740.00119 Council/3–2847: Telegram
The Acting Secretary of State to the Embassy in the Soviet Union
714. Secdel 1394. Dept with assistance all agencies involved has made full reexamination to determine possibility of US exporting 3.1 million tons coal to Europe (3.7 to all destinations) per month.
Supply: Solid Fuels Admin believes sufficient coal will be available at mines to meet such program although some might be of relatively poor quality. Such availability is subject to possibility strike after 1 July. Strike would immediately severely curtail if not stop exports. Effects of strike would be felt for considerable period after settlement. Impossible to forecast likelihood of strike for several weeks at least. Availability of coal would also be decreased if miners return to 5 day week but probably supply would remain sufficient for export program.
Internal Movement: ODT believes sufficient internal movement capacity to move above program to ports.
Loading Facilities: ODT believes sufficient loading capacity in ports to handle above program. Removal on Apr 1 of quality restrictions on exports will allow export of quality coal through Hampton Roads which will largely constitute a net increase of export capacity over that previously available. There is an outside chance that competition between domestic and foreign demand for quality coal will force reimposition quality controls and consequent loss loading facilities.
Shipping: Sufficient ships to carry above program exist but taking ships out of lay-up and refitting would probably be necessary. Authority of Maritime Comm to operate ships through agents and to use current funds to refit ships expires 30 June. Authority to charter on short term basis to operators expires 31 Dec. Believed assurance of adequate shipping to carry program requires legislation plus reversal of present Maritime Comm policy to liquidate its past operations in anticipation of end of authority in accordance with previous Congressional desire to terminate operating functions. Dept will press for necessary legislation and now discussing matter with Maritime Comm. If Congressional opposition to such legislation develops, carrying out of above program would, as practical matter, be very doubtful. Possibility shipping strike at end summer cannot be forgotten.
[Page 500]Executive Powers: Without already requested extension of export control power,1 high degree of coordination and control needed to carry out program impossible and no allocations or control over destinations would be possible.
Summary: In the absence of strikes or serious unforeseen contingencies, with renewal export control legislation and sufficient shipping legislation, best estimate that program of 3.1 million tons coal to Europe possible during summer and fall with uncertainties of weather making winter shipments probably lower. This figure probably represents near peak capacity. Best previous shipments Europe since war were 2.4 in July 1946 with only minor use Hampton Roads.
Allocations; Second quarter allocations to Europe made on basis 2.6 million tons per month and followed ECO recommendations. French allocation 787,500 per month, French North Africa 67,500. None to UK. In view possibility that it might be possible to ship more than allocations, each country was issued Apr export licenses for 120% of allocation which makes 3.1 million licensed for Europe. Extra 20% constitutes authority to try to exceed allocations and if successful Apr agreed to overlicense in May and June also. Since second quarter strike unlikely and legislative situation presently satisfactory, quite possible allocations will be exceeded in which case French plus FNA could reach million tons. Rearrangement to cut Brit in for second quarter would mean changing established pattern.
ECO recommendations third quarter made about middle May. By then strike and legislative situation US may have clarified to allow declared availability from US of 3.1. If so, Dept believes ECO allocation million to France plus FNA and 250,000 to Brit possible without forcing down throats other ECO countries. If prospects are less favorable would be difficult to obtain that figure France and any for UK without danger of wrecking valuable cooperation achieved ECO in past 20 months. Any firm quantitative commitment to France from US or Germany would likewise jeopardize not only ECO but also projected Econ. Comm. Europe which ECOSOC has approved and whose terms ref, including takeover of ECO, ECOSOC expected to approve this session. In event conditions necessary for full US program mentioned above not met and US exports fall seriously, quantitative commitment to France would be at expense other claimants, particularly Italy.
Dept recommends (1) Brit withhold request allocation at least until ECO considers third quarter allocations and then request only if [Page 501] favorable solution uncertainties appears likely (see Moscow’s 1046 to Dept, rptd London as 108). Relevant to note that if Brit miners worked three extra days in 1947 they should produce the 2 million contemplated imports from US and save 16 million dollars cost of coal and probable 24 million dollars shipping cost. (2) French be told US cannot guarantee specific figure but, if third quarter exports expected to reach 3 million per month US will support in ECO 1 million to France plus FNA from US. If third quarter prospects less favorable, US will support proportionate equitable share for France which has in fact done very well relatively in ECO. (See London’s 139 to Moscow, rptd Dept 1912, Berlin 221, Paris 2292).
Sent Moscow, rptd London as 1400 and Paris as 1147.
- President Truman’s message to the Congress requesting extension of the Export Control Act was sent on March 19. The President stressed that “This country is the great undamaged center of industrial production to which the whole world looks for materials of every kind.… Our international responsibilities cannot be fulfilled without this machinery.…” For text of message, see Department of State Bulletin, April 13, 1947, p. 676.↩
- Not printed.↩