Foreign Relations of the United States, 1950, Western Europe, Volume III

CFM Files: Lot M–88: Box 152: File—SFM Meeting Minutes

United States Delegation Minutes, Fifth Meeting of the Foreign Ministers, New York, Waldorf Astoria, September 18, 1950, 5:50 p. m.

New York, September 18, 1950, 5:50 p.m.

secret

SFM Min–5

Members

Mr. Acheson (US)

Mr. Schuman (FR)

Mr. Bevin (UK)

Present

United States	France	United Kingdom
Philip C. Jessup	Henri Bonnet	Sir Pierson Dixon
John J. McCloy	André François-Poncet	Sir Oliver Franks
Henry A. Byroade	Hervé Alphand	Sir Ivone Kirkpatrick
George W. Perkins	M. de la Tournelle	William Strath
	Roland de Margerie	W. D. Allen

Contents

East-West Trade

Migration

Yugoslavia

Germany

• Steel Production
• Berlin
• Communiqué
• Claims

1. East-West Trade.

Mr. Acheson said he was most anxious for the Ministers to reach some arrangement for the definite negotiation and solution of the problem of East-West trade. It was a difficult question, one that had gone unsettled too long, and one that was troubling their relations. He would like to see all three powers recede from any extreme positions of the past and make the best compromise possible to settle this question, at least for a period of months. The Ministers should be able to agree on a set of general rules which could be implemented by the experts in Paris. The US had several peculiar problems in connection with this issue. We know that certain strategic goods had been shipped to the USSR in the recent past. We were in the position of denying exports to our producers and then having European countries export the same commodities. We were also being asked to ship certain commodities to Europe under MDAP when similar commodities were being exported from Europe to the Soviet bloc. In answer to the claim that the US Ib list covered non-strategic items, he wished to point out that 40 percent of the non-munitions items shipped under MDAP are on the Ib list.

Mr. Bevin replied that this had long been a difficult problem. There were some essential British imports not available elsewhere which the UK secured from the USSR. For instance, the UK still needed to import timber and wheat from the Soviet Union. This required them to offer certain exports. He was not informed about possible British shipments of items on the Ib list but he felt that Prime Minister Attlee’s statement the other day in Parliament had gone a long way toward meeting the problem.¹ Beyond that he was not clear what Mr. Acheson had in mind. Everything could contribute to war potential. In setting up controls it was necessary to establish not only a procedure but also a mechanism to take care of it.

Mr. Acheson said that he agreed the UK had recently taken decisions which, if applied, should solve the problem and he would be glad to settle the issue on this basis.

Mr. Bevin said that, unfortunately, the Government had apparently gone too far and was already under extreme attack. There was a very critical economic situation in the UK and any reduction in exports which led to a reduction in food imports or destroyed certain export industries would have a critical effect upon morale.

Mr. Acheson said that he was fully aware of these problems and merely sought to secure a reasonable agreement. The U.S. had proposed a set of rules (Int. Doc. 33²), subject to negotiation and change, as a possible basis for a solution. He wanted to reach agreement on these principles and to then send a team of experts back to Paris to negotiate the details.

After some discussion of the various terms, Mr. Bevin said that the US document was too rigid and would need to be altered, at least with respect to paragraphs 2 and 4. It appeared to be more rigid than the statement made by Mr. Attlee. The British Delegation had itself attempted to draw up a set of principles, which he then circulated (Int. Doc. 39³), designed to adjust the US and UK positions. These included provision for alleviating the effect of any export controls on the Western European economy. This was very important.

Mr. Schuman said that one of the difficulties in the present situation was that other countries were not agreeing with our present position. Goods were being exported from Switzerland and Sweden and some of the other countries. This seriously prejudiced the position of French exports bound by the present controls.

Mr. Acheson replied that there had been deviations in the past and there would continue to be some in the future. He sought to make the agreement as effective as possible, and certainly it would not be possible to get the other countries to agree to something beyond what the three powers were able to work out among themselves. He said he felt the past record had been bad. The US had been particularly embarrassed after defending the record of the British to have the UK Government announce that it had been exporting strategic materials. It was necessary for the three governments to face the question realistically and with complete honesty and frankness. The major difficulty with the British paper was that it did not establish useful principles to guide the work in Paris.

Sir Oliver Franks interrupted to say that he felt there were three distinct types of problems which arose on this question. First, you had those items which all agreed are strategic. Decisions recently taken by the UK puts them into a position to deal with items in this category. In the second place, the British are exporting quantities of what might be called engineering equipment to the USSR. Transportation equipment was a case in point. It certainly contributed to the Soviet ability to run a war, but on the other hand transportation equipment also fell into the realm of normal industrial trade. If Britain could not engage in trade in this general category, how would it manage to get wheat, timber, etc., from the USSR? Here was a case in which the US and UK looked at the problem quite differently, and a set of general rules might not be helpful. Finally, there was the category of goods which the UK was receiving under MDAP when exactly similar items were being exported to the USSR. This was too embarrassing to go on with. The US had brought it up and it was incumbent upon the UK to settle the problem. The entire problem under discussion concerned items in the second category.

Mr. Acheson said that he agreed entirely. The Foreign Ministers had to face the problem and give some general directives, after which the experts could work out the exact list. The items which fell into Sir Oliver’s second category had to be analyzed in terms of Soviet needs and decisions reached on that basis. The US was only suggesting a selection of those commodities from the Ib list which were most critical to the Soviet economy. The reduction on British exports of certain of those commodities did not mean the loss of British trade.

Mr. Bevin said his real fear had always been that if you destroyed a part of this export trade you destroyed a part of your imports. If this was done, he saw no other way to meet critical British needs. He asked if the other Delegations did not have experts present who could sit down immediately and look over the US and UK papers to see if there was any range of agreement.

The three Ministers agreed that they would appoint experts who would meet at 9 o’clock the next morning to review the question and report back to the Ministers.⁴

2. Migration:

Mr. Acheson said that the next item on the agenda was the report to the Ministers on the question of migration (Int. Doc. 16⁵). It was just a report and he felt the Ministers could accept it and agree to designate the officials to continue work on this subject without any discussion.

Mr. Schuman agreed, but said he merely wanted to underline the cost of transportation factor in the report.

In response to an inquiry from Mr. Bevin, Mr. Acheson said that the US had no objection to having other interested governments informed of this report, but that it was strongly opposed to any publication. (Privately the British indicated they had been under pressure from Italy on this question and saw no way to meet the problem other than to inform all consultant governments of the report.)

3. Yugoslavia:

In turning to the question of Yugoslavia, Mr. Acheson said he wished to stress the present desperate situation in Yugoslavia resulting from the recent drought. Because of the urgency of this situation and to meet the general Yugoslav economic problem, the US wished to propose that: (1) the US, UK and France support the $30 million German credit and agree to review further Yugoslav needs at a later date; (2) the UK and France agree to accommodate Yugoslavia on essential exports, even if Yugoslavia fell behind on its commitments as a result of the drought situation; (3) the three powers review at a later time the entire Yugoslav question; (4) the UK and France support the pending loan before the International Bank.⁶

Mr. Bevin said that he was without any instructions to cover Mr. Acheson’s second recommendation. In any case, he did not feel that the matter would arise for some time since Yugoslavia still had a 13 million pound credit which had not been taken up. He had no objection to the other points and certainly at no time had the British Government or High Commissioner placed any objection to the German loan.

Mr. Schuman said that his Government would agree to support the $30 million German credit and that French representatives on the IBRD would be as helpful as possible.

Mr. Bevin noted that the real problem was the question of finding food for Yugoslavia in the face of the drought and he had no answer to this.

4. Germany:

Mr. Acheson said that brought the Ministers to consideration of the German papers, the first of which was the report of the International Study Group.⁷ He considered the work of this group an extraordinary achievement and he wished to have recorded in the minutes the appreciation and thanks of the three Ministers. Mr. Bevin and Mr. Schuman agreed. Mr. Acheson said that he hoped the papers which had been referred to the Ministers could all be accepted as they had been agreed by the various working groups and that the Ministers would only need to take up the three disagreed points.

5. Steel Production Level:

Mr. Acheson said that the first problem was with reference to the text of paragraph 2 of the proposed agreement on PLI (Int. Doc. 37⁸) on which the High Commissioners had recommended one text and the British and French governments had suggested a revision.

Mr. Bevin said that any formal change in the approved level of steel production would create great problems in the House of Commons and in other countries. He felt that the Ministers should make an effort to keep the other countries with them.

Mr. Schuman stated that he was not in favor of changing the established ceiling on steel production because of the difficulties it would involve. As a matter of fact, Germany at its current rate of production is already over the proposed 12 million ton annual ceiling. He agreed that Germany must make an increased effort, but felt that this should not be expressed by a figure. It was impossible to establish any agreed measurement at this time and it was therefore necessary to set forth a sliding scale. He was willing to accept the text proposed by the High Commissioners and supported by the US but only if it was understood that the High Commissioners would make decisions on this point by unanimous agreement among themselves. Otherwise, he felt too much power was being given the High Commissioners. He insisted for domestic political reasons that this statement of unanimity be written into the text and not left as a secret agreement, but he assured the other Ministers that he made this proposal in all good faith in an effort to help.

Mr. Bevin said that he was also prepared to accept the US proposal, and that was agreed, subject to the amendment “by unanimous decision” in paragraph 2.

6. Berlin:

Mr. Acheson said the next paper was the one on Berlin. As he understood it, the Ministers were in agreement on paragraphs 1 through 5, but that the UK and France objected to paragraph 6 until it had been cleared with their governments. The US was willing to withdraw paragraph 6 provided Mr. Bevin and Mr. Schuman would take prompt steps to clear this matter with their governments for later agreement.

Mr. Bevin and Mr. Schuman agreed.

Mr. Acheson said there were two points in the Berlin paper which he wished to call to the attention of the Ministers so that they could explore the issues involved. The first was with regard to paragraph 1 on building up Berlin stockpiles. On this some 347 million DM had been estimated as the requirement for nonperishable food stocks. The figure on coal had been 18 million DM which the US had already covered. The US was also willing to contribute on the question of food, but it definitely could not meet the full amount. On the question of strengthening Allied forces covered in paragraph 4, Mr. Acheson said he wanted to report that the US would get its additional regiment to Berlin about January 1. He felt that if the French and British governments could possibly get there ahead of us it would be helpful for all concerned.

7. German Communiqué:

Mr. Acheson stated that the 6th and 8th paragraphs of the draft communiqué were still not agreed. In order to meet this, he had prepared and circularized proposed substitute paragraphs.⁹

After reading the proposed substitute, Mr. Schuman said that he was bothered by the fact that the statement on German participation in the defense of the West went beyond the text of the communiqué released by the NATO Council.¹⁰ They should be expressed in similar terms. It was also the French desire not to prejudice any final action by the NATO Council which he hoped could be announced next week. It was also important not to make any mention of possible talks with the High Commissioners until after they had taken place.

Mr. Bevin agreed to these changes provided it was clearly understood that the omission of the reference about the High Commissioners did not in any way prejudice the right of the High Commissioners to explore this question with Adenauer.

Mr. Schuman agreed that, despite the omission from the communiqué, it was understood the High Commissioners could discuss the question of German participation.

The Ministers agreed to the language proposed by Mr. Schuman and agreed to the German communiqué.

8. Claims:

Mr. Acheson referred to the paper on principles relating to claims (Int. Doc. 37), stating that the British had previously expressed their agreement to this paper, but Mr. Bevin was now under instructions which made it impossible for him to accept the draft. The question was one of certain outstanding claims against Germany. The US wanted to secure German recognition of the obligation and then go ahead and settle the claims. It was obviously impossible to ask the Germans to repay when they did not have the money. It had actually been the US understanding that this had been settled on June 28 in an exchange with the British.

Mr. Bevin explained his position as requiring a statement of a German “obligation to repay”. He admitted that the three powers would never get the money, but he was in a position with respect to the House of Commons where it was essential that he secure more than an admission of an obligation. It had to be an obligation to repay.

After some discussion of various phrases, Mr. Acheson said that since Mr. Schuman was on his side, he would be glad to refer the issue to him as an arbiter.

Mr. Schuman stated that he was not directly involved in this question, but that he was very anxious to see it settled in order to make possible the agreement on liberalization of controls which was tied to this proposal. He suggested the terminology “acknowledge the debt”, which Mr. Bevin and Mr. Acheson accepted.

The Ministers agreed to the terms of the interim [final?] communiqué¹¹ and agreed to meet with the Benelux representatives at 11:30 a. m., September 19, to discuss the proposed German agreements. It was further understood that there would be no publicity on the communiqués until after the meeting with the Benelux representatives. It was agreed that prior to that meeting the High Commissioners would get in touch with Chancellor Adenauer and inform him of the terms.

The meeting adjourned at 8:20 p. m.

1. For text of Prime Minister Attlee’s statement in the House of Commons on September 12, which dealt inter alia with the export of strategic materials, see Parliamentary Debates, House of Commons, 5th Series, vol. 478, cols. 951 ff.
2. Dated September 13, p. 1285.

3. Document 39 read:

   • “1. The mutual security interest of the Western allies in the present world situation requires that their joint efforts to increase Western military preparedness be accompanied by effective export controls to limit the short term striking power of the Soviet bloc and to retard the development of its war potential in the longer term. This policy is consistent with the general objective of strengthening the West relative to the East.
   • “2. Strategic consideration should be predominant in selecting items for international export control and the opinion of military and intelligence advisers should be sought in assessing the strategic importance of items recommended for control.
   • “3. Officials of the three Governments should meet to prepare a list of key items in those industries which contribute substantially to war potential. The list should have regard to United States List Ib. At the same time, officials should consider the implications for Western European economies of extending controls to the items selected, and should recommend measures designed to ensure, with United States assistance if necessary, that the damage done to these economies is not disproportionate to the Security benefits obtained.
   • “4. The three Governments should inform the other participating countries of any additional controls which may be agreed, and urge on them the desirability of instituting the same controls, if necessary after discussion with the United States Government.” (CFM Files: Lot M–88: Box 152: SFM Documents 1–40)

4. The records of the Foreign Ministers meeting do not indicate exactly what happened to the papers on East-West trade. There is no record of an experts’ meeting on September 19, but there exists a Document 40, “Agreed Minute on East-West Trade,” which presumably resulted from discussions by the experts and was approved by the Foreign Ministers. For its text, see p. 1300.
5. Not printed.
6. The U.S. position on economic assistance to Yugoslavia, set forth in Document 17 [D–5/2], dated September 9, not printed, was identical with points 1, 2, and 4 presented in this paragraph by Secretary Acheson (CFM Files: Lot M–88: Box 152: SFM Documents 1–40). Further documentation on U.S. relations with Yugoslavia is scheduled for publication in volume iv.
7. Dated September 4, p. 1248.
8. Indicated in the footnotes to Document 37 (Final), p. 1286.
9. No copies of these proposed paragraphs have been found in Department of State files.
10. For text of the North Atlantic Council communiqué, September 18, released to the press on September 19, see Department of State Bulletin, October 2, 1950, p. 533.
11. No text of a second interim communiqué was found in the Department of State files. For the text of the final communiqué, see Department of State Bulletin, October 2, 1950, p. 530.