762A.0221/7–1550: Telegram

The United States High Commissioner for Germany (McCloy) to the Secretary of State


410. Reference London’s 8 July, sent Department Sigto 26, repeated Frankfort 25; Department’s 10 July, sent London Tosig 33, repeated [Page 755] Frankfort 169; and London’s 13 July, sent Department Sigto 38, repeated Frankfort 47.1

I have given careful consideration to problems involved in review occupation statute in light of internal German and international situations. I feel strongly that time has arrived for occupying powers to come out with definitive program expressing new approach not only to insure maximum fulfillment Allied objectives still possible, but also avoid being overtaken by swift tide of events.

It appears to me that examination of present statute line by line and article by article without first obtaining tripartite agreement on basic principles is not best method of arriving at workable document, I believe that first of all we should establish an over-all framework encompassing the necessary minimum guaranties which must remain almost unchanged for the rest of the occupation and having reached tripartite agreement on those, proceed to the consideration of reserved powers which, in the light of the over-all structure are still essential. London’s Sigto 38, 13 July, depicts present stage of ISG discussions, as favorable for injection of new approach and exercise of US leadership.

The consideration of the revision comes at a time when a number of specific programs are still in progress but are not expected to continue indefinitely. Their completion will require the continuation of a number of the powers now reserved in section 2 of the statute.

The first step, therefore, is to distinguish between our temporary programs and our longer range objectives in order to clarify how long the powers to achieve them will be required. The second step is to determine the nature of the powers which must be retained to achieve both types of objectives.

I. Objectives:

1. Objectives of indefinite duration:

Basically, our objectives with respect to Germany for the long-run should be two-fold: (1) to assure in Germany a vigorous and healthy democratic order; and (2) to integrate Germany economically and politically into western Europe as fully as possible.

More specifically, in addition to retention of supreme authority, these objectives require reserve powers necessary to insure (a) security from totalitarian aggression whether internal or external or from Gemany’s alignment with the East; (b) protection of a democratic order in Germany, of a government responsible to the people, and of the rights of the individual; (c) protection and support of the occupation forces and authorities.

Haying reserved these powers, we should permit Germany to conduct its foreign relations with friendly states while reserving to ourselves the right to withhold consent to any agreement or treaty which might endanger these objectives or the exercise of these powers. It is moreover necessary to control German relations with the East.

[Page 756]

The fulfillment of any other long-range objectives not falling under those enumerated above might be insured by contractual undertaking.

2. Completion of current programs of limited duration:

In a number of fields, the present statute reserves powers for carrying out specific programs which are now under way. Examples of these are the reorganization of coal and steel industries under AHC law 27,2 the reorganization of Farben; the protection DP’s; external restitution, etc.

It will be necessary to reserve the powers required to assure the completion of these programs. It may be that the present powers could be refined or reduced to some extent, but in large measure they will have to be retained until the programs are complete.

With respect to these programs, we propose that the statute should expressly state that the necessary powers are now reserved only to the extent required to complete the current programs and will lapse when that has been done. In this way the Germans would realize that these powers would have a terminal date and would be under strong pressure to assist actively in completing the programs in order to bring the powers to an early end.

II. Nature of the powers required:

With respect to both types of objectives, it is essential to consider what kinds of powers must be reserved in order to achieve them. Essentially two methods are available: (1) affirmative powers to do things ourselves and (2) commitments by the Germans backed by some form of Allied sanction or power to supervise.

1. Affirmative powers:

In certain fields the Germans either will not or cannot take the action necessary to achieve our objectives. In such fields, we must retain direct power to act ourselves.

2. Indirect sanctions:

In other areas, we can allow the Germans to undertake responsibility and retain our powers of supervision or ultimate power to enforce compliance.

In certain fields our programs will require too long for us to carry them out ourselves. Our only alternative is to turn them over to the Germans. But in order to assure that the Germans do go forward it may be desirable to reserve powers to intervene, such [as?] sanctions to enforce or correct German action in these fields. For example, the program for internal restitutions seems certain to require a number of years for completion. Apparently the Germans have not pushed it forward with any real energy and probably would not complete it without some goading from the Allies. On the other hand we are clearly not in a position to administer the program, especially over [Page 757] any long period. The most we could do would be to reserve certain powers to intervene in order to assure German action.

III. I believe this approach is the best way to deal with the revision at the present time. Since not many of the powers can be fully relinquished at this time, this seems to me the only way likely to make the Germans feel that a real step forward has been taken.

They would recognize that a terminal date had been set for the substantial part of the powers and could be accelerated by their cooperation.

The powers reserved for a longer period would be clearly directed toward objectives which could be more easily explained in relation to Allied interests.

With this approach in mind, we are now preparing detailed answers to London’s Sigto 26 to Department 8 July which we expect forward soonest.

I am also in complete agreement with Douglas’ views expressed Sigto 38 of 13 July wherein my thinking is clearly reflected in paragraph 7.

Would appreciate Department’s comment urgently to insure comprehensive guidance US element HICOM engaged in studies and preparation recommendations to ISG.3

Sent Department 410; repeated info London 35.

  1. Sigto 26 and Tosig 33, not printed, but see footnotes 4 and 2, pages 750 and 749, respectively.
  2. For the text of AHC Law 27, Reorganization of German Coal and Iron and Steel Industries, adopted by the Allied High Commission on May 16, 1950, see Laws, Regulations, Directives and Decisions of the Allied High Commission for Germany, from September 21, 1949 to September 20, 1950, volume I (Bonn-Petersberg, Allied General Secretariat, no date), pp. 155 ff.
  3. In Tosig 49 (repeated to Frankfort as 565), July 24, not printed, the Department of State expressed its full agreement with the general points in this telegram, particularly “that basic principles shld be developed on tripartite basis and that line-by-line exam of Occ Stat is unsatisfactory as method of approach”. The United States contemplated a distinct advance by the Federal Republic toward independence subject to retention of supreme authority by the Allies, especially with regard to security. The Germans would be granted “substantially increased powers in both fonaff and domestic matters.” The Federal Republic would enjoy greater prestige and status as the only German Government qualified to speak for all German people. (396.1–ISG/7–2450)