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

740.00119 EW/11–2248: Telegram

The Secretary of State to the Embassy in France

top secret

Washington, November 26, 1948—9 p. m.

4557. For Thorp¹ from Saltzman. Urtel 5988 Nov. 22.²

1. Position of Dept on level of steel production in Germany has not been changed and we have no proposal for any change at this time in 10.7 level for Bizone or 11.1 for Western Germany.

2. No contrary indication given ECA or Humphrey and we do not know what letter Humphrey refers to.

3. Dept understands ECA–Humphrey examination steel plants relates only to capacity to be retained but that ECA might ask retention different plants than US–UK Mil Govs intended retain and result might be more efficient capacity, different product composition or increase in potential production capacity. Although this might affect eventual ability of Germany to produce steel, this considered separate problem not affecting our continued adherence to 10.7 limit as agreed August 1947 and confirmed, at least by implication, London talks this spring. ECA has now formally requested statement of Govt’s position on this matter and it will be necessary to settle question definitely within next week.

4. Clay’s position present Berlin talks on prohibited and limited industries identical with above-stated position.

5. Suggest you clarify foregoing for Clay if no objection.³ [Saltzman.]

Marshall

1. Assistant Secretary of State Thorp was serving as an Alternate United States Representative at the Third Session of the United Nations General Assembly tin Paris.

2. Not printed. In it Assistant Secretary Thorp reported having recently been informed by General Clay that George Humphrey was considering a German steel production level well above that agreed upon in level of industry plan for Germany. General Clay felt that the heretofore agreed steel production level of 10.7 million tons was inviolate. Humphrey had apparently cited a State Department letter permitting such reconsideration of the level of industry plan (740.00119 EW/11–2248).

   For the level of industry plan for Germany as approved by the Allied Control Council for Germany in March 1946, see Department of State Bulletin, April 14, 1946, pp. 636–641, or Ruhm von Oppen, Documents on Germany, pp. 113–118. For the revised level of industry plan for the U.S.–U.K. zones of occupation, made public on August 29, 1947, see Germany 1947–1949, pp. 358–362, Department of State Bulletin, September 7, 1947, pp. 468–472, or Ruhm von Oppen, Documents on Germany, pp. 239–245. Documentation on the revised level of industry plan of August 1947 is presented in Foreign Relations, 1947, volume ii .

3. In his telegram 2869, December 3, from Berlin, not printed, Ambassador Murphy reported that General Clay seemed to understand the Department’s position on this matter (740.00119 EW/12–348).