47.06.20A (570w)

MEMORANDUM OF CONVERSATION WITH June 20, 1947 THE SECRETARY BY WILLIAM L. CLAYTON1 [Washington, DC] Top Secret

The Secretary asked me to make it quite clear to Mr. Bevin that he regarded the British management of the Ruhr coal problem as pathetic; that the production of coal in the Ruhr is essential to European recovery as we all know, and that we cannot participate in any big new commitments to help Europe get back on its feet unless we know that the problem of producing coal in the Ruhr will be licked and quickly.2 The secretary added that we could not sit by while the British tried out any ideas which they had of experimenting with socialization of coal mines; time does not permit of experimentation. The Secretary added that when he was in Moscow he was not sufficiently informed on this subject to take the firm stand which he now takes. At that time the only advice and information which he had came from our occupation authorities in Germany. Since then he has had information and advice from other sources and is now convinced that the British have made an absolute failure in the Ruhr.3 The Secretary further stated that since we are putting up all the money in keeping Japan alive, we cannot longer stand for punitive interference by the British in our programs there. We must get the Japanese on their feet as quickly as possible in order to get the burden of supporting them off our backs. W. L. C.

1 NA/RG 59 (Central Decimal File, 862.6362/6–2047)

1. Clayton was preparing to leave for London where he would begin talks with British officials on June 24. The department had already drafted and Marshall edited a memorandum of points to be covered when Clayton talked to European officials about US policy on rehabilitation. (See Foreign Relations, 1947, 3: 247–49.)

2. At the meeting of the secretaries of war, navy, and state on June 19, the economic situation in Germany and Japan had been two of the main subjects for discussion. Secretary of War Patterson had written to Marshall on June 13 asking him to press the British to halt or postpone socialization of German coal mines in the Ruhr. Marshall generally agreed with Patterson's views. As a matter of policy, Marshall said, they had to consider two things: (1) the likely reaction in the United States if the administration supported a nationalization of industry program in Germany; (2) the effect of any stand the United States took on German political parties in its zone of occupation. (Foreign Relations, 1947, 2: 927–28.)

2 3. One of these other sources was the Policy Planning Staff's PPS/2, "Increase of European Coal Production" (June 2, 1947), which concluded that: (1) coal production was an important bottleneck in Europe's economic recovery; (2) production had to be increased by fifty million tons (56 percent) in the British zone's Ruhr-Aachen region as well as by substantial amounts in Poland and Great Britain; (3) this increase would substantially meet West Europe's needs and in the future save the $650 million per year that the region was likely to pay in 1947 to import thirty million tons of US coal; (4) that such a program was moderate and achievable in two or three years; and (5) that it was essential that the United States obtain Britain's cooperation at the outset. (NA/RG 59 [Organizational Units, Policy Planning Staff].)

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