396.1–ISG/2–851: Telegram
The United States Delegation at the Intergovernmental Study Group on Germany to the Secretary of State 1
Sigto 434. Discussion PLI resumed at meetings Steering Committee February 8 with Stevens, Gillet and Reinstein.
US and British representatives attempted pin down French as to what arrangement or agreement on coke they are seeking (Sigto 4242) before steel limitations can be discussed. Gillet stated French willing discuss steel capacity questions now, but not level of production. Re coke, French seeking system of allocation which Germans will observe and which will put French steel industry on equal basis with German industry as regards access to coke supplies; expressed view US and Britain could be very helpful in securing such allocation arrangement. Stevens expressed view question of exports from Germany could be settled only in context of allocation system in which Germany treated same as other countries.
[Page 1351]Gillet stated French willingness act on steel not dependent on progress of Schuman Plan since they hope coke problem will be solved long before Schuman Plan operative.
After meeting Gillet told Reinstein privately French are trying to work out arrangement with Germans which would solve coke supply problem by establishing relationship between production and exports, which would then be submitted OEEC. French agreement with Germans, not OEEC allocation arrangement, key to action on steel limitations. Gillet gave impression French had obtained assurances US support for this project, and willingness to put pressure on British to discuss their coal requirements in OEEC. (Gillet apparently under impression British not aware of French negotiations with Germans, though it is apparent to us that British are aware though uncertain as to what involved.)
British not yet ready discuss new US position, i.e. they have not finished resconsideration their position re steel and shipbuilding capacity.
Second meeting devoted to discussion problems schedule A. British and French apparently substantially in agreement with concept Department proposals 7 (c) and (d) Deptel 5046, January 22 to Frankfort3 and Department position paper,4 the French apparently believe NATO will make extremely detailed decisions as to what should and should not be produced in Germany after agreement reached with Germans on German participation in western defense. It was agreed three delegates would consult NATO representatives unilaterally on this question. Further telegram re this problem will follow when we have discussed with US NACDep.
Consensus problem of further defining items to be prohibited pursuant NATO decisions could be deferred for present and probably later considered by HICOM.
Experts committee will meet February 9 to discuss redefinition restricted ship characteristics and details proposed instruction to HICOM re production schedule A items which may be authorized immediately (recommendation 7(c) Deptel 5046 to Frankfort); Steering Committee will continue general discussion PLI February 15.