Office of the Historian

840.50 Recovery/9–1247: Telegram

The Ambassador in France (Caffery) to the Secretary of State
secret
us urgent
Paris, September 12, 1947—1 p. m.

3709. For the Secretary and Lovett from Caffery. After Wednesday’s unsatisfactory meeting with the Executive Committee, Clayton, Douglas and I held a series of informal conferences with key leaders, including Sir Oliver Franks, Hall-Patch, Ramadier, Bidault and Hirschfeld. Our immediate objectives were:

a.
To secure a first report, which would be “correct at least as to major policy lines,” Section 3. Dept’s circular telegram, September 7, 2 a. m.
b.
To obtain, if possible, a short postponement of the conference meeting of Foreign Ministers so that present draft of report could be materially improved.
c.
To obtain agreement that original report would clearly indicate that further work was to be done on it.

Our efforts in this direction were aided by the fact that by yesterday delegates were receiving from their home governments information [Page 426] regarding representations made by our missions in pursuance Dept’s September 7, 1 a. m. circular.

At a meeting with Franks and Hall-Patch we told them that report fell far short of a program which would prove acceptable to the American people but that we would suggest the following changes which, if adopted, would, we thought, improve their case in the United States:

1.
Statement that individual countries should obligate themselves to the group to attain the production targets they had set for key commodities.
2.
Revision of financial section to remove threat of thought [sic] that effective stabilization measures could only be adopted after external aid commenced and production substantially increased.
3.
Greater emphasis on and sharpening of principles, including commitment to reduce and eventually to eliminate trade barriers among the participating countries.
4.
Segregation of capital equipment items (agricultural and mining machinery excepted), with clear indication that conference will look to International Bank and other lending agencies for financing these items.
5.
  • a. Agreement to “recess” rather than “adjourn” the conference.
  • b. Postponement of formal conference session to September 20.
6.
Firm commitment by participating countries that, if assistance is assured, they would form a multilateral organization with powers to review performance of each country.

Franks then consulted with the Executive Committee regarding the foregoing, after which we met with the Committee at its request. Hirschfeld had previously informed Franks that neither Holland, Belgium nor Luxembourg would sign a report which we said would prove unacceptable. At the opening of the meeting Alphand made it clear that the French Government’s position had changed from that of the previous day and that it was prepared to proceed along the lines suggested by US. The Scandinavian representative suggested that the conference reach agreement on as many points as possible within 10 days and then issue a final report, leaving other matters of bilateral arrangements between the US and individual participating countries. He said that United Kingdom coal production was something that Norway could do nothing about and that he did not believe that Norway should enter into any obligations concerning such production. Clayton made it clear that the obligation we had in mind was one which the United Kingdom would have towards its fellow participants in return for obligations which they would hold towards it for standards of performance in other matters. There was a mutuality of interest among European nations in economic matters and if this common interest were not recognized, it was difficult to see how progress could be made.

[Page 427]

The Benelux representative then proposed the following:

1.
The next week would be devoted to making as many improvements in the report as possible.
2.
The report would be issued as a “first report”.
3.
Paralleling US analysis of the report, a number of conference groups (including those on freeing trade barriers, financial experts and several commodity groups) would continue their work.
4.
A group from the conference would then meet with representatives of the US to discuss possible revisions.

In view of the fact that this proposal appeared to closely parallel the Dept’s timetable suggested its circular telegram September 7, 2 a. m., we concurred in this proposal. The Italian delegate also stated his concurrence.

The understanding which we reached with the Committee was as follows:

1.
The Committee would immediately take up the question of postponement of the meeting of Foreign Ministers with a view to informing us of the decision on September 12.
2.
The 6 points outlined above would be communicated to the home governments immediately.
3.
On or about September 16 we would again meet with the Committee to consider progress made on the 6 points.
4.
Our technical experts would continue to meet with the conference people with a view to making other improvements in the first report. Franks indicated that within the time limitations indicated they would give consideration to our further suggestions, pointing out, however, that the new timetable would prevent adjustments in the first report on any additional policy questions, other than those already discussed, which would require consideration by home governments.
5.
The future course of action would be mutually decided at the time of the issuance of the first report.

Franks had previously informed us that he believed that points 2 and 4 could be accepted and that he was hopeful that the Executive Committee would agree to point 1. Point 3 had been the subject of concentrated negotiation for 2 weeks and he did not believe that further progress could be made. Points 5 and 6 were political in character and decisions would be based largely on the views of the home governments.

We have checked over the draft of the first report. Assuming that most of our suggestions are adopted, the final draft should appear to the public as neither black nor white but rather as a grey of a shade dependent on whether it is being analyzed relative to our basic essentials or in the perspective of the history of western Europe with its strong emphasis on national sovereignty and the European political situation generally. In any event a beginning has been made and the [Page 428] important consideration is to keep this group moving as rapidly as possible in the direction of our basic objectives.

Sent Dept as 3709, repeated London for Clayton and Douglas as 728.

Caffery