Memorandum of Conversation, by the Assistant Secretary of State for Economic Affairs (Linder)1

  • Subject:
  • Discussion of Current East-West Trade Problem with French Ambassador
  • Participants:
  • French Ambassador Bonnet
  • M. Gontran de Juniac, Counselor, French Embassy
  • Secretary of State Acheson
  • Ambassador Philip C. Jessup
  • Harold F. Linder—E

The Secretary expressed our concern with the problem of the shipment of prior commitments of material on International List I and requested that the French Government give us every assistance in this matter. He explained that on the whole we had been able to work out satisfactory arrangements multilaterally in respect of future commitments but that unfortunately our law did not distinguish between contracts made prior to the enactment of the Battle Act on which shipments were still to take place and arrangements entered into after the enactment of our legislation. It was pointed out that the total volume of prohibited items shipped last year was approximately $7 million and if nothing were done to arrest them shipments over the next 12 months (of List 1 items) might aggregate as much as $21.5 million. If the U.S. Congress and public should find that in fact the trend of shipments was rising, our position would be most difficult and he thought it almost certain that we would be faced with a legislative mandate which would make it impossible for us to continue aid.

Of the $21.5 million, some $6 million is accounted for by Danish tankers, which matter we are taking up bilaterally with the Danes, and of the remaining $15 million, approximately $5.5 million comprising steel making or fabricating (machine tools) machinery was regarded by us as particularly dangerous. This latter group we regarded as a hard core, although all of the items were on the prohibited list. France had prior commitments aggregating approximately $4.8 million of which about $2.2 million constituted their share of the hard core. It was emphasized that the shipment of these items would constitute a direct addition to the war-making potential of the Soviet Bloc.

The Secretary then remarked that the Ambassador was no doubt familiar with the proposed Kem Amendment and pointed out [Page 851] strongly that the vote in the Senate of 59 to 11 should not be misconstrued. For this he thought we all had to thank the Vice President who had adroitly ruled in such a way as to cause the Senate to choose between the adoption of the conference report or the rejection of the Mutual Security Bill. It was important, he said, that our friends abroad should not be lulled into a sense of security as a result of this action and he stated that he was competently advised that had the issue of the Kem Amendment alone come before the Senate at that time, it was highly probable that the Administration would have been defeated and the amendment adopted. In conclusion the Secretary stated that there was to be a meeting in Paris on June 24 for which Mr. Linder was going over and that he hoped that M. Bonnet would transmit to his Government our great concern with this problem.

M. Bonnet replied that he did not have detailed familiarity with these matters but indicated that he appreciated the gravity of our legislative position and assured the Secretary that he would inform his Government fully and promptly.

  1. Drafted by Assistant Secretary Linder on June 13.