Further to my semi-official secret letters of the 28th October² and 2nd November³regarding, inter alia, the possibility of our securing some ECA grant, I learned yesterday morning that the question had been discussed at a N.A.C. meeting last Thursday and that we had been turned down for any grant. My informant was Harry Clements,⁴ who has been assigned to the U.K., Ireland and Iceland desk in ECA under Jim Nelson⁵ and specialising in Irish affairs. Possibly because he is new in Government service, he appears to be a little less discreet than the average official. He told me yesterday that ECA were still fighting for a grant for us and that Mr. Hoffman would probably 'bang the table' on our behalf at the next meeting. He said that he personally could not understand the case made against us as there were no logical replies to the arguments made in our favour. Clements is, of course, at too low a level to know all that goes on at the policy-making level.

In the course of a further conversation with Clements this morning, he said that he supposed that I had heard that it was agreed at a meeting yesterday afternoon to give us some grant. I enquired what the figure was. He gave it as $3,000,000. I do not know whether this is final yet but it seems not an unlikely compromise between those who were pressing for a substantial grant for us and those who were opposed to our getting any grant. I am seeing Ed. Dickinson this afternoon and I shall endeavour to obtain confirmation from him as to the position.

If it turns out to be the case that we do receive $3,000,000 by way of grant, we will presumably fall within all the provisions of the legislation relating to grant funds. We will have to set up a special counterpart fund which will be governed by the provisions of the legislation, unlike our present counterpart fund. We may also come up against the provisions of the legislation requiring us to take 12￿ % of our wheat in the form of flour and the provisions in the legislation regarding agricultural surpluses.

I enclose some press cuttings from today's 'New York Times', 'New York Journal of Commerce' and 'New York Herald Tribune' regarding the three-power conference in Paris and the integration of Western European trade. It would seem that Mr. Acheson has definitely decided to push the integration of Western European Continental nations but to accept Britain's stand that she should not have to participate.

P.S. Ed. Dickinson told me this afternoon that we were getting a very small grant but he specifically requested me not to transmit the information to anyone as the details have yet to be firmed. His purpose in telling me was so that I might be thinking about the considerations, such as those in the third paragraph above, which might make it scarcely worth our while to accept the grant. The great merit he saw in even a token grant was that it meant a break in the solid front against giving us any grant. We can only hope that State will not now use the availability of the counterpart funds in the air negotiations as a counter to our argument about additional expense.

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