Foreign Relations of the United States, 1955–1957, Western European Security and Integration, Volume IV

86. Memorandum From the Chairman of the Council on Foreign Economic Policy (Dodge) to the Council¹

CFEP 520/4

Washington, April 15, 1955.

SUBJECT

• Cartel Aspects in the European Coal and Steel Community

1. Reference is made to previous papers circulated on subject matter, CFEP 520/1,² 520/2³ and 520/3.⁴

2. After further consideration, it is believed that the problem stated on page 1, and the suggested position on page 5, of CFEP 520/3 might be more exactly stated as follows:

a. Problem

“To determine whether the operations of the European Coal and Steel Community are giving rise to, or are failing to prevent the increase of, restrictive practices through cartels and to determine what further U.S. action should be taken in connection with developing a competitive market for coal and steel in Europe. Included in this problem are the following questions:

1. Are restrictive practices in the coal and steel industries of the Community (a) declining; (b) continuing much as in the past; (c) or increasing?

2. If continuing or increasing, is it despite the efforts of the High Authority or with the High Authority’s tacit or express authorization?

3. What means are available to the High Authority to deal with cartels and their activities?”

b. Suggested Position

• “1. No change should be made at this time in the policy of United States support for the Coal and Steel Community as a constructive development toward the economic and political integration of Europe.
• “2. The United States should continue to encourage the High Authority to use its powers to develop a competitive market for coal and steel.
• “3. In view of the inconclusiveness of present evidence as to whether the High Authority is using the legal authority available to it, or is administering the U.S. loan of $100 million, in such a way as to exercise the maximum influence to prevent the further development or to reduce the existing level of restrictive arrangements, the Department of State is requested:

  a. To prepare a study including information as to:

  (1) the nature and extent of business arrangements which have been approved or rejected by the High Authority under the anti-cartel provisions of the Treaty;

  (2) the nature and extent of restrictive practices of firms which have received loans from the High Authority;

  (3) cases in which the High Authority’s orders have been disregarded by the firm or firms involved and the High Authority’s action thereon;

  (4) whether national governments are hampering efforts of the High Authority to develop more competitive markets;

  (5) actions taken by the High Authority against restrictive and monopolistic practices; and

  (6) actions taken by the High Authority in other areas designed to develop more competitive markets.

  b. To submit recommendations based on the above study for further U.S. action in connection with developing a competitive market for coal and steel in Europe.”

Joseph M. Dodge

1. Source: Department of State, E–CFEP Files: Lot 61 D 282A, CFEP 520/4. Secret.
2. Document 84.
3. Supra.
4. CFEP 520/3, a memorandum from Joseph Dodge to the CFEP, dated April 1, summarized CFEP 520/1 and CFEP 520/2 and offered for discussion a possible position for the Council to take on the CSC cartel problem. (Department of State, E–CFEP Files: Lot 61 D 282A, CFEP 520)