501.BB/12–346
Memorandum of Telephone Conversation, by the Director of the Office of Special Political Affairs (Hiss)
Mr. Gerig called me this morning and said that the question of monopolies was coming up today before the subcommittee of Committee IV.69 He said he thought it was clear that our present proposal (see telegram 255, October 29, 1946 to New York) cannot get sufficient votes in the subcommittee or in the full Committee to be adopted. Even if it were the British, of course, might very likely refuse to accept it in their trusteeship agreements and we would almost certainly not wish to have the entire trusteeship system held up for that reason alone.
Mr. Gerig went on to say that Mr. Thomas, the chief British representative on trusteeship matters, has expressed personal willingness to accept a revision of our proposal which Mr. Gerig feels is sufficiently close to our proposal to be acceptable under the circumstances. Mr. Gerig said he wanted to emphasize that Mr. Thomas has not been able to obtain governmental authority to accept the revision and Mr. Thomas’ advisers are opposed to it.
Mr. Gerig then read to me the proposed revision. Under this revision [Page 694] the last clause of the first sentence and the entire second sentence of our draft would be replaced by the following:
“and that the proposed grant of such monopoly rights shall be promptly reported to the Trusteeship Council and shall as a rule be made in such a manner as to enable the Trusteeship Council to give an effective opinion as to its compatibility with Article 76 of the Charter.”
Mr. Gerig said that Mr. Fowler has been over the proposed revision and thinks that it is the best we can hope to get. Mr. Fowler agrees with Mr. Gerig’s estimate that the present draft will be defeated if forced to a vote. Moreover Mr. Gerig pointed out that since government monopolies will not in any case be permissible even if our draft were to be adopted, it would simply encourage the administering authorities to establish government monopolies even though they otherwise would not be so inclined.
I called Mr. Stinebower, who was just about to leave for New York, and he said he also felt that this was the best we could get under the circumstances and represented a pretty good formula in view particularly of the strength of the belief on the part of our own representatives in New York that the monopolies issue is not of anywhere near the same importance as the issue of getting the Trusteeship Council established.
I then called Mr. Nitze70 who called me back after consulting members of his office. Mr. Nitze said that it was the feeling of ITP that the proposed revision was, under the circumstances, acceptable. Mr. Nitze said that it was the understanding of ITP that the language meant that despite the phrase “as a rule” a prompt report about each proposed grant of monopoly rights would have to be made in any event. ITP understood that the exceptions permitted under the words “as a rule” related simply to the timing and manner of reporting rather than to the fact of reporting itself. Mr. Nitze also thought that the redraft had improved the language covering the type of consideration the Trusteeship Council should give to proposals relating to monopolies in that it spoke of “an effective opinion” as to the “compatibility with Article 76” of proposed grants of monopoly rights.
I then sent word to Mr. Gerig in New York that the revised draft of Article 10(c) would be acceptable to the Department. I pointed out ITP’s understanding of the meaning of the clause and said that I had the same understanding and had so informed ITP. I asked that Mr. Gerig let me know if there was any doubt as to this construction of the revised draft.71
- Except for the November 21 meeting, the Sub-Committee had been preoccupied with an exhaustive article-by-article examination of the draft trusteeship agreement for Western Samoa from its first meeting on November 15 up to and including November 30. On November 30 Mr. Dulles withdrew a United States proposal for a new article in the agreement dealing with the monopolies question “in order to expedite the work of the Sub-Committee. …” (Ga(I/2), Fourth Committee, Pt. II, p. 102). The issue of the monopolies thus was not resolved in the Sub-Committee’s work on the New Zealand agreement. On December 1 the Sub-Committee commenced a general and definitive consideration of the seven draft agreements for the six African territories and New Zealand together on the basis of the experience gained in the detailed examination of the terms for Western Samoa, and the problem of the monopolies came up for final settlement in this phase.↩
- Paul H. Nitze, Deputy Director of the Office of International Trade Policy.↩
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The new U.S. text, as proposed by Mr. Gerig and cleared in the Department by Mr. Hiss, came to a vote on December 4, the vote standing at 3 for, 7 against, and 7 abstaining. For statements made preceding the vote by the U.S. representative on the Sub-Committee, Mr. Gerig, and the U.K. representative, Mr. Thomas, see GA(I/2), Fourth Committee, Pt. II, pp. 165–167.
Certain declarations made by the Mandatory Powers during the work of the Sub-Committee regarding points at issue in the draft terms were included in the report of the Sub-Committee for the attention of the Fourth Committee, and in turn included in the Report of the Committee to the General Assembly (ibid., pp. 298–300 and GA(I/2), Plenary, pp. 1543–1545). In connection with the monopolies question there is included in the two reports the following declaration of the intentions of the Governments of the United Kingdom and of Belgium:
- “(a) The Governments of Belgium and the United Kingdom have no intention of using the grant of private monopolies in Trust Territories as a normal instrument of policy;
- (b) Such private monopolies would be granted only when this was essential in order to enable a particular type of desirable economic development to be undertaken in the interest of the inhabitants;
- (c) In those special cases where such private monopolies were granted they would be granted for limited periods, and would be promptly reported to the Trusteeship Council.” ( Ibid., p. 1544)