840.00R/8–1750: Telegram
The United States Deputy Administrator of the Economic Cooperation Administration (Foster) to the United States Special Representative in Europe (Harriman), at Paris
Torep 7010. Ref Repto 4493 and Repto circ 185.1 This cable contains ECA position, concurred in by State, on revision of long-term program to be considered by OEEC Council 18 August. Agree necessity of postponing and revising instructions and questionnaires for long-term program and believe that national replies to questionnaires should be postponed probably until winter, when clearer and more adequate defense plans have been developed.
2. Overriding consideration in support of this position is state of European defense plans at present and expected for immediate future. As you know, national defense plans currently emerging should in nearly all cases and in many respects be subjected to substantial revision before they would be considered adequate by US. Preparation of replies to OEEC questionnaire on basis these plans would therefore in large majority of cases tend to establish projections, goals and requirement so sharply inconsistent with defense effort we hope will be forthcoming over coming months, and thus would tend to be of dubious value. Question is primarily one of timing. Five-year programs of economic expansion and integration and reassessment of dollar position remain important tools European recovery policy, provided they are based upon realistic defense estimates.
3. August 18 Council meeting obviously not appropriate time or place to express US opinion on national defense efforts now under discussion, [Page 674] however, there are cognate reasons for further delay of long-term program, which can appropriately be advanced, such as lack of clarity on nature and impact, internal and external, of defense efforts both of participants (including sterling area) and of US. Most participants still unclear on composition their defense efforts and of contributions to one another. Estimates of effects on US balance of payments as well as on country B/P cannot usefully be made on basis facts available in September and October. For this reason we doubt usefulness of such projections for some months to come to OEEC or to ourselves.
4. Recognize problems of shifting gears, as indicated in Torep 68802 on relation of OEEC to European rearmament effort. If OEEC can be induced to participate in defense effort along lines indicated in Torep 6880, it will be necessary substantially to revise long-term program questionnaire in order provide data necessary for OEEC assessment of impact of defense effort. Specifically, considerable additional time will be required on national budgets and internal fiscal and financial problems generally. Revision of questionnaire might, as you suggest, be undertaken during September if by then OEEC’s role defense effort has been clarified. However, as noted above, we do not believe that national replies to questionnaires should be scheduled until there has been further improvement in magnitude and timing of increased European defense effort.
Sent Paris Torep 7010, rptd info London Ecato 1040 for Gordon.