740.00119 Council/2–2648: Telegram

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


744. Delsec 1582. On Item C of agenda of tripartite meeting February 261 Massigli in opening statement expressed agreement view Western Germany as center.2. Both political and economic precautions were necessary and to this end international control of Ruhr vital. Recalled French views expressed in memorandum February 19473 and in conversations in US September 1947.4 France had abandoned insistence on separation of Ruhr, but still insisted on international control of management, of distribution of products for internal use and of portion of output exported. There must be prompt agreement not only on system of control but on its inauguration as soon as possible. Latter necessary in view of progressive surrender of power by occupying authorities to Germans.

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De Gruben (Belgium) said guarantees must be sought not in excessive reduction German economic power, since Germany needed to be reasonably prosperous, but rather in continued disarmament of Germany as originally proposed by Secretary Byrnes, in continued military occupation of western part of Germany, in establishment of federal form of government and in international control of Ruhr. Regarding latter control must ensure that Ruhr products not used for aggressive purposes and that distribution of output is such as to promote interest of Europe as whole which might mean favoring some branches of enterprise over others. Opposed international management and ownership and favored supervision over production such as that exercised by US/UK control group over German coal management. Participants in international control would be Benelux and three Western occupying powers.

Hirschfeld (Netherlands) added Ruhr problem should be solved in light general economic equilibrium that would need to be established in Germany, raising question whether Germany could export enough to pay for its imports without expanding exports from its restricted industries. Also raised question as to how Western Europe’s unfavorable trade balance with Western Germany was to be financed and as to whether German coal production could ever achieve necessary pre-war levels without making up present arrears in investments.

Douglas, while stressing US prepared to consider all proposals sympathetically, explained at length US views that these problems must be viewed and solved in light radical change in European environment. It was in light this change and existing struggle between East and West that US had conceived and launched ERP. We must keep in mind constantly absent fourth power and possibility westward extension this influences illustrated by events last few days. Too rigid international control may entail loss of Germany to West. Must remember also that decision on establishment international control at this time would expose US to risk of Soviet demand for participation in event later quadripartite agreement. In response to Benelux and French intimations that such decision would not necessarily prejudge situation in favor ultimate Soviet participation and that Soviet participation on control of economy of Western Germany would be contingent on extension of Western influence eastward, Douglas deprecated reality of any ultimate Western control over eastern areas such as Silesia and reminded delegations of danger inherent in westward extension of Soviet influence, particularly in light of its hostility to Western European recovery.

Strang in outlining British thinking tentatively said impossible now to envisage detailed scheme for long-run control of Germany heavy industry. Negatively British opposed to separation of Ruhr and to international management or ownership. Favored German public [Page 94] ownership of selected heavy industries, some system of international Control of Ruhr and long-term military occupation certain areas. Scope control could not be determined this time, because dependent on entire content peace treaty. The manufacture of certain products would undoubtedly be prohibited. There might be restrictions on certain industries and economic activities other than manufacturing. There would need to be inspectorate to enforce restrictions, and such controls would be particularly necessary in areas of industrial concentration such as Ruhr. Agreed three Western occupying powers and Benelux should participate in any system Ruhr control. Turning to short-term problem of control during period occupation, stressed that was primarily responsibility of occupying authorities from which they could not divert themselves. Moreover development of German heavy industry as had been projected over next four years in outline or ERP and relationship that development to development similar industries in other participating countries would come under review by continuing European organization for ERP. His government was prepared, however, to consider possibility of starting even now beginnings of international control, with Benelux countries acting as observers or represented on some sort of advisory council to occupying powers in matters pertaining to Ruhr.

Further discussion Item C taking place next meeting.

Sent Department as 744, repeated USPolAd Berlin as 30, Paris as 70, Moscow as 33, The Hague as 14, Oslo as 7, Copenhagen as 12, Stockholm as 16, Rome as 33, Brussels as 23, Brussels pass to Luxembourg.

  1. This was the Third Meeting of the London Conference on Germany. The report on the earlier portion of the meeting was contained in telegram 745, Delsec 1581, February from London, supra.
  2. Telegram 753, Delsec 1584, February 27, from London, transmitted the following corrected reading of this sentence:

    “On Item C of agehda of tripartite meeting of February 26 Massigli in opening statement expressed agreement view Western Germany should be integrated into Europe but not in manner to reconstruct Europe with Germany as centre.” (740.00119 Council/2–2748)

  3. Regarding the memorandum under reference, see Foreign Relations, 1947, vol. ii, pp. 154 and 156.
  4. See the memorandum of conversation by the Secretary of State, September 18, 1947, ibid., p. 680.