London Embassy Files, Lot 58F47, 500 Marshall Plan: Telegram
The Chief of the ECA Mission in the United Kingdom (Finletter) to the United States Special Representative in Europe (Harriman), at Paris
secret
London, May 13,
1949—5 p. m.
Torep 951.1 Ref Ecato 968, rptd Paris Torep 4928,2 and Repto 4074, rptd London 525.3
- 1.
- Reference cable was subject of full discussion Mission Chief and all Division Chiefs. Meeting called by Finletter after Killen, Labor Division, raised question of impact of proposed policy on attitude of peoples participating countries toward Marshall Plan generally.
- 2.
- Killen made following points:
- a.
- Communist Party “line” charges U.S. seeking to use ECA as device for establishing firm control over economies of participating countries, thereby “enslaving” people of Western Europe and providing “dumping ground” for U.S. surpluses. This line vigorously pushed by Communist Party from Moscow, in CP press and by CP elements in trade unions.
- b.
- British trade unions and other groups have consistently denied and opposed CP charges re America’s motives in ERP. They have on the other hand repeatedly voiced their satisfaction at absence of attempts by U.S. to exercise undue influence on their Government in determining national policies.
- c.
- If ECA Washington proposals re ECA control of non-ECA dollar expenditures adopted, non-CP and pro-US majority in British Labor movement will find themselves in difficult position and may themselves begin to doubt sincerity of U.S. professions.
- d.
- If this is situation in U.K., there is little reason to believe same reactions will not occur elsewhere.
- 3.
- UK Mission recognizes pressures to which ECA Washington is subjected. At same time we cannot disregard vital importance of maintaining and strengthening non-Communist support for the Recovery Program among the great mass of European peoples, and the effect proposed policy might have on such support.
- 4.
- The problem as we see it may be stated thus: Should ECA indicate, as in Ecato 968, rptd Paris 4928, that U.S. is moving toward firm control of a participating country’s entire economy in order to effect what U.S. considers to be the maximum efficient utilization of that country’s resources, thereby necessarily limiting the country’s freedom of choice in its trade relationships; or should ECA attempt to exercise direct control only over expenditure of ECA monies, leaving [Page 391] participating countries maximum freedom in running their own economies subject only to moral suasion and such self-imposed rules as may be agreed to by all participating nations?
- 5.
- The latter course may involve possible inefficiencies or isolated instances of discriminations in the trade relationships of these countries, but, on the other hand, it will avoid the very real danger of far-reaching and politically explosive charges that U.S. seeks to use ECA as means for domination of European nations.
- 6.
- We fully concur in the views expressed in Repto 4074, rptd London Repto 525, but because of the foregoing reasons, we believe particular attention should be paid to the social and political implications, of the proposed policy and the dangers of internal reactions in Europe.
Finletter