740.00119 EW/1–1749

The Secretary of State to the French Ambassador (Bonnet)


The Secretary of State presents his compliments to His Excellency, the Ambassador of France, and has the honor to refer to the previous communications between the Government of the United States and the Government of France with reference to the plants to be removed from the Western Zones of Germany as reparations, and to the discussions between French and British experts and the Industrial Advisory Committee on German Reparations of the Economic Cooperation Administration, which took place in London during early December of 1948.

The report of the Committee has now been submitted to the Economic Cooperation Administrator. A copy of this report is attached.1 The Administrator has considered the report with which he states he is entirely in accord. He is convinced that the purposes of the European Recovery Program will be most effectively served if the recommendations of the Committee are carried out. Accordingly, he has requested the Secretary of State to obtain the agreement of the Governments of France and the United Kingdom to the retention in Germany of all the plants which are recommended for retention by the Committee.

The United States Government strongly urges that the Government of France agree to the retention in Germany of the plants listed in the Committee report and earnestly hopes that it will receive promptly an indication of such agreement.

As the Government of France is aware, at the time the lists for the dismantling of plants in Western Germany were established, the European Recovery Program was in its early stages, and a coordinated recovery effort for all the participating countries based on mutual aid and the most effective use of existing resources had not been developed in detail, nor had United States support of the recovery program been authorized by the Congress of the United States. Further, a number of arrangements for dealing with the security problem in relation to Germany have been developed since the lists were first established, [Page 548] notably the arrangements agreed upon in the London Agreements of June 1948.2

In view of these facts and as the implications of the recovery program began to appear, it seemed appropriate to the United States Government that a review should be undertaken of the dismantling program. This review has been conducted by a distinguished group of industrial experts, assisted by a technical staff, who through intensive study and individual plant surveys have come to the conclusions contained in the report. The Government of France has already been made aware of the detailed basis of their recommendations through the discussions the Committee conducted in London. The Committee in making its recommendations had the benefit of the views of the French and British experts expressed in these discussions and, having taken these views into account, eliminated a number of plants from further consideration. As the report of the Committee indicates, it has sought to reach a considered balance of the many conflicting factors involved in this difficult problem.

It is the view of the United States Government, after considering the report, that the retention of these plants in Germany will facilitate the accomplishment of the European Recovery Program.

In making this request, the Government of the United States wishes to make observations on two points involved in the recommended retentions. The first point concerns the relationship of the United States request to the negotiations which are currently being conducted by the three Military Governors regarding a revised list of prohibited and restricted industries. In previous discussions regarding the dismantling question, the Government of France has urged the removal of various plants from Germany on security grounds. The United States Government believes that the security aspects of the dismantling program should be dealt with in the context of the negotiations on prohibited and restricted industries. The United States Government is prepared to agree that a decision regarding the retention or dismantling of any plants included in the recommendations of the Committee which are in industries, except the steel industry, now under consideration by the Military Governors should be deferred until a definitive determination respecting prohibited and restricted industries has been made. In the case of the steel industry, the United States Government has previously indicated its willingness to agree to the continuation of a limit on production of 10.7 million tons of crude steel per annum in the Bizone area until the conclusion of a German peace settlement, unless a settlement is unduly delayed. Since this view [Page 549] is in accord with that of the French and United Kingdom Governments, the United States Government believes that consideration of the steel industry does not need to be deferred until the conclusion of the negotiation on prohibited and restricted industries.

The second point concerns the special recommendation included at the end of the report on steel, which relates to the Hamborn plant of the former August Thyssen-Huette A.G. It will be noted that the special recommendation contains alternative proposals. The principal proposal relates to the period of world steel shortage and contemplates the exportation of the product of this plant during that period, after which the plant would be dismantled. If a special arrangement of this character were adopted, the United States Government believes that special provision should be made for the operation of the plant under supervision of the occupying authorities rather than by the government or governments to which the plant might be allocated for reparation, as proposed by the Committee. In view of our common concern about the world steel shortage, the United States Government believes that this proposal merits serious study.

The United States Government has, of course, no objection to the immediate dismantling and allocation, in accordance with the arrangements on allocation agreed by the three Governments at London in June 1948, of those plants on the reparation list whose retention is not proposed. Instructions on this point will be sent to the United States Military Governor in Germany.

A communication similar to this note is being addressed to the Embassy of the United Kingdom.3

Dean Acheson

Washington, January 25, 1949.

  1. Not printed.
  2. Documentation relating to the London Conference on Germany, February 23–March 6 and April 20–June 7, 1948, is in Foreign Relations, 1948, vol. ii, pp. 1 ff.
  3. Not printed.