ECA message files, FRC 53A278, Paris: Circular telegram
The United States Special Representative in Europe for the ECA ( Porter ) to the Acting Administrator for Economic Cooperation ( Bissell )1
Repto circ 197. 1. In order assure effective action on coal production problem at mtg OEEC mins Jan 11, believe important that PC govts be fully aware, before they instruct their mins of significance of problem and measures that may be necessary to meet it.
2. For this purpose, suggest if you deem appropriate you approach govt at suitable high level and explain sitn along lines indicated below. If you think useful for cabinet to have a memo before it, you may use part or all of substance of paras 3–8 below as an aide-ḿemoire.
3. Production of coal in participating countries is still seven percent below prewar (1937). Before war Europe did not normally import any US coal. Report of experts of OEEC special group for coal which will probably be laid before OEEC ministerial mtg estimates European need for imports US coal in fol amounts: 28 million tons calendar 1952 and 15–25 million tons, 1956, At current landed prices this might represent total cost up to nearly $3 billion including intervening years thru 1956. For fiscal 1952 alone current estimates represent about $800 million, or over ¾ of amount appropriated by Congress for econ aid to Europe for fiscal 1952.
4. Estimates of special group for coal represent a defeatist attitude which is simply unacceptable. As far as can now be foreseen, there wld be no way for Europe to pay for this coal except by continued Amer econ aid. To ask Congress to appropriate such aid to enable Europe to pay for import of a commodity of which it has ample resources and of which it is normally independent of US imports wld be unthinkable.
5. Shortage of coal in Europe even with continuation of imports from US at current rate of 40 million tons per year presents single most serious obstacle to defense effort and econ well-being.
6. Major western European coal producing countries accounting for 99 percent total production (UK, western Germany, France, Belgium, Neths, Saar) produced in 1937 approx 486 million tons while in 1951 they will reach only 455 million tons. France and Saar made considerable progress and have surpassed 1937 production [Page 146] by 20 percent and 19 percent respectively. Belgium now producing at approx prewar rate, 29 million tons. Neths producing at rate of 12.4 million tons compared to 14.3 million in 1937. The two big producers, UK and western Germany, who account for approx 75 percent total western European production, now producing 8 and 15 percent respectively less than 1937. Whereas Brit’s prewar production was 244 million tons, it is now 225 million. Western Germany in 1937 produced 139 million tons and expects to reach 119 million in 1951. Production in recent weeks in western Germany has shown gains which will be encouraging if maintained.
7. Altho individual PC’s are making efforts, in varying degrees, to meet this problem, we are convinced that concerted high level approach by OEEC offers best solution (FYI (for your info) only, Stikker has called meeting as result of US urging).
8. In our opinion essential steps that shld be taken at ministerial mtg Jan 11 are:
- (a)
- Adoption of res recognizing necessity and possibility of achieving independence of US coal.
- (b)
- Agreement on procedure to achieve above objective.
9. Believe initiative for working out necessary procedure shld be taken by PC govts, but FYI our tentative view is that procedure might involve establishment of emergency coal board, comite of council, or other appropriate agency, at ministerial level, including reps of principal producing countries and perhaps some consuming countries, to operate under Stikker’s chairmanship. Such board wld report thru its chairman on realistic but ambitious program and goal for achieving independence of US imports. (We wld hope this might specify a target date as early as end of 1952, but perhaps this must be left to the body and not prejudged in council res.) We wld hope such body cld make recommendations directly to PC govts, without further council action, on means of achieving fulfillment of program.
10. FYI, types of specific measures which we contemplate appropriate body might recommend under para 9 above, might include longer work week in some areas, with appropriate labor incentives, use of surplus Italian labor, especially in UK, exchange of tech info and other ideas of means of increasing production, adoption of adequate conservation measures in use of coal, use of substitutes such as natural gas etc. We contemplate that ministerial council wld not specify such details in setting up the appropriate body.
11. In view talks already held with Brit, suggest Batt use own discretion as to advisability any further action pursuant this msg.
- Repeated to all European ECA mission chiefs.↩