Foreign Relations of the United States, 1955–1957, Western European Security and Integration, Volume IV

142. Minutes of the 34th Meeting of the Council on Foreign Economic Policy, Washington, December 20, 1955¹

Washington, December 20, 1955

ATTENDANCE

• Messrs. Hoover, Prochnow, Dixon, Morse, Pendleton, Rockefeller, Rock, Thorp, Hauge, Burns, Mikesell, Anderson, Johnson, Brundage, Hutchinson, Hollister, Charrette, Humphrey, Burgess, Rose, Kendall, McCaskill, Hahman, McClellan, Dodge, Rand, Cullen

Draft Minutes of the 33rd Meeting, December 6, 1955 were approved.

AGENDA SUBJECTS

CFEP 520—U.S. Policy Toward the European Coal and Steel Community.

1. The Chairman briefed the Council on the report prepared by the Department of State at the request of the Council concerning the activities of the European Coal Community in eliminating restrictive business practices, which was distributed as CFEP 520/5² on November 15, 1955. This report and a subsequent CFEP staff study, CFEP 520/6² distributed on December 13, 1955, concluded that the Coal and Steel Community is exercising the maximum influence practicable against restrictive practices in the light of the circumstances and the difficulties which confront it. The basis for this conclusion is:

a. The significant anti-cartel actions already taken.

b. The recently announced plan to break up into three independent sales organizations the “GEORG” coal cartel which controls the sale and allocation of all Ruhr coal.

c. The issuance by the Coal and Steel Community of a directive prohibiting the purchases of steel scrap in the United States through exclusive U.S. agents, thus opening the Community market to all interested U.S. scrap dealers.

d. The successful progressive elimination of other obstacles to trade within the common market; such as internal tariffs, quotas, and discriminatory freight rates.

e. The difficulties encountered in antitrust enforcement against a long tradition of restrictive practices in Europe and the resistance of labor which is fearful of the effect of anti-cartel action on employment.

2. The report states that the Coal and Steel Community did not consider it feasible to administer the U.S. loan of $100 million as a means of eliminating restrictive practices. The loan was largely limited by its terms to coal companies which were engaged in practices similar to the “GEORG” cartel. The Community decided that no action should be taken against these companies until a decision had been reached with respect to the dissolution of “GEORG”. To have withheld loans from these companies would have eliminated the largest number of prospective borrowers and thereby frustrated the purpose of the loan.

3. The Council noted the report of the Department of State and agreed that:

a. The State Department’s present policy of consultation with and representations to the High Authority with regard to elimination of restrictive practices should be continued and intensified where opportune.

b. Government agencies should be advised that the State Department welcomes suggestions for approaches to the High Authority which could result in more effective action against restrictive practices.

[Here follows discussion of matters unrelated to the ECSC]

1. Source: Eisenhower Library, CFEP Records. Confidential. Drafted by Cullen.
2. Not printed. (Department of State, E–CFEP Files: Lot 61 D 282A, CFEP 520)
2. Not printed. (Department of State, E–CFEP Files: Lot 61 D 282A, CFEP 520)