Foreign Relations of the United States, 1951, National Security Affairs; Foreign Economic Policy, Volume I

Truman Library, Truman Papers, PSF–General File

The Secretary of Defense (Lovett) to the President

top secret

Washington, October 23, 1951.

Dear Mr. President: The information requested in your letter of 10 October 1951¹ concerning deliveries of military end items to countries receiving assistance pursuant to the Mutual Defense Assistance Act of 1949, as amended, is submitted herewith in accordance with the extension of time granted by your office. I believe this information will be found to be responsive to your inquiry with one exception, viz., the request for information concerning deliveries projected at the beginning of calendar year 1951, broken down between United States forces and forces of other countries. It has not been possible to furnish this particular breakdown because procurement for mutual defense assistance programs is merged with procurement for United States forces, and at the procurement planning stage no attempt is made to indicate procurement for United States and other forces separately.

I have been concerned for some time with the problem of obtaining from production sufficient military end items to satisfy the requirements of United States forces as well as our foreign needs. At my direction all three Services are continually reviewing their procurement plans for long-lead-time, hard-to-get critical items of military equipment. The purpose of this continuous review is to identify those critical items of military equipment where an increase in production is possible under existing circumstances and to adjust our production accordingly. A statement of the principal obstacles to production which we are now encountering is, in accordance with your request, inclosed herewith.

The policies and priorities for allocation of military equipment, referred to in the last paragraph of your letter, is under continuing review by the Joint Chiefs of Staff. Inclosed is a statement of these policies and priorities as recommended by the Joint Chiefs of Staff on 27 October 1950, together with their latest recommendations thereon, dated 12 October 1951. In accordance with your request, I have taken no decision with respect to these latest recommendations, but it should be noted that in their memorandum of 12 October 1951 the Joint Chiefs of Staff reaffirm the general principles for the allocation of finished munitions as previously recommended by them, and which have been in effect since the date of their approval by the Secretary of Defense on 7 November 1950.

With great respect, I am

Faithfully yours,

Robert A. Lovett

Inclosures—6²

1. Obstacles to Production

2. Allocation Policies

3. MDAP Funds

4. Production & Delivery
Schedules—Army

5. Production & Delivery
Schedules—Navy

6. Production & Delivery
Schedules—Air Force

[Enclosure 1]

Obstacles to Production

The following paragraphs explain some of the obstacles which have been encountered in fully implementing projected delivery plans during the past eight months, and obstacles expected to be encountered in fully implementing such plans in the coming months. In addition to the obstacles listed below, production difficulties pertaining to specific items are explained, where pertinent, on the individual pages of the Production and Distribution Schedules, Inclosures 4, 5, and 6.

Program Implementation: Several obstacles have been encountered in fully implementing projected delivery plans. One important factor has been the indefinite extent and nature of the total program which the Defense Department was to undertake when related to the amount of funds that would be available for its implementation.

Machine Tools: Until recently, the machine tool industry has been relatively slow in stepping up production of critically needed items of equipment. Machine tools that are in extremely short supply in the United States are presently adversely affecting the production schedules of North Atlantic Treaty countries, particularly France, where several additional military production programs are being held up, pending delivery of the machine tools ordered from United States manufacturers. The non-delivery of these machine tools which are needed to produce end items is definitely an obstacle which affects mutual defense assistance deliveries and production scheduling in North Atlantic Treaty countries.

Material Shortages: Spot shortages of certain critical materials in specific forms and shapes have and will continue to delay production.

Strikes: In many critical areas of industry, strikes have been a large contributing factor. Many costly and prolonged work stoppages have delayed, and are continuing to delay production of raw materials, finished and semi-finished products.

Facility Expansion: Fabrication and production capacity has not been available in a few instances, to meet requirements, such as large armor castings, optical fire-control equipment and electronic components. Expediting Production Funds have been made available to industry for such expansion which will bear fruit in the near future.

Personnel Shortage: There has been and will continue to be a shortage of trained personnel in government and industry. Tool makers, die sinkers and other highly skilled personnel are examples of shortages which will undoubtedly continue to impede production. The effect of the ceiling on graded personnel imposed in the Defense Appropriation Act of 1952 has not been fully evaluated, but it may limit the number of personnel available for inspection, contract negotiation and production expediting.

Engineering and Development: In an attempt to make the most modern equipment available, production efforts have been directed towards some items newly designed and engineered which had not been fully tested as to producibility or performance. Some delays have resulted because of necessary engineering changes and lack of “know-how” in producing these items of equipment.

[Enclosure 2]

Allocations Policies

The policies followed in making allocations of finished munitions among United States forces and forces of other countries stem from Section 401 of the Mutual Defense Assistance Act of 1949, as amended (P.L. 329–81st Congress) which provides as follows:

• “Sec. 401. Military assistance may be furnished under this Act, without payment to the United States except as provided in the agreements concluded pursuant to section 402, by the provision of any service, or by the procurement from any source and the transfer to eligible nations of equipment, materials, and services: Provided, That no equipment or materials may be transferred out of military stocks if the Secretary of Defense, after consultation with the Joint Chiefs of Staff, determines that such transfer would be detrimental to the national security of the United States or is needed by the reserve components of the armed forces to meet their training requirements.”

Section 506(b) and (c) of the Mutual Security Act of 1951 (P.L. 165–82nd Congress), also relates to allocations, and provides as follows:

• “Sec. 506(b). The establishment of priorities in the procurement, delivery, and allocation of military equipment shall be determined by the Secretary of Defense. The apportionment of funds between countries shall be determined by the President.
• (c) Notwithstanding any other provision of law, during the fiscal year 1952 the Secretary of Defense may furnish (subject to reimbursement from funds appropriated pursuant to this Act) military assistance out of the materials of war whose production in the United States shall have been authorized for, and appropriated to the Department of Defense: Provided, however, That nothing in this Act shall authorize the furnishing of military items under this subsection in excess of $1,000,000,000 in value. For the purposes of this subsection (1) “value” shall be determined in accordance with section 402(c) of the Mutual Defense Assistance Act of 1949 as amended, and (2) the term “materials of war” means those goods, commonly known as military items, which are required for the performance of their missions by armed forces of a nation including weapons, military vehicles, ships of war under fifteen hundred tons, aircraft, military communications equipment, ammunition, maintenance parts and spares, and military hardware.”

On 27 October 1950, in a memorandum to the Secretary of Defense, the Joint Chiefs of Staff recommended the following policy with respect to supplies and equipment for the Mutual Defense Assistance Program.

“1. Reference is made to the interim report contained in a memorandum by the Joint Chiefs of Staff to you, dated 12 September 1950.³ This is the final report of the action taken by the Joint Chiefs of Staff in connection with your memorandum, dated 18 August 1950, subject, “Supplies and Equipment for Mutual Defense Assistance Program,”³ and concerns that portion of your memorandum wherein you requested that a relative priority for the Mutual Defense Assistance Program (MDAP) in relation to U.S. military programs be established.

2. In considering the relative supply priority to be established for MDAP in relation to United States military programs, it would be well to keep in mind that the long-range, over-all military objective of United States Mutual Defense Assistance Programs should be the development of conditions which will improve to the maximum extent possible within economic realities, both current and foreseen, the ability of the United States in event of war to implement, in conjunction with its allies, a long-range strategic concept. Briefly, that concept is that the United States, in collaboration with its allies, will impose the war objectives of the United States and its allies upon the USSR by conducting a strategic offensive in Europe and a strategic defensive in the Middle East and in the Far East.

3. Military assistance should, in principle, be considered as a complement to the military preparedness of the United States proper, with the essential military equipment needs of the armed forces of the United States receiving highest priority. Programming of mutual defense assistance, therefore, should be accomplished as a further requirement on United States resources, i.e., as being additive to the equipment needs of the United States forces, rather than as a competing element for finished United States munitions.

4. The Joint Chiefs of Staff are fully cognizant of the importance of MDAP to the policy and strategic interests of the United States. They consider that United States production should make the necessary expansion to the extent that MDAP phased requirements can be met simultaneously with United States phased requirements. They further encourage and support the development, under MDAP, of increased additional military production and offshore procurement to relieve partially the heavy commitments against United States industry.

5. In connection with the assignment of priorities, it should be borne in mind that all programs contain items of wide differences in degree of urgency. It is manifestly impractical to assign an overall priority for one broad program with respect to any other broad program. Priority must be associated with each component, not with the program as a whole.

6. In the light of U.S. strategic interests and in the world situation now existing, the Joint Chiefs of Staff believe that finished munitions should be allocated in accordance with the following general principles:

a. First Priority:

(1) United Nations operations in Korea and United Nations operations in any further troublous areas where United States forces are committed, in the order:

(a) United States forces.

(b) Other United Nations forces as approved by competent U.S. authority.

(2) Other operational requirements when specifically determined by the Joint Chiefs of Staff.

(3) Minimum U.S. requirements for national security, to include support of United States forces in occupied areas, necessary equipment for active forces and those now scheduled for mobilization, and other essential defense requirements, including training of civilian components.

b. Second Priority:
Approved foreign military aid programs, provided that no equipment is furnished to recipient countries at a rate faster than can be utilized profitably in the build-up and training of effective forces, with long-term priority among countries being in this general order:

(1) North Atlantic Treaty Organization (NATO) countries.

(2) Other countries.

c. Third Priority:
The remainder of the material requirements of the United States Armed Forces.

7. The Joint Chiefs of Staff recognize that certain factors such as the need for strengthening the morale and internal security of recipient nations and protecting various United States interests abroad may, in exceptional cases, become overriding political considerations; modifying the strict application of the above-mentioned priorities. In this connection, it is considered that United States policy and prestige demand that aid under MDAP be furnished on a substantial basis to each recipient country, with a continuing flow of such assistance to support the build-up of allied forces, as well as to prevent the further encroachment of Communism.

For the Joint Chiefs of Staff:
Omar N. Bradley
Chairman,
Joint Chiefs of Staff.”

On 29 December 1950, in a memorandum to the Secretary of Defense, with respect to MDAP assistance to Indo-China and Formosa, the Joint Chiefs of Staff stated that:

• “In view of the current military situation, it is recommended that the supply priority for Indo-China be above all other Mutual Defense Assistance Programs and that for Formosa be the same as for countries: of the North Atlantic Treaty Organization.”

On 29 August 1951, the Secretary of Defense requested the Joint Chiefs of Staff to review the existing policies governing MDAP assistance and make recommendations accordingly. On 12 October 1951 the Joint Chiefs of Staff reaffirmed the established allocations priorities in a memorandum to the Secretary of Defense as follows:

• “1. In response to your memorandum, dated 29 August 1951, the Joint Chiefs of Staff have reviewed the current policy concerning the relative priorities between U.S. military programs and the Mutual Defense Assistance Program (MDAP) with a view to ascertaining whether a revision of those priorities should be made.
• 2.The Joint Chiefs of Staff still feel that urgent measures to accelerate the delivery of MDAP matériel are required in order that the U.S. and its allies can achieve the capability of implementing the basic strategic concept for the conduct of general war. However, they are of the opinion that military assistance should, in principle, be considered as a complement to the military preparedness of the U.S. proper. The essential military equipment needs of the Armed Forces of the United States should receive highest priority.
• 3. Being cognizant, however, of the importance of MDAP to the strategic interests of the United States, the Joint Chiefs of Staff reiterate their view that U.S. production should make the necessary expansion to meet simultaneously MDAP and U.S. phased requirements.
• 4. The Joint Chiefs of Staff encourage and support the principle of increasing offshore procurement from our present and potential allies, in order to supplement U.S. production, thus relieving the heavy commitments against U.S. industry to the extent that such offshore procurement does not adversely affect the industrial mobilization build-up necessary to achieve the objectives of our Medium Term War Plan. Support of such programs should be accompanied with appropriate allocation of essential raw materials as would not reduce U.S. production to meet the objectives of our Medium Term War Plan. It is believed that a program of this nature would:

  a. Speed up deliveries of total MDAP materials.

  b. Take advantage of skilled workmen in such countries as Japan and West Germany.

  c. Aid in alleviating the critical dollar shortage presently experienced by some of our major allies, such as England and France.

• 5. Although the Joint Chiefs of Staff consider that the current priorities policy is sound, they have requested the Services to review their criteria for establishing minimum matériel needs to meet minimum U.S. requirements for national security, with a view to determining whether an increased flow of finished munitions to MDAP recipients can be effected.
• 6. The Joint Chiefs of Staff reaffirm the general principles for the allocation of finished munitions as set forth in paragraph 6 of their memorandum for you, dated 27 October 1950, and have taken action to explore the possibility of accelerating MDAP deliveries within the application of those principles.

For the Joint Chiefs of Staff:
Hoyt S. Vandenberg
Chief of Staff, United States Air Force.”

Determination of the “minimum U.S. requirements for national security,” which under the existing allocations policy holds the third position under the First Priority (directly behind (1) Korean, and (2) similar operational requirements), is the responsibility of the Joint Chiefs of Staff as affirmed in NSC 14/1⁴ as follows:

• “12. The military assistance program should be governed by the following considerations:
• a. The program should not jeopardize the fulfillment of the minimum materiel requirements of the United States Armed Forces, as determined by the Joint Chiefs of Staff.”

The responsibility for the administration of the foregoing allocations policy has been placed in the Joint Munitions Allocations Committee under the Joint Chiefs of Staff.

In view of the fact that the major programs of mutual assistance are for Army-procured items, an Army Allocations Committee has been operating for some time as a subcommittee of the Joint Munitions Allocations Committee. (Similar subcommittees are being set up for the Navy and Air Force.) This subcommittee meets monthly and, taking into account total assets and requirements, recommends allocations among United States forces and recipients of the Mutual Defense Assistance Program. Every item in short supply which appears in any Army mutual defense assistance program is considered by the Army subcommittee. The minutes and recommendations of this committee are submitted to the Joint Munitions Allocations Committee for approval. This allocations system is substantially the same as that used so successfully in World War II.

1. Not printed. (Truman Library, Truman Papers, PSF–Subject File)
2. Enclosures 4, 5, and 6 do not accompany the source text. Enclosure 3 is filed with the source text, but is not printed here.
3. Not printed.
3. Not printed.
4. For text of NSC 14/1, “The Position of the United States With Respect To Providing Military Assistance to Nations of the Non-Soviet World”, July 1, 1948 (conclusions approved by President Truman on July 10, 1948), see Foreign Relations, 1948, vol. i, Part 2, p. 585.