ECA message files, FRC 53A278, Paris: Telegram
The Acting United States Special Representative in Europe ( Porter ) to the Administrator for Economic Cooperation ( Foster )
Repto 4077. Personal for Foster from Porter.
1. I am deeply disturbed by outlook for Eur coal supply during next twelve months. I had been aware in Wash of growing deficiency but had not appreciated alarming character of problem until I found opportunity to focus attention on it after arrival here. It now seems evident that requirements of OEEC countries will exceed prospective Eur availability by 30 to 40 million tons in next twelvemonth period. It is questionable even with further restoration of moth-ball Liberty ships to service that there will be enough shipping available to deliver this full amount. Some curtailment of steel and indus production with adverse effects upon rearmament is therefore distinct possibility.
2. Assuming, however, US can meet coal deficit, Eur dollar expenditure for imported coal at present prices and shipping rates will be between $¾ and 1 billion, i.e., an amount close to or even exceeding econ aid funds for Eur authorized in House vote Friday.
3. Lag in coal production is most serious single specific failure in Eur economic recovery. Coal production today only 93 percent of prewar compared to index of 139 for all indus production; 108 for elec power; 124 for steel, over 150 for chemicals. Restoration of coal production to prewar level wld eliminate need for any imports from US. Further increase of more 2.5 percent cld end dependence Western Eur on Polish supply and thus wipe out one major element of strong Sov bloc bargaining position for strategic materials from West.
4. Depressing fact is that altho govts of OEEC countries are acutely aware of coal shortage there is no convincing evidence that they are taking effective measures to increase output significantly. Meanwhile quarrels over level of enforced Ger exports may have adverse effects on Schuman Plan and Eur Army.
[Page 140]5. My thinking leads to these conclusions:
- (a)
- What is needed is not more facts, which have been accumulated in great abundance during past six years, but political decisions, especially in UK and Ger, to make major effort to raise production level. Subsequently decisions will have to be taken on numerous policies affecting management and labor and dealing with finance, investment, pricing, employment conditions, trade union policies, migration of labor, housing, and possibly special incentives for both labor and management. Basic fact is that there appears to be ample coal below ground and enough holes to get it out. Principal thing lacking is effective mobilization of human effort.
- (b)
- Problem requires personal leadership of high order. These decisions cannot be obtained by technical comites but only by some personality who is willing to devote his main effort to this job for some months. Person who undertakes to obtain necessary decisions shld be a Eur of broad stature, possessing vigor, imagination, political skill, and willingness to badger and harass Brit and Ger govts into taking measures to increase output, and French and some other govts into taking realistic attitude toward prices and substitution of one quality for another. Action by UK is of primary importance, inasmuch as since nationalization Brit have been indifferent to historic dependence of continent on UK coal exports of 25 to 30 million tons annually. Good response by Brit wld make it easier to get better cooperation from Gers.
- (c)
- Person who undertakes to obtain needed political decisions shld have mandate for [from] respected inter-governmental body, for example, OEEC Council of Mins. I believe it is within auth already given to Dr. Stikker by OEEC for him to initiate action, including appointment of someone to proceed along lines contemplated in para above.
6. Subject your concurrence I propose seek early opportunity to discuss coal sitn with Dr. Stikker. If he is receptive, I will suggest he enlist services of some outstanding Eur for perhaps six to twelve months to develop necessary program and induce govts at cabinet level to support it. I am aware of Brit coolness toward Spaak and Monnet, which might preclude use of either for this job, but man required shld obviously have their kind of resourcefulness and drive. Approach to sensitive Brit, who might resent expression of continental concern, wld have to be handled with great care, yet higher UK output is so essential I do not believe issue can be evaded. Persons selected wld probably need small staff of technical aides and also help of several deputies having major political influence, as for example, Sam Watson, who is one of most influential leaders of Brit Mine Workers Fed and is close to govt leaders.
7. I assume appropriate intervention by our missions with UK and Ger govts wld also be necessary, but I think our role shld be to supplement Eur leadership and not to substitute for it.
[Page 141]8. I have discussed foregoing plan with Katz and with appropriate OSR staff who concur in it.