Department of State Atomic Energy Files

Memorandum by Mr. Edmund A. Gullion, Special Assistant to the Under Secretary of State (Lovett), to the Secretary of State 1


Memorandum for the Secretary

Subject: Senator McMahon’s2 amendment tot he Economic Cooperation Bill (S–2202)

Facts Bearing on the Problem

Section 15(b) of S–2202 provides for the conclusion of a series of bilateral agreements between the United States and participating countries as a condition precedent to their receiving assistance under the Act.

Senator McMahon has now offered the following amendment:

“(e) In addition to the provision required by subsection (b) to be included in agreements concluded with participating countries under this Act, there shall be included an undertaking by each such country to prohibit the exportation other than to the United States from such country of any commodity of which the exportation from the United States is (1) determined by the Secretary of State, the Secretary of Defense, and the Chairman of the Atomic Energy Commission, acting jointly, to be inconsistent with the national security, and (2) prohibited by or pursuant to the laws of the United States.”

The Department of State has followed closely the drafting of all the Section 15 provisions in the Act with the object of insuring that they were reasonable and did not lay us open to the charge of economic imperialism or of using the Act to further selfish military or atomic designs. The McMahon amendment has those defects; and is unnecessary for the reasons expressed in the attached findings (Part A is restricted, Part B is Top Secret).


That the Secretary of State, the Secretary of Defense, and the Chairman of the Atomic Energy Commission consult together with a view to getting Senator McMahon to withdraw his amendment, for the reasons expressed in the attached findings.
If the amendment is not withdrawn, that these Departments express an opinion against it, either, (1) before the Foreign Relations [Page 696] Committee or the Joint Committee on Atomic Energy or (2) by parallel letters to Senator McMahon and the Chairmen of the Committees.


The amendment proposed by Senator McMahon is undesirable. Some of the reservations to it may be expressed openly although with appropriate discretion (Part A); others (Part B3) involve reference to secret matters, and there is attached a Top Secret note with reference to these.

Part A

Open Comments

The amendment is undesirable because:

It would appear to the ERP countries to involve an undertaking to surrender a large degree of control over their foreign trade. Although the amendment aims only at atomic energy materials, it could be interpreted to mean that all exports of all ERP countries were subject to a check imposed by this country. This seems to be a needless invasion of national sovereignty.
The countries most likely to be in a position to supply atomic equipment desired by Eastern Europe, other than fissionable material, would be Sweden and Switzerland. These countries would be particularly antagonized by such an amendment, conflicting, as it does, with their neutrality philosophy. Switzerland is participating in the program almost solely on the basis of Western unity. She will not receive any assistance under the Act; therefore, it is not clear that she would be required to enter into a bilateral agreement containing any conditions. Accordingly the amendment may not even touch Switzerland. Sweden derives relatively little benefit from the European Cooperation Act. It is conceivable that these countries would actually reject or limit participation in view of this amendment. If this should happen they would increase rather than diminish their trade with Eastern Europe.
In the European press and radio the Communists are saying that the Economic Cooperation Program is in reality a device by which the U.S. bargains relief of Europe, against a continuation of our atomic monopoly. Stipulations of the kind envisaged by the amendment would give powerful corroboration to Communist propaganda in Europe.
The amendment could be held to apply to a far wider range of items than those narrowly considered to be military; as drafted it would appear inconsistent with section 15(b) (3) which provides for [Page 697] reducing trade restrictions among participating countries and other countries in the following terms:

“(3) cooperating with other participating countries in facilitating and stimulating an increasing interchange of goods and services among the participating countries and with other countries and cooperating to reduce barriers to trade among themselves and with other countries;”

The amendment would not produce the effect intended. The only materials the export of which is currently “prohibited” by law are fissionable materials within the meaning of the Atomic Energy Act of 1946; it is probable that the AEC even has authority to export these materials under certain conditions. There is no export prohibition in U.S. law on any material whatsoever; there is only a system of export control under which denial of export licenses is permissive. Therefore if prohibition of export under U.S. law is made the test by which exports from participating countries are to be controlled, then the security produced by the amendment is illusory. Moreover it makes no provision for that selective application for which the system in this country is designed. The latter is flexible: For example, under it commodities A, B, and C might be shipped to country X; however, only A and B could go to country Y; and to country Z, possibly neither A, nor B, nor C could go. The amendment would hinder the development of a strong, mutually-reinforcing, economic security bloc of ERP nations.

Edmund A. Gullion
  1. The initials of the Secretary of State appear on the source text.
  2. Brien McMahon, United States Senator from Connecticut; ranking Democrat on the Joint Congressional Committee on Atomic Energy; author of the Atomic Energy Act of 1946, Public Law 585, 79 Congress, 60 Stat. 755–775 (the McMahon Act).
  3. Post, p. 699.