Foreign Relations of the United States, 1951, Europe: Political and Economic Developments, Volume IV, Part 1

No. 66

862.19–Ruhr/8–2251: Telegram

The Deputy United States High Commissioner for Germany ( Hays ) to the Secretary of State ¹

secret

Bonn , August 22, 1951—6 p.m.

121. Ref ourtel to Dept 117, Aug 17,² rptd info Paris 52, London 50, Frankfort unn. FedRep scrap proposal reed by US/UK HICOMs in Adenauer ltr 20 Aug. Proposal identical to that reported in reftel. In addition to formula Adenauer reserves right rediscuss question with allies in case collections drop below present monthly level 400,000 tons. Proposal formula wld in any case be discussed again after 6–9 months operation.

We regard even an unsatisfactory solution preferable to continuing debate without scrap shipments. Suggest if necessary Fed proposal be accepted after US/UK effort to modify as fols:

1. Revise 60 US/UK, 40 other countries formula to approach previous 75–25 ratio.

2. Freeze export quantities to other countries at about 25,000-ton level with additional export availabilities diverted to US/UK.

3. Formula with first 325,000 for Ger provides only minor incentive for stimulating scrap collections although FedRep alleges present requirements 370,000 tons.

4. Fed ltr ignores our proposal to rescind or modify FedRep regulations requiring collectors to deliver 85 tons internally for each 15 tons of export.

Unofficial indication UK wld agree above contingent on degree of success in modification efforts. In securing UK concurrence we might find it necessary to liberalize portion to UK beyond ⅔rds UK, ⅓rd US mentioned in reftel.³

Hays

1. Repeated to Paris, London, Frankfurt, and Dusseldorf.
2. Telegram 117 reported that negotiations with the Germans on the scrap issue were stalled for the moment pending the approval of the Chancellor and Cabinet of the latest German proposal. It also detailed the provisions of the draft German scrap proposal. (862.19–Ruhr/8–1751)
3. In telegram 133 from Bonn, August 27, McCloy reported that the U.K. representatives on the High Commission were prepared to accept the German scrap-export formula with provision that the export quantities to other countries be frozen at the 25,000-ton level. (862.19–Ruhr/8–2751)