Foreign Relations of the United States, 1950, Western Europe, Volume III

740.5 MAP/8–1650: Telegram

The Ambassador in the United Kingdom (Douglas) to the Secretary of State

priority

London, August 16, 1950—6 p. m.

990. ToMAP. For Matthews, Perkins and Spofford and ECA Washington for Wood¹ from Douglas. Reference London Ecato 1021 sent Paris as Torep 6880.²

1. Question of NAT and OEEC relationship, and for that matter relationship of both to Council of Europe, is of obvious importance. For OEEC to continue planning without regard to impact of increased military preparedness on civilian economy would be unrealistic and dangerous. However, I am not satisfied that reftel reflects sufficient consideration of several intangible factors and believe we should move with considerable caution before we divulge to other governments any position such as that defined in reftel. I recommend against further substantive discussions for time being between OSR and OEEC such as reported in Repto 4492 to Washington.³

2. The very fact that not all members of OEEC saw fit to join NAT points up one of these intangible issues. If the “neutrals” are not prepared to join in the concept of collective defense, then we must be very chary of giving them any implicit control (under the principle of unanimity by which OEEC works) over the economic problems which underlie real solution to defense needs and which might thus militate against an adequate solution for filling the power vacuum in Europe. The fact that habits of cooperation and a working Secretariat as established in OEEC should not be confused with the fundamental necessity for achieving urgent and adequate action by NAT countries in regard to defense problem.

3. A second intangible derives from what I believe would be a subconscious revulsion against adequate defense efforts in Europe on the part of persons who have been working with such zeal on the concept of “economic recovery”. This reluctance is mirrored in the inadequacy of initial government responses to Depcirtel July 22 re increased defense efforts. Governments, particularly those dominated or predominantly influenced by social parties, are finding great difficulty in facing the bald fact that adequate defense will require some curtailment of their basic social planning. Pertinent here is the concept of full employment, which appears in the OEEC charter, and all its implications reflecting the placing of the individual’s economic security above that of national security. Our US problem in trying to exercise leadership in the NAT is to find the appropriate balance between worthy and necessary economic and social objectives and the stark requirements for an adequate defensive strength in Europe. The point is that adequate defense cannot be built within the time available in Europe unless there is some compromise of, or retarding in, Socialist plans and the resultant question is whether OEEC is the arena in which to try to work out this compromise.

4. The implication of German participation in OEEC, while it is not in NAT, is important, but consideration should be given to other alternative methods of tying Germany in with increased defense effort. For instance, some relation through Western Union or Council of Europe. We should further examine the question as to whether initial German contributions in terms increased utilization German basic industry in fact need any specific correlation through an international organization.

5. Seems to me reftel puts primary functions of OEEC as analysis impact of defense programs on Western European economies. This seems to be putting wrong emphasis on basic problem and might lead to results other than those which we would hope to see achieved. Second and third sentences paragraph 5c reftel, and third sentence paragraph 6 implies our belief OEEC personnel will strive energetically to increase defense efforts. My own view is that opposite might be the case, particularly so long as UK Government continues to exercise so strong an influence in OEEC. NATO was conceived on different basis than OEEC, is just in process of development and that development should not be confused or diffused at this time by bringing OEEC too strongly in picture.

6. I believe ECA as the American agency administering economic aid must work in closest cooperation with US agencies involved in NAT and MDAP matters and can be of invaluable help to NAT objectives. US economic and military aid must be so correlated as to be mutually supporting and lead to greatest achievement of the three objectives of the US policy in Europe, i.e. the sustaining of reasonable level of economic progress and expectation, the rebirth of a will to fight in defense of our civilization and the recreating of military strength which combined with our own will offer a real basis for successful negotiation toward peace with USSR. I question, however, whether it is necessary or wise at this time to bring OEEC into too direct American responsibility with regard to economic aspects of increased defense efforts in Europe. Would appreciate your comments on above.

Unfortunately Kenney⁴ away from London for several days and I am therefore forwarding this telegram without his comment in order to avoid undue delay.⁵

Sent Department 990, repeated information Paris 248 for Bruce and Bonsai,⁶ Frankfort 133 personal for McCloy.

Douglas

1. C. Tyler Wood, Assistant Administrator for Operations, ECA.
2. August 11, p. 665.
3. August 12, p. 668.
4. W. John Kenney, Chief of the ECA Mission in the United Kingdom.
5. In telegram 987 to London, August 22, not printed, Douglas and Spofford were informed that the Department of State and ECA concurred in the views and recommendations presented in telegram 990 and would comment in greater detail after further consideration of the OEEC–NATO relationship (740.5 MAP/8–1650).
6. Philip W. Bon ml, Political Adviser to the U.S. Special Representative in Europe, ECA.