740.00119 EW/2–1649: Telegram
The Secretary of State to the Embassy in the United Kingdom
553. For Douglas from Saltzman. Urtel 508, Feb. 9.1 Appreciate your difficulty and desire that we authorize you to say something on [Page 554] prohibited and restricted industries. However, as indicated in Deptel 510 Feb. 12,2 we cannot authorize either linking of this question with dismantling question, or any statement on substance of prohibited industry negots.
2. Forurinfo, Dept believes it would be desirable to proceed quickly with negots on prohibited and restricted industries at governmental level, in attempt at least to narrow area of disagreement. Brit have approached us here with suggestion of Govt negots limited to shipbuilding, machine tools, and duration of restrictions, remaining questions to be negotiated by MilGovs. We consider such division of question undesirable and wish negotiate on problem as whole. If we cannot reach agreement consistent with our views, negots would serve purpose of defining disagreements in terms of policy issues which could be resolved at high level tripartite meeting to deal with all outstanding issues. Will discuss this with Army but can not make any statement to Brit on this subject until US Gov decision has been reached. Appreciate that inability state to Brit that we are prepared proceed with attempt to resolve prohibited and restricted industries question even independently of dismantling issue, makes your task very difficult and will attempt get decision this point soonest. Meanwhile, believe you shld proceed with your attempt to resolve dismantling issue separately. Discussions you have had with Bevin seem to have been very useful already in drawing indication that Brit concern limited to five plants.
3. Dept believes solution might lie in public announcement that disposition plants involving security consideration will be settled in prohibited and restricted industry negots. We believe some chemical and nonferrous plants on Humphrey list fall in industrial classifications under consideration these negots, i.e., that they are in industries which wld be restricted under Brit or Fr proposals although in general not under present US positions. These are already deferred under our note of Jan 25.3 Clay has been asked report which plants fall in industries under consideration in prohibited and restricted industry negots. Will give you numbers soonest. We wld in addition be prepared similarly to defer consideration three important steel plants to which security objections have been raised (Krefeld and Bochum plants of Deutsche Edelstahlwerke and Hamborn) if agreement cld thereby be reached on rest of our retention list.
4. Suggest without putting proposal re the 3 steel plants forward you carry on with your discussions with Brit and Fr which might give you indication whether some such solution might be acceptable to [Page 555] them. We wld not be prepared to go beyond this position. Since we do not wish to be put in position of negotiating arrangement of this kind with Brit with possibility of Fr adding additional plants, consider it important dismantling question be discussed on tripartite basis before any such proposal is put forward. Meanwhile, we wld hope be able authorize you to say we will agree to governmental discussions on prohibited and restricted industries at early date, but not join with dismantling issue, although you shld not count on this possibility.
5. Foregoing wld not mean there wld be any commitment on our part to agree to dismantling plants whose consideration deferred. All parties wld maintain their positions pending outcome prohibited and restricted industry negots and dismantling wld continue in suspense. Merit this proposal is that, while continuing keep two subjects separate, Fr and Brit cld say they had not agreed to retention plants they felt strongly involved security problem and that these wld be considered from security viewpoint. Also they wld not at this time have to agree to our entire list. Ultimate agreement to retention additional plants within deferred list wld be at same time as announcement results prohibited and restricted industry negots, which wld presumably serve facilitate public acceptance in France.
Hoffman concurs foregoing.