London Embassy Files: 800 Germany: Telegram
The United States Political Adviser for Germany (Murphy) to the Embassy in the United Kingdom
916. For Douglas from Oppenheimer. Have reported fully to General Clay, Murphy and Wilkinson development of Ruhr talks, in particular discussed at length obstacle to conclusion of agreement caused by French insistence upon some assurance that during post-control period authority should have control over, management coal, iron and steel industries. I showed to General Clay the basis French proposal, [Page 552] British counter-proposal and outlined your tentative thoughts on the subject.
During these discussions which covered wide field of US policy towards France and Germany and which were most satisfactory we also explored alternative course that if French unwilling abide by scope powers defined in annex C we should not make further concession whatsoever to meet French public opinion, but postpone talks indefinitely. This alternative appears least desirable because of repercussions on establishment German Government. It is also to be expected that French will not consent to occupation statute unless they obtain satisfaction concerning Ruhr agreement.
In an attempt to overcome deadlock General Clay has submitted to army a proposal that during control period security desired by French is assured by Military Government through Military Security Board and coal and steel control groups and that prior to relinquishment of Military Government responsibilities including termination of functions of coal and steel control groups the Military Security Board will study and recommend to their Governments the control responsibilities which should [be] transferred from coal, iron and steel groups to IAR. This suggested solution would (1) emphasize security aspect by charging Military Security Board with task of working out extension of powers of the authority, (2) recognize in principle the desirability of exploring possibility of additional controls to be given to IAR and (3) avoid commitment on ownership and management over which boards as constituted have no controls except policy-wise at top level. General Clay made it very clear that he had no further suggestions to make and that final decision must rest with Government.
Felt personally that in substance General Clay’s thinking as reflected in his last proposal is not far apart from Brit or your proposal and I submit following course for your consideration:
- (1)
- Brit proposal is accepted as basis for discussion which would make it easier to reach agreement than if we submitted third proposal;
- (2)
- Brit proposal is not incorporated into agreement but into an agreement signed by French, Brit and US supplementary to the agreement;
- (3)
- Instead of defining new rights to be exercised by
authority in field of deconcentration, denazification and
management, the occupying powers merely decide that
- (a)
- After termination of functions of coal, iron and
steel groups IAR
shall be given sufficient powers to prevent:
- (1)
- Restoration of a pattern of ownership in coal and iron and steel industries which would constitute excessive concentration of economic power,
- (2)
- The return to position of ownership and control of those persons who have been found or may be found, to have furthered the aggressive designs of National Socialist Party,
- (3)
- Implementation of any production, equipment or investment programs relating to coal and iron and steel industries of Ruhr provided such programs involve in the view of Military Security Board a threat to security. (It should be understood that the programs to be worked out by Germans do not require approval of authority as proposed by British.)
- (b)
- The occupying powers concerned will implement above principles which shall form basis for more detailed agreement amending the agreement on IAR and shall take effect immediately prior to relinquishment of responsibilities by Military Governors.
Discussions here also brought out full awareness of danger that the authority might abuse its power to do commercial spying in Germany and to further economic interests of the Allied Powers and their nationals represented on the Council of IAR to detriment of Germany. This danger will necessarily increase if the rights of authority are extended in accordance with paragraph three above. A general statement in the agreement that the authority may not take any steps for purpose of protecting non-German commercial interests or preventing technological improvement or increased efficiency of production of Germany seems desirable but will not prove effective.
Have shown foregoing to Clay, Murphy and Wilkinson.
With your consent I intend now to return to Frankfurt and to terminate my official duty status as of December 9. However I shall visit you after my return to London on or about December 15.