Foreign Relations of the United States, 1952–1954, Western Europe and Canada, Volume VI, Part 1

MSA telegram files, FRC Acc. No. 54 A 298, “Paris Repto”: Telegram

No. 133
The United States Special Representative in Europe (Draper) to the Mutual Security Agency

secret

Paris, November 4, 1952—10 p.m.

Repto 1539. Personal for Kenney and FitzGerald pass Perkins. Ref Torep 1958, Oct 31.¹ Subj: US aid to CSC.

1. My own feeling toward US aid to CSC has always been that latter’s taxing power, and inherent strength of coal and steel industries, shld make it possible and desirable that necessary coal and steel financing be arranged internally by particular companies or by HA for particular companies, as part of overall HA investment program through private and public sources or IBRD, and that US aid as such shld not be necessary. HA has not developed its survey of industries and their needs for investment; it has made no approaches to private or public sources or IBRD for financing, has given no intimation to us that US aid is or will be desired, and probably will not determine its own position until its Jan report is completed.

2. Personally I have felt, however, that Moody Amendment funds were in a different category. Funds cld be placed through HA on a loan basis against projects shld they qualify to implement objectives of Moody and Benton Amendments,² and such support might very well give proponents of increased competition in coal and steel industries an additional means to make their efforts successful.

3. In suggesting to Dorr and Bellows, for your consideration, that only part of total Moody Amendment funds be programmed at this time, I had in mind the view that the part of the intended funds for each country being made available now, wld give them the opportunity to start on the program with the general understanding that more funds wld be shortly available, if the particular country program developed quickly and successfully.

4. I also had in mind that within the next three or four months a workable Moody Amendment project of real importance might develop from the HA in which case we wld be in a position to consider it seriously. So far HA has not come forward with a specific program but officials of HA have expressed an interest in submitting a Moody Amendment Program for coal and steel industries in connection with preparation by HA of survey to be presented to CSC Assembly in January.

5. However, in view of the time factor and the real question whether HA cld work up projects which will meet the Moody Program requirements, we here agree that it is unlikely that any practical HA program can be developed for use of Moody funds this fiscal year. Therefore, I propose, unless you object, to authorize Tomlinson to tell Monnet (a) the coal and steel industries are eligible for Moody funds; (b) time factor and necessity our programming and getting Moody funds into use make it unlikely that projects proposed by HA several months from now cld be effectively implemented before June 30 next; (c) nevertheless, we wld be glad to be advised by HA of any practical projects coming within Benton and Moody Amendment criteria in coal and steel industries and that we wld try find some way implement if approved; (d) while no knowledge whether similar funds to be available next fiscal year, time factor wld permit us give HA and US much better opportunity consider at that time if new funds made available.

6. Main purpose is to counteract impression apparently given that door closed to Moody Amendment funds for coal and steel industries, since national govts no longer having primary interest and HA not yet in position to put forward productivity program. I suggest that if you feel entire funds need to be programmed by country now but with only partial immediate allocation, that all countries be advised that the programming figure will be later reduced if effective program not developed in time to use funds and if other opportunities arise to use funds effectively. This wld give opportunity to include coal and steel projects in country programs or alternatively to withdraw program funds in certain countries and use through HA if effective projects actually presented to us.

Draper

1. Not printed; it discussed the question of U.S. financial assistance to the European Coal and Steel Community and inquired whether the High Authority was likely to request Moody Amendment funds. (MSA telegram files, FRC Acc. No. 54 A 298, “Paris Torep”)
2. For documentation concerning the Moody Amendment, which provided additional funds for the purpose of furthering free private enterprise objectives as set out in the Benton Amendment, see Documents 252 ff.