DEPARTMENT OF STATE Memorandum of Conversation
DATE: April 3, 1952
SUBJECT: Discussion of Items of General Interest to the Dutch
PARTICIPANTS: The Secretary Assistant Secretary George W. Perkins Ambassador Selden Chapin WE - Joseph W. Scott Foreign Minister of the Netherlands, Mr. Dirk U. Stikker Ambassador J. H. van Roijen of the Netherlands J. G. de Beus of the Netherlands Embassy
COPIES TO: S WE G RA EUR UNA FE Amembassy, The Hague
After an exchange of greetings, I asked Mr. Stikker to take informal charge of the meeting and to raise items for discussion in whatever order was most convenient.
Mr. Stikker said that Ambassador Chapin had some time ago asked him what he would like to discuss during his visit here and that he had given the Ambassador a list of eight items, some of which were more important than others from the strictly Dutch point of view.
UNCURK
Mr. Stikker said that in response to requests from the British, the Australians and ourselves, he had appointed a new Dutch representative on UNCURK, Baron Van Ittersum, until now head of the Far Eastern Department of the Foreign Office. He said that Van Ittersum had had a lot of Far Eastern experience and was considered by the Dutch to be a top flight man. He added, however, that his people did not see how, under present circumstances, UNCURK could be expected to do very useful or important work. He asked what we had in mind for UNCURK to do in the future.
I said that we wanted to strengthen the Commission and to keep it in Korea to deal with a number of problems there which the Korean Government was not competent to deal with and which General Ridgway was very worried about. For example, inflation was getting very bad. We had sent a principal advisor to the Federal Reserve Board to Korea to look over the situation and to come back with recommendations. In carrying out such recommendations we thought we would need strong support from UNCURK.
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Another problem that was worrying General Ridgway and ourselves was that President Rhee was unstable and emotional, particularly in matters relating to the Armistice. I said that we had gone to all sorts of lengths to make President Rhee see why the UN Forces shouldn't try to reconquer all of Korea. We had explained that to do so might very well start a general war. If there were a general war, it could hardly be expected that Korea would be a principal theater. Neither could it be expected that reconstruction could begin in Korea for the foreseeable future in the event of a general war.
In addition to his failure to grasp the essentials of the Armistice we were working on, President Rhee has done some things vis-Ã -vis his political opponents which, to put it mildly, had verged on the undesirable. Specifically, he had been putting some of his political opponents in jail and had been seeking Constitutional arrangements designed to ensure his own reelection. Other than the U. S. Ambassador and General Ridgway, we have only UNCURK to help us work out problems like these and that is why we would like to see UNCURK strengthened and maintained.
Mr. Stikker agreed that there was a lot that UNCURK could be called on to do along the above lines but noted that, at the present, it was an extremely frustrating job for the people who were having to sit out there on the Commission more or less twiddling their thumbs. Following out this idea, Ambassador van Roijen asked whether it would be possible for the Unified Command to do something which would give UNCURK more prestige or perhaps to find additional things for UNCURK to do.
I replied that that seemed to be a good idea to me and that we would pass the idea along to General Ridgway and ask him to try to devise something for UNCURK to get underway with right away.
KOREAN ARMISTICE
Mr. Stikker asked what we thought the chances were for an Armistice in Korea. I said that I hoped there was going to be one. One problem that had to be solved was whether the USSR was going to be allowed to participate in the neutral inspection teams. We thought that the inclusion of the Russians would not only be absurd but positively harmful because it would wrap a mantle of neutrality
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around the Soviet Union. Another problem that had to be solved was the prisoner of war problem, that is, whether there was to be forced repatriation. The Communists couldn't accept voluntary repatriation for two reasons. One of these was the doctrinal reason which required them to pretend that everyone wanted to be repatriated to their side. The other was that they weren't sure that voluntary repatriation wasn't a trick on our part. They might think, for example, that we would not allow anyone to return under cover of the argument that no one wanted to.
It seemed to us that the chances for an armistice in Korea really depended in the final analysis on the USSR. I said that it was pure speculation on my part but that it seemed to me that last June, the Kremlin had concluded that the Korean war was growing dangerous and that is why they proposed through Malik to start these armistice talks. They might have reasoned at that time that it would be to their advantage to maintain something like the present situation whereby some of the danger of the Korean operation has been lessened while at the same time a lot of our forces have been pinned down there. Of course, they could not expect that this sort of advantage could last forever since the point must come when the talks will either succeed or will be broken off. If they are broken off, the situation would become dangerous again. In the meanwhile since last June, however, the talks have kept the Korean situation from being dangerous as it would otherwise have become and at the same time, of course, our forces there have been immobilized. Continuing this line of speculation, I added that our guess was that the Russians would try everybody's patience to the extreme limit and then stop. A very wild guess would be that we will have an armistice in a month or so.
Ambassador van Roijen asked what we thought of the possibilities of a large scale extension of the air-war into South Korea and also what we thought of the possibility that the Chinese might want to keep the Korean war going, even if the Russians did not. In reply I said that in our view a large scale extension of air operations in South Korea would call for counter measures on our part and might thus lead to an extension of hostilities beyond the Korea peninsula. As to the Chinese going ahead without Russian support, I said that it seemed to us this would result in China's forces becoming non-operational in a very short time since their heaviest material came from the Russians. There remained, of course, the possibility that they might force the issue. At the moment, however, we saw no indications of the Chinese getting out of hand so far as the Russians were concerned.
INDOCHINA
Mr. Stikker said he had heard from three sources recently, all within a week, that the French may have to give way in Indochina. He identified the sources as the Burmese Ambassador in The Hague, the Netherlands Ambassador
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in New Delhi, and the Netherlands representative on the UN Commission for Germany who had heard it from the Pakistan representative on the German Commission. He said it seemed to him that the situation in which France now finds herself is extremely dangerous. Not only was there the Indochina war, but there was the question of Tunisia and, of course, the question of the financial situation in metropolitan France. He asked whether something more could be done to help the French in Indochina.
I said that I agreed with him that the situation in Indochina was very dangerous. I said that we have been giving a very high priority to the supplying of equipment to the French and National forces in Indochina. Looking at the problem of Indochina in isolation, I said that we had been giving France a tremendous amount of help so far as money was concerned. While it was hard to compare what we had done with what the French had done because of the difference in fiscal years, it could be said that we had spent last year at least a third as much on the Indochina operation as the French had. I added that this was not a real measure of what we had done in Indochina, however, because no matter what the monetary figures involved were, we had in fact been furnishing material which simply could not be had from any other source. Every military airplane in Indochina was an American airplane. As for delivery priorities, I said that we were getting equipment into Indochina at a rate which, if anything, was in excess of the rate at which it was being consumed by the French and National forces there.
On the budgetary side the comparable figure, one-third, which I had mentioned above was exclusive of economic aid to metropolitan France. If we had to, it might be possible for us to bear more of the cost, but this would be difficult because it would be necessary to go to the Congress for more funds and because additional funds for Indochina might be taken at the expense of Western Europe.
On the matter of planning so far as Indochina is concerned, we were now giving earnest consideration to the following problems:
1. On the assumption that the present situation remains about the same, that is, assuming Ho Chi Minh does not receive a substantial increase in help from the Chinese, can the French and Vietnamese forces under these circumstances finally prevail. If they can, then we have to think about what we can do to develop support for the Viet Nam Government with the Vietnamese themselves. The Viet Nam Government seems to have a typically Eastern, fatalistic lack of interest in public support. So far as we can see, France has already given them more autonomy than they have seen fit to use. Clearly, if France is to be able to extricate herself from Indochina, we must develop public support for the Viet Nam Government and we have got to develop the Vietnamese armies.
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Secondly, we are worrying with the problem of what do we do in China comes in in force. Do we start air attacks on China? Do we blockade her? These things are being studied but there are no conclusions yet because there is no full military judgment available on which to base such conclusions.
Mr. Stikker asked whether we were still open-minded on this. I said that we were. It was clear to us that if Indochina were lost, this would have the gravest consequences for Burma and Thailand. There might be a possibility that Malaya could be held but if it were not that would certainly affect Indonesia. I added that although we had not yet reached any conclusions regarding the problems mentioned above, one thing was clear at this point and that was that we were not going to provoke anything.
Mr. Stikker asked whether we would anticipate another UN action, such as that in Korea, if the Chinese were to walk openly into Indochina. I said that difficult as was the terrain in Korea, it - was our understanding that Indochina presented an even more forbidding terrain. But more than
this, there was the question of who had troops to send to Indochina. We haven't and we don't know who has.
Mr. Stikker concluded by saying he thought the Indochina situation was perhaps the most dangerous situation of all today, more so even than Europe. He believed, therefore, that we must do everything we can to help France.
TUNISIA
I recalled that Dr. Stikker had mentioned Tunisia as another one of France's major worries and noted that the Tunisian question would be coming up in the Security Council. I said that I had been discussing with officers in the Department what we should do about this in the Council. I said that it seemed to me that by putting off Security Council discussion we had been losing ground with the Arabs without gaining very much ground in getting the French to do something toward easing the situation in Tunisia itself.
Mr. Stikker said that he agreed with this. He said he had tried four times to get some information from Schuman regarding the Security Council's handling of the Tunisia matter while the Netherlands representative was President of the Council. He thought that as President, the Netherlands representative could be helpful in handling the situation but that he had not been able to get any information out of Schuman on this at all. He said he had the impression there was a small pressure group in the Quai d'Orsay which had fairly well tied Schuman's hands on the Tunisian matter, particularly in the present circumstances of a rather weak Government.
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I said we had also been pressing Schuman for information but to no avail. I said that we had succeeded in getting the Security Council debate held up and then Hautecloque jailed the Tunisian Ministers. After that there was no chance of our avoiding its coming before the Council. I said that we had not decided whether we would abstain or vote against the adoption of the item on the agenda and that our information was the Netherlands Delegation was against its adoption. Mr. Stikker replied that that was not correct. He added, however, that if the UK and the U.S. decided to cast a negative vote along with France, that the Dutch might also.
INTERNATIONAL TRACING SERVICE
Mr. Stikker said that the question of control of the records of the International Tracing Service was important in his country, both for psychological and legal reasons. He said that there were 120,000 Jews in the Netherlands and that it would be difficult to ask them to apply to Germans for information about their relatives. He said also that the practical day-to-day work of maintaining and utilizing the records of the International Tracing Service should not be in German hands, that it should be instead in the hands of an international organization. He asked whether our position on this whole matter could be reconsidered and mentioned the possibility that the International Red Cross might take over the work if a $5 million fund could be raised to enable them to do it.
I asked Mr. Stikker whether he thought the $5 million fund could be raised. He said that the Netherlands would pay its share. I promised him that we would look into the matter.
NETHERLANDS ANTILLES
Mr. Stikker said there had been rumors about plans to bring Latin American countries (he later identified Venezuela as being the country he had in mind) into defense arrangements for the Caribbean including, presumably, the Netherlands Antilles. He said that the Netherlands military people had discussed the defense of the Caribbean with our military people but that so far as the Dutch were concerned, the problem was not solely military. It was also political. He said that a Round Table Conference was just convening in The Hague in which the Governments of Surinam, the Netherlands West Indies and his own Government were participating as equals to bring about a new Constitutional arrangement whereby they would all become equal members in the Netherlands Kingdom. When this got to Parliament, it could certainly be expected that the Parliament would want to know what arrangements had been or would be made for the defense of the Netherlands Antilles. For this reason he hoped we could accept the recent Dutch suggestion regarding an exchange of notes between The Hague and Washington on this matter.
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Without identifying the source, I read to Mr. Stikker an extract taken from Mr. Foster's letter to me dated March 22, 1952, according to which Latin American forces would take part in the defense of the Caribbean area but would not be based in the Netherlands Antilles.
After some conjecture as to whether it was contemplated that U.S. air or naval forces would be based in the Netherlands Antilles - assuming the consent of the Netherlands Government - I said I thought we could agree in principle to an exchange of notes. We would have to avoid anything in the nature of an agreement which would call for registration under Article 102 of the United Nations Charter. It seemed to me, however, that the problem could be handled by an exchange of notes which would enumerate principles to guide military discussions when they were resumed. Mr. Stikker said he thought that this plan seemed quite feasible and he hoped we could get on with it right away.
OEEC AND EPU
Mr. Stikker said that there had recently been some talk of a crisis or even a failure of the OEEC. The danger arose from the fact that creditor nations in the EPU would not be prepared to increase their credit any further and from the fact that if the EPU fund were not increased, these creditor nations would probably prefer to return to bilateral negotiations. He said that if we now had to go back to the practice of bilateral negotiations in Western Europe in order to reach trade agreements that that would be the end, in his opinion, of liberalization of trade. He thought that this was one of the really fundamental problems confronting Europe today and that it had been particularly complicated by the heavy credit position of Belgium, Portugal and Sweden in the EPU.
According to Mr. Stikker, Mr. Draper's recent statement that the U.S. did not expect to make a direct contribution to the EPU in the coming fiscal year had had a very depressing effect. Another cause for depression was the UK's whole attitude toward the OEEC. He referred to his letter to me regarding the British attitude and in elaboration said he was sure that the UK Treasury had a sympathetic attitude toward the OEEC but that the Foreign Office did not. Unfortunately, the Foreign Office was running the UK Delegation in Paris. Sir Edmond Hall-Patch of the UK Delegation in Paris was so much in disagreement with the Foreign Office's attitude that he was going to be replaced. Hall-Patch, along with Spierenburg and Marjolin, had made invaluable contributions to the working of the OEEC. The first two of these had now left and Marjolin was giving serious consideration to leaving before the Organization became a "museum for economic papers."
Mr. Stikker went on to say that if we looked at the UK attitude, which was definitely inclined to favor NATO over the OEEC, and if we looked at the
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recent streamlining of the OEEC staff, we are bound to wonder whether the OEEC can continue to do a job. He said that if the financial situation of every country could not be studied on the basis of collective responsibility, he was sure that Europe was headed for a real economic crisis. He believed that before the end of June a solution had to be found to this latter problem as well as a solution for the critically high credit position for the Belgians, Portuguese and Swedes.
Under pending MSA legislation it seemed to the Dutch that funds could be given directly to an international organization such as the EPU but, he added, the Draper statement referred to above seemed to exclude this. He thought that an investment of a small amount in EPU was more important even than military aid today. He believed that the EPU would need between two and three hundred million to continue another two years beyond June. He thought that most of this, that is about two hundred million, could and should come from Europe. So far, only the Dutch and Italians, however, have seemed definitely willing to contribute. He thought that the U.S. should contribute one hundred million.
I asked Mr. Perkins what had been the basis of the Draper statement. Mr. Perkins replied that in so far as our financial objectives were concerned it could be said that the EPU had contributed to European convertibility but had not contributed to world convertibility. He added, however, that Mr. Draper had said in the same statement that although no further capital contribution to the EPU itself is contemplated at this time, the U.S. expects to continue to assist several European countries to meet their deficit with the EPU.
Mr. Stikker recalled that Mr. Draper had said this but he said that that would not solve the problem of providing a fund of about three hundred million dollars which would enable the EPU to run for the next two years.
I asked Mr. Stikker how firm the figure of 300 million he had mentioned really was, adding that if we were to ask for 100 million to contribute directly to the EPU we might very well expect Congress to want to see how far the EPU could get on the 200 million Mr. Stikker thought EPU members should contribute. I said, however, that we would get in touch with Mr. Harriman and Mr. Snyder before Mr. Stikker's return on April 10 and would try to have some more information on this subject for him by that time.
On the matter of the external credit position of the Belgians, Portuguese and Swedes, Mr. Stikker thought it might be advisable to float a loan in the international market for some 500 million. He believed that this sum would take care of all three. He wondered who he should talk with in Washington about the possibility of floating such a loan. I told him I thought we would check with Willard Thorpe and Ed Martin on this and would let him know as soon as possible.
EUROPEAN DEFENSE COMMUNITY
Mr. Stikker said that there are three problems which might block or indefinitely delay the signing of the EDC treaty. The first of these was the matter of security guarantees. He mentioned that the Netherlands and France had made a demarche in London recently with the objective of getting the British to agree to a Brussels Pact-EDC security guarantee formula which would provide a solution to the impasse between the Dutch and Germans on the matter of defense commitments within the EDC. He said that he had had a personal discussion about this with Mr. Eden in Paris about ten days ago and it seemed to him Mr. Eden was cool to the idea and that he thought Parliament wouldn't like it. He thought Mr. Eden might, however, suggest some other kind of guarantee. In addition, Mr. Schuman had told him that he would have great difficulty with his Parliament if the UK wouldn't accept some realistic form of security guarantee.
Another problem which was blocking the signing of the EDC treaty was the question of the German contribution. He said that he couldn't see that any headway had been made on this since Lisbon.
A third problem delaying the conclusion of the treaty was the organizational problem of relationships with NATO and OEEC. He thought that this latter problem was minor in comparison with the first two, however. Finally, he said that the French did not now seem to be pushing forward with the conclusion of the treaty and he asked what we knew about the British attitude toward security guarantees.
I said that our understanding was that the UK Cabinet was to take up the matter of security guarantees yesterday. I added that we had supported the Dutch formula as much as we thought we could, not being a party to the Brussels Pact ourselves.
On the matter of the German contribution, I outlined our understanding of what the situation would be during the first year of operation under the EDC treaty, adding that for the second year the whole question of allied troop costs in Germany had been left open for discussion. The question of the German financial contribution would in future have to form the subject of talks between the EDC and Germany on the one hand, and with the US-UK on the other. It seemed to us that the problem could only be solved if the UK and the US were to pay their own way in Germany since ours, of course, were the only occupation forces outside of the EDC. The French occupation forces presumably would be financed in exactly the same way as would be financed any other forces of any other member or the Community. It made no difference that we could see, that these French forces were in Germany. I then pointed out that the Federal Republic did not pay directly for the costs of our occupation troops. Instead, services were rendered by Germany to our troops there and it was these services which the Bonn Government actually paid for. I repeated that we would be prepared to pay these costs ourselves provided the British were prepared to pay theirs. I made it plain, however, that we would be unwilling to pay these costs for our troops in Germany unless the UK were willing to pay the costs of their occupation troops there and unless French occupation troop costs were undertaken by the EDC. Otherwise, we would be in a situation vis-Ã -vis Congress very much like our situation with respect to Austrian occupation costs.
Mr. Stikker then emphasized that to the Dutch, the two main points were to avoid an increase in defense costs resulting from the formation of the EDC and to avoid the replacement of US and UK forces on the continent by German forces. In response, I said it was our view that if total troop strength as now foreseen could not be covered by the total income of the EDC, then it would be necessary to slow down the process of building up forces or perhaps even to reduce present force estimates. Finally, I said I agreed that US and UK forces should not be withdrawn from the Continent, adding that I didn't believe the UK had any intention of pulling out.
NETHERLANDS GUARANTEE OF LOAN TO INDONESIA
It was decided that we would take up this matter when Mr. Stikker returns here on April 10.
COMMENT FOR PRESS
It was decided that in response to questions from the press, we would say that we had discussed this afternoon matters of common interest to the two governments such as the OEEC, the EPU, the EDC and European problems in general.
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