Oral History Interview with
British Board of Trade, 1932-53, Under Secretary, 1947;
Second Secretary, 1952. Chairman of U.N. Interim Coordinating Committee
for International Commodity Arrangements, 1953-54
Sir Edgar Cohen
June 12, 1970
by Theodore A. Wilson
[Notices and Restrictions | Interview
Transcript | List of Subjects Discussed]
This is a transcript of a tape-recorded interview conducted for the Harry
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Opened June, 1984
Harry S. Truman Library
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Oral History Interview with
Sir Edgar Cohen
June 12, 1970
by Theodore A. Wilson
COHEN: The main problem immediately after the war was that the countries
hadn't the money and the resources to import freely from one another.
They had a tradition from before the war, many of them, of restrictionism,
and nobody would take the lead in getting trade going again. It was a
very difficult situation, in fact, when the Marshall plan started, I remember.
One couldn't see very far ahead, and we had had the loan, of course, from
the United States in 1945-46.
We were committed to certain conditions of convertibility and non-discrimination.
a breath of fresh air in Europe. It was seized after the way water is
in a drought. I mean the money available to conversion was sucked in,
wherever anyone could suck it because they were so short. And nobody was
prepared to use it as an opportunity to restore freer trade, instead of
making it an opportunity to get hold of some gold or dollars to pay off
debt or to meet immediate and urgent requirements of American raw materials
and equipment. But as far as that went, it was a drop in the ocean in
any event. I mean the money went in a fraction of the time expected, as
you remember, and we had to become inconvertible again. We had to stop
Apart from one or two countries like Belgium, which emerged from the
war rather stronger than some, and Switzerland, which hadn't been in the
war, or Sweden, which was a trading country on the periphery, nobody had
the resources, or the possibility, really, of getting trade moving in
a normal way. One of the things the Marshall plan did was to provide a
great opportunity for that,
because as we saw it in England, the need was there and the Marshall
plan should be partly used to enable people to meet the need, issue imports
more freely. If we don't import more freely from you, you run into a certain
amount of deficit. If you got support from the United States -- and you'd
be lesser alarmed at that prospect -- within reason you get a little bit
deeper into the swimming pool and see if you can't swim a bit. But without
that, people absolutely are at the shallow end dabbling, you know, and
very much afraid of moving.
WILSON: By your reference to trade in the normal way at the end of the
war, this was thought of as an attempt to restore what had been normal
commercial intercourse in the period between the wars, before the breakdown
in the thirties?
COHEN: Yes. That's right.
And also, as further moves towards the reduction of other barriers and
closer restrictions; that was left to the GATT [General Agreements on
Tariff and Trade] in Geneva. But there were at
the end of 1945 joint Anglo-American proposals for the freeing of trade
in a more generalized way with nondiscrimination and reduced tariffs.
Which has still survived in the GATT in Geneva.
WILSON: Yes. This is marked on the American side, of course. Some of
the persons whom I've interviewed have used the word "obsession" to describe
Americans who were pushing for trade liberalization as a solution to almost
COHEN: Well, it was a necessary condition for the solving of problems
on a basis of private enterprise, and they were quite right. They were
quite right I think. They've had to justify what they did. But in the
authority dealing with tariffs and the broad experiment on discrimination,
you want a world basis for what you're doing, and that we got through
the GATT. Insofar as you want to get the people shattered by the war to
restore their old economies and to build up again, and be able to play
a responsible part in world affairs,
it was a geographical problem of Western Europe, and that's where the
Marshall plan came in. You will put up this much money to it and now see
if they can't get on their feet again. You know, from others, how the
United States provided equipment, raw materials, and food in an enormous
quantity into Western Europe and gave these people a chance to breathe
and recover. The whole thing had to be restored. Germany had to recover
WILSON: Some of the information which I have been given suggests that
the thrust of American aid in this period, perhaps even, before the Marshall
plan, viewed Europe as a cohesive trading unit rather than at a part of
the world economy, and that this indeed in part defeated the effort to
reintegrate Europe into the world economy.
COHEN: I think that there may have been an attempt to do things that
way. It's awfully difficult for me to say without asking the individual
Americans who were doing it. But I don't think it defeated anything.
I think it was a necessary step. You put it this way, that on the worldwide
philosophy that the United States had, and the British shared, you would
work on an issue of non-discrimination worldwide. None of these countries
could afford to trade freely; they hadn't the resources. They all have
what's called "balance of payments" difficulties. The demand in that country
was far in excess of what they had in resources. They got Central banks
Therefore, under the system of international law that was built up in
the GATT, the administration of the GATT, everybody could impose restrictions.
I think what the United States felt there -- and what we felt -- our common
approach was inside Europe there was a possibility, as a sort of limited
"hot house" experiment, to say, "Here as against one another, we don't
exercise our rights under international treaties to restrict imports from
one another. This time, let's set a more generous basis among ourselves,
and then when we are strong
enough, we can extend it more fully."
Then of course, the great problem later on was when the United States
demanded, quite rightly, that these things should be extended to imports
from the United States. But let's start now. The more you buy from one
another, the more one another can buy from you. See what I mean? So let's
try and break it down a bit. And we, independently, in Britain were interested
in liberalizing our trade. We had always been a world trading nation and
we reckoned that our industry would be healthier if it had to face some
import competition. I think it was a natural. We were better equipped
for export trade, and it was a natural requirement for development of
the British Commonwealth, to get away from close restrictionism.
Now the difficulty of doing that is that of course you run into balance
of payments difficulties if you do it too fast, and as other countries
are doing it at the same time. So the American move
for liberalization coincided with our own judgment of what really was
in the interest of ourselves and our neighbors, We saw it in the same
way, and we had our plans by 1948-49 to start liberalizing our imports.
We brought that into Europe, and in OEEC broader plans were made, which
subsumed our plans, generally on the basis of liberalizing, giving percentages
of your trade in manufactures, raw materials, and foodstuffs separately
-- as you all moved forward steadily at the same pace. When you got to
75 percent you were beginning to get somewhere. The main difficulty was,
of course, that some countries were more inflationary than others, and
therefore tended to suck in more, while others tended to squeeze out more
exports. That led to a balance of payments dis-equilibrium, which had
to be dealt with.
The parallel contribution, you see, the United States then made under
the Marshall plan was to say, "Now, you chaps liberalize your trade as
hard as you can, and we will finance the union for clearing payments --
a European Payments Union -- so there
will be an element of credit between you. There will be a certain amount
of gold there for your international settlement. You can settle credit,
one country with another, and that will give you the financial basis on
which you can be more courageous about lowering trade barriers."
WILSON: Just how strongly did the United States -- the American representatives
-- carry forward the plan?
COHEN: They carried it forward all right.
WILSON: I know 500 million...
COHEN: I forget the figure, the amount they put into aid in the EPU [European
Payments Union]; that must be readily available. They did put a substantial
sum into the EPU of Marshall plan money. It was very well used, because
the money in there enabled the Europeans to buy more from one another
and hence facilitated their own industrial reconstruction, and thereby
become more independent of American aid. It was money very well spent.
use just giving people food and materials and machinery; they can sit
back and say, "Thank you very much." It's a very pleasant way of living.
But this money was used to get all producing and trading with one another
on a scale which they could not otherwise have afforded, and therefore,
to get their industries restored more quickly. The European Payments Union
was really, I think, a major achievement of the OPEC. But it was introduced
out of the efforts of liberalization of trade, which previously had been
facilitated by payments arrangements of a more primitive kind, what we
called "drawing rights." It was then carried forward much more effectively
when the EPU multi-lateralized the credit arrangements, when each country
had a settlement on a multilateral. basis, whether or not its debtors
were good for the money, so to speak. But if you sold to Greece, and bought
from Belgium, you could convert a part of the surplus by paying it into
EPU. You settle through the EPU, and the American money was there. You
couldn't have got
out of Athens.
The principle was that you could cash in your credits and your deficits,
strike the net balance. If you wanted your net balance you had to surrender,
you had to pay proportionately, in gold. The amount you had to settle
increased according to the extent to which you had drawn up your quota
of credit. The more deeply you got in, the more you had to pay; the bigger
the proportion that was demanded of you. That naturally was the sanction.
Equally, if you were a creditor, you had to give credit first, and the
bigger your credit position, the more you could claim as a settlement
in gold. The American money, you see, helped to finance it and to make
it possible for the European countries to do it. It treated all countries
as equally sound financially; that is to say, the American money enabled
you to obtain, within limits set by EPU, a convertibility of any of the
currencies involved, because you paid in your chips, your IOU's, and they
counted towards your creditor or debtor position. That meant that people
didn't need to be selective as the partner trade developed. That is something
that was overcome when European recovery had reached the point, had passed
the point, where these countries could, on their own resources, finance
these deficits. It anticipated a position that was artificial at first.
Once the position was reached, where the countries could settle these
claims -- it wasn't all that difficult once countries got their industries
going again -- then we reached a point where we didn't need the EPU any
longer. We were able to convert our currencies from one another on a worldwide
Looking back on the thing, one is bound to admit that it was a very great
success. I don't think it's exaggerating it to say that it was a successful
venture, carried through by a handful of extremely able men.
WILSON: Might you identify the ones that you...
COHEN: I forget the main people but there were obviously my people, a
handful of them, the people who devised the European Payments Union, the
people who devised the payments agreement. The payments plans, which they
started with, were quite an ingenious device. What they said in effect
was that, look at a country like Belgium, she came out of the war fairly
well -- Belgium, you might say, well she hadn't gotten dollars, she hadn't
gotten hard currency, to afford the credit. But she didn't need help from
the United States, except to the extent that if she sold to people who
couldn't pay in hard currency, she was making what were formerly bad debts,
but if she was to sell her steel to the British, we will say, she must
charge convertible money for it, because she needed that to buy from the
United States. For the other half, she could balance her account subject
to being paid.
Then the United States in effect said, "Well, we will give you Marshall
aid, on condition that
you give as much aid to European countries immediately as you got from
us." In other words, we'll convert the money for you. But the Belgians
in that case would be given, shall we say, conditional aid X, and would
establish drawing rights equal to X with other European countries. She
would then have given as much as she received in a way which in today's
conditions simply means she was paid in good convertible cash. And then
she wouldn't have needed American money. America said, in other words,
"We will give you money, in effect, to which you convert. Having convertible
money again would be our contribution to it."
On that basis, countries were able to establish drawing rights for the
benefit of countries who were in deficit with them, where those countries
couldn't afford to buy as freely as they should. American aid underpinned
the process by saving the creditor country from the inflationary pressure
that would ensue, and indeed from the economic sacrifice it could not
afford. That would have happened in supplying goods to a deficit neighbor,
instead of selling them on the world market for good money, or using
them at home.
The Americans in effect said, "Well, you can have so much aid, so much
absolute and so much conditional. So the other countries that need your
stuff can get it from you instead of coming to us for it, but we will
pay for it. We're giving you aid, the goods you want from us, but on condition
that you in turn pass it on, because you don't need that much aid net."
Then the multi-lateralization of that was really the next step in the
European Payments Union. The man who had a lot to do with the devising,
or the planning for the conditional aid, and the drawing rights, was Ansiaux,
WILSON: I will see him.
COHEN: Yes. Well Ansiaux had a lot to do with that. He is a very ingenious,
able man, and Ansiaux had a lot to do with it. Other people who know
a lot about it, or did know, was Sir Hugh Ellis-Rees in London, have
you got his name from anyone?
WILSON: Yes. Ambassador [Henry J.] Tasca recommended him and I wrote
him, but I did not receive a reply.
COHEN: I guess he's all right, he's getting pretty elderly; he's in London.
WILSON: I'll try to call him.
COHEN: See if you can call him. He lives in London. I've forgotten the
address, on Georges Square; he's in the phone book, and he had a lot to
do with it. In the United States [Hubert F.] Havlik had a lot to do with
it; he had a lot to do with what I call the "wet metal;" he and Ellis-Rees
used to work with the financial committee there. Do you know Frank Figgures
from the Treasury?
WILSON: Yes, I'll see him in August.
COHEN: Well, he knows a lot about that, he was on
the Secretariat. He might tell you some. All I remember was, the drawing
rights did enable countries to get help from one another, so the European
trade recovered. The United States made that possible by giving aid conditionally
against those rights. The difficulty sometimes was to anticipate what
the deficit should be; the drawing rights might not be used.
WILSON: Germany got into some prime trouble just after the...
COHEN: We got into difficulties before we diverted sterling on the basis
of the exchange rate. There was a difficulty in these artificial things,
but the principle of the thing was to try to plan forward. What were the
likely requirements in excess of what we could meet, or could afford?
WILSON: Let me ask two questions. As you suggested, sterling was in a
somewhat unique position at the beginning of the EPU, and had a rather
special relationship in the sense that they set up, I understand, the
EPU unit as the dollar. And
sterling was also recognized.
COHEN: No, it wasn't as I remember, no. We had to settle in gold or dollars
at the end of each month. We were treated just like everybody else. Sterling
was inconvertible for this purpose. It was one of the problems of the
EPU, and it is, if you like, a reason that the EPU couldn't last indefinitely.
But the main reason, of course, the EPU couldn't last indefinitely is
that it was a regional system, which made for regional liberalization
and regional assistance. It had built-in discrimination against the rest
of the world. There were problems about this, also. Of course, it did
facilitate acceptance of sterling in many parts of the world. That is
to say, people who ran into sterling debt could draw on EPU. I don't think
as far as I can remember there's any means of identifying whether the
debt of Mauritania or Italy was due to buying more from England than from
buying American wool. I mean sterling-area payments were bound to come
into it. These
countries accepted sterling and the money went through London. There
it was. But they did not recognize that they could buy freely, or liberalize
from the sterling area. But the financial ground for discrimination had
gone. And some did, I think, liberalize with raw materials, because that
was common sense, and they had to settle part of it in dollars. It wasn't
always done. The principle of the OEEC as a code was that they must liberalize
for the overseas territories, that's the colonial territories. They were
in the plan, and they were at liberty, as far as I can remember, to liberalize
for other countries in the financial areas. They worked apart. As far
as I can remember, that's how it went, but I don't, honestly, remember
exactly about that.
Some other people you could speak to may remember more clearly, but my
recollection was that it was optional. But certainly sterling's position
as an international currency must have made it impossible to identify
position of the United Kingdom from the wider payments position of each
country with the sterling area generally. Because they were always at
liberty to use sterling within the principal area and in the sterling
area itself they could all use sterling.
WILSON: There was some difficulty as I recall at the time the EPU was
set up, because Great Britain was placed in a creditor position rather
than a debtor position just at the beginning.
COHEN: We went into it; we were in a creditor position, I imagine --
about 1950. I don't remember that we were in a strong creditor position
until the Korean war. The Korean war pushed us into a very strong creditor
position for the reasons I just mentioned here. There was the sterling-area
crisis in raw materials. There was a heavy demand for raw materials after
the Korean war, at high prices to be paid to Australia and Malaya in Asia,
and those high prices were paid in sterling.
WILSON: Which caused some difficulty because prices went up on imports
to Great Britain.
COHEN: All these countries were in sterling deficit -- and therefore
we were in a very strong creditor position with the European Payments
Union. That illustrates, as I said before, that you can't distinguish
them. You are either buying in London on the London Produce Exchange or
the London produce markets. They are buying; and the monies were paid,
even if their buying is through Malaya or Australia. They are buying and
they pay sterling. You can't distinguish sterling's impact in London by
the central banks of those countries. Therefore, we became a very strong
creditor position. In fact, after the Korean war, when prices fell, the
United Kingdom was in a debtor position on capital accounts, to the sterling-area
countries. They built up these huge balances out of the Korean war. And
the running down of those balances caused us consequently to run down
accounts in the European
Payments Union. The reaction after the Korean war ran us into a deficit
to the EPU, but we as an individual nation, so far as I can remember,
were balancing our accounts fairly well in Europe all the time. The independent
sterling countries -- Malaya, Southeast Asia -- the fact that these countries
were running a heavy surplus against the others, put us into a creditor
position. And the fact that they ran down the balances afterwards when
the prices fell, threw us into a deficit position.
WILSON: What about the EPU as an instrument for European integration?
That is, as you suggested, the impetus for it came primarily for...
COHEN: Primarily for the liberalization of trade more than the payments
thing. The fact that it financed the freer development of trade did facilitate
integration. It paved the way for the closer relations of the six, first
in the Schuman plan and then more importantly in the Messina talks. It
got people much more in the habit of meeting around the table
to discuss practical plans to cut their trade barriers, and they got
much more used to trading among themselves. I think in that respect the
EPU was very important. I don't think the payments agreements, the bilateral
agreements, would have done it even though they were made. You had transferable
drawing rights before; they tried to make them transferable. But they
couldn't even then get the same flexibility in the multilateral trade.
There were a number of reasons I think why you had some move more toward
real integration through the OECD. Of course, I think it was partly political.
European countries which had been occupied in the war all lost a certain
amount of their sense of national exclusiveness. Put in broader terms,
there were these human beings, on the one hand, and the oppressors, who
didn't interfere with the Fascist reactionary-Nazi type on the other.
The resistance groups were the Allies, fighting alongside them on the
ground; some of the Vichy people, on the other hand, with the Germans.
I think there was a general
realization that really nationality isn't quite the dividing line.
Then, through the Marshall plan, the people of good sense and good spirit
and good quality of character, got into the practice of working together
so much more closely in OEEC, getting to know one another. It was so much
easier than it had been before the war for them to avoid unnecessary difficulties
in their trade and financial arrangements. It became so much easier for
them to discuss a question around the table and solve it constructively.
We got away from the top-hatted diplomat putting in an aide mémoire,
and got down to the position where you can say, "Why, let's get hold of
two or three wise chaps and sit down at the table and get a judgment on
WILSON: The technical approach, yes.
COHEN: In other words, you got the spirit, the political spirit, I think,
to some extent that
came after the war. Then you had the opportunity for the technical approach
that came through the Marshall plan, which forced the issue in that they
couldn't work the Marshall plan without doing so. But in the process they
had the opportunity through meeting in these committees to do work of
the kind that couldn't be done before, since these things didn't exist
in the League of Nations. It was also, to some extent, due to the fact
that by whatever good chances men of very high quality were here in that
period of time. Not only did you on the outside put in some of the best
men you had available, from your universities, as well as from administration,
and your businessmen - I don't remember the businessmen too well, but
no doubt they were there -- but certainly you got from the administration
and from the universities particularly able men, both in Paris and in
the ECA missions in the capital. But the European governments, realizing
the importance of it, the vital need to make a success of it, put some
of their best men into Paris, or
into the government jobs at home.
So, really the quality of men who might make a success of it were available
at the table. And some of these men have since had ministerial offices
in European countries; others have become heads of their departments in
the Foreign Offices. All of that meant that the policies worked much better
than they could have worked in other circumstances.
WILSON: Would you suggest that the quality of men sent -- I'm speaking
particularly of the American side here -- people who were really aware
of both the opportunities and difficulties of achieving integration, resulted
in a more realistic approach to the problems? In political terms the American
representatives would often talk about, "Well, why don't you just create
a United States of Europe? Why don't you just set up a custom union; why
don't you allow Switzerland to produce all the watches," and that sort
of thing -- the planning approach. But American representatives here,
in Europe, were not as simplistic, I gather, in that approach. There were
problems in moving from
national economies to an international -- supranational economy?
COHEN: I think it was an education for them; let's put it that way, for
them to be in Paris and hear these discussions. They were bound to realize
that it wasn't as simple as it might sound. They would see it firsthand;
there were still important differences of character, temperament, and
of outlook and interest. As I said just now, they were remarkably reduced
at the political level by the experiences of the German occupation, and
the common effort of liberation. So, there were differences and differences
of interest, particularly, and you couldn't overnight create these. There
were, indeed, technical difficulties with the customs union as such. I
think that they did sometimes still oversimplify what was wanted; I'm
To answer your question, do you really want the people who are full-time
dealing with all OEEC business? We could deal with that. On the
trade front it went better. It was easier, but I'm thinking everything
was not as easy as on the trade front. Everybody really had an interest
in doing what OEEC wanted on trade. It paid off ordinarily for any country
to buy and sell more freely. As long as a country has reasonable flexibility
to pick and choose what it is doing in its customs area. Everybody's really
better off with than without it. And, therefore, there is a will. to do
all these things, and it wasn't oversimplified. It only got to that point
when we were asked to provide equity, and then of course, a difficulty
I'd expect it, in fact, to be possible that the United States members
would oversimplify. They would think, "Well, we might not be able to do
this or that at home, but you've got special problems. These people in
Europe have got such a massive uphill climb ahead of them, surely they're
not going to hold things up for the sake of protecting their apples and
their pears and their canned milk products." There may be certain
people dealing with agricultural liberalization who could tell you more
about this. I think, sometimes, when I dealt with American officials they
have tended to think that the governments are uniquely difficult and the
Europeans had bloody well get on with it. But they are not in a strong
position when they carry a waiver of all the rules in the GATT.
The people, you see, who are going into attack ought to be able to defend
the other side; therefore, they see the light better. But the trouble
is that they can't put across at home, and, therefore, they aren't taken
too seriously by those who want to resist them. I think it is their problem
there, which would have been felt then. It must have been felt then, but
to what extent I wouldn't know.
WILSON: This was certainly true; American protectionist policy on agricultural
imports was very strong during this period. So you're suggesting that
the anomaly was recognized in Europe?
COHEN: Well, we just thought they won't do it; they won't remove their
restrictions in the field. They won't when it comes to the point. The
vested interest of the farmers is such that they can't be able to do it.
They'll buy what they need to meet their requirements, but they don't
want to commit themselves to freedom of trade. The American pressures
I think were a little selfish at times. It was well-known of course, that
they couldn't do it themselves and they took stock of the fact that their
difficulties were not altogether different in kind than those of others.
Certainly, by 1950 they had not removed their own restrictions in the
GATT which were legal. When they came and asked for a waiver of the GATT
rules in 1955, it made it very difficult for their people in Paris to
request the Europeans to do the thing in GATT they couldn't do themselves.
Whether or not it was overtly argued in Paris, it is a fact that ministers
were aware of these things. It would weaken their case. But
I wouldn't like you to think I was saying that I thought that if the
United States were set free, the Europeans would not have had any difficulty.
But I think when you get to that point it's very difficult. You see even
now, the community has problems of freeing their trade in agricultural
products. They have to have common prices agreed, and they have to have
arrangements for payments from one another, the extent to which they buy
from outside and so on. It's been the one part of the Common Market that
has caused difficulty of any kind that almost might have broken it down.
Well that shows what policy resistance you get there, even amongst people
who are almost entirely integrated in their economies, in every other
respect. I don't think that at the time in Paris it was possible to appraise
quite realistically what we now see were the difficulties you have in
trading foodstuffs, and especially in raw materials.
WILSON: Were you involved in the UNISCAN arrangements? [Plan for economic
union between the United Kingdom, Denmark, Iceland, Norway, and Sweden.]
WILSON: Tell me about that.
COHEN: They were mainly financial, you know. UNISCAN never really became
much more than an arrangement for a freer transferability of sterling.
To have done anything on that front would have meant either having preferential
tariffs, which we certainly didn't wish to have in Britain -- it was very
complicated -- and/or it would have meant a discriminatory liberalization.
And I don't think, as far as I remember, that we liberalized anything
on a UNISCAN basis and kept up the restrictions against the rest of OEEC;
it would have been a breach of OEEC codes to do it. You've got me here
on something I don't remember very clearly. There may have been in the
code some provision that countries who got closer together would liberalize
more quickly for one another.
WILSON: I seem to recall that was the case.
COHEN: It didn't mean you could permanently do something. You could move
more quickly, but then you
must catch up afterward.
WILSON: The assumption was that FINABEL and the others, FREDELUX, which
didn't actually go into effect, would be regional groupings that would
then be merged themselves.
COHEN: That's how I remember it. I don't think anything came of it. It's
the same philosophy, I think, that some Americans still have for dealing
with the tariff preferences of developing countries. It is one of accelerating
the entire production of these countries, rather than doing it permanently
for them, while not for other people. You might say you would agree to
reduce the tariff by 50 percent every five years. You do it at once for
some countries, and take your five years for the others. It's a temporary
Anyway UNISCAN never did have tariff preferences. I don't think, from
memory, that it ever had quota preferences. It did have freer travel because
there were understandings between the central banks that made it possible
to get money
out more freely. I think, in turn, that was based on fairly traditional
relations between these countries, who before the war had been in the
sterling area, almost surely within the sterling area before the war.
The sterling area then may have had different sorts of rules and arrangements.
The Scandinavian countries did substantially bank in London and the currencies
were substantially linked to the pound. The UNISCAN was sort of a half-way
house between the sterling area and the EPU, but they were in the EPU.
I dare say some of the arrangements were made on the sterling basis and
were not clearly accountable to the EPU. Wait a minute, I'm sorry, let
me not go too quickly on this. I think UNISCAN was before the EPU.
WILSON: That's right, yes.
COHEN: Once we had the EPU, they would have been cleared through the
Union. Before the EPU there was very close relation with the Central Bank
that UNISCAN made possible. Also a certain
degree of additional flexibility in spending your money. I'm sure under
EPU there were separate quotas; therefore, the money must have been cleared.
It would have been impossible under EPU to justify trade discriminations
as long as they had separate currencies. They did have a common quota
in EPU but that is utterly different. The countries with a common quota
in EPU, I think, were allowed to trade quite freely among themselves.
That would be a thing like Britain and its own commonwealth sterling area
members. That isn't separate from EPU at all; it is one financial unit.
But you've got a separate quota at EPU. You had to bring into account
at the end of each month your credit or deficit position with that country.
Therefore, there would be less excuse for saying that one was less important
than the other. About the most you could say you would spend money more
freely on one deficit than another. You would only run a deficit more
freely with a country that was in your own area. I think nearly all the
OEEC countries did have separate quotas. However,
Now taking the Irish case, Ireland never had a separate quota. Any British
deficit with Ireland would have no effect on Britain's deficit position
in the EPU. Therefore, it was a very logical concern to the running of
the EPU if we spent money more freely in Ireland and we liberalized more
freely in Ireland. I think we probably did not have restrictions on imports
from Ireland. Similarly, the Irish were at liberty not to have import
restrictions on us.
I'm speaking quite from memory and I beg you not to quote me if you find
I'm wrong. I just don't remember clearly, but logically I don't see how
it could have been otherwise. I don't see how it could have been
otherwise, because it simply wasn't the case that what happened between
us and the Irish had anything to do with our balance position there. And
the Irish, I think, had not got a position in EPU at all. They simply
drew on London for their payments. It was a matter between us and the
I don't remember how that was run; the Irish position was a reasonably
balanced one anyway. They had been neutral in the war. Their agriculture
had not been destroyed in any way. Industry had not been affected by the
war, except to the extent they couldn't trade. But their industries had
not been bombed out. So their recovery problem wasn't quite the same.
Well, they were a very poor country so it didn't matter. I think apart
from us and the Irish, and possibly Iceland -- there were the French colonies,
of course, in the picture. The French in their trading relations in Africa
would have been separate, like us with our own colonies.
WILSON: What about the problem of developing export trade to the United
States in the period? I'm thinking particularly of "buy American" policies
and the restrictions. on shipping of so much of ECA goods in American
bottoms and this sort of thing. How seriously was this viewed?
COHEN: I can't remember much about it now. It may
sound shocking to tell you that. I do remember that the "buy American"
act always must have been a cause of concern for us. It seemed illogical
that when the United States was putting up so much money, they wouldn't
let us pay our way if we could find some of these goods there. Logic doesn't
always get across politically. But it always was a concern to us, and
it was already then when we could compete successfully that the United
States gave us a chance. It was particularly important when we were getting
on our feet again, because if your best friend should begin to feel the
self-confidence and self-reliance to contend in the world market and can't
contend there except against tremendous odds in the United States, then
there is doubt we will ever come out on this. All we can do is contend
there among countries who got special aid from the United States to pay
for what we were selling. We must be able to sell in America, and the
"buy American" act was always therefore a cause of great difficulty with
certain industries, such as big electrical
machinery. There was always a great problem to avoid misunderstanding
or in creating confidence. But it's not the problem uniquely connected
with the Marshall plan; it was only brought into greater relief by the
Marshall plan. The existence of the Marshall plan made it more difficult
to understand the sense of what the United States was doing. Of course,
the answer to that may be that it was not meant to be sensible. It may
be one of those things you can't help.
WILSON: Yes, that's right.
COHEN: In fact, some of the things I mentioned earlier in the political
field and in the agriculture. Why can't you liberalize your trade in farming?
WILSON: If there is any one single, large body of materials, documents,
at the Truman Library, I think first of the body of letters written to
the President and to his assistants pushing for benefits to American manufacturers
and shippers, under the Marshall plan. It's not
a logical thing, but normal.
COHEN: Yes, but it's a normal show. What they're saying in effect, is
by all means give aid, but give it in such a way that we get a little
of the benefit. That way you can afford to give more aid.
WILSON: "A little of the benefit." You're being quite generous to
COHEN: Yes, I appreciate it. Well, it's the same with aid to developing
countries now, isn't it? I mean people say, "We'll give aid, but we'll
tie it to our industries." Of course, the aid isn't nearly so valuable.
It's still aid. I mean if you give the goods away, you say, "We'll give
goods, but don't give money;" and the people who made the goods say afterwards,
"Oh, it's not quite so bad as it might have been, you know. We still pay
taxes to pay for it, but other people pay taxes, too."
WILSON: It does introduce distortions into the normal
COHEN: Yes, it does. We did have bilateral trade agreements which gave
them very similar terms you know, and which the ECA didn't like at all.
They cut across the principles in this area of non-discriminatory liberalization
in many ways, especially if the quotas were so large in bilateral agreements.
In order to fulfill them you couldn't buy from anyone else. We used to
argue -- in our two British cases it was truly argued -- and, of course,
it was permissive, and if the other fellow couldn't control them, because
he wasn't competitive, he had no grievance. There was always a certain
suspicion that that wasn't quite how it worked out in practice.
WILSON: This came up particularly in petroleum I think.
COHEN: I don't know about petroleum; you may be right. That's a very
special problem; I would not be competent in petroleum. But it certainly
came up in German trade agreements.
WILSON: Oh, yes.
COHEN: Where, I think, with all respect to the American leaders in Germany,
they took a different view of things sometimes than the Americans in Paris
WILSON: Would you expand on that?
COHEN: Well, they were interested in getting bilateral agreements with
Germany, to get the bizone of Germany, the British and American zones,
on their feet. And the bizone did have a very rigorous planned trading
system under the joint import-export agency, which was an extremely bilateralistic
approach to things. We wished to negotiate bilateral agreements with different
countries saying exactly what quotas Germany would bring in, and exactly
what quotas other people would take from Germany. Well, in Paris, of course,
the concern was to get the Germans to liberalize. The more you liberalize,
the less maneuverability
you've got for that sort of thing. It takes a different approach to it.
I'm sure if you look at your documents you will find that the outlook
of, say, John Logan who ran the JEIA was quite different from the outlook
of Henry Tasca.
WILSON: What about the British side of this bizonal agreement?
COHEN: I think we went along with it, you know. How far we had to, I
don't know. Clint Kahn was Logan's deputy and Cecil Weir was the chief
economic advisor on the British side. To be fair, perhaps there was an
emphasis on bilateralism from the particular Americans there, that wouldn't
have happened if they had been different Americans. I may be unfair saying
that. I would take a good deal of research on that.
Ethel Dietrich could tell you all about it, because she had the task
of doing the negotiating and knows all about it, and was herself very
keen on liberalization of trade. She'd be a very good witness for you
if you'd like.
I think John Logan -- and his background was that of banking, not in
the big New York banks, but in the smaller banks, especially in the Middle
West before the war -- he thought very much in terms of bilateral relation
between debtor and creditor and bilateral settlement.
WILSON: The purpose being to achieve some reasonable self-sufficiency
COHEN: Well, pay your way.
WILSON: That's right.
COHEN: If you're going to buy these things from Switzerland, you'd better
know what you're going to pay them, how you are going to pay them, what
you're going to pay them in. And I don't want any of these debts otherwise;
they'll all come back to Washington if you don't. Build up the cautious,
empirical kind. Mind you, we are dealing with a desperately war-shattered
country. I'm not trying to criticize them, just trying to comment and
describe what's happened there. His
approach would have been very strictly empirical. I'll feel my way and
never mind all the theory in all this.
WILSON: That's a very good point, because it's pretty clear from the
documents that the people in the occupation on both the American and I
think the British side were much more, and perhaps almost completely,
concerned with the problem of German recovery, perhaps to the exclusion
of integrating Germany in a larger sense, in a long-term sense into Europe.
COHEN: The idea of integrating Germany hadn't quite come up as early
as that. It was a bizone, you know, not even Western Germany. It was a
bizone of Germany. We had to pump food in and this, that, and the other
thing. It was a thing over and above all that belonged to the Marshall
plan, or apart from them. We had to provide convertible currency for the
Germans; even if we hadn't done it for ourselves, to use ourselves, they
had to use it.
WILSON: Would it be fair to say that the Marshall plan was intended as
a way of resolving this problem?
COHEN: It certainly helped. Germany, as I remember, had her own Marshall
WILSON: That's right, yes.
COHEN: And therefore it helped, you see.
WILSON: It was intended to from the beginning.
COHEN: The Marshall plan wasn't thought of as a fund for helping Germany
particularly. No, but it was used. Germany was a recipient of Marshall
aid, and therefore it reduced very much the problem that otherwise fell
on the shoulders of the British. It fell on the Americans to keep this
country going, because we were in a very difficult financial and economic
position ourselves. It was a burden to take on the Germans on any scale.
The Marshall plan, of course, enormously
expanded the resources which the American administration in Germany could
draw on for German needs. I suppose the German officials were mainly concerned
to see their country get minimally on its feet again. They were very harassed
men; most of the German officials had been lost in the war, or removed
from office before the war. There were very few left. People like the
leading trade men in Germany at that time -- very liberal -- and later
Ambassador to France after that. They were at first in an advisory position;
they had no government authority. They were allowed to advise, advise
only, as far as this going agency, but they had no status. They were given
the status later on about 1951 or '52, and some agreements were made where
they could establish their ministries again, and agreements were drawn
up. The Germans themselves would take quite liberally this sort of agreement.
It was one of the great dangers, Before the war the Germans were the leaders
of bilateral agreements of various kinds. The Hitler regime was very much
making bilateral agreements with weaker countries under which you took
the best from them and paid them off in long-term credits. It was playing
a part in German operations again; they were past masters of it.
I think that some of the Americans who had the responsibility of Germany
at that stage, who advised the American chiefs in Germany, were more sympathetic
to that sort of behavior for a country in difficulties than was wise with
Germans. Fortunately the thing didn't develop that way because Germany
became very strong after the initial deficits before the Korean war, when
she was desperate. She did become very strong. Erhard had already then,
I think, started his "dash for freedom" really; they had begun to stock
up very well before Korea.
WILSON: Yes. Yes, and were in considerable...
COHEN: Looking back now, we can reconstruct, already then before EPU,
or just about when they started EPU, there was some talk of German administration.
They'd already got to the point...
WILSON: Yes, in 1949, yes.
COHEN: Erhard was a liberal -- very, very courageous, foolhardy, if you
like, looking back on it, liberal. Given the Korean war, Erhard's country
did very well after that, because they got all the stocks which they were
nearly bankrupted in EPU. EPU saved them from that. Then when the Korean
war came they got all these stocks in Germany, far cheaper than other
countries. You had to buy their stocks late and couldn't get out of them.
Then Germany became a great creditor country during the war in 1950-51,
and the initial phase of German recovery had been met, was over. Within
the initial phase had it not been for that, I think it would have been
riskful making Germany more bilateral. But things came out all right.
Ethel Dietrich, if she's still around, could tell you a lot about this.
WILSON: Yes, we'll try.
COHEN: And would be fascinating on it. I know a lot
about her, and she was awfully keen on liberalization in Paris. We did
a lot together there. But in Germany she had the task of negotiating bilaterally,
and negotiated bilaterally.
I would think that the 50 percent rule on shipping would inevitably cut
the cost in certain cases; it would make good sense and therefore be cost
effective. To the extent that we were shipping goods to the United States
to exporters, to bring a ship back empty or in ballast (we were not allowed
to carry Marshall aid) was bad. Not to be allowed to carry them for some
other country in Europe, if they hadn't got their ships, was bad. Carrying
goods for other countries in Europe, we could have earned their currencies
and to that extent had a better EPU position, and less need for credit.
And if you hadn't got the ships out there, then it would come naturally
that United States ships would carry the goods. We would have liked to
see the thing competitive and not distorted by tying. It's neither better
nor worse than other forms of tying, I'm trying to say. I think it's
unfair to say this was particularly bad because it's ships. Yes, it's
bad, but all these things are bad of that kind. How bad they are depends
on how much distortion they caused, and that would depend on the situation
at the time. If there was a British ship coming back empty then obviously
it's far more distorted on that occasion. But I don't remember the economics
of it -- to what extent it was just a tail twister; I just don't remember
Obviously the shipping industry would cry about it; obviously they would
say the extent to which we had doesn't apply because we would have had
more ships on the routes if it wasn't for this, and so on. They wouldn't
have addressed themselves to the Board of Trade about that; they went
to the Department of Shipping, and therefore I'm not a good witness for
you. I never reached the people. I don't know who would deal with that
for you; the people in London would probably put you on to someone who
might know about it.
WILSON: In general terms, what about the effect of the Korean war on
the British position?
COHEN: Well, the main thing, of course, on that that I recall, was the
great shortage of raw materials, and the revival of the Anglo-American
cooperation internationally in allocating materials. And the consequent
rise in price which probably would have gone up even more if we had not
had some sort of allocation system.
WILSON: Well, there was some criticism in the OEEC about a special Anglo-American
relationship on the allocation of raw materials.
COHEN: Well, of course, we did go back to a wartime position as one of
the main users and producers of the raw materials, and we got together
to allocate. That would prevent the prices from rising as fast as they
might otherwise have done through free competition. To that extent, it
reduced the distortion of the world economy. But there was a big distortion.
It took the
form of a rather strong creditor position in sterling, but not a creditor
position in the United Kingdom, because we have imported materials. In
other words, we ran up heavy stocks of foreign exchange in the sterling
area, and heavy liabilities in the sterling area. The sterling balances
would go up as we received the foreign exchange of these countries, and
eventually the raw materials. That put us in the first position which
crushed on us in 1951 when the sterling area countries felt the inflation
of this crisis, and spent money more freely in tariff countries. They
then came on us in the foreign exchange bank.
The position in 1951 was quite critical, but in 1952 it began to get
steady again as far as 1 remember. It was about then that we began first
to have ideas about breaking away from the artificiality of the European
monetary system, and making the pound convertible again, especially if
we could get a measure of convertibility all around. We didn't in fact
achieve that for some years. But the Korean war I think was the first
thing that brought home that EPU required a fair normalcy of world conditions.
Anything like a revolutionary movement in the raw materials crisis would
swamp the EPU and did swamp the EPU, its creditors. We weren't a great
creditor country; we were a creditor currency. I think it brought home
to a few people, anyway, who were greatly concerned, that it was an artificial
contraption after all, and you couldn't live with it forever. There were
some people who felt it a very cozy system, you know; a system of automatic
credit to one another and that if the United States would have joined
the EPU, what more do you want? But it's an artificial thing, and any
artificial thing will work so long as the circumstances in the world are
commensurate with the rules of the game. When you get any upheaval, a
major tidal wave like the Korean war, it swamped. As far as economic consequences
are concerned, I don't remember much out of the Korean war, other than
that. You know that was quite serious for
I think it was an eye-opener towards a wider system of trade payments.
It was an eye-opener in that really you either had to go into a world
system or you had to work into a smaller regional system. I think we,
with our traditional and our world-wide interest in trade, and our relations
with you at the time, and the Commonwealth, naturally tended outwards,
while the French and the Germans and their colleagues tended inwards.
When it came to the Schuman plan, we didn't join it. The reasons for
that was as much, I suspect, due to the political currents. But the Schuman
plan of course did prove to be the first step in the really close relationships
between these countries that the plan made possible. It made possible
the much more far-reaching economic union than the Treaty of Rome. We
were on the wrong side of the table when it came to that, and those were
probably some of the reasons for it. The balance has changed rather. Trade
is on a greater scale in Europe than it was.
But looking back into those days, I don't see how we could have acted
much differently. In fact, trade was different then. It just has changed.
We have got a smaller trade relationship with the Commonwealth and a bigger
one with Europe. Our trade with Europe now is very big indeed, with Western
Europe. With the trade rate on that level we could hardly afford to stand
aside while they integrate and we don't. We can't afford it, but it's
a less natural economic evaluation. It's more an artificial economic solution.
WILSON: Were you concerned in any way with the problems of East-West
trade in the period?
COHEN: Not very much. Not as early as that. Not as early as that. Well,
as a matter of personal experience, I did negotiate the trade agreements
with the Poles, the first trade agreement with them in 1948. It wasn't
my general business to negotiate with them. It was done in the office
really. It was a bilateral agreement. You
put it on, really, people who could travel a good deal. I was Under Secretary.
I did see the Poles for the first trade agreement. It was a rather special
thing of its kind; Poland was a very special case. We were very upset
on what the future of Poland was going to be, and there was a certain
amount of prospect that Poland might lean toward the West.
WILSON: There was, of course, increasing American opposition toward large
scale trade, particularly in what were identified as strategic materials.
COHEN: I don't think you've got there. Here it was much more a question
of making agreements that would enable the Poles to restore their agriculture
and that sort of thing. The Poles didn't know where to turn. I had to
do that trade agreement. I remember we did envisage that we might restore
Poland as a supplier.
WILSON: Which was a more normal prewar situation.
COHEN: Yes, prewar trading relationship.
WILSON: Yes, and with Eastern Europe, in general, as a supplier of raw
COHEN: In particular, the Germans were more the people than Hungary and
Bulgaria, and Rumania, I think, in making these other special programs.
WILSON: There was thinking, for some years at least, after the war that
these prewar relationships with Eastern Europe as an importer of manufactured
goods and an exporter of raw materials would be reestablished.
COHEN: I think so. Each case was different from another, you know. The
Poles had always been close to us; we were big importers of food, big
supplies of food. Of course, the Russian hold, I suppose, on Poland was
upset. The Poles had been allies in the war, and they were anti-Russian
as well as anti-German. I don't recall that the United States was concerned
about goods going East. But my guess is that the United States would not
have been allergic at all to
doing what we could to support a continued interest in the West.
WILSON: Yes, perhaps American political leaders decided rather earlier
than leaders in Europe that that was no longer possible; that the Iron
Curtain had descended. I'm thinking of 1949 and, in particular, the so-called
Battle Act which did restrict exports.
COHEN: Exports, yes. I canít recall that the Poles were asking for any
exports that were a problem for you. It doesn't come back to me at all
that there were any arguments about that. They wanted all sorts of things
from us, but I mean they were things that had no particular value to the
Red Army. They were desperately beaten back by the war. They were trying
to reestablish themselves in new territory, The Germans had been pushed
out of West Poland, and the Russians had pushed them out of East Poland.
There they were, But I don't remember that there was anything in it. In
East-West trade, we would have been more forward looking, more free in
our readiness to take
risks with supplying goods to Russia than you were. I think we were less
anxious that they would use these things for military purposes. We were
less willing to believe that some of these goods really were strategically
important. I think we would not have ever wanted to send goods that were
of real strategic value. I think there were differences of view as to
what really was risky. If the Russians wanted certain kinds of mills for
sale, or technologically advanced equipment of various kinds, and we were
certain - at the border we would say - well we would say they only wanted
to use it, and there is no danger in their having it. They'll find out
for themselves in six months anyway. In the meanwhile, we might as well
have the business, and give them more feeling of unity with us in the
West, and less feeling of being alienated. Politically, it pays off. The
United States was very anxious not to take any chances and there were
things there, you know, machines for making tin plate that could be used,
I suppose, for
tinning foodware for the Red Army in the occasion of an aggressive war.
One might say well, the Red Army seems to get its food all right by its
own method, and almost certainly they would want the tinplate to feed
their own people, and you are driving them into opposition and alienation
if you don't let them have that sort of thing. It's awfully difficult
tying in; it's easy to jump backwards on these things, but I know there
was differences in philosophy between us. Certainly we would have gone
further and faster in reducing the list of limited goods to Eastern Europe.
WILSON: For understandable reasons.
COHEN: They also set with other people following the rules.
WILSON: And this was a substitute for the necessity of getting more,
of spending more dollars?
COHEN: Well, certainly, So it came more to a head after Marshall aid,
I think. I think it became
more active because the Russians I think went out more fiercely to buy
the goods after the period, the active period of Marshall aid. It's more
in the middle and late fifties. In any case all they wanted was really
what they could get ahold of. They were offered Marshall aid, after all.
Czechoslovakia wanted it and was stopped from getting aid. In trade, with
Czechoslovakia we had these agreements, and with them all, but it was
They were all different. Czechoslovakia was much more a manufacturing
country than Poland. Hungary was like a poorer form of Poland. Rumania
had other problems. Rumania is not such a poor country; she had seized
British assets. A number of them owed us money, and we didn't get it all
back. They really owe it to you. You don't get anything out of Communist
governments; they always felt that was out of date because they were Communists.
And Bulgaria was much more German in its thinking than British before
the war. In fact,
Hungary and Rumania, I think, did much more business with Germany, and
Bulgaria did, than Poland. Poland was anti-German. With the others we
hadn't gotten a foothold in the same way. And the Germans would do awful
tricks with them. One case I remember reading about, where they would
take the whole of their wheat crop, and in exchange they would supply
bicycles. And they said they'd sell the bicycles to the Rumanians, and
the Rumanian Government would get the bicycles for the proceeds of the
wheat. It ended when the Germans, in order to sell the bicycles and get
them all marketed quickly, sold them on a down term, half purchase. So
there were 10 or 20 years for these fellows, you see. So the Rumanian
Government then found itself being paid over a 10-20 year period with
wheat which the Germans had got, had got down you see. It didn't matter.
I mean they were used to this; they sort of liked trading with the Germans.
But it was that sort of thing in the Germans that I had in mind when I
there are dangers in encouraging the Germans in bilateral trade agreements,
even though they might look good sense economically. You find more about
the tricks of it than even anyone in the joint export-import agencies
knew, because they didn't go in for that sort of skull-duggery.
WILSON: Yes, now that's a great point.
COHEN: And it was a bit tricky. They didn't, of course, come back to
that spot. They got much better quality men together afterwards. Anyway
they didn't have the government who wished to resort to devices like that.
After all, they had managed to help pay for German rearmament. The Germans
were using all their current money to buy materials for armaments, and
getting the Rumanians to give them stuff.
I think after the war, the Germans didn't keep it up very long. I think
Erhard disliked it very much; Erhard was very liberal minded; in a rather
wooly way. It all came off wonderfully
because of the Korean war. And, of course, the Germans worked so hard
always, and money they required on a big scale became available through
their having gotten in on the market so well. Roughly that's how it comes
back to me after all these years. If this isn't consistent with what has
been told by others...
WILSON: Oh, no. No, you've been very helpful.
COHEN: One of the things that comes back to me on this in the early days
when Germany was short of money, before the Korean war; they were shamelessly
short of money. It reached the point where people would say, "Well, the
Germans have got to buy their various things that they normally bought,"
you know, the usual nonsense. The Dutch said, "We can't afford to not
sell our cheese at the same place; we always sold to Germany."
They worked out machinery in OEEC, which shows how effective that organization
that was each case has to be looked at carefully. We'll have three "wise
men" who will give judgment on them. They were a Belgian, an Italian,
Catani, and a Norwegian. It was a pretty remarkable thing that individual
countries recently at war, who were never closely associated before the
war, would all agree: "All right, let those three men tell us, and we'll
do what they say." And they accepted their judgment.
And they might say, "All right, you better take lettuces from Holland
in this quantity," and the Dutch would say, "All right, if that's what
you say." Being of good sense, of course, the Germans would take anything
in those circumstances. They'd lend them money and say, "That's the amount
you should spend on lettuces you don't really need, and no more." But
the "three wise men" system would work already then. Of course, that experiment
in what was really then a form of supranational government went to the
devil entrusting the thing to arbitration. It was a very important step
forward, very important in
clearing the way for closer integration. We can't work unless you have
something like you have in that commission in Brussels.
WILSON: Was there a great deal of sort of prior negotiation to make sure
that the countries they represented in the OEEC were satisfactorily represented
on these commissions?
COHEN: Not that I know of. I don't remember any of that.
WILSON: It was a matter of a...
COHEN: On the main committee, every country had this man there, and it
was up to the government to have a suitable man. They may have done that;
I never heard of it. We put in some of the best people we got; we got
enormous interest there.
I seem to remember, now that you mention it, I think the Germans did
once send to Paris a German who was recognized by the Belgians as being
one of the unpleasant leaders of the occupation.
And he was sent home very quickly. Well, that was the fault of the Germans
or bizonal authority; I would like to know. The wrong German was sent
once, I do remember that. And there were cases of pretty feeble people
on committees, but usually representing countries that didn't matter very
much. And you have to have, of course, enormous patience.
WILSON: I don't know about the people, but the problem of dealing with
Greece which seemed not to be able to come up with statistics, or the
sort of information necessary.
COHEN: That's right. The Greeks never could. They invented them as they
went along. Do you know Marjolin?
WILSON: I have met him, yes. I'm going to see him.
COHEN: Well, Marjolin you must see.
WILSON: Yes, I'll see him.
COHEN: Marjolin can tell you about one or two of
their stories. It was difficult there. You see, they haven't gotten the
thing; they haven't got that form of Government administration. On the
other hand, what they are asking for is quite smaller. It doesn't matter
quite so much. If the French didn't put a man in the field, you could
deal with it, but it was serious.
WILSON: Did the people who were posted in Paris look forward to this
sort of assignment, your colleagues?
COHEN: Oh, I think so. They enjoyed it. I assume they were interested.
[Edmund] Hall-Patch, who did the British work, and others, were fully
WILSON: I don't know whether this is a fair question, but if a person
had an opportunity to stay within the Board of Trade or to serve on a
committee in the OEEC, how would he look at this in the sense of a career?
COHEN: Well now, that's rather different. The
committees were fielded even then from capitals. I was never living in
Paris. I used to go out at least once a month, or once every other month,
attend a meeting for two days and come home again. The Secretariats engaged
people; the buildup of the Secretariat to some extent had been done on
-- what can I call it -- a negotiating basis. You know, the French must
have the top job, or the American sometimes. Then the British are next,
number two, along with an Italian. Then the Belgians who have a share
of the Council; they would be able to put a man there. And then the Dutch
would have a share of something else. You know you've got to get everybody
either into the Secretariat, or in the chairmanship. But they all feel
they've got a say in something, and that the balance of their day corresponds
to their national dignity. There's a certain amount of that. Therefore,
some of the top people weren't always the best. They have to give their
nationality up. I think in those days probably, with Averell Harriman
there, there was no question
but that men of necessary quality were put into the jobs, whatever the
nationality. He wouldn't have tolerated it otherwise. In more recent times
it seems to be a little bit different. You have less to say. You don't
put your best American ships out. They've got to go in those ships. It
has got to be a national rotation in that post because he is a type for
it. You'll find that not all the chaps in the Department want it. And
the other fellow has got to take it. It's a deserved nomination; it's
sinecure, and you get some awful fellows. That's my main objection to
that method of manning posts. The other way you'll get a capital, first-class
man, is that if you don't go to a first-class man, somebody else is going
to vote, and who are you going to vote for. There would be no competition.
It's up to you in those days when Harriman was there. But more recently
there has been a tendency, I think, to allow people to get nominated.
WILSON: Within Great Britain there were a number of
agencies which were dealing with economic foreign policy, of necessity.
There certainly was in the United States. Was there a considerable rivalry
between the Foreign Office and Board of Trade, and things of that sort?
COHEN: No. None as far as I can say when the departments were being newly
created in those days. I certainly don't recall anything of that sort
at home and I knew the Undersecretary of the Foreign Office. He was an
old hand at European affairs. A very pleasant British. I can't imagine
there ever was any feeling that the Board of Trade should keep out of
this or the Foreign Office keep out of that. We all met around the same
table, under the Treasury chairmanship. It was a happy society, really.
Those who wanted to serve in Paris, if they were good enough, usually
would be able to go, but there weren't all that many who easily go abroad.
It wasn't easy if you're not in the diplomatic service; your wife doesn't
want to be abroad, the children are at
school, and one thing or another.
I don't think there was any friction. I think there was a good spirit
abroad, and I always found the people in Europe extremely pleasant to
deal with. Well, the only thing really I can recall that was something
that really caused sometimes a feeling, a fireworks, was at the beginning
of aid. That was a United States invention; let's put it that way. They
allocated the aid at first, and then they say, "Well, you allocated the
aid yourselves." Hall-Patch could tell you more about it. Then, it was
not quite so easy. Have you ever read Alice in Wonderland?
COHEN: Well, there's one story in there, and I can't remember what the
thing was, when the Duchess turns on Alice, having said something quite
ridiculous, and says, "Well, the moral of that, child, is the more there
is of mine, the less there is of yours." Maybe that was what it was
in OEEC then. Itís much harder to get agreement on that footing. And
nobody minded Britain having another ten million dollars, except who was
going to find them.
WILSON: Particularly when ECA would put out one estimate for a year and
then the Congress would appropriate something else.
COHEN: That's right, yes. It was very difficult then. And I think that
was the only business on which I can remember them really going back into
their old shells and being nationalistic and rather difficult. But yes,
it was a very pleasant experience as a cooperation. Throughout the thing,
the smaller countries didn't play a very active part. There were times
I thought they were getting rather testy on some questions; when they
wanted to have a common list of goods for the liberalizers. The whole
thing would just hold everything up, you know. But on the whole the thing
did go well, and as I say, I still think they established a spirit
there without which they couldn't have had the European integration -
but which in its turn was quite likely to lead to it. I think the Marshall
plan was one of the only things that really did come off, you know. It
did come off. It's had enduring results in Europe, and a very important
far-reaching effect, It came off.
WILSON: You would have thought it would have been wiser for the United
States to have made national allocations?
COHEN: I canít help wondering about that. I wasn't involved in the work;
don't quote me on that. But I find it difficult to believe that it was
wise to ask people to divide it up. Certainly it would be a worldwide
tragedy if one went to the developing countries and said, "Well, this
is the amount of money available for international development; now you
divide it up."
WILSON: Oh, yes.
COHEN: They can't even divide up the posts in the
COHEN: That was really asking too much of human nature, I think.
WILSON: This comes perhaps out of the sort of American tradition of,
oh, passing an appropriations act for so much for flood prevention and
then having the states come forward and...
WILSON: And they assumed Europe worked the same way?
COHEN: The United States is one nation, even though they are several
states; Europe wasn't. That sort of thing could put a strain on everyone
WILSON: I asked the question about the kind of administrative problems
because there was pretty clearly in the United States the rivalry between
the Department of State and the ECA
missions, and the Department of Treasury, and so forth. And there was,
for reasons which I as a fairly young person really fail to understand,
the emphasis on economic foreign policy and on this as a career in the
United States. This is a much more recent phenomenon than in Great Britain
certainly or in European countries. We only had a Secretary of State for
Economic Affairs in 1946 for the first time.
COHEN: Very interesting, yes. It's a very important wheel in that...
WILSON: Yes, it is. William Clayton was the first person in that position.
COHEN: That is very interesting.
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List of Subjects Discussed
Anglo-American alliance, 52
Ansiaux, Hubert, 15
Australia, 20, 21
Balance of payments, 6, 8
Belgium, 2, 10, 13-14
Board of Trade, British, 51, 69,
British Commonwealth, 7, 55, 56
British loan, 1946, 1
Bulgaria, 58, 62
Clayton, William, 77
Common Market, 31
Dietrich, Ethel, 43, 49-50
East-West trade, 56-63
Economic Cooperation Administration:
administrative problems, 74-76
Ellis-Reese, Sir Hugh, 16
trade policies, and, 37, 41
Erhard, Ludwig, 48, 49, 64
European Payments Union, 8-13, 15,
17-18, 20-23, 34-36,
Europe, integration of, 22-27
Figgures, Frank, 16-17
Foreign Office, British, 72
France, Vichy regime, 23
General Agreements on Tariffs and Trade (GATT), 3-4,
Geographical economic zones of nations, 31-34
Germany, trade agreements and Marshall Plan aid, 17,
Great Britain, trade, 3, 18, 20-21,
31, 35, 50-55
Greece, 10, 68
Hall-Patch, Edmund, 69, 73
Harriman, Averell, 70, 71
Havlik, Hubert F., 16
Hungary, 58, 62, 63
Iceland, 31, 37
Kahn, Clint, 43
Korean War, effect on international trade, 20-21,
49, 52-54, 65
League of Nations, 25
Logan, John, 43, 44
London Produce Exchange, 21
Malaya, 20, 21, 22
Marjolin, Robert, 68
Marshall Plan, 1-3, 5, 8,
9, 13, 24, 25,
39, 45, 46, 61-62,
Netherlands, 65, 66
North Africa, French colonies in, 37
Office of European Cooperation and Development, 23
Office of European Economic Cooperation, 8, 10,
19, 24, 27-28,
32, 35, 52, 65,
Poland, 56-59, 62, 63
Romania, 58, 62, 63
Schuman Plan, 22, 55
Southeast Asia, 20, 22
domination of Poland, 58, 59
Sweden, 2, 31
East-West trade, and, 60-62
Switzerland, 2, 26, 44
Tasca, Henry J., 16, 43
Treaty of Rome, 1957, 55
"buy American" policies of, 37-39
United States of Europe, 26
GATT, pressures on, 30-31, 33
Weir, Cecil, 43
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