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

Camp files, lot 55 D 105, “OEEC–NATO 1952”

No. 16
Foreign Minister Van Zeeland to the Secretary of State¹

personal

Brussels, March 15, 1952.

My Dear Secretary of State: Since my return from Lisbon,² I have reconsidered the problems that we discussed during the last conversation we had together at the end of the Atlantic Pact Council meeting.

The considerations that I set forth at that time appear to me increasingly serious and urgent. My latest information has only confirmed this conviction.

I. The Lisbon Conference was a success. The resolutions adopted there mark a long step forward. The European Defense Community will probably be set up in a very short time. The new effort promised by the European nations within the framework of the Atlantic [Pact] will appreciably increase the defense forces available to the military chiefs; the medium-term plans drawn up and the firm engagements entered into for 1952 indicate that this strengthening of Western defense will continue to increase and therefore will gradually lessen the risk of war. Lastly, the new measures taken for the reorganization of the Institution appear to me to be adapted to the needs and to furnish suitable means for more rapid and better coordinated action.

However, it seems that the effort promised by the European nations is both a minimum and a maximum effort.

A minimum effort, in the first place; for it appears that such an effort is absolutely essential if we intend to organize an effective defense of the West on a line far enough East.

A maximum effort, on the other hand; for it seems that in accepting these commitments, the European nations have gone to the extreme limit of their ability, more particularly, of their economic and financial ability.

It follows that this effort can be translated into concrete achievements only if Europe succeeds in at least maintaining its economic activity at the present level.

II. Now, a series of facts and recent signs lead to the conclusion that this level of European economic activity is seriously threatened right now.

We see the symptoms appearing of an economic crisis in Europe. The signs are multiplying. I shall point out a few of them, chosen from among the principal ones:

1. The European Payments Union, the functioning of which is essential to the maintenance of adequate economic activity, is in danger. Exaggerated credit and debit positions have already transformed the very conditions under which it operates and may paralyze it before long.

2. The efforts made to create a single market in Europe and the success already obtained in that direction, namely the appreciable reduction of the quantitative restrictions on the movement of goods is directly jeopardized at this time. Several large countries, impelled by needs of which they are the sole judges, are applying safeguard clauses contained in the commercial code of the O.E.E.C.; they have already re-established quantitative restrictions to a dangerous extent. Such measures indicate a serious turning back and prepare the re-establishment of the economic compartmentalization of Europe, the sign of a sure economic recession for the whole community.

3. The expansion projects that had been worked out within the framework of the O.E.E.C. threaten to become ineffective. Serious disturbances, either in public finances, or in movements of capital, or on the exchanges, or again in the employment situation, are already appearing in a whole series of European countries.

III. If measures are not taken in time to prevent the further development of the disturbing phenomena mentioned above, we run the risk that a considerable decline in European economic activity may bring into question again the main points of the policy followed to assure the revival of Europe and the defense of the West, particularly, a part of the decisions taken at Lisbon.

Moreover, it does not seem that the difficulties revealed by these symptoms, forerunners of a crisis, are insurmountable. What appears certain is that they can be overcome only by common action, by general action, by duly concerted action on the part of the Atlantic Powers. Measures taken individually or separately by each of the partners concerned might, as has so often been the case in the economic history of this century, add to the difficulties of the others and render the crisis more serious, longer, and more difficult to meet.

IV. If the foregoing considerations are valid, must we not conclude that steps should be taken to find means of seeking in common, and applying by mutual agreement, an over-all solution?

It seemed to me, during our conversation at Lisbon, that these different points had not escaped your attention and that you desired to examine them further.

On reflection, I wondered whether it would not be advisable to bring together without delay, on an entirely personal and unofficial level, a certain number of Ministers of the countries most interested in the economic aspect of the problems. I am thinking, for example, of a small group including the Ministers of Foreign Affairs of from six to eight countries, namely: the United States, Great Britain, France, the Benelux countries, and others, according to circumstances.

In such a restricted meeting, and without recourse to experts, the Ministers could exchange very frank views on the following points:

1. Should an official meeting be proposed which would be charged with seeking the means of avoiding an economic crisis in Europe?

2. If the reply to the first question is in the affirmative, under what international auspices should the meeting be placed: NATO, or O.E.E.C., or some other organization or international group?

3. What general directives would it be possible to give, at the start, to the suggested meeting, with respect to the solutions to be envisaged?

V. This first unofficial meeting, in spite of its personal and restricted character, should be called only if reasonable chances existed of its achieving some result. If such chances of success did not exist it would be better to do nothing, since any failure might complicate still further a situation which is already difficult enough in itself.

That is why I felt that, before thinking of taking any initiative, I should write to ask you what your own feeling is.

If, in your opinion, the time is not ripe, I shall certainly consider it preferable to await a more propitious moment to undertake anything.

If, on the contrary, you consider that the question should be examined more thoroughly, through an unofficial meeting, I should be very happy if you would take the initiative.

In case you should prefer that I take the responsibility for it myself, I would be glad to do so, at least for the preliminary and personal stage to which I have just referred.

VI. I think such a meeting, short and friendly, should be held very soon.

It should, however, be preceded by a minimum of preparation, so that when they meet the Ministers will have before them a study of some few pages, briefly analyzing the problem and outlining, for all pertinent purposes, a few first suggestions. The sole purpose of such a memorandum would be to start the discussion; it would have fulfilled its function even if it were subsequently rejected or modified in its various parts.

I thought it worth-while, at Lisbon, to submit to a few friends a short memorandum containing suggestions of this sort.

A short summary follows:

1. Distinction between the machinery for international payments for products and goods intended for rearmament and that for the regulation of other operations considered as normal.

2. Establishment of a system of advance financing of armament production.

3. Spreading of military expenditures of an extraordinary nature that burden the budgets of the NATO countries.

These suggestions imply in particular:

1. The creation of a new agency using the funds placed at its disposal for the following purposes:

(a) To facilitate the operation of the machinery for international payments relating to rearmament by the liquidation of the balances.

(b) To undertake the lending operations necessary for the advance financing and spreading of the extraordinary expenditures.

2. The placing in the NATO countries of a gold or dollar loan, calling upon capital that has been hoarded up to now.

The ideas thus summarized are taken up again and somewhat further developed in the attached memorandum.

VII. Of course, such suggestions are quite inadequate and are mentioned here merely by way of example. I myself attach no particular value to any one of them, or to any detail. What appears essential to me is to start the discussion and to succeed in defining both a method and a basis for seeking a possible solution.

I hope that you will be good enough to tell me, at your convenience, what you think of these ideas. If the time for action seems to you to have come, it would be advisable to act as soon as possible, since any delay may make the problems more serious; preventing would be infinitely preferable to curing.

Hoping to hear from you soon, I beg to remain, my dear Secretary,

Faithfully yours,

Paul Van Zeeland

1. According to a handwritten notation in the margin of the source text, the message from Van Zeeland was handed to Acheson by Baron Silvercruys on Mar. 20. The source text, which is a translation by the Division of Language Services of the Department of State, bears this notation: “the original French text of this message has not been found in Department of State files.”

   Van Zeelandsummarized the substance of this letter in a conversation with Ambassador Murphy on Mar. 19, which Murphy reported to the Department of State in telegram 1378 from Brussels, Mar. 19. (840.00/3–1952)

2. This is a reference to the meetings of the Ninth Session of the North Atlantic Council and the Foreign Ministers meetings which were held in Lisbon, Feb. 20–26; for documentation concerning these meetings, see vol. v, Part 1, pp. 107 ff.