Memorandum of Conversation with Secretary of State Dean Acheson and William L. Clayton

DECLASSIFIED 3 33 E. O. 11652, Sec. 3(E) and 5(D) or (E) 3-16-20 By Dept. 6-14-76 TOP SECRET of State letter, 1973 NLT- HC , NARS Date conf 193-a July 19, 1950 8. MEMORANDUM OF CONVERSATION = RECORDE AND Participants: Mr. William L. Clayton Secretary Acheson Mr. Clayton called at his request. He said that the problem before us was how the free world could arm itself in order to get sufficient strength within sufficient time to defeat the menace of communist aggression. The essential part of this problem was to accomplish this result without the United States going broke. If that occurred, we should have lost the struggle. I agreed that this was the problem. Mr. Clayton stated that in his opinion the only way in which this could be done was through federal union of the democracies. He particularly spoke of the importance of bringing Australia and New Zealand into such a federal union. I asked how this would affect the immediate military and financial program since the basic task was for all the democracies to devote a much greater percentage than at present of their national income to military purposes and since mutual aid is already a principle in this effort. Mr. Clayton said that if western Europe was overrun there might be the possibility of the British Fleet's surrendering to the Communists, whereas under the federal union this would not occur. Mr. Clayton went on to say that his principal point was not a military one but an economic one. He thought that it was not possible to get the necessary economic strength unless all financial and trade barriers were removed and that, under the present small national divisions in Europe, economic strength was not possible. He said that the President had an opportunity to become one of the greatest men in history if he would pick up this idea and move forward with it quickly. He urged me to withdraw the State Department's opposition to the resolution now pending before the Thomas Subcommittee so that the matter could be acted upon by the Congress and the public response in the United States could be obtained. He thought that if we took the initiative in this matter, the people of the democracy would override the administration and insist on the formation of the federal union. I told Mr. Clayton that I would give TOP SECRET