396.1–ISG/2–951: Telegram
The Secretary of State to the Embassy in France 1
4206. London’s Sigto 433 Feb 6, rptd Paris 1442, Frankfort 786.2 Dept agrees that any misunderstanding on part Fr of US position steel limitations shld be removed. While responsibility stating US position rests primarily with USDel, ISG, Dept suggests Emb Paris inform Monnet US views and basis of them.
Position is stated in Deptel 3855 to Paris, Jan 22 rptd London Tosig 368, Frankfort 5046,3 and in PLI position paper (ISGG D–10/1 Jan 22, 1951).2 Further supply argumentation is contained in Annex D above paper, airpouched Feb 5.
In summary US believes PLI limitations on steel production and capacity shld be removed not later than at time Ger ratification Schuman Plan and hopes Fr will so promise Gers in Schuman ltr to Adenauer. Major bases US position as fols:
- (a)
- Criteria of FonMins NY decision on review PLI agmt, that is review in light of administrative burdens, changes in our relations with Gers, and needs of Western defense.
- (b)
- Belief US Cong and people steel limitations (and others) serve no useful security purpose and hurt Western Allies as much or more than Gers.
- (c)
- Necessity increasing steel production in Ger as much as is compatible with equitable distribution steel making raw materials.
- (d)
- Unbalanced state of Ger steel capacity as result obsolescence and dismantling, especially in types steel most urgently required for direct and indirect defense needs (i.e. sheet and tube).
- (e)
- Fact that Schuman Plan auth will exercise control over expansion steel capacity in all member countries, including Ger and will ensure equitable distribution coal and coke.
Dept prepared, as stated Deptel 3778 Jan 17 to Paris, rptd Frankfort 4963, London 3429,2 to agree IAR continue allocate coal and coke until Schuman Plan auth in position to assume this function unless another method of assuring equitable distribution Ger coal and coke is agreed upon.