ECA message files, FRC 53A278, Paris: Telegram
The Deputy Administrator for Economic Cooperation ( Bissell ) to the United States Special Representative in Europe for the ECA, at Paris ( Katz ) 1
Torep 2406. Subject—Possible U.S. Contribution to Schuman Plan.
1. State and ECA have been considering possibility U.S. agree provide $50–$100 million financial support for Schuman Plan. Following [Page 112] paragraphs present provisional views here possible form of arrangement. Purpose is to obtain reaction OSR, HICOG, and Am Embassy Paris.
2. All discussions this subject have been confused by absence of clearly defined proposal. While we have not as yet worked out clearly defined proposal our provisional view of the general line of a proposal which might be considered are as follows: (a) agreed amount of ECA funds from present appropriation would be deposited with the Treasury in a permanent trust account for the Schuman Plan; (b) payments from funds might be made either to individual member countries or to the High Authority but in all cases with the approval of the High Authority; (c) purpose for which fund could be drawn upon would be subject to agreement between High Authority and ECA but in general would be for the purpose of financing equipment, modernization, integration of European coal and steel industries including such items as housing for workers in coal and steel industries and other purposes directly related to the expansion and increased efficiency of production and productivity. It would not therefore be available for subsidies, equalization payments, retirement of surplus or outmoded capacity or other purposes not directly related to the expansion and increased efficiency of production and productivity; (d) the form in which the aid would be given from the trust account would depend upon the purposes. If the High Authority required dollars in order to extend local currency loans High Authority could be given free dollars with which to procure the local currency. Similarly if it needed dollars in order to make payment on a guarantee it would be given free dollars with which to procure currency to make such payment. Where the purpose is to finance shipments from the U.S. of capital equipment dollars in those cases would be program dollars made available with the approval of the High Authority to the member countries in accordance with ECA procedures; (e) in general to the maximum extent possible intra-European payments impacts would be handled within the EPU framework and not through the High Authority. In other words the functions of the two institutions will to the maximum extent be kept separate.
3. Foregoing arrangement could be established under authority existing legislation. Creation trust fund out of current appropriations might however be dependent on legal establishment High Authority before July 1, 1951. If High Authority not established by then, probably necessary seek include allowance funds for this purpose in FY ‘52 appropriation. In any event, arrangement could not be established without prior Congressional consultation.
[Page 113]4. Appreciate views OSR, HICOG, AmEmbassy Paris soonest.2
- Drafted by Bissell and cleared with Perkins, Prud’homme, and Vernon. Sent also to the Embassy in France and to the Office of the High Commissioner for Germany at Frankfurt for Bruce, Parkman, McCloy, and Cattier.↩
- In priority telegram 8370 to Paris, April 16, McCloy informed the Department of State that he was “strongly inclined” to support the view of State and ECA that a U.S. commitment of funds to the European Coal and Steel Community prior to its formal establishment through ratification of the treaty by the member nations was “of doubtful wisdom”. (Paris Embassy files, lot 58F53, “500 Coal and Steel Pool”) In telegram Repto 1839 from Paris, April 21, Katz informed ECA Administrator Foster that he felt that “we shld take no initiative for present” and that he was “Impressed by McCloy’s views Frankfurt 8370”. (ECA message files, FRC 53A278, Paris) On April 27 Bissell informed Katz in telegram Torep 2793 that in light of telegrams Repto 1839 and 8370, ECA had decided not to provide any contribution to the Schuman Plan from fiscal 1951 funds but would seek authorization for contributions to “central institutions” from 1952 funds which would be on terms broad enough to cover possible contributions to the Schuman Plan. (ECA message files, FRC 53A278, Paris)↩