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On the 22nd July, Mr. Ivan White, Financial Counsellor of the United States Embassy in Paris, 'phoned our Legation to say that he would like to see me to give me a message from Mr. Walter Clayton. I saw Mr. White this (24th July) morning.

Mr. White said that, during his recent short visit to Paris, Mr. Clayton had given the British and French delegations an account of the broad ideas which the American Government had in mind about the so-called Marshall plan. Mr. Clayton hadn't had time to see our delegation, but he had asked Mr. White to inform us of what he had said to the British and French.

Mr. White said that the first point was that the American Government had nothing in the nature of a plan in mind themselves. If there was to be a 'plan', the European nations would have to produce it themselves. The American Government hoped very much that the Governments at the present meeting would succeed in doing this, but they thought it well to indicate at this stage the essential elements which, in their view, the final report of the present Conference should contain if it was to produce the required effect on informed opinion in America. These elements were principally three in number:-

• a clear explanation and analysis of present economic difficulties in Europe,
• a statement of what European Governments were doing, or proposed to do, to help themselves and one another, building up a prospect that, if these measures were supplemented by the necessary temporary aid from the United States, the European countries concerned would be out of their difficulties and able to stand on their own legs at the end of a specified period, and
• an indication of a willingness on the part of the participating Governments to work together in matters of mutual economic interest, and, for that purpose, to taper off existing barriers to the expansion of trade between them.

I said, as regards the last point, that countries such as ours could not solve the problems of under-employment and full national productivity without reasonable freedom of action in the matter of protective tariffs. Mr. White said that there was a recognised exception for the benefit of under-developed countries, but, in any case, the principal trouble at the moment was not tariffs but exclusive bilateral trading agreements. He didn't mean by that that the United States was unfavourable to developments such as the formation of the Benelux Union. On the contrary, they thought it was an excellent, forward-looking development. American opinion welcomed such arrangements as contributions towards the gradual achievement of a rational economic system in Europe. I said that most of our trade was done with Britain and that, while anything like a customs-union was out of the question, I could imagine close economic arrangements becoming practicable between ourselves and Britain in particular, specified fields if the difficulty of the unconditional most-favoured-nation clause were out of the way. I asked how the American Government envisaged the reconciliation of arrangements such as Benelux with the rather uncompromising most-favoured-nation provisions of the draft charter for ITO. Mr. White said that the French had asked Mr. Clayton precisely the same question. He had no answer ready except to say that the American Government would support any amendment of the draft necessary to legitimise and encourage arrangements looking towards the progressive achievement of European economic unity.

Mr. White asked how we thought the Conference was going. I said that, looking at it as a practical job of work, the task was being tackled very efficiently. He said that, unfortunately, it was more than a practical job: there were political issues in the background, one of which was the question of Germany. Had we any views on that? I said I had no instructions on the point whatever. Speaking quite personally, I said that I thought most people in Ireland would share the prevailing doubts as to whether there could be any stable solution of Europe's economic difficulties without a restoration of productivity in Western Germany, but what I was not sure of was the extent to which our Government would wish to take an official position on a matter so closely connected with the peace settlement. Mr. White said he could understand that.

Mr. White said again that he hoped the report of the Conference would be such as to carry conviction to the minds of informed people in America. It would have to cover all the necessary ground and hold out a firm hope of Europe being able to stand on its own legs once the American aid required had been given. I said that, when exactly similar views had been expressed at the Conference by the British delegation, we had supported them.

Mr. White said that he would like to keep in touch with us. He was always at our disposal if we thought he could be of any use. I thanked him and said I was sure that, for its part, the Irish Government would do all it could to make the present initiative a success.