700.5 MAP/5–151

Memorandum by Colonel Charles H. Bonesteel, III, Special Assistant to the Secretary of State, to the Deputy Under Secretary of State for Political Affairs (Matthews)

top secret

Subject: Possibility of Substantial Decreases in Planned MDAP End-Item Shipments to Foreign Countries, Including NATO Countries

1.
The Bureau of the Budget, after examining the National Defense Budget, has raised serious question as to whether there will be sufficient expansion in military production in the U.S. during the coming fiscal year to justify asking for MDAP funds to anything like the extent presently contemplated. They have further raised the question as to whether actual deliveries to foreign countries can be maintained or increased during FY 1952. They have built up some statistical figures and graphs, based on the Defense budget presentation, which tend to support their questions, at least on a first, superficial basis.
2.
We had a meeting on Saturday morning of persons immediately concerned with this problem, including people from Defense, State, EGA, Budget and Harriman’s office. We decided we needed first to get the facts as clear as possible. This is underway and we hope to have much better information in a day or so, at which time we hope to pull together the whole matter and present it for highest level consideration.1
3.
Among the studies being made is one on the implications abroad of a substantial curtailment of expected MDAP end-item deliveries. I have written a draft of such paper and attach it hereto. I would appreciate any comments you might wish to make on it as soon as feasible.
4.
e implications of the Budget questions, if they be true, are great. They might even imply considerable revision in a great many NSC documents. They would certainly imply a need for a “Munitions assignment” arrangement to handle American military production, at least during that period of eighteen months or so before the flow of finished items is sufficient to take care of all contemplated needs.
5.
When the full story is pulled together we may wish to present it to the Secretary, and such persons as he designates. It might also be necessary to arrange a meeting between the Secretary, General Marshall2 and the JCS, if the situation is as bad as the Budget analysis implies. We are hopeful that it will not be so bad but cannot yet tell.

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[Annex]

Draft Paper by Colonel Charles H. Bonesteel, III, Special Assistant to the Secretary of State 3

top secret

Doc. P–3(d)

Executive Group

Foreign Aid Presentation

the implications of substantially delayed deliveries of mdap end-items

(Written in response to paragraph 3(d), Exec. Group Doc. P–3)4

The Problem

1. A superficial analysis by the Bureau of the Budget of U.S. military production schedules, derived principally from the National Defense Budget for FY ’52, indicates that very small expenditures for MDAP end-item programs can be made in FY ’52. In the history of MDAP, “expenditures” have closely paralleled actual deliveries to recipient countries. If this continues to be true, it is required to analyze the political and other implications of a sharp curtailment of MDAP end-item deliveries during FY ’52 to the NAT countries and other foreign countries expecting U.S. military assistance.

Discussion

2. End-item deliveries to non-NATO countries have been programmed on a basis approximating that of operational requirements (except for Greece, Turkey and Thailand). Drastic curtailment of the shipment of these operational requirements could dangerously affect the containment of Communist aggression in Asia and the Middle East. The loss at this time of Indonesia or Formosa—or the expansion of successful civil war in the Philippines—would jeopardize the retention of all of sub-Asia within the Western World. The loss, progressive or immediate, of sub-Asia would deprive the Western [Page 309]World of strategic materials and trade essential to the preservation of the security and economic viability of the West.

3. Substantial reductions in expected MDAP end-item deliveries to NATO countries in the coming Fiscal Year would have a less immediate, but potentially worse, effect on the national interest and security of the United States. Some of the more important resultants to such a situation are set forth hereafter.

4. The implications of a drastic reduction in expected MDAP end-item deliveries to NATO countries in the near future must be considered against the background of United States policies regarding the North Atlantic Treaty as evidenced by our actions since the Treaty was first considered. The United States was a prime mover in the creation of the concept of a security treaty among members of the North Atlantic community. The United States, evidencing bold leadership, developed the treaty and obtained its ratification by the governments concerned, very largely on the basis that the acceptance of “collective defense” was the only answer by the sovereign democracies of North America and Europe to the threat of outright or piecemeal aggression by the Soviets. Because of the economic weakness of Europe at the time of the ratifications of the Treaty, it was implicit in its concept that the United States would help provide a substantial portion of the arms required to give the treaty realistic validity. This is made almost explicit in Article III of the Treaty. The ratifications of the Treaty by the Parliaments of its European members were courageous declarations on their part of their considered decisions to oppose Communist force by the collective strength of the North Atlantic Treaty countries, rather than to depend on the wishful thinking of neutrality. These decisions were not easy to make considering the almost total lack of strength at the time in Western Europe. It was recognized, however, that the European countries, in themselves, did not have the immediate capability to produce the physical armament necessary to create the degree of strength required for the successful deterring of aggression or for opposing Soviet force with the force of the North Atlantic community.

5. Economic Implications. The United States has, since ratification of the Treaty, been forcefully insisting on increases in the defense efforts of our North Atlantic Treaty partners. The present financial measures of defense effort on the part of many of the NAT countries remain, in terms of percentage of national income, considerably below that of the United States. There is no question but what greater defense budgets could be safely supported by most of the NAT countries if the political situation in the countries was such as to obtain the support of majorities in Parliaments to vote such budgets. On the other hand, the present financial efforts, when related to the margins of safety essential to political stability and to the economic viability [Page 310]needed to support defense efforts, are not too far out of line. If it becomes generally believed that the United States is insisting on an excessive proportional effort in Europe which would have drastic effects on the local economies—as is being suggested by the Bevan5 “insurrectionists” in England—and if, at the same time, U.S. arrangements implied in past NATO planning to provide substantial amounts of military equipment did not seem to be met, there could be widespread dissatisfaction among segments of the European public. This dissatisfaction might be dangerously increased by Communist and other accusations that the United States was selfishly forcing disproportionate burdens of defense on economically weaker partners without regard to their essential economic viability, at the same time that it was going back on the “bait” it used to snare them into the Treaty. Despite the speciousness of such propaganda, there is no doubt but what it could appreciably affect the “will to fight” in certain countries. As the results of decreased availabilities of raw materials and the inflationary aspects of defense production in Europe became more pronounced, these economic implications could become more and more serious.

6. Manpower Implications. The United States has been a leader in the NATO in trying to lengthen terms of conscription and training by other NAT countries. The argument has been energetically advanced by the U.S., multilaterally and bilaterally, that the modern soldier needs at least two years’ training before he is adequately fitted to fight as a member of a large unit. The argument frequently advanced by European countries to the effect that it was not politically wise in Europe at this time to draft men if they could not be given the equipment with which to train, has been brushed aside repeatedly by saying that sufficient equipment, at least on training scales, could be provided in the near future. It is unfortunately true, however, that European countries, being so near the Iron Curtain, resist the suggestion that they scatter available equipment among training establishments instead of keeping it in combat ready units. This argument cannot be completely ignored when one considers the shortness of time which would be available for mobilization in case the Russians started to march. Unless steady, increasing amounts of basic military equipment become available in Europe, to keep abreast of the increased manpower called to the colors, serious political and psychological strains may result. Certainly, the forward momentum of defense efforts in Europe would receive a set-back and the public reaction in Europe might be dangerous to the continuance of the North Atlantic Treaty as a dynamic mechanism for security.

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7. Political Implications. It is proper to assume that there is an increasing “will to resist” building up in Europe. This has not come about spontaneously, but has been slowly built through the combination of many political, military and economic factors. It has been helped most by the knowledge that, largely by U.S. end-item aid, Europe has gradually been getting the arms with which to fight. It is very hard to develop a will to fight Russian tanks with bare hands. The somewhat weak and vacillating governments in many of the European countries have lacked persuasive arguments on which to rest energetic and positive defense programs before their Parliaments and people. There has, however, been slowly developed an increasing willingness on the part of Cabinets to risk political defeat before Parliaments in the effort to get greater defense efforts—a willingness based on an increasing popular appeal for the development of collective strength in which United States end-item assistance plays an essential part. Irresponsible opposition parties, however, could seize on a substantial reduction in expected U.S. assistance to upset existing governments for petty, internal party-politics. The results of a series of governmental defeats on the issue of increased defense efforts would be dangerous to the national interests of the U.S.

8. Morale Implications. Communist propaganda has been concentrating for more than a year on developing neutralism in Europe. The Soviet “Peace Offensive” has, with some success, complemented this objective. Despite these Soviet propaganda policies, however, there has been a growth in morale and determination in Europe over the last several years. This has come about, in large part, because of a growing feeling that American arms deliveries were substantially increasing the ability of Europe to defend itself with modern and adequate weapons. If there suddenly developed a hiatus in arms deliveries from the United States, communists and confused nationalists might create such doubts as to the reality of Europe’s growing ability to defend itself that a public reaction toward neutrality could result. There is a dangerous, vicious circle inherent in such a possible development. Any pronounced increase in such sentiments in Europe would produce increasing doubt in American opinion, including Congress, as to the “guts” of the Europeans, leading to the possibility of decreased American support to the strengthening of NATO—which in turn would increase the possibilities of neutralism.

Conclusions

9. Unless we are to abandon a vast investment, made in the national interest, toward filling the vacuum of power in Western Europe, the above implications must be given full consideration. It seems clear that arrangements should be made within the U.S. Government to sustain, until full U.S. production has been reached, a flow of arms, during the Fiscal Year 1952, from the United States to the European [Page 312]members of the North Atlantic Treaty carefully balanced with the other vital aspects of our national defense. Such allocating arrangements must, of course, also provide for appropriate allocations to the danger spots in Asia and the Middle East.

  1. Notes on the meeting of Saturday, April 28, were contained in Executive Group document P–3, not printed (FRC Acc. No. 62A613: ISA/MDAP Files, Box 124). No documentation on subsequent higher level consideration of this subject has been found in Department of State files.
  2. George C. Marshall, Secretary of Defense.
  3. Copies of this memorandum were transmitted to the following individuals: Lincoln Gordon, Assistant to W. Averell Harriman, Special Assistant to the President; Colonel George A. Lincoln, Assistant to the Secretary of Defense and Defense representative on the Executive Committee on Foreign Aid; C. Tyler Wood, representative of the Economic Cooperation Administration on the Executive Committee; William F. Schaub, Deputy Chief of the Division of Estimates, Bureau of the Budget; Mr. Thomsen of the Bureau of the Budget; Lyle S. Garlock, Assistant Comptroller for Budget, Department of Defense; Robert O’Hara, Chief, Foreign Program Branch, Budget Division, Department of Defense; Major General Stanley L. Scott, Director, Office of Military Assistance, Department of Defense; Charles A. Coolidge, Acting Deputy Director, International Security Affairs; William H. Bray, Jr., Office of International Security Affairs; George W. Perkins, Assistant Secretary of State for European Affairs; and Paul H. Nitze, Director of the Policy Planning Staff.
  4. Not printed.
  5. Aneurin Bevan, Minister for Labour and National Service, resigned from the British Cabinet in April to protest defense policies.