London Embassy Files: Lot 59 F59: File 850 Marshall Plan: Telegram
The United States Special Representative in Europe (Harriman) to the Chief of the Economic Cooperation Administration Mission in the United Kingdom (Finletter)
secret
Paris, June 24,
1948—9 p. m.
580. Sent Dept to ECA 187 rptd London 580 for Finletter.
- 1.
- Hall Patch, speaking on behalf of U.K., has presented to U.S. view that it is impossible for U.K. formulate requirements program or commit itself on payment arrangements with other participating countries without first knowing loan grant ratio for U.K. Hall Patch stressed U.K. scrupulousness with regard to acceptance of credit obligations and stated it was his understanding recipient country would have right to reject all or any part of sums offered by U.S. on loan account. Finletter told me Cripps had raised same question with him.
- 2.
- We have stated ECA could not permit individual countries to exercise unilateral option on acceptance of loan part of aid while maintaining right to receive grants in amount originally coupled with loan. On proposal ECA should fix loan grant ratio in advance, I recommend [Page 456] that Finletter be given tentative loan grant figures for transmittal to Cripps verbally and mission chiefs to other countries that may inquire for planning purposes, to show general order of magnitude. It would be clearly understood, however, that ECA cannot commit itself in advance to refraining from change in loan grant ratio over period for which allocations of total aid to respective countries are made. Reason is that revision of amount of total allocations themselves will be necessary in light of progress made on problem of intra-European payments and in light of amount and location of offshore procurement, and loan grant ratio will be affected by same factors.
- 3.
- Would appreciate further information current Washington thinking on loan grant ratio problem. Particularly request (rpt London for Finletter) present status discussions with British above subject with special reference agreed amount of loans for first and second quarters ECA year. Assume from Ecato 10731 there were no authorizations for loan type assistance for first quarter ending June 30. Has U.K. indicated willingness to accept less than $100,000,000 in loans for first quarter?
Copy for Treasury.
Harriman
- Not found in Department of State files.↩