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July 21, 1947
Washington, 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 bizonal 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
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
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 Bizonal 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.)