740.00119 Council/5–446: Telegram

The Acting Secretary of State to the Secretary of State, at Paris

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2154. For the Secretary from Acheson and Clayton.1 Delsec 461, May 4. Believe it inadvisable for Gordon to proceed to Washington as there is little or no prospect that either NAC which would have to consider matter first or Eximbank would approve credit negotiations with Hungary under present conditions. Chairman of Board and Chief Economist of Eximbank were informally shown Delsec 461 and Budapest’s 818 to Dept, repeated to Paris as 118, and expressed immediately their strong disapproval of Gordon’s visit on grounds that under present circumstances the Bank could not envisage how a bankable credit proposition for Hungary could be worked out. We are uncertain whether you saw Budapest reftel before despatching Delsec 461.

Not only would it be difficult to secure NAC approval of reversal of our previous clear policy against credits to reparations paying countries still under occupation, but for your information strong opposition has recently been expressed in the NAC against the granting of loans which cannot be justified on economic grounds. [Clayton]

Acheson
  1. William L. Clayton, Assistant Secretary of State for Economic Affairs.