840.00/3–1149: Telegram
The Ambassador in the United Kingdom (Douglas) to the Secretary of State
us urgent
910. Personal for Harriman from Bonesteel. WU Financial and Economic commission reconvened 11 hours 10 March.
. . . . . . . . . . . . . .
… During meeting US observer was asked following questions which he discussed but could give no official answer. Commission suggested Ministers would no doubt appreciate clarification for next Monday’s meeting. Questions are:
- (a)
- Will US dollar assistance for European production be restricted for to purchase raw materials and tools in US only or can it be used to cover purchases from third countries outside WU or within WU? Will dollars be available to cover indirect costs such as case when use of available raw materials requires purchase other similar materials for civilian economy or means loss of potential dollar exports? (Question of aid for overall indirect impact hinted at.)
- (b)
- Could US dollars for MAP be made available in lump sum to WU for allocation as agreed by them and be used as sort of little intra-European clearing scheme with drawing rights, etc?
- (c)
- What will be method allocation of MAP aid? Will it be done by Washington or will WU make recommendations similar to OEEC–ECA action on ERP 48/49 program?
US observer gave general answers, stressing they were unofficial and non-commital, along lines general thinking in FACC as of end February, i.e.
- (a)
- Aid could be somewhat flexible and was to cover “necessary” dollar projects.
- (b)
- US dollars would be put up on specific projects after assurance local currency part could be found by noninflationary means.
- (c)
- US would expect WU with close US cooperation to work out most effective use US dollars with US having final say.
FACC please furnish answers these questions for Ambassador Douglas for Monday meeting.
Sent Paris for Harriman, repeated SecState for FACC. Douglas concurs. [Bonesteel.]