US Economic Statecraft for Survival 1933-1991 Part 9

71 FRUS 1944, vol. iv, p. 951, Harriman to Hull, 13 March 1944.

72 Herring, 'Lend-Lease Aid to Russia', pp. 989; Martel, Lend-Lease Loans, p. 74.

73 Harriman Papers, box 173, Harriman to State Department, 27 June 1944.

74 Martel, Lend-Lease Loans, p. 115; FRUS 1945, vol. v, pp. 93840, memo by Collado, 4 Jan. 1945.

75 Ibid., pp. 9424, Harriman to Secretary of State, 4Jan. 1945.

76 Martel, Lend-Lease Loans, p. 129.

77 Quoted from Yergin, Shattered Peace, p. 103.

78 Contemporary doc.u.ments place a figure of $400 million on this agreement, but a retrospective in 1952 put a figure of $233 million, with $19 million unused by March 1947. FRUS 1946, vol. vi, pp. 8201, Durbrow to Acheson, 21 Jan. 1946. HST Lib., Acheson Papers, box 67, memo of conversation 1952, folder: March, memo by Battle 20 March 1952.

79 FRUS 1945, vol. v, pp. 9457, Harriman to Secretary of State, 6 Jan. 1945.

80 Ibid., pp. 9478, Stettinius to Roosevelt, 10 Jan. 1945.

81 Ibid., pp. 2613, memo of conversation, Stettinius, H.D.White and Morgenthau, 17 Jan. 1945.

82 Ibid., pp. 9646, Clayton to Secretary of State, 20 Jan. 1945.

83 Ibid., p. 966, memo of conversation Clayton and Morgenthau, 25 Jan. 1945.

84 Ibid., pp. 9946, Harriman to Secretary of State, 11 April 1945.

85 HST Lib., Acheson Papers box 67, memo of conversations 1952, folder: March, memo by Battle, 20 March 1952 86 FRUS, 1946, vol. vi, pp. 8201, Durbrow to Acheson, 21 Jan. 1946.

87 HST Lib., Acheson Papers box 67, memo of conversation 1952, folder: March, memo by Battle, 20 March 1952.

88 Ibid. Patterson, Soviet-American Confrontation, pp. 47, 512; Pollard, Economic Security, pp. 503.

89 FRUS 1946, vol. vi, pp. 8289, Byrnes to Orekhov, 21 Feb. 1946.

90 HST Lib., PSF box 156, Subject File Cabinet, folder: Commerce Secretary of Henry Wallace, Wallace to Truman, 21 March 1946.

91 Ibid., pp. 8412, Novikov to Acting Secretary of State Grew, 17 May 1946.

92 Ibid., pp. 8423, Luthringer to Clayton, 23 May 1946.

93 Ibid., Pollard, Economic Security, pp. 503.

94 FRUS 1946, vol. vi, pp. 8423, Luthringer to Clayton, 23 May 1946.

95 Ibid., pp. 8446, Secretary of State Byrnes to Nabikov, 13 June 1946.

96 Harry S.Truman, The Memoirs of Harry S.Truman, vol. 1, Tear of Decisions 1945 (Hodder & Stoughton, London, 1955), p. 493.

5 The Truman Administration and the development of strategic embargo policy 1 John Lewis Gaddis, Strategies of Containment: A Critical Appraisal of Postwar American National Security Policy (Oxford UP, New York, 1982), pp. 1415. Fungiello, American-Soviet Trade, p. 15.

2 Of course some did not see $400 million under a Lend-Lease pipeline 3c agreement and $250 million of UNRAA benefits as minor. Instead they were seen as weakening the bargaining position of the Americans and as encouraging the Soviets to seek further piecemeal arrangements that would not involve concessions to the USA. See FRUS 1946, vol. vi, pp. 8201, Dubrow to Acheson, 21 Jan. 1946.

3 See Anne Deighton, The Impossible Peace: Britain, the Division of Germany, and the Origins of the Cold War (Clarendon, Oxford, 1990); and Alan Bullock, Ernest Bevin: Foreign Secretary (Oxford UP, Oxford, 1985).

4 Truman, Year of Decisions, pp. 4923, Truman to Byrnes, 5 Jan. 1946.

5 George F.Kennan (writing as 'X'). 'The Sources of Soviet Conduct', Foreign Affairs, 25, 1947, pp. 56682.

6 Gaddis, Strategies of Containment, p. 35; HST Lib., Naval Aide Files, State Department Briefs 1947 Jan.1949 Dec., folder: JuneAugust 1947, 5 April 1948 Soviet Union; ibid., folder: MayAug. 1948, 3 May, USSR.

7 CAB 129, CP(47)197, 5July 1947.

8 FRUS, 1948, vol. i, p. 546, NSC 7, 30 March 1948, The Position of the United States with Respect to Soviet Directed World Communism'.

9 The term cold economic warfare clearly transcends the chronological boundaries of the historic Cold War 194591, as indeed should the term cold war.

10 HST Lib., Naval Aide Files, State Department Briefs 1947 Jan.1949 Dec., folder: JuneAugust 1947, 5 Nov. 1947 and 10 Nov. 1947.

11 See Fungiello, American-Soviet Trade, ch. 2 and p. 32 citing source Acheson Papers, Political and Government File, Russia, 1947, 'Secretary Harriman's Views on Trade with the USSR and the Satellites', before House Foreign Affairs Committee, 13 Nov. 1947.

12 The NSC was established by the 1947 National Security Act with the purpose of co-ordinating the work of all executive departments with involvement in national security. The first National Security Adviser (NSA) to the President was Sidney W. Souers.

13 HST Lib., PSF box 191, folder: Actions Record of 194749, 14 Nov. 1947, 3rd meeting NSC, action 7.

14 FRUS 1948, vol. iv, pp. 48998, PPS 17, 26 Nov. 1947; State Department East European Economic Working Party, 19 Nov. 1947; Secretary Harriman to NSC, 14 Nov. 1947.

15 Ibid., pp. 51112, NSC 17 Dec. 1947.

16 Ibid.

17 Ibid., pp. 5246, memo conversation, Armstrong, Thorp, Wood and Blaisdell, 16 March 1948. Secretary of Defense Forrestal was also wary of the dangers of economic warfare, see Fungiello, American-Soviet Trade, p. 39, quoting source HST Lib., Papers of Matthew J.Connelly.

18 FRUS, 1948, vol. iv, pp. 5246, memo of conversation, Armstrong, Thorp, Wood and Blaisdell, 16 March 1948.

19 The Advisory Committee on Exports was set up in 1947 and chaired by the Commerce Department, it was renamed Advisory Committee on Requirements in 1948. The Commerce Department was in charge of export controls of non-military and non-nuclear items.

20 FRUS, 1948 vol. iv, pp. 5278, paper presented to Cabinet by Marshall, which it approved, 'Control of Exports to Soviet Bloc', 26 March 1948.

21 For the most persuasive argument about this need see Milward, Reconstruction of Western Europe.

22 FRUS, 1948, vol. iv, pp. 5278, paper presented to the Cabinet by Marshall, which it approved, 'Control of Exports to the Soviet Bloc', 26 March, 1948.

23 Ibid., pp. 53642, Report by Ad Hoc Subcommittee of Advisory Committee of the Secretary of Commerce, 4 May 1948.

24 Ibid., pp. 5424, 550, Thorp to Secretary of State, 6 May 1948, Sawyer to Marshall and his reply, 19 June 1948; HST Lib., PSF 220, folder: NSC Meetings, 12th meeting 3 June 1948, 13th meeting, 18 June 1948.

25 FRUS 1949, vol. v, p. 115, Harriman to Hoffinan, 20 May 1949.

26 Milward, Reconstruction of Western Europe, pp. 1212, notes that the ECA was more hard-line than the State Department in September 1948; however, it never adopted such an aggressive stance as the Commerce Department in the summer of 1948, and by May 1949 appears to have moved close to the State Department position.

27 However, even certain people in the defence establishment were cautious about taking the embargo programme too far: Defense Secretary Forrestal expressed such caution and rendered help to State and ECA in toning down the shrill demands from Commerce: see Jackson, 'Cold War at its Height', and Frland, Cold Economic Warfare.

28 See Frank M.Cain, 'Exporting the Cold War: British Responses to the USA's Establishment of COCOM, 194751', Journal of Contemporary History, 29 (iii), 1994, pp. 50122, p. 505; and HST Lib., PSF box 206, folder: NSC Meeting 39, 5 May 1949, A Report to the NSC by the Secretary of State, 3 May 1949'.

29 Ibid.

30 Ibid., FRUS 1948, vol. iv, pp. 5648, Marshall and Hoffinan to Harriman, 27 Aug. 1948, to implement NSC Dec. 17, 1947, Cab. 26 March 1948, and sect. 117(d).

31 Ibid.

32 Ibid., pp. 5858, Bureau of Economic Affairs, 22 Nov. 1948, no. 178.

33 CAB 129/24, CP(48)72, 'The Threat to Western Civilisation', 3 March 1948.

34 FO 371/77799, UK Delegation OEEC to FO, 24June 1949.

35 Milward, Reconstruction of Western Europe, p. 122.

36 Klaus Schwabe, Atlantic Partnership and European Integration: American European Policies and the German Problem, 19471966', in Lundestad, No End to Alliance.

37 FRUS, 1949, vol. v, pp. 99100, Harriman to ECA, 19 March 1949; HST Lib., PSF box 191, NSC (A-D), Folder: Action Record of 1947^9, 5 May 1949, 29th meeting action 210, 'Understandings on Export Controls in East-West Trade', and ibid., box 206, folder NSC Meeting 39, 5 May 1949, A Report to the National Security Council' by Secretary of State, 3 May 1949.

38 Ibid., p. 115, Harriman to Hoffman, 20 May 1949.

39 Ibid., pp. 11314, Foster to Hoffman, 12 May 1949.

40 Ibid., pp. 1367, 1412, Sawyer to Acheson and his reply, 15 Aug., 19 Sept. 1949.

41 Ibid., pp. 15052, Harriman to Hoffman, 15 Oct. 1949.

42 HST Lib., PSF box 163, Subject File Conferences Sept. 1947-Dec. 1950, folder: subject file conferences Paris Conference Oct.-Nov. 1949, Meeting of US Amba.s.sadors, 2122 Oct. 1949, pp. 1517. The idea of moving responsibility for embargo policy to NATO was never achieved, or indeed pursued vigorously. The Americans did take an initiative in 195051, but it came to nought, see Tor Egil Frland, 'An Act of Economic Warfare? The Dispute Over NATO's Embargo Resolution, 195051', International History Review, 12 (iii), 1990, pp. 490513. When in November 1949 the Americans mentioned to the British the possibility of a permanent group being set up in NATO, their reaction was very negative: they saw NATO as defensive, and thus incompatible with an embargo as economic warfare.

There was also the problem of non-NATO members, FRUS, 1949, vol. v, pp. 1667, Acheson to Paris Emba.s.sy, 2 Nov. 1949.

43 HST Lib., PSF box 163, Subject File Conferences, Sept. 1947Dec. 1950, folder: subject file conferences, Paris Conference, Oct.Nov. 1949, Perkins to Acheson, 'Summary Record of the Paris Meeting and of the Conclusions of the London Meeting', 7 Nov. 1949.

44 HST Lib., Papers of Thomas Blaisdell, box 8, folder: ECA Dept. Commerce 1951, undated statement L.K.Macy, Director OIT to House Foreign Affairs Committee, 'Export Controls for Security Purposes'.

45 Truman said that the USA and Britain 'had to work out their problems on a worldwide basis and that the United States will not negotiate with the British at one point to have them slap us in the face at another', i.e. over China: HST Lib. PSF box 159, folder: Subject File-Cabinet State Secry. of misc., Notes of Presidential Meeting by Webb, 26 March 1950.

46 CAB 128/18, 42(50)3, 4 July 1950 discussing paper CP(50)157, and meeting 44 (50)1, 10 July 1950. These meetings show Britain agreed in principle as early as July 1949 to embargo exports to the PRC, providing other European allies did so as well. At the Anglo-French-US talks in Washington 1315 Sept. 1949 it was agreed that controls on exports to Eastern Europe should be extended to cover trade with China, HST Lib., PSF, box 112, folder: General File, Acheson, Dean, meeting with Bevin and Schuman, Washington DC, 1315 Sept. 1949. However, continuing uncertainty about the wisdom of this emerged in the British Cabinet on 4 July 1950, when, in the absence of Bevin, it decided against imposing the same embargo on the PRC as existed for the Soviet bloc, for fear of provoking Chinese action against Hong Kong. Members of the Cabinet could see no likely practical benefit from an embargo. Five days later, with Bevin present, that decision was overturned.

47 For details of military aid to Britain see: Helen Leigh-Phippard, Congress and Military Aid to Britain: Interdependence and Dependence, 194956 (Macmillan, Basingstoke, 1995).

48 FRUS, 1950, vol. i, pp. 2523, NSC 68, 14 April 1950.

49 Ibid.

50 HST Lib., Papers of Charles Sawyer, box 78, folder: Sec. Commerce Daily Recording File: Cla.s.sified Material, 25 April 1950.

51 FRUS, 1950, vol. iv, pp. 1534, Memo Joint Chiefs of Staff to Secretary Johnson, 26 June 1950, quotes an extract from NSC 69 and also refers to a recent naval intelligence report suggesting that Western observers believed that effects of the embargo had been underestimated, and if applied stringently could 'result in the Russian economy's grinding to a stop within a period of five to ten years'.

52 HST Lib., PSF box 220, folder: memos for President summary of 56th NSC meeting, 5 May 1950.

53 Ibid., folder: memos for the President (1950), Summary of 56th NSC Meeting, Sawyer's Paper NSC 69, 5 May 1950.

54 FRUS, 1950, vol. iii, pp. 10312, telegram reporting conversation, 10 May 1950.

55 Ibid., pp. 1109, paper by McSweeney, 2 Aug. 1950.

56 Acheson Papers, folder: July 1950, Cabinet meeting on Korea, 14 July 1950.

57 For details of the hostile Congressional criticisms of the Administration's embargo policy and the various initiatives that were taken see Fungiello, American-Soviet Trade, ch. 3.

58 FRUS, 1950, vol. iv, pp. 16372, NSC 69/1, Export Controls and Security Policy, 21 Aug. 1950.

59 For a discussion of the different approaches, largely in the context of UK-Soviet trade agreements, see Cain, 'Exporting the Cold War'.

60 FRUS, 1950, vol. iv, pp. 1746, Acheson to US Emba.s.sy, London, 22 Aug. 1950.

61 Ibid., pp. 17981, Action NSC 66th meeting, 24 Aug. 1950; HST, PSF, box 220, folder: NSC Meetings, folder memos for the President, Meetings, Discussions 1950, NSC 66th meeting, 25 Aug. 1950. Fungiello, American-Soviet Trade, p. 57, erroneously suggests that the Commerce Department was more liberal than it actually was, and that it suggested the moratorium, whereas in fact it was Acheson. Fungiello's interpretation seems to go rather uncharacteristically adrift here, as indeed it does on p. 46, where he suggests that the State Department thought export controls were essentially futile.

62 CAB 128/18, 45(50)3, 4 July 1950; ibid., 44(50)1, 10 July 1950.

63 CAB 129/42, CP(50)201, Paper by Shinwell, 31 Aug. 1950.

64 CAB 128/18, 55(50)7, 4 Sept. 1950.

65 Ibid., 57(50)4, 11 Sept. 1950.

66 FRUS, 1950, vol. iv, pp. 2012, memo of conversation, Acheson et al., 11 Oct. 1950.

67 Ibid., pp. 1967, Webb to US Emba.s.sy, London, 27 Sept. 1950. In fact the Cannon amendment had been preceded by the more hard-line Wherry amendment, for which the Administration had only just managed to engineer a defeat. The success of the Administration in getting the Cannon amendment altered so that the President could use his discretion was important: Truman never used the Cannon amendment against ERP countries.

68 Acheson Papers, box 65, folder: Memos of conversation, Oct. 1950, 11 Oct. telephone conversation with William Foster, and 30 Oct. meeting Acheson, Sawyer, Blaisdell, Foster and Bishop.

69 FRUS 1950, vol. iii, pp. 13001, Agreed Minute by US, UK and France, at Foreign Ministers Meeting New York, 26 Sept. 1950.

70 I do not mean to suggest here that the British position encapsulated the composite reservations of all the West European allies. Denmark and Norway, for example, were often more reluctant than Britain to adopt items for control because of their greater sensitivity towards provoking the Soviets. However, on the issues which had impact on the way US policy developed the British position does cast light on most of the relevant factors.

71 CAB 128/18, 85(50)3, 12 Dec. 1950.

72 HST Lib., PSF box 163, folder: Subject File Conferences, Truman-Attlee Talks, Dec. 1950 (folder 1), Memo of Truman-Attlee talks on the Williamsburg, 5 Dec. 1950.

73 John Lewis Caddis, We Now Know: Rethinking the Cold War History (Oxford UP, Oxford, 1997).

74 HST Lib., PSF box 112, folder: General File, Attlee, Clement, US-UK Washington Conversations, 6 Dec. 1950.