No. 201
Memorandum of Conversation, by Isaiah Frank of the Office of Economic Defense and Trade Policy1



  • Meeting Re EPU and Convertibility.


  • Mr. WaughE
  • Mr. Corbett—OFD
  • Mr. Frank—EDT
  • Mr. MooreEUR
  • Mr. BoocheverEUR
  • Mr. RingerFOA
  • Mr. FitzGeraldFOA
  • Mr. BuckFOA
  • Mr. HulleyFOA
  • Mr. KaplanFOA

The meeting was held to discuss the US position on the future of the EPU for the forthcoming meeting of the Council of the OEEC.2

General agreement emerged that the US should not assume the leadership at the meeting but should help guide the discussion in order to bring about a satisfactory one year renewal of the EPU and to preserve existing gains and encourage further progress in the field of trade liberalization. A settlement of outstanding indebtedness to the EPU should be encouraged without recourse to EPU’s convertible assets, but some limited use of such assets should not be ruled out.

There was some discussion of what the US position should be in the event that some EPU country, presumably the UK or Germany, [Page 366] should propose an early move toward convertibility. The FOA members expressed the concern that unless we were prepared with a clearly formulated position as to the relation between such a move and the continuation of EPU, the effect might be to break up the latter organization with repercussions of a serious nature on efforts toward integration in EDC and EPC. The State Department members felt that, in the absence of precise information as to the nature and timing of the move toward convertibility, the US could not adopt a meaningful position with respect to this eventuality at the present time.

There was some discussion of the forthcoming OEEC meeting of economic experts for the purpose of agreeing on the theme for the next annual OEEC report. Sentiment is apparently developing among the Europeans for focusing the report on the effects of a possible US recession. While the Europeans would like to see Mr. Hauge attend for the US, the latter apparently will not be able to do so. There is a possibility that Arthur Burns may go. State and FOA agreed that the European preoccupation with this subject has already been excessive and that we should try to prevent such a session from becoming an exercise in baiting the US.

FOA agreed to draft a paper embodying the foregoing points of agreement.

  1. Copies were sent to all the participants from the Department of State.
  2. Minutes of this meeting, the 251st meeting of the OEEC Council, held on May 5–6, 1954, are in OEEC files, lot 56 D 217, “C/M (54) 15”.