47.07.21(1895w)
MEMORANDUM OF A CONVERSATION July 21, 1947
WITH THE FRENCH AMBASSADORWashington, DC
Ambassador Bonnet called this afternoon at his request. He said that he had explained to Mr. Lovett on Friday the great anxiety in France with regard to recent bi-zonal discussions on Germany. Since then, he said, M. Bidault had received my brief message and it was appreciated.1 Aside from the “technical aspects” of the new level of industry proposals, he said, the French government and public opinion attached the greatest importance to the security problem raised for France. He did not wish to repeat what he had told Mr. Lovett but merely wished to say that much use was being made in France of the belief that the recovery of Germany was being given priority over that of France and other Allies. France did not believe that European steel production should be on the same pattern as before the war. Under the Monnet Plan there was provision for a considerable increase in French steel production which France felt should to that extent replace German steel. The French further objected to the proposals for management of the Ruhr coal mines (i.e., turning them back to more direct German operation).2 M. Bidault felt so strongly that the proposed agreement on the level of industry and any announcement concerning it should be postponed that he was prepared to take a plane for Washington to discuss it.
I told M. Bonnet briefly of the various proposals at Moscow for the increase in the German level of industry where the Soviet Union had suggested a German steel output of 13 million tons. When it became apparent that there could be no agreement on the economic unification of Germany at Moscow Mr. Bevin had suggested the immediate announcement of an increase in the bi-zonal level of industry envisaging a steel output of some 10 million tons. I had felt that this would not be wise at that time and that we did not have enough data to know what the proper level should be. We had therefore agreed that there would be no announcement at Moscow but that we would have our bi-zonal authorities undertake an immediate study with a view to announcing the conclusions within 30 to 60 days. The study proved more complicated than we had anticipated and discussion was consequently long-drawn out. The British and American zonal authorities just happened to reach conclusions at the time of the Paris talks. I said that I could well understand the French worries from the point of view of security in view of the number of times M. Bonnet’s country had been invaded by the Germans and what it had suffered from them. Personally, I did not feel that Germany could be a danger to France for many years to come and I was convinced that the Soviet Union shared this feeling, otherwise, they would not have proposed a German steel level of 13 million tons. The danger, as I saw it, to France would be a Germany controlled by the Soviet Union with German military potential utilized in alliance with the Soviet. This I thought was the real menace for France since it is clear the Soviet regime wants to use Germany for its own advantages. It is not to France’s interest to have the Soviet dominate Germany.
There was one aspect of the question which perhaps was not fully appreciated in France, I said, namely, the matter of American appropriations for the costs of our occupation in Germany. The War Department is finding it more and more difficult to obtain approval for its appropriations and insists that it is the one which has to carry the battle with Congress. This was not entirely true since I joined in the support of their appropriations and it seemed to me as though I had appeared before about every Committee on the Hill. We have just had news that the appropriations for Germany, Austria, Korea and Japan have been cut by $175,000,000 so that as it stands now we only have enough funds to carry us through March. We cannot count on a deficiency appropriation after that time for we are then charged by Congress with failure to allocate appropriated funds so that they will last for the full year. In addition the British have told us that they are having difficulty holding up their financial end in the bi-zonal area and have indicated that they will not long be able to do so. I thought the French government should know of these difficulties. The principal objective at the present seems to me to get increased coal production which is the one thing all Europe needs and then to get it properly allocated.
I said there was one aspect of the matter which I did not fully understand and that is why Mr. Bidault wanted publicity concerning the level of industry agreement. I said that now Molotov knows all about the difficulties and would certainly make full use of the public discussion. I supposed Mr. Bidault’s attitude on German industry would help him politically in France.
Mr. Bonnet replied that leaks concerning the impending level of industry agreement had come out first from Germany and coupled with the announcement of our new directive to General Clay had created such agitation in France and had given such ammunition to the Communists that Mr. Bidault felt that he had to make his position clear. He said that his Government could not see the urgency of proceeding with the agreement since German industry will probably not reach the level already accepted by quadri-partite agreement for several years. I said that while this was true our people in Germany said that it was important to let the Germans know what plants would be retained and which ones would be destroyed. Otherwise the uncertainty made it difficult to get them in operation.
The Ambassador said that he had been authorized to tell me that if the CFM [Council of Foreign Ministers] meeting in November did not reach quadri-partite agreement, France would be prepared to join her zone to the British-American zones. His Government felt that to raise the level of industry on a bi-zonal basis went beyond zonal authority and was contrary to quadripartite agreements. It could not properly be undertaken prior to the November CFM.
He emphasized France’s willingness to consult on ways and means of increasing coal output and offered to send engineers. He said that France had had some of the same problems in getting production in its own mines where the miners and their families had been underfed as well as in the Saar and he thought France could make a real contribution.
I handed the Ambassador for his information a copy of the attached message sent to Bidault this afternoon. He read it and expressed his satisfaction. He said that he knew Mr. Bidault would appreciate our agreement to withhold any further public announcement of the revised bizonal level of industry until the French Government had been consulted.3
COPY OF MESSAGE FROM SECRETARY MARSHALL TO MR. BIDAULT
Since sending you my message on July 18 I have given further consideration to the problems you raise in connection with the proposals put forward by the US-UK representatives in Germany as regards the future level of industry in the Bi-zonal area in Germany and the management and control of the coal industry in Germany. In order to give time for a full consideration of the views of the French Government in these matters the US Govt will suspend further announcement upon the proposal for the revised Bi-zonal level of industry in Germany until the French Govt has had a reasonable opportunity to discuss these questions with the US and UK govts.
I have already approached Mr. Bevin in this connection and I hope that we may shortly be in a position to indicate to you the manner in which a consideration of the issues involved may be arranged. I have been informed by Mr. Bevin that the British Government is now considering the whole position and I hope that therefore it will be possible within a few days to go into this matter in greater detail with you.
NA/RG 59 (Central Decimal File, 862.60/7–2147)
1. In a July 16 telegram to Marshall, Robert Murphy, the political adviser for Germany, summarized the revised plans for reparations and level of industry in the bizonal area. The previous plan provided for the retention of industrial capacity sufficient to approximate production for the depression year 1932 (i.e., 70–75 percent of 1936), while the new plan would approximate the 1936 levels, “a year characterized by neither boom nor depressed conditions.” Announcement of the new level of industry, scheduled for July 16, was postponed due to French objections—the “current furor . . . adroitly magnified by Communist propaganda,” as US Ambassador Caffery termed it. (Foreign Relations, 1947, 2: 988–90, 996.)
Bidault had written to Marshall on July 17 to express “my surprise and my concern at the sudden revelation of a line of action which has such painful consequences for us in connection with the effort which I have made.”France, having committed itself to cooperation with the British and Americans on Germany, felt betrayed and “placed in an unexpected and untenable situation” by the decisions on German level of industry, which would justify Molotov’s position and that of the French Communists. Bidault strongly suggested that he might resign from the government and that the affair might have unfortunate repercussions for “the entire future of the civilized world.” (Ibid., pp. 991–92.) The “brief message”dated July 21 that Marshall mentions was in reply to Bidault’s telegram and said that the proposals would not be announced “until the French Government has had a reasonable opportunity to discuss these questions with the United States and United Kingdom Governments.” (Ibid., pp. 1003–4.)
2. The Monnet Plan was a four-year plan for French industrial and agricultural reconstruction and modernization prepared under the general supervision of economist Jean Monnet and approved by the French government in January 1947. The plan presumed that France would have control over the German coal and steel areas of the Saar and portions of the Ruhr and that Germany’s industrial capacity would be limited.
3. General Lucius Clay, US military governor for Germany and commander in chief Europe, was not pleased with the State Department’s response to the French. In a July 24 teleconference with Howard C. Petersen, assistant secretary of war, he said: “I think we are facing disaster in Germany and I don’t like to head a failure which I can do nothing about. Under present conditions, it seems to me War Department should disdain further economic responsibility [for the US zone of Germany] and insist now on civilian takeover by State. We simply cannot stand still—we either move ahead on a constructive program or collapse and failure are certain.” He suggested that he might resign. The following day Robert Murphy informed Marshall of this threat, adding: “I believe that if Clay does retire under these circumstances he may feel obligated to make certain public statements of his views and his disagreement with what he understands has happened.” (Jean Edward Smith, ed., The Papers of General Lucius D. Clay: Germany, 1945–1949, 2 vols. [Bloomington and London: Indiana University Press, 1974], 1: 386; Foreign Relations, 1947, 2: 1008–9.)
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