Memorandum, State Department Summary of Telegrams

DEPARTMENT OF STATE OFFICE OF THE SECRETARY WASHINGTON December 19, 1949 are TC E I SUMMARY OF TELEGRAMS EUROPE Former Belgian Premier Spaak has informed Ambassador Murphy that he is determined to go through with the proposal for heading up and strengthening the OEEC provided there is no substantial opposition within the organization which would destroy the possibility of any solid accomplishment. Spaak expressed the conviction that the British are steadfast in their opposition to his appointment, which they are now expressing through a proposal that he must resign from Belgian political life if he takes this position. Spaak indicated that he would not do this, and proposed instead that he might accept the proposed position on a six months trial basis. He feels this issue has become a test between the US and UK, and is gloomy about the future unless some major action is taken by the OEEC at this time. The Secretary has reviewed at length with Sir Oliver Franks the situation concerning the UK bilateral agreement under MAP, pointing out that we have attempted to meet the major points raised by the British in connection with the agreement and emphasizing the serious effect which would be produced on American public opinion and on future Congressional action on the MAP and ERP programs if the UK does not sign the bilateral. Franks said that his government was concerned with various political problems presented by the coming election and particularly by the ques- tion of what demands we might subsequently make of them under the mutual aid commitment CHINA The British government has sent a note to the US and French governments indicating its intention to recognize the Chi- nese Communists, preferably on January 2. The message to the French expresses the hope that this will not prove embarrassing to the French in their relations with the Bao Dai government in Indochina and notes that the UK is planning de facto recognition of Bao Dai at a later time, presumably after the Commonwealth conference and after French ratifica- tion of their basic agreements with Indochina. In view of the Burmese recognition of the Communists and the intention of the British to recognize in the near future, which we feel E.0. i State Do:- By HC n-13-00