Foreign Relations of the United States, 1950, Western Europe, Volume III

740.5/8–150: Telegram

The Secretary of State to the Embassy in France ¹

secret
priority

Washington, August 1, 1950–9 p. m.

579. For Bruce.

1. Fol instructions have been sent to Spofford:²

• “(1) In course your informal discussions with individual reps other NAT countries in London you shld take occasion to indicate US view that scope of defense effort required by current international situation cannot be managed without finding means to utilize Ger productive capacity to turn out non-combat types of eqpt such as trucks and perhaps certain kinds of parts and basic materials such as steel. No intention to propose gen amendment of present PLI agreement³ (Reinstein⁴ can give you full details this agreement) although may be necessary to propose some modifications if for example a shortage of steel or of certain components of prohibited items shld develop.

  Alternatives seem to us to be inadequate effort, dangerous delay in rearmament, or impairment of economic stability of NAT countries.

• (2) It shld be made clear that:

  a. German capacity wld be utilized whenever it offers a relative advantage in prompt accomplishment of NAT production program. Ger program of course wld have to be worked out with NAT countries who will use output of Ger industry.

  b. US will help in working out means financing procurement in Ger.

  c. Arrangements wld of course have to take account of guidance from Standing Grp on strategic location factors.

  d. This proposal does not reflect any change in US views concerning Ger rearmament or production of combat eqpt in Ger.

• (3) Our main objective at present is to secure careful and if possible favorable consideration by NATO govts to gen idea of using Ger industrial capacity. US cannot make firm proposal until after Congressional action on funds to at least help finance such production. However, if reaction seems to offer a favorable opportunity for doing so, you may at your discretion press for an agreement in principle to this proposal.
• (4) Spofford will advise Embassies on his discussions so they may make suggestion at high level when appropriate.
• (5) Appreciate full reports on governmental and individual attitudes.”

2. In connection with additional MAP appropriation now being presented to Congress strong feeling has developed that all facilities in the free world which can be effectively used shld be employed in producing additional matériel requirements. Hence above message. Record before Congress will clearly show intention to use MAP funds for purchase end items and components as well as AMP and raw materials. This includes Ger and in all probability Japan but in these cases no expectation of procuring combat type matériel. Nor is there any intention at present to make any general amendment to PLI Agreement to increase capacity in Ger. This will mean that we will be considering the use of Ger productive capacity in connection with our expenditures under additional MAP and that we will also be urging other NATO countries to place orders there when advantageous. Secy will take above line before Congress Aug 2 and probably news will be out Aug 3. We believe it is important that Fr and Brit be informed first and at once. We are sending similar wire to Douglas. In presentation it shld be stressed that basic motive is to find means of carrying defense load with minimum impairment of economic standards in countries undertaking this task including U.S.

3. Please repeat tels this subject to London for Douglas and Spofford and to Frankfort eyes only for McCloy.⁵

4. Pls inform Spofford immediately in addition to Dept⁶ when you have informed Fr so he can discuss matters with NAT Deputies.

Acheson

1. Repeated for information and background to Ottawa as 30, Oslo as 85, Copenhagen as 70, The Hague as 139, Brussels as 142, Luxembourg as 9, and London (for Spofford) as 579.
2. Todep 15 to London, July 28, 9 p. m., not printed.
3. For text of this U.S.-U.K.-French agreement of April 13, 1949, on prohibited and limited industries, see Germany, 1947–1949: The Story in Documents (Washington, Government Printing Office, 1950), pp. 366–371. For documentation on the negotiation of this agreement, see Foreign Relations, 1949, vol. iii, pp. 546 ff.
4. Jacques J. Reinstein, Director, Office of German Economic Affairs.
5. The contents of this telegram 579 were conveyed to John J. McCloy, U.S. High Commissioner for Germany, in telegram 846, August 1. McCloy, in his telegram 1013 from Frankfort, August 7, stated that he had already initiated a staff study of how West German economic strength could contribute to the western effort to an even greater degree than suggested in the instructions to Spofford. Telegrams 846 and 1013, not printed (740.5 MAP/8–150 and 740.5/8–750, respectively).
6. In telegram 619, August 2, not printed, Bruce replied that he had seen Pleven that afternoon and had found him in “thorough accord with this objective” (740.5/8–250).