Foreign Relations of the United States, 1949, Western Europe, Volume IV

840.20/10–749: Telegram

The Chargé in the United Kingdom (Holmes) to the Secretary of State

secret

London, October 7, 1949—11 a. m.

4023. For FACC from ECC.

1. In view urgency of initiating additional military production program in Europe, and in light of sections 101 and 102, Senate Bill 2388, reference “integrated defense NAT area”, following comments are submitted:

2. It has not been possible, without definite knowledge of stocks to be made available by US, adequately to screen Western Union production program. Further, to our knowledge, WU production program has never been screened by US as a program to determine:

(a) Desirability of producing items from priority point of view. In other words, does production schedule proposed meet the highest priority of items in which WU deficient after deduction of US stocks to be made available, and of items probably to be procured from production in US?

(b) Items which can best be produced in Italy or by other non-WU European pact countries.

3. Distinction between overall program review, and individual project review should be kept clearly in mind. Project review, without overall production program review, can result only in piecemeal approach to problem.

4. Recognized, however, that work already accomplished by WU cannot be scrapped—that present proposed production schedules, in spite of unsatisfactory nature in many respects, is a basis on which to build a better coordinated program for Europe.

5. Many projects within WU program clearly in line with military priorities (reference London’s 3956,¹ repeated Paris 744) and project justification can proceed on these items looking toward their initiation at earliest possible moment.

6. Certain other items which represent production superimposed on existing military production, which are not of the highest priority, may have to be accepted by US within limits of program as probably the best WU can do in view of present capabilities. There may be some items, however, even in this area, unjustifiable on a priority or on economic basis. US must make clear will not give dollar support to individual projects which are non-essential and seem to be proposed on nationalist or non military basis.

7. Where projects require new tooling or represent entirely new production, careful consideration of a coordinated production program for Western Europe is in order.

8. Where certain production items are not acceptable to US as result of review suggested above, US should be in position to suggest others for consideration of WU countries, or request WU countries to initiate such suggestions themselves.

9. Consideration should be given in overall program review of the desirability of encouraging production for future requirements (including spare parts in Europe) of certain items presently available from US stocks to fill partial WU requirements. Such encouragement, subject to security considerations, would further the principle of self-help.

10. Request Washington advice on mechanics by which steps along lines mentioned above are to be performed, including integration of non-Western Union production capabilities and net deficiencies of all Western European pact countries.

Sent Department 4023, repeated Paris 763 (for Harriman).

Holmes

1. Telegram 3956, October 3, not printed.