740.00119 EW/3–1749: Telegram

The Secretary of State to the Embassy in the United Kingdom


944. For the Ambassador. [1.] We feel your success in obtaining elimination of great variety of restrictions from discussion constitutes helpful achievement. Our opposition to far-reaching industrial restrictions does not stem from any lack of preoccupation with security matters as Bevin charges (para 10 ur 9821) but desire that what is done have a direct relationship to security considerations. Unless it is, enforcement of restrictions will not in long run commend itself to Allied opinion. Furthermore while we believe Germans may be reconciled to limitations which can be seen to be related to military security they will resist strongly limitations which appear to them to be directed toward restricting German trade for reasons of commercial competition. Brit and Fr attitude has seemed to us inconsistent. If West were to base its policy primarily on risk of Soviets overrunning Germany, it wld have to be wholly different from what we have all agreed. If German collaboration with Soviets is what Bevin fears, one way to diminish this risk is to refrain from measures which needlessly restrict reconstruction German life and breed communism or foster Rapallo mentality.

2. Proposals reported ur 9942 and 10143 still involve serious difficulties from our viewpoint, most important of which is duration. Period of 5 years proposed wld involve commitment longer than we consider wise on some parts of PRI, particularly steel. Events during next five years may make advisable change in some restrictions. In addition, we hesitate to enter into commitments for so long a period independently of agreement among Western powers on more fundamental aspects of our policy toward Germany. As mentioned by Murphy on phone, we wld like ur opinion whether we could advantageously link at this time the discussions on occupation statute and principles of trizonal fusion with your present talks.

3. We have gone over carefully draft ur 994 and comments in 1014. There are set forth below proposals which we hope wld enable you to reach agreement. If we cannot get agreement on something substantially [Page 574] along the lines of your proposal as thus amended, our current thinking is to allow two subjects, PRI and dismantling, to go over to tripartite meeting in Washington.

4. Duration. In line with position US has consistently taken in pre-peace agreements on Germany that peace settlement supersedes and necessary to retain possibility of review as German situation develops, we wld be prepared to accept following formula:

Prohibitions to continue until a peace treaty or other instrument by which prohibitions and limitations are accepted by or imposed upon the German Govt. Believe phrase “with authority over the whole of Germany” in para one Part II ur 994 should be omitted.
On other hand, restrictions (limitations) should be maintained until treaty or other instrument referred to in (a) or until June 30, 1952 (i.e., end of ERP) whichever is earlier. If no treaty, they [then?] reviewed prior to June 30, 1952 and wld continue after that date only to extent then agreed. Text in para one Part II ur 994, however, does not seem to us make entirely clear that new agreement necessary to continue them after agreed date. Limitations understood to mean steel, aluminum, shipbuilding, bearings and, if they are included synthetic ammonia and chlorine.
It shld be understood that any individual item in either prohibition or restrictions could be reviewed at any time (either before or after June 30, 1952) on request of one of three Govts, if it felt that circumstances warranted reconsideration, but wld continue, within time limits stated above, unless three Govts agreed to change it.

5. Shipbuilding. We feel heart of security question is German building capacity, not characteristics of German ships. Position you have been authorized to take wld, in Clay’s opinion, severely restrict German building capacity and consequently ability to initiate naval building program. We are ready to agree that committee of experts shld be established to recommend on prohibited characteristics of a genuine security nature, but do not wish to have a situation in which the present mass of restrictions continue unless all three Govts agree on their relaxation. We do not believe that limitations such as 6000 tons and 12 knots on ocean going ships are necessary on security grounds. We are not clear what the security considerations are on which we wld base limitations of kind discussed in ur 1031.4 (Urtel 1014 not clear on whether Brit proposals apply only to ships built by Germany or also to those acquired from other sources.) Way out might be to agree on directive to committee of experts which wld set pattern for their work and exclude possibility of introducing commercial considerations. Could you get from Brit exact statement of purpose of continuing restrictions, which could be considered as basis for directive?

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6. Synthetic Oil. We have asked Army to query Clay on his views, to be repeated to you.

7. Synthetic Rubber. State agrees to removal of research and testing facilities, and those for butadiene production but Army request you obtain Clay’s views. On styrene we lack info to make judgment on amount of capacity which could be removed. We have requested Army to seek Clay’s views, repeating to you. State is in principle prepared to agree to removal of whatever is excess to German peacetime need.

8. You may agree to limitation synthetic ammonia and chlorine to capacity remaining after reparation removals if essential to reach agreement and if our position on duration is accepted.

9. Very pleased with agreement on aluminum.

10. Humphrey Committee Report. Satisfactory proceed according your proposal re seven plants, but steel plants, items 5, 6 and 7 have been assigned priority for release by Wolf as follows: 7, 5, 6 (7 being least desirable to retain). Assume re Item 2 ur proposal envisages agreement to retention facilities mentioned in alternative recommendation. We cannot agree to removal of Krefeld.

It is understood that PRI agreement on foregoing basis will be subject to reaching satisfactory agreement on occupation statute and trizonal fusion.

Army and ECA concur.

Will send supplementary telegram on electronic valves and machine tools.5

Repeated to USPolAd, Berlin for Riddleberger and Clay, and to Paris for Caffery.

  1. Not printed.
  2. Ante, p. 569.
  3. Not printed; for a summary of this telegram, see footnote 5 to telegram 994.
  4. Not printed; in it Douglas asked if the Department of State would accept the following limitations for speed and tonnage on shipping: cargo liners and combination ships, 18 knots and 12,000 dead weight tons; tankers, 18 knots and 20,000 dead weight tons; coastal ships, 12–13 knots and 5,000 dead weight tons except for special purpose ships; fishing craft, 12–13 knots and 5,000 dead weight tons. (800.85/3–1749)
  5. In telegram 950, March 19, to London, not printed, the Department of State informed Douglas that the Department of the Army was hesitant to use the Military Security Board as a licensing agency for electronic valves and machine tools. Production of machine tools for peaceful use should be under the discretion of the Military Governors and only these items not intended for peaceful production would be prohibited. The Department preferred that production of all electronic tubes under 10 watts and 250 megacycles be permitted except those having military characteristics. (740.00119 EW/3–1749)