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

Bruce Mission files, lot 57 M 38, “U.S. Loan—Implementation”

No. 216
Louis C. Boochever of the Office of European Regional Affairs to Robert Eisenberg of the Office of the United States Representative to the European Coal and Steel Community, at Luxembourg

limited official use
official–informal

[Washington,] May 10, 1954.

Dear Bob: I was out of the office a couple of days last week and did not receive your letter¹ until Friday. Hence this is really my first opportunity to reply.

Taking the easiest question first, the text of the agreement has been made available to the public in Washington, and I see no reason why the High Authority should not make it available freely to those who are interested. We have also given copies to the Canadian, Italian, Austrian and German diplomatic missions in the course of discussing the loan with them. The public release of the text was the same as for the various communiqués; i.e., copies were made available to the press in the State Department’s News Division. So far I have not seen any of the text cited in the various newspaper articles and editorials which have appeared.

As for the letter on coal import restrictions, I discussed this with Isaiah Frank this morning, and we agreed that it would be advisable for you to follow up by reminding Monnet of his offer to give us such a letter. (I have checked with Ben Moore and he agrees.) By following up we emphasize again our concern with the restrictions, and also may secure a fuller statement from the HA, which would be more useful to us than the one incorporated in the communiqué.² The communiqué, for example, says only that the provisions of the Treaty do not preclude removal of the restrictions, and does not indicate whether any consultation with the High Authority or other member states is necessary before such action is taken. The minutes of the discussion on this point should have reached you by now, but I shall send you an additional complete set in any event.

I do not think there are any other steps that you need take on the coal imports at the moment.

I suspect that you are at least as well informed as I am on the later stages of the loan negotiations, if you have had a chance to talk with Guyot or others. All of the provisions referred to in our Edcol 110³ (Luxembourg) were decided on at a very high level on the U.S. side and I don’t think any of our staff was in on the later stages of discussion of them with Monnet. Actually, the only matter that required extensive discussion with the HA was that of the pledge and the related covenants. The Monday after you left we received word that Monnet was willing to accept the pledging of the security from the project loans. It then became clear that Mr. Humphrey also wanted the pledge to cover the security from other project loans, with the U.S. and all other lenders to benefit equally. The intention here was to make sure that the U.S. should not wind up with security on its loan inferior to that of subsequent lenders to the HA. When it became clear that the defining of such a pledge, if possible at all, would be a complex and time-consuming project, a compromise was worked out as described in paragraph 2 of Edcol 110.

Jack Corbett, who has just returned from Luxembourg, tells me that the HA is studying the question of enlarging the pledge. It would be helpful if you could keep in touch with their thinking on this subject, and would keep us currently informed. This will assist in reaching a decision as envisaged in the loan agreement, with respect to the advisability of enlarging the pledge. I have a call in for Mr. Arey at Exim and will try to keep you posted on any progress from this side.

The final communiqué also emerged from the high level conversations with substantial changes from the U.S. draft which I had prepared. Paragraphs 3 and 6, in particular, underwent significant changes. In the latter, which was inserted at the request of Mr. Vernon and Mr. Waugh, a reference to the desirability of further efforts in the direction of increasing competition was eliminated. The former paragraph went through several versions on the U.S. side, with Treasury taking the lead in limiting the references to private capital; eliminating the reference to continuing negotiations and to assistance of the Government, etc. The paragraph finally included is much closer to the version originally prepared by the HA.

The copy to Ben Moore of your memorandum⁴ to him hasn’t reached his office yet, but I will watch out for it. Your idea of instructing USRO on the Danish approach seems like a good one, and I will see what can be done when we have had a chance to read your memorandum.

The arrangements for the signing of the agreement required a great burst of speed, typing late into the night on Thursday, proofreading until a half hour before the signing, etc., but the ceremony went off reasonably well, I thought. Immediately afterwards, I was intensively occupied with the preparations for the OEEC meeting, but have now returned to more normal round of activities.

I am glad to hear that your leave orders are all set, and look forward to seeing you again soon.

Kindest regards,

Louis C. Boochever, Jr.

1. In a letter to Boochever, dated May 4, Eisenberg asked for a copy of the press release of Apr. 23 (see footnote 2 below) and for information concerning the background of the reference in the press release to private capital funds. (RA files, lot 58 D 374, “CSC—General, January to June 1954”)
2. For the text of the communiqué issued on Apr. 23 in press release 210, see Department of State Bulletin, May 3, 1954, pp. 671–672.
3. Not printed. Telegram Edcol 110 to Paris, Apr. 23, summarized the points incorporated in the loan agreement which were agreed to after Robert Eisenberg left Washington to return to Paris. (850.33/4–2354)
4. Not further identified.