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

396.1 LO/4–2750

Draft Report on Progress in Implementing the North Atlantic Treaty, Prepared in the Office of European Regional Affairs¹

top secret

[Washington,] April 27, 1950.

U.S. Position on Items 2 and 3 of NAC Tentative Agenda

problem

Review of progress in implementing the North Atlantic Treaty in the year since its signature, including reports of the Defense Committee and Defense Financial and Economic Committee.

Consideration of steps necessary to insure increased self-help and mutual aid, with particular reference to more effective economic and financial arrangements to support military defense plans so that maximum collective strength and security can be built up.

background

With the significant exception of the United States Mutual Defense Assistance Program and gifts of certain modern aircraft by Britain to France NATO activities have been largely limited to military planning. The greatest progress has been achieved in strategic planning with the completion of a Medium-Term defense plan. While subject to continuous review and while accepted as a “first approximation” of the collective security goal to be achieved, this plan, for the first time, gives a rough estimate of the magnitude of the task to be accomplished.

The Military Production and Supply Board (MPSB) has compiled preliminary lists of available capacity for military production and of equipment needs, neither of which has yet been related to coordinated NATO defense plans. Actually, they are based on individually prepared national lists. The MPSB has also prepared preliminary surveys of available surplus equipment and of U.S. spare parts. However, these indicate minimum availabilities as they also are based on unilateral national statements resulting from initial surveys.

Planning in the Defense Financial and Economic Committee (DFEC) has been essentially limited to a survey of present military budgets. The DFEC’s projects as to over-all financial and economic resources available for military production and on the related subject of developing criteria to indicate the relationship between present military burdens and the capacity of the respective NAT countries to support them have not progressed.

Progress in defense planning is handicapped by a kind of vicious circle in which the military and production side of the Treaty Organization calls for financial guidance for their planning, while the financial and economic side calls for equipment needs and the cost thereof before determining financial and economic availabilities.

The initial steps to break the deadlock and move forward concurrently on the military and financial fronts were taken at the recent meetings of the DFEC (Finance Ministers) on March 29, 1950, and of the Defense Committee on April 1, 1950.

On the military side of the Treaty Organization, the necessary instructions have been given to obtain the essential but heretofore unavailable basic requirements data.

1. The Regional Planning Groups have been instructed to establish the net equipment deficiencies for the forces scheduled to be in being or mobilizable within 90 days on July 1, 1951, the end of the first period of the Medium-Term defense plan. These deficiencies will be communicated, together with broad priorities among major items, to the Military Production and Supply Board for cost estimates and recommendations as to production. Individual countries have been requested to supply the same information for their national forces directly to their representatives on the MPSB.

2. The same instructions were given with reference to the Medium-Term plan’s 1954 objectives. As contrasted with cost figures for 1951 forces, the medium-term 1954 cost figures will include outlays for supporting the additional forces envisaged as well as the necessary additional equipment costs.

3. The Defense Committee has directed the Military Committee to invite, through the Standing Group, the regions to proceed as a matter of urgency with the study of the manner in which they contemplate increasing their forces in order to reach the military strength necessary for the defense of the North Atlantic area.

4. The Defense Committee requested the DFEC to take cognizance of the fact that these programs will require additional expenditures and asked the DFEC immediately to undertake an examination of the financial and economic ability of the Treaty nations to support additional military expenditures and to consider new and more adequate economic and financial dispositions, in particular for the implementation of an integrated defense program.

5. The need for maximum possible economy is implicitly recognized in the Defense Committee’s report which states that the Regional Groups and the Standing Group, in reviewing the “first approximation” and determining the resources in manpower and material required to support it, will seek to assure the maximum economy compatible with the essential security of the North Atlantic area. To this end the planners have been directed to insure the most efficient utilization of forces, the closest coordination between regional requirements and the exploitation of the latest developments in military technology.

On the financial side, the DFEC sent a request to the Defense Committee for a detailed estimate of the cost of the defense of the North Atlantic area, together with priorities. While the Finance Ministers expressly refrained from committing themselves to meeting the total cost figure to be supplied by the military planners, they expressed their anxiety to make progress with the problem of financing the defense of the North Atlantic countries. Moreover, the lack of general agreement at the DFEC meeting with Sir Stafford Cripps’ “economy and finance first” attitude, although shared by a few countries, tended to indicate recognition of the need for additional over-all financial effort for defense preparations.

As a result of the Defense Committee and DFEC meetings, the Council will have before it at the forthcoming session several papers, including:

A. From the Defense Committee:

1. Report from the Defense Committee on the status of defense planning.
The most important element of this report is a request that the Council agree to the immediate need for urgent action to insure the progressive build-up of the forces estimated as being required to support the medium-term defense plan. Also, the Defense Committee requests that the Council agree that an immediate determination should be made as to the financial and economic ability of the members to increase their present expenditures for military preparations, particularly for the implementation of an integrated armament program.

2. The Defense Committee’s request to the DFEC to undertake immediately an examination of the financial and economic potentialities of the Treaty nations to support the defense of the North Atlantic area.

3. Coordination between agencies of the North Atlantic Treaty Organization.
The Defense Committee recommends that the Council issue instructions providing for full coordination and closest liaison between the permanent agencies of the North Atlantic Treaty Organization and their respective staffs.

B. From the DFEC:

1. A request that the Defense Committee send forward as soon as possible a detailed estimate of the finances, setting forth priorities, involved in defense programs.

[Here follow further discussion of the preceding matters and a list of recommendations for NATO Council action. These recommendations were later considered by the IWG in its preparation of resolutions for NATO Council action.]

1. This report was circulated as FM D B–2/1b under the title “Review of Progress in Implementing North Atlantic Treaty,” April 27, 1950. It was developed at working level with the Department of Defense and was widely cleared within the Department of State. It contains revisions suggested in discussion with Acheson on April 25.