87. Letter From the President of the High Authority of the European Coal and Steel Community (Monnet) to the Secretary of State 1

Excellency: The High Authority of the European Coal and Steel Community is concerned by reports that the United States Government is considering the imposition of restrictions on the export of steel scrap. Representatives of the High Authority have had occasion to discuss the problem with the United States Representative to the C.S.C. and detailed technical information has been furnished by the High Authority for the information of the United States Government.

I am confident that the United States Government has been fully informed by the United States Representative of the position of the Community and the views of the High Authority, but I feel that, in view of the importance of the issue, I should draw your personal attention to the consequences which might flow from the imposition of quotas on scrap exports. The High Authority might then find that the Community is faced with a serious shortage which would entail the application of the measures provided in Article 59 of the Treaty of the European Community for Coal and Steel.

This would mean the establishment of a system of allocation and quotas which would restore national markets for scrap and might impair the free operation of the common market for steel, established under the Coal and Steel Community Treaty. This would be a backward step in the economic integration of Europe.

The attention of the Government of the United States is also invited to the close relationship between steel production within the Community and the defense efforts of the member states of the Community. A reduction in the production of steel could unfavourably affect production essential for the defense of Europe. Further, a smaller production of steel within the Community would adversely affect the high level of general economic activity which in recent [Page 276] months has made an important contribution to increased standards of investment and consumption in Western Europe and which has played its parts in the development of a more stable economic foundation in the West.

At the present time, the stocks of scrap available are sufficient for only seven weeks of production. It is essential not only that the exports of scrap to the Community be maintained at the present level, but also that maintenance of supply be assured. Uncertainty could have a seriously damaging effect on scrap price stability and on steel production.

With these factors in mind, and taking also into account the legitimate interests of steel producers in the United States, the High Authority would be prepared to examine with the member Governments the possibility of limiting to the present level the volume of scrap purchased by the C.S.C. industry in the United States. Action of this kind by the Community could be considered only if the Community were in a position to count on United States scrap being available up to these limits. If it should not prove possible for the United States Government to agree to such an arrangement, the High Authority feels that the Community’s interests would be safeguarded only if the United States authorities would not reduce scrap exports to the Community below the present level without giving the High Authority advance notice of at least three months.

I know, Excellency, of your continued and close interest in the affairs of the European Community for Coal and Steel, and therefore the High Authority has taken this opportunity to place before you this problem of common concern.

Accept [etc.]

Jean Monnet
  1. Source: Department of State, Central Files, 400.119/3–2855. Limited Official Use. Copies of this letter were transmitted to the Secretary of Commerce, the Secretary of the Interior, the Director of the Office of Defense Mobilization (ODM), and the members of the CFEP, under cover of a letter from Hoover, dated March 28. The letter reads in part as follows: “You will undoubtedly wish to consider the adverse effects on the Community, the European economy generally, and on European defense production which M. Monnet suggests might flow from the imposition of export restrictions by the United States. It is understood that the question of controls over scrap exports is to be discussed at the Council on Foreign Economic Policy next week. The Department believes that, in reaching a decision on this matter, the impact of the proposed control arrangements on our allies and objectives abroad should be taken fully into account.”