Multilateralizing trade and payments in postwar Europe

International Organization

Volumn 55, Issue 4, 2001, Pages 949-969

  Oatley, Thomas H ^a  

^a NONE

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EID: 0040375825     PISSN: 00208183     EISSN: None     Source Type: Journal    
DOI: 10.1162/002081801317193655     Document Type: Article

References (39)

1. See Eichengreen 1993; and Diebold 1952.
2. Asbeek-Brusse 1997, 83.
3. See Hogan 1987; Kaplan and Schleiminger 1989; and Milward 1984.
4. Eichengreen 1993.
5. For a description of this system see Patterson and Polk 1947; and Diebold 1952.
6. The British trade deficit in 1949 is, to some extent, misleading. This large deficit reflected the overvaluation of sterling. After the 1949 devaluation, the United Kingdom moved into surplus on its European trade. However, because of the problem of sterling balances, the British bargaining position shared more in common with the other European debtor governments than with the other European creditors.
7. Eichengreen 1993, 16-17.
8. Under the bilateral agreements, Britain owes Belgium $5 million, Italy owes Belgium $6 million, and Britain owes Italy $6 million, for a total debt of $17 million. Under multilateral clearing, Italy transfers its $6 million credit with Britain to Belgium, thereby paying its debt. The only remaining debt is Britain's $11 billion debt to Belgium (the $5 million of its own deficit and the $6 million arising from the Italian transfer).
9. Bean 1948, 408.
10. Triffin 1957, 149.
11. This example comes from Bean 1948, 410.
12. See Hogan 1987, 119-21; and Diebold 1952.
13. Bean 1948, 408.
14. See Disadvantages of Pro-Debtor Proposals - Clearing Union - Full Employment, 24 January 1950; and Disadvantages of Pro-Creditor Proposals - Clearing Union, PS/AAP(50)14 AAP Policy Series, 24 January 1950; File: European Cooperation; Records of Special Assistant for Staff Planning Henry J. Tasca, 1949-51 (Tasca Papers 1949-52); Records of the Office of the United States Special Representative in Europe, Record Group 469.2.2 (RG469.2.2); National Archives at College Park, Md. (NACP).
15. Memorandum of Conversion, Hebbard and Bolton, 24 January 1950; File: Finebel-Fritalux; Tasca Papers 1949-52; RG469.2.2; NACP.
16. Triffin 1957, 172-74.
17. Joel Bernstein to Henry Tasca, The Reconciliation of Intra-European Payments Objectives, 14 March 1950; File: Finance, P; Finance and Trade Division 1949-52; RG469.2.2, NACP.
18. On trade liberalization, see Diebold 1952; and Asbeek-Brusse 1997.
19. OEEC Code of Liberalization, 1948.
20. While Article III did lay out the general conditions under which governments could opt out of the trade liberalization program, the article contained no explicit constraint on governments' ability to invoke these clauses. Determining whether opting out was necessary appears to have been left to the discretion of the government. Also not imposed were explicit penalties for invoking Article III or explicit requirements that the government doing so engage in some costly signal, as Rosendorff and Milner suggest one should see. Rosendorff and Milner, this volume. Rather than explicit penalties, an informal process does seem to have emerged, driven largely by the handling of the German crisis in 1950-51. See Kaplan and Schleiminger 1989, chap. 6.
21. Diebold 1952, 92-95.
22. See Gold Settlements Under EPU, April 1950; and Gold Payments Under EPU Compared with Actual Intra-European Gold Payments Since October 1948, 20 June 1950; both in File: Finance, P; Finance and Trade Division 1949-52; RG469.2.2; NACP. U.S. policymakers also reduced British concerns about sterling balances being cleared through the EPU by insuring British gold against this risk: "In the event that EPU operations should unexpectedly result in British dollar payment obligations beyond some agreed danger point, ECA would be prepared to consider the allotment of special dollar aid to the United Kingdom." Secretary of State to the British Secretary of State for Foreign Affairs, Aide Memoire, EPU, 11 May 1950. U.S. Department of State 1950, 3:655-56.
23. See Intra-European Credits in EPU, 8 May 1950, RG469.2.2, NACP; and National Advisory Council (NAC) Minutes, meeting no. 158, 29 June 1950; Minutes of Council Meetings 1945-70 (Minutes); Records of the NAC on International Monetary and Financial Problems and the NAC on International Monetary and Financial Policies, Record Group 56.12.1 (RG56.12.1); NACP.
24. In the event, these expectations proved optimistic. The EPU was renewed every two years until finally dismantled in 1959. Settlement mechanisms were not greatly hardened until the 1954 renewal, at which point all debts and all surpluses were settled in 50 percent gold and 50 percent credit. See Kaplan and Schleiminger 1989.
25. See Memorandum of Conversation, Meeting of the Representatives of the U.S. Advisory Steering Committee with the CEEC Delegation, 3:30-6:00 p.m., 22 October, 1947; File: Memoranda of Conversation and Questions for Discussion; Lot 123; Formulation of the European Recovery Program; General Records of the Department of State, Record Group 59; NACP.
26. Schelling 1955, 609.
27. See Memorandum of Conversation, Meeting of the Representatives of the U.S. Advisory Steering Committee with the CEEC Delegation, 3:30-6:00 p.m., 22 October 1947; File: Memoranda of Conversation and Questions for Discussion; Lot 123; RG59 Lot 123; NACP.
28. NAC Minutes, 14, 19, and 23 January 1950; File: Minutes, 21 August 1945-25 October 1968; Minutes; RG56.12.1; NACP.
29. NAC Minutes, 14 January 1950; File: Minutes, 21 August 1945-25 October 1968; Minutes; RG56.12.1; NACP.
30. NAC Minutes, 19 January 1950; File: Minutes, 21 August 1945-25 October 1968; Minutes; RG56.12.1; NACP.
31. For State Department views on free dollars, see The Acting Secretary of State to the Embassy in France, 26 August 1947, in U.S. Department of State 1947, 3:386-87.
32. U.S. Department of State 1948, 50.
33. See, for example, Proposal for the Establishment of a European Monetary Authority, PS/ AAP(49)10 (draft), AAP Policy Series, 5 December 1949; File: European Cooperation; Tasca Papers 1949-52; RG469.2.2; NACP.
34. See Hogan 1987, 295-96; and Van der Beugel 1966, 203.
35. Triffin 1957, 170-71.
36. See, for example, OSR to Secretary of State, Relations EPU with International Monetary Fund, (draft) 23 January 1950; and Answer to Treasury Paper to NAC, 23 January 1950; File: Finance; Finance and Trade Division, 1949-52; RG469.2.2; NACP.
37. Koremenos, Lipson, and Snidal, this volume.
38. For creditor and debtor government positions, see Experts' Report on EPU - Suggested OSR Position; and The Reconciliation of Intra-European Payments Objectives, 14 March 1950; File: Finance; Finance and Trade Division, 1949-52; RG469.2.2; NACP. See also Diebold 1952.
39. See Van der Beugel 1966, 202; and Diebold 1952.