Foreign Relations of the United States, 1947, Council of Foreign Ministers; Germany and Austria, Volume II

862.6362/8–448

The Assistant Secretary of State for Economic Affairs (Thorp) and the British Political Adviser in Germany (Strang) to the Government of the United States and the Government of the United Kingdom ⁸³

confidential

Report on the Anglo-American Talks on Ruhr Coal Production

1. Arising out of an invitation conveyed to Mr. Attlee on 30th June 1947 by the United States Ambassador in London, H.M. Government in the United Kingdom agreed to discussions at the official level in Washington on technical problems connected with increased coal production in the Ruhr and neighboring mining areas in Germany.

2. The conversations began in Washington on 12th August with a Plenary Session. They were continued by way of executive sessions and working parties. A list of the members of the two delegations and their advisers is attached as an annex to this letter.⁸⁴

3. A joint report⁸⁵ embodying our review of the problem and our recommendations was approved at the final plenary session on [10] September 1947. We now beg to submit this report to the Governments of the United States and United Kingdom.

4. In submitting this report, we have felt that our recommendations should exclude matters of detail and any questions which might not be held fully to come within our terms of reference.

5. There are, however, certain subjects on which we feel that more detailed information would be useful. We accordingly have the honor to enclose copies of two Working Party Reports on Housing and Mine Supplies,⁸⁶ with which we agree and which we have used in formulating our recommendations.

6. We would also draw your attention to the recommendations on Food contained in our report. These are confined to proposals in regard to the rationing system, a statement of the importance of maximizing indigenous collections, with certain proposals as to how this should be done, and a suggestion that the Rhine ports should be used for the unloading of inward food shipments as an insurance against a repetition of last year’s distributional breakdowns. We have not, however, included in the report any recommendations in regard to food imports needed, which are such a vital factor in the general food supply position.

7. It is in our view essential that the maximum quantities of grain within the approved program be shipped into Germany particularly during the coming months. In view of the present world grain situation it is our opinion that foods other than grains must also be purchased in much greater quantities than heretofore even to ensure that the present ration of 1550 calories is fully met. It must be recognized that our ability to maintain or improve present ration scales depends upon our being able to build up adequate stocks in Germany by the winter in preparation for the time when indigenous resources will have been largely exhausted and the maintenance of ration scales will therefore be dependent upon imported supplies.

8. In considering the German food problem, we have had the advantage of a working party report prepared by experts which we have the honor to submit to you herewith. That report rightly points out that the problem of food for the Ruhr is inseparable from the wider problem of food for the whole bizonal area. It further draws attention to the deterioration in the world supply position that has taken place during the past few weeks and makes certain proposals in regard to the types and quantities of foodstuffs which should be procured to meet both the 1550 and the 1800 calorie ration scales. It also makes certain recommendations in regard to the relaxation of the present machinery of procurement in respect both of purchases undertaken by the two Zone Commanders and by external procurement agencies. Although certain recommendations of the experts’ report may fall outside the scope of the coal talks, we are firmly convinced that the food problem of Germany must be solved or all other efforts to improve coal production will be of no avail. A satisfactory solution can only be achieved if the measures recommended in the experts’ report, or others of an equally effective nature, are carried out immediately and we recommend that they be brought without delay to the notice of the competent authorities of the two Governments. It is recognized that financial considerations are also involved which must be given immediate attention if these urgent supply recommendations are to be carried out.

9. We have been impressed in our studies of the various aspects of present German economic life which affect coal output, by the serious adverse effect of the lack of confidence in the Reichsmark. We have shown the important part played by food in coal production and, in the food supply position generally, by the collection of indigenous foodstuffs. We recognize however that the greatest deterrent to the farmer in delivering up his produce is that the money he receives for his crops cannot be spent on consumer goods and the uncertainty which he feels in regard to its future purchasing power. This uncertainty in regard to the value of the currency, coupled with the scarcity of goods, reduces the inducement to work, and has led to the necessity of such measures as miners’ incentives schemes. Moreover, the present price structure in Germany is out of line both internally and in relation to world price levels. Finally, the ceiling which has been imposed on price and wage levels has removed from the trade unions their long recognized right to engage in collective bargaining.

None of these evils can be eliminated without the introduction of measures of financial reform which will have as their objective not only the reduction of money in circulation, but also a price adjustment including an exchange value for the Reichsmark.

We accordingly recommend that immediate consideration should be given to the adoption of the necessary corrective measures.

10. Finally, we would like to emphasize once again the vital importance of an early solution of the German transport problem. Unless such a solution can be found, there will be a serious setback not only to German recovery, but to the plans now under consideration in Paris for the recovery of Western Europe as a whole.

September [10], 1947.

• [ William Strang ]
• [ Willard Thorp ]

83. The source text is an unsigned copy. In a letter to General Clay, dated September 18, 1947, Secretary of the Army Royall wrote as follows:

    “As you already know, the Anglo-American Talks on Ruhr Coal Production concluded on 10 September 1947. On that date Sir William Strang, representing the United Kingdom, and Assistant Secretary of State Willard L. Thorp, representing the U.S., signed a confidential letter addressed to their respective Governments and also a joint report embodying a review of the problem and specific recommendations.

    “On 17 September 1947, the Under Secretary of State, Robert A. Lovett, wrote to me enclosing all of the pertinent papers referred to above and stated ‘the Department of State is in agreement with the recommendations made in these documents.’

    “I am therefore forwarding the report, the confidential letter, certain working party reports referred to in that letter, and a copy of the communication I have received from the Department of State. These papers are sent to you for your guidance and implementation since the Department of the Army is in accord with these recommendations.” (862.6362/9–1847)

84. The list of delegations is not printed here. A brief listing is included in the memorandum by Bolton, September 22, 1947, infra.
85. For the text of the joint report, which was released to the press in Washington and London on September 10, 1947, see Department of State Bulletin, September 21, 1947, pp. 576–584. A portion of the recommendations contained in the report is also printed in Documents on International Affairs, 1947–1948, pp. 622–623.
86. Neither printed.