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

740.00119 EW/12–748: Telegram

The Ambassador in the United Kingdom (Douglas) to the Secretary of State

secret

London, December 7, 1948—8 p. m.

Subject: Humphrey Committee and Separations

5140. From Douglas and Hoffman for ECA and State. Original plans developed into prospect of 50 or 60 persons December 6 to discuss reparations. This was cancelled and instead meeting between Hoffman, Humphrey, Douglas, Saltzman representing US; Alphand, Maeff [ Rueff?] representing France; Stevens, Whitham representing UK.¹

General problem outlined by Douglas. Humphrey then stated 381 plants on ECA list considered for retention and indicated approximate number recommended by Wolf and engineers for release with statement committee will concur in this recommendation. (Actual figures are as follows: Committee started with 381 plants. ECA released 12 at outset. Thereafter committee recommended release 13 suballocated, 20 allocated, approved by ECA. French agreed retain 43, excluding parts of 7 allocated plants included in list of 20 above. Total thus reduced to 293. Tentative figures agreed to by committee December 6 as follows: Of 85 steel plants release 42. Of 208 other plants release 21. These figures currently being reexamined by committee.)

Wolf recommendation on steel² was outlined by Humphrey noting that increase to 13.5 million tons capacity was insignificant since 1947 phase of industry agreement with 10.7 million production envisaged 13.3 million capacity. Pre-war ingot capacity was 18.5 millions; 25 million thus lost can be accounted for by approximately 1 million electric furnace capacity, 750,000 Goering plant and 2 million Hamborn plant, all of which are to go as reparations under the Wolf recommendations (with however special provision as to Hamborn involving production of finished steel, for export only over period presumably not exceeding ERP) and 1 million bomb damage.

Regarding standards for his committee Humphrey stated he did not feel bound in making recommendations by level of industry agreements and added that in his view a plant on reparations list now retained breaks level of industry agreement. Only question is, how far do we break it or bend it. However, he stated that the level of industry problem was not within scope of his committee. Nor did Humphrey Committee consider military security or political factors; but as businessmen they knew these factors existed and they did not blind themselves to them.

Humphrey Committee is here pursuant agreement with British and French to advise with them. The committee wishes to discuss with British and French recommendations of its experts so committee can reach firm conclusion. These meetings not to be considered negotiations.

Douglas pointed out disadvantages of large meeting of 50–60 and suggested for comment and British and French advice that instead such meeting the various groups divide into four committees as follows:

(1] Main committee consisting of approximately those listed in opening paragraph.

(2) Chemical and non-ferrous Industry Committee.

(3) Mechanical Industry Committee.

(4) Steel Committee.

This suggestion was agreed to.

It was agreed that press would be told meeting was being held but details and figures would be kept in strictest confidence by all. (However, this morning’s Paris Herald Tribune contains story reflecting possible breach this understanding.)

British and French expressed desire at later time to discuss military and political factors.

Main committee will meet again December 7 to obtain general and preliminary French and British reactions to presentations made December 6 before the various committees referred to above. Point will be made by Douglas at that meeting that 10.7 level of industry for steel stands until changed at the Peace Treaty or by intergovernmental arrangement. (Deptel 4535 December 4³)

Sent Department 5140; repeated Paris 997. [Douglas and Hoffman.]

Douglas

1. Between December 6 and 14, 1948, United States, British, and French Delegations held a series of talks on reparations and dismantling problems. These talks were held at the Foreign Office in London. The United States was represented by Ambassador Douglas, members of the Industrial Advisory Committee (Humphrey, Geier, Price, McCaffrey, and Wilson), experts to the Committee, Assistant Secretary of State Saltzman, Special Assistant Reinstein, E.C.A. Administrator Hoffman, James Hendrick, Deputy I.A.R.A. Delegate Robinson, and others. The United Kingdom was represented by Roger Stevens and D.W.G.L. Haviland of the German Department of the Foreign Office, Gilbert Whitham of the Control Commission for Germany, and by other officers of the Foreign Office, Ministry of Supply, Ministry of Defence, Board of Trade, Treasury, and Control Commission for Germany. France was represented by Hervé Alphand, Jacques Rueff, François de Panafieu of the Foreign Ministry and by other officers of the Foreign Ministry, the Ministry of Industrial Production, and the French Military Administration in Germany.
2. On November 3, 1948, E.C.A. Administrator appointed a Steel Mission headed by George W. Wolf to conduct an inspection and evaluation of German steel plants scheduled for removal as reparations from the western zones of occupation of Germany. The report of the Wolf Steel Mission, entitled “Recommendations for Retention of Steel Capacity in Western Germany,” was submitted to the E.C.A. Administrator on December 4, 1948.
3. Not printed; it transmitted a portion of the text of the letter of December 3, from Acting Secretary of State Lovett to E.C.A. Administrator Hoffman, p. 836.