Foreign Relations of the United States, 1951, Europe: Political and Economic Developments, Volume IV, Part 1

No. 75

120.4362A/2–551

Report of the Western European Ambassadors Conference at Frankfurt

top secret
AMCO/SR (51)1

Frankfurt, February 7, 1951.

Summary Record of Meeting Held at 9:30 a.m., February 5, 1951

The Conference of American Ambassadors to Western European Countries opened at 9:45 a.m. under the chairmanship of Assistant Secretary Perkins.

After a welcoming introduction by U.S. High Commissioner for Germany McCloy, the Chairman requested Ambassador Gifford to present a survey of the situation in the United Kingdom.

item 1: general review of the situation on a country basis

Ambassador Gifford stated that the British Government was at the present time wrestling with the following difficulties:

A. the coal shortage

B. its slim majority in the House of Commons

C. the present meat shortage

With respect to the relationship of Great Britain to Europe and the world, Ambassador Gifford believed the British Government would go along with any reasonable program of German rearmament that might be worked out but would prefer moving slowly until the strength of Allied Forces in Germany has been built up. The recent visit of General Eisenhower¹ had strengthened the British determination to press ahead with the defense effort.

Although Ambassador Gifford felt that the divergence between the U.S. and the U.K. on Far Eastern questions had recently diminished, the anxiety nevertheless continued regarding possible differences of opinion which were aggravated by the delicacy of the British Government’s relations with the nations of the Commonwealth. The most serious problem in these relations was the question of India’s attitude. It was Ambassador Gifford’s view that the other Commonwealth nations would go along with any reasonable agreed U.S.–U.K. policy.

As regards the problem of Communism in Great Britain, Ambassador Gifford stated that the Communist Party there was extremely small and that Communism as such should not be considered as a serious factor.

He noted that the publication of the decisions on the release of the Landsberg prisoners in Germany was unfavorably commented upon in the British press.

In conclusion, Ambassador Gifford stated that the relations between the U.S. and the U.K. were basically sound.

In reply to Mr. McCloy’s observation that the criticism of the U.S. appearing in the New Statesman and Nation had been extensively quoted in the German press, Ambassador Gifford replied that the magazine reflected the thinking of a small group of left wing intellectuals only.

Ambassador Murphy, in reviewing the present situation in Belgium, remarked that although the country was a relatively small one, its large international business interests lent it considerable importance. Its considerable economic potential could be used to great advantage in building up the military strength of Free Europe. He believed that Belgium would meet its commitments arising out of NATO.

The present Government could not be termed strong, and its majority in both chambers appeared precarious. Should the international situation sharpen, a national coalition government could be expected to emerge.

The large industrial plant of the country could be easily expanded to meet the needs of an increased defense program. Furthermore, the Belgian Congo was a highly important source of raw materials for the U.S., among them uranium, cobalt and tin. Belgium pursued a policy of trade liberalization, and was a strong adherent of free economy. Its finances were sound.

The outlook for a considerable improvement in military preparedness and strength was brightened by the recent visit of General Eisenhower. Belgium’s army consisted at present of 65,000 men with a reserve of 50,000, of an airforce of 10,000 and a navy of 6,000. Legislation was pending and would shortly be approved for the extension of military service to twenty-four months; budgetary provisions to cover the expanding army would undoubtedly also be provided.

The Communist strength in Belgium had declined considerably during the past six years (from forty-six representatives in parliament in 1946 to ten representatives in 1951). The Communist vote would not now exceed three to four percent of the voting strength. The circulation of the Communist press had also declined considerably. The government party (Catholic) was planning measures designed to curtail Communist activity.

To Colonel Byroade’s question as to how strong the Benelux ties were, Ambassador Murphy replied that this depended on the nature of the problems involved. On things military, for example, the Belgians supported the French, while on Far Eastern questions they tended to side with the Dutch. The rivalry between the ports of Antwerp and Rotterdam also continued although a coordination of agricultural policy was expected to be achieved shortly.

Ambassador Spofford stated that there seemed to be a difference between the attitude of the Belgian and Dutch Governments with regard to the Medium Term Rearmament Plan² which the Belgians supported with greater vigor, to which Ambassador Murphy replied that the policies of the Benelux countries were not always consistent.

In surveying the situation in Austria, Ambassador Donnelly pointed out that this small republic was unique in that it was the only spot where the Western Allies still met regularly in council with the Soviets. The present coalition government in Austria was strong and was, therefore, opposed vigorously by the Soviets.

There seem to be two main U.S. responsibilities in Austria:

(1) to support the pro-Western coalition government fully, and

(2) to attempt the completion of negotiations for the State Treaty.

The Communist Party, although small in numbers, was strengthened by the support of the Soviet Army which occupied 35 percent of the country with 50 percent of the population.

In a recent showdown between the Communists and the government on Communist-instigated strikes and disorders, the government law enforcement agencies were successful in handling the situation.³

In the face of the incessant Soviet interferences, the Austrian Government had shown a remarkable courage and has, so far, successfully resisted Communistic encroachment. There has been, however, a marked tightening of the situation during the past ten days with the Communists reorganizing and strengthening their strong arm squads in Communist controlled factories. The possibility could, therefore, not be excluded that an attempt will be made in the near future by the Austrian Communists to seize power by a coup d’etat. They could have no expectation of seizing control of the entire state, but they could endeavor to obtain a sufficient foothold in the labor and security organizations to be able to dictate terms in the future.

The forthcoming election of a new State president could possibly provide a pretext for a showdown. The election of the president by the assembly would necessitate an amendment of the constitution. Such amendment, however, calls for a unanimous decision of all four members of the Allied Council in Austria. The Austrian Government has, however, chosen to have the president elected by popular vote, thus depriving the Soviets of the chance to exercise their veto powers. The Soviet authorities had now come forward with the thesis that the constitution and all laws directly based on it have no validity. Should this position prevail, the whole legal structure of the Republic would be challenged. At the Allied Council meeting on February 9 this question was expected to be decided, Ambassador Donnelly hoped, against the Soviets.

Economically, the country still depended, and would depend for some years to come, on U.S. assistance, for which the country was grateful.

The common Communist tactics of threat and fear were consistently applied in Austria. The Soviet authorities had lately accused us of organizing an Austrian Army and of increasing the Gendarmérie in violation of existing agreements.

. . . . . . . . . . . . . .

To Ambassador Kirk’s⁴ question regarding the disposition of Austrian oil, Ambassador Donnelly replied that the Soviets controlled production and distribution and made only a small portion of it available to the Soviet Zone of Austria and Vienna, while shipping the bulk to the satellite nations. The Soviets exploited their zone to the full, refusing payment of taxes from their so-called German assets and using railway facilities, etc., without payment. As regards the chances for coping successfully with a Communist attempt to overthrow the Government, Ambassador Donnelly replied to another question by Ambassador Kirk that if Soviet troops did not directly participate in such an action, we believed the Austrian Government would be able to control the situation.

In reporting on the situation in France, Ambassador Bruce stated that the recent visit of Prime Minister Pleven to Washington had proven an unequivocal success.

As to France’s internal problems, the question of electoral reform appeared to be the most important one at the moment since national elections were scheduled this year. The present system of proportional representation had enabled the Communists to win 182 out of 620 seats in the National Assembly. This was equivalent to 28 percent. In 1946, the Communist popular vote amounted to 29 percent. The proposed electoral reform which would introduce partially the majority system would cut down Communist representation considerably and thus enable the Parliament to function on a more stable basis. Pleven was pledged to get this reform voted, but the possibility could not be excluded of his being overthrown on this issue. His Government would then, in all probability, be replaced by another “third force” government.

In external affairs, the problem of Indo-China caused the greatest concern, although developments there have taken a more favorable turn lately. This could partially be attributed to the presence of General de Lattre de Tassigny. The loss of 26,000 professional soldiers, including a large number of officers and non-coms, since 1946, was especially grave since it would affect the rate of expansion of the French Army. The shipment of U.S. arms and equipment was also an important factor in improving the situation. If the expected Chinese Communist attack did not materialize within the next two months, it appeared possible that it might be delayed until October or November because of monsoon weather. With 162,000 troops engaged in Indo-China, the drain on French manpower and resources was serious. General de Lattre de Tassigny was expected to request an additional 1 1/2 divisions in 1951, which, if supplied, would decrease the quality at least of France’s contribution to Europe’s defense.

With respect to France’s contribution to this defense, two questions were paramount:

A. Will the French succeed in putting ten divisions in the field during this year?

B. Will they play their part in equipping these forces?

While the answer to the first question appeared positive, the outcome of the second remained in doubt. French leaders were, however, strongly determined to realize this program.

In reviewing the Communist problem in France, Ambassador Bruce stated that while the Communist Party in 1946 had 1,000,000 card-carrying members, the membership was estimated today at 675,000. The hard core of resolute and aggressive militarists, pledged to follow Moscow’s bidding amounted to only some 20,000 to 50,000.

Although the Communist-controlled unions (CGT) were still considerably stronger than the non-Communist unions (FO and CFTC), it was significant that the Government was capable of suppressing all Communist attempts at sabotaging arms shipments.

In Prime Minister Pleven’s view, with which Ambassador Bruce agreed, great numbers of people voted for Communist candidates more in protest against the economic conditions of the working class than from any sympathy with Communist ideology;

The Communist press had suffered proportionately greater losses in circulation than had the democratic press. Communist penetration of the army was not significant. Measures were being taken to further reduce the number of Communists among the military as well as the civil servants. Furthermore, the Interior Ministry was confident that it would be able to handle any Communist disturbance which did not have extensive non-Communist support.

Financial difficulties remained great and the danger of inflation was constant. Among the chief reasons for this was France’s dependence on imports of raw materials.

To Ambassador Gifford’s question as to whether the French would fight, Ambassador Bruce answered that in Indo-China the French army had displayed a remarkable fighting spirit, high morale, and great valor. French resistance to a Soviet attack, however, would be contingent on their confidence that sufficient strength and armaments would be available to give such resistance some prospect of success. In his opinion, a great number of French people still believed that an occupation would be preferable to a hopeless fight involving the physical destruction of France.

In reviewing the present situation in the Soviet Union, Ambassador Kirk underlined the inflexibility of the Soviet situation. He stressed the monolithic structure of the Soviet system headed by Marshal Stalin, under whom the Politburo supervised the activities of the 60 ministers. In Ambassador Kirk’s opinion Prime Minister Stalin still was the leading Soviet figure. When he last saw Stalin in 1949 his health appeared to be good and he displayed remarkable mental ability. He probably would continue to guide the destiny of the Soviet Union for the indefinite future. Since Stalin had succeeded in returning to the Russian Empire vast lost areas and since incessant propaganda proclaimed that he had introduced a remarkable betterment in the condition of the masses, he was genuinely accepted by a large proportion of the Soviet people as a symbol of Russia’s greatness.

It could not be denied that a remarkable progress in the development of industry had been made since the last war. Grandiose projects for a further increase of industrial capacity were planned. Steel production had reached a level of 27 million tons a year amounting to 1/4 of U.S. production.

Military spending accounted for the largest slice of the budget, with heavy industry as second and consumer goods as third. It was estimated that 4 million men were under arms; 1/2 million in the navy; 1/2 million in the air force; 1/2 million in the security police; and 2 1/2 million in the army. The troops were stationed on the periphery of the Soviet Union and were ready to move on short notice.

The virulence of Soviet propaganda directed against the West and especially against the United States was remarkable. Since it was fed to the Soviet people for a considerable length of time, it was unavoidable that a great proportion of the population came to believe it. Our propaganda, on the other hand, has had very little effect on the Soviet people. This is mainly due to the successful interference with our Russian-language radio programs. The penetration of the Soviet Union by other means appeared almost impossible since the frontiers were hermetically sealed.

It appeared, moreover, that the Soviets still adhered to their expectation of an impending deteriorating of the capitalist system which would enable the Soviet Union to achieve its objectives without the expenditure of blood and treasure. The Communists would continue to work for the economic collapse of the democratic countries of Western Europe, like France and Germany. This would, in their opinion, leave the U.S. isolated and it could then be subjugated easily by military force.

The Sino-Soviet treaty caused some concern because of the mutual assistance provisions of Article I of the treaty. The Soviet press has recently been pressing the point that Japan is allied with the U.S. in military operations in the Far East, and this press campaign may be laying the basis for possible Soviet intervention in any conflict between China and the U.S.

The relationship between Moscow and Peiping differed from that existing between Moscow and the satellites. The latter were treated as inferior powers, while China was treated by the Soviet Union more like an equal.

Soviet relationships with its other Asiatic neighbors should also be watched carefully, especially the relationship with Iran whose oil constituted a great temptation. Iran’s policy toward the Allies has of late, also deteriorated, while Turkey continued to maintain its strong stand vis-à-vis the Soviet Union.

With regard to Soviet reaction to German rearmament, Ambassador Kirk stated that an Allied action which would bring the military strength of the Federal Republic on a par with that developed by the Soviet Union in the East Zone might not provoke Soviet aggression. Should, however, West German military strength be developed in the magnitude of, say, 50 divisions, this could provoke Soviet aggression.

Taking into consideration Stalin’s achievements to date, he might not wish to risk his assured place in history and the present predominant position of the Soviet Union in a world war. On the other hand, vanity and the flattery of advisers might cause him to take the decision for war on the basis that the chances for Soviet victory appeared more favorable today when they would be in the future.

Assistant Secretary Perkins remarked that the consensus at the Paris meeting of the U.S. chiefs of mission was that there were no signs of preparations for immediate hostilities although the buildup of military strength continued. It was reported, however, that in Budapest construction of air raid shelters was proceeding on a night-and-day basis. Ambassador Kirk remarked that no new activity for defense such as the building of air shelters or balloon barrages, could be observed in Moscow when he left on December 4.

In reporting on the German situation, United States High Commissioner McCloy stressed the remarkable progress made in Germany since the last Ambassadors’ meeting.⁵ Not only had the government stabilized its position but the Parliament had also shown signs of increasing maturity. The economic progress in terms of productivity continued. Unemployment was, however, still serious, while the lack of housing continued to be a serious problem.

The community was understandably nervous and uneasy under the increasingly strong pressure from the East. Although the Communists, as a party, had lost all influence, their propaganda succeeded in instilling a desire for neutralization in a considerable segment of the population.

The appeal which unification held for them called for the clarification of the position to be taken at any forthcoming Council of Foreign Ministers meeting. Mr. McCloy stated that the German people were anxious for unification. Although most Germans desired integration with the West, neutralism would be accepted by them if they thought that fighting on the side of the Western Powers would mean defeat.

The ambivalent character of the Germans had to be taken into consideration. There were certain elements which were disposed to align Western Germany with the East. On the other hand, Dr. Adenauer preferred the present situation as against a unified but neutralized Germany, which would, in his opinion, inevitably be absorbed into the soviet orbit.

The Grotewohl letter⁶ and the resolution of the Soviet Zone Parliament proposing conferences on German unity had stirred the country.⁷ The position of the Evangelical Church, exemplified by Pastor Niemoeller, accentuated the instability of German public opinion on German unification.

The German people’s general attitude with regard to participation in Western defense paralleled closely that of the French. The Germans would fight if they felt that Allied strength, together with German forces, would be strong enough successfully to resist Soviet aggression.

The Soviets had developed in their zone paramilitary forces numbering approximately 50,000. It appeared that the intention of the Western Allies to strengthen their military power had acted as a deterrent to further expansion of these German forces. There had been, however, a purge of unreliable elements and a considerable sharpening of their military training. This force could be expanded rapidly to a strength of 250,000. In addition there were 35 Soviet divisions ready to march at any time.

Mr. McCloy stated that whether we should rearm Germany or not, we had to adopt a vigorous, consistent policy if we aspired to keep Germany on our side. We had to be more imaginative and active, and less hesitant and vascillating. Time was running out. Constructive measures had to be taken now, without paying too much attention to Western opinion.

Instead of discussing the German situation in terms of limitations such as those imposed by PLI, ISG and the replacement of the Occupation Statute by contractual agreements, we should proceed to envision a broad, positive program of integration of Germany as an equal partner with the West.

With regard to criticism leveled in Great Britain at decisions reducing sentences of war criminals imprisoned at Landsberg, Mr. McCloy referred to the reasoning which led to these decisions, incorporated in a HICOG brochure. Mr. McCloy said that these revisions had been made in an attempt to bring the sentences into line with the American concept of justice.

Summary Record of Meeting Held at 2:00 p.m., February 5, 1951

AMCO/SR(51)2

item 2: Europe’s relation to the rest of the world

The Chairman stated that in Washington, agreement existed that Europe was of first importance. He said the question was whether Europe could get along if Asia were lost. The Chairman said that the thinking of the group present on this question would be helpful to the Department.

Ambassador Gifford thought that the U.K. Government concentrated its efforts in Asia on keeping India on their side since it felt that its loss would lead to the loss of other Asian commonwealth nations and finally to the disintegration of the Commonwealth itself.

The Chairman proposed to return to consideration of this question in the course of one of the next meetings.

item 3: spain and yugoslavian’s place in the european scene

The Chairman discussed the question of associating Spain with Western Defense. He summarized the paper adopted by the NSC on February 1 in which it was agreed that we should go ahead and try to get Spain lined up on our side. The procedure would be to get the support of France and the U.K. in the first instance, and then that of the other NATO countries. The Chairman explained that while the JCS had originally thought of the Spanish contribution to Western Defense in terms of troops, the emphasis now was on air and naval bases.

Ambassador Bruce stated that in view of the strong anti-Franco sentiment of the French Republic in general and of the trade unions in particular, Spain’s inclusion as an active member of the NATO should not be raised, at least pending new elections. Pressing for Spain’s inclusion in NATO would produce a negative emotional reaction which would retard the acceptance of Spain as a military partner. There was the danger of such a move being interpreted as a strategic decision to withdraw to the Pyrenees, thus throwing doubt on the Allied ability and will to defend continental Europe.

Ambassador Murphy stated that the Belgians took a realistic view on Spain’s participation. Holland’s position was unknown, but Italy, although unwillingly, agreed to association of Spain in the defense effort. Mr. McCloy stated that while ideological difficulties would not be encountered in Germany, he feared an adverse psychological reaction regarding Allied intentions of defending Germany.

Ambassador Gifford stated that the U.K. Labor Government was unalterably opposed to associating Spain with the NATO organization.

The consensus was that the gradual association of Spain with the defense of Western Europe was desirable; that because of political factors in Western Europe, no attempt should be made now to associate Spain multilaterally through NATO; that the approach should be bilateral (U.S.-Spanish) with minimum publicity.

. . . . . . . . . . . . . .

item 4: status of plans for a european army

Ambassador Bruce began by saying that the conference to be held in Paris on the creation of a European army was postponed to February 15 and that a memorandum of the French presentation would be circulated in advance.⁸ There existed a serious desire on the part of the French Government to realize this project which was considered by leading French statesmen as an important further step in French policy for European integration, paralleling in the military field what was to be accomplished in economic field by the Schuman Plan.

The basic principles, as now conceived by the French, were that the European Army’s functions were to provide completely trained divisions to the NATO commands, but to have no authority in matters of command and armaments.

Although the plan was not yet available on paper, it appeared that the French envisaged the appointment of a High Commissioner for the European Army who would be responsible to a Council of Defense Ministers of the participating countries and the corresponding German official. An Assembly consisting of parliamentary representatives of the participating countries and having advisory powers only would be established. One of the first tasks of the High Commission would be to work out a common budget and a common set of military regulations.

In discussions as to the strength of units, it was noted that the strength of regimental combat teams appeared to be rather flexible.

Mr. McCloy made a detailed report on the High Commission’s negotiations with the Germans concerning their participation in Western Defense. (A summary of these negotiations is attached as Appendix “A”.)⁹ Mr. McCloy subsequently pointed out that the Germans were prepared to accept the concept of a European army, and apparently did not wish to create a national military force.

Ambassador Bruce stated that, in his opinion, it was of paramount importance to France to obtain firm German integration with French forces even if nobody else would join. The French considered this preferable to allowing Germany to develop its military potential alone. He also expressed the view that General Eisenhower will succeed in obtaining the size and type of unit which best suited the over-all scheme.

Mr. McCloy also pointed out that the structure of the 10,000 man unit which the Germans had proposed, seemed especially suited to offset the Soviet masses with great fire power and mobility.

item 5: Germany’s future as part of western europe

Mr. McCloy stated that the main political and economic developments were set forth in detail in the HICOG briefs, and proceeded to the discussion of a possible U.S. position at any CFM conference which may be held as a result of the Soviet request for such a meeting.¹⁰

The U.S. had, for a long time, advocated the policy of German unification based on such things as free elections and freedom of political parties throughout Germany.

The East German authorities had recently come out with proposals for unification which went far beyond the proposals made in Prague. Even if these offers were made in good faith, it was evident that the Soviets would not agree to German unification without neutralization. On the other hand, it appeared fantastic to suppose that Russia would ever relinquish such immediate benefits as its strong position in Eastern Germany, and its control over the uranium mines in Saxony for possible long-term benefits to be derived from a unified, neutralized Germany.

There existed a great sentiment for unification among the German people, strengthened by their apathy and fear of another war.

Both Dr. Adenauer and Dr. Schumann [ Schumacher], however, realized that Germany’s neutralization must inevitably lead to its absorption by the Soviets.

Berlin constituted another problem intricately connected with the question of unification. It stood to reason that should we refuse to go ahead with unification and, by implication with German neutralization, Berlin might again be subjected to a serious attack. It was doubtful whether we would be in a position now to defeat another blockade. Although Berlin’s economy had improved, its situation behind the Iron Curtain made it extremely vulnerable. Recently there had been troop reinforcements close to Berlin, whose population constituted our staunchest supporters in Germany.

Should Germany be unified, the problem of Berlin would be solved, since that city would again become the capital of a unified Germany. Should we be placed in a position of blocking what appeared to be a reasonable plan for unification, this could mean the loss of Berlin, a serious reversal for our policy in Germany and in the whole of Europe.

Mr. McCloy stated that for these reasons he viewed the proposed CFM with great trepidation, and that we must steer a course which would not jeopardize our objectives.

At the Chairman’s request, Col. Byroade outlined current Washington thinking on the position to be taken at the CFM.

Col. Byroade stated that there has as yet not been a crystallization of views on the problem. While the Russian specialists consider that the Soviet Union would never give up an area which they controlled so solidly, the German specialists felt that the signs indicated that there was a decided possibility of substantial concessions from the Soviets to attempt neutralization of Germany.

On the other hand, it was realized in Washington that the neutralization of Germany would weaken the rearmament effort in the Low Countries and Scandinavia, and eventually in France. In that case, public opinion in the U.S. might also turn, since the U.S. has come to regard German rearmament as necessary to successful defense of Europe.

Germany was not a negotiable item at the present time. It could not be bartered for an easing in tensions. Therefore, conclusion of the Austrian Treaty and the departure of the Soviet Army from the satellite areas should be prerequisites to any agreement on Germany’s unification.

Col. Byroade then referred to a paper prepared in GER which discussed possible U.S. positions at the CFM. (For contents of this paper, see Appendix B–2, AMCO/SR(51)2, containing four commitments which should have to be avoided.)¹¹

After considerable discussion the meeting felt that if the Soviets would not agree to conditions which would generally relieve the existing East-West tension, the four points contained in Col. Byroade’s paper should be recommended for consideration as the U.S. position in the forthcoming CFM.

Col. Bonesteel asked whether our present difficulties were not caused by our loss of the propaganda war. He considered the delaying of the CFM essential, and referred to statement by Mr. McCloy, who had advocated the view that all available time should be used for rapid increase of Allied strength.

The Chairman stated that should we reverse our position on NATO for the sake of trying to reach questionable agreements with the Soviets, we would have to face the slackening of the will to rearm at the present time evidenced by the West European countries.

The discussion of the subject was postponed pending the decoding of the Soviet reply to the latest U.S. note on CFM,¹² which it was learned had just been delivered.

The meeting adjourned at 5:30 p.m. to reconvene at 9:30 a.m., Tuesday, February 6, 1951.

Summary Record of Meeting Held at 9:30 a.m., February 6, 1951

AMCO/SR(51)3

item 6: nato problems

At the Chairman’s suggestion, Ambassador Spofford outlined the structure of the North Atlantic Treaty Organization and pointed out the areas of conflict which had caused public criticism of the organization’s slowness in achieving results. He outlined the Canadian proposals for the reorganization of this structure, which is now actively under discussion in the Council Deputies, and presented briefly his own compromise position which he had presented in Washington.

The main point of debate on the reorganization of the NATO had been the continuation of the Defense Committee and the form it was to take if continued. Ambassador Spofford stressed the importance of receiving instructions. His compromise proposal, which was under discussion in Washington, provided for a council whose members were to represent governments and a defense committee to serve the council in an advisory capacity.

It was agreed that this proposal was generally acceptable to the Ambassadors and that an appropriate cable should be dispatched to Washington.¹³

item 6 (3): production problems

Ambassador Spofford outlined the difficulties facing NATO in the production of goods for Western defense. In the past the agencies concerned with effecting military production had been at too low a level and had suffered from lack of coordination. Recently these agencies had been reorganized and a twelve-man Defense Production Board established consisting of representatives of the member nations of NATO, headed by a coordinator. It was hoped that this higher level board would be able to expedite production of defense materials. It was hoped that the past experiences and the data compiled by previous agencies would enable the newly named coordinator, Mr. Herod, to speed up production.

A general discussion disclosed that it had been heretofore impossible to agree on an over-all plan for standardization of military supplies in the member nations of NATO or to determine what particular items would be produced in the various countries. In the absence of such an over-all plan, France, the U.K. and Italy had formulated plans of their own which considered their own needs rather than those of countries which might have surplus manpower but lacked the industrial potential to arm them. Other countries with industrial surplus (particularly Belgium) were capable of producing far more arms than their small national armies would require. The problem was, thus, to start production immediately in these countries pending the development of an overall plan. It appeared that these requirements could be met only through budgetary appropriations by the countries with surplus industrial capacity. It would, however, be difficult, if not impossible, to convince the Finance Ministers to say nothing of the Parliaments of these countries that they should supply funds without knowing what these funds would be spent for. It would be politically easier in these countries to appropriate funds for certain numbers of tanks, guns or ammunition, rather than to appropriate funds for unspecified purposes.

Since no multilateral plan could be expected to be developed in the immediate future, it was important for the U.S. to negotiate bilaterally with all governments concerned to attempt to induce them to include appropriations for defense production within their budget and to provide them with as much detail as possible as to the use which would ultimately be made of these funds.

It was the understanding of the meeting that Ambassador Murphy would draft recommendations along these lines to be despatched to the Department.¹⁴

item 6 (2): economic problems

Ambassador Katz outlined the economic situation in Europe, pointing out that the total armament load asked of European countries did not exceed their ability to produce without radically lowering living standards. Thus the problem was not essentially an economic one, but was rather political and psychological. The European nations must be brought to believe that they are being treated fairly and their contribution to their own defense was in their own imperative interest, not a favor which they are doing for the U.S.

Ambassador Katz, in discussing U.S. aid to Europe, emphasized that the objectives of ECA and MDAP economic aid were similar, that both were U.S. forms of assistance and that they could not be separated if our objectives were to be obtained without loss of efficiency, and consequent misapplication of many dollars. They must be under one head and run as a unit. He further pointed out that availability of raw materials rather than the question of U.S. dollars would be increasingly the problem. The allocation of raw materials would become a matter of economic assistance and control of materials should be integrated with the other two programs. He concluded by stressing that though the Marshall Plan itself was decreasing in size, U.S. economic assistance, whether indirect as in grants of defense materials or direct, was still invaluable to the accomplishment of U.S. objectives.

items 6 (2) a & c: equalization of burdens and raw materials planning

Since these subjects were adequately covered by NATO papers included in the HICOG briefing book, there was no discussion on these items.¹⁵

item 6 (2) e: relationship of nato, eca and oeec

Assistant Secretary Perkins asked the meeting to consider the “Relationship of NATO, ECA and OEEC.”

Considerable discussion developed and the meeting generally agreed that some reorganization of the relationship between these agencies was necessary.

The meeting recessed at 12:30 p.m.

Summary Record of Meeting Held at 2:30 p.m., February 6, 1951

AMCO/SR(51)4

item 6 (2) e of agenda: relationship of nato, eca and oeec

The Chairman opened the session by stating that the discussion of Agenda Item 6 (2) E would continue.

The meeting discussed at length Department Cable sent Frankfurt Circ. 454 (attached as Appendix “A” to AMCO/SR (51)4¹⁶ concerning the relationships between the Embassies, NATO and ECA. This discussion centered around the functional responsibilities of various agencies and the need for coordinating their programs. It was generally felt that this coordination will be enhanced by a move of the headquarters of the various organizations to the same location. The consensus was that the most appropriate location for this centralized headquarters would be in Paris but that the large part which General Eisenhower’s headquarters would play made it mandatory that his wishes be respected.

Ambassador Gifford pointed out that the British would oppose any move of NATO-organizations from London but felt that this opposition would be lessened if General Eisenhower were to express his desire for the move.

General discussion of means of accomplishing closer coordination and of eliminating duplication between the U.S. international agencies operating in any one country disclosed general agreement among the Ambassadors as to the form such a reorganization should take.

It was agreed that a working party should draft a reply to the Department’s Cable for consideration of the Ambassadors and that Ambassadors Bruce and Katz would frame the long-term recommendations of the Ambassadors.

In the course of the afternoon the working group to formulate a reply to the Department’s Circular telegram returned a draft which after some discussion, was agreed and dispatched as Sec State 6511, Frankfurt to the Department. (Attached as Appendix “B” to AMCO/SR(51)4¹⁷)

item 8: four-power meeting

The text of the Soviet reply of February 5 to the U.S., British and French notes dated January 23, 1951 on the subject of a four power foreign ministers’ meeting (See Appendix “C” to AMCO/SR(51)4¹⁸) having been received, the meeting turned to discussion of this note.

Mr. McCloy, analyzing its contents, pointed out that the note appeared to be somewhat broader than the former Soviet approach which would limit talks solely to German rearmament; moreover, the present document mentioned the question of Western rearmament and thus offered an opportunity to focus the attention of world opinion on the large-scale rearmament and remilitarization which had gone on in Soviet areas.

In accusing us of wishing to present them with a fait accompli as regards German rearmament, the Soviets were subject to an Allied counter attack, especially as regards rearmament of the Soviet Zone of Germany, the satellite violations of the peace treaties, Korea, Czechoslovakia, etc. In attacking Adenauer and Schumacher, the Soviets had given us an opportunity to bring those two closer together by defending them.

Colonel Byroade noted that the Soviet proposal called for a Council of Foreign Ministers Meeting, not a meeting of the four Foreign Ministers and hence, that the meeting be conducted within the terms of the Potsdam Agreement.

Various lines of approach to the note and to the entire subject of discussions with the Soviets were explored. The greatest interest centered around the definition of steps which would have to be taken to reduce the causes of international tensions in a manner acceptable to the U.S., and it was agreed that the principal causes should be stated in the reply to the note.

Two questions were raised in this connection:

(1) How should the note be answered? and,

(2) If a meeting developed, what should be the U.S. approach?

In Ambassador Brace’s opinion, the United States position taken at previous CFM meetings concerned itself too much with the analysis of the Soviet approach and the determination of possible concessions by the Russians which would enable at least partial agreement. The time had come for the United States to take an aggressive stand and state flatly the terms under which the United States would consider a broad agreement, relieving the present world tension, possible. The nine points mentioned in this connection by Ambassador Bruce coincided largely with those contained in a British position paper regarding the forthcoming CFM. These points were:

1. The dissolution of the Cominform;

2. cessation of Soviet propaganda;

3. cessation of fostering insurrection in areas outside the Soviet orbit;

4. free elections under UN supervision in the satellite areas;

5. reduction of the armies of the Balkan satellites in accordance with the peace treaties;

6. agreement to general disarmament and atomic control under international inspection;

7. immediate cease-fire in Korea;

8. regulation of the Formosa problem under auspices of the UN;

9. affirmation of the UN Charter provision on non-aggression.

If the United States would come forward with such a broad program then the failure of the Soviets to agree in its implementation would put the onus squarely on Soviet shoulders.

A proposal to limit U.S. proposals for the CFM agenda to European questions was opposed by Colonel Byroade. He stated that it would not be opportune for Secretary Acheson to discuss solely European questions while U.S. troops were engaged in Korea. During the subsequent discussion it was agreed that not all of the points mentioned should necessarily be either used in the reply to the Soviet note or included on the agenda. It was also agreed that the reply reject the allegations regarding Adenauer and Schumacher. General Handy remarked that to the common man the Soviet note would appear to be a favorable reply and that it would be difficult to take a negative stand.

Mr. McCloy pointed out the implications of a possible agreement on Berlin, on the general U.S. position in Europe, and on the will to get forward with defense in Europe should the meeting lead, against expectations, to Germany’s unification and neutralization.

Ambassador Gifford and Mr. Holmes expressed the view that the Soviet note would be considered by the British Government as making Allied attendance at a preliminary conference with the Soviets to determine the agenda for a possible CFM impossible to decline.

Ambassador Bruce stated that the same attitude would be taken by the French Government.

It appeared to be generally agreed that Ambassador Katz’s suggestion of a strong propaganda drive to accomplish whatever line was adopted must be implemented immediately.

In view of Secretary Acheson’s press conference scheduled for Wednesday morning it was agreed on Mr. McCloy’s suggestion that the Ambassadors’ views concerning the Secretary’s approach in this press conference should be cabled and that general discussions be resumed at the fifth session. (The Ambassadors’ views as drafted by Colonel Byroade and Mr. Reber, Col. Gerhardt and Mr. Trimble were dispatched as Frankfurt Cable 6518 to Department.¹⁹)

Ambassador Spofford circulated a paper on Germany’s relationship to NATO for discussion at the next session.

The meeting subsequently considered Paris telegram on the Schuman Plan addressed to the Department and HICOG for action. This message contained Netherlands’ proposals watering down Articles 60 and 61 of the Schuman Plan. Since the message was addressed to HICOG rather than the Conference, the meeting agreed that no action was called for.

The meeting adjourned at 5:55 p.m. to resume in the fifth session at 9:30 a.m. on Wednesday, February 7.

Summary Record of Meeting Held at 9:45 a.m., February 7, 1951

AMCO/SR(51)5

Consideration of Policy on Publicity

The Chairman, Assistant Secretary Perkins, when asked about a communiqué regarding the conference, stated that the conference should be considered on par with departmental meetings. In analogy, no communiqué should be published and no information given to the press as to items discussed.

item 6–d (b): german participation in the schuman plan

Mr. McCloy reported that US HICOG had spent considerable time and effort in trying to influence the German authorities to play a positive role in bringing the negotiations on the Schuman plan to a successful completion.

With the French staying in the background and the British believed to be engaged in undercover maneuvers against the plan, we have felt justified in exercising pressure on the Germans. There were many difficulties of an economic nature involved in the realization of the plan, as outlined in the HICOG brief on the subject. It seemed, however, that these difficulties were almost overcome. Mr. McCloy concluded by stating that there was “a prospect of a dawn” as regards the Schuman Plan.

Assistant Secretary Perkins remarked that Secretary Acheson was actively interested in the Schuman Plan and had inquired whether we were doing all we could in Germany to help the plan along.

Mr. McCloy replied that the question was whether we were not doing more than we should. He felt that this was justified since utmost importance for future fundamental developments in Europe should be attached to the realization of the Schuman Plan.

item 6–f: problems of east-west trade

Mr. McCloy outlined the serious implications involved in the problem of East-West trade.

The strict enforcement of control lists met with some German resistance since other West European countries did not enforce them with the same vigor which we demanded of the Germans. Moreover, certain border areas depended on raw materials which could only be obtained from East Germany. As a result, border controls were not strictly enforced.

At Mr. McCloy’s request, Mr. Cattier, Director of Office of Economic Affairs, HICOG, and chief of ECA Mission in Germany, supplemented Mr. McCloy’s report by stating that there was good cooperation from high German authorities. Cooperation down the line of the administrative machinery was, however, less satisfactory. This could be due to the fact that German administration has been but recently created. There has been an improvement in the situation during the past three or four months which was coupled with an increase in border control personnel. The alternatives to the present situation were:

1. Enforcement of complete control of trade with the Soviet orbit and East Germany.

This would lead to severe retaliatory measures and perhaps to a new Berlin blockade. It would also necessitate complete control of trade which would result in the need for greater dollar aid to Western Germany.

2. Introduction of partial controls whereby certain goods would be subject to export prohibition.

3. Introduction of straight barter deals negotiated on an individual basis.

Subsequent discussion brought to light that there had been an increase of 100 per cent in Berlin’s trade during the past several months.

Mr. Katz relayed Ambassador Kirk’s view that the possibility should not be excluded of the Soviet orbit terminating East-West trade on its own initiative. This view was based on the fact that the whole orbit area was making progress in achieving autarchy and, although such a step could lower their standard of living, they might consider that the cessation of East-West trade would hurt Western Europe more.

Consideration of Cable Reply to Washington Circular 454 on Relationships Between Embassies, ECA Missions and MAAG

The Chairman reviewed the draft reply which was approved with certain modifications.

item 6: nato problems, german association with nato

Ambassador Spofford commented on a paper circulated at the previous session and outlined the desirability of associating Western Germany with the NATO. In the meantime there should be participation by German representatives in NAT organizations as appropriate. He pointed out that some thinking favored an indirect association through the OEEC. He inquired of Mr. McCloy as to the German reaction to association with NATO. Mr. McCloy replied that German reaction was at first unenthusiastic. This attitude had, however, changed as of late, becoming more favorable although there was no eagerness as yet to join. The German complex on the question of “equality” was injected also into this problem.

After further discussion, the meeting agreed that no move should be undertaken for the time being on Germany’s association with NATO until German developments, as a whole, had made more progress. The discussion brought to light that German industrial potential has so far been left out of NATO planning.

Ambassador Katz stated that it was intended to have Mr. Batt, the U.S. representative on the Supply Board, work through Directors of Industrial Divisions of all ECA missions thus assuring the necessary contacts and coordination.

item 7: coordination of psychological warfare programs

The Chairman requested Mr. McCloy to outline the problem.

Mr. McCloy saw no need to emphasize the importance of psychological warfare to the attainment of U.S. objectives since the Ambassadors were already aware of the need for emphatic action in this sphere. He pointed out that Soviet propaganda is having considerable impact on the people of Germany who are influenced by the Communist propaganda lines, such as neutrality and the peace front even though they do not vote as Communists or subscribe to Communistic ideologies. He pointed out that U.S. efforts alone would not be adequate to attain our objectives, nor would the efforts of any single nation. It was necessary, in Mr. McCloy’s opinion, to stimulate all of the free nations to do more in the field of propaganda. The present propaganda effort would gain in effectiveness if it were more European and less obviously American. We should try to work increasingly through the national information services of the Western European countries. He suggested the establishment of a board to operate out of a central headquarters, possibly Paris, to formulate recommendations for a program to contact the public relations authorities of the country to which the board members were accredited, in order to stimulate a more effective propaganda program.

Ambassador Spofford considered that the NATO information service which had recently been set up with an integrated staff might play a more active role in the propaganda field. Increased personnel would be necessary although the approach would be through national information services with a minimum of direct operations. Some of the smaller nations lacked monitoring facilities and the finances to undertake such work. The U.S. and U.K. had begun supplying monitoring reports to these countries. The British have not been enthusiastic about bringing the smaller countries into a more active role in propaganda operations, believing that the U.S. and the U.K. are already doing well enough without such assistance.

Ambassador Bruce pointed out that the propaganda activities of all free nations needed stimulation since Russian efforts had been much more successful than ours. He felt that our reliance on “truth and truth alone” in the propaganda war was insufficient; to be successful truth must be mixed with skill.

Ambassador Katz pointed out that good propaganda should bear no national label. He thought that unions of one country should talk to unions in another, that farmers should speak to farmers, businessmen to businessmen and intellectuals to intellectuals. He outlined the possible organization to accomplish our objectives but pointed out that no organization could be successful without a leader of the highest caliber. He felt that our overt information must continue its policy of absolute truthfulness.

After considerable discussion the meeting agreed to make no definite recommendations in view of the extensive plans of government and nongovernment agencies to take action in the immediate future. It was agreed, however, that the ambassadors would give this their individual attention and would encourage periodic meetings of their respective information staffs in an effort better to coordinate the program.

The meeting and conference closed at 12:45 p.m.

1. For documentation concerning the tour of the NATO capitals by the Supreme Allied Commander Europe in January, vol. iii, Part 1, pp. 392 ff.
2. For documentation concerning this plan, usually referred to as the Medium-Term Defense Plan (MTDP), see vol. iii, Part 1, pp. 1 ff.
3. For documentation on the disorders in Austria during September and October 1950, see Foreign Relations, 1950, vol. iv, pp. 404 ff.
4. Alan G. Kirk, Ambassador in the Soviet Union, was present for the first day of meetings in Frankfurt.
5. For documentation concerning the Ambassadorial meeting held in Rome, March 22–24, 1950, see Foreign Relations, 1950, vol. iii, pp. 795 ff.
6. For documentation concerning Grotewohl’s letter to Adenauer of November 30, 1950, see ibid., vol. iv, pp. 668 ff., and vol. iii, Part 2, pp. 1747 ff.
7. For documentation concerning the Volkskammer resolution of January 30, see ibid., pp. 1751 ff.
8. For documentation concerning the Conference for the Organization of a European Defense Community, see vol. iii, Part 1, pp. 755 ff.
9. Appendix A, not printed, described in four pages the present status of negotiations concerning “German Defense Participation” and the problems that stood in the way of creating a Western European army. For documentation on the meetings at Bonn held to discuss this question, see ibid., pp. 990 ff.
10. For documentation concerning the Four-Power Exploratory Talks at Paris, held to prepare an agenda for a possible Council of Foreign Ministers meeting, see vol. iii, Part 1, pp. 1086 ff.
11. Appendix B–2 is not printed. The original draft of this paper, dated December 28, 1950, is in vol. iii, Part 1, p. 1048.
12. For text of the note by the United States and the Soviet reply of February 5, see vol. iii, Part 1, pp. 1065 and 1070.
13. The agreed proposal was transmitted to the Department of State in telegram 6517 from Frankfurt, February 6. (120.4362A/2–651) For documentation on the reorganization of NATO, see ibid., pp. 1 ff.
14. These recommendations were transmitted in telegram 6537 from Frankfurt, February 7. (120.4362A/2–751)
15. The NATO papers on equalization of burdens and raw materials planning are not printed.
16. Appendix A, Department of State circular telegram 454, February 6, is not printed.
17. Appendix B, telegram 6511 from Frankfurt, February 6, is not printed.
18. Appendix C is not printed, but see footnote 13 above.
19. Telegram 6518 from Frankfurt, February 7, is printed in vol. iii, Part 1, p. 1073.