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

840.00/2–949: Telegram

The Secretary of State to the Embassy in the United Kingdom

top secret

Washington, February 14, 1949—6 p. m.

523. For Ambassador only. Ur 495, Feb 9.¹ It is our understanding that many Western Union military proposals such as those for increased military production in Western Union countries will be referred to Western Union Finance and Economic Committee for review as to effect on economy of countries involved and as to methods of financing. Assumption of responsibility for additional military production in Western Union countries is of direct interest to U.S. in view (1) importance our being in position to assure Congress Western Union countries doing full share and (2) possible effect on success of ERP. It is essential there be proper balance between additional self-help and mutual aid on one hand and priority for economic recovery on other.

It is possible U.S. financial assistance may be available for dollar costs of increased production of military items in Western Union countries and possibly including dollar compensation for impact on recovery. However, this concept should not yet be discussed with Western Union govts. Such assistance wld only be available for projects which wld not seriously interfere with recovery programs.

In view above considerations it is view of U.S. Govt that it should be represented by an observer on Finance and Economic Committee when military assistance matters are under discussion. If Western Union representation at highest level, for your infor and appropriate use, contemplate Harriman as US observer.

It is requested you undertake such informal discussions as seem to you appropriate to secure invitation for US participation in work of Financial Comite and its subordinate bodies on this subject² Interim instructions to US member Finance and Economic Comite now in process clearance appropriate agencies and will be transmitted shortly.

Acheson

1. Telegram No. 495 from London, not printed.
2. Telegram No. 574 from London, February 15, reviewed the action taken by the Embassy on this matter (840.00/2–1549). In telegram No. 605 from London, February 17, the Ambassador reported receipt of a letter from the Chairman of the Permanent Commission dated February 16 conveying an invitation to the U.S. Government to delegate a representative at earliest convenience to participate in work of the Finance and Economic Committee on the same basis as U.S. Representatives on the Chiefs of Staff Committee and the Military Committee (840.00/2–1749).