700.5/8-751
The Secretary of State to the Chairman of the House Committee on Foreign Affairs (Richards)1
My Dear Mr. Richards: My attention has been called to H.R. 5020, a bill “To promote the foreign policy and provide for the defense and general welfare of the United States by furnishing assistance to friendly nations in the interest of international security”, which you introduced in the House of Representatives on August 1, 1951.2 I have also read your accompanying explanatory statement.
First of all, I wish to state my pleasure at your strong endorsement of the purposes of the Mutual Security Program and your forcefully expressed opinion that this program is essential for the security of the United States. In the second place, I would like to express my personal appreciation for the painstaking, thorough and objective manner in which you and your Committee have conducted the hearings on this program and the exhaustive way in which you have been exploring the important and intrinsically difficult problems of national security for which the program seeks to provide some answer.
At the same time, I must indicate my concern over the large reduction which your bill would make in the amounts of aid which were recommended in this program as it was submitted to the Congress by the President. In doing so, I am voicing the joint concern of myself, Secretary of Defense Marshall, the Administrator of ECA, Mr. William Foster, and others in the Executive Branch who are responsible for this program. In our opinion, these reductions would have an adverse effect on the success of the program and would, for this reason, run counter to our national interests. As a consequence, I am convinced that we must have failed in our presentation to bring out, or properly to emphasize, the facts, figures and supporting arguments which, in our judgment, compel such a conclusion. In this letter, therefore, I should like briefly to summarize our position and to indicate our readiness to furnish any additional testimony or information which the Committee might find helpful.
Before addressing myself to the specific reductions which you have recommended, I would like to say a few words about the program as a whole and the manner in which it was constructed.
First, I want to reiterate a statement which I made when I appeared before your Committee—that the size of the program does not reflect requirements but that rather, on the contrary, its size was drastically reduced below requirements because of limitations in readily available [Page 351] equipment, supplies and technical personnel. In other words, the amounts of assistance recommended by the Executive Branch do not begin to fill those foreign needs which, if it were not for current scarcities in military equipment and other materials of aid, our national interests would dictate should be met in full.
Thus, the military aid which we actually requested had already been severely cut back from requirements as they were developed by our military authorities. Our production experts determined that any larger total military aid appropriations, when considered in conjunction with our own military appropriations, would not in fact result in the production of any larger quantities of military equipment during this fiscal year than under the program proposed. The limitation here is the capacity of American industry, operating at the present level of mobilization, to carry out a bigger production program during 1952 than the one which is called for by a combination of the President’s proposals for our own military establishment and for foreign military aid. We believe the present military aid program to be feasible, but we wish, because the requirements certainly so demand, that it might be materially increased. Similarly, in the case of economic and technical assistance, we have been confronted with serious world-wide shortages in raw materials, machine tools, industrial equipment and technicians, and these shortages have handicapped us in developing programs of an economic and technical character which are adequate fully to accomplish our objectives.
The program which was submitted represents the product of nearly a year’s work on the part of some of the ablest people in the Executive Branch of the Government. It is one of the most carefully prepared programs that has ever been transmitted to the Congress. Requirements were developed in great detail through exhaustive field studies and thoroughly screened. These requirements were considered in conjunction with the requirements of our own defense establishment and the civilian economy after equally careful studies had been made of our resources and productive capacity. The amount of the program was repeatedly cut back, representing the elimination or deferment of less urgent requirements because of limitations in resources. One of these progressive cutbacks is reflected in the difference of more than $1,150,000,000 between the amount for foreign aid contained in the President’s Budget Message and the amount proposed in the specific program now before you.
If time were not crucial, the further sizeable reductions which you propose might not have the same adverse consequences that we believe they now do. Under such circumstances the meeting of requirements could be phased over a longer period. Today, however, time is crucial, and the future of our nation will depend upon how well we use the time that we still have available to build strength in places where [Page 352] strength is critical to the survival of free nations. The longer that situations of great military, political and economic weakness prevail in various areas of the free world, the longer will we face the risk that Soviet exploitation of these situations will precipitate a third world war or cause the loss of peoples that are vital to the position of the free nations. If the free world had already attained the degree of strength which, over the next few years, the Mutual Security Program should help to create, the possibility of other Korea’s would be vastly reduced, as would the danger that vital regions will fall prey to Soviet subversion. Until the day when this level of strength has been achieved, and can be maintained, the present danger does not merely continue, it increases, because the Soviet world is relentlessly seeking to improve its military posture and has accelerated its efforts to capitalize on the poverty, sickness, ignorance and frustration which prevail in many areas of the free world where our technical and economic assistance could do so much in helping to remove these conditions and in giving their peoples a hope for the future. Time, therefore, is vital in this whole field, and we cannot afford to postpone until tomorrow any of those measures which we have the capacity and national interest to undertake today.
I turn now to the specific consequences which would flow from the particular reductions that you have suggested.
In the case of Europe, your bill would reduce the aggregate amount available for foreign assistance by $550,000,000—$265,000,000 in military aid funds and $285,000,000 in the funds available for economic assistance. It is our considered judgment that this reduction would seriously affect our efforts to build military strength in Europe and set back the present, already much too extended timetable for raising and equipping the forces which are required by General Eisenhower.
I can best explain the reasons for the foregoing conclusion by reviewing the processes by which the amounts proposed by the President were arrived at in the first instance. As you know, the North Atlantic Treaty Organization has developed, and the participating governments have approved, a military plan which calls for the creation within a specified period of forces which will be capable of withstanding aggression against the North Atlantic Treaty area. The general size and composition of these forces has been initially defined; the cost of raising, maintaining and equipping them has been roughly estimated; and the general magnitude of the capital equipment requirements for them has been calculated. In addition, estimates have been made of the extent to which the European NATO members can, during the specified period, and upon the assumption that U.S. economic assistance of a marginal nature will be continued, pay for the support, training, equipment and facilities which such forces will need. With these several calculations in hand, it has been possible to make a rough [Page 353] approximation of that portion of the total capital equipment requirement which may need to come from, or be financed directly by, non-European sources, principally the United States. The military assistance funds requested by the President would make possible one of several successive installments for meeting this total amount.
Subsequent screening of this plan by General Eisenhower may result in some reduction in these requirements, but it is also possible that such a review may indicate the necessity for an increase. Subject only to this qualification, I am in a position to assure you, after considering the time period within which the plan should be completed and the long lead-times involved in producing military equipment, that the military assistance proposed by the President for the forthcoming year represents a disproportionately small slice of the total requirements. The proposed slice would be much larger if our productive capabilities appeared adequate, at the present level of mobilization, to make it larger. The physical requirements exist, and they cannot be disregarded. They are among the hard facts with which we must contend if we are to reach the end which we seek. Any reduction in the funds which we have sought can therefore only postpone, not alter the necessity for, the fulfillment of these requirements. Such a postponement, moreover, while it in no way increases the ultimate saving to the United States, does have the effect of decreasing, and by a disproportionately large amount, the security which the United States might otherwise attain. For one thing, it lengthens the period of serious war risk by deferring the day when strength adequate to deter or repel aggression will exist in Europe. Moreover, failure to deliver this equipment on the schedules which have previously been worked out can upset the plans for the raising and training of forces which have already been agreed to by our North Atlantic Treaty partners. Thus, it can retard the process of European mobilization, for the raising and training of forces must go hand in hand with the provision of equipment, and the former must invariably be slowed down as the rate of deliveries is reduced. Such a cut would, in addition, make it much more difficult, out of the equipment to be produced from the funds included in this legislation, and in the event that future developments should make this advisable, to divert any substantial quantities to Germany or other non-NATO countries.
The reduction in economic aid would, if anything, have equally adverse effects on the rearmament of Europe, As we have constantly stressed, one of our principal purposes in this program is to help the Europeans to carry as much of the rearmament burden as they can without undermining the basic economic and social structure which we and they have worked so hard to create through the European Recovery Program. Such an approach not only increases the speed with which we can obtain real strength in Europe but also reduces the period [Page 354] during which the maintenance of this strength will require continued assistance from this country. The proposed reduction will slow both of these processes.
Our economic aid has been, and will continue to be, marginal in the sense that it represents those resources which the Europeans do not have and cannot obtain for themselves, but which they require in order to develop and make the fullest use of their own resources. Our economic assistance as administered has had a multiplying effect in that a dollar’s worth of such assistance, when coupled with the manpower, materials and facilities already available in Europe, has resulted in increased output many times in excess of that dollar. In this way the productive capacity of Europe has been greatly increased, and this increase is largely responsible for the fact that Europeans have been able to carry the significant burdens of rearmament that have already been undertaken. Since consumption, on the average, is close to the minimum level, any further significant increases in the European defense effort are dependent upon continued increases in production output. A reduction in assistance can only lead to a reduction in the ability of the Europeans to increase their output and thereby to provide greater amounts for defense purposes. The result, here again, will be a postponement of the day when these nations can be self-sufficient, with a probable consequent increase in the total ultimate cost to the United States, and a postponement of the time when General Eisenhower will have the necessary military strength behind him.
While it is true, as you have indicated, that European defense production has grown more slowly than we had originally hoped and expected, progress has been substantial, and a large number of the early physical and technical obstacles to the acceleration of this process have now been or will shortly be removed. With their removal, the big remaining obstacle for the Europeans is the problem of financing—the problem of mobilizing resources of their own which are sufficient to support this production together with all the other military tasks they must perform. Since the economic aid proposed for the NATO countries is already based on optimistic assumptions concerning the defense burdens which each of these countries can finance for itself, the suggested reduction can have no other effect than to limit the military efforts which these countries will be able to make during the year ahead. Moreover, because of the multiplying effect of our economic assistance, to which I referred above, the reduction will curtail these efforts by more than the dollar value of the economic assistance which is withheld. At a time when each one of the participating nations should do everything of which it is physically capable, it would be unfortunate if our aggregate effort should fall [Page 355] seriously short of the total effort which, through the judicious use of U.S. economic assistance, would otherwise be possible.
In the case of the Far East and South and Southeast Asia, the proposals contained in your bill would reduce the aggregate amount of authorized economic assistance from $375,000,000 to $225,000,000, or a reduction of 40%. $100,000,000 of the total cut would be reflected by the deduction of this amount from the authorization for $112,500,000 in new funds which was requested by the President for relief and reconstruction work in Korea. The other $50,000,000 would constitute an approximately 20% decrease in the $262,500,000 recommended for economic and technical assistance in South and Southeast Asia, Formosa and the Philippines. The total reduction would necessitate a revision in our present plans, and such revision would, in our opinion, decrease our ability to attain important national security objectives in this critical region.
In this vast area, an expanse embracing nearly 30% of the world’s population, the economic programs as they were submitted are, when measured against our vital interests in the area and the needs of the area, of modest proportions. They represent only 3% of the amount which has been proposed for the Mutual Security Program as a whole. Their relatively small size was again dictated by limitations in available materials and technical personnel and by the extent to which available aid could be effectively utilized, under the conditions existing in these countries, to advance the security of the free nations. Over 80% of the total amount requested has been programmed for four countries—Formosa, the Philippines, Indochina and India—where either the size of the need or the critical character of the immediate situation, or both, necessitate the largest effort in terms of assistance. In most of the remaining countries in this area, the planned programs are so small that any appreciable reduction therein would materially reduce, if not eliminate, the value of proceeding with them, and yet their abandonment would, we believe, be detrimental to our efforts to build real strength in this important corner of the world. Consequently, as a practical matter, all or substantially all of the $50,000,000 cut would necessarily come out of the present programs for the four countries which I have mentioned. I shall therefore review the specific results that would follow if this were done.
The assistance proposed for the Philippines is designed to make possible the implementation of the long-term recommendations of the Bell mission for the recovery and stabilization of the Philippine economy. This mission made the most careful study of the situation existing in the Philippines and its conclusions have been endorsed both by this government and by the Philippine government as a sound approach to the economic problems of this new country. A portion of these recommendations concern far-reaching and politically difficult [Page 356] actions to be taken by the Philippine government itself. Many of these actions have already been taken, and they have been taken in the faith that other recommendations in the report—those calling for actions by the United States—would also be carried out. Failure on the part of this government to undertake these actions would be viewed as a breach of a moral commitment, and would make more difficult, and delay, the economic recovery which the report envisaged. Since the problems of the Philippines, including the problem posed by the Communist guerrilla forces, are in large measure a product of the country’s economic plight, failure to address the evil at its root will prolong the situation which now exists. Moreover, the military assistance which we are providing to assist in eliminating the Communist guerrilla threat will prove useless in the long run if the conditions which have given rise to and nourished the Huk movement are permitted to continue. We risk this result if any appreciable portion of the proposed $50,000,000 cut were taken from the Philippine program.
I hardly need to stress the importance of Formosa or to describe the difficult economic burden which has been imposed on this small island by the necessity of maintaining not only a civilian population which has been augmented by refugees from the mainland, but also a military force in the neighborhood of a half million men. We are attempting by the provision of large quantities of military assistance to make these people relatively secure in the event of any attempted Chinese Communist invasion. This effort will be impossible of success, or at least meaningless in the end, if economic conditions in Formosa should seriously deteriorate or if the country should be unable to provide the basic support required by the military forces. The economic aid which we have proposed has a two-fold purpose—first, to make it possible for the Chinese government to feed, clothe, provide the facilities for, and otherwise to maintain during the coming year, the military forces to which we are furnishing equipment and, second, to increase the capacity of this island to become self-supporting at the earliest possible future date. The application of all or some part of the $50,000,000 cut to the projected Formosan program would therefore have either one or both of the following consequences: (1) extend the future period during which Formosa would be dependent on outside economic assistance or (2) deprive the Formosan forces, with all the adverse effects on morale and military effectiveness which this would entail, of certain essential maintenance support. The over-strained Formosan economy: cannot carry the entire military load without our help.
In Indochina the battle for Southeast Asia is now being bitterly waged. Much of the country is a theater of active military operations, and on the outcome of these operations may hang the fate of free Asia. At the moment, 150,000 French Union troops, together with slowly [Page 357] increasing forces of the Associated States, are holding their own. It is nonetheless clear that even with our military assistance, it will be difficult to continue to hold in the future, not alone to improve the situation, unless a number of other developments occur. Unless the governments of the Associated States can deal with the problems of relief that are created by the scorched earth tactics of the guerrillas, can develop institutions which are responsive to the needs of their people, can raise and support additional forces of their own to augment, and eventually to replace, the French Union troops, and can commence projects which promise a better future for their subjects, the situation will become hopeless. At their present stage of development, and beset by widespread hostilities and subversion, these new states are unable to take all of these steps without the kind of technical and economic assistance that we have proposed in the current program. The value of our military assistance in the solution of current military difficulties will be materially lessened unless this complementary economic and technical aid is also provided. The application of all or an appreciable portion of the $50,000,000 reduction to the Indochina program would thus materially detract from the attainment of our objectives.
The problems of India have had the special attention of your Committee on several occasions during the last six months, and I need not belabor them. The continued freedom of its 350,000,000 people from Soviet control is obviously a matter of great moment to the rest of the free nations. In relation to its importance, population and needs, the amount of aid which we have recommended is the minimum needed in order to begin an effective attack on India’s central problem—the shortage of food. We believe it is necessary to expand, and to complement with essential supplies, the small technical assistance projects which we already have under way and which have shown such promise, projects which are directed almost entirely to increasing the production of food. In addition, it is important to effect a rapid increase in the base of Indian agriculture—to expand India’s agricultural “plant capacity” by clearance of new land, by ground-water irrigation of land that is now marginal, and by the expansion of capacity to produce and use fertilizer. The application of all, or any appreciable portion, of the $50,000,000 reduction to this program would make the implementation of these measures impossible.
As a practical matter, therefore, this reduction, if it is allowed to stand, would necessarily eliminate, or seriously impair, the programs which have been planned for one or more of the above four countries and, in doing so, materially hamper our efforts to build strength in Asia. Without such strength, Asia is likely to be lost to Soviet Communism, and such loss would do incalculable damage to our capacity to defend ourselves. Although some of the projects which are proposed [Page 358] are long-range in the sense that they will take a number of years to come to fruition, they are essential to this strength, and if they are not commenced now, in this critical period when the future of the free world is being shaped, the reasons for commencing them, and the opportunity to commence them, may well be lost. The free countries may then already have been absorbed in the Soviet sphere.
I am also concerned over the effect of the proposed cut of $100,000,000 in the authorization of funds for Korean relief and rehabilitation upon the morale of the Korean people, upon their willingness and ability to continue resistance to Communist control, and upon the contributions which other countries have made or pledged for the relief and rehabilitation of the Korean people. I fully sympathize with the considerations which led you to propose this reduction, but I believe that those which I am setting forth below should be controlling.
The Korean Government and people are already familiar with the proposed $250,000,000 program of the United Nations, and with the fact that the United States, subject to the approval of the Congress, has pledged $162,500,000 toward this program. The Korean people will not understand the failure of this government to authorize an appropriation equivalent to the United States pledge and will be disturbed over the implications of this failure for their future. Only the hope of an eventual improvement in their serious economic plight, a hope which is symbolized in the proposed United Nations program, has sustained their morale and will to endure their present hardships and sufferings. During this period of armistice negotiations, moreover, they are particularly apprehensive over the long-run intentions of the United States and the United Nations with respect to their country. The recent announcement of arrangements between the Unified Command and the United Nations Korean Reconstruction Agency has been extremely helpful, according to our Ambassador, in persuading the Koreans that there was no intention to desert them.
I hardly need emphasize the intimate relationship between the morale of the Korean civilian population and the success of the armies operating in Korea, if warfare continues, and of its similar relationship to the maintenance of political stability, if warfare should cease. I believe that the effect of low morale or disillusionment upon Korean cooperativeness in military and political negotiations, and upon their determination by their own efforts to create military and economic strength, is also evident. The results of low morale could be disastrous and largely undo the accomplishments of our costly military efforts.
I should also stress that an indication of Congressional unwillingness to authorize the full amount pledged by the United States to the [Page 359] United Nations Korean Reconstruction Agency (UNKRA), subject to Congressional approval, would have an unfortunate effect on the similar legislative actions which are required at this time in other countries in fulfillment of their own pledges. It would also certainly affect our expectation that additional countries will contribute to the financial support of this undertaking. In addition, the United States must not overlook the fact that certain other nations have already made their pledges good. To name only one, Canada has paid its contribution of $7,250,000. The United Kingdom, its contribution of $28,000,000 authorized by Parliament, has indicated that its pledge was made with the anticipated United States contribution in mind, and that its payments will be governed by the payments made by the United States. I therefore think that if the United States fails to exercise leadership by fulfilling its moral commitment to this undertaking, such action will have an adverse effect on the promised or anticipated contributions of other nations, whereas forthright action now in accordance with our pledge is likely to stimulate such contributions. Such a development might, in view of our residual responsibility to the Republic of Korea, result in a greater total cost to the United States in the long run.
While the date for commencement of a major program cannot yet be fixed, it is likely that it will be under way sufficiently early in the current U.S. fiscal year so as to require large amounts available for prompt commitment. The United States contribution will require action by the Appropriations Committees as well as by the committees concerned with foreign affairs, and there is a danger that funds could not be made available in time if the full authorization were not now approved.
The United States should, by authorizing the full contribution now, honor its moral obligation. In this way it will affirm its good faith and give an important vote of confidence to these heavily burdened people who have suffered some $2,000,000,000 in war damage to their homes, farms, hospitals and businesses.
I hope that the foregoing review of the effects of the proposed reductions is sufficiently explicit and detailed to provide you with a clear understanding of the reasons for our concern over your proposals and of the importance which we attach to an authorization for the full amounts requested. If it fails to do so, we are prepared to appear at any time to furnish further explanations.
Sincerely yours,