The Acting Chairman of the American Delegation (Gibson) to the Secretary of State
[Received July 2—9 a.m.]
300. We find that the proposal for one-third cut of the defense contingent in effectives works decided hardship on certain small countries in dislocating their organization. We have studied the problem with our military advisers and are of the opinion that we could readily admit the exemption from the application of the [Page 259]President’s plan of those states whose total effectives are less than 40,000. Please note that this includes Austria, Bulgaria, Hungary all of which although bound by the peace treaties would show plus figures under our calculations. It also includes such countries as Estonia, Finland, Norway, Sweden and Switzerland none of which cause concern to their neighbors. The nearest figure in Europe is Portugal with approximately 66,902.
In South America the sole difficulty is Argentina with.44,212. If she would reduce to 40,000 she would gain as compared with the formula which would reduce her to approximately 37,000. Brazil and Chile both have minus figures. Urgent reply requested.