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

611.41/3–753

No. 389
United States Delegation Minutes of a Meeting of Secretary of State Dulles and Foreign Secretary Eden at the Department of State, March 7, 1953, 11 a.m.

top secret
WET MIN–5

March 7, 1953, 11 a.m.

Participants:

• U.S.

  • Secretary Dulles
  • Secretary Humphrey
  • Mr. Douglas
  • Mr. Stassen
  • Mr. Burgess
  • Ambassador Aldrich
  • Mr. Linder
  • Mr. Overby
  • Mr. Gordon
  • Dr. Hauge
  • Mr. Williams
  • Mr. Locker
  • Mr. Southard
  • Mr. Leddy
  • Mr. White
  • Mr. Corbett—Rapporteur

• U.K.

  • Foreign Secretary Eden
  • Chancellor of Exchequer Butler
  • Ambassador Makins
  • Sir Leslie Rowan
  • Sir Edwin Plowden
  • Sir Frank Lee
  • Sir Pierson Dixon
  • Mr. Rickett
  • Sir Edmund Hall-Patch
  • Mr. Clarke
  • Mr. Parsons
  • Mr. Armstrong
  • Mr. Gore-Booth
  • Mr. Ridsdale
  • Mr. Shuckburgh

[Here follows a list of the subjects discussed.]

Communiqué:

The draft communiqué on economic matters was read, amended, and agreed by both sides.¹

Western Europe:

Foreign Secretary Eden: The Foreign Secretary asked what was to be said to the OEEC. The U.K. does not intend to put detailed proposals to the Council. These would continue to retain their secret character. The Foreign Secretary hoped that the U.S. could agree to the aims set out in the Commonwealth communiqué and that this indication could be given to the Europeans.² He thought that this much was done in the communiqué which had just been discussed.

The problem is to work out the next stage in the OEEC. There would have to be consultations between the U.K. and the U.S. between now and March 23 when the British appear before the Council.

The Foreign Secretary also raised the question of the continuation of EPU and the right of withdrawal. The U.K. regarded, and he thought the U.S. did also, the EPU as a transitional institution. However, no consideration has been given to the manner in which the transition is to be made. He thought that the OEEC could well work on this matter and it was certainly something that had eventually to be faced up to.

Mr. Stassen: The Director for Mutual Security thought the suggestion that the OEEC study means by which the EPU could be an approach to convertibility a good one.

He wished, however, to draw particular attention to the problem of withdrawal from the EPU. This should not be handled in such a way as to create uncertainty in the minds of the Europeans. Otherwise there would be an unsettling influence on the institution and would impair its effectiveness in performing its functions. The very existence of the right of withdrawal can decrease the value of an institution and the U.S. is very much concerned with this aspect of the matter.

Chancellor of the Exchequer Butler: The Chancellor thought that the OEEC would enjoy making the study he had proposed and that it would serve a useful function during this period. The U.K. proposed, of course, to insure the renewal of the EPU. The study would follow this step.

Sir Leslie Rowan: Sir Leslie thought that this matter of withdrawal might have to be considered under both headings—(1) the renewal of the EPU, and (2) the study of the future of EPU. He did not think, as had been suggested, that the matter of withdrawal could be limited only to the study aspect.

Chancellor of the Exchequer Butler: The U.K.’s point of view was to enlarge the area of freedom of trade and reduce the present compartmentalization represented by the OEEC. In doing this the U.K. certainly did not wish to disturb the satisfactory development of the EDC and the Schuman Plan.

Foreign Secretary Eden: The Foreign Secretary said he must revert to the same question that he had raised at the beginning of these meetings, that is, how discussions could be continued with the Commonwealth and how the matter could be broached with Western Europe. He wondered if it would possible to take up the topics we have been discussing along very general lines. The Foreign Secetary inquired whether there were anything in these ideas to which the U.S. would take objection. If there is something to which the U.S. would object then the U.K. would not want to take it up with the Western European countries.

Secretary of Treasury Humphrey: The Secretary remarked that we do not want to raise false hopes on the part of others. There was certainly no misunderstanding between the U.K. and the U.S. We understood what had transpired. Based upon the U.K. conception of the importance of the relaxation of U.S. tariffs, the question came in his mind as to what the U.K. could usefully say about our reactions. This is a matter which we must study in a practical way. Whether anything can be accomplished is certainly a subject to which we must give more thought.

Chancellor of the Exchequer Butler: The Chancellor said there were two aspects: (1) whether there was any objection in principle on our part, and (2) what was obtainable in practice. He thought it was easier for us to agree on the first point.

Secretary of State Dulles: The Secretary thought that a number of important and possibly bad consequences would ensue if a program was promoted in Europe which we all recognize could not be made effective unless a lot of other things happened. These other things would include trade measures and financial support.

U.K. conversations with the Europeans should not lead them to believe that there were predetermined conclusions on our part in these matters. The U.S. has not begun to study these questions. If the U.K. went out to sell such a notion to the Europeans there would indeed be complications.

Mr. Douglas: In addition to the remarks of Secretary Dulles and Secretary Humphrey, Mr. Douglas wished to raise some specific questions. He referred to his doubts about the sterling balance problem and also about the influence that a moving rate would have upon the position of sterling. These are in some respects technical matters and he had not studied them sufficently to have views. These are serious questions on which careful technical judgment would have to be sought.

Secretary of Treasury Humphrey: The Secretary stated that while we shared the objectives of the British he wondered how much of their thinking is based on achieving a certain balance of trade. He was not now in a position to see clearly, if at all, how this goal is to be achieved in a period of time which would permit the construction of plans.

Foreign Secretary Eden: The Foreign Secretary said the problem remains of what can be said to the Europeans.

Secretary of Treasury Humphrey: The Secretary did not see that any more could be said than that we share common objectives and that we are studying the problem.

Mr. Stassen: The Director for Mutual Security wondered if we might not also ask the OEEC to study the specifics of possible ways to expand trade between them and ourselves.

Chancellor of the Exchequer Butler: The Chancellor said that he would propose to be frank about the difficulties of achieving the desired pattern of trade and that he would emphasize that the U.S. Administration had not been long in power.

He thought that South Africa would be most disappointed because of the additional impact of the negative reaction to the gold question. Canada also presented him with some worries, but he thought the Canadians would prove to be more understanding.

Foreign Secretary Eden: The Foreign Secretary hoped that instructions might be sent to the U.S. Representative to the OEEC, Ambassador Draper, so that he might facilitate the British presentation to the Council on March 23. He thought that the proper attitude on the part of the U.S. Representative in Paris would be most helpful.

Mr. Stassen: The Director for Mutual Security referred to the fact that we would be having an exchange of views on this matter in the meantime.

Chancellor of the Exchequer Butler: The Chancellor felt he must say that the U.K. retain full rights to say whatever they wished about their own policies and views. It was only when the U.K. was making reference to the reactions and views of the U.S. that a careful line be followed.

Secretary of State Dulles: The Secretary said that we will study these matters and will have clearer ideas about our own plans and about the possibility of moving ahead later.

Secretary of Treasury Humphrey: The Secretary said that of course presentation of purely U.K. views was all right but it was important that our present position was not misrepresented. We would not want to mislead others by suggesting that the U.K. ideas have a greater currency with us than is in fact the case.

Chancellor of the Exchequer Butler: The Chancellor thought that some countries would derive some pleasure from this outcome, while there might be disappointments in several parts of the Commonwealth that we had not been able to go further. However, he would do all within his power to moderate the disappointment.

Mr. Stassen: The Director for Mutual Security asked that the Foreign Secretary and the Chancellor not underestimate the educational aspects of the talks we have had over the last few days.

Chancellor of the Exchequer Butler: The Chancellor thanked Mr. Stassen for his comments and hoped that there was no misunderstanding on the U.S. side concerning his remarks of yesterday morning.³ He thought it was only fair that he raise certain questions with the U.S. representatives since, on the preceding day, so many questions had been raised with him about U.K. affairs.

The meeting adjourned after mutual expressions of good will and a desire to work towards our common objective.

1. For the text of the final communiqué, see Document 391.
2. For the text of the communiqué issued at the end of the Commonwealth Prime Ministers meeting at London, Dec. 11, 1952, see Documents (R.I.I.A.) for 1952, pp. 62–67 or Department of State Bulletin, Mar. 16, 1953, pp. 397–399.
3. For a record of the meeting at the Treasury during the morning of Mar. 6, see Document 387.