discussions on 13th October,2 Mr. Hoffman asked for reconsideration in the light of the European Recovery Programme of the reparations and dismantling programme of the British Zone which has hitherto operated on a basis of agreement in connection with the level of industry, and in co-operation with the other Governments concerned. He made certain specific requests regarding co-operation with the Humphrey Committee which he has appointed and dismantling in the British Zone. I undertook to examine the technical implications of the proposals we discussed, to submit them to the Cabinet, to consult with the French Government and to notify the U.S. Government of the position of His Majesty’s Government at an early date.
I am now writing to you as arranged, after having obtained the views of my colleagues, after consultation with the French Government, and after a preliminary technical examination of the dismantling problem. Mr. Hoffman requested that His Majesty’s Government should so far as the British Zone is concerned cooperate fully with the Humphrey Committee with a view to facilitating its work of investigation both in the British Zone and elsewhere into the possibility of retaining in Germany in the interests of E.R.P. plants at; present scheduled for reparations. I confirm that His Majesty’s Government is ready to cooperate fully with this investigation and I take this opportunity of re-affirming my anxiety that it should be completed at the earliest possible date. I understand that the Committee will be asked to maintain close contact with British representatives as its work progresses. Such contact will be warmly welcomed by His Majesty’s Government and every effort will be made to ensure that cooperation and contact will be as effective as possible.
Mr. Hoffman further requested that continued dismantling in the British Zone should be of such a character as will not prevent the eventual retention in Germany in the interests of E.R.P. of any plants under review by the Humphrey Committee excluding those already [Page 828] allocated by I.A.R.A. I am prepared to go as far as I possibly can to meet this request. On the basis of the technical examination which has already been conducted I am able to give an assurance that there will be no dismantling of items of equipment in unreleased plant which cannot be re-erected. In particular no blast furnaces under examination by the Humphrey Committee will be dismantled. I am also prepared to give an assurance that priority as regards the use of labour will be given to the dismantling of released plants wherever this can be done. I would add that our experts would be glad to examine with U.S. experts the practice of dismantling in the U.S. Zone with a view to seeing whether there are any methods which could be usefully adopted in the British Zone in order to give further effect to the objectives we both have in view. I also confirm the undertaking given in the letter which I sent to Mr. Marshall on 1st October that no new dismantling shall begin at any of the plants under examination by the Humphrey Committee where it has not yet started until December 15th, by which date I hope that the examination will have been completed.
I must, however, enter one caveat in connexion with the plants, which according to Mr. Hoffman numbered 22, which were released for allocation last June, but which the Humphrey Committee, on instructions from Congress, has been asked to re-examine. There is some doubt on the part of the experts about the exact identity of these plants, but the following is based on the assumption that they are identical with 20 plants in this category of which the State Department gave particulars to the British Embassy in Washington on 30th September. Of these 20 plants, 10 have been divided east and I am ready to treat these as regards dismantling in the same manner as plants which were not released in June. Five have already been sub-allocated by I.A.R.A. and I understand that these are not covered by Mr. Hoffman’s request. There are, however, five further plants which have been made available to I.A.R.A. but not as yet sub-allocated. On three of these dismantling has begun. I consider that it would prejudice the relationship between the Military Governor and I.A.R.A. if these plants were to be withdrawn unilaterally. I shall, however, be ready to arrange for these plants to be treated in the same way as unreleased plants if the U.S. Government can arrange for I.A.R.A. to agree that they should be withdrawn from allocation.
The foregoing commitments are entered into by His Majesty’s Government on the understanding that Mr. Hoffman will urge the Humphrey Committee to give priority in their examination to the plants on which dismantling has already started and to give early attention to preparing a list of plants in which they have no further interest in order that such plants can be made available to I.A.R.A. for [Page 829] allocation. I also understand that before any examination of plants is conducted in the British Zone a Press statement will be issued in agreed terms explaining the nature of the investigation, emphasising its limited scope and duration and the fact that subject to its findings the reparations programme, including any plants made available for reparations as a result of the intergovernmental discussions now in progress concerning the prohibited industries, is unaffected and will he brought to as speedy a conclusion as possible.
It might be well if finally I were to confirm my understanding of the procedure for the investigation now being conducted by the Humphrey Committee. I understand that when this Committee has completed its investigation it will report to Mr. Hoffman. Mr. Hoffman will then examine the report and reach his conclusions about the plants which in his view should be retained in Germany in the interests of E.R.P. These conclusions will then be forwarded by him to the U.S. Secretary of State who will communicate with the British and French Governments with a view to seeking their agreement as provided in Section 115F of the Economic Cooperation Act; and the conclusion will not become binding upon His Majesty’s Government until that agreement has been sought and obtained.
Yours sincerely,