Report on East-West Trade from Robert N. Golding to William C. Foster

COPY Mr. William G. Foster 20 February 1950 Dep. Adm., room 508 Mr. Robert N. Colding Dept. Adm., room 502 East-West Trade A. Hypotheses. 1. The Participating Countries are "on the back of the American taxpayer" because they weighed less than the alternative burden of solitary opposition to a Russia augmented by the productive capacity of the Participating Gountries. 2. The objective of the ECA Recovery Program is to revitalize the free nations of Europe so that they can stand on their own feet, but along side of us, in opposition to the resurrected Asiatic Empire of Russia. 3. East-Nest trade is a necessary ingredient of economic recovery in Eu- rope, but nothing is gained by any given transaction which also brings about a balancing increase in military potential in Asia. 4. Every decision in the East-West trade field involves, to a varying ex- tent, the three elements of: (a) Recovery (b) Security e Political expediency 5. A judgment based upon a consideration of any one element only or upon a too rigid insistence upon one element, may result in a failure to reach the objective because one or both of the other two elements may be brought into play to influence the situation adversely. 6. The problem is unlimited in geographical extent, is an integrated whole, and no part can exist as an independent entity separated from all the other parts. 7. The correctness of a decision, either on policy or an individual trans- action, is more apt than not to be contingent upon a prior exchange of infor- mation and points of view by the various agencies concerned. (The opposite of a narrow, compartmentalized and jurisdictional point of view). B. The Problem. 1. Our relationship with the Iron Curtain being an integrated whole and not divisable into separate questions of recovery, security, dollar gap, etc., the problem is essentially one of funneling into one place information and points of view of various agencies and divisions before a decision is arrived at by the agency having that duty, as Commerce on U.S. exports, State on nego- tiations, ECA on recovery, Defense on security. SEGRET