740.00119 EW/12–848: Telegram
The Ambassador in the United Kingdom (Douglas) to the Secretary of State
us urgent
5169. For State and ECA, AmEmbassy Paris and OSR from Douglas and Hoffman. Meetings of steel, chemical and mechanical engineering groups, December 6 and 7 concerned for most part with general principles. French and British stressing level of industry. French protesting substantial number chemical plants US wished retained.
Meeting Douglas, Hoffman, Saltzman, and Humphrey Committee members with Stevens and Whitham (UK) and Alphand (France) December 7. Highlighted by Alphand’s protest that US asking retention too many plants. He noted that many nonparticipating countries involved in reparations picture and asked whether there could be compensation for plants retained in Germany under 115 (F) Foreign Assistance Act, for example, by excess machine tools. Stevens stressed importance of security element, both from military and psychological standpoints. Hoffman and Douglas minimized the reparations problem showing only some $40 million residual value of equipment involved in the 230 plants under consideration, pointing out the surest security is US cooperation and asking whether it is worth while risking this cooperation for the small amount involved.
Douglas explained that committee was not raising for consideration revision of agreement on 10.7 million tons as permitted limit steel ingot production, and said that committee’s proposal related only to which facilities were to be retained, without affecting agreement as to permitted operating rate.
At December 8 morning meeting, Humphrey Committee members, Hoffman, Douglas, Saltzman, Alphand, Rueff (France), Stevens, Whitham (UK) British asked retention a few designated plants explaining reasons. Asked reduction number of two-inch tubing plants [Page 846] to be retained. Asked speedy settlement mechanical engineering plants, since uncertainty situation encouraging German resistance their dismantlement. Urged plants 40 percent or more dismantled be released. On chemical and mechanical engineering plante, stated their concern was with French situation and security.
French stated would agree retention 12 mechanical engineering plants, 14 chemical plants, 1 steel plant.
UK agreed extend agreement dismantlement on plants still under consideration. French silent on this point, but assumed they will go along.
Present plan is for French and British present lists plants they consider essential for release at same time Humphrey Committee presents list of plants considered essential for retention. Subsequent meetings with such members Humphrey Committee as may remain London December 11–14. Thereafter unlikely any further changes made Humphrey Committee list.
Number plants to be recommended for retention by Humphrey Committee still under discussion December 8.
Present plan Humphrey, Wilson, Geier, McCaffrey, Rose, Hendrick, return, sailing December 15.
Sent Department 5169; repeated Paris 1009. [Douglas and Hoffman.]