Office of the Historian

740.5/8–250: Telegram

The Secretary of State to the Embassy in the United Kingdom

top secret
Washington, August 3, 1950—8 p. m.

629. For Douglas from Secretary and Perkins. 1. There is complete agreement here with general tenor urtel 720.

[Page 180]

2. We want to do everything possible to play down publicity for proposed use of German industrial capacity. However, great Congressional interest this subject. In establishing Congressional record to permit offshore procurement under present MDAP legislation, necessary to indicate our intention of procuring where we could do so most cheaply and efficiently. This naturally led to questions about whether this included Western Germany, to which Executive Branch witnesses had to reply in affirmative. Agree entirely however that with minimum publicity we shld just go ahead and procure, and suggest to other NAT countries that they do likewise on a routine basis.

3. Agree entirely that as volume of purchases increases it will probably become apparent to all concerned that amendment of PLI Agreement with respect to specific raw material capacity limits and perhaps with respect to certain components of combat type equipment is desirable.

4. Our present thinking is that potential impact of rearmament demands on German industry will not have progressed to extent to affect PLI discussions scheduled in ISG on 15 August but this is matter to which further thought must be given and on which we will welcome any comments you may have.

5. Wld be useful to us here if you wld be willing to have this msg and urtel 720 repeated to Bruce and McCloy for their comments.1 [Secretary and Perkins.]

Acheson

  1. In answering telegram 753 from London, August 4, not printed, Douglas said “Fully concur paragraph 5 urtel 629, August 3. I am repeating my 720 to Bruce and McCloy and assume you will send yours” (740.5/8–450).

    In telegram 1223 from Frankfort, August 11, not printed, McCloy indicated his agreement that initially the NAT countries should merely procure desired materials from Germany on a routine basis. He added that France would be more likely to agree to revision of the PLI Agreement if and when the Schuman Plan was adopted. (750.5/8–1150)

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