The Acting United States Member at the Intergovernmental Study Group on Germany (Holmes) to the Secretary of State
Sigto 273. Distribution in Department as indicated by Byroade. Reference Secto 45, September 24 .1 Stevens Foreign Office approached Reinstein informally on question including in PLI agreement some authorization HICOM to permit manufacture light military equipment in Germany. He suggested desirability of including provision for what had already been agreed at New York. He also suggested desirability making provisions for any future decisions on this subject.
US representative indicated our belief that New York agreement did not contemplate any action at this time by way of implementation of permission to produce weapons. I pointed out proposals US Delegation had submitted in ISG would permit HICOM to authorize production for NATO countries of certain types of equipment (not including weapons) which can be produced without special tooling or techniques, (reference ISGG–5 as amended, Tosig 174, October 24, repeated Frankfort 3047, Paris 21612).
US representative indicated our view was that whole question of production weapons, whether for German use or export, should be related to decisions to be taken on German participation in Western defense and should not be discussed at this time. If PLI revision is completed before decisions reached on defense, there should be clear [Page 785] understanding that agreement will be further revised once defense decisions are taken. Stevens said British would consider matter further and agreed not to raise question in tripartite discussions prior consultation with US Delegation. In course of discussions, he referred to US proposal of 26 October (DC/29) on German contribution.3 He remarked British felt statement as to type of equipment which could be made somewhat restrictive. They had avoided raising point, however, feeling they did not wish to do anything which might interfere with getting French agreement on German contribution.
I would appreciate being informed Department’s view as to status of agreements (Secto 45) on preparation and plans for utilizing ministerial potential for production weapons. Would also appreciate statement Department’s general approach re extent to which Germans would be permitted, once they have been brought into defense scheme, to produce military equipment. Our thought had been there would be selected limitations on production military end use items designed to prevent Germans from having at their disposal means of production strategic items. These limitations would include some heavy weapons, guided missiles, naval craft and aircraft, for example. (Reference Sigto 219, November 1, repeated Frankfort 314, Paris 7504) US proposal in DC/29, October 26, seems to us considerably more restrictive in its approach. We continue to feel that long term security controls will have to be discussed in relation to effect on German participation in Western defense, and note that US has itself emphasized safeguards in its presentations on this subject.
NAT Deputy Spofford has seen this telegram and is in general agreement.
Sent Department Sigto 273, repeated Frankfort 403 for McCloy, Paris 940 for Bruce.5