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HIS DOCUMENT 13
PROPERTY OP H
IS BRITANNIC MAJESTY'S 1
. GOVERN;ENT) TOP SECRET C.F. (U-S)
156
COPY NO. 15TH APRIL, 19U6
CABINET THE FUTURE OF GERMANY AND THE RUHR Note by
J^^^ij^ojQ^l^^crotary By direction of the Foreign Secretary
^iJH/x.)
I circulate the attached papery (GEN. 121/1
which should be read in connection with a paper
on the Ruhr which the Foreign Secretary is
circulating for discussion at Cabinet on
Wednesday, 17th April. ­
35
(Signed) NORMAN BROOK Cabinet Office, S . V / . 1 ,
1 5 t h April, 191).6.
s C P . (b 6)
r
139.
THIS DOCUMENT IS T H E PROPERTY OF H I S BRITANNIC MAJESTY'S GOVERNMENT
Printed
for
the Cabinet.
March
17
1946.
Copy No.
T O P S E C R E T
Gen. 1 2 1 / 1 .
llth
March,
1946.
CABINET.
Committee on G e r m a n I n d u s t r y .
THE
FUTURE
OF
GERMANY
AND
THE
RUHR.
M E M O R A N D U M BY T H E S E C R E T A R Y O F S T A T E F O R F O R E I G N
AFFAIRS.
Conclusions.
I m u s t lay before m y colleagues a n u m b e r of p r o b l e m s w h i c h r a i s e f a r ­
r e a c h i n g issues. T h e a n s w e r s a r e n o t e a s y a n d y e t t h e y m u s t be f o u n d .
They
c a n n o t be delayed indefinitely. T h e F r e n c h G o v e r n m e n t a r e p r e s s i n g f o r a n earlv
r e p l y to t h e i r p r o p o s a l s r e g a r d i n g t h e R u h r a n d t h e R h i n e l a n d , a n d t h e y h a v e
n o w s u g g e s t e d a F o u r - P o w e r C o n f e r e n c e to c o n s i d e r t h e m . T h e y h a v e also asked
for a m o r e i m m e d i a t e d e c i s i o n o n t h e S a a r . I myself f a v o u r e a r l y d i s c u s s i o n s
between t h e F o u r G o v e r n m e n t s c o n c e r n e d , n o t o n l y on t h e F r e n c h p r o p o s a l s , b u t
on t h e f u t u r e of G e r m a n y a s a w h o l e , i t s level of i n d u s t r y , a n d i t s c o n t r o l , a n d ,
finally, o n t h e U n i t e d S t a t e s p r o p o s a l for a F o u r - P o w e r T r e a t y t o e n s u r e
disarmament.
2. I , t h e r e f o r e , a s k m y c o l l e a g u e s ' v i e w s a s t o t h e l i n e I s h o u l d t a k e i n a n y
forthcoming discussions w i t h the F r e n c h , U n i t e d S t a t e s a n d Soviet Governments.
To facilitate consideration a n d decision I have formulated the following
p r o p o s i t i o n s w h i c h cover, I t h i n k , t h e v a r i o u s q u e s t i o n s involved.
(1) A s r e g a r d s t h e R u h r , is i t i n B r i t i s h a n d g e n e r a l i n t e r e s t s t h a t t h i s a r e a
of n a t u r a l i n d u s t r i a l w e a l t h s h o u l d be e c o n o m i c a l l y s o u n d a n d become a p o s i t i v e
element i n E u r o p e a n r e c o n s t r u c t i o n ?
(2) I f so, h o w best c a n t h e n e c e s s a r y c o n d i t i o n s be a c h i e v e d , e.g.:—'
(a) by k e e p i n g i n d u s t r y u n d e r B r i t i s h c o n t r o l so l o n g as o u r o c c u p a t i o n of
t h e B r i t i s h z o n e l a s t s , a n d t h e n h a n d i n g i t over t o t h e G e r m a n G o v e r n ­
m e n t w i t h or w i t h o u t s a f e g u a r d s ;
(b) b y p l a c i n g t h e R u h r i n d u s t r y u n d e r i n t e r n a t i o n a l o w n e r s h i p a n d control,
while r e t u r n i n g eventually the t e r r i t o r y to the G e r m a n S t a t e ;
( ) by p l a c i n g t h e R u h r i n d u s t r y u n d e r i n t e r n a t i o n a l o w n e r s h i p a n d control,
a n d a t t h e s a m e t i m e d e t a c h i n g t h e t e r r i t o r y f r o m G e r m a n y a n d setting­
it u p as a n independent S t a t e u n d e r international control.
c
(3) A s r e g a r d s 2 (a) w h a t a r e t h e p r o s p e c t s of o u r b e i n g able t o c o n t i n u e for
a n y l e n g t h of t i m e t h e m i l i t a r y o c c u p a t i o n of o u r zone a n d t h e f e e d i n g of t h e
German population?
I f t h e p r o s p e c t s a r e b a d , is t h e s o l u t i o n t o w o r k for t h e
early c r e a t i o n of a G e r m a n G o v e r n m e n t t o w h o m t h e whole of G e r m a n y , i n c l u d i n g
t h e R u h r , should be h a n d e d over ?
(4) Again if i t is d e c i d e d t o l e a v e t h e R u h r i n s i d e G e r m a n y a n d u n d e r
G e r m a n a d m i n i s t r a t i o n , c a n w e e x p e c t to g e t f r o m t h e U n i t e d S t a t e s a n d Soviet
G o v e r n m e n t s a g r e e m e n t to a h i g h e r level of i n d u s t r y t h a n t h a t t h o u g h t s a f e for
G e r m a n y as a w h o l e , i.e., m o d i f y t h e P o t s d a m d e c i s i o n ?
Can we hope to get
a g r e e m e n t for a p o s i t i v e policy for a G e r m a n R u h r a n d n o t m e r e l y for one"of
negation and prevention ?
13182 [ 3 1 4 2 7 ]
[31647]
B
(5) A s r e g a r d s 2 (b), c o u l d t h e R u h r i n d u s t r y be r u n efficiently u n d e r i n t e r ­
n a t i o n a l o w n e r s h i p a n d c o n t r o l if i t r e m a i n e d w i t h i n t e r r i t o r y g o v e r n e d by t h e
G e r m a n S t a t e ? W h a t a c c o u n t m u s t be t a k e n of t h e p r o b a b i l i t y of a C o m m u n i s t
a n d Soviet-controlled G e r m a n Government in Berlin?
W o u l d this increase the
r i s k s of l e a v i n g t h e R u h r i n d u s t r y i n s i d e t h e G e r m a n S t a t e , even t h o u g h i t m i g h t
i n c r e a s e t h e l i k e l i h o o d of t h e S o v i e t G o v e r n m e n t a g r e e i n g t o t h e a r e a e n j o y i n g
easier economic conditions?
(6) A s r e g a r d s 2 (c), s u p p o s i n g w e d e c i d e d t h a t o u r r e q u i r e m e n t s w o u l d only
be m e t by r e m o v i n g t h e t e r r i t o r y of t h e R u h r f r o m G e r m a n y , w o u l d a n i n t e r ­
national administration prove workable?
C o u l d w e be s u r e t h a t i t w o u l d n o t
involve, i n t h e l o n g r u n , w o r s e economic a n d p o l i t i c a l c o n s e q u e n c e s , e i t h e r t o o u r ­
selves or to t h e G e r m a n s , t h a n c o n t i n u a t i o n of t h e p r e s e n t c o n d i t i o n s by w h i c h
w e r e m a i n solely r e s p o n s i b l e for t h e B r i t i s h zone w h i l e w e r e m a i n i n o c c u p a t i o n ?
(7) A s r e g a r d s t h e S a a r , s h o u l d w e s u p p o r t t h e F r e n c h d e m a n d t h a t t h e m i n e s
be r e s t o r e d t o F r e n c h o w n e r s h i p a n d t h e a r e a itself i n c l u d e d i n t h e F r e n c h c u s t o m s
u n i o n , w h a t e v e r d e c i s i o n i s u l t i m a t e l y r e a c h e d a s r e g a r d s t h e R u h r or R h i n e l a n d ?
T h i s w o u l d s t r e n g t h e n F r e n c h e c o n o m y a n d i n c r e a s e t h e i r sense of s e c u r i t y .
(8) S h o u l d w e s u p p o r t t h e F r e n c h p r o p o s a l t o t u r n a l l G e r m a n t e r r i t o r y w e s t
of t h e R h i n e i n t o one o r m o r e s e p a r a t e i n d e p e n d e n t S t a t e s ?
If the R u h r were
s e p a r a t e d a n d i n t e r n a t i o n a l i s e d , t h e case f o r s e p a r a t i n g t h e left b a n k of t h e R h i n e
w o u l d be s t r e n g t h e n e d .
S h o u l d w e i n a n y case o b j e c t t o t h e m a i n t e n a n c e of
French, Belgian, L u x e m b o u r g and D u t c h garrisons in this a r e a indefinitely?
(9) S h o u l d w e welcome M r . B y r n e s ' p r o p o s a l for a F o u r - P o w e r T r e a t y for
t h e d i s a r m a m e n t of G e r m a n y w h i c h w o u l d p r o v i d e , a f t e r t h e t e r m i n a t i o n of
A l l i e d o c c u p a t i o n , a s y s t e m of q u a d r u p a r t i t e i n s p e c t i o n ?
Should we stipulate
t h a t i t d i d n o t p r e c l u d e c o n t i n u e d o c c u p a t i o n for a n i n d e f i n i t e p e r i o d of c e r t a i n
k e y a r e a s of G e r m a n y by t h e F o u r P o w e r s c o n c e r n e d a n d t h a t i t took a c c o u n t of
the eventual agreement in r e g a r d to the R u h r ?
I.—POSITION
IN EASTERN
EUROPE.
A t t h e P o t s d a m C o n f e r e n c e i t w a s a g r e e d t h a t p e n d i n g t h e final d e l i m i t a t i o n
of P o l a n d ' s w e s t e r n f r o n t i e r a t t h e p e a c e c o n f e r e n c e , t h e f o r m e r G e r m a n
t e r r i t o r i e s e a s t of t h e O d e r - W e s t e r n N e i s s e l i n e s h o u l d be p l a c e d u n d e r t h e
a d m i n i s t r a t i o n of t h e P o l i s h S t a t e a n d r e m o v e d f r o m t h e R u s s i a n zone.
This
transferred area would include D a n z i g but exclude the Kbnigsberg area which
w a s to be p l a c e d u n d e r S o v i e t a d m i n i s t r a t i o n .
2. I t w a s also a g r e e d t h a t t h e G e r m a n p o p u l a t i o n s r e m a i n i n g i n P o l a n d ,
C z e c h o s l o v a k i a a n d H u n g a r y s h o u l d be t r a n s f e r r e d to G e r m a n y i n a c c o r d a n c e
w i t h a p l a n to be p r e p a r e d by t h e C o n t r o l C o u n c i l . I n N o v e m b e r t h e C o n t r o l
C o u n c i l a p p r o v e d a p l a n , p r o v i d i n g for t h e t r a n s f e r to be c o m p l e t e d by t h e e n d
of J u l y 1946. T h o u g h t h i s d a t e is l i k e l y to be p o s t p o n e d a n d t h o u g h some of
t h e G e r m a n s i n q u e s t i o n , p a r t i c u l a r l y i n C z e c h o s l o v a k i a , m a y be a l l o w e d to
r e m a i n i n t h e i r c o u n t r i e s of o r i g i n , n e v e r t h e l e s s by t h e e n d of t h i s y e a r t h e b u l k
of t h e G e r m a n p o p u l a t i o n s i n P o l a n d , C z e c h o s l o v a k i a a n d H u n g a r y w i l l p r o b a b l y
h a v e been e x p e l l e d a n d d i s t r i b u t e d a m o n g t h e v a r i o u s zones of G e r m a n y .
The
Y u g o s l a v G o v e r n m e n t h a v e also a s k e d for t h e e x p u l s i o n of s u c h of t h e i r G e r m a n
p o p u l a t i o n as s t i l l r e m a i n i n Y u g o s l a v i a .
3. T h o u g h i t w a s l a i d d o w n a t P o t s d a m t h a t t h e final d e l i m i t a t i o n of
P o l a n d ' s w e s t e r n f r o n t i e r s h o u l d a w a i t t h e p e a c e s e t t l e m e n t , i t h a s been g e n e r a l l y
t a k e n for g r a n t e d t h a t n o c h a n g e i n t h e P o t s d a m l i n e w i l l be m a d e i n Germany's
f a v o u r . B u t t h e P o t s d a m decision p l a c e s R u s s i a i n a v e r y s t r o n g p o s i t i o n . The
P o l e s w i l l n e v e r be a b l e to d i s p e n s e w i t h R u s s i a n p r o t e c t i o n i n o r d e r t o hold
their newly acquired lands. A t the same t i m e the Soviet Government will always
h a v e a m e a n s of e n t i c i n g t h e G e r m a n s i n t o t h e i r c a m p by offering to r e t u r n
some of t h e lost t e r r i t o r y .
4. T h e economic difficulties i n G e r m a n y a r e c l e a r l y i n c r e a s e d b y these
P o t s d a m d e c i s i o n s . N o t only h a s s h e lost a g r e a t p a r t of h e r best food p r o d u c i n g
l a n d , b u t she h a s t o receive i n t o t h e r e d u c e d t e r r i t o r y a v a s t n u m b e r of p e n n i l e s s
i m m i g r a n t s . T h e p o s i t i o n is a g g r a v a t e d by t h e f a i l u r e t o c a r r y o u t t h e P o t s d a m
d e c i s i o n to t r e a t G e r m a n y a s a s i n g l e economic u n i t . T h e R u s s i a n zone is, i n fact,
a walled-off a r e a , e c o n o m i c a l l y as w e l l a s p o l i t i c a l l y , a n d h a s suffered b o t h by
t h e w h o l e s a l e s t r i p p i n g of i t s i n d u s t r i a l a n d a g r i c u l t u r a l w e a l t h a n d by the
u n e c o n o m i c r e d i s t r i b u t i o n of l a n d a n d b y t h e f a c t t h a t t h e R u s s i a n A r m y of
O c c u p a t i o n h a s been l i v i n g off t h e l a n d . W h e r e f a c t o r i e s h a v e been l e f t they
a r e believed to be w o r k i n g l a r g e l y o n R u s s i a n o r d e r s .
18
-
3
5 . P o l i t i c a l l y , the R u s s i a n zone i n G e r m a n y ( p o p u l a t i o n a b o u t 1 8 £ m i l l i o n )
i s b e i n g o r g a n i s e d a l o n g t h e m o d e l a p p l i e d in o t h e r t e r r i t o r i e s u n d e r S o v i e t
domination. A l l p r e p a r a t i o n s a r e being m a d e for a single U n i t e d W o r k e r s
P a r t y w h i c h will be r i g i d l y c o n t r o l l e d f r o m t h e t o p a n d w i l l a m a l g a m a t e t h e
old S o c i a l D e m o c r a t a n d C o m m u n i s t P a r t i e s .
T h e m e n i n effective, if n o t
n o m i n a l , c h a r g e w i l l be C o m m u n i s t s t r a i n e d i n R u s s i a .
The t r a d e unions are
similarly being organised in the a p p r o v e d R u s s i a n m a n n e r .
6. T h e a i m of these m a n o e u v r e s seems t o be t o i n c l u d e t h e e a s t e r n h a l f of
G e r m a n y i n a solid block of S o v i e t - c o n t r o l l e d t e r r i t o r i e s s t r e t c h i n g f r o m L u b e c k
to T r i e s t e . F i n l a n d , P o l a n d , H u n g a r y , R o u m a n i a , Y u g o s l a v i a , B u l g a r i a a n d
A l b a n i a a r e e i t h e r i n t h e b a g a l r e a d y , o r v e r y n e a r l y so. T h e p r o s p e c t of C z e c h o ­
s l o v a k i a h o l d i n g o u t is n o t too h o p e f u l . I n A u s t r i a t h e issue is a s yet u n d e c i d e d ,
b u t t h e R u s s i a n s , of course, o c c u p y t h e e a s t e r n p a r t a n d , a s i n G e r m a n y , t h e
c a p i t a l is a n i n t e r n a t i o n a l i s l a n d i n t h e S o v i e t - o c c u p i e d p r o v i n c e s .
Greece
w o u l d f a l l i n t o l i n e if t h e E . A . M . e v e r g o t c o n t r o l t h e r e . T u r k e y is b e i n g s u b ­
jected t o a w a r of n e r v e s d e s i g n e d to force h e r i n t o t h e Soviet o r b i t .
T h e S c a n d i n a v i a n c o u n t r i e s a r e also s h o w i n g s i g n s of n e r v o u s n e s s i n r e g a r d to
Soviet R u s s i a .
7 . T h e Soviet G o v e r n m e n t h a v e n o w s t a t e d t h e i r i n t e n t i o n to p r e p a r e a
5 - y e a r economic p l a n for t h e t e r r i t o r i e s w i t h i n t h e i r s p h e r e of r e s p o n s i b i l i t y .
T h e p u r p o s e of such a p l a n w i l l n o d o u b t be t o h a r n e s s t h e r e s o u r c e s of t h e w h o l e
a r e a , i n c l u d i n g p r e s u m a b l y t h e R u s s i a n zone of G e r m a n y , f o r t h e benefit of
R u s s i a n r e h a b i l i t a t i o n a n d one of i t s likely c o n s e q u e n c e s will be to s e a l off t h i s
a r e a even m o r e completely t h a n a t p r e s e n t . R u s s i a n t r a d e w i l l n o d o u b t l a r g e l y
fill t h e g a p left by G e r m a n t r a d e in t h e E a s t e r n E u r o p e a n c o u n t r i e s . N o r a r e
t h e a i m s of t h e Soviet G o v e r n m e n t confined t o t h e a c t u a l t e r r i t o r i e s m e n t i o n e d .
T h e y a r e closely i n t e r e s t e d also i n p h y s i c a l l y c o n t r o l l i n g t h e sea r o u t e s , viz., t h e
S t r a i t s o n t h e one side a n d t h e B a l t i c on t h e o t h e r .
I t c a n h a v e been n o
coincidence t h a t t h e P o l e s r e c e n t l y a s k e d for a p e r m a n e n t c o a l i n g s t a t i o n a n d
free p o r t a t S a s s n i t z in t h e i s l a n d of R u g e n .
N o r h a s B o r n h o l m y e t been
evacuated.
II.—WESTERN
(See M a p
GERMANY.
1.)
8 . W e s t e r n G e r m a n y i s d i v i d e d i n t o B r i t i s h , F r e n c h a n d A m e r i c a n zones
of o c c u p a t i o n .
9. P o l i t i c a l l y , o u r p o l i c y is t o b u i l d u p a B r i t i s h f o r m of d e m o c r a c y slowly
from t h e bottom. W e h a v e b e e n a t p a i n s t o l a y t h e f o u n d a t i o n s solidly, w i t h t h e
r e s u l t t h a t n o t even t h e l o w e s t level of e l e c t i o n s w i l l be h e l d i n o u r z o n e b e f o r e
the s u m m e r . B u t n o m i n a t e d c o u n c i l s h a v e n o w b e e n set u p a n d a r e f u n c t i o n i n g .
I t is o u r a i m to t r a n s f e r r e s p o n s i b i l i t y to t h e G e r m a n s a s f a s t as i s t h o u g h t
p r a c t i c a b l e . T h e A m e r i c a n s h a v e g o n e a h e a d w i t h f a r g r e a t e r speed.
Local
elections h a v e a l r e a d y t a k e n p l a c e a n d S t a t e G o v e r n m e n t s h a v e been set u p .
T h e r e is r e a s o n to t h i n k t h a t t h e p r o c e s s h a s b e e n p u t t h r o u g h t o o q u i c k l y i n t h e
i n t e r e s t s of t h e A m e r i c a n d e m o b i l i s a t i o n p r o g r a m m e a n d t h a t t h e f o u n d a t i o n s
a r e l i k e l y to be s h a k y . N o t m u c h i n f o r m a t i o n comes o u t of t h e F r e n c h zone, b u t
l i t t l e seems t o h a v e been d o n e so f a r i n t h e p o l i t i c a l field.
1 0 . T h e strongest political p a r t i e s a r e the Social Democrats a n d the
C h r i s t i a n D e m o c r a t i c U n i o n , a n d b o t h a r e s h o w i n g s i g n s of v i t a l i t y .
The
C h r i s t i a n D e m o c r a t s a r e l a r g e l y , b u t n o t e n t i r e l y , a s u r v i v a l of t h e o l d C a t h o l i c
C e n t r e P a r t y . T h e Social D e m o c r a t s i n W e s t e r n G e r m a n y s t r o n g l y o p p o s e a n y
i d e a of f u s i o n w i t h t h e C o m m u n i s t s .
T h e C o m m u n i s t s for t h e i r p a r t a r e a
small b u t v i g o r o u s a n d w e l l - o r g a n i s e d m i n o r i t y , t h e i r s t r o n g e s t influence b e i n g
in t h e R u h r a n d H a m b u r g . T h e y a r e i n close t o u c h w i t h t h e C o m m u n i s t s i n
Berlin a n d through them w i t h the Russians.
T h e y h a d l i t t l e success in t h e
elections i n t h e A m e r i c a n z o n e a n d w o u l d be u n l i k e l y a t p r e s e n t to w i n m a n y
seats in o u r s . A s i n t h e R u s s i a n zone, t h e y a r e n o w o p e n l y e n l i s t i n g N a z i s i n t o
t h e i r r a n k s a n d b e a t i n g t h e n a t i o n a l i s t d r u m o n t h e t h e m e of U n i t e d G e r m a n y
a n d no a n n e x a t i o n s i n t h e W e s t .
11.
E c o n o m i c a l l y t h e B r i t i s h z o n e is b a d l y p l a c e d . E v e n i n p e a c e t i m e i t
is n o t s e l f - s u p p o r t i n g in foodstuffs.
T o - d a y i t s n o r m a l source of s u p p l y i n
E a s t e r n G e r m a n y h a s been d e s t r o y e d a s a r e s u l t of t h e R u s s i a n m i l i t a r y occu­
p a t i o n a n d Soviet policy. I t c o n t a i n s t h e m o s t b a d l y d a m a g e d i n d u s t r i a l a r e a s
[31427]
B
2
a n d i t s p o p u l a t i o n is swollen by i m m i g r a n t s f r o m t h e E a s t a n d n o w n u m b e r s
s o m e 2 1 m i l l i o n s . A f u r t h e r 1\ m i l l i o n i m m i g r a n t s f r o m t h e E a s t a r e s t i l l to
come. W e t h e r e f o r e h a v e a v e r y s e r i o u s l i a b i l i t y . I m p o r t s i n t o t h e zone to k e e p
t h e p o p u l a t i o n b a r e l y above s t a r v a t i o n level a r e e x p e c t e d to a m o u n t to a t l e a s t
£ 1 0 0 m i l l i o n s t e r l i n g i n 1946, of w h i c h w e only e x p e c t to recover h a l f i n e x p o r t s .
T h e A m e r i c a n zone ( p o p u l a t i o n a b o u t 16 m i l l i o n ) is less i n d u s t r i a l i s e d , b u t it, too,
is n o t s e l f - s u p p o r t i n g i n foodstuffs a n d i s also c a r r y i n g a s w o l l e n p o p u l a t i o n .
T h e F r e n c h zone ( p o p u l a t i o n a b o u t 6 m i l l i o n ) i s a t t h e m o m e n t t h e w o r s t off of
t h e t h r e e a s , u n l i k e o u r s e l v e s a n d t h e A m e r i c a n s , t h e F r e n c h live to a g r e a t e x t e n t
off t h e c o u n t r y .
I I I . — F U T U R E OF T H E R U H R .
12. W i t h t h i s p i c t u r e b e f o r e u s i t i s c l e a r h o w m u c h i m p o r t a n c e a t t a c h e s
t o t h e f u t u r e of t h e R u h r . T h e n a t u r a l resources of t h e R u h r c a n n o t be d e s t r o y e d .
I t s h i g h l y s k i l l e d p o p u l a t i o n m u s t be able t o live. Y e t i t s o u t p u t m u s t be
r e n d e r e d i n n o c u o u s . M y o w n a p p r o a c h t o t h e p r o b l e m w a s to t r y t o m a k e t h e
R u h r s a f e for E u r o p e b y t r a n s f e r r i n g i t s i n d u s t r i e s t o a P u b l i c U t i l i t y C o r ­
p o r a t i o n controlled by an i n t e r n a t i o n a l consortium. I wished to ensure t h a t this
a r e a s h o u l d n o t l o n g e r p r o d u c e w a r m a t e r i a l b u t s h o u l d s u p p l y t h e w h o l e of
E u r o p e w i t h much-needed peace-time commodities, o u t p u t being rationalised a n d
integrated w i t h corresponding industries in the p a r t i c i p a t i n g countries.
I
p r o p o s e d , t h e r e f o r e , to t r a n s f e r t h e o w n e r s h i p of t h e e s s e n t i a l i n d u s t r i e s to a n
i n t e r n a t i o n a l c o r p o r a t i o n , t h e s h a r e s of w h i c h w o u l d be h e l d n o t b y p r i v a t e
i n d i v i d u a l s b u t b y G o v e r n m e n t s . I a l s o w i s h e d t h e R u h r to c o n c e n t r a t e o n semi­
finished
p r o d u c t s , t h e finishing i n d u s t r i e s b e i n g l o c a t e d e l s e w h e r e i n E u r o p e .
I n o r d e r t o s e c u r e R u s s i a ' s a g r e e m e n t to t h e p l a n I p r o p o s e d t o a s s o c i a t e h e r
w i t h it from the outset.
The E.I.P.S.
Plan.
13. I t h e r e f o r e d i r e c t e d E . I . P . S . t o w o r k o u t a p l a n on t h e s e lines, t h e a r e a
i n q u e s t i o n t o b e g o v e r n e d a s p a r t of G e r m a n y b u t to be o c c u p i e d by a n i n t e r ­
n a t i o n a l force for a n indefinite period.
14. T h e p l a n p r e p a r e d by E . I . P . S . is a t A n n e x A . B r o a d l y , i t p r o v i d e s
f o r economic c o n t r o l b e i n g e x e r c i s e d t h r o u g h o w n e r s h i p o r p a r t o w n e r s h i p of
a selected g r o u p of i n d u s t r i a l c o m p a n i e s . I t a s s u m e s fulfilment of t h e P o t s d a m
R e p a r a t i o n P l a n , t h e o c c u p a t i o n of t h e w h o l e of G e r m a n y f o r a t l e a s t five m o r e
y e a r s , a n d for i n d e f i n i t e o c c u p a t i o n b y a n i n t e r n a t i o n a l force of t h e a r e a w h e r e
t h e p r i n c i p a l i n d u s t r i a l c o n c e r n s i n q u e s t i o n lie. I t also p r o v i d e s for S o v i e t
p a r t i c i p a t i o n i n t h e c o n t r o l . T h e a r e a p r o p o s e d is t h e N o r t h e r n p a r t of t h e
R h i n e l a n d p r o v i n c e a n d t h e S o u t h e r n p a r t of W e s t p h a l i a . I n c e r t a i n c i r c u m ­
s t a n c e s i n o r d e r to r o u n d off c o n t r o l i t c o n t e m p l a t e s a c q u i s i t i o n of i n d u s t r i a l
concerns situated outside the area.
15. T h e i n d u s t r i a l c o n c e r n s a r e t h e p r i n c i p a l coal a n d steel complexes,
i n c l u d i n g t h e H e r m a n n G o r i n g S t e e l W o r k s a t S a l z g i t t e r ( o u t s i d e t h e a r e a ) , as
well as the p r i n c i p a l chemical, engineering a n d public utility enterprises. Owner­
s h i p of t h e c o n c e r n s w o u l d be t r a n s f e r r e d to a n I n t e r n a t i o n a l H o l d i n g C o r p o r a ­
t i o n , v o t i n g c o n t r o l of w h i c h w o u l d be r e t a i n e d by t h e p a r t i c i p a t i n g P o w e r s .
P r o f i t s , h o w e v e r , w o u l d be m a d e a v a i l a b l e to t h e G e r m a n people, e i t h e r t h r o u g h
a n e w local a u t h o r i t y c o v e r i n g t h e a r e a , or to t h e p r o v i n c i a l g o v e r n m e n t s of the
R h i n e l a n d a n d W e s t p h a l i a or, if d e s i r e d , to a c e n t r a l G e r m a n G o v e r n m e n t .
T h e s e profits c o u l d be u s e d to b u y i m p o r t s for G e r m a n y a n d , i n so f a r a s they
a l l o w e d , t o m e e t t h e costs of o c c u p a t i o n a n d r e p a r a t i o n s p a y m e n t s . T h e Cor­
p o r a t i o n w o u l d b e d i r e c t e d by a C o u n c i l of r e p r e s e n t a t i v e s of e a c h p a r t i c i p a t i n g
P o w e r Who w o u l d r e p o r t d i r e c t to t h e i r G o v e r n m e n t s a n d w o u l d h a v e votes
e q u i v a l e n t t o t h e s h a r e h o l d i n g of t h e i r G o v e r n m e n t , d e c i s i o n s b e i n g t a k e n by
a 5 1 p e r cent. vote. I n a d d i t i o n , i n d u s t r i a l c o u n c i l s w o u l d be set u p for each
m a i n i n d u s t r y , t o g e t h e r w i t h c o m m i t t e e s on g e n e r a l finance, e m p l o y m e n t a n d
t r a d e . B e l o w t h e s e w o u l d come G e r m a n m a n a g e m e n t s of t h e o p e r a t i n g c o m p a n i e s .
16. A f t e r t e r m i n a t i o n of t o t a l o c c u p a t i o n a n d w i n d i n g u p of t h e C o n t r o l
C o m m i s s i o n i n B e r l i n , t h e p o w e r s of t h e C o r p o r a t i o n w o u l d be defined i n a
c h a r t e r f r o m t h e G e r m a n G o v e r n m e n t w h i c h w o u l d be t h e s u b j e c t of a g r e e m e n t
w i t h t h e p a r t i c i p a t i n g P o w e r s . T h e C o r p o r a t i o n w o u l d possess n o a d d i t i o n a l
p o w e r s s u c h a s t h e r i g h t of veto over l e g i s l a t i o n or of c o m p e l l i n g t h e G e r m a n
G o v e r n m e n t t o p a s s n e w l a w s , b u t a n y b r e a c h of t h e c h a r t e r w o u l d c o n s t i t u t e a
breach between the German Government and the p a r t i c i p a t i n g Powers entitling
the latter to impose sanctions.
T h e s a n c t i o n s p r o p o s e d w o u l d be t e m p o r a r y
a s s u m p t i o n of g o v e r n m e n t i n t h e a r e a , a n d t h e u s e of t h e o c c u p y i n g forces to
r e i n f o r c e t h e C o r p o r a t i o n ^ a u t h o r i t y , if n e c e s s a r y by c u t t i n g oft' coal a n d steel
deliveries to t h e r e s t of G e r m a n y . T h e p l a n s u g g e s t s t h e S e c u r i t y C o u n c i l of
t h e U . N . O . be m a d e a C o u r t of A p p e a l for t h e G e r m a n G o v e r n m e n t , b u t to
c o u n t e r u n d u e d e l a y a p r o v i s i o n is p r o p o s e d w h e r e b y a 7 5 p e r c e n t , v o t e of
t h e Council of t h e C o r p o r a t i o n w o u l d c o n s t i t u t e a u t o m a t i c a u t h o r i t y f o r t h e
C o m m a n d e r - i n - C h i e f of t h e o c c u p y i n g forces to t a k e a c t i o n in a d v a n c e of a n y
such a p p e a l .
17. T o m a k e t h e p l a n m o r e p a l a t a b l e t o t h e G e r m a n s i t is p r o p o s e d t h a t
control s h o u l d be t e r m i n a t e d a t t h e e n d of a s t a t e d p e r i o d of 50 y e a r s , s u b j e c t
to t h e S e c u r i t y C o u n c i l , t h e p o s s i b i l i t y of G e r m a n y r e c e i v i n g a s h a r e i n t h e
v o t i n g r i g h t s b e f o r e t h e n b e i n g also h e l d o u t . T h e p r o d u c t s of t h e a r e a w o u l d
pass freely t h r o u g h o u t G e r m a n y a n d the- p a r t i c i p a t i n g P o w e r s w o u l d g r a n t t h e m
m o s t - f a v o u r e d - n a t i o n r i g h t s . T h e p l a n e n v i s a g e s t h e d a n g e r i n t i m e of w o r l d
s l u m p of t h e p a r t i c i p a t i n g P o w e r s s e e k i n g to e x p o r t t h e i r " u n e m p l o y m e n t t o t h e
R u h r . I t t h e r e f o r e c o n t e m p l a t e s i n t e r - g o v e r n m e n t a l a r r a n g e m e n t s on c a r t e l l i n e s
to e n s u r e G e r m a n y a s h a r e of t h e w o r l d m a r k e t s a n d to p r o t e c t her home m a r k e t s .
M e a s u r e s a r e also" s u g g e s t e d f o r c o n t r o l of f o r e i g n e x c h a n g e e a r n i n g s .
18. T h e E . I . P . S . r e p o r t a l s o c o n s i d e r s , b u t r e j e c t s , a p r o p o s a l for a lease of
a prescribed a r e a , c o u p l e d w i t h o w n e r s h i p of t h e p r i n c i p a l i n d u s t r i a l c o n c e r n s as
above, on t h e g r o u n d t h a t i t w o u l d be t a n t a m o u n t t o p o l i t i c a l s e p a r a t i o n , t h a t i t
would involve t h e p a r t i c i p a t i n g P o w e r s i n f u n c t i o n s of g o v e r n m e n t a n d t h a t ,
because of t h e s e n s i t i v i t y of t h e a r e a t o booms a n d s l u m p s , i t w o u l d be p r e f e r a b l e
t h a t i t should be p a r t of a l a r g e r u n i t to w h i c h i t w o u l d c o n t r i b u t e , or,
alternatively, from w h i c h i t w o u l d d r a w relief.
19. T h e E . I . P . S . d o n o t c o n c e a l t h e f a c t t h a t w h a t e v e r p o w e r s a r e t a k e n
u n d e r t h e P e a c e T r e a t y t o e n s u r e fulfilment of c o n t r o l , i t w o u l d be e x t r e m e l y
difficult to e n s u r e e x e c u t i o n i n t h e f a c e of d e l i b e r a t e a n d p e r s i s t e n t o p p o s i t i o n by
a G e r m a n G o v e r n m e n t o r n o n - c o - o p e r a t i o n by t h e local p o p u l a t i o n . A t t e n t i o n is
also d r a w n t o the r i s k of d i s a g r e e m e n t a m o n g t h e p a r t i c i p a t i n g P o w e r s a n d to
the g r e a t d a n g e r w h i c h w o u l d e n s u e if c o n t r o l w e r e i n c o n s e q u e n c e a b a n d o n e d t o
G e r m a n y a f t e r i n d u s t r i a l d e v e l o p m e n t h a d been r e v i v e d . A c c o r d i n g l y t h e p l a n
is designed t o give a s f r e e a h a n d a s possible to t h e G e r m a n m a n a g e m e n t s , w h i l e
a n y p o w e r s of v e t o i n g l e g i s l a t i o n a r e w i t h h e l d on t h e g r o u n d t h a t to be effective
they w o u l d h a v e to be so e x t e n s i v e a s t o r e n d e r impossible t h e r e l a t i o n s h i p b e t w e e n
the C o r p o r a t i o n a n d t h e G e r m a n G o v e r n m e n t " w h i c h w o u l d be e s s e n t i a l f o r t h e
p l a n t o h a v e a n y c h a n c e of s u c c e s s . "
20. T h e r e a r e c l e a r l y g r a v e r i s k s i n h e r e n t i n t h e p l a n .
I t depends
a d m i t t e d l y f o r success on t h e c o - o p e r a t i o n of t h e G e r m a n G o v e r n m e n t . I t f r a n k l y
seeks t o g a i n G e r m a n c o - o p e r a t i o n b y confining t h e C o r p o r a t i o n to t h e m i n i m u m
functions necessary for s u p e r v i s i o n of t h e p l a n , b y a s s o c i a t i n g U . N . O . w i t h it,
by s e t t i n g a t i m e - l i m i t a n d by h o l d i n g o u t a b r i b e of a n e v e n t u a l s h a r e i n t h e
control itself. O n t h e o t h e r h a n d , i t does p r o v i d e for t h e p r e s e n c e of t r o o p s of
o c c u p a t i o n a n d m a c h i n e r y for b r i n g i n g t h e m i n t o i m m e d i a t e a c t i o n by m e a n s of
a 75 p e r cent, vote of t h e C o u n c i l of t h e C o r p o r a t i o n . N o n e t h e less, t h e E . I . P . S .
p l a n r e m a i n s d e p e n d e n t f o r success o n t h e g o o d w i l l of t h e G e r m a n G o v e r n m e n t .
T h e l a t t e r , by s a b o t a g e , by p o l i t i c a l o r o t h e r p r e s s u r e , could r e d u c e t h e
C o r p o r a t i o n t o i m p o t e n c e w i t h o u t even n e c e s s a r i l y t r a n s g r e s s i n g t h e p r o v i s i o n s
of t h e c h a r t e r .
N o r w o u l d i t be e a s y for a C o r p o r a t i o n t h u s confined i n i t s
f u n c t i o n s to p l a y a p o s i t i v e role a s a P u b l i c U t i l i t y A u t h o r i t y i n t h e i n t e r e s t s of
Europe as a whole as opposed to p u r e l y G e r m a n interests. Moreover, in assessing
t h e a t t i t u d e of t h e G e r m a n G o v e r n m e n t i n B e r l i n w e m u s t b e a r i n m i n d t h e
p r o b a b i l i t y of i t s b e i n g a s s o c i a t e d w i t h t h e S o v i e t G o v e r n m e n t b o t h p o l i t i c a l l y a n d
economically.
The
French Plan (see M a p 2).
2 1 . T h e T r e n c h G o v e r n m e n t h a d also been g i v i n g t h o u g h t to t h e p r o b l e m
of t h e R u h r . A l r e a d y i n A u g u s t 1 9 4 4 M . M a s s i g l i i n f o r m e d M r . E d e n of h i s
G o v e r n m e n t s d e s i r e t h a t t h e R h e n o - W e s t p h a l i a n b a s i n s h o u l d be p e r m a n e n t l y
occupied, p l a c e d u n d e r a s p e c i a l p o l i t i c a l r e g i m e a n d d r a w n i n t o t h e w e s t e r n
economic o r b i t . A t t h e F o r e i g n M i n i s t e r s ' C o n f e r e n c e i n L o n d o n i n S e p t e m b e r
1945 M . B i d a u l t c i r c u l a t e d a m e m o r a n d u m w h i c h i n c l u d e d t h e s t a t e m e n t t h a t
" t h e final s e p a r a t i o n of t h i s r e g i o n , i n c l u d i n g t h e R u h r , f r o m G e r m a n y is b o t h
i n d i s p e n s a b l e in o r d e r t o cover t h e F r e n c h f r o n t i e r a n d a n e s s e n t i a l c o n d i t i o n f o r
t h e s e c u r i t y of E u r o p e a n d t h e w o r l d . "
T h e Conference decided t h a t the
q u e s t i o n s r a i s e d b y t h e F r e n c h m e m o r a n d u m s h o u l d be t h e s u b j e c t of p r e l i m i n a r y
s t u d y t h r o u g h t h e d i p l o m a t i c c h a n n e l a n d t h e n s u b m i t t e d f o r c o n s i d e r a t i o n by
t h e Council of F o r e i g n M i n i s t e r s w i t h a v i e w to d e c i s i o n s b e i n g t a k e n .
22. S h o r t l y a f t e r t h e L o n d o n C o n f e r e n c e a d e l e g a t i o n of F r e n c h officials
v i s i t e d L o n d o n w i t h t h e o b j e c t of e x p l a i n i n g t h e F r e n c h p r o p o s a l s . A r e p o r t on
t h e s e d i s c u s s i o n s is a t A n n e x B . T h e F r e n c h h a v e since t h e n h e l d d i s c u s s i o n s w i t h
t h e U n i t e d S t a t e s , Soviet, B e l g i a n a n d N e t h e r l a n d s G o v e r n m e n t s , b u t t h e a t t i t u d e
of t h e s e P o w e r s h a s n o t y e t been r e v e a l e d . I t w i l l be seen t h a t t h e F r e n c h base
t h e i r p r o p o s a l s on t h e i d e a of s e c u r i t y . T h e y t a k e t h e v i e w t h a t t h e G e r m a n s
w i l l be h i g h l y d i s c o n t e n t e d w i t h t h e final p e a c e s e t t l e m e n t b e c a u s e i t w i l l confirm
t h e loss of t h e i r E a s t e r n t e r r i t o r i e s , a n d i t is o n l y b y r e m o v i n g t h e R u h r a n d t h e
R h i n e l a n d f r o m t h e i r c o n t r o l t h a t t h e y c a n be effectively p r e v e n t e d f r o m r e n e w e d
aggression. The F r e n c h do not t r y to j u s t i f y their proposals on economic grounds,
t h o u g h t h e y d e n y t h a t t h e r e is a n y i n h e r e n t economic o b j e c t i o n t o t h e m .
They
c l a i m t h a t t h e r i c h r e s o u r c e s of t h e R u h r c a n only t h u s be m a d e a v a i l a b l e i n s a f e t y
for g e n e r a l benefit. T h e F r e n c h freely a d m i t , h o w e v e r , t h a t i t w o u l d be m o s t
d a n g e r o u s if a n e w r e g i m e w e r e set u p i n t h e R u h r a n d t h e n , a t a l a t e r s t a g e ,
o w i n g to a d i s a g r e e m e n t b e t w e e n t h e C o n t r o l l i n g P o w e r s or for some o t h e r r e a s o n ,
the regime were abandoned.
(a) The
Ruhr.
2 3 . T h e F r e n c h p l a n r e q u i r e s t h e c o m p l e t e a n d p e r m a n e n t s e v e r a n c e from
G e r m a n y of t h e t e r r i t o r i e s w e s t of t h e R h i n e a n d of t h e R u h r a r e a itself.
The
R u h r w o u l d be o r g a n i s e d a s a s e p a r a t e p o l i t i c a l e n t i t y of some 5 m i l l i o n
i n h a b i t a n t s and subject to an i n t e r n a t i o n a l political a n d economic regime. The
Four Powers occupying Germany would lay down the regime, Belgium, Luxem­
b o u r g a n d H o l l a n d b e i n g i n v i t e d l a t e r t o a s s o c i a t e themselves w i t h i t . W h i l s t
t h e local a d m i n i s t r a t i o n w o u l d be a p p o i n t e d by t h e local p o p u l a t i o n w h o m i g h t
also e v e n t u a l l y p a r t i c i p a t e i n t h e G o v e r n m e n t itself, t h e l a t t e r w o u l d be i n t h e
h a n d s of a G o v e r n i n g C o m m i s s i o n of n i n e m e m b e r s a p p o i n t e d by a m a j o r i t y
decision of t h e P o w e r s d i r e c t l y c o n c e r n e d . T h e m e m b e r s , once a p p o i n t e d , w o u l d
a c t collectively, n o t a s r e p r e s e n t a t i v e s of G o v e r n m e n t s b u t a s a n i n t e r n a t i o n a l
body. T h e C o m m i s s i o n w o u l d h a v e all t h e p o w e r s of g o v e r n m e n t a n d w o u l d
o r g a n i s e a g e n d a r m e r i e a n d a police force. T o e n s u r e i n t e r n a l s e c u r i t y a force
of 50,000 t r o o p s p r o v i d e d by t h e S t a t e s d i r e c t l y c o n c e r n e d a n d p a i d for by t h e
R u h r w o u l d be p e r m a n e n t l y s t a t i o n e d i n t h e t e r r i t o r y a t t h e o r d e r s of t h e
G o v e r n i n g C o m m i s s i o n . T h e s u p e r v i s i o n of t h e r e g i m e w o u l d be c a r r i e d o u t by
the signatory P o w e r s w h o would g u a r a n t e e its i n t e g r i t y in conformity w i t h the
p r o v i s i o n s of U . N . O .
2 4 . I n d u s t r i a l c o n c e r n s w o u l d be t a k e n over by i n t e r n a t i o n a l c o n s o r t i u m s ,
shares being held by the p a r t i c i p a t i n g Powers. T h e latter would supply w o r k i n g
c a p i t a l a s f a r a s n e c e s s a r y , profits b e i n g d i v i d e d a m o n g t h e A l l i e s or u s e d as
r e p a r a t i o n s . I n t h e R u h r as i n t h e r e s t of G e r m a n y t h e w a r i n d u s t r i e s w o u l d be
completely s u p p r e s s e d , t h e i r o n a n d e n g i n e e r i n g i n d u s t r i e s b e i n g m u c h r e d u c e d
b u t coal o u t p u t i n c r e a s e d . I r o n a n d coal p r o d u c t i o n w o u l d be closely l i n k e d w i t h
t h a t of F r a n c e , B e l g i u m a n d L u x e m b o u r g . T h e r e w o u l d be a n e w a n d s e p a r a t e
c u r r e n c y w i t h a local b a n k of issue. T h e r e w o u l d be n o s p e c i a l b a r r i e r r o u n d the
R u h r a n d t h e r e w o u l d be n o o b j e c t i o n t o t h e e x p o r t of R u h r p r o d u c t s t o G e r m a n y .
(b) The
Rhineland.
2 5 . T h e R h i n e l a n d , c o n s i s t i n g of G e r m a n t e r r i t o r y Avest of t h e R h i n e ,
w o u l d also be finally a n d completely s e p a r a t e d f r o m G e r m a n y . I t w o u l d become
t h e t e r r i t o r y of a n i n d e p e n d e n t S t a t e o r of t w o o r t h r e e i n d e p e n d e n t S t a t e s , w h i c h
w o u l d be a l m o s t e n t i r e l y s e l f - g o v e r n i n g e x c e p t t h a t t h e y w o u l d be s u b j e c t e d to
p e r m a n e n t occupation by Allied troops.
26. F r a n c e , in conjunction with Belgium and Luxembourg, would undertake
t h e m i l i t a r y o r g a n i s a t i o n of t h e left b a n k of t h e R h i n e u p to, a n d i n c l u d i n g ,
Cologne. F u r t h e r north, i t is s u g g e s t e d t h a t t h i s s h o u l d be a m a t t e r r a t h e r for
B e l g i u m , H o l l a n d a n d t h e U n i t e d K i n g d o m if t h e l a t t e r c o n s i d e r i t a p p r o p r i a t e .
2 7 . T h e F r e n c h v i e w is t h a t G e r m a n y m u s t n e v e r a g a i n be able to use the
R h i n e l a n d a s in t h e p a s t as a s p r i n g b o a r d for a t t a c k s a g a i n s t F r a n c e , a n d t h a t
t h i s p u r p o s e c a n only be a c h i e v e d by t h e p e r m a n e n t p r e s e n c e of t r o o p s , i n c l u d i n g
if possible those of t h e o t h e r W e s t e r n P o w e r s , a l o n g t h e w h o l e l e n g t h of t h e west
b a n k of t h e R h i n e .
(c) The
Soar.
28. I t i s p r o p o s e d t h a t t h e S a a r m i n e s , whose o w n e r s h i p w a s g r a n t e d t o
F r a n c e by t h e T r e a t y of V e r s a i l l e s a n d r e g a i n e d by G e r m a n y i n 1935, s h o u l d
once m o r e become F r e n c h p r o p e r t y , w i t h t h e c o r o l l a r y t h a t t h e t e r r i t o r y itself
should be i n c l u d e d in t h e F r e n c h c u s t o m s a n d c u r r e n c y s y s t e m since t h e economies
of F r a n c e a n d t h e S a a r a r e a l m o s t e n t i r e l y c o m p l e m e n t a r y .
W h i l s t t h e final
form of g o v e r n m e n t w o u l d be d e c i d e d i n d u e course, F r e n c h m i l i t a r y forces s h o u l d
be s t a t i o n e d t h e r e p e r m a n e n t l y .
29. T h e F r e n c h G o v e r n m e n t h a v e r e c e n t l y p r e s s e d t h a t a decision i n f a v o u r
of s e p a r a t i o n of the S a a r on t h e above lines s h o u l d be t a k e n a t once a n d if
necessary i n a d v a n c e of t h e decision i n r e g a r d t o t h e R u h r a n d t h e R h i n e l a n d .
T h e y a r e a n x i o u s t h a t i t s h o u l d be e s t a b l i s h e d t h a t t h e S a a r s h o u l d n o t be
subjected t o t h e P o t s d a m policy i n r e g a r d to t h e level of G e r m a n i n d u s t r y a n d
t h a t i m m e d i a t e s t e p s s h o u l d be possible to b r i n g a b o u t i t s recovery a n d i n t e g r a t i o n
w i t h F r e n c h economy. I n f a c t , t h e y a r e a s k i n g for t h e S a a r w h a t t h e P o l e s h a v e
o b t a i n e d for U p p e r S i l e s i a in a d v a n c e of t h e p e a c e s e t t l e m e n t .
30. T h e F r e n c h p r o p o s a l s c a n n o t be fully a p p r e c i a t e d u n l e s s set a g a i n s t
their background.
A f t e r t h e l a s t w a r t h e F r e n c h s o u g h t above all s e c u r i t y
a g a i n s t t h e i r r i c h e r a n d m o r e p o p u l o u s n e i g h b o u r ; i n a d d i t i o n , t h e y w i s h e d to
get w h a t r e p a r a t i o n w a s possible for t h e p h y s i c a l d a m a g e t o t h e i r c o u n t r y . T o
satisfy these a i m s they^ p u t f o r w a r d t w o t e r r i t o r i a l d e m a n d s a p a r t f r o m t h e
r e t u r n of A l s a c e - L o r r a i n e .
F i r s t t h e y c l a i m e d t h e a n n e x a t i o n of t h e S a a r
t e r r i t o r y . Secondly, t h e y p r e s s e d for t h e p o l i t i c a l s e p a r a t i o n f r o m G e r m a n y
of t h e t e r r i t o r y west of t h e R h i n e , i t s c o n s t i t u t i o n a s a n a u t o n o m o u s S t a t e or
g r o u p of S t a t e s , a n d i t s i n c l u s i o n i n a c u s t o m s u n i o n w i t h t h e w e s t e r n c o u n t r i e s .
T h e essential m i l i t a r y c o n d i t i o n s w e r e t h a t t h e R h i n e b r i d g e s s h o u l d be
controlled a n d t h a t t h e b a r r i e r s h o u l d be h e l d , n o t by t h e F r e n c h alone, b u t by
i n t e r - A l l i e d forces.
31. U n d e r both h e a d s t h e y w e r e d i s a p p o i n t e d . I n t h e S a a r t h e y o b t a i n e d
t e m p o r a r y o w n e r s h i p of t h e m i n e s b u t , a t t h e i n s i s t e n c e of t h e B r i t i s h a n d
Americans, the territory was placed u n d e r international a d m i n i s t r a t i o n , its
final fate, t o be d e t e r m i n e d by p l e b i s c i t e a f t e r fifteen y e a r s . T h e p l e b i s c i t e i n
1935 showed a n o v e r w h e l m i n g m a j o r i t y i n f a v o u r of r e i n c o r p o r a t i o n i n
G e r m a n y w i t h t h e r e s u l t t h a t t h e ownershi2D of t h e m i n e s r e v e r t e d t o G e r m a n y .
T h e i r p r o p o s a l for t h e R h i n e l a n d w a s also o p p o s e d by b o t h G r e a t B r i t a i n
a n d t h e U n i t e d S t a t e s , a n d e v e n t u a l l y t h e y w e r e p e r s u a d e d to d r o p i t i n f a v o u r
of (a) t r e a t i e s of g u a r a n t e e , (b) t h e t e m p o r a r y o c c u p a t i o n of t h e R h i n e l a n d ,
a n d (c) t h e p e r m a n e n t d e m i l i t a r i s a t i o n of t h e G e r m a n t e r r i t o r y t o t h e w e s t of
the R h i n e p l u s a 50 k i l o m . s t r i p to t h e e a s t . T h e t r e a t i e s of g u a r a n t e e i n t h e
event never came i n t o f o r c e a t a l l .
T h e o c c u p a t i o n of t h e R h i n e l a n d w a s
prematurely brought to a n end at the very time when G e r m a n y was beginning
to r e g a i n h e r s t r e n g t h . T h e d e m i l i t a r i s e d zone, t h o u g h s u b s e q u e n t l y confirmed,
in the L o c a r n o A g r e e m e n t , w a s v i o l a t e d b y H i t l e r w i t h i m p u n i t y i n 1935.
In
1940 M a r s h a l F o c h ' s w o r s t f e a r s w e r e fulfilled.
32. I n p u t t i n g f o r w a r d t h e i r c l a i m s t o - d a y t h e F r e n c h t h e r e f o r e h a v e a
b a c k g r o u n d of p a i n f u l e x p e r i e n c e . T h e y r e g a r d a f a v o u r a b l e s e t t l e m e n t of t h i s
question as t h e jDivotal p o i n t of t h e i r w h o l e f o r e i g n policy. I f w e r e j e c t t h e i r
claims or w h i t t l e t h e m d o w n i n s u c h a m a n n e r a s t o d e p r i v e t h e m of w h a t t h e y
r e g a r d as e s s e n t i a l t o s e c u r i t y , w e c a n h a v e l i t t l e h o p e of m a i n t a i n i n g close
r e l a t i o n s or influence w i t h t h e F r e n c h . T h e y w i l l seek t h e i r s e c u r i t y elsewhere,
probably i n Moscow. T h e d e f e a t i s m , w h i c h ' is a t t h e b o t t o m of t h e g r e a t p a r t
of t h e i r p r e s e n t i n t e r n a l t r o u b l e s , w i l l be intensified, a n d t h e c h a n c e s of t h e i r
r e t u r n i n g to s t a b l e c o n d i t i o n s w i l l be t o t h a t e x t e n t d i m i n i s h e d .
Furthermore,
t h e f a i l u r e t o p u t A n g l o - F r e n c h r e l a t i o n s on ia r e a l l y close f o o t i n g w i l l p r e j u d i c e
o u r r e l a t i o n s w i t h B e l g i u m a n d H o l l a n d a n d w i l l m a k e m o r e difficult of a t t a i n ­
ment t h a t close c o - o p e r a t i o n b e t w e e n o u r s e l v e s a n d t h e W e s t e r n E u r o p e a n
countries which we r e g a r d as a very i m p o r t a n t element in o u r f u t u r e security.
3 3 . A s for t h e a c t u a l F r e n c h p r o p o s a l s , i t m a y be s a i d t h a t t h e y p r e s e n t a
clear cut, logical scheme w h i c h h a s t h e m e r i t of finality a n d is free of t h e t y p e of
compromise t h a t p r o v e d so u n s u c c e s s f u l i n t h e V e r s a i l l e s s e t t l e m e n t . I f t h e p l a n
worked as t h e F r e n c h believe, i t w o u l d c e r t a i n l y p r o v i d e a c o m p l e t e s a f e g u a r d
a g a i n s t t h e G e r m a n s i n i t i a t i n g a n o t h e r w a r of a g g r e s s i o n . T h e E . I . P . S . p l a n
for t h e i n t e r n a t i o n a l c o n t r o l of t h e R u h r i n d u s t r y could be fitted i n t o it a n d i t
m i g h t be a r g u e d t h a t t h e e l i m i n a t i o n of t h e G e r m a n G o v e r n m e n t a n d A d m i n i s t r a ­
tion w o u l d lessen t h e o p p o r t u n i t i e s of t h o s e w i s h i n g t o m a k e t h e E . I . P . S . p l a n
u n w o r k a b l e . T h e r e w o u l d be n o o b j e c t i o n t o t h e profits of t h e a r e a c o n t r i b u t i n g
t o p a y m e n t f o r t h e i m p o r t s of G e r m a n y a n d r e p a r a t i o n s .
i t s o w n f r e e w a t e r w a y of t h e R h i n e .
T h e a r e a w o u l d enjoy
34. O n t h e o t h e r h a n d , t h e F r e n c h p l a n r a i s e s a n u m b e r of difficulties.
T h e f a c t t h a t t h e G o v e r n i n g C o m m i s s i o n w o u l d be r e s p o n s i b l e t o o u t s i d e P o w e r s
a n d n o t t o t h e p o p u l a t i o n i s difficult t o reconcile w i t h t h e p o l i t i c a l p r i n c i p l e s
f o r w h i c h w e s t a n d a n d w h i c h w e a r e n o w t r y i n g to i n s t i l i n t o t h e G e r m a n people.
A l l t h e G e r m a n p o l i t i c a l p a r t i e s w o u l d b i t t e r l y o p p o s e p o l i t i c a l s e p a r a t i o n as
w o u l d a l s o t h e t r a d e s u n i o n s , a n d t h e y w o u l d be s t r o n g l y b a c k e d by G e r m a n
sympathisers abroad.
I t i s conceivable t h a t t h e C o n t r o l l i n g P o w e r s m i g h t in
c o u r s e of t i m e l a c k t h e n e c e s s a r y d e t e r m i n a t i o n t o m a i n t a i n t h e s e p a r a t i o n i n the
f a c e of s u c h o p p o s i t i o n .
35. T h e economic difficulties a r e also c o n s i d e r a b l e . O u r economic a d v i s e r s
believe, d e s p i t e F r e n c h a r g u m e n t s t o t h e c o n t r a r y , t h a t by c r e a t i n g a n a d m i n i s t r a ­
t i v e b a r r i e r b e t w e e n t h e R u h r a n d t h e r e s t of G e r m a n y , t h e p l a n w o u l d be
e c o n o m i c a l l y d i s a s t r o u s f o r b o t h a r e a s a n d w o u l d also, in t i m e s of s l u m p , involve
t h e C o n t r o l l i n g P o w e r s i n t h e necessity t o find r e l i e f for t h e p o p u l a t i o n of the
Ruhr. Level
of Industry
in Germany and
Security.
36. B o t h t h e s e p l a n s , t h e E . I . P . S . p l a n l e a v i n g t h e R u h r i n s i d e G e r m a n y
a n d t h e F r e n c h p l a n s e v e r i n g i t from G e r m a n y , m u s t be v i e w e d i n t h e l i g h t of
t h e c u r r e n t d i s c u s s i o n s on t h e f u t u r e level of i n d u s t r y i n G e r m a n y . "We a r e now
f a c e d w i t h a d e a d l o c k o n t h i s issue i n B e r l i n w h e r e b o t h t h e R u s s i a n s a n d the
A m e r i c a n s a r e s e e k i n g to i m p o s e such a r e d u c t i o n of t h e o v e r a l l level of G e r m a n
i n d u s t r y a s i n o u r o p i n i o n w ill p r o v e f a t a l to t h e m a i n t e n a n c e of f u t u r e G e r m a n
e c o n o m y t h r o u g h f a i l u r e of e x p o r t s to b a l a n c e i m p o r t s .
r
37. M y o w n i d e a w a s t o m a k e of t h e R u h r a p o s i t i v e e l e m e n t of E u r o p e a n
r e c o n s t r u c t i o n a n d c o - o p e r a t i o n by e n a b l i n g it t o w o r k u n d e r full i n t e r n a t i o n a l
c o n t r o l f o r t h e p e a c e - t i m e r e q u i r e m e n t s of E u r o p e . I d i d n o t c o n t e m p l a t e the
e s t a b l i s h m e n t of a n i n t e r n a t i o n a l c o n s o r t i u m for p u r e l y n e g a t i v e p u r p o s e s of
p r o h i b i t i o n a n d i n s p e c t i o n . Y e t , u n l e s s a level of i n d u s t r y is a l l o w e d in t h e R u h r
s u b s t a n t i a l l y h i g h e r t h a n t h a t n o w p r o p o s e d for t h e r e s t of G e r m a n y , the I
p r o s p e c t s of t h e successful o p e r a t i o n of a P u b l i c U t i l i t y C o r p o r a t i o n w o u l d be
r e m o t e i n d e e d . T h e F r e n c h p r o p o s a l s d o n o t involve a n y m o d i f i c a t i o n of the I
g e n e r a l level i n f a v o u r of t h e R u h r , a n d t h e a r e a f o r w h i c h i t is p r o p o s e d t h a t
t h e A l l i e s s h o u l d a s s u m e full r e s p o n s i b i l i t y w o u l d be b a n k r u p t f r o m t h e s t a r t .
38. I s u g g e s t , t h e r e f o r e , t h a t it is e s s e n t i a l for t h e success of a n y s u c h plan
t h a t t h e R u h r — - w h e t h e r a s p a r t of G e r m a n y or a s a s e p a r a t e S t a t e — s h o u l d be
a l l o w e d a h i g h e r level of i n d u s t r y t h a n t h a t l a i d d o w n for t h e r e s t of G e r m a n y .
39. I f t h i s v i e w is a c c e p t e d , t h e q u e s t i o n a r i s e s w h e t h e r w e a r e m o r e likely
t o s e c u r e t h e c o n d i t i o n s w e n e e d by p r o p o s i n g to s e p a r a t e t h e R u h r f r o m G e r m a n y
a n d to p l a c e i t u n d e r i n t e r n a t i o n a l g o v e r n m e n t , t h a n b y l e a v i n g i t i n s i d e G e r m a n y
u n d e r t h e G e r m a n G o v e r n m e n t . A s w e h a v e i n d i c a t e d above, t h e E . I . P . S . plan
is b a s e d o n c o - o p e r a t i o n w i t h ' t h e G e r m a n G o v e r n m e n t , i t seeks to i m p o s e a
m i n i m u m of r e s t r i c t i o n s on G e r m a n m a n a g e m e n t a n d in f a c t d e p e n d s for success
o n G e r m a n g o o d w i l l . O n t h e face of it, i t seems hopeless to s u p p o s e t h a t the
s t r o n g r e s i s t a n c e of t h e S o v i e t s a n d t h e U n i t e d S t a t e s -to t h e fixing of a h i g h e r
level of i n d u s t r y c o u l d be overcome in f a v o u r of a p l a n for t h e R u h r w h i c h left
such freedom to G e r m a n enterprise.
40. F o r if a n a d e q u a t e level of i n d u s t r y is one c o n d i t i o n for success of the
p l a n , t h e o t h e r is s e c u r i t y a g a i n s t G e r m a n a t t e m p t s a t i n t e r f e r e n c e a n d recovery
of c o n t r o l . H e r e i t m u s t be a d m i t t e d t h a t t h e F r e n c h p l a n of complete s e p a r a t i o n
offers g r e a t e r s e c u r i t y t h a n t h a t of E . I . P . S . T h e economic a s p e c t of t h e French
p l a n is o b v i o u s l y o p e n t o a d j u s t m e n t .
4 1 . T h e r e is n o t h i n g i n h e r e n t l y i m p o s s i b l e in t h e a r e a b e i n g g o v e r n e d by an
o u t s i d e a u t h o r i t y . T h e S a a r w a s so g o v e r n e d for m a n y y e a r s u n d e r t h e League
of N a t i o n s . C l e a r l y t h e council of t h e h o l d i n g c o m p a n y w o u l d n o t be suitable
f o r t h i s p u r p o s e , b u t a g o v e r n i n g c o m m i s s i o n or c o m m i s s i o n e r c o u l d be a p p o i n t e d
e i t h e r r e s p o n s i b l e to t h e F o u r P o w e r s w h i l e t h e C o n t r o l A u t h o r i t ) ' r e m a i n s in
Berlin, or to the U.N.O.
I t s h o u l d n o t be i m p o s s i b l e to devise s a f e g u a r d s to
e n s u r e t h e p r o s p e r i t y of t h e R u h r b e i n g m a d e t o benefit t h e r e s t of G e r m a n y .
42. I f s e p a r a t i o n w e r e a d o p t e d i t is s u g g e s t e d t h a t t h e a r e a i n question
s h o u l d b e l a r g e r t h a n t h e n a r r o w R u h r p r o p o s e d i n t h e F r e n c h p l a n , a n d should
9
-
21
e x t e n d t o a n d i n c l u d e t h e a r e a w e s t of t h e R h i n e u p to t h e D u t c h f r o n t i e r .
This
w o u l d h a v e g r e a t a d m i n i s t r a t i v e a d v a n t a g e s . T h i s w h o l e a r e a c o u l d be f o r m e d
i n t o a s e p a r a t e S t a t e w i t h full local g o v e r n m e n t u n d e r a c o m m i s s i o n e r or a
o-overning c o m m i s s i o n selected by t h e U . N . O . w i t h w h i c h t h e n e w S t a t e a n d
c o n s o r t i u m could be closely a s s o c i a t e d t h r o u g h t h e S e c u r i t y C o u n c i l a n d t h e
Social a n d E c o n o m i c C o u n c i l . T h e i n t e r n a t i o n a l force ( w h i c h i s also c o n t e m ­
p l a t e d u n d e r t h e E . I . P . S . p r o p o s a l s ) w o u l d be s i t u a t e d in t h i s a r e a u n d e r t h e
o r d e r s of t h e a d m i n i s t r a t o r a n d m i g h t come to r e p r e s e n t t h e r e s i d u e of t h e
m i l i t a r y o c c u p a t i o n of G e r m a n y w h e n t h e t i m e came to a b a n d o n t h e p r e s e n t
generalised occupation.
The Soviet A ttittide.
43. T h e S o v i e t G o v e r n m e n t a r e d e e p l y i n t e r e s t e d in t h e R u h r . U n d e r t h e
P o t s d a m A g r e e m e n t t h e y s t a n d t o o b t a i n f r o m i t a c o n s i d e r a b l e p a r t of t h e i r
s h a r e of r e p a r a t i o n s from W e s t e r n G e r m a n y .
A p a r t from t h a t , they are
d e t e r m i n e d t h a t it s h a l l n e v e r be u s e d as t h e economic b a c k b o n e of e i t h e r a
G e r m a n revival or a W e s t e r n bloc a i m e d a g a i n s t t h e m s e l v e s . A t t h e P o t s d a m
Conference t h e S o v i e t D e l e g a t i o n t a b l e d a p r o p o s a l w h e r e b y t h e R u h r , w h i l e
r e m a i n i n g p a r t of G e r m a n y , w o u l d be p l a c e d u n d e r s p e c i a l a d m i n i s t r a t i o n
exercised by a C o u n c i l of B r i t i s h , U n i t e d S t a t e s , S o v i e t a n d F r e n c h r e p r e s e n t a ­
tives. N o f u r t h e r d e t a i l s of t h e i r p r o p o s a l h a v e been g i v e n , b u t i t i s safe to
suppose t h a t i t w o u l d be d e s i g n e d to d e p r e s s t h e R u h r r a t h e r t h a n t o revive i t .
A n y proposal, t h e r e f o r e , w h i c h a i m e d a t r a i s i n g t h e level of i n d u s t r y w o u l d m e e t
w i t h d e e p Soviet s u s p i c i o n , n o t o n l y a s d i m i n i s h i n g r e p a r a t i o n d e l i v e r i e s of
i n d u s t r i a l e q u i p m e n t b u t a s a p o l i t i c a l t h r e a t t o themselves.' T h e S o v i e t G o v e r n ­
m e n t have given no i n d i c a t i o n w h a t e v e r a s y e t of t h e i r a t t i t u d e t o t h e F r e n c h p l a n
beyond s a y i n g t h a t t h e y a r e s t u d y i n g i t . T h e S o v i e t s m u s t be e x p e c t e d t o p l a y
a l a r g e role in t h e R u h r i n any case, w h e t h e r a s m e m b e r s of a n i n t e r n a t i o n a l
r e g i m e or a s the PoAver b e h i n d t h e G e r m a n C o m m u n i s t P a r t y .
The German A ttitude.
44. H e r e it is n e c e s s a r y to c o n s i d e r t h e G e r m a n a t t i t u d e . W e m u s t e x p e c t
all G e r m a n p o l i t i c a l p a r t i e s to be h o s t i l e to a n y i n t e r n a t i o n a l c o n t r o l of t h e
R u h r , b u t especially to i t s s e p a r a t i o n f r o m G e r m a n y . I n d e e d , t h e B e r l i n C o m ­
munists are already insisting t h a t the R u h r must remain G e r m a n . T h e Social
D e m o c r a t s a n d t h e C h r i s t i a n D e m o c r a t s , w h o c a n h a r d l y be e x p e c t e d t o be less
n a t i o n a l i s t i c , a r e a l r e a d y s h o w i n g s i g n s of f o l l o w i n g s u i t .
45. I n d e c i d i n g t h e f u t u r e of t h e R u h r w e m u s t c l e a r l y t a k e i n t o a c c o u n t
the p r o b a b l e p i c t u r e of p o s t - w a r G e r m a n y . T h e m o s t s t r i k i n g f e a t u r e a t p r e s e n t
is t h e d e t e r m i n e d a c t i o n b e i n g t a k e n by t h e Soviet G o v e r n m e n t i n t h e E a s t e r n
Zone a n d especially B e r l i n t o s u p p o r t a n d i m p o s e t h e C o m m u n i s t P a r t y .
The
Soviets h a v e p r o v i d e d l e a d e r s for t h e l a t t e r in t w o M o s c o w - t r a i n e d m e n , U l b r e c h t
a n d P i e c k . T h e C o m m u n i s t s , a i d e d by t h e S o v i e t a u t h o r i t i e s , a r e a t p r e s e n t b u s y
forcing t h r o u g h f u s i o n w i t h t h e S o c i a l D e m o c r a t s in t h e E a s t a n d t h e i r a i m is
to e x t e n d t h e fusion t o t h e p a r t i e s i n t h e W e s t e r n Z o n e s . T h e i r a i m is t o c r e a t e
a new p a r t y , t h e U n i t e d W o r k e r s ' P a r t y , w h i c h b e h i n d a d e m o c r a t i c f a c a d e w o u l d
be C o m m u n i s t - c o n t r o l l e d . T h e C o m m u n i s t s h a v e a l r e a d y p e n e t r a t e d t h e T r a d e
Union movement a n d imposed a single union system in Berlin. I n the W e s t e r n
Zones t h e t w o l e a d i n g p a r t i e s , t h e S o c i a l D e m o c r a t s a n d C h r i s t i a n D e m o c r a t s , led
by S c h u h m a c h e r a n d K a i s e r r e s p e c t i v e l y , a r e so f a r r e s i s t a n t to S o v i e t p e n e t r a t i o n .
The Communists are numerous in the R u h r and H a m b u r g b u t comparatively
u n i m p o r t a n t i n t h e r e s t of t h e W e s t . T h e i r o r g a n i s a t i o n , h o w e v e r , i s m o r e a c t i v e
a n d w i d e s p r e a d t h a n t h a t of t h e i r r i v a l s .
46. S o l o n g as t h e p r e s e n t z o n a l o c c u p a t i o n c o n t i n u e s a n d G e r m a n y is n o t
c e n t r a l i s e d , o u r p r e s e n c e a n d t h a t of t h e A m e r i c a n s i n t h e W e s t affords s o m e
protection to the democratic G e r m a n p a r t i e s against C o m m u n i s t pressure from
t h e E a s t e r n Zone. W e can t r y t o stiffen t h e Social D e m o c r a t s a g a i n s t f u s i o n
a n d enable t h e m a n d t h e C h r i s t i a n D e m o c r a t s to s t r i k e r o o t i n t h e v a r i o u s local
elections w h i c h a r e e n v i s a g e d . Once B e r l i n a g a i n becomes t h e s e a t of a G e r m a n
G o v e r n m e n t , t h e l a t t e r w i l l be e x p o s e d t o s t r o n g C o m m u n i s t a n d S o v i e t p r e s s u r e .
T h e C o m m u n i s t s w i l l be e n t r e n c h e d i n t h e E a s t a n d w i l l p r o c e e d to t h e offensive
a g a i n s t t h e p a r t i e s in t h e W e s t . F o r I f e a r w e m u s t p r o c e e d o n t h e a s s u m p t i o n
t h a t t h e S o v i e t G o v e r n m e n t w i l l c o n t i n u e t o d o all i t c a n to e n s u r e t h a t t h e f u t u r e
G e r m a n G o v e r n m e n t w i l l be C o m m u n i s t a n d S o v i e t - c o n t r o l l e d .
T h i s is t h e
a t t i t u d e t h e y have a d o p t e d in o t h e r b o r d e r c o u n t r i e s ; t h e i r m e t h o d s in G e r m a n y
[31427]
c
a r e t r u e t o t y p e . A c c o r d i n g t o o u r r e p o r t s f r o m B e r l i n no o p p o r t u n i t y a p p e a r s to
he m i s s e d for s t r e s s i n g t h e i n c o m p a t a b i l i t y of E a s t a n d W e s t a n d t h e n e e d to
d r a w i n s p i r a t i o n for G e r m a n u n i t y e n t i r e l y f r o m Moscow.
47. I n t h e s e c i r c u m s t a n c e s , w e s h o u l d be wise, I t h i n k , t o p r o l o n g the
p r e s e n t s y s t e m of a d m i n i s t r a t i o n a n d g o v e r n m e n t by zones a n d d e l a y t h e s e t t i n g
u p of a s i n g l e G e r m a n G o v e r n m e n t o p e r a t i n g f r o m B e r l i n . B y t h i s m e a n s "we
w o u l d g a i n t i m e for t h e d e m o c r a t i c p a r t i e s t o g r o w a n d for c o m p l e t i o n of o u r
o w n a r r a n g e m e n t s i n t h e R u h r . B u t , on t h e o t h e r h a n d , so l o n g as t h e zonal
s y s t e m s c o n t i n u e w e s h a l l n o t be able to r e d u c e t h e cost of o u r o c c u p a t i o n , n o t a b l y
t h a t of f e e d i n g t h e G e r m a n p o p u l a t i o n i n o u r Z o n e .
48. B u t w h a t l i k e l i h o o d is t h e r e of t h e i r b e i n g able to resist t h e Soviet­
controlled p a r t i e s in the long r u n ?
W e c a n s u p p o r t t h e m t h r o u g h o u t the
W e s t e r n Z o n e s i n t h e o p p o s i t i o n to t h e C o m m u n i s t s . W e c a n b a c k t h e m w i t h
o u r p u b l i c i t y . T h e o n l y s u p p o r t likely t o c o u n t , h o w e v e r , w o u l d be t h e g i v i n g
of f a v o u r s a n d t h e e s t a b l i s h m e n t t h r o u g h o u t t h e W e s t of a m u c h h i g h e r s t a n d a r d
of l i v i n g , a n d t h a t w e a r e p r e c l u d e d f r o m d o i n g by t h e P o t s d a m A g r e e m e n t .
B u t w h a t a r e t h e c h a n c e s of t h e d e m o c r a t i c p a r t i e s m a i n t a i n i n g t h e i r r e s i s t a n c e
against C o m m u n i s t pressure, especially after B r i t i s h and U n i t e d States troops
a r e w i t h d r a w n a n d t h e level of i n d u s t r y is m a i n t a i n e d a t such a low level a s to
create chronic unemployment ?
49. I t h i n k it is p o s s i b l e t h a t w e r e t h e r e n o S o v i e t b a c k i n g , t h e d e m o c r a t i c
p a r t i e s m i g h t h o l d t h e i r o w n . T h e b l a c k r e c o r d of S o v i e t o c c u p a t i o n u s u a l l y
r e a c t s a g a i n s t t h e c h a n c e s of t h e local C o m m u n i s t p a r t y w h e n t h e r e is n o o u t s i d e
f o r c e b e h i n d t h e m . B u t so l o n g a s t h e S o v i e t s a r e e s t a b l i s h e d i n t h e E a s t e r n
Z o n e , a n d even a f t e r t h e i r w i t h d r a w a l so long a s t h e y a r e p r e s e n t on t h e O d e r ,
i t m u s t be e x t r e m e l y d o u b t f u l w h e t h e r t h e G e r m a n d e m o c r a t i c p a r t i e s w i l l resist.
T h e G e r m a n c h a r a c t e r p r e d i s p o s e s t h e m to t o t a l i t a r i a n p a r t i e s . T h e effects of
defeat a n d economic chaos m u s t increase this.
50. E v e n t s i n A u s t r i a p r o v i d e a n i n t e r e s t i n g p a r a l l e l . So l o n g a s t h e r e
w a s a c h a n c e of a C o m m u n i s t G o v e r n m e n t i n V i e n n a , t h e S o v i e t G o v e r n m e n t
t o o k t h e l e a d i n t h e A l l i e d C o u n c i l i n p r e s s i n g f o r g r e a t e r f r e e d o m for the
A u s t r i a n G o v e r n m e n t . S i n c e t h e e l e c t i o n s , a t w h i c h t h e C o m m u n i s t s f a i l e d , the
Soviet G o v e r n m e n t have t u r n e d their other face to A u s t r i a a n d a r e blocking
e v e r y m o v e to i n c r e a s e h e r i n d e p e n d e n c e , a n d t h e i r o c c u p y i n g t r o o p s a r e d i g g i n g
i n for a n o t h e r w i n t e r . W e m u s t a n t i c i p a t e , i n f a c t , t h a t , u n l e s s t h e G e r m a n
G o v e r n m e n t comes u n d e r C o m m u n i s t c o n t r o l , t h e S o v i e t G o v e r n m e n t w i l l p r o l o n g
t h e i r o c c u p a t i o n on o n e p r e t e x t o r a n o t h e r a n d a p p l y t h e b l u d g e o n t o b r i n g it
about.
5 1 . I f t h e c h a n c e s a r e t h u s a g a i n s t o u r b e i n g able to p r e v e n t t h e G e r m a n
G o v e r n m e n t f r o m b e c o m i n g C o m m u n i s t a n d S o v i e t - c o n t r o l l e d , w e h a v e f r o m the
s e c u r i t y a n g l e a v e r y s e r i o u s a r g u m e n t for t r y i n g t o hold a t a n y r a t e t h e R u h r
by r e m o v i n g i t n o t o n l y f r o m t h e economic c o n t r o l b u t also f r o m t h e political
c o n t r o l of B e r l i n . I f G e r m a n y i s l i k e l y to be u n d e r S o v i e t c o n t r o l , i t i s better
t h a t G e r m a n y s h o u l d n o t i n c l u d e t h e a r s e n a l of t h e R u h r . Thte f a c t t h a t the
G e r m a n p a r t i e s w o u l d be a g a i n s t us a t t h e s t a r t s h o u l d n o t b l i n d u s to the
p o s s i b i l i t y t h a t i n t h e l o n g r u n a n i n t e r n a t i o n a l R u h r , if a success, m i g h t become
t h e focus for W e s t e r n G e r m a n y l a t e r .
52. O n t h e o t h e r h a n d , we m u s t f a c e t h e f a c t t h a t t h e S o v i e t G o v e r n m e n t
m a y d e c i d e to b a c k a C o m m u n i s t G e r m a n G o v e r n m e n t in r e s i s t i n g t h e d e t a c h i n g
of t h e R u h r t e r r i t o r y a n d even of t h e R u h r i n d u s t r y f r o m G e m a n y .
I n that
e v e n t w e s h o u l d h a v e e i t h e r to a c q u i e s c e in G e r m a n y r e t a i n i n g t h e R u h r , with
s u c h p u r e l y economic c o n t r o l s a s w e could e s t a b l i s h , or be p r e p a r e d t o stand
o u t w i t h t h e F r e n c h ( a n d w i t h d o u b t f u l A m e r i c a n s u p p o r t ) in o p p o s i n g i t s r e t u r n
b y c o n t i n u i n g o u r o c c u p a t i o n i n t h e f a c e of c o m b i n e d G e r m a n a n d S o v i e t pressure.
The
United States A ttitude
and. Proposal
for a Four-Power
Treaty.
53. T h e U n i t e d S t a t e s G o v e r n m e n t h a v e n o t y e t g i v e n a n y i n d i c a t i o n of
their attitude towards the French proposals.
I n t h e F o u r - P o w e r C o u n c i l in
B e r l i n , h o w e v e r , t h e y h a v e a l l i e d t h e m s e l v e s w i t h t h e S o v i e t G o v e r n m e n t in
o b s t i n a t e l y b l o c k i n g o u r a t t e m p t s t o r a i s e t h e level of i n d u s t r y in G e r m a n y . They
a r e also p r e s s i n g t h e F r e n c h G o v e r n m e n t t o a g r e e t o t h e s e t t i n g u p of a c e n t r a l i s e d
G e r m a n a d m i n i s t r a t i o n i n B e r l i n . T h e y a r e , of course, k n o w n t o be a n x i o u s to
r e d u c e a n d w i t h d r a w A m e r i c a n t r o o p s of o c c u p a t i o n a s soon as possible.
54. M r . B y r n e s h a s n o w c o m m u n i c a t e d t o m e a n d to M . M o l o t o y a t e n t a t i v e
d r a f t f o r a F o u r - P o w e r T r e a t y on G e r m a n d i s a r m a m e n t a n d d e m i l i t a r i s a t i o n .
T h e t e x t of t h i s p r o p o s a l , w h i c h is h i g h l y confidential a t t h i s s t a g e , is a t A n n e x C.
55. B y t h e t e r m s of t h e T r e a t y t h e U n i t e d S t a t e s , t h e U n i t e d K i n g d o m , t h e
Soviet a n d F r e n c h G o v e r n m e n t s w o u l d b i n d t h e m s e l v e s to e n s u r e t h e c o m p l e t e
d i s a r m a m e n t of G e r m a n y ( A r t i c l e 1). U p o n t h e t e r m i n a t i o n of t h e A l l i e d
o c c u p a t i o n a system of q u a d r u p a r t i t e i n s p e c t i o n w o u l d be set u p ( A r t i c l e 2)
a c c e p t a n c e by G e r m a n y of these p r o v i s i o n s b e i n g a n e s s e n t i a l c o n d i t i o n of
t e r m i n a t i n g t h e A l l i e d o c c u p a t i o n ( A r t i c l e 3). T h e q u a d r u p a r t i t e C o m m i s s i o n
of C o n t r o l set u p u n d e r A r t i c l e 2 w o u l d r e p o r t to t h e F o u r G o v e r n m e n t s w h e n e v e r
by a m a j o r i t y of vote they believed t h a t A r t i c l e 1 w a s in d a n g e r of v i o l a t i o n , a t
t h e s a m e t i m e s u b m i t t i n g r e c o m m e n d a t i o n s for a c t i o n .
Thereupon the Four
Powers would agree to take such p r o m p t m i l i t a r y measures as were needed. F o r
this purpose they would w i t h i n six months negotiate detailed agreements l a y i n g
down t h e p r o c e d u r e of t h e C o m m i s s i o n of C o n t r o l , t h e n u m b e r s a n d t y p e s of
forces w h i c h each p a r t y s h o u l d c o n t r i b u t e , t h e i r l o c a t i o n a n d such o t h e r f a c i l i t i e s
w h i c h t h e y w o u l d p r o v i d e ( A r t i c l e 4).
T h e T r e a t y w o u l d r u n for 2 5 y e a r s
( A r t i c l e 5).
:
56. T h i s A m e r i c a n p r o p o s a l is n o d o u b t d e s i g n e d to speed u p t h e t e r m i n a ­
t i o n of t h e t o t a l o c c u p a t i o n a n d to f a c i l i t a t e a n e a r l y A m e r i c a n w i t h d r a w a l f r o m
Germany.
None t h e less i t p r o v i d e s for t h e c o m p l e t i o n of d i s a r m a m e n t first.
A ^ a i n a G e r m a n G o v e r n m e n t w o u l d h a v e t o be in e x i s t e n c e to u n d e r t a k e t h e
necessary pledges. I t w o u l d b i n d t h e U n i t e d S t a t e s G o v e r n m e n t for 2 5 y e a r s
to the p r i n c i p l e a n d p r a c t i c e of i n s p e c t i o n of G e r m a n y a n d of t h e u s e of force,
by m e a n s of c o n t i n g e n t s to be a g r e e d i n a d v a n c e , in t h e event of v i o l a t i o n s . T h e
T r e a t y is not p r e s u m a b l y i n t e n d e d t o t a k e t h e p l a c e of t h e g e n e r a l P e a c e T r e a t y
w i t h G e r m a n y , w h i c h will h a v e t o be c o n c l u d e d w i t h all t h e b e l l i g e r e n t s .
The
p r o v i s i o n s for i n s p e c t i o n a n d e v e n t u a l a c t i o n i n r e g a r d to d i s a r m a m e n t on a
p u r e l y F o u r - P o w e r b a s i s w o u l d obviously be f a r m o r e effective t h a n a n y s i m i l a r
provision r e q u i r i n g a g r e e m e n t by a l a r g e n u m b e r of P o w e r s .
57. On t h e o t h e r h a n d , i n s p e c t i o n alone c a n n o t be a c c e p t e d a s a s a t i s f a c t o r y
m e a n s of control of G e r m a n y . T h e lesson of i n s p e c t i o n a f t e r t h e l a s t w a r i s
t h e r e to show h o w successfully t h e G e r m a n G o v e r n m e n t e l u d e d s u c h c o n t r o l a n d
r e a r m e d u n d e r our noses. I t is c e r t a i n t h a t t h e F r e n c h G o v e r n m e n t , or for t h a t
m a t t e r t h e Soviet G o v e r n m e n t , w o u l d n o t r e g a r d m e r e i n s p e c t i o n of t h e R u h r i n
t h e c o n d i t i o n s p r o p o s e d as a s u b s t i t u t e for o c c u p a t i o n a n d a m o r e s p e c i a l i s e d
form of control on some s u c h l i n e s as d i s c u s s e d above. N o r could I possibly
recommend t h a t we s h o u l d a g r e e t o w i t h d r a w a l of o u r o w n forces f r o m t h e
R u h r m e r e l y on t h e s t r e n g t h of t h e c o m p l e t i o n of d i s a r m a m e n t a n d t h e a c c e p t a n c e
by a G e r m a n G o v e r n m e n t of t h e s e r v i t u d e s of t h e T r e a t y . U n d e r m y o w n
conception of t h e R u h r , u p o n w h i c h t h e E . I . P . S . w o r k e d , I a l w a y s c o n t e m p l a t e d
t h a t t h e a r e a m u s t be occupied by a n i n t e r n a t i o n a l force for a n i n d e f i n i t e p e r i o d .
58. I t h i n k , t h e r e f o r e , t h a t t h e A m e r i c a n p r o p o s a l s h o u l d be welcomed f o r
the a s s u r a n c e i t c o n t a i n s of c o n t i n u e d U n i t e d S t a t e s p a r t i c i p a t i o n i n i n s p e c t i o n
a n d e v e n t u a l m e a s u r e s of r e p r e s s i o n . O n t h e o t h e r h a n d w e should s t i p u l a t e t h a t
t h e p a r t i e s m u s t n o t be p r e c l u d e d from m a i n t a i n i n g p a r t i a l o c c u p a t i o n . of
G e r m a n y m e r e l y because d i s a r m a m e n t h a s been c o m p l e t e d , a G e r m a n G o v e r n m e n t
set u p a n d a system of i n s p e c t i o n p r o v i d e d .
British
59.
Interests.
B r i t i s h i n t e r e s t s m a y be s u m m a r i s e d a s follows :—
(1) S e c u r i t y from t h e r e v i v a l of G e r m a n a g g r e s s i o n .
(2) R e a s o n a b l e economic well-being in G e r m a n y a n d E u r o p e .
(3) R e d u c t i o n of t h e B r i t i s h costs of o c c u p a t i o n of G e r m a n y a n d f e e d i n g of
Germans.
(4) A d e m o c r a t i c a n d W e s t e r n - m i n d e d G e r m a n y .
(5) T h e r e s t r i c t i o n of p r e d o m i n a t i n g Soviet influence as f a r E a s t as possible.
(6) T h e recovery of F r a n c e a s a solid m e m b e r of t h e W e s t e r n d e m o c r a c i e s .
60.
hands.
F o r (1) a n d (2) c o n t r o l of t h e R u h r is t h e key w h i c h is a t p r e s e n t i n o u r
61. F o r (3) we m u s t f a c e t h e f a c t t h a t i t is g o i n g to become i n c r e a s i n g l y
difficult t o keep t h e A m e r i c a n t r o o p s i n G e r m a n y . " H a r d l y less difficult w i l l it
I 31427 J
c 2
be t o k e e p o u r o w n t r o o p s in G e r m a n y , e s p e c i a l l y if i t m e a n s s p e n d i n g v a s t sums
i n d o l l a r s i n f e e d i n g o u r G e r m a n s . I f w e a n d t h e A m e r i c a n s go w e m u s t t r y a n d
c u t o u r losses a n d s a v e a s m u c h of t h e p o s i t i o n a s possible.
62. F o r (4), if w e c a n n o t p r o l o n g t h e z o n a l g o v e r n m e n t of G e r m a n y w i t h all
t h a t i t m e a n s i n m a n p o w e r a n d m o n e y , t h e r e is n o . a l t e r n a t i v e b u t t o set u p a
G e r m a n G o v e r n m e n t . I n v i e w of t h e economic p o s i t i o n a n d t h e G e r m a n p r c ­
p e n s i t y f o r t o t a l i t a r i a n s o l u t i o n , t h e p r o s p e c t s a r e u n f a v o u r a b l e u n l e s s t h e r e is
a c h a n g e o f S o v i e t p o l i c y a s a r e s u l t of w h i c h t h e S o v i e t t i d e recedes.
6 3 . F o r (5), if w e a n d t h e A m e r i c a n s c a n n o t m a i n t a i n i n d e f i n i t e l y t h e
m i l i t a r y o c c u p a t i o n of o u r zones a n d if w e c a n n o t k e e p t h e Soviet G o v e r n m e n t
from dominating a central G e r m a n Government in Berlin, then there are grounds
f o r r e t a i n i n g c o n t r o l over t h e R u h r f o r t h e W e s t . W e s h o u l d h a v e m o r e c o n t r o l
over a s e p a r a t e R u h r u n d e r A l l i e d m i l i t a r y o c c u p a t i o n , w h i c h i n c l u d e d t h e Soviets
i n t h e c o n t r o l , t h a n over a G e r m a n R u h r a s p a r t of a G e r m a n y u n d e r a C o m m u n i s t
and Soviet-controlled Government in Berlin.
64. F o r (6), a s e t t l e m e n t of t h e R u h r a n d t h e R h i n e l a n d w h i c h w o u l d
reassure F r a n c e is essential.
E. B.
Foreign Office, S.W. 1. 11th March,
1946. ANNEX
A.
ECONOMIC AND INDUSTRIAL PLANNING
T H E CONTROL OF T H E
N O T E BY THE
STAFF.
RUHR.
SECRETARY.
T H E a t t a c h e d p a p e r h a s been p r e p a r e d a t t h e r e q u e s t of t h e S e c r e t a r y of
S t a t e for F o r e i g n A f f a i r s a n d i n c o r p o r a t e s t h e v i e w s of t h e B r i t i s h E l e m e n t of
t h e C o n t r o l C o m m i s s i o n for G e r m a n y .
1th February,
1946.
C O N T R O L OF T H E
RUHR.
1. W e h a v e been a s k e d t o e x a m i n e a n d r e p o r t on t h e best t y p e of r e g i m e
w h i c h could be set u p i n t h e a r e a of " N o r t h " R h i n e l a n d a n d Westphalia t o
secure for t h e A l l i e s c o n t r o l over Germany'"s w a r i m p o r t a n t i n d u s t r i e s i n t h a t
locality w i t h o u t s e p a r a t i n g t h e a r e a p o l i t i c a l l y f r o m t h e r e s t of G e r m a n y . I n
c o n s i d e r i n g this p r o b l e m w e h a v e f u r t h e r been a s k e d t o e x a m i n e t w o a l t e r n a t i v e
methods, namely :—
(a) control t h r o u g h t h e o w n e r s h i p or p a r t - o w n e r s h i p of a selected g r o u p of
industrial companies;
(b) t h e lease to t h e A l l i e d c o u n t r i e s c o n c e r n e d of a p r e s c r i b e d a r e a of G e r m a n
t e r r i t o r y , c o u p l e d w i t h t h e o w n e r s h i p o r p a r t - o w n e r s h i p of t h e
principal i n d u s t r i a l concerns w i t h i n that territory.
F i n a l l y , we h a v e been a s k e d t o c o n s i d e r w h a t w o u l d be t h e g e n e r a l e c o n o m i c
consequences of t a k i n g a w a y t h e t e r r i t o r y , o n t h e w e s t b a n k of t h e R h i n e a n d
s e t t i n g i t u p as a s e p a r a t e S t a t e . O u r v i e w s on t h e effects w h i c h t h i s w o u l d h a v e
both on G e r m a n y a n d o n t h e n e w S t a t e a r e set o u t i n A n n e x A (1).
Assumptions.
2. I n c o n s i d e r i n g
a s s u m p t i o n s :—
this
problem
we
have
made
the
following
basic
(a) t h a t a R e p a r a t i o n P l a n g i v i n g effect to t h e P o t s d a m A g r e e m e n t w i l l be
carried out;
(&) t h a t t h e o c c u p a t i o n a n d c o n t r o l of t h e w h o l e of G e r m a n y w i l l c o n t i n u e
for a t l e a s t a f u r t h e r five y e a r s f r o m n o w ;
(c) t h a t w h e n t h e m i l i t a r y o c c u p a t i o n of G e r m a n y a s a w h o l e ceases, m i l i t a r y
c o n t i n g e n t s of t h e A l l i e d P o w e r s p r i n c i p a l l y c o n c e r n e d w i l l c o n t i n u e
t o o c c u p y a n a r e a i n W e s t e r n G e r m a n y i n w h i c h t h e m a j o r i t y , a t least,
of t h e p r i n c i p a l i n d u s t r i a l c o n c e r n s t a k e n u n d e r A l l i e d c o n t r o l a r e
situated;
(d) t h a t R u s s i a w i l l p a r t i c i p a t e in w h a t e v e r f o r m of c o n t r o l i s set u p i n
Western Germany.
3. A f t e r s t u d y i n g t h e t w o a l t e r n a t i v e p r o p o s a l s set o u t in t h e t e r m s of
reference, w e h a v e r e a c h e d t h e conclusion t h a t o w n e r s h i p or p a r t - o w n e r s h i p of
a selected g r o u p of i n d u s t r i a l c o m p a n i e s w o u l d b e t h e m o s t s a t i s f a c t o r y m e t h o d
of a c h i e v i n g o u r m a i n objective, n a m e l y , t h e d e v e l o p m e n t of t h e i n d u s t r i e s of
W e s t e r n G e r m a n y in t h e i n t e r e s t s of E u r o p e a n p r o s p e r i t y i n s u c h a w a y a s to
leave us w i t h a m a x i m u m d e g r e e of s e c u r i t y t h a t is p o s s i b l e w i t h o u t a p o l i t i c a l
s e p a r a t i o n of t h e a r e a i n w h i c h t h e s e i n d u s t r i e s a r e s i t u a t e d f r o m t h e r e s t of
G e r m a n y . W e w o u l d l i k e t o s t r e s s , however, t h a t w h a t e v e r p o w e r s a r e t a k e n
u n d e r the P e a c e T r e a t y t o e n s u r e t h a t the p u r p o s e s of o u r c o n t r o l a r e d u l y c a r r i e d
out, i t w o u l d be e x t r e m e l y difficult t o e n s u r e t h e i r e x e c u t i o n in t h e f a c e of
deliberate a n d l o n g - s t a n d i n g o p p o s i t i o n by a c e n t r a l G e r m a n G o v e r n m e n t o r t h e
s u s t a i n e d n o n - c o - o p e r a t i o n of t h e local p o p u l a t i o n . M o r e o v e r , i n so f a r as t h e i r
control h a d p e r m i t t e d t h e i n d u s t r i a l d e v e l o p m e n t of W e s t e r n G e r m a n y beyond
the s t a g e t h a t w o u l d h a v e been l i k e l y h a d t h e A l l i e s a c q u i r e d n o i n t e r e s t i n
G e r m a n i n d u s t r y , t h e d a n g e r to s e c u r i t y if d i s a g r e e m e n t a m o n g s t t h e controllingP o w e r s o r G e r m a n o b s t r u c t i o n i s t t a c t i c s r e s u l t e d in t h e A l l i e s r e l i n q u i s h i n g t h e i r
c o n t r o l w o u l d be g r e a t e r . O n t h e o t h e r h a n d , t h e a v o i d a n c e of t h i s d a n g e r by
t h e s e p a r a t i o n of t h i s a r e a f r o m t h e r e s t of G e r m a n y w o u l d h a v e s u c h d i s a s t r o u s
effects o n t h e g e n e r a l e c o n o m y of t h e l a t t e r a n d t h e R u h r , a n d i n c o n s e q u e n c e on
W e s t e r n E u r o p e a s a w h o l e , a s to c o n s t i t u t e a p o t e n t i a l l y g r e a t e r s o u r c e of d a n g e r
t h a n t h e t h e o r e t i c a l r i s k i n h e r e n t i n o u r p r e s e n t p r o p o s a l ' (see A n n e x A ( 2 ) ) .
4. I n t h e f o l l o w i n g p a r a g r a p h s w e set o u t o u r r e c o m m e n d a t i o n s i n r e g a r d
t o t h e s t r u c t u r e a n d n a t u r e of t h e c o n t r o l u n d e r t h e p r o p o s a l w h i c h w e f a v o u r .
The A tea.
5. T h e a r e a i n w h i c h t h e i n d u s t r i e s m o s t i m p o r t a n t f r o m t h e s e c u r i t y a s p e c t
a r e c o n c e n t r a t e d is t h e n o r t h e r n p a r t of t h e R h i n e l a n d P r o v i n c e a n d t h e s o u t h e r n
p a r t of t h e p r o v i n c e of W e s t p h a l i a ( h e r e i n a f t e r r e f e r r e d t o as " t h e a r e a " ) . W e
h a v e c o n s i d e r e d w h e t h e r i n d u s t r i a l u n d e r t a k i n g s o u t s i d e t h e a r e a s h o u l d a l s o be
i n c l u d e d i n t h e c o n t r o l a n d h a v e been u n a b l e t o r e a c h a decision on t h i s p o i n t .
O n t h e o n e h a n d , i t i s a r g u e d t h a t s i n c e effective c o n t r o l w i l l d e p e n d u p o n the
p r e s e n c e of o c c u p y i n g forces i t w o u l d be a m i s t a k e t o t a k e i n t o c o n t r o l a n y u n d e r ­
t a k i n g s i n p a r t s of t h e c o u n t r y w h e r e o c c u p y i n g f o r c e s a r e n o t s t a t i o n e d .
A s s u m i n g t h a t t h e G e r m a n s w i s h e d to u n d e r m i n e t h e a u t h o r i t y of t h e P a r t i c i ­
p a t i n g P o w e r s , t h e y w o u l d be c e r t a i n to c o n c e n t r a t e first on t h o s e outlying­
p r o p e r t i e s , a n d if t h e P a r t i c i p a t i n g P o w e r s w e r e n o t a b l e or p r e p a r e d t o t a k e
t h e n e c e s s a r y c o u n t e r - m e a s u r e s , t h e i r p o s i t i o n w o u l d b e w e a k e n e d n o t only
vis-a-vis t h e s e p a r t i c u l a r p r o p e r t i e s , b u t also w i t h r e g a r d t o t h e o t h e r p r o p e r t i e s
w i t h i n t h e a r e a . T h e o t h e r v i e w is t h a t , i n s p i t e of t h e g r e a t force of t h i s
a r g u m e n t , t h e r e m a y be c e r t a i n e x c e p t i o n a l cases w h i c h w o u l d j u s t i f y t h e
a c q u i s i t i o n of i n d u s t r i a l c o n c e r n s o u t s i d e t h e a r e a . T h e s e e x c e p t i o n s s h o u l d be
confined t o cases w h e r e t h e o w n e r s h i p of a c o n c e r n o u t s i d e t h e a r e a , b u t w i t h i n
t h e B r i t i s h or A m e r i c a n zones, w o u l d r e s u l t i n t h e A l l i e s o b t a i n i n g v i r t u a l
100 p e r c e n t , c o n t r o l of a n i m p o r t a n t G e r m a n i n d u s t r y . A n e x a m p l e of t h i s is
the H e r m a n n G o r i n g Steel W o r k s at Salzgitter, which w i t h the p l a n t s in the R u h r
w o u l d p r o b a b l y r e p r e s e n t t h e b u l k of G e r m a n steel p r o d u c t i o n .
T h e complete
c o n t r o l of t h i s i n d u s t r y w o u l d e n a b l e t h e P a r t i c i p a t i n g P o w e r s t o e x e r c i s e
c o n s i d e r a b l e influence over i t s r e l a t i o n s h i p s w i t h o t h e r s t e e l - p r o d u c i n g c o u n t r i e s .
I t w o u l d e n a b l e t h e m t o s u p e r v i s e t h e o p e i a t i o n s of S a l z g i t t e r m o r e closely t h a n
w o u l d b e p o s s i b l e u n d e r r i g h t s of i n s p e c t i o n c o n f e r r e d u n d e r a P e a c e T r e a t y .
A d e c i s i o n on t h i s p o i n t m i g h t b e left o p e n for l a t e r d i s c u s s i o n w i t h t h e o t h e r
P o w e r s concerned.
Industries
to be
controlled.
6. T h e f o l l o w i n g g r o u p s of i n d u s t r i e s w i l l be t a k e n i n t o c o n t r o l by t h e A l l i e d
countries concerned :—
(a) T h e u n d e r t a k i n g s in t h e a r e a of t h e s i x p r i n c i p a l coal a n d steel complexes,
viz. : —
'
(1) G u t e h o f f n u n g s h u t t e A k t i e n v e r e i n f u r B e r g b a u u . H u t t e n b e t r i e b ,
Niirnberg.
(2) H o e s c h A . G . , D o r t m u n d .
(3) K l o c k n e r W e r k e A . G . , D u i s b u r g . (4) F r i e d r i c h K r u p p , E s s e n . (5) M a n n e s m a n n R o h r e n w e r k e A . G . , D u s s e l d o r f .
(6) V e r e i n i g t e S t a h l w e r k e A . G . , D u s s e l d o r f .
(b) A l l t h e o t h e r colliery c o m p a n i e s a n d t h e i r a s s o c i a t e d c o m p a n i e s i n the
area.
(c) A l l t h e o t h e r steel c o m p a n i e s a n d t h e i r a s s o c i a t e d c o m p a n i e s i n t h e a r e a
together p e r h a p s w i t h the H e r m a n n G o r i n g Steel W o r k s a t Salzgitter
(see p a r a g r a p h 5 above).
(d) A l l t h e p r i n c i p a l p l a n t s w i t h i n t h e a r e a b e l o n g i n g t o l a r g e complexes
p r i n c i p a l l y interested in the chemical a n d e n g i n e e r i n g i n d u s t r i e s and
m a j o r p u b l i c u t i l i t y e n t e r p r i s e s (such a s I . G . F a r b e n , D e m a g ,
Rheinisch-Westfalisches Elektrizitatswerk).
( N . B . — T h e t a k i n g over by t h e A l l i e d c o u n t r i e s c o n c e r n e d of i n d u s t r i a l complexes
i n t h e a r e a i s r e c o m m e n d e d for t w o r e a s o n s . F i r s t , i t is i m p o s s i b l e t o - d r a w a
h a r d - a n d - f a s t l i n e b e t w e e n steel a n d e n g i n e e r i n g ; c o n t r o l of steel w o r k s which
i s e s s e n t i a l w o u l d t h e r e f o r e a u t o m a t i c a l l y e n t a i l c o n t r o l of sorvn e n g i n e e r i n g
is
-
24
w o r k s . Secondly, w e a r e c o m m i t t e d u n d e r t h e P o t s d a m A g r e e m e n t to b r e a k
d o w n c o n c e n t r a t i o n s of economic p o w e r ; t h i s w i l l be p a r t i c u l a r l y difficult t o
achieve o w i n g to t h e lack of a n i n v e s t i n g m i d d l e c l a s s i n G e r m a n y ; if w e r a n n o t
succeed i n l e a v i n g t h e s e complexes i n G e r m a n o w n e r s h i p a n d b r e a k i n g t h e m u p
i n t o t h e i r s m a l l e r c o n s t i t u e n t s , t h e m o s t s a t i s f a c t o r y a l t e r n a t i v e w o u l d seem t o be
to a c q u i r e t h e m ourselves.)
Form
of
control.
7. T h e u n d e r t a k i n g s w o u l d be a c q u i r e d as g o i n g c o n c e r n s a n d t r a n s f e r r e d
to a n I n t e r n a t i o n a l H o l d i n g C o r p o r a t i o n . T h e s h a r e a n d l o a n c a p i t a l of t h e
c o m p a n i e s o w n i n g a c q u i r e d u n d e r t a k i n g s , w h i c h w o u l d i n m o s t cases i n c l u d e
assets w h i c h t h e I n t e r n a t i o n a l H o l d i n g C o r p o r a t i o n w o u l d n o t w i s h t o a c q u i r e ,
would be left i n t h e h a n d s of t h e i r o r i g i n a l o w n e r s . T h e l a t t e r w o u l d look t o
t h e a p p r o p r i a t e G e r m a n a u t h o r i t i e s f o r c o m p e n s a t i o n for t h e a s s e t s a c q u i r e d
by the I n t e r n a t i o n a l H o l d i n g C o r p o r a t i o n b u t w o u l d r e t a i n t h r o u g h t h e i r s h a r e
or loan h o l d i n g s t h e i r i n t e r e s t i n a s s e t s n o t so a c q u i r e d , e.g., t h o s e o u t s i d e t h e
a r e a . N e w G e r m a n s u b s i d i a r y c o m p a n i e s w o u l d be f o r m e d by t h e I n t e r n a t i o n a l
H o l d i n g C o r p o r a t i o n t o c o n t r o l a n d m a n a g e all t h e a c q u i r e d u n d e r t a k i n g s . F o r
t h e sake of c l a r i t y , t h e f o l l o w i n g definitions h a v e been u s e d i n t h e ensuing­
discussion of t h i s o r g a n i s a t i o n : —
Corporation
m e a n s the I n t e r n a t i o n a l H o l d i n g Corporation.
Operating
Companies
means the wholly-owned subsidiary
o p e r a t i n g the u n d e r t a k i n g s w h i c h h a v e been a c q u i r e d .
companies
T h e c a p i t a l s t r u c t u r e of t h e C o r p o r a t i o n n e e d n o t be c o n s i d e r e d i n d e t a i l
i a t t h i s stage, b u t i t s h o u l d be so d e s i g n e d a s t o e n s u r e t h a t t h e v o t i n g c o n t r o l
w o u l d be r e t a i n e d by t h e P a r t i c i p a t i n g P o w e r s w h i l e t h e profits, s u b j e c t to s u c h
reserves as were t h o u g h t necessary, w e r e m a d e a v a i l a b l e t o t h e G e r m a n p e o p l e .
T h e voting r i g h t s m i g h t be a l l o t t e d t o t h e P a r t i c i p a t i n g P o w e r s i n s o m e t h i n g
l i k e the following p r o p o r t i o n s :—'
Per cent.
U n i t e d K i n g d o m , U n i t e d S t a t e s . F r a n c e a n d R u s s i a (each)
20
Holland
10
Belgium and Luxembourg together
...
....
...
10
T h e profits m i g h t be a l l o c a t e d e i t h e r t o t h e n e w local a u t h o r i t y r e f e r r e d t o
in p a r a g r a p h 17, or t o t h e p r o v i n c i a l G o v e r n m e n t s of t h e P r o v i n c e s of R h i n e l a n d
a n d W e s t p h a l i a i n a m o u n t s a p p r o x i m a t e l y p r o p o r t i o n a t e t o t h e v a l u e of t h e
i n d u s t r i a l p r o p e r t i e s a c q u i r e d i n each of t h e s e t w o P r o v i n c e s . T h e p r o v i n c i a l
Governments r a t h e r t h a n a c e n t r a l G o v e r n m e n t h a v e been s u g g e s t e d p a r t l y because
this w o u l d be i n c o n f o r m i t y w i t h o u r policy of d e c e n t r a l i s a t i o n , a n d p a r t l y because
there m i g h t be n o a l t e r n a t i v e c e n t r a l a u t h o r i t y i n G e r m a n y a t t h e t i m e t h e
t r a n s f e r w a s m a d e . W h e n , however, a G e r m a n G o v e r n m e n t h a s been e s t a b l i s h e d
a n d its a d m i n i s t r a t i v e s t r u c t u r e fixed i t m a y p r o v e t o be d e s i r a b l e t h a t it, r a t h e r
a looal a u t h o r i t y , s h o u l d receive t h e profits.
Constitution.
8. T h e d i r e c t i o n of t h e C o r p o r a t i o n w o u l d be i n t h e h a n d s of a C o u n c i l
which w o u l d c o n s i s t of one r e p r e s e n t a t i v e a p p o i n t e d by e a c h P o w e r w h o w o u l d
r e p o r t d i r e c t t o h i s G o v e r n m e n t . T h e s e r e p r e s e n t a t i v e s w o u l d be n o n - t e c h n i c a l
a n d w o u l d be c o n c e r n e d p r i m a r i l y w i t h m a t t e r s of b r o a d g e n e r a l policy. T h e y
would also m a k e d e c i s i o n s on r e c o m m e n d a t i o n s received f r o m t h e I n d u s t r i a l C o m ­
mittees (see below). E a c h r e p r e s e n t a t i v e o n t h e C o u n c i l w o u l d h a v e votes
e q u i v a l e n t to t h e p e r c e n t a g e s h a r e h o l d i n g of h i s G o v e r n m e n t i n t h e C o r p o r a t i o n .
Decisions of t h e C o u n c i l w o u l d n o r m a l l y be t a k e n b y a 51 p e r cent. vote.
9. I n a d d i t i o n t o t h e C o u n c i l , I n d u s t r i a l C o m m i t t e e s w o u l d be set u p f o r .
each of t h e m a i n i n d u s t r i e s in w h i c h t h e C o r p o r a t i o n w a s i n t e r e s t e d .
Similar
committees m i g h t be e s t a b l i s h e d to d e a l w i t h "such g e n e r a l s u b j e c t s a s finance,
employment a n d t r a d e . T h e s e I n d u s t r i a l C o m m i t t e e s w o u l d ' c o n s i s t of one
member f r o m e a c h of t h e c o u n t r i e s c o n c e r n e d . T h e m a i n f u n c t i o n s of t h e com­
mittees w o u l d be to e n s u r e t h a t these i n d u s t r i e s c a r r i e d o u t t h e g e n e r a l policy
laid d o w n by t h e C o u n c i l , t o k e e p t h e m s e l v e s fully i n f o r m e d of t h e i r o p e r a t i o n s
a n d i n p a r t i c u l a r t o t a k e all s t e p s n e c e s s a r y i n r e g a r d t o t h e s e c o m p a n i e s t o e n s u r e
the observance of t h e i n d u s t r i a l d i s a r m a m e n t clauses of t h e P e a c e T r e a t y . T h e
voting r i g h t s of t h e d i r e c t o r s of these I n d u s t r i a l C o m m i t t e e s w o u l d be "similar
to those of t h e C o u n c i l .
10. B e l o w t h e s e a g a i n w o u l d come t h e G e r m a n m a n a g e m e n t s of t h e o p e r a t i n g
c o m p a n i e s . E a c h g r o u p of i n d u s t r i e s w o u l d elect f r o m a m o n g s t i t s m e m b e r s an
e x e c u t i v e b o d y w h i c h w o u l d be t h e p r i n c i p a l p o i n t of c o n t a c t b e t w e e n t h e i n d u s t r y
and the Industrial Committees.
1 1 . I n g e n e r a l , t h e p o l i c y of t h e P a r t i c i p a t i n g P o w e r s s h o u l d be to give as
free a h a n d a s possible t o t h e G e r m a n m a n a g e m e n t s a n d t h e p r i n c i p a l t h o u g h not
exclusive p o w e r w h i c h t h e I n d u s t r i a l C o m m i t t e e s or t h e C o u n c i l w o u l d enjoy
w o u l d be t h a t of v e t o .
Dispossession
and compensation
of previotis
owners.
12. T h e u n d e r t a k i n g w o u l d be t a k e n over b y s i m p l e r e q u i s i t i o n , t h e o w n e r s
l o o k i n g for t h e i r c o m p e n s a t i o n t o w h i c h e v e r a u t h o r i t y , local o r c e n t r a l , w a s
d e s i g n a t e d a s t h e r e c i p i e n t of t h e profits of t h e C o r p o r a t i o n .
S o m e special
a r r a n g e m e n t s m i g h t be n e c e s s a r y i n t h e case of i n t e r e s t s a c q u i r e d f r o m nonG e r m a n owners.
The
relationship
of the Corporation
with the central
13. T h i s c a n be d i v i d e d i n t o t w o p h a s e s :—
German
authority.
(a) t h e p e r i o d w h e n t h e c e n t r a l a u t h o r i t y c o n s i s t s of t h e q u a d r i p a r t i t e
Control Council;
(&) a f t e r t h e C o n t r o l C o u n c i l h a s t e r m i n a t e d a n d t h e r e is a c e n t r a l G e r m a n
Government.
14. A s f a r a s (a) is c o n c e r n e d , t h e p o w e r s of t h e C o r p o r a t i o n w i l l n e e d no
p r e c i s e d e f i n i t i o n ; . t h e i r p r o p e r t i e s b e i n g s i t u a t e d i n G e r m a n y , t h e y w i l l be b o u n d
by decision of t h e q u a d r i p a r t i t e C o n t r o l C o u n c i l a n d it m u s t be a s s u m e d t h a t
since t h e f o u r P o w e r s r e p r e s e n t e d i n B e r l i n w i l l be t h e f o u r l a r g e s t i n d i v i d u a l
s h a r e h o l d e r s i n t h e C o r p o r a t i o n , n o d i v e r g e n c e s of v i e w s a r e l i k e l y t o develop
o t h e r t h a n t h o s e w h i c h i n t h e first i n s t a n c e s h o u l d be s e t t l e d by t h e C o n t r o l
C o u n c i l . I n a n y case, d u r i n g t h i s p e r i o d t h e r e w i l l be n o s e c u r i t y r i s k .
15. W h e n , h o w e v e r , t h e C o n t r o l C o u n c i l is w o u n d u p , t h e C o r p o r a t i o n will
n e e d t o h a v e a c h a r t e r f r o m t h e G e r m a n G o v e r n m e n t w h i c h w i l l be i n c o r p o r a t e d
i n a n a g r e e m e n t w i t h t h e P a r t i c i p a t i n g P o w e r s . T h e p r e c i s e p o w e r s w h i c h the
C o r p o r a t i o n w i l l n e e d t o e n j o y i n o r d e r to c a r r y o u t i t s o b j e c t i v e s c a n be l e f t to
be w o r k e d o u t i n d e t a i l d u r i n g t h e e a r l i e r s t a g e s o f i t s e x i s t e n c e w h e n t h e C o n t r o l
C o u n c i l w i l l s t i l l be o p e r a t i n g .
16. W e h a v e c o n s i d e r e d w h e t h e r t h e C o r p o r a t i o n w o u l d n e e d a n y a d d i t i o n a l
p o w e r s , s u c h a s t h e r i g h t t o v e t o l e g i s l a t i o n or compel t h e G e r m a n G o v e r n m e n t
t o p a s s n e w l a w s . A l t h o u g h a t first s i g h t t h e r e w o u l d a p p e a r t o be some
a d v a n t a g e in such an a r r a n g e m e n t we have reached the conclusion t h a t in practice
i t w o u l d b e u n l i k e l y t o a c h i e v e t h e d e s i r e d effect. I f t h e G e r m a n G o v e r n m e n t is
d e t e r m i n e d to s a b o t a g e b y all m e a n s a t i t s d i s p o s a l t h e c a r r y i n g o u t of t h e p u r p o s e s
for w h i c h t h e C o r p o r a t i o n h a s been f o r m e d , t h e r i g h t s of p o s i t i v e a n d n e g a t i v e
p o w e r s over G e r m a n l e g i s l a t i o n w h i c h t h e C o r p o r a t i o n w o u l d n e e d to protecc
itself, w o u l d be so f a r - r e a c h i n g a s to r e n d e r i t i m p o s s i b l e a t t h e o u t s e t t o establish
t h e s o r t of r e l a t i o n s h i p b e t w e e n t h e C o r p o r a t i o n a n d t h e G o v e r n m e n t w h i c h would
be e s s e n t i a l for t h e p l a n t o h a v e a n y c h a n c e of success. W e t h e r e f o r e t h i n k it
p r e f e r a b l e t h a t t h e p o w e r s of t h e C o r p o r a t i o n s h o u l d be defined q u i t e c l e a r l y i n the
c h a r t e r . A n y b r e a c h of t h e c o n d i t i o n s set o u t i n t h a t c h a r t e r w o u l d c o n s t i t u t e a
b r e a c h of t h e a g r e e m e n t b e t w e e n t h e G e r m a n G o v e r n m e n t a n d t h e P a r t i c i p a t i n g
P o w e r s a n d w o u l d t h e r e f o r e e n t i t l e t h e l a t t e r to i m p o s e s a n c t i o n s .
17. I n o r d e r for t h e s a n c t i o n s t o b e effective t h e P a r t i c i p a t i n g P o w e r s must
be p r e p a r e d t o t a k e a c t i o n a l o n g t w o l i n e s . O n e of t h e s e i s t h e t e m p o r a r y
a s s u m p t i o n b y t h e m of t h e p o w e r s of g o v e r n m e n t w i t h i n t h e a r e a a n d t h e other
t h e u s e of t h e o c c u p y i n g forces t o r e i n f o r c e t h e i r a u t h o r i t y . I t w i l l be e a s i e r to
a p p l y t h e f o r m e r if, a t t h e i n c e p t i o n of t h e scheme, a n e w local a u t h o r i t y is set up
for t h e a r e a . A l t h o u g h t h e n e w local a u t h o r i t y w o u l d i n n o r m a l c i r c u m s t a n c e s
h a v e p r e c i s e l y t h e s a m e r e l a t i o n s h i p w i t h a c e n t r a l G e r m a n G o v e r n m e n t a s any
o t h e r local a u t h o r i t y , i t w o u l d h a v e i t s o w n s e p a r a t e a d m i n i s t r a t i v e m a c h i n e
w h i c h could be a d a p t e d for u s e by t h e P a r t i c i p a t i n g P o w e r s i n t h e a r e a , should
t h e occasion a r i s e . T h e u s e of a r m e d forces w o u l d c e r t a i n l y be r e q u i r e d u n d e r
t h e s e c i r c u m s t a n c e s a n d i t m i g h t also be n e c e s s a r y t o m a k e u s e of t h e s e if some
a c t i o n s h o r t of t h e a s s u m p t i o n of p o w e r s of g o v e r n m e n t w e r e t h o u g h t sufficient.
F o r e x a m p l e , t h e s t a t i o n i n g of c o n t i n g e n t s of t h e o c c u p y i n g forces a t k e y p o i n t s
on t h e b o u n d a r y of t h e a r e a c o u l d be u s e d t o c u t off a t a m o m e n t ' s n o t i c e s h i p m e n t s
of coal a n d steel f r o m t h e R u h r t o t h e r e s t of G e r m a n y .
18. T h e r e l a t i o n s h i p of t h i s a r r a n g e m e n t t o t h e U n i t e d N a t i o n s O r g a n i ­
s a t i o n w o u l d h a v e t o be c o n s i d e r e d i n t h e l i g h t of f u t u r e d e v e l o p m e n t s . I t m i g h t
prove desirable f o r q u e s t i o n s affecting t h e a p p l i c a t i o n of t h e agreement t o be
b r o u g h t before t h e S e c u r i t y C o u n c i l and i n p a r t i c u l a r f o r t h e German G o v e r n ­
ment t o h a v e t h e r i g h t of a p p e a l i n a n y case w h e r e t h e C o r p o r a t i o n w a s e x e r c i s i n g
its p o w e r s i n a m a n n e r w h i c h c o u l d be s h o w n t o be d e t r i m e n t a l t o G e r m a n n a t i o n a l
i n t e r e s t s w h e r e n o issues affecting s e c u r i t y w e r e involved. A f u r t h e r p o i n t w h i c h
m u s t be c o n s i d e r e d is w h e t h e r t h e P a r t i c i p a t i n g P o w e r s w i l l h a v e t h e r i g h t t o
apply m i l i t a r y sanctions w i t h i n t h e area on their own initiative or w h e t h e r they
m u s t first o b t a i n t h e p e r m i s s i o n of t h e S e c u r i t y C o u n c i l , T h e l a t t e r , t h o u g h
p e r h a p s m o r e logical, m i g h t be d a n g e r o u s i n t h a t d e l a y s w o u l d p r o b a b l y occur
w h i c h m i g h t p r e j u d i c e t h e a u t h o r i t y of t h e C o r p o r a t i o n . T h i s w o u l d be p a r t i c u ­
larly likely if, i n t h e e v e n t of a b r e a c h o c c u r r i n g w h i c h , i n t h e o p i n i o n of t h e
P a r t i c i p a t i n g P o w e r s , j u s t i f i e d r e c o u r s e t o m i l i t a r y a c t i o n , t h e G e r m a n case w a s
h e a r d a s well a s t h a t of t h e C o r p o r a t i o n . A p r e f e r a b l e a r r a n g e m e n t w o u l d be
a provision t o be i n c l u d e d i n t h e C o r p o r a t i o n ' s c h a r t e r w h e r e b y a 75 p e r c e n t , vote
of t h e Council c o n s t i t u t e d a u t o m a t i c a u t h o r i t y f o r t h e C o m m a n d e r - i n - C h i e f of
t h e forces of o c c u p a t i o n t o t a k e s u c h a c t i o n a s t h e C o u n c i l m i g h t p r e s c r i b e . I f
t h i s w a s accepted i t w o u l d be o n l y r e a s o n a b l e , however, to give t h e G e r m a n
Government t h e r i g h t of a p p e a l ex post facto t o t h e S e c u r i t y C o u n c i l .
19. T w o o t h e r p o i n t s h a v e been s u g g e s t e d for m a k i n g t h i s s c h e m e m o r e
acceptable to t h e G e r m a n s a n d t h e r e f o r e less l i k e l y t o a r o u s e t h e i r l a s t i n g
opposition. T h e first of t h e s e i s a clause i n t h e c h a r t e r w h i c h w o u l d p r o v i d e for
t h e t e r m i n a t i o n of c o n t r o l b y t h e P a r t i c i p a t i n g P o w e r s a t t h e e n d of a s t a t e d
p e r i o d subject to t h e c o n c u r r e n c e a t t h a t t i m e of t h e S e c u r i t y C o u n c i l . T h e
second is t h a t we s h o u l d h o l d o u t t o t h e G e r m a n s t h e p r o m i s e of a n e v e n t u a l
share in t h e v o t i n g r i g h t s of t h e C o r p o r a t i o n p r o v i d e d t h e y h a d c o - o p e r a t e d
satisfactorily w i t h i t i n t h e m e a n t i m e . A s r e g a r d s t h e . f i r s t of t h e s e p r o p o s a l s ,
we t h i n k t h a t if t h e G e r m a n s k n e w a t t h e t i m e t h e C o r p o r a t i o n w a s f o r m e d t h a t
they would u l t i m a t e l y r e g a i n c o n t r o l of t h e a c q u i r e d u n d e r t a k i n g s i t w o u l d h a v e
an i m p o r t a n t p s y c h o l o g i c a l effect. F r o m t h i s a n g l e a p e r i o d of, s a y , 2 5 y e a r s ,
which would be w i t h i n t h e l i f e t i m e o f t h e m a j o r i t y of t h e p o p u l a t i o n , w o u l d be
most a d v a n t a g e o u s . B u t i n v i e w of t h e difficulties of r e - e d u c a t i n g t h e G e r m a n s
w i t h i n so s h o r t a p e r i o d a n d t h e i m p o r t a n t s e c u r i t y a s p e c t s involved, n o p e r i o d
of less t h a n 50 y e a r s is l i k e l y t o be a c c e p t a b l e t o t h e P a r t i c i p a t i n g P o w e r s . T h e
promise of e v e n t u a l p a r t i c i p a t i o n i n t h e v o t i n g r i g h t s of t h e C o r p o r a t i o n p r e s e n t s
greater difficulties. T h e G e r m a n s could n o t receive a s h a r e l a r g e r t h a n t h a t of
the f o u r p r i n c i p a l P o w e r s , a n d t h i s w o u l d n o t be sufficient t o influence t h e
decisions of t h e C o u n c i l i n m a t t e r s of l e g i t i m a t e i n t e r e s t to t h e G e r m a n G o v e r n ­
ment w h e r e decisions a r e t a k e n b y a 5 1 p e r cent, m a j o r i t y vote. I t m i g h t , h o w e v e r ,
enable t h e m t o i n t e r f e r e i n t h e o n e field i n w h i c h t h e P a r t i c i p a t i n g P o w e r s s h o u l d
have u n d i s p u t e d a u t h o r i t y , n a m e l y , t h e u s e of a r m e d force a s a s a n c t i o n a g a i n s t
a breach of t h e a g r e e m e n t i n v o l v i n g a t h r e a t t o s e c u r i t y .
Tariffs.
20. I t is i m p o r t a n t t h a t t h e p r o d u c t s of t h e o p e r a t i n g c o m p a n i e s s h o u l d be
allowed t o p a s s freely a n d w i t h o u t d i s c r i m i n a t i o n t h r o u g h o u t G e r m a n y . I n t h e
m a t t e r of i m p o r t d u t i e s a n d of i n t e r n a l d u t i e s levied i n t h e i r t e r r i t o r i e s , t h e
P a r t i c i p a t i n g P o w e r s s h o u l d g r a n t m o s t - f a v o u r e d - n a t i o n t r e a t m e n t t o goods p r o ­
duced by t h e c o n t r o l l e d i n d u s t r i e s of t h e a r e a . I n all o t h e r r e s p e c t s t h e y s h o u l d
make n o a r b i t r a r y d i s c r i m i n a t i o n a g a i n s t s u c h goods. P r e s u m a b l y any a g r e e m e n t
a r r i v e d a t by t h e C o m m e r c i a l C o n f e r e n c e t o be h e l d d u r i n g t h e c o m i n g s u m m e r
would be a p p l i e d so f a r a s r e l e v a n t t o t h i s case.
Industrial
Policy.
2 1 . O n e of t h e g r e a t obstacles i n t h e w a y of t h e A l l i e d c o n t r o l of t h e
p r i n c i p a l i n d u s t r i e s i n W e s t e r n G e r m a n y a c h i e v i n g t h e objectives w h i c h w e h a v e
in m i n d i s t h e v e r y r e a l d a n g e r t h a t i n t i m e s of w o r l d s l u m p t h e P a r t i c i p a t i n g
P o w e r s w o u l d e x e r c i s e t h e i r c o n t r o l over G e r m a n i n d u s t r y t o e n s u r e t h a t i t w a s
G e r m a n y a n d n o t t h e i n d u s t r i e s of t h e i r r e s p e c t i v e c o u n t r i e s w h i c h suffered t h e
adverse consequences of d e c l i n i n g w o r l d d e m a n d . I n o t h e r w o r d s , t h e r e w o u l d
[31427]
D
be g r e a t t e m p t a t i o n for e a c h of t h e c o n t r o l l i n g P o w e r s to e x p o r t t h e i r u n e m p l o y ­
ment to the R u h r .
T o p r e v e n t t h i s , some i n t e r - G o v e r n m e n t a l a r r a n g e m e n t will
be n e c e s s a r y w h i c h w i l l s e c u r e for G e r m a n y a s h a r e in w o r l d e x p o r t m a r k e t s ;
a l l o w h e r t o p a r t i c i p a t e i n e x p a n s i o n of p r o d u c t i v e c a p a c i t y b r o u g h t a b o u t by
t h e i n c r e a s e i n w o r l d d e m a n d , a n d i n t i m e s of s l u m p to p r o t e c t h e r h o m e m a r k e t
f o r h e r h o m e i n d u s t r i e s . T h i s w o u l d i n effect m e a n t h e s e t t i n g u p of a f o r m of
i n t e r - g o v e r n m e n t a l c a r t e l a n d a l t h o u g h t h e U . S . G o v e r n m e n t a r e k n o w n to be
o p p o s e d to c a r t e l s , t h e y m a y be p r e p a r e d to a g r e e t o some f o r m of i n t e r - g o v e r n ­
m e n t a l m a c h i n e r y d e s i g n e d to m e e t t h i s specific case.
Raising
of fresh
capital.
22.
I f t h e o p e r a t i n g c o m p a n i e s a r e to he a l l o w e d t o e x p a n d t o m e e t an
i n c r e a s e of w o r l d d e m a n d f o r t h e i r p r o d u c t s , t h e C o r p o r a t i o n w i l l n e e d t o r a i s e
a d d i t i o n a l c a p i t a l f r o m t i m e t o t i m e . G e n e r a l l y s p e a k i n g , t h i s c a p i t a l should
be r a i s e d f r o m i n t e r n a l s o u r c e s t h r o u g h t h e n e w local a u t h o r i t y o r t h e p r o v i n c i a l
G o v e r n m e n t s of t h e R h i n e l a n d a n d W e s t p h a l i a . T h e l a t t e r c o u l d issue t h e i r
o w n p r o v i n c i a l G o v e r n m e n t b o n d s , a n d p e r h a p s be g i v e n t h e r i g h t to secure
t h e s e o n e a r n i n g s of t h e C o r p o r a t i o n . I n t h e l a t t e r e v e n t , h o w e v e r , t h e bond
h o l d e r s w o u l d receive n o lien o n t h e p r o p e r t i e s of t h e o p e r a t i n g c o m p a n i e s a n d
n o r i g h t s of f o r e c l o s u r e , since i t is i m p o r t a n t to e n s u r e t h a t t h e s e c u r i t y of the
P a r t i c i p a t i n g P o w e r s is p r e s e r v e d i n t a c t . T h e o p e r a t i n g c o m p a n i e s s h o u l d also
h a v e t h e r i g h t to b o r r o w a b r o a d .
I n t h e event of one of t h e P a r t i c i p a t i n g
P o w e r s b e i n g w i l l i n g t o p u t u p t h e m o n e y , o p p o r t u n i t y s h o u l d b e g i v e n t o each
of t h e P a r t i c i p a t i n g P o w e r s t o s u b s c r i b e pro rata t o t h e l o a n . T h e u n w i l l i n g n e s s
of o n e or m o r e P o w e r s t o s u b s c r i b e s h o u l d n o t of itself convey a r i g h t t o veto
t h e i n t e n d e d loan, p r o v i d e d t h a t t h e n e c e s s a r y m a j o r i t y vote of t h e C o u n c i l h a d
been o b t a i n e d to i t s issue. S u b s c r i p t i o n t o a f o r e i g n c u r r e n c y l o a n b y a P a r t i c i ­
p a t i n g P o w e r s h o u l d n o t c o n f e r a n y a d d i t i o n a l v o t i n g r i g h t s . A s in t h e case
of i n t e r n a l b o r r o w i n g s , i s s u e s m a d e by f o r e i g n G o v e r n m e n t s c o u l d be s e c u r e d on
r e v e n u e b u t n o t on a s s e t s .
Control of foreign exchange
earnings.
23. I t h a s been suggested t h a t the P o w e r s represented in t h e Corporation
s h o u l d r e t a i n p o s s e s s i o n of t h e f o r e i g n e x c h a n g e e a r n i n g s of t h e o p e r a t i n g com­
p a n i e s , a n d o n l y r e l e a s e t h e s e t o t h e G e r m a n a u t h o r i t i e s on s a t i s f a c t o r y proof
t h a t t h e y w e r e n o t b e i n g u s e d for u n d e m o c r a t i c or w a r l i k e p u r p o s e s .
The
C o r p o r a t i o n w o u l d c e r t a i n l y n e e d to p r o t e c t itself i n i t s c h a r t e r f r o m a n y foreign
e x c h a n g e c o n t r o l i m p o s e d by t h e c e n t r a l G o v e r n m e n t b e i n g e x e r c i s e d i n s u c h a
w a y a s to d e f e a t t h e o b j e c t i v e s for w h i c h t h e C o r p o r a t i o n h a s been established.
I t is, h o w e v e r , i m p o r t a n t i n o u r o p i n i o n t h a t t h e g e n e r a l r e l a t i o n s h i p between
t h e C o r p o r a t i o n a n d t h e G e r m a n G o v e r n m e n t s h o u l d be s u c h t h a t t h e C o r p o r a ­
t i o n w o u l d r e s p e c t t h e a u t h o r i t y of t h e G e r m a n G o v e r n m e n t e x c e p t w h e r e this
c a n be s h o w n a s b e i n g u s e d i n a m a n n e r i n j u r i o u s t o t h e C o r p o r a t i o n ^ interests.
I t w o u l d t h e r e f o r e , i n o u r o p i n i o n , be w r o n g for t h e C o r p o r a t i o n i n t h e c a s e of
t h e f o r e i g n e x c h a n g e e a r n i n g s of i t s o p e r a t i n g c o m p a n i e s t o be p l a c e d i n an
e x c e p t i o n a l p o s i t i o n i n w h i c h i t b e c a m e i n i t s o w n r i g h t a j u d g e of t h e political
p o l i c y of t h e c e n t r a l G e r m a n a u t h o r i t i e s . O n t h e o t h e r h a n d , i t m i g h t w e l l be
d e s i r a b l e , a s a m e a n s of a p p l y i n g p r e s s u r e i n t h e e v e n t of a b r e a c h of the
P e a c e T r e a t y , for t h e U n i t e d N a t i o n s t o h a v e some g e n e r a l c o n t r o l over G e r m a n
f o r e i g n e x c h a n g e e x p e n d i t u r e a s a w h o l e . I f so i t w o u l d seem p r e f e r a b l e to do
t h i s b y m e a n s of c a n a l i s i n g G e r m a n f o r e i g n e x c h a n g e r e c e i p t s i n t o some central
b a n k i n g f u n d , w h i c h t h e U n i t e d N a t i o n s O r g a n i s a t i o n w o u l d h a v e t h e r i g h t to
block i n cases of e m e r g e n c y .
Timing.
- '
24. I f i t is a g r e e d t h a t c o n t r o l b y m e a n s of a h o l d i n g c o m p a n y is t h e best
m e a n s of a c h i e v i n g o u r objectives, i t w o u l d be i n a d v i s a b l e for t h e A l l i e s to take
over t h e i n d u s t r i e s l i s t e d i n p a r a g r a p h 6 above u n t i l t h e u n d e r t a k i n g s i n question
c a n be o p e r a t e d a s g o i n g c o n c e r n s , a n d u n t i l t h e r e m o v a l s of p l a n t a n d e q u i p m e n t
u n d e r t h e r e p a r a t i o n p r o g r a m m e h a v e been c o m p l e t e d . W h e n t h e s e conditions
h a v e been fulfilled i t i s p r o b a b l e t h a t t h e s t r u c t u r e o u t l i n e d i n t h e p r e c e d i n g
p a r a g r a p h s m i g h t b e set u p w i t h i n a p e r i o d of a b o u t t w e l v e m o n t h s . P e n d i n g
t h e c r e a t i o n of t h e C o r p o r a t i o n , t h e o c c u p y i n g P o w e r i n w h o s e zone t h e under­
t a k i n g s t o be a c q u i r e d a r e l o c a t e d m i g h t t a k e t h e i r a s s e t s i n t o c u s t o d y i n the
s a m e w a y a s h a s a l r e a d y been d o n e i n t h e case of t h e R u h r m i n e s .
26
io
The
lease to the Powers
concerned
of a prescribed
area in German
territory,
coupled tvith the ownership
or part-ownership
of the principal
industrial
concerns within
that
territory.
25. A t first s i g h t t h i s p r o p o s a l a p p e a r s to have m a n y a t t r a c t i o n s .
In
fact i t a m o u n t s to a lease to t h e P a r t i c i p a t i n g P o w e r s for a fixed p e r i o d of
y e a r s of c e r t a i n f u n c t i o n s of g o v e r n m e n t w i t h i n t h e a r e a c o n c e r n e d , w h i c h w o u l d
be m u c h s m a l l e r t h a n t h e p r o v i n c e s of N o r t h R h i n e l a n d a n d W e s t p h a l i a .
In
practice, however, it has m a n y disadvantages. If the Allies were to exercise all
the f u n c t i o n s of a G e r m a n G o v e r n m e n t , i t w o u l d a m o u n t to p o l i t i c a l s e p a r a t i o n
of the a r e a f r o m t h e r e s t of G e r m a n y . I n a n y case, i t w o u l d n o t be p r a c t i c a b l e
for the P a r t i c i p a t i n g P o w e r s t o e x e r c i s e t h e s e f u n c t i o n s . T h e p r o p e r t y i n t e r e s t s
of the P a r t i c i p a t i n g P o w e r s i n t h a t a r e a w o u l d be confined t o t h e assets of t h e
p r i n c i p a l i n d u s t r i e s , e.g., coal a n d steel, b u t all t h e r e s t w o u l d r e m a i n w i t h
t h e i r e x i s t i n g o w n e r s w h o for a d m i n i s t r a t i v e c o n v e n i e n c e w o u l d r e m a i n s u b j e c t
to G e r m a n l a w . M o r e o v e r , since t h e a r e a i n q u e s t i o n (i.e., t h e R u h r ) w o u l d
be most sensitive to t h e i m p a c t of booms a n d s l u m p s , i t w o u l d be e s s e n t i a l f o r t h e
a r e a for t a x a t i o n a n d c u r r e n c y p u r p o s e s t o be t r e a t e d as p a r t of G e r m a n y .
In
o t h e r w o r d s , i n t i m e s of p r o s p e r i t y t h e c e n t r a l G e r m a n G o v e r n m e n t w o u l d e x p e c t
to o b t a i n r e v e n u e from t h e a r e a w i t h w h i c h t o s u b s i d i s e t h e p o o r e r p a r t s of
G e r m a n y , w h i l e i n t i m e s of s l u m p t h e a r e a itself w o u l d r e q u i r e s u b s i d i s i n g o u t
of the c e n t r a l r e v e n u e s of t h e c o u n t r y .
26. I f t h e r e w a s a n y r e a l c h a n c e t h a t t h e P a r t i c i p a t i n g P o w e r s w o u l d
receive the fullest c o l l a b o r a t i o n f r o m a c e n t r a l G e r m a n G o v e r n m e n t t h e s e
difficulties w o u l d l a r g e l y d i s a p p e a r , b u t w e d o n o t t h i n k t h a t t h i s is a r i s k
t h a t we could afford to a c c e p t . A leased a r e a w i t h a n a n t a g o n i s t i c G e r m a n
Government would p r e s e n t i n t o l e r a b l e p r o b l e m s . T h e r e w o u l d be n o g u a r a n t e e
t h a t t h e local G e r m a n m u n i c i p a l a u t h o r i t i e s w o u l d be p r e p a r e d t o obey t h e o r d e r s
of the P a r t i c i p a t i n g P o w e r s , a n d if t h e y d i d i n f a c t a d o p t c a ' c a n n y m e a s u r e s ,
t h e P a r t i c i p a t i n g P o w e r s w o u l d h a v e n o o p t i o n b u t t o t a k e over t h e a d m i n i s t r a ­
tion of the a r e a t h e m s e l v e s . T h i s w o u l d be a c o n s i d e r a b l e a d m i n i s t r a t i v e b u r d e n
in any c i r c u m s t a n c e s , a n d if a S e v e n - P o w e r C o n t r o l involved t h e e s t a b l i s h m e n t
of a S e v e n - P o w e r K o m m e n d a t u r a ; i t i s m o s t u n l i k e l y t h a t a n y efficient n o n G e r m a n a d m i n i s t r a t i o n could b e a c h i e v e d . T h e r e is also t h e p o l i t i c a l difficulty
t h a t if the lease w a s n o t r e g a r d e d a s s e p a r a t i o n t h e a r e a w o u l d h a v e t h e r i g h t
to send d e p u t i e s to t h e R e i c h s t a g . T h e P a r t i c i p a t i n g P o w e r s w o u l d find t h e m ­
selves in a n e x t r e m e l y e m b a r r a s s i n g p o s i t i o n if t h e s e d e p u t i e s o p e n l y a v o w e d
t h e i r desire t o t e r m i n a t e , t h e r e g i m e . I n t h e economic field t h e p o s i t i o n of t h e
P a r t i c i p a t i n g P o w e r s c o u l d be m a d e e x t r e m e l y difficult. I f i n t i m e s of s l u m p
the G e r m a n a u t h o r i t i e s f a i l e d t o s u b s i d i s e t h e p o p u l a t i o n of t h e a r e a a n d w i d e ­
spread s t a r v a t i o n r e s u l t e d , t h e P a r t i c i p a t i n g P o w e r s w o u l d h a v e a d i r e c t
responsibility t o p r o v i d e relief, w h i c h t h e y c o u l d scarcely e v a d e .
27. A l t h o u g h for t h e above r e a s o n s w e h a v e come to t h e conclusion t h a t
control by m e a n s of a n i n t e r n a t i o n a l h o l d i n g c o m p a n y i s p r e f e r a b l e t o c o n t r o l
by m e a n s of a l e a s e d a r e a , w e still r e g a r d t h e lease w i t h a l l i t s d a n g e r s a s
p r e f e r a b l e t o p o l i t i c a l s e p a r a t i o n . I n t h e first p l a c e , i t w o u l d be possible u n d e r
such a n a r r a n g e m e n t for t h e a r e a s t i l l t o r e m a i n p a r t of t h e G e r m a n C u s t o m s
system, w h i c h w o u l d n o t be f e a s i b l e if i t w a s p o l i t i c a l l y s e p a r a t e d f r o m t h e r e s t
of G e r m a n y . S e c o n d l y , a lease h a s less finality a b o u t i t t h a n s e p a r a t i o n , a n d
it would a l w a y s be p o s s i b l e for t h e P a r t i c i p a t i n g P o w e r s t o v a r y t h e t e r m s of
the lease a c c o r d i n g t o t h e b e h a v i o u r of t h e c e n t r a l G e r m a n G o v e r n m e n t .
ANNEX
Establishment
of German
State and the effects
rest of
Germany.
A
(1).
territory
on the west bank of the Rhine as a
separate
of such a proposal
both on the new State and on the
W E h a v e a s s u m e d i n c o n s i d e r i n g t h i s p r o b l e m t h a t t h e t e r r i t o r y t o be
s e p a r a t e d f r o m G e r m a n y w i l l be confined to t h a t p a r t of t h e R h i n e l a n d a n d t h e
P a l a t i n a t e w h i c h lies o h t h e w e s t b a n k of t h e R h i n e a n d w i l l e x c l u d e t h e S a a r .
In subsequent p a r a g r a p h s we refer to t h i s t e r r i t o r y as '' the S t a t e . "
[31427]
D 2
Effect
on the
State.
2. T h e r e is l i t t l e d o u b t t h a t if t h e S t a t e w e r e s e p a r a t e d f r o m t h e rest of
G e r m a n y a n d s e t u p a s a n e w e n t i t y i t c o u l d be m a d e e c o n o m i c a l l y v i a b l e .
The
S t a t e possesses i m p o r t a n t n a t u r a l r e s o u r c e s i n t h e s h a p e of h a r d a n d b r o w n coal
m i n e s , w i t h r i c h a g r i c u l t u r a l l a n d w h i c h s h o u l d i n t i m e be c a p a b l e of develop­
m e n t t o p r o d u c e a s u b s t a n t i a l s u r p l u s of t h e h i g h e r cost foodstuffs. F r o m t h e
i n d u s t r i a l p o i n t of v i e w i t c o n t a i n s i m p o r t a n t steel a n d e n g i n e e r i n g i n d u s t r i e s
a n d u n l e s s t h e s e a r e s u b s t a n t i a l l y r e d u c e d u n d e r t h e r e p a r a t i o n p l a n t h e y could
be a d j u s t e d i n s u c h a w a y a s e v e n t u a l l y t o m a k e t h e a r e a l a r g e l y self-sufficient
so f a r a s t h e p r o d u c t i o n of p l a n t a n d e q u i p m e n t is c o n c e r n e d . T h e S t a t e also
c o n t a i n s i m p o r t a n t c h e m i c a l i n d u s t r i e s . T h e r e is a s u b s t a n t i a l s u r p l u s of electric
p o w e r i n t h e S t a t e , b u t i t is deficient i n g a s .
3 . I n s p i t e of t h e s a t i s f a c t o r y p o s i t i o n s u m m a r i s e d i n t h e p r e c e d i n g p a r a ­
g r a p h , t h e s e t t i n g u p of a b a r r i e r b e t w e e n t h e S t a t e a n d t h e r e s t of G e r m a n y would
u n d o u b t e d l y c r e a t e difficulties i n r e g a r d t o t h e d i s p o s a l of t h e s u r p l u s e s which
a r e n o w c o n s u m e d i n o t h e r p a r t s of G e r m a n y . T h e r e is a close c o n n e c t i o n between
t h e S t a t e a n d t h e R u h r , the l a t t e r t a k i n g s u r p l u s power from the S t a t e and
s e n d i n g i t g a s . T h e S t a t e also looks t o t h e R u h r for t e c h n i c a l l e a d e r s h i p .
There
a r e also s t r o n g economic c o n n e c t i o n s w i t h o t h e r p a r t s of G e r m a n y t o w h i c h the
S t a t e sells i m p o r t a n t q u a n t i t i e s of c h e m i c a l s , i n c l u d i n g i n p a r t i c u l a r c a r b i d e a n d
c y a n a m i d e , a n d also s p e c i a l steels. T h e S t a t e also d i s p o s e s of i t s s u r p l u s s u g a r
p r o d u c t i o n t o t h e r e s t of G e r m a n y . W i t h s e p a r a t i o n t h e S t a t e w o u l d become a
n e w c u r r e n c y a r e a , a n d on t h e b a s i s of p a s t e x p e r i e n c e , h e r e x p o r t s to G e r m a n y
w o u l d s u b s t a n t i a l l y exceed h e r i m p o r t s f r o m G e r m a n y . I t i s u n l i k e l y t h a t
G e r m a n y w o u l d be a b l e t o afford t o i m p o r t t h e s u r p l u s e s f r o m t h e S t a t e a s i n the
p a s t , g i v e n t h e economic difficulties w i t h wdiich she is f a c e d a n d t h e f u r t h e r
p r o b a b l e effects of t h e r e p a r a t i o n p l a n . T h e S t a t e w o u l d t h e r e f o r e h a v e t o find
n e w o u t l e t s f o r p a r t a t l e a s t of t h e e x p o r t s w h i c h f o r m e r l y w e n t t o G e r m a n y .
r
4 . I n g e n e r a l w e c o n c l u d e t h a t t h e r e a r e n o i n s u r m o u n t a b l e economic objec­
t i o n s f r o m t h e p o i n t of v i e w of t h e S t a t e itself, t o i t s e s t a b l i s h m e n t as a s e p a r a t e
p o l i t i c a l e n t i t y , p r o v i d e d t h a t i t s p o p u l a t i o n is n o t i n c r e a s e d above i t s p r e - w a r
level. W e w o u l d , h o w e v e r , p o i n t o u t t h a t t h e c r e a t i o n of s m a l l i n d e p e n d e n t S t a t e s
w i t h a s e p a r a t e c u r r e n c y a n d fiscal s y s t e m of t h e i r o w n is c o n t r a r y t o g e n e r a l
e c o n o m i c t r e n d s s i n c e i t involves t h e c r e a t i o n of n e w tariff f r o n t i e r s a n d is apt
t o r e t a r d t h e d e v e l o p m e n t of w o r l d t r a d e . W e s h o u l d r e g a r d t h e p r o s p e c t s of
t h e S t a t e a s b e i n g v e r y m u c h m o r e p r o m i s i n g f r o m t h e economic a n g l e if i t could
be i n c l u d e d i n a C u s t o m s U n i o n w i t h , say, H o l l a n d , B e l g i u m a n d L u x e m b o u r g .
Effect
on the rest of
Germany.
5. T h e r e c a n be n o d o u b t t h a t f r o m t h e p o i n t of v i e w of t h e r e s t of Germany,
t h e s e p a r a t i o n of t h i s a r e a w o u l d a d d to h e r economic difficulties. T h e loss of
t e r r i t o r y i n t h e e a s t w i l l h a v e a v e r y h a r m f u l effect o n t h e economy of t h e country
i n a n y case, a n d i t is e x t r e m e l y d o u b t f u l w h e t h e r once t h e r e p a r a t i o n p l a n has
been c a r r i e d o u t she w i l l . b e able t o s u p p o r t a t o l e r a b l e s t a n d a r d of l i v i n g without
external assistance.
I t follows f r o m t h i s t h a t t h e r e m o v a l f r o m G e r m a n y of any
f u r t h e r a r e a w h i c h is itself e c o n o m i c a l l y v i a b l e w i l l i n c r e a s e t h e difficulties of
t h e r e m a i n d e r of t h e c o u n t r y . T h e r e a r e c e r t a i n a d d e d d i s a d v a n t a g e s in that
s e p a r a t i o n w o u l d t e n d to r e s u l t i n t h e r u p t u r e of t h e s t r o n g economic a n d technical
l i n k s w h i c h n o w e x i s t b e t w e e n t h e R u h r a n d t h e i n d u s t r i e s s i t u a t e d i n t h e north
of t h e S t a t e . T h i s w i l l be p a r t i c u l a r l y t h e case in v i e w of t h e f a c t t h a t the
p r o d u c t i o n of t h e e a s t a n d w e s t b a n k s of t h e R h i n e w e r e so l a r g e l y supple­
mentary.
H i n d r a n c e t o t h e f r e e e x c h a n g e of goods w i l l n e c e s s a r i l y l e a d t o new
c a p a c i t y i n G e r m a n y w h i c h w i l l a d d a f u r t h e r b u r d e n t o t h e G e r m a n economy
a t a t i m e w h e n i t w i l l be e n d e a v o u r i n g to p i e c e t o g e t h e r t h e a s s o r t m e n t of plants
left b e h i n d a f t e r t h e r e p a r a t i o n r e m o v a l s .
6. T h e r e is o n e s p e c i a l b u r d e n w h i c h w i l l be i m p o s e d on t h e r e s t of Germany.
T h e loss of t e r r i t o r y i n t h e e a s t w i l l l e a v e G e r m a n y w i t h a f a r g r e a t e r density
of p o p u l a t i o n t h a n s h e h a d b e f o r e t h e w a r . T h e s e t t l e m e n t of G e r m a n s trans­
f e r r e d f r o m c e d e d t e r r i t o r y i n t h e e a s t a n d f r o m c e n t r a l E u r o p e will p r e s e n t great
difficulties.
T h e S t a t e , i n v i e w of i t s p r e s e n t c o m p a r a t i v e l y low d e n s i t y of
p o p u l a t i o n a n d o p p o r t u n i t y f o r a g r i c u l t u r a l d e v e l o p m e n t is a n a t u r a l reception
a r e a f o r some of t h e t r a n s f e r r e d p o p u l a t i o n . T h i s w o u l d n o l o n g e r be t h e case
if t h e S t a t e w e r e set u p a s a s e p a r a t e e n t i t y s i n c e i t w o u l d be i m p o r t a n t to ensure
t h a t i t d i d n o t s t a r t i t s l i f e w i t h p r o s p e c t s of a p p r e c i a b l e u n e m p l o y m e n t . A d j u s t ­
m e n t s a t a l a t e r d a t e o n a n y l a r g e scale w o u l d be i m p r a c t i c a b l e since t h e n a t i o n ­
a l i t y of t h e i n h a b i t a n t s of t h e n e w S t a t e w o u l d h a v e t o be d e t e r m i n e d a t t h e t i m e
i t w a s set u p a n d t h e s u b s e q u e n t influx of l a r g e n u m b e r s of G e r m a n s w o u l d
p r e j u d i c e a n y c h a n c e s of s t a b i l i t y . T h e c r e a t i o n of t h e S t a t e w o u l d t h e r e f o r e
a d d to t h e difficulties w i t h w h i c h t h e G e r m a n G o v e r n m e n t i s a l r e a d y faced in
settling transferred populations.
ANNEX
Economic
Effects
of the Political
of
A
(2).
Separation
Germany.
of the
Ruhr
from
the
Rest
T H E F r e n c h a d m i t t h a t t h e i r p r o p o s a l to s p l i t t h e R u h r f r o m t h e r e s t of
G e r m a n y w o u l d c r e a t e economic difficulties, c e r t a i n l y for t h e r e s t of G e r m a n y
a n d possibly for t h e a r e a itself. T h e y c o n s i d e r , however, t h a t t h e p r o b l e m s of
reconstruction w h i c h c o n f r o n t G e r m a n y a r e so v a s t t h a t t h e a d d i t i o n a l difficulties
w h i c h m i g h t r e s u l t f r o m t h e s e p a r a t i o n of t h e R u h r w o u l d be r e l a t i v e l y
insignificant. I n a n y case t h e y m a i n t a i n t h a t t h e decision i n r e g a r d t o t h e i r
proposal m u s t be t a k e n on p o l i t i c a l g r o u n d s alone since t h e economic consequences
of s e p a r a t i o n should n o t be a l l o w e d to affect t h e m a i n issue.
2. W e agree t h a t if a n o v e r w h e l m i n g case c a n be m a d e for s e p a r a t i o n a s t h e
only satisfactory m e t h o d of p r e v e n t i n g f u t u r e G e r m a n a g g r e s s i o n , t h e economic
consequences a r e n o t sufficiently s e r i o u s t o w a r r a n t a r e j e c t i o n of t h e F r e n c h
p l a n . B u t the F r e n c h a d m i t t h a t t h e m o s t d i s a s t r o u s s t e p t h a t c o u l d be t a k e n
w o u l d be to set u p a n e w S t a t e a n d l a t e r a b a n d o n it. I t is t h e r e f o r e e s s e n t i a l
t h a t we should be satisfied before s e p a r a t i o n t h a t t h e economic difficulties a r i s i n g
from it would n o t be so g r e a t a s t o w e a k e n t h e w i l l of t h e p a r t i c i p a t i n g P o w e r s
to continue i t indefinitely. D i s a g r e e m e n t between t h e m as t o t h e w a y i n w h i c h
t h e i r control should be e x e r c i s e d w o u l d give t h e G e r m a n s a n o p p o r t u n i t y of
"which they would be q u i c k t o t a k e a d v a n t a g e , t o p l a y off one a g a i n s t t h e o t h e r
a n d t h i s m i g h t well p r o v e t o be i t s u n d o i n g . I n t h e f o l l o w i n g p a r a g r a p h s w e
e x a m i n e the difficulties t h a t a r e l i k e l y to a r i s e .
3. T h e F r e n c h h a v e a g r e e d t h a t t h e s e p a r a t i o n of t h e R u h r f r o m t h e r e s t
of G e r m a n y is n o t a n a l t e r n a t i v e w a y of o b t a i n i n g s e c u r i t y t o t h e p r i n c i p l e of
de-industrialisation which w a s agreed to a t P o t s d a m . On the contrary, they have
stated explicitly i n a m e m o r a n d u m e l a b o r a t i n g t h e i r p r o p o s a l s t h a t t h e P o t s d a m
r e p a r a t i o n s p r o g r a m m e w i l l be c a r r i e d o u t i n full.
4. I t w a s a g r e e d a t P o t s d a m t h a t G e r m a n y ' s m e t a l l u r g i c a l , c h e m i c a l a n d
e n g i n e e r i n g i n d u s t r i e s a n d c e r t a i n o t h e r i n d u s t r i e s w h i c h w e r e of p a r t i c u l a r
i m p o r t a n c e to h e r w a r p o t e n t i a l s h o u l d e i t h e r be e l i m i n a t e d or r e d u c e d i n
c a p a c i t y t o t h e level n e c e s s a r y for h e r p e a c e - t i m e economy.
It was further
provided t h a t t h e s t a n d a r d of l i v i n g w h i c h G e r m a n y w o u l d be a l l o w e d t o enjoy
should not exceed t h e a v e r a g e s t a n d a r d of l i v i n g of a l l E u r o p e a n c o u n t r i e s o t h e r
t h a n the U . S . S . R . a n d U n i t e d K i n g d o m , a n d t h a t p l a n t a n d e q u i p m e n t w h i c h
w a s u n n e c e s s a r y for t h e m a i n t e n a n c e of s u c h a s t a n d a r d of l i v i n g s h o u l d be
removed a s r e p a r a t i o n s .
5 . I f these m e a s u r e s a r e a p p l i e d t o t h e w h o l e of G e r m a n y i t is p r o b a b l e
t h a t i t is t h e R u h r t h a t w i l l b e a r t h e h i g h e s t d e g r e e of d e - i n d u s t r i a l i s a t i o n
since i t is i n t h a t a r e a t h a t t h e g r e a t e s t c o n c e n t r a t i o n of G e r m a n y ' s m e t a l l u r g i c a l ,
heavy e n g i n e e r i n g a n d h e a v y c h e m i c a l i n d u s t r i e s e x i s t . A l t h o u g h G e r m a n y w i l l
need t o m a i n t a i n c o n s i d e r a b l e e x p o r t s i n o r d e r t o m e e t h e r e s s e n t i a l i m p o r t s t h e
r e p a r a t i o n p l a n w i l l a l m o s t c e r t a i n l y be f r a m e d i n such a w a y a s to c o n c e n t r a t e
e x p o r t s in t h e c o n s u m e r goods i n d u s t r i e s w h i c h h a v e less i m p o r t a n c e f r o m t h e
p o i n t of v i e w of w a r p o t e n t i a l . T h e R u h r a r e a is l a r g e l y deficient i n these
consumer goods i n d u s t r i e s a n d t h e o u t p u t of t h e R u h r will t h e r e f o r e p r e d o m ­
m a n t l y be used e i t h e r to m e e t t h e d i r e c t r e q u i r e m e n t s of t h a t a r e a o r t o p r o d u c e
semi-finished goods for e x p o r t to t h e r e s t of G e r m a n y . T h e o n e e x c e p t i o n w i l l
be coal, w h e r e t h e r e s h o u l d be a s u b s t a n t i a l s u r p l u s a v a i l a b l e for e x p o r t t o n o n ­
ijerman destinations.
6
T l l e
F
r
e
n
c
n
T? i , '
i n t h e i r p r o p o s a l h a v e s u g g e s t e d " t h a t t h e economy of t h e
Kufir should be r e o r i e n t a t e d t o w a r d s t h e W e s t . " B u t if a f t e r t h e r e p a r a t i o n
p l a n h a s been c a r r i e d o u t t h e s t e e l , e n g i n e e r i n g a n d c h e m i c a l p r o d u c t i o n of the
R u h r is e x p o r t e d w e s t w a r d s a n d n o t m a d e a v a i l a b l e t o t h e r e s t of G e r m a n y , the
l a t t e r w i l l , i n f a c t , be deficient of t h e m a t e r i a l s n e e d e d to m a i n t a i n t h e a p p r o v e d
s t a n d a r d of l i v i n g . I f s h e c a n n o t o b t a i n t h e s e g o o d s f r o m t h e W e s t s h e will
u n d o u b t e d l y t u r n t o w a r d s t h e E a s t w h e r e t h e i n c r e a s e d coal a n d steel p r o d u c t i o n
of S i l e s i a a p p e a r s t o offer a p r o m i s i n g a l t e r n a t i v e s o u r c e of s u p p l y .
Czecbo­
s l o v a k i a , t h o u g h to a lesser d e g r e e , c o u l d also h e l p t o fill i n the' g a p c r e a t e d by
t h e loss of R u h r p r o d u c t s . B o t h P o l a n d a n d C z e c h o s l o v a k i a a r e p o l i t i c a l l y and
e c o n o m i c a l l y u n d e r t h e S o v i e t influence a n d if t h e y w e r e t o become t h e s u p p l i e r s
of t h e R u m p G e r m a n y i n t h e p l a c e of t h e R u h r i t s e e m s p r o b a b l e t h a t Soviet
influence w o u l d s p r e a d w e s t w a r d s . I n o t h e r w o r d s , t h e r e o r i e n t a t i o n of t h e R u h r
e c o n o m y t o w a r d s t h e W e s t is l i k e l y t o b r i n g a b o u t a c o r r e s p o n d i n g r e o r i e n t a t i o n
of R u s s i a n e c o n o m y t o w a r d s t h e W e s t .
7. I n o r d e r t o c o u n t e r a c t t h i s t e n d e n c y i t w o u l d be n e c e s s a r y n o t o n l y to
a b a n d o n t h e i d e a of r e o r i e n t a t i n g t h e e c o n o m y of t h e R u h r w i t h t h e W e s t , b u t to
f o s t e r t h e m a i n t e n a n c e of t h e e c o n o m i c r e l a t i o n s w i t h t h e R u m p G e r m a n y .
B e f o r e t h e w a r t h e u s e of R u h r p r o d u c t s i n C e n t r a l a n d E a s t e r n G e r m a n y w a s
d e l i b e r a t e l y e n c o u r a g e d by m e a n s of t r a n s p o r t a n d o t h e r s u b s i d i e s .
Whether,
w i t h o u t these subsidies, C e n t r a l a n d W e s t e r n G e r m a n y would still be a market
f o r R u h r p r o d u c t s r e m a i n s to be seen, b u t t h e i m m e d i a t e s t e p s n e c e s s a r y to
e n c o u r a g e t h i s t r e n d w o u l d be a C u s t o m s U n i o n b e t w e e n t h e R u h r a n d t h e rest
of G e r m a n y a n d a c o m m o n c u r r e n c y i n b o t h a r e a s . T h e F r e n c h h a v e s t a t e d
c a t e g o r i c a l l y a n d w i t h good r e a s o n t h a t t h e y c o u l d n o t c o u n t e n a n c e a C u s t o m s
U n i o n s i n c e t h i s w o u l d p r e j u d i c e t h e i r p l a n of p e r m a n e n t l y s e p a r a t i n g t h e R u h r
f r o m t h e r e s t of G e r m a n y .
8. T h e E c o n o m i c S e c u r i t y a n d R e p a r a t i o n p r o g r a m m e a g r e e d i n P o t s d a m
c a n n o t be c a r r i e d o u t w i t h o u t l e a v i n g b e h i n d i t a s e r i o u s u n e m p l o y m e n t p r o b l e m .
I t is c l e a r t h a t t h e F r e n c h h o p e t h a t tJhe i n h a b i t a n t s of t h e n e w R u h r S t a t e a n d
of a n y o t h e r a r e a s i n W e s t e r n G e r m a n y w h i c h m a y also be d e t a c h e d , w i l l develop
a vested interest in their future independence.
T h i s is h a r d l y l i k e l y t o be
a c h i e v e d if t h e i n d e p e n d e n t S t a t e h a s to s t a r t i t s l i f e w i t h a n a p p r e c i a b l e
p r o p o r t i o n of i t s p o p u l a t i o n u n e m p l o y e d a n d w i t h l i t t l e h o p e of finding w o r k . I t
s t a n d s t o r e a s o n , t h e r e f o r e , t h a t t h e R u h r a n d a n y o t h e r p a r t of W e s t e r n G e r m a n y
p o l i t i c a l l y s e p a r a t e d f r o m t h e R e i c h w i l l n o t be r e c e p t i o n a r e a s f o r G e r m a n s
t r a n s f e r r e d f r o m P o l a n d a n d C z e c h o s l o v a k i a a n d C e n t r a l E u r o p e , b u t o n the
c o n t r a r y w i l l w r s h t o e j e c t t h e s u r p l u s p o p u l a t i o n w h i c h c a n n o t find a m e a n s of
l i v e l i h o o d . I n t h e c a s e of t h e R u h r 1 - 1 ^ m i l l i o n p e o p l e w i l l h a v e t o look elsewhere
f o r a b s o r p t i o n a n d if e m i g r a t i o n i s d i s r e g a r d e d t h e o n l y p l a c e t h e y c a n go t o will
be t h e R u m p G e r m a n y , w h o s e p o p u l a t i o n w i l l a l r e a d y be s w o l l e n c o n s i d e r a b l y by
r e f u g e e s f r o m t h e E a s t . T h e p o p u l a t i o n of R u m p G e r m a n y , a s a r e s u l t of these
t r a n s f e r s f r o m t h e E a s t a n d W e s t , is l i k e l y t o be i n t h e n e i g h b o u r h o o d of
6 1 m i l l i o n s a s c o m p a r e d w i t h a p r e - w a r p o p u l a t i o n of 49 m i l l i o n s .
Rump
G e r m a n y d e p r i v e d of free access t o i t s r e m a i n i n g i m p o r t a n t n a t u r a l resources
w o u l d c l e a r l y be u n a b l e t o s u p p o r t so l a r g e a p o p u l a t i o n w i t h o u t e x t e r n a l
a s s i s t a n c e . T h e F r e n c h r e c o g n i s e t h e a d v e r s e e c o n o m i c effects of s e p a r a t i o n on
the R u m p G e r m a n y a n d have suggested as a solution t h a t the necessary
financial
a s s i s t a n c e m i g h t be p r o v i d e d by t r a n s f e r r i n g to t h e R u m p G e r m a n y t h e s u r p l u s
f o r e i g n e x c h a n g e e a r n i n g s of t h e R u h r . I n m a k i n g t h i s s u g g e s t i o n t h e F r e n c h
h a v e a s s u m e d t h a t t h e f a v o u r a b l e b a l a n c e of t r a d e of t h e R u h r w i l l be sufficient
t o m e e t t h e a d v e r s e t r a d e b a l a n c e of t h e r e s t of G e r m a n y , b u t t h i s is o p e n t o doubt.
F r o m a p l a n w h i c h t h e F r e n c h E l e m e n t of t h e C o n t r o l C o m m i s s i o n h a v e recently
p r e p a r e d i n B e r l i n for t h e f u t u r e level of G e r m a n i n d u s t r y a f t e r t h e r e p a r a t i o n
p l a n h a s b e e n c a r r i e d o u t , i t is e v i d e n t t h a t t h e F r e n c h a c c e p t t h e v i e w s of the
B r i t i s h a n d A m e r i c a n D e l e g a t i o n s t h a t even a u n i t a r y G e r m a i r y w i l l o n l y just
be able to b a l a n c e i t s i m p o r t s a n d e x p o r t s . T h e s e p a r a t i o n of t h e R u h r f r o m the
r e s t of G e r m a n y c a n n o t b u t r e s t r i c t t h e v o l u m e of t r a d e in b o t h a r e a s . U n d e r
t h e s e c i r c u m s t a n c e s i t seems u n l i k e l y t h a t even if t h e R u h r w e r e to succeed in
a c h i e v i n g a f a v o u r a b l e b a l a n c e t h i s w o u l d be sufficient t o m e e t t h e deficit of the
R u m p G e r m a n y . F u r t h e r m o r e , a n a r r a n g e m e n t w h e r e b y t h e R u h r s u b s i d i s e d the
r e s t of G e r m a n y f r o m w h i c h i t h a d been f o r c i b l y s e p a r a t e d w o u l d be h i g h l y
a r t i f i c i a l a n d i n t h a t i t r e t a r d e d a n y i m p r o v e m e n t i n l i v i n g s t a n d a r d s w o u l d not
be c o n d u c i v e t o e n c o u r a g i n g t h e p o p u l a t i o n of t h e R u h r t o r e m a i n i n d e p e n d e n t .
9. A s r e g a r d s t h e R u h r itself, i t is by n o m e a n s a f o r e g o n e c o n c l u s i o n t h a t
i t w o u l d be a p r o s p e r o u s S t a t e . B e f o r e t h e w a r t h e n a t i o n a l i n c o m e of t h e R u h r
w a s a b o u t t h e s a m e a s t h e a v e r a g e i n c o m e t h r o u g h o u t G e r m a n y . I t w a s a good
deal lower t h a n B e r l i n , H a m b u r g a n d o t h e r i n d u s t r i a l c e n t r e s w h e r e t h e finishing­
side of G e r m a n i n d u s t r y w a s c o n c e n t r a t e d . I n t i m e s of s l u m p the R u h r h a d t o
be s u p p o r t e d f r o m t h e c e n t r a l r e v e n u e s of t h e S t a t e w h i l e i n m o r e p r o s p e r o u s
t i m e s t h e S t a t e h a d to p a y s u b s i d i e s o n t h e i n c r e a s e d q u a n t i t i e s of R u h r p r o d u c t s
m o v i n g over t h e r e s t of G e r m a n y . I f t h e R u h r is s e p a r a t e d f r o m t h e r e s t of
G e r m a n y t h e r e w i l l be n o e q u a l i s a t i o n f u n d to w h i c h she c a n look for
financial
a s s i s t a n c e i n t i m e s of d e p r e s s i o n . M o r e o v e r , s i n c e t h e n u m b e r s of h e r p o p u l a t i o n
will be fixed a t t h e t i m e of s e p a r a t i o n , s h e w i l l be u n a b l e to absorb some of h e r
unemployed in n e i g h b o u r i n g a g r i c u l t u r a l a r e a s as she now can. I n other words,
unless t h e c o n t r o l l i n g P o w e r s a r e to e n s u r e t h a t even i n t i m e s of w o r l d s l u m p
the R u h r i n d u s t r i e s o p e r a t e a t a h i g h level t h e r e is e v e r y p o s s i b i l i t y t h a t i t m a y
become a o-igantic d e p r e s s e d a r e a . I t seems h a r d l y l i k e l y t h a t t h e p a r t i c i p a t i n g
P o w e r s w o u l d be p r e p a r e d d u r i n g t h e s e p e r i o d s t o m a i n t a i n R u h r o u t p u t a t t h e
expense of t h e i r o w n p r o d u c t i o n , a n d u n d e r s u c h c i r c u m s t a n c e s t h e R u h r , f a r
from beino- able t o s u b s i d i s e t h e r e s t of G e r m a n y , w o u l d itself look f o r a s s i s t a n c e
to t h e p a r t i c i p a t i n g P o w e r s .
10. T h e o b l i g a t i o n s of t h e p a r t i c i p a t i n g P o w e r s u n d e r t h e F r e n c h p l a n
will be considerable.
T h e y c a n n o t r e l y o n a p o w e r of veto only, for t h e
a d m i n i s t r a t i o n of t h e a r e a w i l l be i n t h e i r h a n d s a n d i t is t h e r e f o r e t h e y w h o
will be l a y i n g d o w n t h e policy by w h i c h t h e n e w S t a t e w i l l be g o v e r n e d a n d
will be responsible for t h e r e s u l t i n g p o l i t i c a l , social a n d economic c o n d i t i o n s .
Unless t h e p a r t i c i p a t i n g P o w e r s a r e c o - o p e r a t i n g successfully i n t h e w o r l d a t
l a r g e , differences of o p i n i o n i n o t h e r s p h e r e s of i n t e r e s t a r e likely t o be reflected
in a n u n c o m p r o m i s i n g a t t i t u d e i n t h e i n t e r - A l l i e d a d m i n i s t r a t i o n of t h e R u h r .
U n d e r these c i r c u m s t a n c e s t h e d i v e r g e n t p o l i t i c a l ideologies of t h e Soviet U n i o n
a n d t h e U n i t e d S t a t e s , for e x a m p l e , w o u l d r e m a i n i r r e c o n c i l a b l e a n d t h e n e w
S t a t e would d r i f t helplessly a l o n g w i t h o u t g u i d a n c e .
11. I n the economic field, i n p a r t i c u l a r , t h e s i t u a t i o n w o u l d be l i k e l y to
be very difficult. A s a l r e a d y m e n t i o n e d , i n t i m e s of s l u m p t h e R u h r m i g h t
have a s u b s t a n t i a l a d v e r s e b a l a n c e of p a y m e n t s a n d even n e e d relief i m p o r t s
from a b r o a d . T h e c a p a c i t y of t h e v a r i o u s p a r t i c i p a t i n g P o w e r s t o p r o v i d e
relief would v a r y a n d i t is m o s t i m p r o b a b l e t h a t e a c h w o u l d a g r e e to p r o v i d e
its p r o p o r t i o n a l s h a r e . T h o u g h t h e U n i t e d S t a t e s w o u l d be in t h e p o s i t i o n
to p r o v i d e t h e n e c e s s a r y goods, h e r c o n t i n u e d i n t e r e s t in t h e w e l l - b e i n g of
E u r o p e c a n n o t be g u a r a n t e e d .
I t is m o s t i m p r o b a b l e t h a t t h e U n i t e d K i n g d o m
could afford to p r o v i d e i t s c o n t r i b u t i o n . T h e S o v i e t U n i o n w o u l d h a r d l y be
p r e p a r e d to s u p p o r t financially a n a r e a w h i c h she w o u l d still r e g a r d as p a r t of
a W e s t e r n bloc a n d t h e r e f o r e a p o t e n t i a l t h r e a t t o h e r o w n s e c u r i t y .
12. Differences of o p i n i o n a n d of i n t e r e s t a r e also likely to a r i s e i n r e g a r d
to t h e d e v e l o p m e n t of t h e R u h r . I f i t is to h a v e a v e s t e d i n t e r e s t in i t s o w n
c o n t i n u a n c e some i n d u s t r i a l e x p a n s i o n w i l l be n e c e s s a r y a n d t h i s w i l l call for
e x t e r n a l financial a s s i s t a n c e , since t h e a r e a is too s m a l l t o p r o v i d e all t h e c a p i t a l
itself. H e r e a g a i n d o u b t a r i s e s a s t o w h e t h e r i n t e r - A l l i e d a d m i n i s t r a t i o n w o u l d
agree t h a t t h e R u h r c o u l d r a i s e a n e x t e r n a l l o a n or o n t h e p u r p o s e s for w h i c h
the loan could be used. E a c h of t h e p a r t i c i p a t i n g P o w e r s w o u l d c o n s i d e r i t s
own c o m m e r c i a l i n t e r e s t s a n d t e n d t o o p p o s e a n y d e v e l o p m e n t t h a t m i g h t in
future compete in world e x p o r t m a r k e t s w i t h its own domestic industries.
It
is equally d o u b t f u l w h e t h e r , if t h e b o r r o w i n g w e r e a u t h o r i s e d , a n y o r all of t h e
p a r t i c i p a t i n g P o w e r s w o u l d be w i l l i n g to p r o v i d e t h e money. F a i l u r e t o r e a c h
a g r e e m e n t w o u l d r e t a r d t h e r e c o v e r y of t h e R u h r a n d i n c r e a s e t h e sense of
unfulfilled m o r a l o b l i g a t i o n ; w h i l e t h e influx of t o o m u c h c a p i t a l m i g h t r e s u l t
m t h e r e - c r e a t i o n of a h e a v y i n d u s t r y w h i c h , if t h e r e g i m e w e r e to collapse, m i g h t
leave G e r m a n y r e a d y t o h a n d a m o d e r n a n d i n t e g r a t e d w a r p o t e n t i a l .
13. I n t h e l i g h t of t h e f o r e g o i n g a r g u m e n t s w e h a v e r e a c h e d t h e conclusion
t h a t , h o w e v e r a t t r a c t i v e t h e F r e n c h p l a n m a y superficially a p p e a r , it c r e a t e s
economic difficulties of s u c h m a g n i t u d e a n d c o n t a i n s t h e seeds of such i n t e r AUied d i s s e n s i o n t h a t t h e o n e f e a r w h i c h t h e F r e n c h themselves recognise,
namely, t h e s u b s e q u e n t a b a n d o n m e n t of t h e p l a n , is a v e r y r e a l d a n g e r i n d e e d .
By c o m p a r i s o n w e s h o u l d r e g a r d a p r o p o s a l w h i c h left t h e R u h r p o l i t i c a l l y a
p a r t of G e r m a n y b u t t r a n s f e r r e d t o t h e p a r t i c i p a t i n g P o w e r s t h e c o n t r o l of i t s
p r i n c i p a l i n d u s t r i e s as a m o r e feasible p l a n .
12th February,
1946.
A N N E X B. [C 8 1 2 9 / 2 2 / 1 8 ] Mr. Benin
to Mr. Buff
Cooper
(Paris).
(No. 2068.)
Sir,
Foreign Office, 16th November,
1945.
I H A V E s e n t y o u r E x c e l l e n c y f r o m t i m e t o t i m e ' r e c o r d s of t h e m e e t i n g s
w h i c h h a v e b e e n held, w i t h F r e n c h officials w i t h a v i e w t o e l u c i d a t i n g t h e F r e n c h
p r o p o s a l s w i t h r e g a r d t o t h e R u h r a n d t h e R h i n e l a n d . I n o w enclose a final
r e p o r t on these discussions w h i c h h a s been a g r e e d w i t h t h e F r e n c h authorities.
T h e first a n n e x t o t h e r e p o r t is a l s o enclosed, c o n s i s t i n g of a F r e n c h m e m o r a n d u m
(in t r a n s l a t i o n ) o n t h e e c o n o m i c a s p e c t s of t h e i r p r o p o s a l s . T h e second and
t h i r d a n n e x e s , c o n s i s t i n g of a s t a t e m e n t by S i r D a v i d W a l e y w i t h r e g a r d to
t h e F r e n c h economic m e m o r a n d u m a n d a counter-statement by M . A l p h a n d , are
n o t y e t a v a i l a b l e i n final f o r m .
T h e y w i l l b e f o r w a r d e d t o y o u a s soon as
possible^ )
2. I n t h e c o u r s e of t h e s e d i s c u s s i o n s e v e r y effort h a s been m a d e to m a k e
i t q u i t e c l e a r t o t h e F r e n c h r e p r e s e n t a t i v e s t h a t i t w a s n o t t h e p u r p o s e of H i s
M a j e s t y ' s G o v e r n m e n t i n e n t e r i n g o n t h i s s t a g e of t h e t a l k s t o e x p r e s s a n y views
of t h e i r o w n c o n c e r n i n g t h e F r e n c h p r o p o s a l s . T h e sole o b j e c t w a s t o o b t a i n
c l a r i f i c a t i o n of t h e F r e n c h p r o p o s a l s a n d t h e i r i m p l i c a t i o n s i n o r d e r t h a t H i s
M a j e s t y ' s G o v e r n m e n t m i g h t t h e n be i n a p o s i t i o n to c o n s i d e r t h e i r a t t i t u d e
towards the proposals.
3. I t is u n d e r s t o o d t h a t t h e F r e n c h G o v e r n m e n t h a v e a l r e a d y i n i t i a t e d
similar conversations w i t h the U n i t e d States a n d Soviet Governments separately,
a n d t h e y w i l l n o d o u b t i n f o r m u s of t h e r e s u l t s of t h e s e c o n v e r s a t i o n s i n due
course. M e a n w h i l e H i s Majesty's Government propose to study t h e French
p r o p o s a l s i n a n a t t e m p t to define t h e i r p o l i c y t o w a r d s t h e m .
4. I a m s e n d i n g copies of t h i s d e s p a t c h to H i s M a j e s t y ' s r e p r e s e n t a t i v e s af
W a s h i n g t o n , M o s c o w , B r u s s e l s a n d T h e H a g u e a n d t o S i r W i l l i a m S t r a n g at
B e r l i n for t h e i r confidential information.
I a m . &c.
ERNEST BEVIN.
1
Enclosure.
Report
drawn up as a result of the Fr-anco-British
Conversations
place in London from 12£A-26iA October concerning
the Future
tion of the Rhineland
and the
Ruhr.
which
took
Administra­
I N t h e c o u r s e of t h e m e e t i n g of F o r e i g n M i n i s t e r s i n L o n d o n t h e F r e n c h
D e l e g a t i o n c i r c u l a t e d o n t h e 1 4 t h S e p t e m b e r , 1945, a m e m o r a n d u m s e t t i n g out
its views on the steps being t a k e n w i t h r e g a r d to the control a n d administration
of G e r m a n y .
I n t h i s p a p e r t h e F r e n c h G o v e r n m e n t r e c a l l e d t h a t i t h a d been informed
o n t h e 3 1 s t J u l y of t h e t e x t of t h e a r r a n g e m e n t r e a c h e d a t P o t s d a m between
the A m e r i c a n , B r i t i s h a n d Soviet G o v e r n m e n t s r e g a r d i n g t h e " Political
P r i n c i p l e s w h i c h w o u l d g o v e r n t h e t r e a t m e n t of G e r m a n y i n t h e i n i t i a l period
of c o n t r o l . " T h e F r e n c h G o v e r n m e n t h a d since t h a t d a t e e x p r e s s e d r e s e r v a t i o n s
a b o u t t h i s a g r e e m e n t . T h e s e r e s e r v a t i o n s c o n c e r n e d p a r t i c u l a r l y t h e decision to
r e - e s t a b l i s h f o r t h w i t h G e r m a n c e n t r a l a d m i n i s t r a t i o n s s e t u p i n B e r l i n which
seemed l i k e t h e first m a n i f e s t a t i o n of a r e b i r t h of t h e R e i c h .
M o r e o v e r , t h e F r e n c h G o v e r n m e n t h a d observed t h a t i n t h e t e r m s of the
P o t s d a m c o m m u n i q u e t h e t e r r i t o r y s i t u a t e d to t h e e a s t of a c e r t a i n l i n e would
J
( ) The second and third annexes to the report, transmitted to Paris in despatch No. 2141
of the 29th November, are, for convenience, included in this paper.
be h a n d e d over to t h e a d m i n i s t r a t i o n of t h e P o l i s h G o v e r n m e n t a n d w o u l d
i m m e d i a t e l y be r e m o v e d f r o m t h e a u t h o r i t y of t h e I n t e r - A l l i e d C o n t r o l i n B e r l i n
a n d f r o m t h e a u t h o r i t y of f u t u r e G e r m a n c e n t r a l a d m i n i s t r a t i o n s . T h e F r e n c h
m e m o r a n d u m , w i t h o u t r a i s i n g o b j e c t i o n s a priori
against an a r r a n g e m e n t on
these lines, d r e w a t t e n t i o n t o t h e d a n g e r t h a t t h i s a r r a n g e m e n t m i g h t be
i n t e r p r e t e d a s c o n f i r m i n g t h e m a i n t e n a n c e of G e r m a n s o v e r e i g n t y over t h e r e s t
of G e r m a n y .
T h e F r e n c h G o v e r n m e n t , w h i c h h a s o n m a n y occasions g i v e n p u b l i c n o t i c e of
the i m p o r t a n c e w h i c h i t a t t a c h e s t o t h e f u t u r e of t h e R h e n o - W e s t p h a l i a n r e g i o n
in p a r t i c u l a r , a s k e d t h e C o u n c i l of F i v e M i n i s t e r s for F o r e i g n A f f a i r s t h a t
p e n d i n g t h e s e t t l e m e n t of a definite s t a t u s for t h i s a r e a i t s h o u i d be l a i d d o w n
t h a t t h e a r e a w o u l d be w i t h d r a w n f r o m t h e a u t h o r i t y of G e r m a n c e n t r a l
a d m i n i s t r a t i o n s if t h e s e w e r e l a t e r set u p .
T h i s p r o p o s a l w a s set o u t b e f o r e t h e m e e t i n g by M . B i d a u l t , M i n i s t e r f o r
F o r e i g n Affairs, o n t h e 1 4 t h S e p t e m b e r , 1945. I t w a s a g r e e d t h a t a s t u d y o f
the whole of t h e q u e s t i o n s r a i s e d by t h e F r e n c h m e m o r a n d u m w o u l d be p u r s u e d
through the diplomatic channel.
The French Government asked the Governments concerned to state t h e i r
views on t h e p r o c e d u r e t o be followed in o r d e r t o c a r r y o u t t h i s d e c i s i o n .
T h e B r i t i s h G o v e r n m e n t s u g g e s t e d o n t h e 8 t h O c t o b e r t h a t i n t h e first s t a g e
the conversations should be c a r r i e d o u t by t h e F r e n c h G o v e r n m e n t s e p a r a t e l y a n d
directly w i t h each of t h e t h r e e o t h e r G o v e r n m e n t s . T h e B r i t i s h G o v e r n m e n t
proposed t h a t a F r a n c o - B r i t i s h e x c h a n g e of v i e w s s h o u l d b e g i n i m m e d i a t e l y i n
London. I t w a s a g r e e d t h a t t h e s e first c o n v e r s a t i o n s w o u l d h a v e n o o t h e r o b j e c t
t h a n to inform t h e B r i t i s h G o v e r n m e n t a b o u t t h e F r e n c h G o v e r n m e n t s v i e w s ,
w i t h o u t involving c o m m i t m e n t s on e i t h e r s i d e . T h e c o n v e r s a t i o n s w o u l d b e g i n
o n a general p l a n e a n d w o u l d w i t h o u t d e l a y be followed b y t e c h n i c a l d i s c u s s i o n s
between experts t o s t u d y all t h e a s p e c t s of t h e p r o b l e m s w h i c h h a d been r a i s e d
Mr. Oliver H a r v e y a n d M . C o u v e d e M u r v i l l e w e r e a p p o i n t e d f o r t h i s p u r p o s e
by t h e two G o v e r n m e n t s a n d h a d a first c o n v e r s a t i o n o n t h e 1 2 t h October.
At
the same time t h e F r e n c h G o v e r n m e n t i n s t r u c t e d t h e F r e n c h A m b a s s a d o r s i n
Washington and Moscow to inform the A m e r i c a n a n d Soviet Governments a n d
to notify them of i t s d e s i r e t o proceed, a s soon a s possible, i n t h e s a m e m a n n e r
with each of t h e m .
The L o n d o n c o n v e r s a t i o n s w e r e c a r r i e d on b e t w e e n t h e 1 2 t h a n d t h e
26th October b y m e a n s of m e e t i n g s of p o l i t i c a l , economic a n d m i l i t a r y
sub-committees.
T h e r e s t of t h i s r e p o r t c o n t a i n s a s t a t e m e n t of t h e F r e n c h p o s i t i o n a n d o f
rts i m p l i c a t i o n s a s t h e s e h a v e been e l u c i d a t e d i n t h e c o u r s e of t h e c o n v e r s a t i o n s .
The B r i t i s h r e p r e s e n t a t i v e s d i d n o t e x p r e s s a n y v i e w s on t h e p r a c t i c a b i l i t y o r
desirability of t h e F r e n c h p r o p o s a l s .
The French
Point
of
View.
T h e m a i n p r e o c c u p a t i o n of t h e F r e n c h G o v e r n m e n t is s e c u r i t y . A f t e r t h e
last w a r n o t h i n g w a s clone t o i n f r i n g e t h e i n t e g r i t y of G e r m a n y a n d t h e m e a s u r e s
of s e c u r i t y w h i c h w e r e t a k e n , i.e., m i l i t a r y o c c u p a t i o n , w e r e only p l a n n e d for a
limited p e r i o d d u r i n g w h i c h t h e r e w a s , i n f a c t , n o c h a n c e of G e r m a n y b e c o m i n g
a d a n g e r t o p e a c e . T h e m a i n t e n a n c e of G e r m a n i n t e g r i t y i m p l i e d t h e m a i n ­
tenance of a m i l i t a r y P o w e r w h o s e e n e r g i e s w e r e i n e v i t a b l y d i r e c t e d t o w a r d s
revenge a n d t h e r e c o v e r y of t e r r i t o r i e s w h i c h G e r m a n y h a d lost a s a r e s u l t of
the w a r . T h i s e r r o r m u s t n o t b e r e p e a t e d .
I n t h e o p i n i o n of t h e F r e n c h G o v e r n m e n t , t h e s e c u r i t y of E u r o p e a n d of
the w o r l d d e m a n d s t h a t G e r m a n y s h o u l d lose t h e f r e e u s e of t h e w a r p o t e n t i a l
r e p r e s e n t e d by t h e i n d u s t r y a n d t h e r e s o u r c e s of t h e R h e n o - W e s t p h a l i a n a r e a .
I t is also d e s i r a b l e t h a t t h e s e r i c h r e s o u r c e s s h o u l d be m a d e u s e of i n t h e g e n e r a l
interest. M o r e o v e r , t h e s e c u r i t y of t h e w e s t a g a i n s t G e r m a n a g g r e s s i o n d e m a n d s
t h a t t h e R h i n e l a n d c o u n t r i e s s h o u l d n o t be a b l e t o r e c o n s t i t u t e a n a v e n u e , a n
arsenal a n d t h e s t a r t i n g p o i n t for a n a t t a c k d i r e c t e d a g a i n s t . F r a n c e a n d m o r e
generally a g a i n s t t h e w e s t e r n P o w e r s . T o m e e t t h e s e p r e o c c u p a t i o n s , t h e F r e n c h
G o v e r n m e n t does n o t p r o p o s e to h a v e r e c o u r s e t o t e r r i t o r i a l a n n e x a t i o n b u t t o
exclude f r o m n o w on t h e a c t i v i t y of a n y c e n t r a l G e r m a n a u t h o r i t y f r o m t h e
Rhineland a n d the R u h r and to establish in these areas a regime conducive to the
obiectives i n d i c a t e d above.
[31427]
B
T w o g e n e r a l p r i n c i p l e s c a n a t t h i s s t a g e be set o u t : —
(1) W h a t e v e r m a y be t h e d e t a i l s of t h e final a r r a n g e m e n t s , i t is most
i m p o r t a n t t h a t a d e c i s i o n of p r i n c i p l e s h o u l d be t a k e n i m m e d i a t e l y
t o t h e effect t h a t t h e s e t e r r i t o r i e s s h o u l d be p e r m a n e n t l y s e p a r a t e d
f r o m G e r m a n y a n d t h a t t h i s s h o u l d be m a d e p e r f e c t l y clear t o the
i n h a b i t a n t s by a p u b l i c d e c l a r a t i o n . T h i s d e c i s i o n i m p l i e s t h a t the
a r e a s i n q u e s t i o n w o u l d be r e m o v e d f r o m t h e a u t h o r i t y of t h e Allied
C o n t r o l C o u n c i l i n B e r l i n a t a d a t e w h i c h r e m a i n s t o be fixed, but
w h i c h s h o u l d be w i t h i n t h e s h o r t e s t possible t i m e .
(2) T h e s e t e r r i t o r i e s s h o u l d n o t c o n s t i t u t e a s a w h o l e a s i n g l e e n t i t y either
p o l i t i c a l l y or e c o n o m i c a l l y . Different r e g i m e s m u s t be w o r k e d o u t for
e a c h of t h e a r e a s involved.
(a) Left bank of the
Rhine.
A d e q u a t e m i l i t a r y forces m u s t be p e r m a n e n t l y s t a t i o n e d i n t h e G e r m a n
t e r r i t o r i e s o n t h e l e f t b a n k of t h e R h i n e , i n c l u d i n g p e r h a p s some b r i d g e h e a d s
on t h e r i g h t bank.
I n so f a r a s t h i s o c c u p a t i o n is i n t e n d e d t o c o n s t i t u t e a c o v e r i n g force for
F r a n c e itself, i.e., u p t o a n d i n c l u d i n g Cologne, i t w o u l d be for F r a n c e to see to
t h e m i l i t a r y o r g a n i s a t i o n of t h e left b a n k of t h e R h i n e , p e r h a p s i n c o n j u n c t i o n
w i t h B e l g i u m or L u x e m b u r g .
F u r t h e r n o r t h t h e p r o b l e m i s n o t of s u c h d i r e c t i n t e r e s t t o F r a n c e b u t r a t h e r
t o B e l g i u m , H o l l a n d a n d t o t h e U n i t e d K i n g d o m , if t h e l a t t e r c o n s i d e r s it
a p p r o p r i a t e . T h e o b j e c t of t h e forces of o c c u p a t i o n w i l l be p r i m a r i l y s t r a t e g i c .
T h e s e forces w i l l c o n s t i t u t e t h e o u t p o s t s of t h e g e n e r a l d e f e n c e s y s t e m of all
t e r r i t o r y w e s t of t h e R h i n e .
T h e R h i n e l a n d s h o u l d n o t f o r m p a r t e i t h e r of G e r m a n y o r of F r a n c e a n d must
be s u b j e c t e d t o p e r m a n e n t m i l i t a r y o c c u p a t i o n . T h e e s t a b l i s h m e n t of a definite
s t a t u s for t h i s a r e a i n a c c o r d a n c e w i t h t h e s e p r i n c i p l e s w i l l d e p e n d o n t h e develop­
m e n t of local c o n d i t i o n s . T h e r e m a y be a s i n g l e S t a t e s u b j e c t e d t o i n t e r - A l l i e d
m i l i t a r y o c c u p a t i o n , o r t h e r e m a y b e t w o o r t h r e e S t a t e s e a c h o c c u p i e d b y . the
t r o o p s of different A l l i e d P o w e r s .
S u b j e c t t o t h e i r a c c e p t i n g t h e p r e s e n c e of f o r e i g n g a r r i s o n s a n d r e f r a i n i n g
f r o m m i l i t a r i s a t i o n a n d f r o m a t t e m p t s t o r e j o i n G e r m a n y , t h e G o v e r n m e n t s of
t h e S t a t e o r S t a t e s t o be c r e a t e d i n t h e R h i n e l a n d s w o u l d be f r e e to m a n a g e their
o w n affairs.
(b) The
Saar.
T h e S a a r m i n e s , w h o s e o w n e r s h i p w a s g r a n t e d t o F r a n c e by t h e T r e a t y of
V e r s a i l l e s a n d w a s r e g a i n e d by G e r m a n y in 1935, m u s t become o n c e m o r e French
p r o p e r t y , w i t h t h e c o r o l l a r y t h a t t h e t e r r i t o r y of t h e S a a r s h o u l d be i n c l u d e d in
t h e F r e n c h c u s t o m s a n d c u r r e n c y s y s t e m , since t h e e c o n o m i e s of F r a n c e a n d the
S a a r a r e a l m o s t e n t i r e l y c o m p l e m e n t a r y . T h e final f o r m of g o v e r n m e n t of the
t e r r i t o r y w o u l d be d e c i d e d i n d u e course.
F r e n c h m i l i t a r y forces s h o u l d be
-stationed t h e r e p e r m a n e n t l y .
(c) The
Ruhr.
T h e R u h r a r e a c o n s i s t s of t h e coal m i n e s a n d of t h e f a c t o r i e s a s s o c i a t e d with
t h e m . I t h a s a p o p u l a t i o n of a b o u t 5 m i l l i o n i n h a b i t a n t s .
T h e F r e n c h Government considers that, in order to ensure t h a t the natural
a n d i n d u s t r i a l r e s o u r c e s of t h i s a r e a s h a l l n o l o n g e r be e x p l o i t e d for military
p u r p o s e s b u t r a t h e r i n c o n f o r m i t y w i t h t h e g e n e r a l i n t e r e s t of h u m a n i t y , it is
e s s e n t i a l t o t r e a t t h e a r e a n o t a s p a r t of a S t a t e or even of a l a r g e r t e r r i t o r y but
as a political entity independent from Germany a n d subjected to an international
p o l i t i c a l a n d economic r e g i m e .
A h \ t h e c o u n t r i e s c o n c e r n e d s h o u l d p a r t i c i p a t e i n t h e o r g a n i s a t i o n of this
r e g i m e : t h e S t a t e s p a r t i c u l a r l y c o n c e r n e d s h o u l d p a r t i c i p a t e i n t h e selection of
t h e m e m b e r s of t h e G o v e r n m e n t , t h e o t h e r i n t e r e s t e d P o w e r s i n some o t h e r way.
T h e l o c a l a d m i n i s t r a t i o n s h o u l d be a p p o i n t e d , so f a r a s possible, by t h e local
p o p u l a t i o n , w h i c h c o u l d also, i n d u e course, p a r t i c i p a t e i n t h e f u n c t i o n s of
Government.
A n i n t e r n a t i o n a l force w o u l d be s t a t i o n e d i n t h e t e r r i t o r y a n d i t s integrity
s h o u l d be g u a r a n t e e d by all t h e P o w e r s concerned.
.
T h e R u h r t e r r i t o r y w o u l d be o p e n to t h e t r a d e of a l l c o u n t r i e s . I t would
b e s e r v e d by t h e i n t e r n a t i o n a l w a t e r w a y of t h e R h i n e a n d , i n t h e o p i n i o n of the
F r e n c h e x p e r t s , w o u l d p r o b a b l y be p r o s p e r o u s . T h e r e w o u l d be n o o b j e c t i o n to the
i
R u h r e x p o r t i n g p a r t of i t s p r o d u c t i o n t o t h e r e s t of G e r m a n y p r o v i d e d , of c o u r s e ,
t h a t these e x p o r t s d i d n o t i n c l u d e a n y k i n d of w a r m a t e r i a l .
The Governing
Commission a n d t h e P o w e r s w h i c h w e r e i n a p o s i t i o n t o d i r e c t t h e c o m m i s s i o n ^
a c t i v i t i e s could o r i e n t a t e t h e p r o d u c t i o n of t h e R u h r i n a n y d i r e c t i o n w h i c h
seemed d e s i r a b l e . I n p a r t i c u l a r t h e y c o u l d t a k e all n e c e s s a r y m e a s u r e s to e n s u r e
that the R u h r did not unfairly compete w i t h other areas w i t h a similar r a n g e
of p r o d u c t i o n .
T h e p r i n c i p l e s of economic d i s a r m a m e n t w h i c h m a y be d r a w n u p by t h e
C o n t r o l C o u n c i l w o u l d be a p p l i e d in t h e R u h r t e r r i t o r y i n t h e s a m e w a y a s i n
Germany.
P a r t of t h e p r o b a b l e s u r p l u s i n t h e R u h r t r a d i n g a c c o u n t s c o u l d
p e r h a p s be u s e d for a c e r t a i n p e r i o d as p a r t - p a y m e n t for n e c e s s a r y s u p p l i e s
i m p o r t e d i n t o G e r m a n y on t h e b a s i s t h a t s u c h s u p p l i e s m a y be c a l c u l a t e d by t h e
C o n t r o l Council.
T h e m i n e s a n d t h e m o s t i m p o r t a n t i n d u s t r i a l e n t e r p r i s e s w o u l d be
e x p r o p r i a t e d a n d t u r n e d i n t o a n i n t e r n a t i o n a l i n t e r e s t . T h e e x p l o i t a t i o n of t h e s e
mines a n d e n t e r p r i s e s a n d of t h e m i n e s b e l o n g i n g h i t h e r t o to t h e R e i c h s h o u l d
be t a k e n over by i n t e r n a t i o n a l p u b l i c u t i l i t y u n d e r t a k i n g s . T h e i n t e r e s t of t h e
w o r k e r s should "be s a f e g u a r d e d .
I t h a s been m a d e c l e a r by t h e F r e n c h e x p e r t s t h a t t h e F r e n c h p r o p o s a l s
have n o t been p u t f o r w a r d o n e c o n o m i c g r o u n d s a n d t h a t t h e decisions to be
t a k e n d e p e n d essentially o n p o l i t i c a l c o n s i d e r a t i o n s . T h e s e q u e s t i o n s a r e d e a l t
w i t h i n g r e a t e r d e t a i l in a F r e n c h m e m o r a n d u m a n d i n B r i t i s h a n d F r e n c h
comments w h i c h are a t t a c h e d t o t h i s r e p o r t .
S u c h a r e the o u t l i n e s of t h e F r e n c h p r o p o s a l s c o n c e r n i n g t h e o r g a n i s a t i o n
of the R h e n o - W e s t p h a l i a n a r e a .
T h e question h a s been r a i s e d of t h e d a t e a t w h i c h t h e s e a r r a n g e m e n t s s h o u l d
be p u t into effect. T h e F r e n c h v i e w w a s t h a t w h i l e i t is i m p o r t a n t t o a g r e e , a s
soon as possible, t h a t t h e w h o l e of t h e s e a r e a s s h o u l d be s e p a r a t e d f r o m G e r m a n y ,
t h e r e is not the same u r g e n c y i n c o m i n g to a d e t a i l e d d e c i s i o n w i t h r e g a r d t o t h e
f u t u r e s t a t u s of t h e R h i n e l a n d .
The R u h r , on t h e o t h e r h a n d , r a i s e s u r g e n t p r o b l e m s , n o t a b l y w i t h r e g a r d t o
coal production, w h i c h i n t e r e s t m a n y P o w e r s . T h e i m p l e m e n t a t i o n of t h e R u h r
regime should be u n d e r t a k e n i m m e d i a t e l y a n d c o u l d be c a r r i e d o u t i n s t a g e s
beginning w i t h economic m e a s u r e s .
The
International
Regime
in the
Ruhr.
D e t a i l e d s t u d y w a s u n d e r t a k e n of t h e n a t u r e of t h e r e g i m e e n v i s a g e d f o r
the R u h r w i t h t h e f o l l o w i n g r e s u l t s : —
(1) Establishment
of the
regime.
T h e i n t e r n a t i o n a l r e g i m e of t h e R u h r s h o u l d be l a i d d o w n by a decision of
ihe four P o w e r s in o c c u p a t i o n of G e r m a n y . B e l g i u m , L u x e m b u r g a n d H o l l a n d ,
as P o w e r s d i r e c t l y c o n c e r n e d , s h o u l d l a t e r be i n v i t e d t o a s s o c i a t e themselves w i t h
this decision.
(2)
Objects.
T h i s decision s h a l l s p e c i f y t h a t t h e o b j e c t w i t h w h i c h t h i s r e g i m e is
established is t o e n s u r e t h a t t h e n a t u r a l a n d i n d u s t r i a l r e s o u r c e s of t h e R u h r a r e
no longer e x p l o i t e d f o r m i l i t a r y p u r p o s e s b u t i n c o n f o r m i t y w i t h t h e g e n e r a l
interest of h u m a n i t y .
-
(3) Area.
'
T h e t e r r i t o r y s u b j e c t e d to t h i s r e g i m e s h a l l b e a s s m a l l a s possible a n d
should i n c l u d e p a r t i c u l a r l y t h e coal b a s i n a n d t h e p r i n c i p a l i n d u s t r i e s a s s o c i a t e d
w i t h it. T h e l i m i t s of t h e a r e a covered by t h i s d e f i n i t i o n a r e s h o w n o n a m a p
d r a w n u p by t h e F r e n c h e x p e r t s .
(4) Separation
from
Germany.
T h e r e g i m e e n v i s a g e d involves t h e c o m p l e t e a n d p e r m a n e n t s e p a r a t i o n of
the t e r r i t o r y f r o m t h e G e r m a n R e i c h a n d t h e e s t a b l i s h m e n t of t h e t e r r i t o r y a s a n
entity i n i n t e r n a t i o n a l l a w t o be n a m e d t h e R u h r T e r r i t o r y . T h e i n h a b i t a n t s
of this t e r r i t o r y w h o possesssed G e r m a n n a t i o n a l i t y w o u l d lose i t a n d w o u l d h a v e
the r i g h t t o become c i t i z e n s of t h e R u h r T e r r i t o r y .
T h e y could, on t h e o t h e r
hand, w i t h i n a p e r i o d t o be fixed, o p t f o r G e r m a n n a t i o n a l i t y o n c o n d i t i o n that,,
if they d i d so, t h e y left t h e R u h r T e r r i t o r y .
[31427]
"
'
E 2
T h e G o v e r n i n g C o m m i s s i o n o r a n a u t h o r i t y a p p o i n t e d by i t for this
p u r p o s e w o u l d l a y d o w n r u l e s g o v e r n i n g t h e e n t r y i n t o t h e R u h r t e r r i t o r y of
a l l p e r s o n s w h o left i t o n t h e a r r i v a l of t h e forces of t h e U n i t e d N a t i o n s or
w h o , a t t h a t d a t e , w e r e n o t h a b i t u a l l y r e s i d e n t t h e r e . F o r t h e f u t u r e , conditions
for t h e a c q u i s i t i o n a n d loss of R u h r t e r r i t o r y n a t i o n a l i t y w o u l d be d e c i d e d by
t h e l e g i s l a t i v e a u t h o r i t i e s of t h e t e r r i t o r y .
( 5 ) Governing
Commission.
T h e q u e s t i o n w a s a s k e d w h e t h e r t h e R u h r s h o u l d b e g o v e r n e d by a body
set u p t h r o u g h t h e U n i t e d N a t i o n s O r g a n i s a t i o n or by a g r o u p of S t a t e s a c t i n g
o u t s i d e t h e f r a m e w o r k of t h e U n i t e d N a t i o n s O r g a n i s a t i o n .
T h e v i e w w a s e x p r e s s e d , so f a r a s t h e F r e n c h r e p r e s e n t a t i v e s w e r e concerned,
t h a t t h e c o n c e p t i o n of t r u s t e e s h i p c o u l d n o t be a p p l i e d t o t h e R u h r a n d t h a t it
w o u l d be b e t t e r t o p u t t h e r e g i m e u n d e r i n t e r n a t i o n a l c o n t r o l e s t a b l i s h e d by a
special agreement between the P o w e r s concerned.
I t is c l e a r t h a t t h e i n s t r u m e n t s e t t i n g u p t h e n e w r e g i m e s h o u l d be
registered with the United Nations Organisation.
T h e g o v e r n m e n t of t h e t e r r i t o r y s h o u l d be e n t r u s t e d t o a G o v e r n i n g Com­
m i s s i o n c o m p o s e d of n i n e m e m b e r s c o r r e s p o n d i n g to t h e f o l l o w i n g l i s t of
ministerial departments:
Political.
Interior.
Finance.
Justice.
Education. Transport. Posts a n d Public Works. National Economy. Labour and Public Health T h e m e m b e r s of t h i s c o m m i s s i o n s h o u l d be a p p o i n t e d by m a j o r i t y decision
of t h e P o w e r s d i r e c t l y c o n c e r n e d . T h e i r a p p o i n t m e n t s s h o u l d be terminable
i n t h e s a m e f a s h i o n . T h e y w o u l d be a p p o i n t e d for five y e a r s a n d be replaced
by r o t a t i o n .
R e t i r i n g m e m b e r s w o u l d b e e l i g i b l e f o r r e - e l e c t i o n . T h e com­
m i s s i o n w o u l d d e c i d e t h e f u n c t i o n s of e a c h of i t s m e m b e r s a n d t h o s e w h i c h it
w o u l d c a r r y o u t itself. T h e h e a d of t h e c o m m i s s i o n w o u l d be a p p o i n t e d by a
m a j o r i t y d e c i s i o n of t h e P o w e r s d i r e c t l y c o n c e r n e d .
H e w o u l d a c t a s the
e x e c u t i v e of t h e c o m m i s s i o n .
T h e c h a r a c t e r of a p o l i t i c a l r e g i m e d r a w n u p o n t h e s e l i n e s w o u l d be
d e t e r m i n e d by t h e fact t h a t the Governing Commission was e n t r u s t e d w i t h a
p o l i t i c a l m i s s i o n w i t h t h e object of m a i n t a i n i n g i n t e r n a t i o n a l s e c u r i t y . The
m e m b e r s of t h e G o v e r n i n g C o m m i s s i o n w o u l d be a p p o i n t e d b y c e r t a i n Govern­
m e n t s a c t i n g collectively a n d w o u l d n o t be r e g a r d e d a s t h e r e p r e s e n t a t i v e s of
t h e s e G o v e r n m e n t s b u t a s t h e m e m b e r s of a collective b o d y w h o s e f u n c t i o n s were
of i n t e r n a t i o n a l c o n c e r n .
I t i s c o n t e m p l a t e d t h a t i n d u e course t h e local p o p u l a t i o n m i g h t p a r t i c i p a t e
i n t h e e x e r c i s e of g o v e r n m e n t .
(6) Powers of the
Commission.
T h e c o m m i s s i o n s h o u l d h a v e i n t h e R u h r t e r r i t o r y a l l t h e p o w e r s of. govern­
m e n t . C o n s e q u e n t l y , i t could t a k e all l e g i s l a t i v e a n d a d m i n i s t r a t i v e measures
w h i c h i t m i g h t j u d g e n e c e s s a r y . I t could, in p a r t i c u l a r , m a i n t a i n o r modify
adminstrative institutions.
I t w o u l d a p p o i n t a n d d i s m i s s officials and
m a g i s t r a t e s , some of w h o m m i g h t , if n e c e s s a r y , be r e c r u i t e d a m o n g n a t i o n a l s of
foreign countries.
J u s t i c e w o u l d c o n t i n u e t o be a d m i n i s t e r e d by t h e c o u r t s e x i s t i n g i n the
R u h r t e r r i t o r y a t t h e e n t r y i n t o force of t h e n e w r e g i m e e x c e p t t h a t a new
S u p r e m e C o u r t w o u l d be s u b s t i t u t e d f o r t h e R e i c h s g e r i c h t of L e i p z i g .
The
G o v e r n i n g C o m m i s s i o n w o u l d be able t o m o d i f y e x i s t i n g j u d i c i a l a r r a n g e m e n t s .
A s a c o n s e q u e n c e of t h e s e p a r a t i o n of t h e R u h r t e r r i t o r y f r o m t h e German
R e i c h t h e G o v e r n i n g C o m m i s s i o n w o u l d t a k e a l l n e c e s s a r y m e a s u r e s f o r the
r e p l a c e m e n t of t h e R e i c h by t h e n e w t e r r i t o r y p a r t i c u l a r l y a s r e g a r d s t h e owner­
s h i p of g o o d s w h i c h w e r e t h e p r o p e r t y of t h e R e i c h , a n d i t w o u l d t a k e all
m e a s u r e s n e c e s s a r y f o r t h e c o m p l e t e s e p a r a t i o n of p u b l i c services such as
r a i l w a y s a n d p o s t s f r o m those of t h e R e i c h .
(7) Gendarmerie,
Police and
Customs.
T h e G o v e r n i n g C o m m i s s i o n s h o u l d see to t h e o r g a n i s a t i o n of a G e n d a r m e r i e
a n d of a police force of t h e t e r r i t o r y w h i c h could be r e c r u i t e d on t h e s p o t and
would function under its authority.
I t w o u l d s i m i l a r l y p r o v i d e for t h e f r o n t i e r police, w h o s e p e r s o n n e l w o u l d ,
a t first, be p a r t l y r e c r u i t e d o u t s i d e t h e t e r r i t o r y .
A customs administration
would also be n e c e s s a r y , w h o s e p e r s o n n e l w o u l d be, i n t h e m a i n , r e c r u i t e d locally
except for t h e h i g h e s t officials.
( 8 ) Armed
Forces.
I n o r d e r to e n s u r e i n t e r n a l s e c u r i t y in t h e R u h r t e r r i t o r y t h e S t a t e s
d i r e c t l y concerned w o u l d p u t a t t h e d i s p o s a l of t h e G o v e r n i n g C o m m i s s i o n a
m i l i t a r y force, w h o s e n u m b e r s h a v e been e s t i m a t e d a t 50,000, w h i c h w o u l d be
stationed p e r m a n e n t l y in the territory.
T h e u p k e e p of t h i s force w o u l d be p a i d for b y t h e t e r r i t o r y .
T h e different c o n t i n g e n t s w o u l d be p l a c e d u n d e r a s i n g l e c o m m a n d .
T h e c o m m a n d e r - i n - c h i e f w o u l d be a p p o i n t e d by t h e G o v e r n i n g C o m m i s s i o n
in r o t a t i o n f r o m a m o n g t h e officers of t h e S t a t e s m e n t i o n e d i n p a r a g r a p h (1) of
t h i s section a n d a f t e r c o n s u l t a t i o n w i t h t h e G o v e r n m e n t s of t h e s e S t a t e s .
He
would be d i r e c t l y r e s p o n s i b l e t o t h e G o v e r n i n g C o m m i s s i o n .
A i r forces ( a b o u t t e n fighter-bomber s q u a d r o n s ) could be p u t a t t h e d i s p o s a l
of the G o v e r n i n g C o m m i s s i o n w i t h o u t b e i n g s t a t i o n e d i n t h e t e r r i t o r y .
These a r m e d forces a n d t h e p e r s o n s a t t a c h e d t o t h e m w h o w e r e i n
possession of a n i d e n t i t y d o c u m e n t , i s s u e d by t h e m i l i t a r y c o m m a n d , a n d a l l
those employed by t h e s e forces or i n t h e i r service s h o u l d be l i a b l e o n l y t o t h e
m i l i t a r y j u r i s d i c t i o n of t h e force.
All persons a c c u s e d of a c r i m e a g a i n s t t h e s e forces or m e m b e r s of t h e m
could be t r i e d before t h e m i l i t a r y c o u r t s of these forces.
The G o v e r n i n g C o m m i s s i o n w o u l d be t h e only a u t h o r i t y c a p a b l e of d e c l a r i n g
m a r t i a l law. T h e n a t u r e of s u c h m a r t i a l l a w w o u l d be d e c i d e d by t h e l e g i s l a ­
t u r e of the t e r r i t o r y .
(9) Foreign
Relations.
The U n i t e d N a t i o n s w o u l d be able to a p p o i n t consuls i n t h e R u h r t e r r i t o r y .
I t would be for t h e G o v e r n i n g C o m m i s s i o n t o g r a n t t h e m a n e x e q u a t u r .
T h e G o v e r n i n g C o m m i s s i o n could a r r a n g e for t h e p r o t e c t i o n of R u h r
citizens a n d i n t e r e s t s a b r o a d by a p p o i n t i n g c o n s u l a r a g e n t s w h o could be n a t i o n a l s
of the t e r r i t o r y i n w h i c h t h e y w e r e t o f u n c t i o n , a n d a t a l a t e r s t a g e by t h e
a p p o i n t m e n t of c a r e e r consuls.
T h e G o v e r n i n g C o m m i s s i o n could a l s o e n t r u s t t h i s p r o t e c t i o n t o one of t h e
P o w e r s i n d i c a t e d i n section 5 above.
T h e G o v e r n i n g C o m m i s s i o n w o u l d t a k e t h e n e c e s s a r y s t e p s to a r r a n g e for
t h e i n d e p e n d e n t p a r t i c i p a t i o n of t h e R u h r t e r r i t o r y i n t e c h n i c a l a n d a d m i n i s t r a ­
tive i n t e r n a t i o n a l u n i o n s a n d c o m m i s s i o n s a n d t o n e g o t i a t e economic t r e a t i e s
affecting t h e t e r r i t o r y .
(10) Stiperoision
and Guarantee
of the Status of the Ruhr
Territory.
T h e s u p e r v i s i o n of t h e a p p l i c a t i o n of t h e R u h r r e g i m e w o u l d be c a r r i e d o u t
by t h e G o v e r n m e n t s w h o s i g n e d t h e i n s t r u m e n t s e t t i n g i t u p (see section 1 above).
These G o v e r n m e n t s w o u l d receive e a c h y e a r a n a n n u a l r e p o r t f r o m t h e
G o v e r n i n g C o m m i s s i o n o n t h e m a n n e r i n w h i c h i t s f u n c t i o n s h a d been c a r r i e d
out, a n d on t h e s i t u a t i o n of t h e R u h r t e r r i t o r y .
T h e s e G o v e r n m e n t s w o u l d see t h a t t h e G o v e r n i n g C o m m i s s i o n ^ a c t i v i t i e s
were in c o n f o r m i t y w i t h t h e o b j e c t i v e set o u t i n section 2 above.
T h e s e G o v e r n m e n t s w o u l d w o r k o u t t h e d i r e c t i v e s t o be g i v e n t o t h e
commission.
T h e y w o u l d be e n t i t l e d t o receive c l a i m s c o n c e r n i n g t h e R u h r t e r r i t o r y w h i c h
m i g h t be s u b m i t t e d t h r o u g h t h e d i p l o m a t i c c h a n n e l , a n d t o d e a l w i t h t h e m i n
such m a n n e r a s seemed s u i t a b l e .
T h e a b o v e - m e n t i o n e d G o v e r n m e n t s w o u l d g u a r a n t e e t h e i n t e g r i t y of t h e R u h r
t e r r i t o r y a n d w o u l d e n s u r e r e s p e c t for i t s s t a t u s . T h e scope of t h i s g u a r a n t e e
would be i n c o n f o r m i t y w i t h t h e p r o v i s i o n s of t h e U n i t e d N a t i o n s C h a r t e r .
The Governments who signed the arrangement setting u p the R u h r territory
would d r a w u p f r o m t i m e t o t i m e a l i s t of S t a t e s w h o s h o u l d receive copies of
the a n n u a l r e p o r t of t h e G o v e r n i n g C o m m i s s i o n by v i r t u e of t h e i r i m p o r t a n c e
either a s i m p o r t e r s or p u r c h a s e r s for t h e economy of t h e R u h r .
T h e s i g n a t o r y G o v e r n m e n t s w o u l d receive t h e o b s e r v a t i o n s of t h e s e S t a t e s
on t h e r e p o r t a n d c o u l d i n v i t e o n e or m o r e of t h e s e S t a t e s t o t a k e p a r t i n t h e i r
discussions on t h i s s u b j e c t .
General
Observations.
T h e F r e n c h p r o p o s a l s a r e b a s e d g e n e r a l l y on t h e i d e a t h a t t h e only s a t i s f a c t o r y
w a y of e n s u r i n g t h a t G e r m a n y is n e v e r a g a i n i n a p o s i t i o n t o w a g e a w a r of
a g g r e s s i o n i s to remove f r o m G e r m a n c o n t r o l t h e m i n e r a l a n d i n d u s t r i a l resources
of t h e R u h r . I f G e r m a n y is d e p r i v e d b o t h of S i l e s i a a n d of t h e R u h r she w o u l d
a l m o s t c e r t a i n l y n o t a g a i n p r e s e n t a d a n g e r to s e c u r i t y .
T h e p r o p o s a l s w i t h r e g a r d t o t h e o c c u p a t i o n of t h e R h i n e l a n d a r e
complementary to the proposals w i t h r e g a r d to the R u h r , the establishment and
s t a b i l i t y of t h e i n t e r n a t i o n a l r e g i m e for t h e R u h r b e i n g f a c i l i t a t e d b y t h e
o c c u p a t i o n of t h e R h i n e l a n d , i n v i e w of t h e g e o g r a p h i c a l s i t u a t i o n of t h e two
a r e a s . T h e o b j e c t of t h e p r o p o s a l s is to d e p r i v e G e r m a n y of a n a r e a w h i c h she
h a s m o r e t h a n once u s e d a s a b a s e for i n v a s i o n .
I t i s n o t i n t e n d e d t h a t the
R h i n e l a n d s h o u l d be i n t e n s i v e l y o c c u p i e d . T h e i m p o r t a n t t h i n g is t h a t t h e A l l i e s
s h o u l d h a v e t h e f a c i l i t y of s t a t i o n i n g t r o o p s on t h e R h i n e over i t s w h o l e l e n g t h .
I t w o u l d be of g r e a t i m p o r t a n c e to e s t i m a t e t h e r e a c t i o n s of t h e p o p u l a t i o n
b o t h i n t h e R u h r a n d i n t h e r e s t of G e r m a n y to t h e i n t r o d u c t i o n of p r o p o s a l s on
t h e above lines, b u t i t i s p r a c t i c a l l y i m p o s s i b l e t o d o so i n a d v a n c e .
T h e F r e n c h v i e w is, i n g e n e r a l , t h a t t h e G e r m a n s w i l l be d i s c o n t e n t e d w i t h
a n y p o s s i b l e s e t t l e m e n t of G e r m a n y a n d w i l l i n e v i t a b l y h a r b o u r f e e l i n g s of
r e v e n g e . I t is o n l y b y r e m o v i n g t h e R u h r f r o m t h e c o n t r o l of G e r m a n y t h a t
t h e s e f e e l i n g s c o u l d be p r e v e n t e d f r o m a s s u m i n g p r a c t i c a l e x p r e s s i o n i n a n e w
o u t b r e a k of m i l i t a r i s m a n d a g g r e s s i o n .
I f t h e p r o p o s a l s w e r e t o be i n t r o d u c e d , t h e sooner t h i s could be d o n e t h e
b e t t e r , s i n c e i n t h e p r e s e n t s t a t e of G e r m a n y less v i o l e n t r e a c t i o n s w o u l d be
expected t h a n when t h e G e r m a n s h a d recovered t o a greater extent.
T h e a d m i n i s t r a t i o n of t h e R u h r w o u l d h a v e t o be c a r r i e d o u t i n s u c h a w a y
as t o m a k e t h e n e w r e g i m e a s a t t r a c t i v e a s possible t o t h e i n h a b i t a n t s .
This
w o u l d involve, e.g., a l l o w i n g t h e m a h i g h e r s t a n d a r d of l i v i n g t h a n t h e r e s t of
G e r m a n y , b u t i t "is n o t i n t e n d e d t h a t t h e p r o g r a m m e of r e m o v a l of p l a n t for
r e p a r a t i o n s f r o m t h e R u h r t e r r i t o r y s h o u l d be modified if t h e s e p r o p o s a l s a r e p u t
i n t o effect.. I t w o u l d also n a t u r a l l y be d e s i r a b l e t o a l l o w t h e i n h a b i t a n t s of t h e
R u h r a s m u c h f r e e d o m as possible i n r u n n i n g t h e affairs of t h e t e r r i t o r y , b u t i t
w o u l d be m o s t u n d e s i r a b l e t o h o l d o u t a n y h o p e to t h e m t h a t t h e y m i g h t e v e n t u a l l y
become i n d e p e n d e n t o f i n t e r n a t i o n a l c o n t r o l .
T h e i n t r o d u c t i o n of t h e F r e n c h p r o p o s a l s w o u l d n o t e n a b l e t h e P o w e r s
o c c u p y i n g G e r m a n y t o r e d u c e t h e i r forces i m m e d i a t e l y i n case t h e s e p a r a t i o n of
t h e R u h r a n d t h e R h i n e l a n d m i g h t l e a d to local u n r e s t i n G e r m a n y . B u t i t w o u l d
e n a b l e t h e o c c u p y i n g P o w e r s t o r e d u c e t h e d u r a t i o n of t h e o c c u p a t i o n of t h e r e s t
of G e r m a n y , since G e r m a n y w o u l d , w i t h o u t t h e R u h r a n d t h e R h i n e l a n d , be
u n a b l e t o d e v e l o p h e r m i l i t a r y p o w e r . ( T h i s does n o t t a k e a c c o u n t of t h e o t h e r
p u r p o s e s of o c c u p a t i o n , s u c h a s t h e r e - e d u c a t i o n of t h e G e r m a n p e o p l e a n d t h e
i n s t a l l a t i o n of a d e m o c r a t i c G o v e r n m e n t . )
T h e m o s t d a n g e r o u s t h i n g w o u l d be if a n e w r e g i m e w e r e set u p i n t h e R u h r
o n t h e l i n e s of t h e F r e n c h p r o p o s a l s a n d t h e n a t a l a t e r s t a g e , o w i n g t o d i s a g r e e ­
m e n t b e t w e e n t h e C o n t r o l l i n g P o w e r s or f o r some o t h e r r e a s o n , t h e r e g i m e w e r e
a b a n d o n e d . F o r if t h i s r e s u l t e d i n t h e r e i n c o r p o r a t i o n of t h e R u h r t e r r i t o r y in
G e r m a n y t h e latter would, a t a stroke, reacquire her richest industrial a r e a . '
Annex 1 to Report.
French
Memorandum
concerning
the Future
Economic
in the
Ruhr.
and
Financial
Regime
(Translation.)
(Secret.)
T H E o b j e c t of t h e p r e s e n t m e m o r a n d u m is t o s e t o u t i n a p r e l i m i n a r y way
t h e e c o n o m i c a n d f i n a n c i a l consequences of t h e e s t a b l i s h m e n t i n t h e R u h r of an
i n t e r n a t i o n a l r e g i m e s u c h a s h a s j u s t been r e c o m m e n d e d by t h e F r e n c h Govern­
m e n t (aide-memoire
f r o m t h e F r e n c h A m b a s s a d o r i n L o n d o n of t h e 31st A u g u s t ,
1 9 4 5 , a n d r e p o r t of t h e 1 2 t h October, 1945, o n t h e R h i n e l a n d a n d t h e R u h r ) .
2. I t is i m p o r t a n t first of a l l to e m p h a s i s e t h a t t h e d e s i r e of t h e F r e n c h
G o v e r n m e n t t o d e t a c h t h e R u h r t e r r i t o r y f r o m G e r m a n y a n d to i m p o s e u p o n it
a s e p a r a t e i n t e r n a t i o n a l r e g i m e i s d u e a b o v e a l l t o c o n s i d e r a t i o n s of security
a n d n o t to economic g r o u n d s . T h e i m p o r t a n c e of s o l v i n g t h e p r o b l e m in t h i s
m a n n e r for t h e f u t u r e s e c u r i t y of E u r o p e is c l e a r l y s h o w n w h e n i t i s r e m e m b e r e d
t h a t , t a k i n g i n t o a c c o u n t t h e losses of t e r r i t o r y i n t h e e a s t a n d t h e e n t r y of t h e
S a a r i n t o t h e F r e n c h c u s t o m s a r e a , t h e s e p a r a t i o n of t h e W e s t p h a l i a n b a s i n
w o u l d d e p r i v e G e r m a n y of t h e g r e a t m a j o r i t y of t h e r e s o u r c e s w h i c h w o u l d be
necessary for m a k i n g a n o t h e r w a r , i.e.:—
Per cent.
Coal
95
Cast iron
78
Steel
80
Eolled p r o d u c t s
78
as c o m p a r e d w i t h p r e - w a r p r o d u c t i o n i n G e r m a n y .
3. Nevertheless t h e F r e n c h G o v e r n m e n t c o n s i d e r s t h a t t h i s loss of t e r r i t o r y ,
w h i c h is of f u n d a m e n t a l i m p o r t a n c e f r o m t h e p o l i t i c a l p o i n t of view, could
c o n s t i t u t e a n i m p o r t a n t e l e m e n t in t h e r e c o n s t r u c t i o n a n d p r o s p e r i t y of E u r o p e
w h a t e v e r m i g h t be t h e r e s u l t i n g economic a n d financial difficulties i n t h e e a r l y
stages.
The present memorandum contains nothing more than a general
exposition of t h i s idea. I t is difficult to collect s t a t i s t i c a l d a t a on t h e p r o d u c t i o n
of t h e R h i n e l a n d a n d W e s t p h a l i a n a r e a s , b u t i n o u r o p i n i o n t h e f u r t h e r d e t a i l s
w h i c h will have to be o b t a i n e d a r e n o t l i k e l y t o m o d i f y t h e c o n c l u s i o n s of t h i s
' first study.
. 4 .
T o answer t h e q u e s t i o n s w h i c h a r i s e i t seems n e c e s s a r y t o s t u d y t h e
consequences of t h e f u t u r e p o l i t i c a l r e g i m e of t h e R u h r u n d e r t h e f o l l o w i n g
h e a d s :—
(i) Economic d i s a r m a m e n t p r o g r a m m e for t h e R u h r a n d t h e f u t u r e of i t s
different i n d u s t r i e s ,
(ii) F u t u r e a r r a n g e m e n t s for o w n e r s h i p in t h e R u h r .
(iii) The labour p r o b l e m .
(iv) Customs a n d m o n e t a r y a r r a n g e m e n t s a n d t h e influence of t h e p r o p o s e d
solution on t h e economic c o n d i t i o n s of v a r i o u s o t h e r c o u n t r i e s a n d
p a r t i c u l a r l y on G e r m a n y .
(i) Economic
Disarmament
of the Ruhr
and the Future
of its
Principal
Industries.
5. T h e w i t h d r a w a l of t h e R u h r f r o m t h e c o n t r o l of t h e G e r m a n S t a t e does
n o t imply t h a t economic d i s a r m a m e n t r u l e s i n force i n G e r m a n y s h o u l d n o t be
a p p l i e d in t h e R u h r t e r r i t o r y .
I n the Ruhr, as in Central Germany, w a r
i n d u s t r i e s m u s t be completely s u p p r e s s e d .
6. T h i s s t a t e m e n t does n o t in a n y w a y m e a n t h a t t h e R u h r t e r r i t o r y w i l l
be d e p r i v e d of a l l i t s i n d u s t r i e s . T h e r e e x i s t i m p o r t a n t finishing i n d u s t r i e s
which a r e of use i n p e a c e a n d w h i c h o u g h t to be k e p t u p . C e r t a i n m a n u f a c t u r e s
which a r e a t p r e s e n t c a r r i e d on i n t h e c e n t r e of G e r m a n y could b e t r a n s f e r r e d
to the R u h r u n d e r i n t e r - A l l i e d c o n t r o l . T h e economic l i n k s b e t w e e n t h e R u h r
a n d G e r m a n y w i l l of course n o t be e n t i r e l y b r o k e n , b u t i n m a k i n g G e r m a n y
d e p e n d e n t for c e r t a i n e s s e n t i a l p r o d u c t s o n a R u h r t e r r i t o r y g o v e r n e d by t h e
Allies w e shall h a v e m a d e a c o n t r i b u t i o n to t h e economic d i s a r m a m e n t of t h e
G e r m a n S t a t e . A t t h e s a m e t i m e t h e I n t e r n a t i o n a l G o v e r n m e n t of t h e R u h r
will h a v e t h e p o w e r a n d t h e d u t y t o a r r a n g e p r o d u c t i o n i n s i d e t h e t e r r i t o r y in
such a w a y t h a t t h i s t e r r i t o r y does n o t c o n s t i t u t e a d i s t u r b i n g e l e m e n t a s r e g a r d s
the n e i g h b o u r i n g economic a r r a n g e m e n t s i n t h e s e a r c h for f o r e i g n m a r k e t s .
I t is in t h i s s p i r i t t h a t w e m u s t e x a m i n e w h a t s h o u l d be t h e d e v e l o p m e n t i n
the R u h r of t h e i r o n a n d e n g i n e e r i n g i n d u s t r i e s , of coal p r o d u c t i o n , of p o w e r
p r o d u c t i o n , of t h e c h e m i c a l i n d u s t r y , a n d of v a r i o u s o t h e r i n d u s t r i e s .
(a) Iron Industry
and Engineering
Manufacture.
7. T h e a p p l i c a t i o n t o t h e i r o n a n d e n g i n e e r i n g i n d u s t r i e s i n t h e R u h r of
the p r i n c i p l e of s u p p r e s s i n g all w a r l i k e m a n u f a c t u r e w i l l r e s u l t i n a first l a r g e ­
scale r e d u c t i o n i n t h e p r o d u c t i o n of t h e s e i n d u s t r i e s . T h i s i n v o l v e s t h e t r a n s f e r
a s r e p a r a t i o n , or, f a i l i n g t h i s , t h e d e s t r u c t i o n of all l a r g e - s c a l e f o r g i n g w o r k s
and presses, of h e a v y steel r o l l i n g - m i l l s for a r m o u r p l a t i n g a n d h e a v y billets,
of w o r k s h o p s for p r o d u c i n g g u n s , of a i r c r a f t e n g i n e m a n u f a c t u r e , &c, a n d
consequently a p r o p o r t i o n a t e r e d u c t i o n of t h e m e a n s of p r o d u c t i o n of c a s t i r o n
and steel. T h e h i g h q u a l i t y steels m a n u f a c t u r e d i n e l e c t r i c f u r n a c e s a r e p r i n c i ­
pally r e q u i r e d by a r m i e s , a n d t h e e l e c t r i c a l steel w o r k s i n t h e R u h r s h o u l d
c o n s e q u e n t l y be s u p p r e s s e d .
I t seems t h a t p a r t of t h e i r p l a n t c o u l d w i t h
a d v a n t a g e be t r a n s f e r r e d t o A l l i e d c o u n t r i e s a s r e p a r a t i o n . T h e s a m e a p p l i e s
t o t h e m a c h i n e tool i n d u s t r y .
8. T h u s t h e i r o n a n d steel i n d u s t r i e s w h i c h w i l l be a b l e to m a i n t a i n
e x i s t e n c e i n t h e R u h r w i l l only b e t h o s e w h i c h a r e r e q u i r e d b y a p e a c e - t i m e
economy.
I n t h i s c o n n e x i o n t h e R u h r s h o u l d b e s u p p l i e d , t o a n e x t e n t w h i c h w i l l have
t o be d e c i d e d , w i t h semi-finished i r o n p r o d u c t s b y t h e F r e n c h i n d u s t r y i n L o r r a i n e
i n e x c h a n g e for t h e d e s p a t c h f r o m t h e R u h r of c o k i n g coal o r of coke. T h i s will
r e s u l t i n a r e d u c t i o n i n t h e p r o d u c t i o n of c a s t i r o n a n d steel i n t h e R u h r , whose
i n d u s t r y w i l l be m o r e c o n c e n t r a t e d o n r o l l i n g a n d on t h e m a n u f a c t u r e of p r o d u c t s
r e q u i r i n g a g r e a t e r d e g r e e of
finishing.
G e r m a n i r o n p r o d u c t i o n w i l l b e closely l i n k e d w i t h t h e p r o d u c t i o n of F r a n c e ,
B e l g i u m a n d L u x e m b u r g , b u t t h e c a s t i r o n a n d steel p r o d u c t i o n of t h e Allies
w o u l d be i n c r e a s e d a t t h e e x p e n s e of t h e R u h r p r o d u c t i o n . I n s t e a d of e x p o r t i n g
F r e n c h i r o n - o r e t o G e r m a n y w e w o u l d i m p o r t coke a n d c o k i n g coal i n t o L o r r a i n e .
L o r r a i n e w o u l d t h u s be i n a p o s i t i o n t o s u p p l y steel t o t h e finishing i n d u s t r y
i n t h e R u h r w i t h a v i e w t o t h e m a n u f a c t u r e a n d e x p o r t of finished p r o d u c t s
f r o m t h e r e . T h e s e e x p o r t s c o u l d be m a d e to a n y w h e r e i n t h e w o r l d , b u t p r i n c i ­
p a l l y to G e r m a n y a n d E a s t e r n E u r o p e .
9. I t w o u l d definitely b e p o s s i b l e t o c a r r y o u t a s u b s t a n t i a l , r e d u c t i o n of the
i r o n a n d e n g i n e e r i n g i n d u s t r i e s of t h e R u h r once t h e m a n u f a c t u r e of a r m s was
s u p p r e s s e d . D e t a i l e d figures c a n o n l y b e g i v e n a f t e r a closer s t u d y . T h e calcula­
t i o n w o u l d , m o r e o v e r , d e p e n d on t h e r e d u c t i o n of t h e i n d u s t r i a l c a p a c i t y of the
r e s t of G e r m a n y , w h i c h w o u l d be t h e R u h r ' s p r i n c i p a l c l i e n t .
Nevertheless, a
first e x a m i n a t i o n l e a d s t h e F r e n c h a u t h o r i t i e s c o n c e r n e d t o believe t h a t a p r o ­
d u c t i o n figure f o r G e r m a n y a n d t h e R u h r of 6 m i l l i o n t o n s of steel a y e a r
( e x c l u d i n g t h e S a a r a n d S i l e s i a ) w o u l d suffice t o m e e t t h e n o r m a l n e e d s of
G e r m a n y a n d t o p r o v i d e for a c e r t a i n a m o u n t of e x p o r t s of r o l l e d p r o d u c t s . The
r e l a t i v e p r o p o r t i o n s t o be e s t a b l i s h e d b e t w e e n t h e i r o n p r o d u c t i o n of t h e R u h r a n d
of G e r m a n y m u s t f o r m t h e s u b j e c t of f u r t h e r s t u d y . M o r e o v e r , i n v i e w of the
difficulty of d e t e r m i n i n g e x a c t l y a t t h e p r e s e n t m o m e n t t h e steel r e q u i r e m e n t s of
E u r o p e d u r i n g t h e r e c o n s t r u c t i o n p e r i o d a n a d d i t i o n a l s a f e t y m a r g i n of 2 million
t o n s c o u l d n o r m a l l y be a l l o w e d t o t h e R u h r a s a r e s e r v e .
S u p p l i e s of o r e f o r t h e i r o n w o r k s of t h e R u h r s h o u l d b e p r o v i d e d first f r o n
G e r m a n o r e a n d i n t h e n e x t p l a c e f r o m L o r r a i n e ore. T h e s e s o u r c e s m u s t m a k e up
a s l a r g e a s p o s s i b l e a p r o p o r t i o n of t h e possible r e q u i r e m e n t s of t h e R u h r . The
r e s t of w h a t is r e q u i r e d w o u l d be i m p o r t e d f r o m S w e d e n a n d N o r t h A f r i c a . As
a l l t h i s o r e w o u l d b e t r a n s p o r t e d o n t h e R h i n e i t w o u l d be s i m p l e t o s u p e r v i s e the
quantities.
(b) Coal
Production.
10. T h e r e i s e v e r y a d v a n t a g e i n m a i n t a i n i n g a n d even i n c r e a s i n g a s m u c h as
p o s s i b l e t h e e x p l o i t a t i o n of R u h r coal. P r o d u c t i o n r e a c h e d 120 m i l l i o n t o n s a
y e a r i n 1 9 4 3 . I t w a s o n l y 100 m i l l i o n t o n s i n 1937, of w h i c h 60 m i l l i o n w e r e con­
s u m e d i n G e r m a n y a n d 40 m i l l i o n e x p o r t e d . T w o - t h i r d s of t h e e x p o r t s w e n t to
t h e w e s t e r n c o u n t r i e s ( F r a n c e : 1 2 - 1 5 m i l l i o n , B e l g i u m , H o l l a n d ; also Italy,
Switzerland and Scandinavia).
1 1 . T h e r e q u i r e m e n t s of t h e R u h r a n d of G e r m a n y w i l l n e c e s s a r i l y be very
m u c h r e d u c e d . I t w i l l be p o s s i b l e t o i n c r e a s e c o n s i d e r a b l y t h e a m o u n t which
F r a n c e w i l l a b s o r b , also t h e e x p o r t s t o B e l g i u m , H o l l a n d a n d I t a l y . T h e exports
i n q u e s t i o n w i l l be c o m p o s e d e s s e n t i a l l y of c o k i n g coal a n d of coke. I t i s necessary
t o e n v i s a g e i n t h e c o m i n g y e a r s a r e d u c t i o n i n o u r i m p o r t s f r o m E n g l a n d as a
r e s u l t of t h e r e d u c t i o n of B r i t i s h p r o d u c t i o n . ( " )
F r e n c h n e e d s a r e , m o r e o v e r , less for coke t h a n f o r c o k i n g coal i n o r d e r that
a d v a n t a g e m a y be t a k e n of t h e g a s a n d b y - p r o d u c t s d r a w n f r o m t h e p r o d u c t i o n of
coke f r o m coal.
T h e R u h r coal i n d u s t r y w o u l d t h e r e f o r e r e m a i n am i m p o r t a n t f a c t o r i n the
a c t i v i t y of t h e t e r r i t o r y a n d w o u l d c o n t i n u e t o e m p l o y t h e g r e a t e r p a r t of the
250,000 w o r k e r s a n d e m p l o y e e s w h o w e r e w o r k i n g i n i t b e f o r e t h e w a r .
2
( ) It must be noted that, since English supplies consist mainly of hard coal and the
increased imports of coke and coking coal from the Ruhr into France would correspond to
the increase in our iron production, they should not upset the English exporters as soon as
the latter are in a position to resume their exports on a large scale.
3 3
33
-
(c) Power
Production.
12. T h e R u h r is a g r e a t p o w e r p r o d u c e r . E l e c t r i c i t y is s u p p l i e d by g a s a n d
coal i n s t a l l a t i o n s . G a s is s u p p l i e d by t h e c o k i n g w o r k s a n d b l a s t f u r n a c e s . T h e s e
t w o k i n d s of p o w e r a r e e x p o r t e d f a r beyond t h e l i m i t s of t h e R u h r B a s i n .
13. P o w e r p r o d u c t i o n w i l l a u t o m a t i c a l l y be r e d u c e d to a c o n s i d e r a b l e e x t e n t
by reason of t h e m e a s u r e s p r o p o s e d above ( r e d u c t i o n i n t h e p r o d u c t i o n of coke a n d
of cast i r o n ) . I t does n o t seem t h a t i t w o u l d be n e c e s s a r y t o a p p l y a n y a d d i t i o n a l
m e a s u r e t e n d i n g to r e d u c e s t i l l f u r t h e r t h e p o w e r p r o d u c t i o n of t h e R u h r .
14. I n a d d i t i o n i t w o u l d be v e r y d e s i r a b l e to see p o w e r s u p p l i e s f r o m t h e
R u h r directed t o w a r d s the countries situated to the west, F r a n c e , B e l g i u m a n d
H o l l a n d , by m e a n s of t h e c o n s t r u c t i o n of p i p e s for t h e l o n g - d i s t a n c e t r a n s p o r t
of gas a n d p a r t i c u l a r l y b y e l e c t r i c h i g h - t e n s i o n lines.
(d) Chemical
Industry.
15. T h e c h e m i c a l i n d u s t r y of t h e R u h r m u s t be s u b j e c t e d to t h e g e n e r a l
p r i n c i p l e s of d e s t r u c t i o n , t r a n s f e r a n d c o n t r o l l a i d d o w n for t h e r e s t of G e r m a n y .
I n p a r t i c u l a r a b e g i n n i n g w o u l d be m a d e i n t h e s u p p r e s s i o n of all m a n u f a c t u r e
considered useful for w a r p u r p o s e s a n d i n t h e first p l a c e to t h e m a n u f a c t u r e of
synthetic p e t r o l .
16. T h e r e m a i n d e r of t h e chemical i n d u s t r y w i l l be a u t o m a t i c a l l y s u b j e c t e d
to c e r t a i n reductions a s a r e s u l t of t h e d e c r e a s e i n t h e n u m b e r of coke w o r k s .
I n general an effort w i l l be m a d e t o e x p o r t coal i n a c c o r d a n c e w i t h t h e g e n e r a l
principles i n d i c a t e d above r a t h e r t h a n t o leave i t o n t h e s p o t i n o r d e r to a l l o w
of the functioning o f all of t h e i n d u s t r i e s d e r i v e d f r o m it.
17. Nevertheless, t h e r e m u s t e x i s t i n t h e R u h r a l i m i t e d c h e m i c a l i n d u s t r y
whose markets w o u l d be p r i n c i p a l l y for p e a c e - t i m e n e e d s i n G e r m a n y , p a r t i c u ­
larly the n i t r o g e n i n d u s t r i e s a n d t h e p r o d u c t i o n of n i t r o g e n o u s f e r t i l i s e r s
necessary for G e r m a n i n d u s t r y .
(e) Various
Industries.
18. A l u m i n i u m . F r e n c h policy e n v i s a g e s t h e c o m p l e t e s u p p r e s s i o n of
aluminium in G e r m a n y . T h e r e e x i s t e d i n t h e R u h r , h o w e v e r , n e a r L i i n e n , a n
i m p o r t a n t c o m p l e x of a l u m i n a p r o d u c t i o n (90,000 tons) a n d a l u m i n i u m p r o d u c t i o n
(45,000 tons) w h i c h f u n c t i o n e d on a n economic basis. I f a r e d u c e d p r o d u c t i o n of
a l u m i n i u m is m a i n t a i n e d i n G e r m a n y (e.g., 25,000 t o n s a y e a r ) i t m i g h t be
possible to c o n c e n t r a t e t h e t o t a l p r o d u c t i o n i n t h e L i i n e n f a c t o r y . I n t h i s w a y
supervision w o u l d be m o r e effective t h a n if v a r i o u s i n s t a l l a t i o n s for t h i s p u r p o s e
were a u t h o r i s e d t o c o n t i n u e t o f u n c t i o n i n t h e h e a r t of G e r m a n y .
19. T h e o t h e r R u h r i n d u s t r i e s whose p r o d u c t i o n m e e t s p e a c e - t i m e n e e d s
will have to be a l l o w e d c e r t a i n a c t i v i t y : t e x t i l e s , l e a t h e r , food p r o d u c t s , &c.
Besides local c o n s u m p t i o n t h e s e f a c t o r i e s w o u l d find t h e i r m a r k e t s chiefly i n
G e r m a n y a n d i n C e n t r a l a n d E a s t e r n E u r o p e . I n fixing t h e s e c o m m e r c i a l c h a n n e l s
account m u s t c l e a r l y be t a k e n of t h e l e g i t i m a t e i n t e r e s t s of t h e A l l i e d c o u n t r i e s .
(ii) Future Arrangements
for Ownership
in the
Ruhr.
20. O n t h e s u p p o s i t i o n t h a t t h e R u h r is i n d u s t r i a l i s e d a n d t h a t t h e i n t e r ­
n a t i o n a l a u t h o r i t y gives t h e o r i e n t a t i o n i n d i c a t e d above t o t h e i n d u s t r i e s of t h e
R u h r t e r r i t o r y i t m u s t be a s k e d w h a t w i l l be t h e s t a t u s of t h e u n d e r t a k i n g s
comprised i n t h e t e r r i t o r y . I t is i m p o s s i b l e t o leave t h e m i n e s i n t h e h a n d s of
their p r e s e n t o w n e r s .
F o r p o l i t i c a l a n d s e c u r i t y r e a s o n s i t w i l l be e q u a l l y
necessary t o e x p r o p r i a t e t h o s e w h o a t p r e s e n t c o n t r o l h e a v y i n d u s t r y . T h i s policy
will n e c e s s i t a t e t h e t a k i n g over of these u n d e r t a k i n g s by a n e w m a n a g e r i a l staff
or a t least close s u p e r v i s i o n . A l l t h e A l l i e d c o u n t r i e s w h o t a k e p a r t i n t h e i n t e r ­
n a t i o n a l G o v e r n m e n t w i l l be faced w i t h a p r o b l e m of. p e r s o n n e l . T h e c o u n t r i e s
concerned m u s t c l e a r l y p r o v i d e as soon a s possible for r e c r u i t i n g t h e n e c e s s a r y
m a n a g e r i a l staffs, w h e r e a s t h e t e c h n i c i a n s c a n be f o u n d a m o n g t h e G e r m a n
personnel.
2 1 . E x p r o p r i a t i o n p u r e a n d s i m p l e seems, i n fact, to be t h e o n l y s o l u t i o n .
I t would r e s u l t i n a n a b r u p t s e v e r a n c e of all t h e financial l i n k s w h i c h a t p r e s e n t
join the i n d u s t r y of t h e R u h r t o t h e b u s i n e s s i n t e r e s t s of Cologne a n d even m o r e
of F r a n k f u r t .
22. I n t h e s e c i r c u m s t a n c e s w h o will a s s u m e t h e r i g h t s of o w n e r s h i p i n t h e
R u h r t e r r i t o r y - w h i c h w i l l t h u s h a v e become v a c a n t ? I t does n o t seem t h a t
recourse s h o u l d be h a d t o p r i v a t e i n t e r e s t s . T h e s o l u t i o n w h i c h seems to m e r i t
acceptance is t h e t a k i n g over of these i n d u s t r i a l a c t i v i t i e s by i n t e r n a t i o n a l
[31427]
F
c o n s o r t i u m s w h o s e s h a r e s w o u l d be h e l d b y t h e S t a t e s e n t r u s t e d w i t h the
administration.
T h e s e S t a t e s w o u l d h a v e to s u p p l y t h e c o n s o r t i u m s w i t h w o r k i n g
c a p i t a l i n so f a r a s t h i s c o u l d n o t be p r o v i d e d by t h e e x p r o p r i a t e d c o m p a n i e s .
T h e p r o f i t s , i n so f a r a s t h e y w e r e n o t r e i n v e s t e d i n t h e e n t e r p r i s e s , w o u l d be
d i v i d e d b e t w e e n t h e A l l i e d n a t i o n s a n d w o u l d c o u n t a g a i n s t r e p a r a t i o n s d u e from
G e r m a n y o r w o u l d be u t i l i s e d for a n y o t h e r p u r p o s e ( a n d i n p a r t i c u l a r for the
p a y m e n t of i m p o r t s a g r e e d t o be i n d i s p e n s a b l e for G e r m a n y ) .
( i i i ) Labour
Problems.
2 3 . W e s h a l l h a v e t o g i v e p a r t i c u l a r s t u d y t o t h e - r e s u l t s of i n t e r ­
n a t i o n a l i s a t i o n of t h e R u h r o n t h e a b o v e l i n e s w i t h r e g a r d t o t h e d e m o g r a p h i c
s i t u a t i o n a n d e s p e c i a l l y a s r e g a r d s l a b o u r . I t is c l e a r t h a t t h e g e n e r a l r e s u l t of
t h e m e a s u r e s p r o p o s e d w i l l be a r e d u c t i o n i n t h e R u h r ' s l a b o u r r e q u i r e m e n t s .
24. A t t h e s a m e t i m e i t c a n be s u p p o s e d t h a t i n c o n n e x i o n w i t h t h i s
r e d u c t i o n t h e r e w i l l be a n i m p o r t a n t d e c r e a s e i n t h e w o r k i n g p o p u l a t i o n of the
R u h r a s a r e s u l t of t h e d e p a r t u r e of a l l t h e f o r e i g n e r s t h e r e . B e f o r e t h e w a r
t h e R u h r i n c l u d e d n u m e r o u s g r o u p s of P o l i s h w o r k e r s w h o w i l l w i t h o u t doubt
w i s h to r e t u r n to their native country. Since the w a r the N a z i Government had
b r o u g h t i n t o t h e R u h r a v e r y l a r g e n u m b e r of f o r e i g n w o r k e r s a s forced l a b o u r
(French, Dutch, Polish, U k r a i n i a n , Belgian, Italian). According to certain
figures t h e p r o p o r t i o n of f o r e i g n e r s r e a c h e d 60 p e r c e n t , i n 1943. I t is c l e a r t h a t
all these workers are now leaving G e r m a n y .
2 5 . I t r e m a i n s t o be a s k e d h o w t h e G e r m a n p o p u l a t i o n , w h o w i l l live i n the
R u h r , w i l l a d a p t t h e m s e l v e s t o t h e n e w t a s k s w h i c h w i l l be a l l o t t e d t o t h e m .
I t is i m p o s s i b l e t o g i v e t h e a n s w e r i n a d v a n c e .
I n t h e l i g h t of t h e above o b s e r v a t i o n s o n e c a n n e v e r t h e l e s s e s t i m a t e t h a t the
m o v e m e n t s of p o p u l a t i o n w h i c h w i l l t a k e p l a c e i n t h e R u h r w i l l n o t be of g r e a t
m a g n i t u d e a n d will not cause any i m p o r t a n t disturbances. On any hypothesis
t h e s e m o v e m e n t s w i l l n o t be different f r o m t h o s e w h i c h w o u l d h a v e h a d t o t a k e
p l a c e if t h e R u h r h a d r e m a i n e d a n i n t e g r a l p a r t of G e r m a n y .
(iv) Customs
and Monetary
Regime
and Implications
as regards
International
Exchanges.
2 6 . I t is c l e a r l y difficult t o d e s c r i b e i n d e t a i l a n d i n a d v a n c e w h a t w i l l be
t h e c u s t o m s a n d m o n e t a r y r e g i m e of t h e R u h r a n d w h a t w i l l be t h e consequences
o f i n t e r n a t i o n a l i s i n g i t as r e g a r d s i n t e r n a t i o n a l e x c h a n g e s . I n v i e w of t h e lack
o f r e c e n t s t a t i s t i c s a n d i n f o r m a t i o n o n p r o d u c t i o n i n G e r m a n y i t is n o t possible
to do more t h a n suggest certain hypotheses.
27. O n t h e o t h e r h a n d i t is n e c e s s a r y t o b e a r i n m i n d t h a t t h e solution
p r o p o s e d b y t h e F r e n c h G o v e r n m e n t is above a l l d i c t a t e d by a n x i e t y w i t h r e g a r d
,to f u t u r e s e c u r i t y . I t w i l l a l w a y s be p o s s i b l e to d e m o n s t r a t e , w i t h t h e h e l p of
figures, t h a t t h i s s o l u t i o n is n o t p a r t i c u l a r l y r e a s o n a b l e f r o m t h e e c o n o m i c p o i n t
o f v i e w . I t c a n a l w a y s be s a i d t h a t i t i s n o t r i g h t t o c r e a t e a n e w c u s t o m s u n i t
i n E u r o p e w h e n e v e r y t e n d e n c y is t o e x t e n d t h e l i m i t s of free e c o n o m i c a r e a s . I t
w o u l d be p o s s i b l e t o g o so f a r a s t o s a y t h a t t h e best s o l u t i o n f r o m t h e s t r i c t l y
e c o n o m i c p o i n t of v i e w w o u l d be t h e e s t a b l i s h m e n t of a g r e a t e r G e r m a n y . The
a n s w e r i s t h a t t h e F r e n c h G o v e r n m e n t h a s n o t a n y i n t e n t i o n of j u s t i f y i n g its
i d e a s by e c o n o m i c c o n s i d e r a t i o n s .
2 8 . T h e e c o n o m i c s t r u c t u r e of a n y r e g i o n t e n d s i n e v i t a b l y t o a d a p t itself
t o t e r r i t o r i a l s o l u t i o n i m p o s e d on p o l i t i c a l g r o u n d s . B u t in t h e p r e s e n t case it
a p p e a r s t o u s t h a t t h e s o l u t i o n w h i c h w e h a v e in m i n d c o r r e s p o n d s n o t o n l y to
t h e e s s e n t i a l n e e d s of s e c u r i t y , b u t c o u l d be a n i m p o r t a n t f a c t o r i n the
r e c o n s t r u c t i o n of E u r o p e a n d of i t s p r o s p e r i t y .
2 9 . T h e r e w o u l d be n o q u e s t i o n of t h e i m m e d i a t e e s t a b l i s h m e n t of customs
b a r r i e r s o n t h e f r o n t i e r s of t h e R u h r t e r r i t o r y . A c u s t o m s c o n t r o l w o u l d n a t u r ­
a l l y b e e s t a b l i s h e d b e t w e e n t h e R u h r a n d t h e t e r r i t o r y s u r r o u n d i n g it, b u t the
e s s e n t i a l o b j e c t of t h i s s t e p w o u l d be t o a l l o w t h e I n t e r n a t i o n a l C o m m i s s i o n to
s u p e r v i s e t h e e x e c u t i o n of s u c h m e a s u r e s a s i t m i g h t h a v e t a k e n .
30. T h e e c o n o m i c a n d p o l i t i c a l s e v e r a n c e of t h e R u h r w i l l i m p l y t h e c r e a t i o n
of a n e w c u r r e n c y . I t w i l l be n e c e s s a r y to. f o u n d f o r t h i s p u r p o s e a b a n k of
i s s u e . T h e r e v e n u e i t w i l l r e q u i r e for t h i s p u r p o s e w i l l be e a s i l y p r o v i d e d by
t h e e x c e s s of d e p o s i t s over w i t h d r a w a l s .
3 1 . A t t h i s p o i n t i t is n e c e s s a r y t o r e p l y t o a n o b j e c t i o n to t h e d e t a c h m e n t of
t h e R u h r t e r r i t o r y w h i c h h a s been r a i s e d e s p e c i a l l y i n G r e a t B r i t a i n . I t has
b e e n m a i n t a i n e d t h a t t h i s s o l u t i o n w o u l d d e p r i v e t h e old R e i c h of t h e most
i m p o r t a n t p a r t of i t s r e s o u r c e s , a n d w o u l d t h u s leave i n t h e c e n t r e of E u r o p e a
p o p u l a t i o n of t h e o r d e r of 50 m i l l i o n i n a c o n t i n u a l s t a t e of p o v e r t y , w i t h t h e
result t h a t a p e r m a n e n t s o u r c e of t r o u b l e a n d a t h r e a t to t h e t r a n q u i l l i t y of
E u r o p e w o u l d be k e p t i n b e i n g . I t is t r u e t h a t t h e i n t e r n a t i o n a l i s a t i o n of t h e
R u h r will, i n t h e first i n s t a n c e , c r e a t e i n G e r m a n y a s e r i o u s economic d i s ­
e q u i l i b r i u m , over a n d above t h e difficulties a l r e a d y c r e a t e d by t h e a n n e x a t i o n of
Silesia by P o l a n d . G e r m a n e x p o r t s of coal a n d coke, of i r o n p r o d u c t s , finished
a n d semi-finished m e t a l l u r g i c a l goods a n d even t e x t i l e s a n d c h e m i c a l s w i l l suffer
a c o n s i d e r a b l e d i m i n u t i o n . I t w i l l d o u b t l e s s be possible t o r e d u c e G e r m a n i m p o r t
r e q u i r e m e n t s , since t h e n e e d f o r a r m a m e n t s w i l l h a v e d i s a p p e a r e d a l t o g e t h e r .
B u t i t w i l l r e m a i n i n d i s p e n s a b l e , even if a g r i c u l t u r a l p r o d u c t i o n i n G e r m a n y i s
e x p a n d e d to t h e g r e a t e s t possible e x t e n t , t o p r o v i d e for t h e necessity of b u y i n g
abroad a v e r y c o n s i d e r a b l e t o n n a g e of food-stuffs.
I n 1937 G e r m a n y , w i t h
69 million i n h a b i t a n t s , i m p o r t e d c e r e a l s to t h e v a l u e of 4 2 7 m i l l i o n m a r k s , a n d
m e a t cattle, d a i r y p r o d u c e , f r u i t , f a t s , coffee, tea, & c , to t h e v a l u e of 940 m i l l i o n
marks.
E v e n a G e r m a n y of 50 m i l l i o n i n h a b i t a n t s w o u l d t h e r e f o r e h a v e to
r e m a i n t o a l a r g e e x t e n t a n i m p o r t e r o f food-stuffs.
32. I t i s t h e r e f o r e c e r t a i n t h a t d u r i n g t h e p e r i o d of t h e r e a d a p t a t i o n of i t s
economic s t r u c t u r e t h e n e w G e r m a n y w i l l h a v e g r e a t difficulties i n c o p i n g w i t h
the deficit on i t s b a l a n c e of p a y m e n t s . . H o w is s u c h a deficit to be d e a l t w i t h ?
(a) I n t h e first p l a c e i t m u s t be observed t h a t t h e s e v e r a n c e of t h e R u h r a n d
t h e S a a r w i l l r e m o v e f r o m G e r m a n y p o p u l a t i o n s w h i c h , since t h e i r
activities a r e a l m o s t e x c l u s i v e l y i n d u s t r i a l , d o n o t c o n t r i b u t e t o t h e
feeding of t h e c o u n t r y .
(&) W i t h i n t h e l i m i t s of w h a t c a n be a c h i e v e d a g r i c u l t u r a l p r o d u c t i o n i n
G e r m a n y w o u l d h a v e t o be r a i s e d to i t s m a x i m u m level by e v e r y con­
ceivable m e a n s .
(c) Germany w o u l d c o n t i n u e t o possess i m p o r t a n t i n d u s t r i e s , since she w o u l d
retain such regions as Saxony, T h u r i n g i a , Berlin, H a m b u r g , Hanover
a n d K a s s e l . G e r m a n y ' s r e s o u r c e s w o u l d be d e v o t e d exclusively t o h e r
peaceful n e e d s , a n d n o l o n g e r t o t h e p u r c h a s e of r a w m a t e r i a l s o r
m a n u f a c t u r e d goods of m i l i t a r y v a l u e .
(d) F r o m t h e p o i n t of v i e w of d e n s i t y of p o p u l a t i o n , G e r m a n y is a t t h e
m o m e n t u n d e r g o i n g e x c e p t i o n a l difficulties. N o p e r m a n e n t s o l u t i o n
of t h i s q u e s t i o n c a n be a r r i v e d a t so l o n g a s difficulties c o n t i n u e i n t h i s
degree. M e a s u r e s w i l l h a v e t o be t a k e n t o r e m e d y t h e m , n o t a b l y b y
a d o p t i n g a p o l i c y of e m i g r a t i o n .
33. N e v e r t h e l e s s , all t h e s e m e a s u r e s w i l l be insufficient t o e n a b l e t h e n e w
G e r m a n y to e x i s t w i t h o u t e x t e r n a l s u p p o r t . B u t t h e t e r r i t o r i a l m e a s u r e s h e r e
c o n t e m p l a t e d w i l l n o t i n t h e m s e l v e s a g g r a v a t e t h e p r o b l e m a t all, s i n c e n o t h i n g
will p r e v e n t t h e e m p l o y m e n t of t h e e x p o r t s u r p l u s of t h e R u h r for s u c h p u r p o s e s
as i t w o u l d h a v e been p u t t o w i t h i n t h e old l i m i t s of t h e R e i c h . T h e s u r p l u s of
foreign e x c h a n g e r e s u l t i n g f r o m e x p o r t s f r o m t h e R u h r c o u l d be devoted, a s t h e
responsible P o w e r s m a y d e c i d e , e i t h e r t o r e p a r a t i o n s or t o m e e t a p r o p o r t i o n o f
such f o r e i g n p u r c h a s e s by G e r m a n y a s a r e d e e m e d i n d i s p e n s a b l e by t h e I n t e r Allied C o n t r o l C o u n c i l .
34. T h e f o r e g o i n g c o n s i d e r a t i o n s a r e sufficient to d e t e r m i n e t h e e s s e n t i a l
c h a r a c t e r of t h e t e r r i t o r y w h i c h s h o u l d be d e t a c h e d f r o m G e r m a n y a n d s u b j e c t e d
to a n i n t e r n a t i o n a l r e g i m e . T h i s t e r r i t o r y s h o u l d i n c l u d e t h e m a j o r i t y of t h e
i n d u s t r i e s a n d m i n e s w h o s e p r o d u c t i o n i t is n e c e s s a r y to c o n t r o l . B u t i n o r d e r
not to i n c r e a s e t h e difficulty of t h e p r o b l e m w h i c h h a s t o be solved, every effort
should be m a d e to d e t e r m i n e t h e m i n i m u m a r e a c o m p a t i b l e w i t h these c o n d i t i o n s .
The boundaries traced on the a t t a c h e d m a p would provide a satisfactory
solution t o t h e p o l i t i c a l p r o b l e m , t h e economic consequences of w h i c h t h i s m e m o ­
r a n d u m h a s a t t e m p t e d , i n b r o a d o u t l i n e , t o describe.
Paris, 22nd
"314271 October,
1945.
G
A p p e n d i x 1 t o A n n e x 1.
Statistics
of Industrial
Ruhr.
Area (square kilometres)
4,700
Population on 17th May,
5,030,000
1939
D e n s i t y of population ...
1,070
Production (in thousands
of tons).
Coal­
1938
1943-44...
Lignite—
1938
1943-44
Coke­
1938
1943-44
Iron ore—
1938
Cast iron—
1938
1944
Steel1938
1944
Boiled products—
1938
1944
Sulphuric acid—
1937
Nitrogen—
1939
Electric energy (million
kvvs.)—
1944
129,823
125,314
...
32,171
35,4633
35,46
Saar.
Population
Remaining
Territory
West of
Rhine.
Territory
East of
Oder-Weisse
Line.
Rest
of Germany.
Total.
19,97
19,9766
95,000
95,00 0
348,94
348,9444
470,544
470,544
840,000
436
4,980,000
249
9,800,000
103
48,850,000
140
69,500,000
148
13,733
16,241
16,24 1
7,943
7,33
7,334
4
5,714
6,141
6,14 1
188,007
261,590
261,590((
...
56,322
68,077
2,926
3,524
3,52 4
1,344
1,31
1,3144
10
10,000
13,000
1,900(*)
2,50
2,500
0
?
11,000
15,50
15,5000
1,400 (*)
2,750
?
?
30,854
106,56
106,5600 ( )
3
1,358
1.24
1.24S
S
3
()
(*)
()
()
5
6
1,930
3,571
3,57 1
41,669
52,183(
52,183(''
70
14,920
14,92 0
15,000
15,000
?
4
275
4,750( )
500
?
700
5,0250
?
?
120
5
550
4,250( )
172
458
?
420
56
5
8
187,228
252,39
252,3966
3,298
8,401
8,40 1 ( )
?
400
150
'
250
9
2,000
2,00
0
129,548
182,98
182,9888
3
l,041(s)
l,041(s )
11
Production.
1,92
1,9244
...
8,000
. 10,400
and
18,045
20,775
22,656
25,67
25,6755
14,200
17,601 \
10
SO
Including production of Polish Silesia.
I n 1932.
Consists mainly of output of Hermann Goering Works.
Ruhr plus left bank of Rhine.
A p p e n d i x 2 t o A n n e x 1.
Ruhr
Zone:
Population
Data
(on 17th
T o t a l p o p u l a t i o n : 5,030,000 i n h a b i t a n t s , i.e.,
kilometre.
May,
1939).
a d e n s i t y of 1,070 t o square
T o w n s of m o r e t h a n 100,000 i n h a b i t a n t s :Essen
Diisseldorf
...
Dortmund
Duisburg-Ruhrort
W u p p e r t a l ...
Gelsenkirchen
Bochum
Oberhausen ...
Hagen
Solingen
Mtilheim an der R u h r
Reimscheid ...
666,000
548,000
542,000
541,000
401,000
317,000
305,000
191,000
151,000
140,000
137,000
103,000
i
6ft
[ T h e second a n d t h i r d a n n e x e s to t h e r e p o r t , t r a n s m i t t e d to P a r i s i n d e s p a t c h
No. 2 1 4 1 of 2 9 t h N o v e m b e r , a r e , for c o n v e n i e n c e , r e p r o d u c e d b e l o w . ]
Annex 2 to Report.
Statement
by Sir
David
Waley.
T H E F r e n c h d e l e g a t i o n p r o v i d e d a n a i d e - m e m o i r e w h i c h is of g r e a t u s e
in e l u c i d a t i n g t h e v i e w s of t h e F r e n c h G o v e r n m e n t o n t h e e c o n o m i c a n d
financial
aspects of a n i n t e r n a t i o n a l R u h r S t a t e .
I n p a r a g r a p h 2 7 of t h e m e m o r a n d u m , t h e F r e n c h G o v e r n m e n t r e m a r k t h a t
the solution w h i c h t h e y a d v o c a t e is, above a l l , d i c t a t e d by c o n s i d e r a t i o n s of
f u t u r e s e c u r i t y . T h e y a d d t h a t o n e c o u l d a l w a y s s h o w t h a t e c o n o m i c a l l y i t is
not very r a t i o n a l . T h e r e p l y , t h e y say, w o u l d be t h a t t h e F r e n c h G o v e r n m e n t
in no w a y t h i n k s of j u s t i f y i n g i t s p r o p o s a l s b y economic c o n s i d e r a t i o n s . T h u s ,
in p o i n t i n g o u t t h a t t h e p r o p o s a l s involve c e r t a i n economic a n d
financial
difficulties, t h e U n i t e d K i n g d o m r e p r e s e n t a t i v e s a r e o n c o m m o n g r o u n d w i t h t h e
F r e n c h r e p r e s e n t a t i v e s . T h e r e is, h o w e v e r , a. c o n s i d e r a b l e difference of v i e w a s
to how serious s u c h economic a n d financial difficulties w o u l d be, a l t h o u g h w e a r e
certainly on c o m m o n g r o u n d i n r e g a r d i n g a p r o p h e c y a b o u t t h e f u t u r e a s
exceedingly a n d p e c u l i a r l y difficult i n s u c h a case a s t h i s . I t seems t o u s t h a t
t h e difficulties w h i c h m u s t a t t a c h to a n y p r o p o s a l t o c o n v e r t a r e l a t i v e l y f e w
s q u a r e miles of a c o u n t r y i n t o a s e p a r a t e S t a t e m i g h t be p a r t i c u l a r l y g r a v e i n
the case of a very h i g h l y i n d u s t r i a l i s e d S t a t e . T h e r e w o u l d be m a n y d i s a d v a n t a g e s
in t u r n i n g the I s l e of W i g h t i n t o a n i n d e p e n d e n t c o u n t r y , b u t i t seems t o u s t h a t
t h e r e would be even g r e a t e r d i s a d v a n t a g e s i n t u r n i n g t h e i n d u s t r i a l a r e a s i n S o u t h
W a l e s or the T y n e s i d e i n t o a s e p a r a t e S t a t e .
Economic fluctuations affect a n i n d u s t r i a l a r e a m u c h m o r e a c u t e l y t h a n a n
a r e a of mixed i n d u s t r y a n d a g r i c u l t u r e . I n t i m e s of s l u m p , a n i n d u s t r i a l a r e a
is faced w i t h a c u t e u n e m p l o y m e n t . T h e a b s o r p t i o n of t h e u n e m p l o y e d i n t o t h e
s u r r o u n d i n g c o u n t r y s i d e i s m a d e m u c h m o r e difficult if t h e s u r r o u n d i n g
countryside is i n a f o r e i g n c o u n t r y . A c o u n t r y c o n s i s t i n g of a n i n d u s t r i a l a r e a
at the time of e c o n o m i c d e p r e c i a t i o n w o u l d find i t s i n g u l a r l y difficult t o r a i s e
sufficient r e v e n u e t o m e e t i t s e x p e n s e s a n d t o find a m a r k e t for sufficient e x p o r t s
to cover i t s i m p o r t s .
On t h e o t h e r h a n d , i n t i m e s of p r o s p e r i t y , i t is a r g u a b l e t h a t t h e e x p o r t s of
the R u h r a n d t h e r e s t of G e r m a n y t a k e n t o g e t h e r w o u l d cover t h e i m p o r t s of
those t w o t e r r i t o r i e s t a k e n t o g e t h e r , b u t if t h e R u h r is d e t a c h e d f r o m G e r m a n y ,
the rest of G e r m a n y w o u l d n o l o n g e r be able t o o b t a i n i t s m i n i m u m i m p o r t s . T h i s
p o i n t is d e a l t w i t h i n p a r a g r a p h s 3 1 - 3 3 of t h e F r e n c h m e m o r a n d u m a n d i n
p a r a g r a p h 33 i t is s u g g e s t e d t h a t t h e e x p o r t s u r p l u s of t h e R u h r m i g h t be p a r t l y
used to meet a deficit i n t h e b a l a n c e of p a y m e n t s of t h e r e s t of G e r m a i r y . T h i s
system, u n d e r w h i c h t h e R u h r w o u l d n o r m a l l y o r o n occasions, h e l p o u t t h e r e s t
of G e r m a n y b y a k i n d of L e n d - L e a s e seems t o u s l i k e l y t o g i v e r i s e t o a c u t e
political difficulties a n d also i t w o u l d be difficult t o reconcile w i t h t h e o b j e c t of
m a k i n g t h e R u h r t e r r i t o r y e n t i r e l y i n d e p e n d e n t f r o m t h e r e s t of G e r m a n y .
To p u t t h e m a t t e r i n t h e s i m p l e s t w a y , w e find i t difficult t o believe t h a t i t w i l l
be a good t h i n g t o p u t a p o l i t i c a l f r o n t i e r r o u n d a " S p e c i a l A r e a " a n d t o
constitute i t a s a s e p a r a t e S t a t e .
W e h a v e n o t a t t e m p t e d t o c o n s i d e r i n d e t a i l h o w t h e p r o p o s a l w o u l d affect
the c o m m e r c i a l i n t e r e s t s of t h e U n i t e d K i n g d o m . W e t h i n k , h o w e v e r , t h a t t h e
effect on a l o n g - t e r m b a s i s o n t h e U n i t e d K i n g d o m coal t r a d e w o u l d n e e d v e r y
careful c o n s i d e r a t i o n a n d w e s h o u l d n o t w i s h t o a c c e p t , w i t h o u t f u r t h e r
e x a m i n a t i o n , t h e p o i n t of v i e w e x p r e s s e d i n t h e f o o t n o t e on p . 32 a b o u t t h e effect
of t h e p l a n on t h e U n i t e d K i n g d o m coal t r a d e .
T h e p r o p o s a l t h a t coke f r o m t h e R u h r s h o u l d be i m p o r t e d i n t o L o r r a i n e a n d
t u r n e d i n t o s e m i - m a n u f a c t u r e d m e t a l goods, t h o u g h i t w o u l d c l e a r l y possess
certain a d v a n t a g e s , m i g h t n e e d f u r t h e r e x a m i n a t i o n f r o m t h e p o i n t of v i e w - o f
United K i n g d o m t r a d e interests.
W e h a v e n o t e d t h a t p a r a g r a p h 5 of t h e m e m o r a n d u m ' s t a t e s t h a t t h e p o l i c y
of r e m o v i n g c a p i t a l i n d u s t r i a l e q u i p m e n t s u r p l u s t o G e r m a n y ' s p e a c e - t i m e n e e d s
would be a p p l i e d i n t h e R u h r S t a t e as i n G e r m a n y . T h i s seems t o u s i m p o r t a n t ,
since a n y o t h e r p o l i c y w o u l d be to t h e d e t r i m e n t of c o u n t r i e s e n t i t l e d t o
r e p a r a t i o n d e l i v e r i e s , i n c l u d i n g t h e U . S . S . R . O n t h e o t h e r h a n d , i n p a r a g r a p h s 17
and 18, i t i s s u g g e s t e d t h a t i n c e r t a i n i n s t a n c e s e x c e p t i o n s m i g h t be m a d e a n d
the p r o d u c t i o n of n i t r o g e n a n d a l u m i n i u m m i g h t be a l l o w e d i n t h e R u h r a s a
detached S t a t e , t h o u g h i t w o u l d n o t h a v e been a l l o w e d i n t h e R u h r if i t r e m a i n s
[31427]
G. 2
r
p a r t of G e r m a n y . W e t h i n k t h a t t h e w i s d o m of s u c h a policy w o u l d n e e d t o be
further considered.
T o c o n c l u d e , o u r m a i n d o u b t i s w h e t h e r t h e financial a n d economic objections
t o m a k i n g a s e p a r a t e p o l i t i c a l S t a t e o u t of a t e r r i t o r y c o m p a r a b l e w i t h the
T y n e s i d e o r S o u t h W a l e s a r e l i k e l y t o be r e l a t i v e l y i n s i g n i f i c a n t , a s t h e F r e n c h
e x p e r t s believe, for, i n o u r o w n v i e w , s u c h difficulties w o u l d p r o b a b l y be very
formidable.
S. D .
25th
October,
W.
1945.
Annex 3 to Report.
Reply by M. A Iphand to Sir David
Waley.
(Confidential.)
T H E F r e n c h a i d e - m e m o i r e o n t h e f u t u r e economic a n d financial
t h e R u h r h a s t h r e e e s s e n t i a l o b j e c t s :—'
r e g i m e of
(a) T o s h o w t h a t t h e p r o p o s e d i n t e r n a t i o n a l r e g i m e w i l l r e s u l t i n p l a c i n g
u n d e r A l l i e d C o n t r o l c o n s i d e r a b l e r e s o u r c e s w h i c h o t h e r w i s e could be
u s e d by G e r m a n y for p r e p a r i n g a n e w w a r .
(b) T o s h o w t h a t t h e s e r e s o u r c e s if t h e y a r e u t i l i s e d i n a r a t i o n a l m a n n e r
by t h e i n t e r n a t i o n a l G o v e r n m e n t c a n c o n s t i t u t e a n i m p o r t a n t element
i n t h e r e c o n s t r u c t i o n a n d p r o s p e r i t y of E u r o p e .
(c) L a s t l y t o s h o w t h a t t h e s e p a r a t i o n of t h e R u h r w i l l n o t n e c e s s a r i l y have
s u c h e c o n o m i c c o n s e q u e n c e s for G e r m a n y a s to p e r p e t u a t e i n t h e centre
of E u r o p e a s t a t e of d i s q u i e t a n d i n s e c u r i t y .
T h i s a i d e - m e m o i r e g a v e r i s e t o v e r y t h o r o u g h a n d f r a n k e x c h a n g e s of views
between t h e F r e n c h a n d B r i t i s h Delegations. T h e comments which were made
d i d n o t l e a d u s to m o d i f y o u r p o s i t i o n . B u t t h e y a r e e x t r e m e l y u s e f u l t o u s in
a l l o w i n g u s t o g i v e p r e c i s e f o r m t o v a r i o u s i m p o r t a n t p o i n t s a n d to e x a m i n e in
a d v a n c e t h e m e a s u r e s t h a t w i l l be n e c e s s a r y to overcome t h e e c o n o m i c difficulties
f e a r e d by o u r B r i t i s h colleagues.
I w o u l d l i k e t o r e p l y t o t h e p r i n c i p a l c r i t i c i s m s w h i c h h a v e been f o r m u l a t e d
by S i r D a v i d W a l e y .
I . T h e B r i t i s h D e l e g a t i o n t h i n k s t h a t a h i g h l y p o p u l a t e d a n d entirely
i n d u s t r i a l S t a t e l i k e t h e R u h r w i l l be m o r e s e n s i t i v e t h a n a n y o t h e r S t a t e to
economic c r i s e s .
T h e i d e a i s c l e a r l y r i g h t . I t could be a p p l i e d e q u a l l y w e l l t o B e l g i u m , for
e x a m p l e , a s to t h e f u t u r e R u h r S t a t e . W e c a n h o p e t h a t efforts w i l l be m a d e to
p r o m o t e t h r o u g h o u t t h e w o r l d a p o l i c y of e x p a n s i o n a n d f u l l e m p l o y m e n t which
w i l l e n a b l e u s t o l i m i t t h e c o n s e q u e n c e s of w o r l d economic f l u c t u a t i o n s . More­
over t h e f a c t t h a t t h e m i n e r a l a n d m e t a l l u r g i c a l p r o d u c t s of t h e R u h r w i l l be
n a t i o n a l i s e d w i l l a l l o w t h e S t a t e s r e s p o n s i b l e for t h e a d m i n i s t r a t i o n t o c a r r y out
m o r e e a s i l y t h e p l a n s i n t e n d e d to l i m i t u n e m p l o y m e n t .
I I . O u r B r i t i s h c o l l e a g u e s t h i n k t h a t w e a r e v e r y o p t i m i s t i c to imagine
t h a t t h e R u h r w i l l n e c e s s a r i l y h a v e a f a v o u r a b l e b a l a n c e of a c c o u n t s . C e r t a i n l y
i t is i m p o s s i b l e t o c a l c u l a t e e x a c t l y t h e v a r i o u s e l e m e n t s i n t h e commercial
e x c h a n g e s of t h e f u t u r e i n t e r n a t i o n a l S t a t e , b u t i t is possible t o believe t h a t , given
t h e c o n s i d e r a b l e i n c r e a s e i n t h e v o l u m e of coal w h i c h w i l l be e x p o r t e d , t h e metal­
l u r g i c a l r e s o u r c e s w h i c h w i l l r e m a i n i n t h e t e r r i t o r y , t h e p r o d u c t s of peaceful
i n d u s t r i e s ( n o t a b l y e n g i n e e r i n g , c h e m i c a l a n d t e x t i l e i n d u s t r i e s ) , t h e R u h r will
definitely h a v e a n e x c h a n g e s u r p l u s . I t m u s t , i n f a c t , be r e m e m b e r e d t h a t all
t h e s e p r o d u c t s a r e i n v e r y g r e a t d e m a n d t h r o u g h o u t t h e w o r l d a n d we m u s t hope
t h a t a s u i t a b l e i n t e r n a t i o n a l p o l i c y w i l l p e r m i t of t h e m a i n t e n a n c e of these
m a r k e t s . B e s i d e s , t h e R u h r w i l l o n l y h a v e t o i m p o r t from o u t s i d e i t s iron-ore
a n d i t s food.
T h i s r e p r e s e n t s a c o m p a r a t i v e l y s m a l l a m o u n t w h i c h could be
covered by e x p o r t s of coal alone, so t h a t t h e e x p o r t s of o t h e r i n d u s t r i e s would
c o n s t i t u t e t h e a s s e t s s i d e of t h e b a l a n c e of p a y m e n t s .
I I I . A t t h e s a m e t i m e , t h e B r i t i s h D e l e g a t i o n e x p r e s s e d some a p p r e h e n s i o n
about the competition w h i c h t h e R u h r m i g h t m a k e on foreign m a r k e t s against
E n g l i s h i n d u s t r y . T h i s f e a r seems i n c o n s i s t e n t w i t h t h e p e s s i m i s t i c views they
e x p r e s s e d a b o u t t h e e x i s t e n c e of a f a v o u r a b l e b a l a n c e of p a y m e n t s for t h e R u h r
territory.
I t i s e a s y t o a n s w e r t h a t t h e c o m p e t i t i o n of t h e R u h r t e r r i t o r y
a d m i n i s t e r e d by a n i n t e r n a t i o n a l G o v e r n m e n t i n w h i c h G r e a t B r i t a i n h e r s e l f
w i l l p a r t i c i p a t e w i l l be m u c h less d a n g e r o u s t h a n t h a t of a t e r r i t o r y a d m i n i s t e r e d
by a G e r m a n G o v e r n m e n t , a c c u s t o m e d to t h e p r a c t i c e of d u m p i n g a n d d i s ­
crimination.
I V . F i n a l l y , w e do n o t believe t h a t t h e s e p a r a t i o n of t h e R u h r m u s t r e s u l t
i n a n y i m p o r t a n t a g g r a v a t i o n of G e r m a n y ' s e c o n o m i c s i t u a t i o n . W e i n d i c a t e d
t h e r e a s o n s for t h i s i n p a r a g r a p h 32 of o u r a i d e - m e m o i r e . I w o u l d r e c a l l t h a t
t h e R u h r w i l l n o t b e s u r r o u n d e d by a n i m p a s s a b l e c u s t o m s b a r r i e r . I t w i l l be
possible for i t s r e s o u r c e s t o be e x p o r t e d t o G e r m a n y a n d t h e excess of i t s b a l a n c e
of p a y m e n t s could, if necessary, be u s e d i n p a r t i n o r d e r to p a y f o r p a r t of
Germany's supplies.
S i r D a v i d W a l e y f e a r s t h a t t h i s k i n d of lease-lend w i l l c a u s e c o n s i d e r a b l e
political difficulties a n d w i l l n o t allow u s to m a k e t h e R u h r e n t i r e l y i n d e p e n d e n t
of G e r m a n y . W e h a v e a l r e a d y s a i d w h a t w e t h i n k of t h i s i d e a : t h e R u h r w i l l
be i n d e p e n d e n t of G e r m a n y , b u t G e r m a n y w i l l r e m a i n d e p e n d e n t on t h e R u h r ,
which is e x a c t l y w h a t best m e e t s t h e n e e d for s e c u r i t y by w h i c h w e a r e i n s p i r e d .
I t only r e m a i n s f o r m e to e x p r e s s t h e h o p e t h a t o u r c o n v e r s a t i o n s h a v e c o n t r i ­
buted to t h e e n l i g h t e n m e n t of o u r r e s p e c t i v e G o v e r n m e n t s . I t h i n k , a s does
S i r D a v i d W a l e y , t h a t t h e r e is m o r e a difference of d e g r e e t h a n of s u b s t a n c e
between our p o i n t s of view. I t h a n k , o u r B r i t i s h colleagues f o r t h e o b j e c t i v e
manner in w h i c h t h e y h a v e been good e n o u g h to e x a m i n e t h e F r e n c h oi-onosalc
ANNEX
C.
(Secret.)
D R A F T T R E A T Y ON T H E D I S A R M A M E N T AND D E M O B I L I S A T I O N O F G E R M A N Y .
PREAMBLE.
O N t h e 5 t h J u n e , 1945, t h e G o v e r n m e n t s of t h e U n i t e d S t a t e s , t h e U n i o n of
Soviet Socialist Republics, the U n i t e d Kingdom, a n d t h e F r e n c h Republic
d e c l a r e d t h e i r i n t e n t i o n to effect t h e t o t a l d i s a r m a m e n t a n d d e m o b i l i s a t i o n of
Germany.
I n s u b s t a n t i a l m e a s u r e t h i s i n t e n t i o n h a s a l r e a d y been fulfilled.
N o t h i n g s h a l l p r e v e n t t h e c o m p l e t i o n of t h e process. I t r e m a i n s t o e n s u r e t h a t
t h e t o t a l d i s a r m a m e n t a n d d e m i l i t a r i s a t i o n of G e r m a n y w i l l be e n f o r c e d a s long
a s t h e p e a c e a n d s e c u r i t y of t h e w o r l d m a y r e q u i r e . O n l y t h i s a s s u r a n c e will
p e r m i t t h e n a t i o n s of E u r o p e a n d t h e w o r l d t o r e t u r n s i n g l e - m i n d e d l y to t h e
h a b i t s of p e a c e . T o a c h i e v e t h i s objective, t h e G o v e r n m e n t s of t h e U n i t e d S t a t e s ,
t h e U n i o n of S o v i e t S o c i a l i s t R e p u b l i c s , t h e U n i t e d K i n g d o m a n d t h e F r e n c h
R e p u b l i c a g r e e t o e n g a g e i n t h e c o m m o n u n d e r t a k i n g defined in t h i s t r e a t y .
ARTICLE
I.
T h e h i g h c o n t r a c t i n g p a r t i e s a g r e e t h a t t h e y s h a l l t a k e s t e p s j o i n t l y to e n s u r e
that:—
(A) A l l G e r m a n a r m e d forces, i n c l u d i n g l a n d , a i r , a n t i - a i r c r a f t a n d n a v a l
forces, a l l p a r a - m i l i t a r y forces s u c h a s t h e S S , t h e S A , a n d t h e G e s t a p o , a n d
all o r g a n i s a t i o n s a u x i l i a r y to t h e f o r e g o i n g s h a l l be a n d s h a l l r e m a i n completely
disarmed, demobilised and disbanded.
(B) T h e G e r m a n G e n e r a l Staff a n d t h e staffs of a n y p a r a - m i l i t a r y o r g a n i s a ­
t i o n s s h a l l be a n d s h a l l r e m a i n d i s b a n d e d .
(C) N o G e r m a n m i l i t a r y or p a r a - m i l i t a r y o r g a n i s a t i o n i n a n y f o r m or guise
s h a l l be p e r m i t t e d i n G e r m a n y .
( D ) T h e m a n u f a c t u r e , p r o d u c t i o n , or i m p o r t a t i o n of m i l i t a r y e q u i p m e n t in
G e r m a n y s h a l l b e p r e v e n t e d . I n p a r t i c u l a r , t h e h i g h c o n t r a c t i n g p a r t i e s shall
p r e v e n t t h e m a n u f a c t u r e , p r o d u c t i o n , or i m p o r t a t i o n of :—
(1) A l l a r m s , a m m u n i t i o n , e x p l o s i v e s , m i l i t a r y e q u i p m e n t , m i l i t a r y stores
a n d s u p p l i e s a n d o t h e r i m p l e m e n t s of w a r of a l l k i n d s ;
(2) A l l n a v a l vessels of a l l classes, b o t h s u r f a c e a n d s u b m a r i n e , and
auxiliary naval-craft;
(3) A l l a i r c r a f t of all k i n d s , a v i a t i o n e q u i p m e n t a n d devices a n d e q u i p m e n t
for a n t i - a i r c r a f t d e f e n c e .
(E) T h e e s t a b l i s h m e n t , u t i l i s a t i o n or o p e r a t i o n f o r m i l i t a r y p u r p o s e s of any
of t h e f o l l o w i n g s h a l l be p r e v e n t e d :—'
(1) A l l m i l i t a r y s t r u c t u r e s , i n s t a l l a t i o n s a n d e s t a b l i s h m e n t s , i n c l u d i n g but
n o t l i m i t e d t o m i l i t a r y airfields, s e a p l a n e bases, a n d n a v a l bases, mili­
t a r y a n d naval storage depots, p e r m a n e n t a n d t e m p o r a r y land and
c o a s t f o r t i f i c a t i o n s , f o r t r e s s e s a n d o t h e r fortified a r e a s ;
(2) A l l f a c t o r i e s , p l a n t s , s h o p s , r e s e a r c h i n s t i t u t i o n s , l a b o r a t o r i e s , t e s t i n g
s t a t i o n s , t e c h n i c a l d a t a , p a t e n t s , p l a n s , d r a w i n g s , a n d inventions,
d e s i g n e d o r i n t e n d e d to p r o d u c e o r to f a c i l i t a t e t h e p r o d u c t i o n of
i t e m s l i s t e d i n t h e p a r a g r a p h ( D ) above.
(F) U n d e r c o n d i t i o n s w h i c h m a y be e s t a b l i s h e d by t h e h i g h c o n t r a c t i n g
p a r t i e s , t h e d e m i l i t a r i s a t i o n a n d d i s a r m a m e n t r e q u i r e d by t h i s A r t i c l e shall be
s u b j e c t t o t h e f o l l o w i n g e x c e p t i o n s a n d to n o o t h e r s :—
(1) T h e f o r m a t i o n a n d e m p l o y m e n t of s u c h d e t a c h m e n t s of
p o l i c e a s m a y be e s s e n t i a l to t h e m a i n t e n a n c e of p u b l i c
(2) T h e m a n u f a c t u r e , p r o d u c t i o n or i m p o r t a t i o n of m i n i m u m
t h o s e i t e m s l i s t e d i n p a r a g r a p h (D) (1) above, s u c h a s
i n g r e d i e n t s of e x p l o s i v e s , w h i c h m a y be e s s e n t i a l for
c o n s t r u c t i o n , m i n i n g , a g r i c u l t u r e , or' for o t h e r p e a c e f u l
G e r m a n civil
security, and
q u a n t i t i e s of
explosives or
p u r p o s e s or
purposes.
ARTICLE
II.
T o i m p l e m e n t t h e d i s a r m a m e n t a n d d e m i l i t a r i s a t i o n p r o v i s i o n s set f o r t h in
A r t i c l e I , t h e h i g h c o n t r a c t i n g p a r t i e s a g r e e t h a t t h e y s h a l l m a k e p r o v i s i o n for.
a system of q u a d r u p a r t i t e i n s p e c t i o n , w h i c h s h a l l become o p e r a t i v e u p o n t h e
t e r m i n a t i o n of t h e A l l i e d o c c u p a t i o n of G e r m a n y . T h i s s y s t e m of i n s p e c t i o n
shall be c o n d u c t e d t h r o u g h a C o m m i s s i o n of C o n t r o l to be e s t a b l i s h e d by t h e
hi""h c o n t r a c t i n g p a r t i e s on a q u a d r u p a r t i t e basis. T h e C o m m i s s i o n of C o n t r o l ,
t h r o u g h i t s officers a n d a g e n t s , s h a l l c o n d u c t , i n a n y a n d all p a r t s of G e r m a n
t e r r i t o r y , such i n s p e c t i o n s , e n q u i r i e s a n d i n v e s t i g a t i o n s a s i t m a y d e e m n e c e s s a r y
to d e t e r m i n e w h e t h e r t h e d i s a r m a m e n t a n d d e m i l i t a r i s a t i o n p r o v i s i o n s set f o r t h
in A r t i c l e I a r e b e i n g observed.
ARTICLE
III.
T h e h i g h c o n t r a c t i n g p a r t i e s a g r e e t h a t for t h e d u r a t i o n of t h e p e r i o d
of A l l i e d o c c u p a t i o n of G e r m a n y , t h e y s h a l l , t h r o u g h t h e A l l i e d C o n t r o l C o u n c i l
and in t h e i r r e s p e c t i v e zones, e n f o r c e s t r i c t l y t h e d i s a r m a m e n t a n d d e m i l i t a r i s a ­
tion p r o v i s i o n s set f o r t h i n A r t i c l e I . T h e y a g r e e f u r t h e r t h a t t h e e x p r e s s
acceptance by G e r m a n y of t h e p r o v i s i o n s of A r t i c l e s I a n d I I s h a l l be a n
essential c o n d i t i o n to t h e t e r m i n a t i o n of A l l i e d o c c u p a t i o n of G e r m a n t e r r i t o r y .
ARTICLE
IV.
T h e C o m m i s s i o n of C o n t r o l p r o v i d e d f o r in A r t i c l e I I s h a l l s u b m i t a r e p o r t
to t h e h i g h c o n t r a c t i n g p a r t i e s w h e n e v e r , i n t h e o p i n i o n of a m a j o r i t y of t h e
members of t h e C o m m i s s i o n , it h a s r e a s o n to believe t h a t a v i o l a t i o n of t h e
d i s a r m a m e n t a n d d e m i l i t a r i s a t i o n p r o v i s i o n s of A r t i c l e I h a s o c c u r r e d or is
about to occur. I n c o n j u n c t i o n w i t n s u c h r e p o r t t h e C o m m i s s i o n s h a l l s u b m i t
a r e c o m m e n d a t i o n for a c t i o n o n t h e p a r t of t h e h i g h c o n t r a c t i n g p a r t i e s w h i c h
a p p e a r s a p p r o p r i a t e to a m a j o r i t y of t h e m e m b e r s of t h e C o m m i s s i o n .
Upon
receipt of s u c h r e p o r t a n d r e c o m m e n d a t i o n s , t h e h i g h c o n t r a c t i n g p a r t i e s will,
by common a g r e e m e n t , t a k e s u c h p r o m p t a c t i o n — i n c l u d i n g a c t i o n by a i r , sea
or land f o r c e s — a s m a y be n e c e s s a r y t o a s s u r e t h e i m m e d i a t e c e s s a t i o n o r
prevention of s u c h v i o l a t i o n or a t t e m p t e d v i o l a t i o n .
The high contracting
p a r t i e s a g r e e t h a t , w i t h i n s i x m o n t h s of t h e effective d a t e of t h i s t r e a t y , t h e y
shall c o n s u l t for t h e p u r p o s e of n e g o t i a t i n g s p e c i a l q u a d r u p a r t i t e a g r e e m e n t s
which s h a l l p r o v i d e i n t h e g r e a t e s t p r a c t i c a b l e d e t a i l for i n s p e c t i o n , e n q u i r y
a n d i n v e s t i g a t i o n b y t h e C o m m i s s i o n of C o n t r o l , f o r t h e n u m b e r s a n d t y p e of
forces w h i c h e a c h p a r t y s h a l l m a k e a v a i l a b l e for p u r p o s e s of t h i s t r e a t y , for
t h e i r d e g r e e of r e a d i n e s s a n d g e n e r a l l o c a t i o n , a n d for t h e n a t u r e of t h e f a c i l i t i e s
and assistance which each shall provide. Such special q u a d r u p a r t i t e agreements
shall be s u b j e c t t o r a t i f i c a t i o n b y t h e h i g h c o n t r a c t i n g p a r t i e s i n a c c o r d a n c e
with their respective constitutional processes.
ARTICLE
V.
T h i s t r e a t y s h a l l be r a t i f i e d by t h e h i g h c o n t r a c t i n g p a r t i e s i n a c c o r d a n c e
with their respective constitutional processes.
T h e r a t i f i c a t i o n s h a l l be
deposited w i t h t h e G o v e r n m e n t of . . . . w h i c h s h a l l n o t i f y a l l t h e h i g h
c o n t r a c t i n g p a r t i e s of e a c h d e p o s i t . T h i s t r e a t y s h a l l come i n t o force u p o n t h e
deposit of r a t i f i c a t i o n s by e a c h of t h e h i g h c o n t r a c t i n g p a r t i e s .
This treaty
shall r e m a i n i n f o r c e f o r a p e r i o d of twenty-five y e a r s f r o m i t s effective d a t e .
The h i g h c o n t r a c t i n g p a r t i e s a g r e e t o c o n s u l t s i x m o n t h s before t h e d a t e of
e x p i r a t i o n of t h i s t r e a t y for t h e p u r p o s e of d e t e r m i n i n g w h e t h e r tlhe i n t e r e s t s
of i n t e r n a t i o n a l p e a c e a n d s e c u r i t y r e q u i r e i t s r e n e w a l , w i t h or w i t h o u t
modification, or w h e t h e r t h e G e r m a n p e o p l e h a v e so f a r p r o g r e s s e d i n t h e recon­
s t r u c t i o n of t h e i r life on a d e m o c r a t i c a n d p e a c e f u l b a s i s t h a t t h e c o n t i n u e d
imposition of t f i e c o n t r o l s defined h e r e i n is n o l o n g e r n e c e s s a r y .
THIS DOCUMENT IS T H E PROPERTY OF H I S BRITANNIC MAJESTY'S GOVERNMENT
Printed
for the Cabinet.
March
1946.
S E C R E T .
Copy No.
Gen. 1 2 1 / 2 .
11th March,
1946.
CABINET.
Committee on G e r m a n I n d u s t r y .
THE
SAAR
TERRITORY.
M E M O R A N D U M BY T H E S E C R E T A R Y OF S T A T E F O R F O R E I G N A F F A I R S .
1. P a r t of t h e F r e n c h G o v e r n m e n t ' s p r o p o s a l s f o r a s e t t l e m e n t of t h e
f u t u r e r e g i m e i n W e s t e r n G e r m a n y r e l a t e s to t h e S a a r . T h e i r specific p r o p o s a l
on t h i s s u b j e c t a s m a d e in t h e c o u r s e of c o n v e r s a t i o n s w i t h F r e n c h officials
in L o n d o n l a s t O c t o b e r w a s a s follows : —
' ' T h e S a a r m i n e s , w h o s e o w n e r s h i p w a s g r a n t e d t o F r a n c e by t h e
T r e a t y of V e r s a i l l e s a n d w a s r e g a i n e d b y G e r m a n y i n 1935, m u s t become
once m o r e F r e n c h p r o p e r t y , w i t h t h e c o r o l l a r y t h a t t h e t e r r i t o r y of t h e
S a a r s h o u l d be i n c l u d e d in t h e F r e n c h c u s t o m s a n d c u r r e n c y system, since
the economies of F r a n c e a n d t h e S a a r a r e a l m o s t e n t i r e l y c o m p l e m e n t a r y .
T h e final f o r m of g o v e r n m e n t of t h e t e r r i t o r y w o u l d be d e c i d e d i n d u e course.
F r e n c h m i l i t a r y forces should be s t a t i o n e d t h e r e p e r m a n e n t l y . "
2. A n official c o m m u n i c a t i o n r e g a r d i n g t h e S a a r h a s n o w been received
from t h e F r e n c h A m b a s s a d o r , a n d a t r a n s l a t i o n is a t t a c h e d a s A n n e x A .
The
F r e n c h r e q u e s t is briefly t h a t t h e q u e s t i o n s h o u l d be c o n s i d e r e d a t t h e e a r l i e s t
possible m o m e n t by t h e f o u r F o r e i g n M i n i s t e r s or by d e l e g a t e s a p p o i n t e d f o r
this purpose, a n d t h a t they should agree to t r a n s f e r the t e r r i t o r y immediately
to F r e n c h a d m i n i s t r a t i o n , t h e final d e t e r m i n a t i o n of t h e r e g i m e b e i n g l e f t to
t h e p e a c e s e t t l e m e n t . T h i s is i n effect w h a t w a s g r a n t e d to t h e P o l e s a t t h e
P o t s d a m C o n f e r e n c e in r e s p e c t of t h e E a s t e r n p r o v i n c e s of G e r m a n y .
The
F r e n c h c o m m u n i c a t i o n defines t h e t e r r i t o r y as a p p r o x i m a t i n g to t h a t p l a c e d
u n d e r a n i n t e r n a t i o n a l r e g i m e i n 1919, w i t h some small, b u t undefined, a d d i t i o n s .
T h e p o p u l a t i o n of t h e o l d S a a r t e r r i t o r y w a s a p p r o x i m a t e l y 864,000 i n 1939.
3. T h e B r i t i s h E l e m e n t of t h e C o n t r o l C o m m i s s i o n h a s a l r e a d y d r a w n
a t t e n t i o n t o t h e d e s i r a b i l i t y of a n e a r l y d e c i s i o n as to w h e t h e r t h e S a a r is t o be
left to G e r m a n y or not, a s w i t h o u t s u c h d e c i s i o n t h e p l a n s for G e r m a n y ' s f u t u r e
economy m a y be d r a w n u p on f a l s e p r e m i s e s . I w o u l d t h e r e f o r e a s k m y colleagues
t o a g r e e t h a t w e s h o u l d s u p p o r t t h e F r e n c h r e q u e s t for a n i m m e d i a t e discussion
of t h i s q u e s t i o n by t h e f o u r P o w e r s . I see no o b j e c t i o n to d e a l i n g w i t h i t as
a n e n t i r e l y s e p a r a t e issue f r o m t h a t of t h e R u h r a n d t h e R h i n e l a n d , a n d I t h i n k
we can assume t h a t the new post-election Government in France, whatever its
c h a r a c t e r , w i l l m a i n t a i n t h e d e m a n d for t h e i n c o r p o r a t i o n of t h e S a a r .
4. I also a s k my c o l l e a g u e s t o a g r e e t h a t w e s h o u l d i n p r i n c i p l e s u p p o r t
t h e F r e n c h r e q u e s t t h a t t h e t e r r i t o r y b e t r a n s f e r r e d i m m e d i a t e l y to F r e n c h
a d m i n i s t r a t i o n . T h e e x t e n t of t h e t e r r i t o r y to be t r a n s f e r r e d w i l l need t o be
f u r t h e r e x a m i n e d i n t h e l i g h t of t h e p r e c i s e p r o p o s a l s w h i c h t h e F r e n c h G o v e r n ­
m e n t p u t f o r w a r d . T h e q u e s t i o n w i l l also a r i s e , a n d s h o u l d , I suggest, be con­
s i d e r e d f o r t h w i t h by t h e a p p r o p r i a t e D e p a r t m e n t s , w h e t h e r t h e assets of t h e
t r a n s f e r r e d t e r r i t o r y s h o u l d be d e b i t e d to t h e F r e n c h on r e p a r a t i o n account.
E. B.
Foreign Office, S.W. 1, Uth March, 1946. 13195A
[31451]
. ANNEX
A.
(Translation.)
T h e a b s e n c e of a n y a g r e e m e n t o n t h e s t a t u s of W e s t e r n G e r m a n y presents
v e r y s e r i o u s difficulties w h i c h a r e d a i l y b e c o m i n g m o r e a p p a r e n t i n t h e course
of t h e w o r k of t h e C o n t r o l A u t h o r i t i e s i n B e r l i n .
T h e F r e n c h G o v e r n m e n t h a v e a l r e a d y m a d e k n o w n t h e r e a s o n s w h y they
a r e n o t i n a p o s i t i o n to s t u d y t h e e s t a b l i s h m e n t of c e r t a i n c e n t r a l G e r m a n
a d m i n i s t r a t i o n s a s l o n g as t h e c o m p e t e n c e of s u c h a d m i n i s t r a t i o n s e x t e n d s to the
R u h r and the Rhineland.
T h e u n c e r t a i n t y w h i c h c o n t i n u e s to e x i s t o n t h e f u t u r e s t a t u s of t h e S a a r
l e a d s t o e v e n m o r e i m m e d i a t e difficulties.
O n t h e one h a n d i t seems e x t r e m e l y difficult t o fix G e r m a n y ' s " l e v e l of
i n d u s t r i a l l i f e " a n d i n p a r t i c u l a r t h e steel p r o d u c t i o n c a p a c i t y w h i c h she will
be a l l o w e d , w i t h o u t first k n o w i n g w h e t h e r t h e S a a r is t o be i n c o r p o r a t e d in the
F r e n c h c u s t o m s u n i t or n o t .
O n t h e o t h e r h a n d t h e C o n t r o l C o u n c i l m u s t d e t e r m i n e w i t h o u t delay the
i n d u s t r i a l 1'emovals w h i c h a r e t o t a k e p l a c e f r o m f o r m e r G e r m a n t e r r i t o r y for
r e p a r a t i o n p u r p o s e s , a n d t h e r e t e n t i o n of c e r t a i n of t h e s e f a c t o r i e s in t h e S a a r
t e r r i t o r y d e p e n d s on t h e n a t u r e of t h e s o l u t i o n to be f o u n d t o t h e q u e s t i o n of the
Saar.
I n t h e s e c i r c u m s t a n c e s t h e F r e n c h G o v e r n m e n t w i s h t o define i n a clear
m a n n e r t h e a d m i n i s t r a t i o n w h i c h t h e y d e s i r e t o see e s t a b l i s h e d f o r t h w i t h in the
S a a r t e r r i t o r y ; s u c h d e f i n i t i o n t o be w i t h o u t p r e j u d i c e t o t h e s u b s e q u e n t discussion
of t h e p l a n s a l r e a d y o u t l i n e d by t h e m o n t h e q u e s t i o n of t h e f u t u r e s t a t u s of the
Ruhr and Rhineland.
1. Boundaries
of the Saar
Territory.
T h e b o u n d a r i e s of t h e t e r r i t o r y to w h i c h t h i s p r o p o s a l a p p l i e s a r e m u c h the
s a m e a s t h o s e of t h e f o r m e r S a a r t e r r i t o r y c r e a t e d i n 1919. B u t t h i s t e r r i t o r y was
a n i m p e r f e c t i m p r o v i s a t i o n w h i c h a i m e d a t g r o u p i n g t o g e t h e r t h e w h o l e of the coal
b a s i n . I t w o u l d now, t h e r e f o r e , b e n e c e s s a r y to m a k e c e r t a i n a d j u s t m e n t s , p a r t i c u ­
l a r l y w i t h a v i e w t o a v o i d i n g t h e d i s s e c t i o n of c e r t a i n a g g l o m e r a t i o n s a n d with
a v i e w t o i n c l u d i n g lines of c o m m u n i c a t i o n or i n d u s t r i a l t o w n s w h o s e i m p o r t a n c e
h a s g r o w n since 1939 a n d w h i c h a r e l i n k e d to t h e e c o n o m i c u n i t y of t h e coal basin.
2. T h e a d m i n i s t r a t i o n e n v i s a g e d is b a s e d above all o n economic considera­
t i o n s ; t o d e p r i v e G e r m a n y of a p a r t of h e r w a r p o t e n t i a l a n d t o i n t e g r a t e the
S a a r i n F r a n c e ' s economic a n d m o n e t a r y u n i t .
(a) The Economic
administration.
(i) T h e S a a r m i n e s , o w n e r s h i p of w h i c h w a s g i v e n to F r a n c e by t h e Treaty
of V e r s a i l l e s a n d w h i c h w e r e r e c o v e r e d by G e r m a n y i n 1935, s h o u l d r e v e r t to the
o w n e r s h i p of t h e F r e n c h S t a t e .
(ii) T h e S a a r t e r r i t o r y w o u l d be i n c l u d e d i n t h e F r e n c h c u s t o m s u n i t . This
c u s t o m s u n i o n w o u l d be f a c i l i t a t e d b y t h e f a c t t h a t t h e economy of t h e Saar
t e r r i t o r y a n d t h a t of t h e n e i g h b o u r i n g F r e n c h t e r r i t o r i e s ( A l s a c e a n d Moselle)
are for the greater p a r t complementary.
(iii) T h e S a a r s h o u l d be i n t e g r a t e d in t h e F r e n c h m o n e t a r y u n i t a n d the
f r a n c s h o u l d f o r t h w i t h be s u b s t i t u t e d for t h e m a r k .
(b) The Political
administration.
T h e final s t a t u s of t h e S a a r w o u l d only be d e t e r m i n e d a t t h e t i m e of the
Peace Settlement.
T h e p o l i t i c a l c o n d i t i o n s w h o s e a p p l i c a t i o n F r a n c e c o n s i d e r s a s b o t h adequate
and essential a r e the following: —
(i) T h e S a a r t e r r i t o r y s h o u l d be w i t h d r a w n f o r t h w i t h f r o m t h e competence of
t h e C o n t r o l C o u n c i l i n B e r l i n a n d n e v e r a g a i n be s u b o r d i n a t e d t o a German
Central administration.
(ii) A F r e n c h m i l i t a r y force sufficient to g u a r a n t e e i n t e r n a l o r d e r a n d frontier
c o n t r o l s h o u l d p e r m a n e n t l y be s t a t i o n e d i n t h e t e r r i t o r y .
(iii) F r a n c e s h o u l d a s s u r e t h e p e r m a n e n t c o n t r o l of t h e a d m i n i s t r a t i o n of
the territory.
T h e s t a t u s of t h e i n h a b i t a n t s , p a r t i c u l a r l y a s f a r a s t h e i r n a t i o n a l i t y and
r i g h t of o p t i o n a r e c o n c e r n e d , s h o u l d b e s e t t l e d a t a l a t e r d a t e .
T h e F r e n c h Government would forthwith t a k e all the necessary measures
to sever c o m p l e t e l y p u b l i c services s u c h as r a i l w a y s a n d p o s t s f r o m t h o s e of t h e
R e i c h . T h e y w o u l d u n d e r t a k e t h e p r o t e c t i o n a b r o a d of t h e S a a r n a t i o n a l s a n d
interests.
T h e above p r o p o s a l s a r e r e s t r i c t e d to t h e c o n d i t i o n s w h i c h a r e i n d i s p e n s a b l e
for r e a l i s i n g t h e c o m p l e t e s e p a r a t i o n of t h e t e r r i t o r y of t h e S a a r f r o m t h a t of
the R e i c h . T h e i r a d o p t i o n w o u l d p e r m i t t h e C o n t r o l C o u n c i l A u t h o r i t i e s to
t a k e a c e r t a i n n u m b e r of d e c i s i o n s of a n economic c h a r a c t e r w h i c h a t p r e s e n t
r e m a i n i n s u s p e n s e a s a r e s u l t of t h e absence of a n y a g r e e m e n t on t h e S a a r .
The F r e n c h G o v e r n m e n t t h e r e f o r e r e q u e s t t h a t t h e y be m o s t u r g e n t l y c o n s i d e r e d
by t h e G o v e r n m e n t s r e s p o n s i b l e for t h e s u p r e m e a u t h o r i t y i n G e r m a n y , a n d
with t h i s in v i e w s u g g e s t t h a t t h e y be discussed a s soon a s possible by t h e f o u r
F o r e i g n M i n i s t e r s o r by t h e d e l e g a t e s w h o m t h e y m a y a p p o i n t for t h i s p u r p o s e .
French
Embassy,
London, 19£/t February,
1946.