840.50 Recovery/1–1648: Telegram

The Chargé in Belgium (Millard) to the Secretary of State

top secret

107. Have just conveyed to Spaak full substance Deptel 40, January 10, 3 p. m.1 He expressed cordial thanks and described Department’s views as, “very interesting.” He said he would give the points covered by Department careful thought and would get in touch with me later for future discussions.

Spaak said he noted in press we had discouraged British and French proposal to reconvene CEEC; he thought European initiative a good one; and asked if I could cast any light on this. In reply I conveyed [Page 368] to him sense Department’s information telegram January 14, 11 a. m.2 He seemed fairly satisfied as to my reply, but pointed out he doubted CEEC would take attitude Department feared.

Spaak then referred to question of liquidation of blocked Belgian credits. He said, while it was true general expansion of production and trade would be helpful under normal conditions, in actual practice European trade is being reduced due to financial limitations. He had just returned from Netherlands where he had endeavored make arrangements continue former level Belgian exports, but was informed that without credits Dutch could not accept more from Belgium then Netherlands can export to Belgium. Similar situation obtained in France. It was a little better with British, but tendency was same. It was all very well say that country must produce more but, for example, to do so Dutch would have to purchase equipment and under present basis of minimum balanced barter they could not do this. Thus European trade was suffering from a kind of descending spiral. Spaak said this theory of production and trade as cure was one point on which he had never been able to agree with Clayton3 and that present problem is largely financial.

Spaak said the Luxembourg Minister, who had just preceded me, had told him that French Minister in Luxembourg and French Ambassador in Brussels had said French wish to join Benelux. Spaak told me he could not believe the French would be willing to join Benelux customs union and that perhaps their action was just a gesture for publicity with nothing much behind it. He added this was the first he had heard of it.

  1. Ante, p. 358.
  2. The reference is actually to the Department’s circular telegram of January 13, 1948, 11 a. m., in which the Department informed its missions “that until Congress has given some clear indication of its intentions toward ERP we do not feel that either we ourselves or Committee of Eur Econ Cooperation would have firm ground to work on and we therefore question utility or wisdom of any reconvening of CEEC before committee hearings …” (800.00 Summaries/1–1348)
  3. William L. Clayton, formerly Under Secretary of State for Economic Affairs, and a major architect of United States post-war international economic policy.