Foreign Relations of the United States, 1947, The British Commonwealth; Europe, Volume III

Policy Planning Staff Files

Memorandum by the Director of the Policy Planning Staff (Kennan)¹

secret

[Washington,] May 16, 1947.

The Planning Staff is undertaking its work along the following lines of thought:

1. The most important and urgent element in foreign policy planning is the question of restoration of hope and confidence in Western Europe and the early rehabilitation of the economies of that area. The character and outcome of the action we may take with relation to western Europe will have overwhelming implications for our policy elsewhere. Therefore, the problems of this area must be considered first.²

2. A special ad hoc committee of SWNCC is already at work on the study of “policies, procedures, and costs of assistance by the United States to foreign countries.” This committee is completing an interim report and is beginning work on a final report scheduled for completion in mid-July. Its work relates to possible American assistance in all areas, and thus embraces the problems of western Europe.

3. The Policy Planning Staff recognizes the high quality and value of the work being performed by this SWNCC committee, and feels that the working out of detailed plans for American aid to Western Europe must continue to be the responsibility of that committee. There will be, however, a number of points on which the Planning Staff will have suggestions to make which will affect the assumptions and points of departure on which the committee is proceeding. The Planning Staff hopes to submit those to you at an early date in the form of a set of principles which it feels should be observed in framing a master plan for US assistance to western Europe. It believes that these principles may be useful not only to the SWNCC committee but also to other units in the Department and elsewhere in the Government which are occupying themselves with this problem.

The following is a tentative list of such principles:

(a) The program for American aid should be, if possible, supplementary to a program of intramural economic collaboration among the western European countries which should, if possible, be initiated by one of those countries and cleared through the Economic Commission for Europe. A clear distinction must be observed between these two programs.

(b) The schedule of American aid should be embodied in a master-program, which, like the European collaboration scheme which it is designed to support, would look ahead for a period of four to five years to a point where western Europe would no longer need to be the object of charity from outside.

(c) The scheme of American aid for western Europe must be tied in with some workable plan for the solution of England’s difficulties and must be agreed in advance with the British.

(d) The over-all plan of American aid must rest on guarantees from the European countries which will preclude communist sabotage or misuse. It must be made possible for us to terminate the flow of assistance at once if we are not satisfied on this point.

(e) We should be careful not to talk in terms of loans when there is no plausible prospect of repayment and should make it clear to everyone that assistance in these cases will have to be by means of outright grants.

(f) The program should be designed to encourage and contribute to some form of regional political association of western European states. Our occupational policies in Germany and Austria must be shaped toward enabling the western zones of those countries to make the maximum contribution to economic restoration in western Europe in general.

(g) We should use our influence to see that the program to be agreed on for western Europe leaves the road open for Czechoslovakia and other states within the Russian orbit to come, as soon as they can give guarantee that their participation will be constructed [constructive].

4. The above refers to an over-all program of American aid which we would hope could be put before the American public and Congress by mid-summer. The Planning Staff feels, however, that there is great need, for psychological reasons, of some energetic and incisive American action to be undertaken at once in order to create in Europe the impression that the United States has stopped talking and has begun to act and that the problem is being taken in hand swiftly and forcefully.

The Planning Staff is searching for a suitable field in which such action could be taken without prejudice to the execution of the eventual over-all program. It feels that the most likely field would be that of the rapid restoration of the coal-producing capacity of the Rhine valley; and it is examining the feasibility of a scheme that could be put in hand at once of the enlistment of American energy and resources to this end.

It envisages here the launching of an undertaking

which might be called “Coal for Europe” or something of that sort;

which would aim at a specified increase in the coal production of that area during a specific period (say from July 1 to December 31, 1947);

which would include every possible way in which the United States could help to boost production;

which would be accomplished by maximum publicity and public dramatization; and

which would be given as far as possible the character of an action not so much by the US Government to the French Government and other Governments of that area but by the US public to the peoples of those areas.

We conceive that this action might include, for example:

measures to increase production and procurement of coal-mining machinery of every sort and rush it to the coal-producing areas;

campaigns to make available food by popular sacrifice here (breadless days, etc.) to be sent specifically to coal-producing areas of ex-Allied states (such shipments to be accompanied direct to those areas by representatives of American organizations, such as Veterans’ organizations or labor unions);

special American government-grants to help the British overcome production difficulties in the Ruhr;

maximum cooperation of our occupational authorities in Germany in providing labor, materials, etc. for the coal-producing areas; and possibly,

assistance to various European countries in developing other sources of energy in order to ease coal allocations.

The purpose of the above action would be primarily to achieve the following psychological effect: (a) to instill into the minds of people associated with coal production in Europe the feeling that the United States was behind them and was determined to see that conditions would be provided which would help them to achieve maximum output; (b) to convince European peoples in general that this country is in earnest and is determined to do all in its power to see economic problems of that area taken energetically into hand; and (c) to capture the interest and imagination of the American public and channel it into the problem of reviving European productive facilities.

5. The Planning Staff hopes to be able to make formal suggestions along these lines very soon.

1. The Policy Planning Staff was established on May 5, 1947, in the office of the Under Secretary of State to assure the development of long-range policy. Minutes of the Staff are in Lot 64 D 563, files of the Policy Planning Staff, Department of State, 1947–1953.

   On May 19 Mr. Kennan used the present memorandum as the basis for a discussion with Under Secretary Acheson about the activities of the Staff to that time.

2. On April 24, before the Staff actually began functioning, Mr. Kennan had set this priority for its work. In a memorandum of that date he had called for the assembling of documents on current economic trends in the United Kingdom, France, Italy, and the Western zones of Germany and Austria in order to make an overall assessment of what these areas would need “(a) by way of relief, in order to keep human life going in case no programs of rehabilitation are undertaken beyond those already in existence, and (b) to effect complete rehabilitation [of the] economy and to render it self-supporting.” (64 D 563, Box 2042, 1947 Chron File).

   In the Staff’s meeting on May 15, it was “agreed generally that the main problem in United States security today is to bring into acceptable relationship the economic distress abroad with the capacity and willingness of the United States to meet it effectively and speedily; that with Greece and Turkey taken care of and the Korean problem now being posed, the greatest and most crucial problem’ is in Western Europe; that the areas most urgently concerned are France, Italy, the occupied zones of Germany and Austria, and Great Britain; that the problem is both political and economic, and not military (except insofar as maintenance of US military effectiveness is concerned); that the approach to the political problem for the moment must be economic; that it win not be possible to evolve in a short space of time any program to meet the long-term problem, but that some sort of immediate action is necessary for psychological reasons; and that since coal is so vitally important to Western Europe, we should examine the problem to see what the United States can do immediately to bolster production in Europe.” (64 D 563, Box 20036, 1947 Minutes of meetings.)