§ Mr. J. B. Hynd
asked the Secretary of State for Foreign Affairs what instructions he has sent to the United Kingdom High Commissioner in Germany with regard to the treatment of those German coal companies listed in Schedule C of Allied High Commission Law No. 27, 112W which have declined to be includec in reorganisation plans.
§ Mr. Ernest Davies
Law 27 lists certain German coal and steel companies in Schedule "C" which are to be included in reorganisation of the coal and steel industries only if certain alternative conditions are fulfilled. Among these are the consent of the owners to inclusion in reorganisation, and a determination by the Allied High Commission that inclusion "is essential" to accomplish the purposes of the Law."
A number of these Schedule "C" companies were included in the reorganisation plan for the coal industry and were therefore asked as a first step whether they consented to inclusion. Only five of them, however, were willing to be included without conditions and the question therefore arose whether the inclusion of the non-assenting Schedule "C" companies were essential to accomplish the purposes of the Law.
This question was discussed by the Council of the Allied High Commission in Germany on 12th July. The United Kingdom High Commissioner was instructed to argue in favour of the inclusion of the non-assenting Schedule "C" companies on the grounds that their exclusion would seriously reduce the scope of reorganisation; that the reorganisation plan including the Schedule "C" companies had been drawn up by a body of German experts who had urged that it should be accepted in its entirety; and that the German Trade Unions, whose support for Allied deconcentration measures was important, had pressed strongly for the inclusion of these companies.
The American and French High Commissioners were, however, unable to accept these arguments and urged that no case had been made out for inclusion on deconcentration grounds and that, moreover, the Federal Chancellor had expressed the view that compulsory inclusion would not be legitimate. A majority decision was, therefore, taken against the compulsory inclusion of Schedule "C" companies in reorganisation against which there is no ground for appeal under the terms of the Tripartite Control's Agreement.
§ Mr. J. B. Hynd
asked the Secretary of State for Foreign Affairs what instructions he has sent to the United Kingdom 113W High Commissioner in Germany with regard to the transfer to private ownership of shares in companies formed under Allied High Commission Law No. 27.
§ Mr. Ernest Davies
On 12th April the Council of the Allied High Commission decided that as soon as the new unit companies are set up under the plans for the reorganisation of the German coal, iron and steel industries, shares will be distributed to stockholders who are not disqualified under the provisions of Law 27. This was not, however, a unanimous decision.
The United Kingdom High Commissioner was instructed to argue that Law 27 obliged the Federal German Government to take a general decision on the form of ownership of these industries before any shares in the new companies passed from the hands of Allied trustees and were distributed to stockholders. His Majesty's Government considered that the proposal to transfer the shares to private owners now would prejudice such a decision and would run counter to a resolution passed by the Federal German Parliament in November, 1950, requesting the Federal Government and Allied High Commission to do nothing in the course of reorganisation which would influence this decision.
The United Kingdom High Comissioner was outvoted on this question and gave notice of an appeal to Governments. His Majesty's Government then invited the French and United States Governments to reconsider this question and suggested that before any action under the majority decision was taken, the Federal Government should be asked to consult the Federal Parliament as to whether this decision would constitute prejudice to the ownership issue under the terms of its resolution of November 1950. The United States and French Governments were, however, unwilling to agree to this and, in terms of the Agreement on Tripartite Controls, the majority decision took effect 30 days after the appeal.
His Majesty's Government remain of the view that this decision was unfortunate and that it would have been preferable to maintain the Trusteeship System until the Federal Government had decided the future pattern of ownership of the German coal and steel industries.