840.50 Recovery/7–2747: Telegram
The Ambassador in France (Caffery) to the Secretary of State
2987. For Lovett. Sir Oliver Franks yesterday afternoon conveyed to me informally following comment concerning progress of Conference of European Economic Cooperation:
He has been somewhat concerned about controversy going on between Benelux group and French. In effort to get at root of problem, British first had Benelux group to dinner and found that Belgians took dim view of Monnet plan because in half dozen instances French were projecting large production increase for items which Belgians [Page 339] were either producing or expecting to produce and for which they regarded France normal market. He mentioned artificial nitrates as example.
Dutch problem was of somewhat greater proportions, because economies of western Germany and Netherlands were complementary, and because Dutch placed such great dependence on entrepot trade as source of foreign exchange. Magnitude of this source of income in turn is dependent very largely on level of economic activity in Germany.
British subsequently had dinner with French to explore this problem and found that French were quite conciliatory and prepared to make effort to adapt Monnet plan to meet in large part Belgian objections. It did not appear that solution to Dutch problem would prove as easy to find.
Sent Dept; repeated to London 588; repeated to Clayton at Geneva 121.