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

OEEC files, lot 56 D 217, “C/M (53) 11 through 22”

No. 168
Minutes of the 212th Meeting of the Council of the Organization for European Economic Cooperation, Chateau de la Muette, Paris, May 15, 1953, 5 p.m.¹

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Paris, May 15, 1953, 5 p.m.

Present:

Sir Hugh Ellis-Rees (Chairman)	United Kingdom
Mr. Standenat	Austria
Mr. Denis	Belgium
Mr. Bartels	Denmark
Mr. Charpentier	France
Mr. Werkmeister	Germany
Mr. Christidis	Greece
Mr. Benediktsson	Iceland
Mr. Cremin	Ireland
Mr. Cattani (Chairman of the Executive Committee)	Italy
Mr. Hommel	Luxembourg
Mr. Tjarda van Starkenborgh Stachouwer	Netherlands
Mr. Koht	Norway
Mr. Antunes	Portugal
Mr. von Sydow	Sweden
Mr. Bauer	Switzerland
Mr. Silvi Antonini	Trieste
Mr. Tiney	Canada
Mr. Heeney	Turkey
Mr. Draper	United States
Mr. Marjolin, Secretary-General

Secretariat

Mr. Jacomet

[Here follows a summary of statements made by Sir Hugh Ellis-Rees, Robert Ernest Marjolin, and Attilio Cattani, thanking William H. Draper for his efforts as United States Special Representative in Europe upon his retirement which was accepted by President Eisenhower on May 11 and was effective on June 30.]

Mr. Draper said he was very much moved by the words which had been pronounced on the occasion of his departure.

This last year and a half had been not only the most interesting and pleasurable period of his life, but also the most constructive. The discussions which had taken place in the Council, the different documents which he had read and the information he had received on questions of trade, payments, the development of production, etc., which were the result of the work of the delegations and the Secretariat, had been of immense educational value to him. In this connection what had particularly impressed him was the practical nature of the solutions or the recommendations adopted. He was thinking in particular of the last meeting of the Council at Ministerial level, at which the United Kingdom and German Delegations had announced the measures of liberalisation of trade which they had decided to take.

The world was at present passing through a critical period. Immense collective progress had been made since the immediate postwar period, in spite of the fact that another threat was arising. It had to be recognised that despite rearmament, the change in the face of Europe in the past seven years had been really phenomenal.

The period was critical, however; it should be recalled in this connection that the dollar gap was not just a problem of those seven or eight years; it really went back twenty or thirty years. It probably had its roots in the fact that the United States represented a large market; in this market large capital accretions had developed, combined with the use of new inventions, new machinery and the opportunity of large scale production. Thus, for some thirty years, there has been a forging ahead on one side of the Atlantic, two world wars on the other, involving the loss of some of the best manpower and some of the best capital through war destruction. The European countries had thus been held back in this race for economic good health and an improved standard of living.

The time had now come to find a means to bridge this gap. In the United States a new Administration had come to power; it represented a party that historically had been favouring high tariffs. If, moreover, it was realised that this new team had not been in power for 20 years, the fact would certainly be appreciated that although they had not gone nearly so far as the members of the Council would wish, they had nevertheless adopted a definite position in numerous cases and this in itself was a kind of revolution which could not have been anticipated in all circumstances. The debate had now opened in the United States; many organisations had taken the international point of view of balancing exports and imports and avoiding the necessity either for American aid or for reduced trade. Others had raised their voices, quite naturally; a debate had to have two points of view. It was most probable that this debate would grow in meaning and clarity through this year and that the studies which Mr. Lewis Douglas and the Congressional and Citizens Committee had been asked to make would bring these points of view before the attention of the country and the Congress. It was not likely that these decisions would be made before next spring.

The dollar problem was at present as follows: the extraordinary dollar expenditure flowing to Europe came from three sources:

(1) military expenditure for the American troops in Europe, which was about $1,000 million per annum, and should continue at that rate for some time:

(2) the economic aid for defence support, which was now running at about the rate of $1,000 million per annum and would probably decline substantially over the next year or two and then disappear;

(3) expenditure for off-shore purchases, which were growing rapidly in the present year, and would probably be in the range of about $500 million in 1953. These sums would probably double in 1954, which would make up for the decline of economic aid.

The total of these three sources was approximately $2,500 million for 1953. In the course of 1954 this amount should be roughly the same; it should diminish in 1955.

The dollar gap of the Member countries which had been estimated in the Fourth Annual Report of the O.E.E.C. at about $3,000 million for 1952 (which was a little less if invisibles were included) seemed to have declined from July last to a rate of about $2,000 million per annum or maybe a little less. This tendency seemed to be borne out by the fact that, with extraordinary dollar expenditure in the range of about $2,500 million—reserves of Member countries were rising (at any rate this tendency had been observed in the last nine months) at a rate of about $500 million per annum.

Thus the dollar gap, which, five years ago, was in the range of $5 or $6,000 million, had come down to about $2,000 million. Moreover, in the two or three years ahead the amount of extraordinary expenditure should at least cover and even exceed this deficit. This was an opportunity which neither United States nor Member countries should lose, since it was only a short transitory period.

He was convinced that the debate on the other side of the Atlantic would give results, but he pointed out that everything the Organisation and Member countries could undertake, in particular in connection with trade and payments, would facilitate the solution of the dollar problem and encourage the United States to take the required measures on their side of the water.

In conclusion, Mr. Draper wished to state that he had particularly enjoyed his work in this Organisation and he would endeavour, whenever he could, to work towards the objectives of the O.E.E.C. which were so important to the future economic success and well-being, not only of Europe but of the world. He hoped that his own path and those of his colleagues in the Organisation would often cross in the future.

In conclusion, the Council adopted the following Resolution:

The Council

(99)	expressed its appreciation of the valuable services Mr. Draper had rendered to the Organisation and its Member countries during his period of office as the United States Special Representative in Europe, and its regret at his departure, and extended its best wishes to him in his future activities.

The meeting rose at 5.45 p.m.

1. The minutes of this meeting were circulated as document C/M(53)11(Prov.), and were approved without amendment at the 215th meeting of the Council on June 12. Drafted on May 21.