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)
[Washington,] May 1, 1951.
Subject: Possibility of Substantial Decreases in Planned MDAP End-Item Shipments to Foreign Countries, Including NATO Countries
- 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.
- 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
- 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.
- 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.
- 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.
- 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.↩
- George C. Marshall, Secretary of Defense.↩
- 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.↩
- Not printed.↩
- Aneurin Bevan, Minister for Labour and National Service, resigned from the British Cabinet in April to protest defense policies.↩