Foreign Relations of the United States, 1949, National Security Affairs, Foreign Economic Policy, Volume I

Department of State Atomic Energy Files

Summary Log of Atomic Energy Work in the Office of the Under Secretary of State, February 1, 1949–January 31, 1950

top secret

[Washington, undated.]

I. United Nations Atomic Energy Commission¹

At the request of the General Assembly, the UNAEC reconvened on February 28 in order to determine whether there was anything “practicable or useful” that it could do. After a series of meetings, the UNAEC, in two resolutions passed on July 29, 1949, reaffirmed the impasse outlined in its Third Report and stated that there was nothing practicable or useful that it could do until the six permanent members of the UNAEC have found a basis for agreement. The six permanent members first met on August 9, 1949 and, on October 25, 1949, in an interim report to the General Assembly, they stated that no basis for agreement had yet been found. The five non-Soviet members, in a separate report, outlined the basic difficulties to be overcome.

In the General Assembly, atomic energy was debated and a resolution was passed on November 23 by 49 votes to 5, reaffirming support for the United Nations plan and calling upon the six permanent members of the UNAEC to continue their consultations.

II. Combined Policy Committee

In the course of the year, major CPC activities involved:

A. Periodic discussions with the United Kingdom and Canada on long-term future relationships (see U.K.).

B. Pending the conclusion of an over-all agreement governing the relationships of the CPC countries, an interim allocation of raw materials for 1950 was agreed to in principle and details were worked out which are awaiting only formal approval to become operative.

C. Negotiations with Belgians regarding 1944 Agreement (see Belgium).

D. Consultations regarding announcement of Soviet atomic explosion in September.

III. Relations With Foreign Countries

a. eur

1. United Kingdom

Discussions with the United Kingdom and Canada continued on a periodic basis throughout the year, seeking definition of future long-term working arrangements between the three Governments to secure most effective employment of their respective facilities to produce atomic weapons. By mutual agreement, these discussions were placed in indefinite suspense with the development of the Fuchs’ case in January.²

2. Sweden and Norway

a. Toward the close of the year, the Swedes and the Norwegians considered an exchange whereby Norway would furnish heavy water for the projected Swedish reactor and in exchange would receive Swedish uranium. The Swedes approached the American Embassy to ascertain whether we had objection to projected interchange. After consultation with the British, the Swedes were advised that the matter was one for determination internally by the Swedes, although we would be interested in knowing the final outcome. We appreciated the matter having been brought to our attention in light of the 1945 secret discussions, and we hoped that our viewpoint on this case would not impair our position with respect to future cases in which the Johnson understandings would become operative.³ The Swedes apparently are disposed to go through with the exchange with Norway but this will require amendment of the present law prohibiting the export of uranium. Indications are that the Swedes are proceeding to make appropriate modification of the law in general terms, but we have been assured that no loopholes will exist whereby the Soviet Bloc could have access to Sweden’s uranium.

b. The Swedish pilot plant for production of uranium oxide from kolm began successful operations. The Swedes continue their interest to secure U.S. assistance in the design and know-how for a small reactor.

c. The Norwegians still continue to struggle to produce sufficient uranium ore from their deposits to launch a reactor program of their own. Having received no satisfaction from the U.K. or the U.S. in regard to converting their ores to refined uranium, they have been dickering with the French and Swedes. Both Sweden and Norway may turn to France for aid in the fundamentals of atomic development if the U.K. and the U.S. are unable, for various reasons, to cooperate.

3. Portugal

a. The British concluded an understanding with the Portuguese Government essentially of a contractual nature which would permit the export over the next seven years of uranium concentrates produced from the CDA-owned mines. The British were also able to secure informal assurances that the Portuguese Government would do everything possible to prevent uranium from Portuguese territory reaching “persons inimical to” this understanding, i.e. persons within the Soviet bloc.

b. The Embassy engaged in discussions with parties having available certain refractory uranium ores in Mozambique. In view of the relatively high price asked for the ores, the apparent limited quantities available and the present lack of processing facilities in the United States, it was decided that the U.S. Government had no interest in the purchase of these materials. In consequence, the producers subsequently signed a contract whereby the French AEC will receive the equivalent of 16 tons of uranium oxide in the next year.

4. Switzerland

Discreet discussions with certain Swiss officials were conducted by the Legation with the objective of initiating moves within the Swiss Government toward the establishment of controls over the export of atomic energy items. These informal discussions were unsuccessful and at the close of the year the Legation was disposed to make a formal approach at the highest level of the Swiss Government. A matter of paramount concern to the U.S. in connection with Swiss export controls relates to the continued shipment of large quantities of graphite electrodes to Satellite countries.

5. Belgium and the Congo

a. As a preliminary to the formal Governmental talks described below, arrangements were made between the Union Minière and the AEC regarding the distribution of radioisotopes in Belgium. These arrangements were made with the knowledge and approval of the Belgian Government and thus became part of the over-all understandings to be arrived at.

b. Apparently as a result of the prominence given atomic energy developments last fall (Soviet bomb and tripartite discussions), the Foreign Minister requested consideration of Belgium’s participation in allocation of Congo ores between the U.S. and U.K. and renewed the desire of Belgium to participate now in benefits of the commercial application of atomic energy. Discussion of these and related problems by representatives of the U.S., U.K., and Belgium commenced in Washington in January and are still continuing. With commercial application still a far distant goal, the U.S. is obviously in no position to supply what the Belgians hoped could be immediately available to them. We have, however, offered to assist Belgium toward attaining fundamental scientific and nuclear competence on a realistic basis. Little satisfaction can be given the Belgians with respect to a price increase, justified as it is ostensibly only on the Foreign Minister’s desire to enhance his political position.

6. The Netherlands

Following the transfer of sovereignty to the new Republic of Indonesia, the Netherlands Government gave notice to the U.S. and U.K. that it was no longer in a position to fulfill its obligations under the monazite agreement⁴ and that with respect to the territories now under the jurisdiction of the Indonesian Republic, the terms of the agreement have lapsed. Since The Hague Round Table Agreements⁵ provide for the assumption of previous international obligations by the Indonesian Government made by the Netherlands, we are considering an approach to the Indonesian Government at an appropriate time to obtain its accession of the applicable terms of the agreement.

7. France

In connection with growing indications that Joliot-Curie would be ousted as head of the French Atomic Energy Commission, we pursued the policy of avoiding any step which would create the appearance that we were pressurizing the French to achieve this end. In view of strong Communist influence in the French AEC, we continued the policy of withholding any aid or encouragement to the French atomic program. The first French plutonium on a minute scale was produced in ZOE at the end of the year. (See also Export Control section.)

8. Italy

Several alleged discoveries of uranium deposits in Italy were investigated through the Embassy but without definite results. Cooperation of Italian authorities was enlisted to help stamp out black marketeering of the remainders of former German uranium stocks. (See also Export Control section.)

9. USSR

The most momentous event was, of course, the detection of an atomic explosion occurring somewhere in the Soviet Union late last summer. As a result, a thorough reevaluation of Western security policy appears necessary. The psychological impact on Western Europe and the Asiatic countries has not yet taken definite form.

10. South Africa

Negotiations were conducted in Pretoria in November which resulted in a basis for agreement regarding the production and sale of uranium concentrates to the CDA by the South African Atomic Energy Board. Provision was made for the financing of the necessary concentrating plants, probably through an Eximbank loan for this specific purpose. The negotiated arrangements are being considered by the CPC and it is expected that the South Africans will be advised soon that the terms are acceptable to the U.S. and U.K. Governments.

11. Germany

For various reasons, there was continued drag in the promulgation of Allied control laws to prohibit manufacture in and export from Germany of atomic energy items. Our strong concern at the lack of these controls was expressed, and toward the close of the year it appeared that progress was being made to block shipments of these materials to the Soviet Bloc. Particular emphasis is being laid on the problem of controlling carbon and graphite electrode shipments to Switzerland to prevent diversion to the East.

b. ara

1. Brazil

• a. Monazite. The Brazilians failed to present a promised version of a new modus operandi to replace the secret agreement which they claim cannot be reconciled with their 1946 constitution. The satisfactory status quo regarding the export of monazite solely to U.S. purchasers continues as a result of assurances from the Foreign Minister. However, with the expiration of commercial contracts at the first of the year the situation is cloudy as to Brazilian future policy. Two bills are being considered in the Brazilian Congress which would provide for the absolute prohibition of export of monazite (as well as of uranium and beryl ores). In view of these legislative proposals, the Embassy has made representations in the form of a memorandum handed to the Foreign Office on December 15. No reply has been received to this approach. The Department, taking cognizance of persistent reports that the embargo legislation is meeting no opposition either in the Congress or from the Executive Branch of the Brazilian Government, is asking the Ambassador for a full report on developments and has indicated that the Department and AEC are to send representatives to Brazil for consultation with the Embassy or for talks with the Brazilians should the latter be viewed by the Ambassador as a means of averting the legislative embargo.
• b. Beryl. With respect to beryl, which would also be banned for export under the legislative proposals, the Embassy has had no discussions with the Brazilians. It was learned in December that one American beryllium company has been requested by private Brazilian parties to consider the erection of a beryl processing plant in Brazil. It is understood that negotiations are still continuing.

2. Argentina

Nothing significant to report.

3. Mexico

Through formal representations to the Mexican Government, the Embassy was able to secure return of a slug of uranium stolen from a U.S. atomic energy installation during the war and recovered in Mexico.

4. Colombia

An American Minerals Attaché cooperated with Colombian officials to lay out a program for the exploration of radioactive mineral deposits in Colombia.

5. Venezuela

The Venezuelan Government has indicated a desire to secure the loan of two U.S. geologists to investigate radioactive mineral deposits in that country, although a reconnaissance by the American Minerals Attaché was largely negative.

6. Chile

Arrangements were completed with the Chilean Government for a cooperative investigation of certain radioactive mineral areas by a team composed of two AEC and two Chilean geologists. The work will take about six weeks.

c. nea

1. India

a. Following on discussions in New Delhi in May and June, negotiations were completed in October in Washington regarding terms of an understanding between the two governments on inter alia beryl and a beryllium processing plant. The proposed agreement has been considered at length by the Department and other Governmental agencies concerned. It is now the Department’s view that the procurement features of the understandings might be embodied in a procurement contract to be supplemented (optionally) with a note verbale containing a unilateral declaration of intent by the United States Government on the extent and manner of assistance to be given the Indians in connection with beryl processing, basic scientific training in atomic energy, and related matters.

b. Erection of a monazite processing plant in accordance with an agreement reached between the GOI and a French company is being delayed for unknown reasons. A small quantity of monazite has been shipped to France for “experimental” work in the training of Indian technicians. It is understood that all thorium recovered will be returned to India. Rumors that the Indian Government might be disposed to sell large quantities of monazite to the U.S. industry have not proved accurate. It appears plain that the Indians are interested in processing all available monazite in their own country and may even erect a second plant on the east coast of Travancore.

d. fe

1. China

As a result of the Nationalist debacle on the mainland, the practically finalized agreement concerning field investigation of radioactive deposits in China has become completely meaningless.

IV. Export Policies

A. During the year, with the exception of Switzerland, satisfactory progress was made with all foreign countries having prominence hi the field of production of atomic energy items. At the year’s end, agreement in principle plus assurances that adequate administrative controls were either operating or would be established had been obtained from the U.K., Canada, Norway, Sweden, The Netherlands, Belgium, France and Italy, including the Allied Trieste Zone. As stated under Germany, progress was being made on long-delayed measures to establish controls there. With regard to Switzerland, the Legation will discuss the matter at the highest level.

B. As the next step in the parallel control program, we are asking our Missions abroad to ascertain the attitude of the other Governments to coordination of the AEC laws with the Military Security laws through appropriate administrative control mechanisms. If the other Governments consider this feasible and desirable, we shall take steps through the Intergovernmental East-West Trade Group now meeting periodically in Paris to coordinate the action on an effective multilateral basis.

V. Relations With ECA

The AEC and the Department were forced to call to the attention of the ECA several instances whereby ECA funds were proposed to be used for the purchase of equipment useful primarily for atomic energy purposes. The ECA acted promptly to prevent use of their funds for these purposes, readily admitting that these could not possibly contribute to the economic viability of Europe.

VI. Congressional Relations

Nothing significant to report.

VII. Relations With Defense Establishment

Formulation of policy governing President’s decision on the super weapon, announced February 4.⁶

VIII. Intelligence

The detection of the atomic explosion in the Soviet Union, occurring in late summer of 1949, made necessary a re-evaluation of the status of the Soviet atomic energy program. This event gave an invaluable benchmark of Soviet progress which permitted a more accurate interpretation of the various fragments of information which previously had been impossible to interpret.

IX. Miscellaneous

A. Radioisotopes

During 1950, the following countries were registered to participate in the AEC program for the foreign distribution of radioisotopes, bringing the total number of countries under the program to thirty-two: Finland, Colombia, Uruguay, Lebanon, Egypt, Japan and Portugal.

Radioisotopes are to be distributed in Japan under the auspices of SCAP.

During the year, Canada instituted a foreign distribution program patterned after ours. The USAEC Liaison Officer stationed at Chalk River has been appointed as the American representative to handle the procurement of isotopes in Canada.

B. Oak Ridge Institute

Foreign nationals were accepted for training in radioisotope techniques courses at the Oak Ridge Institute in the following numbers: 6 Belgians, 3 Canadians, 2 British, 2 Indians, 1 Dutchman, 1 Spaniard, 1 New Zealander, 1 Finn and 1 Norwegian, making a total of 18. Applications were received from a much larger number of foreign nationals than could be accommodated.

1. For documentation on the work of the United Nations Atomic Energy Commission, see pp. 7 ff.
2. On February 2, 1950, Klaus Fuchs, a British atomic scientist who had participated in the development of the atomic bomb in the United States during the Second World War, was arrested in Britain and charged with passing classified information to the Soviet Union.
3. For documentation on the discussions which occurred between United States Minister Herschel V. Johnson and Swedish officials during 1945 concerning atomic energy, see Foreign Relations, 1945, vol. ii, pp. 24–53 passim.
4. The memorandum of agreement between the Netherlands Government and the Governments of the United States and the United Kingdom, signed in London on August 4, 1945, is not printed, but for documentation on its negotiation, see Foreign Relations, 1945, vol. ii, pp. 9–36 passim.
5. For documentation on the interest of the United States in Nationalist opposition to the restoration of Netherlands rule in the East Indies and consideration by the United Nations Security Council of the Indonesian case, see vol. vii, Part 1, pp. 119 ff. For a summary account of The Hague conference, August 23–November 2, 1949, see Department of State Bulletin, December 12, 1949, pp. 958–969.

6. Reference is to President Truman’s statement on the hydrogen bomb, January 31, 1950, which read as follows: “It is part of my responsibility as Commander in Chief of the Armed Forces to see to it that our country is able to defend itself against any possible aggressor. Accordingly, I have directed the Atomic Energy Commission to continue its work on all forms of atomic weapons, including the so-called hydrogen or superbomb. Like all other work in the field of atomic weapons, it is being and will be carried forward on a basis consistent with the overall objectives of our program for peace and security.

   “This we shall continue to do until a satisfactory plan for international control is achieved. We shall also continue to examine all those factors that affect our program for peace and this country’s security.”