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32 John Gillingham over tax on steel output that covered its operating expenses, while companies could, and did, resort to either conventional or government financing. In fact, the HA soon began to run up embarrassing surpluses, never borrowed the full $100 million available to it, and indeed soon found itself in the enviable position of looking for constructive ways to spend the money. 39 The purposes to which it was put continued to be a source of worry. Monnet, with Dulles' encouragement, refused categorically to accept Treasury demands for project-by-project review. 40 This presented real problems, as the astute Camp, now attached to the Foreign Operations Administration, warned in December 1953: "The High Authority has, as yet, (she emphasized) made no strong move against the powerful coal and steel cartels known to be operating within the Community." Camp added that the investment policy of the High Authority was not to expand but lower costs in the steel industry by re-equipping the mills and raising productivity in the coal and iron ore mines. 41 The funds could, in other words, create serious and possibly unfair competition for American industry. To deflect this kind of criticism, Monnet channelled as much as possible of the American loan into the construction of socially desirable company housing. 42 Thus a Republican government found itself in the awkward position of perpetuating a way of doing business it was committed to eliminating and subsidizing in Europe the kind of program it opposed at home. The American loan episode was an embarrassment but little more; the amounts involved were trifling in comparison to the overall aid flow. It nevertheless aroused suspicions that, in spite of the heroic pretentions of the Monnetists, the CSC was, "at bottom", a fraud. This, in so many words, was the conclusion of the Dodge Memorandum. It issued from the special committee that undertook the most important policy review of the Eisenhower years, the Council on Foreign Economic Policy (CFEP). Its voluminous reports documented beyond the shadow of a doubt that far from de-cartelizing, Western European heavy industry was rapidly re-cartelizing. 43 Summoned to Washington to justify this state of affairs, Albert Coppé, a member of the High Authority, made no denial but explained the persistence of restrictive practices as the result of tradition, and, though promising action in the future, refused to use the US loan as a lever for reform. 44 The State Department's definitive response of 28 October 1955 to the CFEP queries, though hedged in ambi- 39. J. GILLINGHAM, Coal, Steel, and the Rebirth of Europe, pp. 330, 340-342, 350. 40. FRUS 1952-1954/VI "Memorandum by the Deputy Assistant of State for European Affairs (Bonbright) to the Acting Secretary of State", 4 February 1954. 41. FRUS 1952-1954/VI "Memorandum by the Officer in Charge of Economic Organization Affairs (Camp) to the Assistant Director for Policy and Planning, Office of the Director of Foreign Oerations Administration (Gordon)", 18 December 1953. 42. J. GILLINGHAM, Coal, Steel and the Rebirth of Europe, p. 343. 43. FRUS 1955-1957/IV, "Memorandum from the Assistant Secretary of State for Economic Affairs (Waugh) to the Undersecretrary of State (Hoover)", 14 February 1955. 44. FRUS 1955-1957/IV "Memorandum of a Conversation. Department of State, Washington, April 20, 1955".
American Monnetism and the European Coal-Steel Community in the Fifties 33 guous language, admitted defeat but recommended pressing on anyway. 45 The key passage noted that "If the High Authority had made no loans to firms believed to be involved in restrictive arrangements pending the outcome of its investigations or efforts to modify broadly the structure of coal marketing in the CSC area, coal companies would have been eliminated from consideration as loan recipients, since the loan would have had to be drawn by 30 June 1955." 46 The State Department nevertheless continued to lend credence to the innumerable plans and projects rolled out of the Luxembourg papermill and above all rejected the idea that faith either in the Coal and Steel Community or the supranational principle upon which it had been constructed had in any way been misplaced. EURATOM and the Scrapping of the CSC The so-called re-launching of Europe in June 1955 indeed breathed new life into Monnetism in general and the CSC in particular. The problem with the organization, "The Theologians" now argued, was that it operated in a sector of industry governed by entrenched interests; the supranational principle should therefore be applied elsewhere, in a related field just beginning to develop – atomic power for instance. Coppé had floated such a notion as a trial balloon at his 28 April 1955 meeting in Washington and received an encouraging response. Was it not a brilliant idea to link the European Idea to an industry of the future rather than those of the past? His interlocutors seized upon the logic of connecting energy to coal, which called for broadening the competence of the High Authority as well as the opportunities opened for long-term planning and development presented by the exciting new technology. 47 In addition, they could not have overlooked the fact that by controlling the supply of fissile material the United States could restrain the development of national nuclear programs. The EURATOM proposal was ready to be hatched, and indeed soon was. The Messina conference of 3-5 June, convoked to re-start the integration process, placed it at the top of the European agenda. Along with the plans for a customs union, it would become part of the Treaty of Rome. EURATOM was stillborn not least of all because atomic power would not prove to be the promised panacea. More immediately, West German industry wanted to develop its own nuclear technology and, supported by the government, had no intention of subjecting itself to regulation by a supranational authority. 48 By the time the idea was first broached, moreover, France had decided to proceed with 45. FRUS 1955-1957/IV "Report by the Department of State to the Council on Foreign Economic Policy", 28 October 1955. 46. Ibid. 47. FRUS 1955-1957/IV Memorandum of a Conversation, Department of State, Washington April 20, 1955. 48. USNA, RG469 Box 68 "Euratom:pol" "Annual Report on Atomic Energy Developments in the Federal Republic of Germany through March 31, 1957".
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