DEPARTMENT OF STATE ASSISTANT SECRETARY
April 14, 1950
S/S
I request that no distribution be made for the present of the attached memo of conversation without first checking with me.
The paragraph on European payments Union on page 2 is very brief because I had to leave at that point to attend the hearings on the Hill. If it is not adequate, perhaps a paragraph should be added.
George W. Perkins
Attached:
Memo of conversation Secretary and Sir Oliver, April 13, 1950
DEPARTMENT OF STATE Memorandum of Conversation
DATE: April 13, 1950
SUBJECT: British Agenda in Newsweek Sterling Balances European Payments Union
PARTICIPANTS: Secretary of State Acheson: Sir Oliver Franks, British Ambassador, Mr. George W. Perkins, Assistant Secretary of State.
COPIES TO: S/S
Sir Oliver first brought up the matter of the British suggestions for the agenda of the meetings in London which were published in Newsweek today. He said he felt sure that this had not come from the British Embassy. It was pointed out to him that it was difficult to believe that it had come from the Department because there had been agenda lists in the Department for two or three weeks prior to the receipt of the British agenda proposal, and that if there were leaks here it was logical that one of our earlier lists would have leaked rather than the British list.
Sir Oliver then took up the question of the handling of the expected paper on sterling balances. He said after thinking it over he felt that he should present it to a meeting at which Secretary Snyder, Mr. Hoffman, Ambassador Wrong, and I would be present. They were anxious to have our views on their proposals prior to the meeting in Canberra next month and the subsequent meeting of the Commonwealth Finance Ministers in June. He indicated there were two possibilities in the proposals; one by which the U.K. would handle the situation alone and the other by which they would require U.S. assistance. He also mentioned that from the point of view of preserving their position with the Commonwealth countries, a proposal had been made to send a wire out informing the Commonwealths that the matter was being discussed with the U.S. and Canada. I suggested that such a wire might cause undue concern in the Commonwealths. Various other methods of examining the paper were discussed. Sir Oliver offered to submit a copy of the proposed wire for our information and comment. I suggested that I would like to discuss the matter with Secretary Snyder and get his reaction as to what might be the best procedure. I would then let Sir Oliver know what our feeling was.
Sir Oliver turned to the question of the European Payments Union and said that he wanted to be sure that the Secretary understood the nature of the problem as the British saw it. He felt that the issue was whether the sterling area was to be subordinate to the European Payments Union, superior to the European Payments Union, or co-equal with it; that was the basic problem that had to be determined.
Subsequently I saw Secretary Snyder who felt that a meeting to discuss the telegram would be unproductive and would attract unnecessary attention, that it would be preferable for Sir Oliver to hand copies of the paper and the telegram to me and to Ambassador Wrong. After there had been an opportunity to consider it, this Government could then express its opinion on the matter. This I communicated to Sir Oliver over the telephone. He indicated that perhaps the wire had already gone out from London and that our comment on that might be too late but he would see what he could do about it. I expressed to him that our concern over the telegram arose from the fact that it apparently involved the U.S. and, therefore, we would like very much to see it if it had not already been dispatched.
Dean Acheson
EUR:GWPerkins: ebw