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

Conference Files: Lot 59 D 95: CF 49

United States Minutes, Truman–Attlee Conversations, Third Meeting, The White House, Washington, December 6, 1950, 11:40 a. m.–12:30 p. m.

Washington, December 6, 1950, 11:40 a.m.–12:30 p.m.

top secret

US Min–3

Participants

United States	United Kingdom
The President	Prime Minister Attlee
Secretary of State Acheson	Sir Oliver Franks
Secretary of Defense Marshall	Sir Edwin Plowden
Secretary of Treasury Snyder	Field Marshal Sir William Slim
Secretary of Commerce Sawyer	Lord Tedder
Mr. W. Averell Harriman	Sir Leslie Rowan2
Mr. W. Stuart Symington	Mr. Robert Hall
Mr. William Foster	Mr. Denis Rickett
Ambassador at Large Philip Jessup
Assistant Secretary of State Thorp
Assistant Secretary of State Perkins
Amb.-designate Walter S. Gifford
Mr. Ralph Trigg1
Mr. George Elsey

[Here follows a table of contents.]

The President said that, if the Prime Minister wished to make a statement, he would be very glad to hear it.

The Prime Minister spoke at length following closely a prepared paper (Annex A). He said that they were full of admiration for the great work which the United States was putting into the rearmament effort. They wished to do their full share in the defense effort. The Prime Minister’s interpolations as he read the paper included emphasis on the need for going ahead to meet certain immediate difficulties; on the thought that, while the United States was a great producer, the United Kingdom was also; that, unless in our stockpiling program we watch out for the needs of other countries, we will cause trouble for the United Kingdom; while normal discussions must go on through departments and established channels, the point is reached as it was from time to time during the war when something had to be done straight away and special immediate action was required; in regard to machinery for UK–US cooperation, we had the vast experience of the last war and also the men who actually operated the combined boards, so that both the experience and the personnel were already available.

The President said that he fully agreed with this. The very matter had been discussed at the Cabinet Meeting yesterday afternoon. He fully recognized that our efforts are parallel in this matter, and he had issued instructions last night to the members of the Cabinet who are concerned to get in touch with the Prime Minister’s experts to see if we could get the needs of both of us into balance. We must be ready to meet the shortages against the day when the emergency comes about. He would ask the Secretary of State to set out certain views on the question.

Secretary Acheson said that this was a vitally important matter. There must be cooperation between the United Kingdom and the United States as a base for what we do next. We would get nowhere unless we two were together since there was no one else who really understands the problem.

The President interposed that he wanted to get a concrete agreement before the Prime Minister left, and he wanted to see that this was done.

Secretary Acheson continued that there were, of course, the immediate things such as those the Prime Minister mentioned including sulphur, cotton and zinc. He thought that a group could work over these immediate problems this afternoon and bring back a recommendation to the President and the Prime Minister in regard to it.

At this time, however, he thought it would be useful to state some principles which might guide the Working Group. In the first place, there was the matter of the production of raw materials. We needed to get together to increase production. Some of these raw materials, such as columbium, are under British control, some are under our control, and some are under the control of others. If we can reach agreement i regard to those that we separately control, we can induce the others to go along.

The second question was the matter of distribution, and on this one needed principles for guidance. The production of military items was a high, if not the first, priority. Then there were vital elements of civilian production and the need for cutbacks. During the war, we used the principle of equality of sacrifice. He did not think this meant numerical equality since the United States standard had been built up higher and we can cut deeper in some cases.

Next, we need machinery. The work of NATO and OEEC was very good and could not be scrapped, but we need some new substitute for the shipping control which during the war enabled us to manage this problem.

In regard to our stockpiling program, the Prime Minister was quite right in saying that it was important to get the facts. He understood we were prepared to give them full information on our plans. We must consider how stockpiling operates as a reservoir for our common defense. Then there was the question of controls which must be administered so as not to bear down too hard on one another and to avoid supplying materials to the Soviet Union. There were also some questions of preclusive buying.

The Working Group this afternoon might consider these plans. Perhaps these were not the right principles or the right points, but he would ask Mr. Symington to make any correction in them. When the Working Group completed its task, he hoped it could bring in to the President and the Prime Minister some Minute which they could approve.

The President then called on Mr. Symington who said that the Secretary of State had set forth the matter better than he could. He did want to mention certain points without going into detail in regard to any item. It was relatively easy to cooperate on some items and more difficult on others. He felt sure that, when the facts were brought out on the stockpiling program, it would be seen that this program had little effect on our economy or on theirs. He thought that we could be mutually helpful in this respect and if the facts were laid on the table we would be able to clear up some of these things, as the Secretary of State had said.

Secretary Sawyer said that he had not been in on all of the conversations and was not familiar with all of the background, but he thought there were areas in which we could help each other. In regard to the first four items submitted in the United Kingdom memorandum, he hoped that it would be possible to report to the President and the Prime Minister. In regard to the Working Group meeting, he hoped that the agenda could include other items which Mr. Symington might want to put on it in addition to the four items raised by the British.

The President said he thought this was quite all right if the Prime Minister were willing. (The Prime Minister agreed.) The President thought they ought to put on whatever had to do with the production problem.

There was then talk back and forth about the British items of cotton linters, zinc and sulphur, and Mr. Symington suggested that they add copper, tin and rubber.

The President repeated that they should discuss anything which we needed to meet the enemy.

Sir Edwin Plowden was called on by the Prime Minister and said there was one point which had not been mentioned by the Secretary of State which had been included in the remarks by the Prime Minister. The Secretary of State had said that the needs of defense must come first. However, there was a difference in the problem confronting the United Kingdom and the problems confronting the United States. This was their economy dependence on imports of raw material and food. They had to pay for these imports, and they could only do it by their export trade or through American financial help. He was sure it would be agreed that they should pay for them themselves through their exports. Accordingly, for their own economic situation the maintenance of the export trade had an equal priority with the defense effort. Without that, they would not be able to maintain their economy and the defense effort itself. He referred to certain difficulties which had arisen in this connection during the war in connection with lease-lend.

Mr. Harriman, in response to a question from the President, said he merely wanted to express the hope that they would concentrate on the ways and means to accelerate production. This was the only way in which to meet the problem in the long run.

The Prime Minister said this was true “in the long run.”

The President inquired whether there was any other matter which anyone wished to bring up. He was ready to suggest the names of the people on the American side who would meet in the afternoon.

The Prime Minister thought they had generally agreed on the general line.

The President then said he would like Mr. Harriman to act as Chairman and the others would be Secretary Sawyer; Secretary Snyder; Mr. Symington; Chairman of the Board of Economic Advisers, Mr. Keyserling; Under Secretary of Agriculture, who would be needed to deal with the problem of foodstuffs and cotton in which the British were very much interested; Mr. Foster or Mr. Bissell.³ He asked if there were any others who should be included.

Secretary Acheson suggested Assistant Secretary of State Thorp, and inquired whether General Marshall would like Mr. Small, Chairman of the Munitions Board.

General Marshall thought that would be very useful.

Mr. Symington suggested that it would be also well to include Mr. Larson,⁴ if the President approved. He also suggested that Mr. Trigg might take the place of the Under Secretary of Agriculture since Mr. Trigg had been in on previous meetings and was thoroughly familiar with the problems.

The President agreed saying that he wanted at the meeting the people who knew all of the facts and who would be able to reach a decision.

It was agreed that, since the President and the Prime Minister are meeting in the Cabinet Room at 3:30 p. m., the Working Group would meet in Fish Room across the hall.⁵

At 12:30 p m, Mr. Stephen T. Early, Temporary Press Secretary to the President, released the following statement:

“The discussions centered on the economic problems arising from the mutual defense efforts, with particular reference to raw material requirements. It was agreed that the problem of raw material shortages was vitally urgent, and that vigorous efforts should be made to increase production and to assure the most effective use of the limited supplies available.

A wide area of agreement was apparent and a working party (that means a staff force) was established to explore the matter further.”

Annex A

secret

[Washington, December 6, 1950.]

Paper Prepared by the British Delegation

United Kingdom Defence Programme

It is the firm policy of His Majesty’s Government to do its full share of common defence. Therefore, H.M.G. is currently putting in hand orders for our existing £3.6 m. programme as quickly as possible. As regards sharing the economic burden of defence, we rely on the working out of the Nitze exercise. But while this is being worked out, we shall go ahead with orders.

2. But H.M.G. must state quite clearly that no adequate defence programme can be carried out, and still less maintained, except on the basis of a sound, efficient and expanding economy in the United Kingdom, while fully recognizing that this will involve some falling away from the Standard of recovery already achieved.

3. Our economic position is based upon having adequate supplies of raw materials and using them to the best advantage. Without the continuance of these two factors we cannot maintain the growth of production at home. Without the growth of production our defence effort must be seriously curtailed. This is the major point which H.M.G. wishes to bring to the notice of the U.S. Administration. H.M.G. is bound to state that their expectation of supplies of raw materials is such that there can only be a falling away in the level of U.K. production. Unless this position is remedied, and remedied speedily, the U.K. will be able to carry out less rearmament than at present contemplated, not more, and there will be considerable danger of economic dislocation of a major character to the U.K., and therefore to the whole Sterling Area system. What the U.K. Government asks, and asks urgently, is the full co-operation of the U.S. Government in ensuring supplies of raw materials essential to the maintenance of full production and the carrying out of our defence programme.

4. H.M.G. feel bound to stress strongly that the political attitude of the British, and other European people, would be most adversely affected if reduction in output were seen to be caused by physical shortages of raw materials resulting from unilateral U.S. action.

5. H.M.G. recognizes that in present circumstances shortages of raw materials are inevitable and the U.K. is prepared to make the necessary sacrifices. But it must be borne in mind that the room for manoeuvre in the U.K. economy is much more restricted than in that of the United States. Ever since the end of the war, the British people have had severe restrictions on the level of civilian consumption, made necessary in order to achieve economic recovery. They have maintained through this period food rationing, rigid restrictions on building, and a limitation of supplies at home in favour of export markets. Account should be taken of this in any comparison of currently imposed restrictions.

6. The U.K. depends on imports for most of its industrial production and about half of its food. We cannot get these imports without paying for them, and we can only pay for them by our exports. If the supply of raw materials from the U.S. is made conditional on restriction of exports containing such materials, we shall be unable to pay our way, and the stability of our economy will be endangered.

7. H.M.G. does not claim that it should be in any special position compared with other members of North Atlantic Treaty Organisation. H.M.G. fully accepts the strategy of defence as far to the east in Europe as possible. Nevertheless, the facts of the situation are:

(a) that the U.K. will be a major production and supply base for any war in Europe,

(b) that the U.K. has natural defences against attack which are not possessed by other N.A.T.O. countries in Europe.

We think, therefore, that in deciding on policies in these various fields, due regard should be had to these facts.

8. The problem is both short and long term.

(a) Short Term Problems

The U.K. is already in serious difficulties with certain essential materials, e.g. zinc, sulphur and cotton, and we are threatened with more serious difficulties, especially in doing the necessary forward planning of production, by actions of the U.S., e.g. on stockpiling and general purchasing policy, on which our information is either nonexistent or insufficient, and which, therefore, leaves us in acute anxiety about our future supplies. We are also much concerned about the attitude of the U.S. Government on exports of materials produced in the United States, e.g. cotton and sulphur. We, therefore, attach a memorandum asking immediate emergency action by the U.S. Government on the following materials: zinc, sulphur, cotton, cotton linters.⁶

(b) Long Term Problems

Longer term raw materials problems are currently under consideration by O.E.E.C. and will soon be under consideration by N.A.T.O. The broad policy is that on the basis of recommendations by such bodies, appropriate governments should call international conferences to consider methods of dealing with scarce raw materials whether by means of international allocation or otherwise. But the problem is of increasing urgency and it will not be dealt with either adequately or in time unless there is joint Anglo-American agreement on the facts of the situation and on combined action to deal with them. We make the following suggestions:

(i) Joint agreement on the facts

We propose that there should be immediate Anglo-U.S. talks to establish the facts. In order that these should be completed speedily, it will be necessary for both countries to state their own military and civilian requirements in detail and to make the best estimates possible of the requirements of other countries, making use of studies already made in O.E.E.C. and elsewhere. In addition, it would be necessary to make the best estimates possible of availabilities.

(ii) Combined action to deal with the situation

Each commodity raises problems of its own. We, therefore, wish to consider with the American Government the best method of ensuring coordination between the policies adopted for dealing with individual raw materials and of giving the necessary impulse to the work. These purposes were successfully achieved by the Combined Raw Materials Board during the last war. Although circumstances are somewhat different, the Combined Board should serve as a pattern for the type of organization required. We suggest that there should be immediate Anglo-American talks on the subject.

9. Pending the outcome of the talks proposed, we ask that the U.S. Administration will ensure that the common interest of maintaining the economic and defence efforts of N.A.T.O. countries, is fully taken into account in framing their policies regarding—

(i) Purchasing policy for raw materials for strategic stockpiling and current use;

(ii) Limitation of non-military domestic consumption of raw materials, and

(iii) Allocation of exports of raw materials as between N.A.T.O. countries, potential allies on the one hand, and potential neutrals and potential enemies on the other.

2. Sir Leslie Rowan, Minister at the British Embassy.
1. William C. Foster, Administrator of the Economic Cooperation Administration; Willard L. Thorp, Assistant Secretary of State for Economic Affairs; Ralph Trigg, Administrator of the Production and Marketing Administration and Member of the Board of Directors of the Federal Crop Insurance Corporation and the Commodity Credit Corporation.
3. Richard M. Bissell, Deputy Administrator of the Economic Cooperation Administration.
4. Presumably a reference to Jess Larson, Administrator of the General Services Administration and Member of the National Power Policy Committee.
5. The Working Group on Raw Materials, chaired by Symington, met at 2:30 on December 6 and at 10:30 a. m. and 5 p. m. on December 7. Subcommittees were established to consider the problems of zinc, tin, and rubber; sulphur; and cotton. At the second meeting the United States Delegation tabled a draft statement of principles which was amended and adopted at the third meeting. For the draft statement and final text, see the agreed statement, p. 1787, and footnotes thereto. The United States and British Delegation minutes of the meetings are in the Conference Files: Lot 59 D 95: CF 49 and Department of the State central files 711.41, respectively.
6. Not printed.