840.50 Recovery/3–1748: Circular telegram

The Secretary of State to Certain Diplomatic Offices in Europe 1

confidential
us urgent

Dept has held initial discussions with representatives participating countries regarding preparations for ERP. Following is substance US remarks. Dept hopes enabling legislation will be passed early April. Senate bill provides RFC advance of one billion to get program underway. It cannot be expected that appropriations action will be taken until June and amount cannot be forecast. Though no commitment of any kind can be made now, it is important to discuss necessary preliminaries so action can be taken promptly if bill passes in substantially form of Senate bill. This bill would authorize Administrator to extend assistance in form of few essential commodities until June 30, 1948 if needed alleviate hunger and cold and prevent serious economic retrogression. Administrator can also extend assistance over whole recovery range for three months after passage act provided participating country signifies its adherence to purposes act and its intention to enter into bilateral agreement with US under para 15 b. Therefore desirable start discussions on this matter promptly.

Equally important begin discussions of possible program of assistance which could be gotten under way promptly if bill passes. Therefore Dept wishes discuss import programs of each country for period subsequent to April 1. While these in part already financed or will be financed from sources other than ERP, Dept recognizes that programs will be based in part on prospects for ERP assistance. Dept also recognizes that programs for months after July 1 will in part depend on assistance in first quarter since funds must be available for obligation considerably before shipments in many cases. Therefore assistance during April–June quarter will have to be applied in part to shipments after July 1.

In order to have some figure on which technical discussions of these programs can be based, and subject to understanding that no commitments possible until Congress has acted and that amount of aid available even in first quarter cannot be determined until Congress has acted on appropriations, Dept suggests that discussions be started on basis that there may be available from ERP funds for obligation during period April 1 through June 30 the following sums. Each country was given only its tentative allocation and these should be kept confidential: Austria 65 million dollars, Belgium-Luxembourg 20, Denmark 15, France 375, Greece 55, Iceland 1, Ireland 10, Italy 170, [Page 395] Netherlands 90, Norway 15, Sweden 10, Turkey 10, UK 375, Bizone 75, and French Zone and Saar 15.

It was pointed out that Senate bill forbids reimbursement for goods which have arrived in participating country at date of passage of Act and that as a general rule it is not contemplated that funds would be used to reimburse for goods for which financing has been arranged prior to passage of Act even though they have not been shipped. Procurement in sources outside US can be included in program. Requirements of dependent overseas territories can be included. No indication can be given as to whether assistance would be extended as a grant or loan, or partly each, nor terms of any loan. Programs should be consistent with international allocations for goods under allocation.

Actual programming will be done by ERP Administration when established. Purpose of present and following technical discussions simply preparatory. In subsequent periods and to extent practicable in the coming quarter US would expect CEEC to play major role in programming.

In closing, again stressed that no commitment possible at this time, that Administrator might find it necessary to divide funds differently, that amount mentioned is in no way an indication of what might be expected in subsequent periods.

Dept will communicate further with Missions on technical discussions and problems arising therein.

Marshall
  1. Sent to diplomatic offices in fourteen CEEC capitals and in the United States zone in Germany.