840.6362/5–1247: Telegram
The Secretary of State to the Embassy in the United Kingdom
us urgent
niact
2068. This is Lasco 319. Refer Salco 487. We believe UK has right present to ECO its request for US coal and that we cannot ask UK abstain from requesting coal.
Reasonableness UK request in relation French opposition depends upon total availability coal from all sources. If US export availability rises to point which exceeds effective demand of some countries, UK should have opportunity compete in ECO for US coal. If UK were prevented from getting US coal, France, which evidently has not reached saturation point from dollar standpoint for US coal, would in effect be in position procure by default marginal supply US coal turned back by other countries. Marginal US coal not procurable by some other ECO claimants should not go by default to France in absence other effective demand but should, in effect be allocated by ECO. For that reason US insists US coal be allocated by ECO and within ECO and that France cannot use her presumptive right to a fixed proportion of all US coal at all levels US availability with which to bargain for Saar coal. If French strongly resist UK allocation on ground of equitability, US may be unable support UK in order avoid damage to ECO. But US opposes use US coal for bargaining purposes re Saar.
Recent investigations held here point to prospect exporting possible maximum of 3.4 million tons per month to Europe during third quarter if there is no strike. Meeting of US Coal Committee May 15 will discuss this prospect. We may therefore be able give ECO a third level of US export availability at 3.4 million tons in addition other two already given for third quarter.
Sent London as 2068 rptd Paris as 1722 and Geneva for Porter as 355.