Foreign Relations of the United States, 1950, Western Europe, Volume III

740.5 MAP/2–2550: Telegram

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

priority

London , February 25, 1950—2 p. m.

1087. ToMAP. Subject is preparation AMP program FY 51 for presentation to Congress.

1. Per instructions from Washington and in view great urgency involved, US delegates PWS NAT MPSB and DFEC with assistance ECC staff are proceeding on coordinated plan to obtain necessary information from Title I countries¹ for formulation FY 51 AMP congressional justification.

2. FMACC concept AMP for future entails each country taking military production budget of calendar year 48 or most closely corresponding FY of country as base for evaluation “normal production”. AMP which can be supported with dollar aid will correspond to that amount of estimated military production budget covering US FY 52 which is in excess of this 1948 base.

3. For your information only. Our present understanding of FMACC intent is that US dollar aid can be given to any country AMP project meeting certain criteria provided total cost of all projects to be aided does not exceed estimated amount “additional” production budget. This would mean projects aided need not necessarily be new projects but can include continuation of existing high priority military production. This not finalized and should not be communicated to governments.

4. On basis that budgetary limitations rather than countries physical capacities will again be controlling factor AMP programs FY 52, Breithut (U.S. representative) has requested country delegates PWS DFEC to provide information on military production budgets on both obligations and expenditures basis for 48 (or most closely corresponding FY) and each subsequent year including a best estimate (not commitment covering US FY 52). Amount by which estimated effort US FY 52 exceeds amount military production budget in base year will determine estimated total value AMP projects eligible for MDAP assistance.

5. Delegates PWS DFEC requested provide above information, part by March 2 and remainder March 15, in order prepare for DFEC ministerial meeting late March. Governments have been asked to furnish same budgetary information to Embassy Special Assistants MDAP as is furnished PWS DFEC. Embassies should comment to ECC staff soonest after receipt this information to cover accuracy past data and validity future estimates, particularly as related to non-jeopardy economic viability, US coordination with ECA Missions re these comments is important.

6. General Hayes² has requested Title I countries delegates PWS MPSB to provide by March 10, production information concerning AMP projects tentatively planned for US FY 52 in preparation meeting top supply board late March. This information insofar as feasible in short time available for preparation to show items, quantities and values in dollars in estimated country program with dollar aid requirements broken down if possible into machine tools, raw materials and services (with equipment other than machine tools also shown but listed separately in hope new legislation can cover); also items and quantities which might be available for transfer other MDAP countries.

7. Hayes has also asked governments provide Embassy MDAP Special Assistant with the production information as forwarded PWS MPSB. MDAP sections comment to ECC staff on this information also requested soonest after its receipt. These comments should cover in general way physical capability of country to carry out projects and apparent validity US aid envisaged.

8. Time schedule involved as well as difficulty planning projected AMP projects under this new definition of “additional” production makes it unlikely country submissions will be complete and in full detail. However, hoped they will provide sufficient basis for indication to Congress of intent Title I countries continue or expand military production over present and an indication of type of projects which would be expected to require dollar aid and size of this aid. Information from countries being obtained through NAT organs on Washington decision to avoid bilateral approach and obtain maximum NAT sanction of data. If any specific actions are required of Embassy MDAP sections before they receive submissions from country governments, these will be subject further cables.

9. If desired an ECC staff member will be prepared visit each Embassy in near future to explain in further detail above procedure and go over with. MDAP section Embassy comments desired on country submissions.

10. Comments on all of above procedure requested.³

Sent Paris 310 for Embassy and OSR, Brussels 51, Hague 43, Copenhagen 39, Oslo 42, Rome 95, Frankfort 80, Frankfort pass to Heidelberg for Handy as London’s 43. Brussels pass Luxembourg.

Holmes

1. Member nations of the North Atlantic Pact, receiving assistance under the MDAP.
2. Maj. Gen. Thomas J. Hayes, Chairman and Senior U.S. Representative on the Permanent Working Staff of the NAT Military Production and Supply Board (NAT–MPSB–PWS).
3. In telegram 998 to London, March 14, not printed, the FMACC commented at length on the coordinated plan presented in telegram 1087. For the most part, the FMACC approved the plan of action and commended those who had developed it. Telegram 998 is in Department of State file 740.5 MAP/3–450.