740.5/8–1050: Information airgram

The Secretary of State to the United States Embassy in Canada 1

top secret

A–52. For the Chief of Mission.

US Policy on Use of German Industrial Capacity

We have informed Ambassador Douglas that we completely agree with him that our policy of utilizing German production capacity to provide non-combat items for rearmament of free world will inevitably involve modification of the agreement on prohibited and limited industries. We want to do everything possible to play down publicity on the proposed use of German industrial capacity but we agree with Douglas that with minimum publicity we should go ahead and procure and suggest to other Atlantic Pact countries that they do likewise on a routine basis. We agree entirely with Douglas that as the volume of purchases increases it will probably become apparent to all concerned that amendment of the agreement on prohibited and limited industries with respect to certain components of combat type equipment is desirable.

  1. Source text carries the instruction “no distribution in the Department”.