A. The Washington conversations on European economic cooperation

Editorial Note

The report from Paris of the Committee of European Economic Cooperation was closely examined and evaluated by various committees within the Executive Branch of the Government with a view to formulating a comprehensive European recovery program for presentation to the Congress. These committees had been organized in response to a growing awareness within the Government that European recovery was proceeding too slowly and too disjointedly. The creation in March 1947 of the SWNCC Committee on Extension of U.S. Aid to Foreign Governments began the process, and during the remainder of the year there developed a network of working and study groups, each within its particular area of competence studying problems, evaluating priorities, and making recommendations. Some of these groups were in the Department of State, and others were interdepartmental.

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The Department of State had organized the Committee on European Recovery Program on June 25, 1947. Meeting regularly on Tuesday and Thursday evenings, the Committee came to focus the thought and energies of the Department as to the needs and priorities of the European countries under study. Through its Executive Secretary, Charles P. Kindleberger, the Committee maintained liaison with the Policy Planning Staff and other offices in the Department, with the Harriman, Krug, and Nourse Committees, and with such interdepartmental bodies as the National Advisory Council on International Monetary and Financial Problems and the Executive Committee for Economic Foreign Policy.

In addition to formulating and coordinating recommendations for Departmental policy the Committee on European Recovery Program undertook to organize the overall framework or concept within which individual studies could be made and interdepartmental groups could operate. Several members of the Committee represented the Department of State on the interdepartmental Advisory Steering Committee on European Recovery Program (ASC), which was set up in response to Under Secretary Lovett’s letters of August 29, ante. The Departments of War, Navy, Commerce, Interior, Treasury, Agriculture and Labor were represented, as were the Bureau of the Budget, the Federal Reserve Board, and the White House. The Committee’s discussions were confidential; at the first meeting of the Committee on September 9, 1947, Mr. Lovett noted “that in view of the obvious political implications of the European recovery program any open discussion of this problem would result in extreme repercussions abroad. This is the reason for the emphasis on the security aspect at the present time.”

A four-man Correlation Committee consisting of representatives of the State, Treasury, and Commerce Departments, under the chairmanship of Lt. Col. Charles Bonesteel, served as the executive group for the Advisory Steering Committee, which by pooling technical experts from the interested areas and from different departments created functional working teams to analyze programs and make policy recommendations. Among the auxiliary groups created was the objectives subcommittee headed by the Chief of the Policy Planning Staff (Kennan); its function was to review the broad aspects of the program as it developed. Other specially created subcommittees and their chairmen included: the Organization and Administration Group, Mr. Lincoln Gordon, Department of State; the Legislative Drafting Group, Mr. Ernest Gross, Department of State; the Financial Policy Group (which was to prepare balance of payments calculations as a basis for an appropriations bill in Congress), Mr. Frank Southard, Treasury Department; the Economic Policy Group (to deal with such things as controls to channel aid to Europe, offshore procurement, and the like), [Page 441] Mr. Thomas Blaisdell, Department of Commerce; the Functional and Commodity Analysis Group (to appraise availabilities to meet CEEC’s stated requirements), Mr. Paul H. Nitze, Department of State; the Labor and Manpower Group, Mr. Philip Kaiser, Department of Labor; and the Country Analysis Group, Mr. Henry Labouisse, Department of State, which analyzed the potential impact of aid against needs and availabilities.

The Advisory Steering Committee and its subcommittees performed several distinct yet interrelated functions including the holding of discussions on a technical level with representatives of the CEEC (the Washington Conversations); the preparation of a legislative program for presentation to Congress; and the planning of a special interim aid program. Documentation concerning these subjects follows.