711.56352/2–2653: Telegram
No. 881
The Secretary of
State to the Embassy in
Spain1
niact
649. (1) Revision FY ’54 budget (in line with Administration’s policy to make major budget economies) requires urgent review proposed aid to Spain before end this week.
(2) We assume: (a) agreements will not be signed in time to permit obligation this FY of any significant amount, if any, of $125 million now available; (b) therefore practically all, if not all, of $125 million ($75 million for economic and $50 million for military aid will be carried over to FY 1954) and (c) some new appropriations are required for successful conclusion negotiations.
(3) Subject approval other agencies and decision DMS and Budget, Department now considering recommending: (a) new authorization $35 million military aid, to add to presently available $50 million, order to have $85 million available for military aid in first year of program; (b) $75 million economic aid, carry-over from available appropriations, considered sufficient both to meet economic requirements and to generate enough counterpart for base construction in light expected rate peseta expenditures. However, Department considering recommending new authorization $25 million economic aid, if you consider such additional amount indispensable for negotiating purposes, and as evidence good faith US statement of intent.
(4) Please cable immediately your recommendations and, if impossible, please phone Saturday morning.
- Drafted by Tesoro and Dunham and cleared with Cleveland and Byington.↩