840.6362/4–2347: Telegram
The Acting Secretary of State to the Embassy in the United Kingdom
1783. This is Lasco 311. For Douglas and Porter from Acheson. 1. We agree appeal to President would be inadvisable urtel 2292 Apr 18 as it might create impression in ECO that US and UK were willing to consider reaching bilateral understanding committing US to support Brit request.
2. As background to following refer to Secdel 1362 repeated London 1275 Mar 21; to Secdel 1394 repeated London 1400 Mar 28; and to Delsec 1354 repeated to London as 108 Mar 27.
3. May we have your reaction to following suggested points to comprise basis for discussions with UK:
4. US keenly aware of UK’s need for coal to attain economic goals. However, since UK 1947 coal supply available for internal consumption is comparatively better than that of other European importing countries (as measured by pre-war rate of internal consumption), UK request to ECO places US in difficult position because UK procurement would reduce availabilities to other countries.
5. In view of this difficulty US believes that it will be able to support UK request in ECO (a) only if total exportable coal available to European importing countries from all sources for third quarter reaches level approximating that outlined in Salco 454 para three, including three million tons monthly from US and (b) only if allocation to UK is supported by other countries without too much bitterness.
6. Unfortunately US will be unable to give firm estimate of US third quarter availability for some time owing to possibility of coal strike on or after July 1, 1947. Also relevant to mention that US authority to allocate coal exports is dependent upon extension of Export Control Act. US may be unable to determine whether a strike will or will not occur until a very few days before end of Krug-Lewis contract which is presumably 30 June when authority of Govt to operate mines expires. Therefore, US cannot in the meantime make a firm [Page 503] third quarter estimate of three million tons per month, or, indeed, for any level of exports.
7. If US were to present an optimistic estimate of availability to ECO for third quarter allocation at three million tons or more, then UK may be able to obtain an ECO allocation. If strike should then occur in July actual volume of coal exported will prove to be appreciably lower especially if strike lasts more than two weeks. UK in meantime will have been given authority to compete with other European claimants for a short supply of coal at a level of export availability substantially below three million tons.
8. In the circumstances, US proposes to give ECO two estimates of export availability, probably one estimate at three million tons monthly, at which UK would presumably obtain an allocation and another estimate at 2.6 tons, at which level UK presumably would have a lesser chance of obtaining an allocation. It is presumed that at level of export availability below three million tons, other ECO claimants would be extremely reluctant to share US coal with Britain and that Britain’s chances of obtaining an allocation would be reduced with decreasing levels of availability. Note that neither of these estimates is firm in the event of a strike because effect of strike cannot be foretold. However, if a strike occurs the lower estimate is likely to be closer to actual results than the higher.
9. About June 1 US would issue firm allocations for third quarter at 2.6 million tons. If and when union-management and other factors clarify to point where US can adopt a three million ton target for Europe with a reasonable chance of success, US would revise third quarter allocations on basis of ECO’s suggested distribution at that level and, assuming ECO has recommended an allocation for UK at upper level of export availability, would try to do everything possible, allocation-wise, to have UK obtain its fair share of US coal for third quarter based upon US export possibilities for that quarter as a whole. It should be borne in mind that if a serious strike does occur, US may be unable to adopt a three million ton program for some time following strike’s termination owing to possibility of a serious coal shortage.
10. Foregoing proposals re US export availability are not for submission to ECO but are suggested only for purpose of discussion with UK.
11. If foregoing proposals are acceptable to you, you may proceed with discussions immediately. However, we should by all means preserve our freedom of action within ECO and avoid any bilateral understanding which would commit us to support Brit request, even at three million ton US export availability, in face of stubborn opposition from other claimants. Outcome of proposed Brit discussions with France and Belgium re an allocation might provide material clue to reaction of those countries. Therefore, we suggest you indicate to UK that US believes it inadvisable for US and UK to reach understanding outside ECO and that purpose of your discussion is to acquaint UK of difficulties confronting US. While US would like to [Page 504] assist UK in its present difficulties, US believes, and is sure that Britain agrees, that serious damage to ECO should be avoided.1
Sent to London as Lasco 311, repeated to Moscow Secdel as 1486, repeated to Paris as 1482, repeated to Brussels as 573.
- In telegram 2407, Salco 482, April 24, from London, not printed, Ambassador Douglas replied: “We agree completely with the proposals contained in Lasco 311 and have informed British Government officials that we cannot be a party to any extralateral understanding which would commit us to support any British claim presented to ECO and we appreciate the possible serious consequences should ECO be damaged.” (841.6362/4–2447)↩