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

862.6362/9–1747

The Secretary of State to the French Ambassador (Bonnet)²

The Secretary of State presents his compliments to His Excellency the Ambassador of France and has the honor to transmit herewith a memorandum setting forth the views of the United States Government on the observations of the French Government, communicated’ in the Ambassador’s note, No. 310, dated September 17, 1947,³ on the Anglo-American plan to establish a German Coal Management for the coal mines in the Ruhr-Aachen area.

The United States Government wishes to state that, notwithstanding the terms of paragraph 8 of the enclosed memorandum, sympathetic consideration will be given to the possibility of making special arrangements for the Karl Alexander mine.

It is understood that an identical memorandum is being addressed to the French Government by the British Government.

Washington , November 14.

[Enclosure]

Memorandum⁴

In consultation with the British Government, the United States Government has given careful consideration to the views expressed by the French, Belgian, Luxembourg and Netherlands Governments⁵ on the plan for the management of the German coal mines in the Anglo-American Zone of Germany, the text of which was communicated to the representatives in London of these four governments on August 28th last.

2. The observations of all four governments covered two main points

(a) The general question of the advisability of handing over the management of the mines to a German coal management; and

(b) the particular question of the effect on foreign-owned mines of putting into force of the coal management plan.

3. On the first point the four governments expressed a view that an undesirable concentration of economic power would be placed in German hands. This power might subsequently be abused by Germany to the detriment of other European countries and to the prejudice of European security. It was argued that although the coal management plan was only of a provisional character, its acceptance and implementation would inevitably prejudice any later and more permanent arrangement which might subsequently be found desirable. In particular, the adoption of the coal management plan would make it difficult subsequently to impose measures of international control over the industries of the Ruhr-Aachen area and their output, such as have been recommended at various times by certain of the four governments.

4. In reply the United States Government wishes to draw attention to the very considerable powers reserved under the plan for the United States-United Kingdom control group. This group, which is directly responsible to the two Military Governors for the implementation of the plan, will closely supervise the latter’s operation and will have the duty of ensuring that the Germans properly discharge their responsibilities under the plan. The control group will have general powers to inspect all mine properties. The control group will issue directives to the German General Director on all questions concerning the export of coal and will also be empowered to issue directives on behalf of the United States-United Kingdom Military Government on any other appropriate subject. It will also have a general power of veto over the decisions of the German Coal Management. Insofar as the levels of wages and of internal selling prices are concerned these are matters which will not come within the competence of the German General Director.

5. In these circumstances the United States Government does not agree that undue power is being handed over to the Germans, nor that the latter will be placed in a position to be able to make use of their powers to the detriment of non-German interests. The United States Government feels confident that the powers entrusted to the United States-United Kingdom control group will enable them to prevent discrimination in any way against foreign interests. In any event, in any cases where discrimination against non-German interests is discovered or suspected, it will always be open for the Government concerned to take the matter up with the United States-United Kingdom Military Government, or in matters of minor importance with the United States-United Kingdom control group, in order that the Anglo-American authorities may, should the circumstances warrant it, take appropriate action with the German authorities. It is suggested that should foreign governments wish to make any communication to the United States-United Kingdom control group the most suitable procedure would be for the communication to be made through the Liaison Officers at present attached to the North German Coal Control at Essen, who, it is contemplated, will continue to function in a similar capacity with the United States-United Kingdom control group when the coal management plan is put into effect.

6. The United States Government does not feel that this plan for the handing over of the actual management of the mines to a German organization, coupled as it is with the retention of very considerable powers in the hands of the United States-United Kingdom control group, will prejudice the position should it be agreed at a later date that some form of international control should be set up to regulate the Ruhr industries and their output. German management of the mines would not in itself seem to be incompatible with overall international control and should it subsequently be agreed that some such international control should be established, the United States Government would certainly for its part not be deterred from proceeding with such a scheme by the fact that the management of the mines was in German hands.

7. As regards the second question raised by the four governments—i.e. the position of Allied-owned mines under the plan—it should be pointed out in the first place that the suggestion made in the last section of the Allied industrialists’ memorandum to which reference was made by some of the Governments, that the Allied-owned mines (especially those in the Aachen area) should be excluded from the coal management plan and subjected to a special regime, is not practicable. Apart from any other considerations, it is considered essential if coal production is to be maximized and the German coal industry organized on the most efficient basis that there should be a single managing agency for the whole of the combined zone. Only in this way can overall plans for raising production and for ensuring that requirements of materials, manpower, etc. are met be properly drawn up and implemented. The inclusion of the foreign-owned mines in the management scheme is therefore essential.

8. The United States Government is, however, fully conscious of the importance which the four governments attach to the protection of the interests of their nationals in certain of the mines and in the light of the representations which have been made to them have reconsidered the provisions set out in paragraph 10 of the draft coal management plan. The United States Government is now prepared to agree that in the case of individual or collective majority holdings (51 per cent interest or more) a manager selected by the foreign company or companies concerned and sponsored by the interested government or governments may be appointed, with the approval of the United States-United Kingdom Military Government, to the mine or mines in question. It would be understood that these managers would comply with any regulations that might be laid down by the United States-United Kingdom control group for the operation of the mine as a whole and that their powers would not be such as to effect the authority of the control group or the German coal management. In particular, it would be incumbent upon the foreign managers to carry out any measures laid down in fulfillment of the policy of the United States-United Kingdom Military Government of maximizing coal output.

9. Although the foreign managers would thus be subordinate to the overall directions of the German coal management they would always have the right in any case where they considered that the interests which they represent are being prejudiced by the German coal management to appeal to the United States-United Kingdom control group—through the appropriate Liaison Officer as suggested at the end of paragraph 5 above.

If the German coal management wish to complain against any foreign manager they will be required to make their representations to the United States-United Kingdom control group which will in the first instance approach the Allied Liaison Officer concerned before taking any action on the complaint. Should it be felt necessary to take any steps vis-à-vis the foreign manager on account of this complaint, this action will be initialed by the United States-United Kingdom control group and not by the German management.

10. As far as minority holdings in the mines are concerned, the United States Government feels that these should be adequately protected by the Allied Liaison Officers already referred to who will be in daily contact with the United States-United Kingdom control group. The United States Government is, however, prepared to consider sympathetically any applications which may be made on behalf of substantial Allied minority holdings (individual and collective) for the appointment of special representatives to supervise their interests; such representatives would not, however, possess managerial powers.

11. In the case of all collective holdings, whether majority or minority, it would be necessary for the various parties concerned to agree upon a manager or representative as the case may be and to arrange for him to be sponsored by the Allied government or governments concerned. There is no reason why the managers or representatives should not be Allied nationals.

12. Various proposals were put forward by some of the governments which would have the effect of making available to an Allied government the production of the coal mines in the Ruhr-Aachen area owned by its nationals. Such a proposal is not, however, practicable at the present time. In the first place, as the four governments are aware, the total quantity of German coal available for export to European countries (except Austria), is declared to the E.C.O. for allocation recommendations in accordance with the principles established by that organization. In the second place any such arrangement would make it difficult to make the most economic use of the limited transport at present available and would therefore tend seriously to prejudice deliveries of all coal exports from the Ruhr.

13. The United States Government trusts that the above-mentioned modifications to Article 10 of the plan will be agreeable to the four governments and that the latter’s apprehensions regarding the plan in general and its effects on the interests of their nationals in particular will have been removed by the above explanations.

14. Both the United States Government and the British Government are convinced that the maximum output of German coal, so vitally needed for the recovery of Europe as a whole, can only be attained if responsibility for the overall management of the mines is entrusted to the Germans—subject always to the supervision of the United States-United Kingdom Military Government and to the direction of the latter in policy matters. They feel that any further delay in putting the coal management plan into effect will have an unfortunate effect on German opinion and react unfavorably on coal production. They have, therefore, decided that they must put the plan, modified as indicated in paragraphs 8–11 above, into operation in the very near future. The date on which the plan will actually be put into effect will be notified to the four governments as soon as possible. The United States Government will always be glad to provide these governments with additional information about the plan that they may wish to receive.

Washington, November 14, 1947.

2. The Secretary of State addressed notes similar to this to the Belgian and Netherlands Ambassadors and the Luxembourg Minister.
3. Not printed; for a brief summary, see telegram 4178, September 26, to London, p. 966.
4. Copies of this memorandum were also transmitted to the Belgian and Netherlands Ambassadors and to the Luxembourg Minister.
5. The views of the Belgian Government were transmitted in the Belgian Ambassador’s note of September 26, those of the Luxembourg Government were transmitted in the Luxembourg Minister’s note of October 3, and those of the Netherlands Government in the Netherlands Ambassador’s note of September 9, none printed (862.6362/9–2647, /10–347, and /9–947).