Foreign Relations of the United States, 1949, National Security Affairs, Foreign Economic Policy, Volume I

FACC Files¹

Policy Paper Approved by the Foreign Assistance Correlation Committee ²

top secret

[ Washington ,] 7 February 1949.

FACC D–3

Draft No. 8

Basic Policies of the Military Assistance Program

a. policies underlying the foreign military assistance program

It is the policy of this Government to provide military and other assistance to free nations, whose security is of critical importance to the United States, which require strengthened military capabilities, and which make determined efforts to resist communist expansion.

In light of present circumstances the military assistance program may cover direct and indirect costs of furnishing military aid to regularly constituted and recognized armed forces (or in special cases, such as Austria,³ to internal security forces). The military assistance program may, in general, include:

(1) Finished armaments, munitions and implements of war, including all components and spare parts relating thereto, and any items necessary to the direct utilization of the foregoing;

(2) Personal equipment and supplies of a type peculiar to armed forces;

(3) Raw materials, machinery and other items required for the production in recipient countries, beyond approved levels existing or planned as of January 1, 1949, or articles covered by (1) and (2) above;

(4) Technical assistance and information to, and training of, armed forces;

(5) Reimbursement for costs arising out of diversion of resources, including manpower, required to implement approved military programs.

In special cases, items not covered by the foregoing may be furnished under the program, as for example food in Greece and construction equipment for roads in Turkey.⁴

The policy stated above and those underlying it are an essential and integral part of our basic foreign policies which derive from (1) our fundamental national ideals and interests; (2) our recognized position as the leading Power of the free world; and (3) the policies and programs of Soviet Russia and international communism. The foreign policies of this country, however, deal with a constantly changing world environment and require constant review.

The provisions of Senate Resolution 239⁵ define as a basic policy of the U.S. “To achieve international peace and security through the United Nations so that armed force shall not be used except in the common interest”, and set forth that pursuant thereto the U.S. Government should pursue as objectives within the UN Charter:

“(2) Progressive development of regional and other collective arrangements for individual and collective self-defense in accordance with the purposes, principles and provisions of the Charter.

(3) Association of the United States, by constitutional process, with such regional and other collective arrangements as are based on continuous and effective self-help and mutual aid, and as affect its national security.

(4) Contributing to the maintenance of peace by making clear its determination to exercise the right of individual or collective self-defense under article 51 should any armed attack occur affecting its national security.”

It is also a basic policy of this country so to act that the Soviet Government will recognize the practical undesirability of acting on the basis of its present concepts and the necessity of complying with the precepts of international conduct as set forth in the purposes and principles of the U.N. Charter.

As a part of this policy it is our purpose to help to strengthen the free nations of the non-Soviet world in their effort to resist Soviet-Communist aggression, external and internal, and to help increase the economic and political stability and the military capability of such of those nations as are willing to make an important contribution to U.S. security. In so strengthening these nations it is our purpose not only to reduce the likelihood of further Soviet-Communist aggression and to improve the ability of those nations to resist if attacked, but also to create an atmosphere of confidence and security within which the chances for success of economic recovery programs may be enhanced and a more favorable atmosphere for the accomplishment of the principles and purposes of the UN established.

Basic military security policies with respect to military assistance are to:

1. strengthen the security of the U.S. and its probable allies,

2. strengthen the morale and material resistance of the free nations,

3. support their political and military orientation toward the U.S.,

4. augment U.S. military potential by improvement of our armament industries,

5. increase through progress in standardization of equipment and training the effectiveness of military collaboration between the U.S. and its probable allies in event of war, and

6. augment our collective war potential by reciprocal assistance, economic and military.

b. criteria for evaluating and screening foreign military assistance programs

Each individual program must be assessed in relation to its relative contribution to the security of the U.S. and probable allies in (a) peace and (b) the event of war.

Economic and military assistance programs must be integrated into a comprehensive, world-wide program which will be kept within limits that will not weaken the basic economic strength of the U.S. and other participating nations.

The programs should not jeopardize the fulfillment of the minimum materiel requirements of the U.S. Armed Forces nor be inconsistent with our strategic concepts. The strict application of these principles may be modified when certain factors such as the need for strengthening the morale and internal security of recipient nations and protecting various U.S. interests abroad become overriding political considerations.

Any U.S. military assistance program must be predicated to the maximum practicable extent upon self-help, and mutual assistance among recipient states and the United States, consistent with the purposes and principles of the UN Charter, and consistent with recovery of the basic economic health of the recipients.

Military assistance programs must be viewed from the standpoint of their effectiveness in strengthening the military capabilities of the recipient nations to resist communist expansion.

The programs, particularly those relating to the short term future, must be viewed also from the standpoint of their effect in improving the chances for the maintenance of peace, on which the emphasis of U.S. policy is placed as well as from their significance with respect to the winning of a possible war.

Each assistance program must be evaluated in terms of its relationship to other programs and to the world-wide program and assigned an appropriate priority classification.

c. criteria for determining recipients and priorities between them

No policy can yield any automatic or mathematically exact deductions about priorities among recipients or replace the need for continuous review in the light of the existing situation, political, economic, and military. The overriding political and security interests of the United States must be the determining factor in each decision.

Under existing policies the following considerations must govern the determination of priorities:

(1) The strategic relationship of the area or country to the United States, which includes:

a. The Political Factor. The political factor includes consideration of: the relative importance to the U.S. of keeping any given country free from Soviet communist domination; each country’s inherent internal political stability; the strengthening of anti-communistic activity within each country; the strengthening of internal political conditions through improvement of the economic stability therein; and the degree of orientation of each country toward the United States in its own political philosophy.

b. The Military Factor. The principal elements of the military factor comprise the location and terrain of each country or group of countries and its importance to U.S. strategic plans: the economic ability of each country to support a military program: and the military capability of each country or group of countries to utilize military assistance.

(2) Since events have indicated that political or indirect aggression is most likely to succeed in the proximity of the Soviet army, general precedence in assistance should be given to those countries on the periphery of the Soviet world, subject to modifications required by obvious politico-strategic considerations, such as keeping open lines of communication “through the Mediterranean and preserving the United Kingdom for use as a source of production and as an advanced base.

(3) It is the present policy of the United States that in measures of military assistance additional to those already provided for in specific legislation or in existing governmental undertakings, first priority should be given to Western Europe. Negotiations are currently in progress looking toward a collective defense arrangement for the North Atlantic area in which the United States and certain other countries would be full participants. When such an arrangement comes into force, first priority should be extended to meeting the coordinated defense requirements of the countries participating in it.

(4) There are current military understandings with Brazil,⁶ Canada⁷ and Mexico which affect defense coordination with the United States.

(5) The United States is committed to providing military assistance to certain specified areas and countries, notably Greece, Turkey, Iran⁸ and Korea.

(6) The United States is committed by its ratification of the Rio de Janeiro treaty to the general principles accepted by the signatory nations of common defense against aggression.⁹

It is of the utmost importance that the concept and application of priorities for furnishing military assistance to foreign nations should not be made known to the representatives of other countries. Initially, priorities should be applied with principal attention to strategic area requirements rather than to individual country requirements.

d. relationship to economic recovery programs

It is the policy of this government, with respect to the relationship between military and economic recovery programs, that a program of mutual aid and self-help supplemented by military assistance from the U.S. must be so designed as to enable the recipients to stand on their own feet, economically, politically, and so far as practicable, militarily. In this connection, economic recovery is basic and military assistance must facilitate recovery through the increased confidence attendant upon attaining increased security. It is our policy that economic recovery must not be sacrificed to rearmament and must continue to be given a clear priority. Exceptional situations may justify, in the light of overall U.S. interests, departures in particular cases from the rigid application of the foregoing policy, but in principle rearmament expenditures and manpower diversion should not be permitted to bring about any serious reduction in the allotment of European resources to the recovery effort. Of basic importance is recognition of the limits of U.S. financial and economic aid available. A balance must be struck between the needs of our domestic economy, our own armament requirements, our contribution to the recovery of recipient states and our contribution to their rearmament.

e. relationship to the united nations

The program is designed to strengthen international security which is a major objective of the United Nations Charter. Under existing conditions the purposes and principles of the Charter will be advanced by arrangements for collective self-defense and mutual assistance designed to enable free nations which are acting in support of such purposes and principles to preserve their independence and freedom, to promote respect for human rights, and to fulfill effectively their obligations under the Charter. While the basic concept of this program is consistent with the purposes and principles of the Charter, measures for implementing the program must also conform to such purposes and principles.

In addition, in accordance with Article 103 of the Charter, measures for implementation of the program must be subject to present and future U.S. obligations with respect to actions taken by the UN to maintain or restore international peace and security, including action taken under Article 26 which deals with the regulation of armaments.

Under this program it is not contemplated that direct military assistance will be granted the UN as an organization.

Provision should be made to give the President discretion to suspend or withdraw military assistance to any state the activities of which are determined by him to be in violation of its obligations as a member of the United Nations.

f. scope and duration of legislative authorization to be sought

Effective implementation of a policy of strengthening the military capabilities of free nations would be facilitated by the early enactment of legislation broadening the authority of the President to provide, suspend or withdraw military assistance in the interest of the national security and the political interests of the United States.

It is not possible to predict with any degree of exactness the period of time for which military assistance will be required nor as to the overall amounts that will be needed. The U.S. does not have control over the concepts and policies of the Soviet Union which have made the military assistance program necessary and may continue to do so for an indefinite period. Some tentative estimates of requirements can be furnished by the NME in terms of what would probably be required first to reach and second to maintain a specified degree of military strength based upon existing strategic concepts. It is obvious, however, that neither the present accuracy nor continuing validity of these estimates can be assured.

The Congress must be advised that military assistance to foreign nations will undoubtedly be required over a period of years, but that it is not now possible to determine in what total volume or for how long a period, and accordingly, legislative authorization should be sought for an indefinite period, and appropriations should be requested for a one year period. The question of authorization for appropriations for more than one year cannot be determined at this time.

g. reciprocal assistance

The primary return sought by the United States is the preservation of the security of the United States and its probable allies.

(1) North Atlantic Pact Countries. Assuming the consummation of a North Atlantic Pact, a principal benefit in the way of reciprocal assistance from members thereof is the participation of those countries in a coordinated defense program under which each country will contribute, commensurate with its resources, economic condition, and geographic location what it most effectively can in facilities, manpower, resources, productive capacity or raw or finished materials.

In the case of those countries, the United States should require as a matter of principle, that reciprocal assistance, such as base rights, materials, labor, services or other forms, be granted, where necessary, to the United States and its allies. Should individual members prove uncooperative with respect to such reciprocal assistance this would be a highly important factor to be taken into account in the determination of military aid programs; and if the lack of cooperation was serious, this would mean no military aid at all. Negotiations for the obtaining of reciprocal assistance and of granting United States military assistance, would be carried on through such organizational mechanism as is established for this purpose.

(2) Other Countries. The amount of reciprocal assistance to be obtained from countries which do not participate in such a coordinated defense program but to whom it is determined that military assistance should be provided is not anticipated as likely to balance in tangible material values the amounts we may give them. Nevertheless, it is the policy of the United States in each such case to determine what reciprocal assistance in the way of material benefits such as base rights, materials, labor, services or other forms, is vital to the security of the United States and in so far as practicable in the light of political and strategic considerations, to require the recipients to grant such benefits as a condition of our assistance.

(3) Among the principal benefits in all cases as a result of military assistance are an increase in the determination of these countries to withstand communist pressures, an increase in their confidence that they can successfully do so, and a decrease in the tendency to temporize with communism, or to withhold support from efforts at resistance to communism, out of fear that communist pressures may prove irresistible. This does not mean that the desired results will flow automatically from aid granted to the respective countries; but these are major purposes of the program; and, if achieved, should be regarded as a most valuable return.

(4) Decisions with respect to the acquisition of critical materials should be made only after correlation with the ECA program for the acquisition of critical materials.

1. Documentation prepared by and circulated in the Foreign Assistance Correlation Committee is located in Department of State Lot File 54D5.

2. The Foreign Assistance Correlation Committee was established in December 1948 by agreement among the Department of State, the National Military Establishment, and the Economic Cooperation Administration. This committee, consisting of representatives of the three agencies, had no formal terms of reference, but served as the advisory interdepartmental organization for coordination of the position of the Executive Branch on plans, policy, and legislation relating to foreign military assistance. It was initially contemplated that while FACC would meet for day-to-day and working purposes, a Foreign Assistance Steering Committee (FASC) consisting of the Secretary of State, as Chairman, the Secretary of Defense, and the Economic Cooperation Administrator, would meet to provide top level personal consideration of policy matters. In practice, FASC never met. Secretary-level approvals were obtained informally.

   On January 3, 1949, the position of Coordinator for Foreign Assistance Programs (U/CFA) was established in the office of the Under Secretary of State. Ernest A. Gross, who was designated Coordinator, was charged with coordinating departmental responsibilities, activities, and programs for foreign military assistance. Gross served as State Department member and chairman of the Foreign Assistance Correlation Committee. Maj. Gen. Lyman L. Lemnitzer and Mr. Alexander I. Henderson represented the National Military Establishment and the Economic Cooperation Administration, respectively.

   FACC began meeting in January with the view toward formulating policies to govern the United States foreign military assistance program and to draft enabling legislation for submission to Congress. Summary records of FACC meetings exist, beginning with the meeting of February 5.

   A covering memorandum by Curtiss Murrell, Secretary of FACC, explains that the present document constituted a statement of basic policies underlying military assistance programs and that the policies set forth were consistent with policy formulated in the National Security Council and the State–Army–Navy–Air Force Coordinating Committee. The document was approved by FACC on February 8, with the exception of Section G. (FACC Files)

3. For documentation on United States interest in the independence and integrity of Austria, see vol. iii, pp. 1206 ff.
4. Documentation on United States assistance to Turkey is scheduled for publication in volume vi.
5. For the text of the “Vandenberg Resolution,” S. Res. 239, 80th Cong., 2nd sess., June 11, 1948, see Foreign Relations, 1948, vol. iii, p. 135.
6. For documentation on United States relations with Brazil, see vol. ii, pp. 549 ff.
7. For documentation on discussions between the United States and Canada on economic and military matters, see ibid., pp. 393 ff.
8. Documentation on United States policy with respect to Iran is scheduled for publication in volume vi.
9. Reference is to the Inter-American Treaty of Reciprocal Assistance (Department of State Treaties and Other International Acts Series (TIAS) No. 1838), concluded at the Inter-American Conference for the Maintenance of Continental Peace and Security, August 15–September 2, 1947, Rio de Janeiro; for documentation on the conference, see Foreign Relations, 1947, vol. iii, pp. 1 ff.