740.5/10–2951
Memorandum by Ridgway B. Knight of the Office of European Regional Affairs to the Assistat Secretary of State for European Affairs (Perkins)1
Subject: Conversation with Mr. Harriman on October 28, and Various Subjects to be Taken up with Mr. Harriman
I spent three hours with Mr. Harriman yesterday, During most of the time Messrs. Ohly, Tannenwald and Schelling were there and we were joined by Dick Bissell about a half hour before I left.
I. Mr. Harriman seems to have three major purposes during his short stay in Washington:
A. Deliveries to NATO Countries. Mr. Harriman is more concerned with short range problems than with deliveries for the total period. [Page 338] He is primarily interested in making sure that at all times during the build-up period we will have a cohesive adequately equipped battle force. In particular, he mentioned the fact that the real danger at this time comes not from the vast strength in ground forces of the USSR as a whole, but from the twenty-two divisions in Eastern Germany and which could strike at any time. Consequently, his main objective is to see that General Eisenhower by next summer has an adequate force to prevent a lightning attack with immediate catastrophic results. He is ready to urge that we grant the same priority for deliveries to troops on the flanks of our forces as to our forces themselves. General Eisenhower is the person to indicate which forces of what countries are to receive this priority. Mr. Harriman is very intent on this subject and can be expected to push this point with maximum energy with Mr. Lovett. It is recognized that there will be a practical problem, even though Mr. Lovett is convinced, in view of his forthcoming absence and possibility that conversion of Mr. Lovett will not mean conversion of the JCS. Just before leaving Paris Mr. Harriman dispatched a strong telegram to Mr. Lovett on this deliveries question which was concurred in by General McNarney, and which stated that General Olmsted had “helped to prepare it”.
B. Level of U.S. Aid for 1952. Mr. Harriman stated that this was an essential part of TCC work—necessity to firm up without further delay the level of aid which the Executive Branch would be ready to request from Congress. He was fully informed about Mr. Snyder’s position and of the necessity to overcome objections in that quarter.
C. French Problem.2 At last the French financial-military problem should receive the required simple, over-all consideration which has been called for for some time. The figures which for months have been forecast will materialize: the cost of carrying out the military program initiated by Moch and in line with France’s contribution under D.C. 28 will, according to Pleven, be in the neighborhood of 1,400 billion francs. According to same source, the French Government can’t possibly include in its budget more than 1000 billion francs. The problem is therefore acute. I urged that every possible means be considered in order to make it possible for the French to carry through with their program which is so essential to the MTDP as a whole, particularly from the point of view of ground forces, and that we not, in fact, prejudge the entire question by taking a decision pertaining to only one aspect of the French problem, but which would make it a certainty that the French would have to decrease their military program. In other words, the question before the house is how important is fulfillment of the French military program. Mr. Bissell registered this point. Mr. Harriman was not unsympathetic but obviously [Page 339] has some doubts which are probably fully justified that France could at best implement the program. He was particularly interested in having a good summary of information which we have on the cost of Indochina during French Fiscal 1952 in view of contradictions between information received from Paris and Saigon.
II. TCC Submission
A. TCC Questionnaire as a whole. Mr. Harriman was warned of the strong opposition on the part of the Council of Economic Advisers, Treasury and Defense to the inclusion in our submission to the TCC of the impact of a defense effort on the hypothesis of 20% of present planned maximum levels. Mr. Harriman felt that we should do so primarily so as to not appear as assuming that we belonged in a separate category unto ourselves. He did not think though that we had to go into details in this submission, that it could be short, qualitative in character and should be “demolished” right away by the use of such arguments as: (a) political impossibilities in an election year, (b) the effect on raw material availabilities to Europe of a U.S. 20% increase across the board (an argument which he believes would find the Europeans most receptive), and the inflationary effect on the U.S. He stated that all the Europeans whom he had seen were petrified of U.S. inflation. Concerning the draft summary as it now stands, he believes it too rambling and should be less defensive in character, playing up the factors listed above and availing itself more of such things as present extremely high U.S. tax rates.
B. U.S. Aid. Must be covered more adequately. In this connection, the question of aid for Germany’s military contribution should also be thought out some more.
C. Off-Shore Procurement. The submission now mentions the “O’Hara” program of $5 hundred million and refers to the possibility that our 1952 program might even be as high as $750 million. He did not seem too disturbed by the absence of a similar forecast for 1953 and 1954. (At an interagency meeting last Friday, October 26, Frank Nash had indicated that Defense would be willing to think in terms of “twice the O’Hara program for 1953, and twice again for 1954.” This view is not reflected in the submission.)
D. Infrastructure. There is no forecast in our submission of U.S. disbursements in Europe for infrastructure. This point was made to Mr. Harriman but it was not possible to determine whether he considered this important or not.
III. Other Questions
1. Examination of U.S. Submission. November 10 is the accepted date by all agencies and was agreed at the October 26 meeting. Dick Bissell will be there for ECA. Mr. Pace and Frank Nash will represent Defense. Mr. Livermore at CEA said that we can virtually count [Page 340] on Mr. Fleishman being there. The following questions remain to be decided: (a) Do we want Mr. Wilson instead of Mr. Fleishman? (b) Do we want to try to get Mr. Keyserling? (c) Would it be advisable to have the Bureau of the Budget represented by either Mr. Lawton or Elmer Staats?
2. Defense’s Idea that Entire TCC Operation Should be Moved to Rome at Time of NAC. It was not possible to discuss this subject with Mr. Harriman yesterday. I urge that you seek to convince Mr. Harriman (this may not be necessary!) that such a move would bring unneeded bodies to Rome. Obviously General McNarney and Mr. Harriman’s key collaborators in this work should be there as advisers.
3. Date of Rome Meeting. In confirming Line Gordon’s telephonic report it was made apparent by a passing reference on the part of Mr. Harriman that he believed November 24 may be premature.
4. Defense’s Attitude in Regard to DPB. I made point that, notwithstanding Defense’s lip service to DPB guidance, it was quite apparent that Defense viewed with genuine fear any NATO interference in its own planning. I do not think you need make this particular point with Mr. Harriman. However, I think it might be advisable to make the general point (which was the subject of my first remark yesterday) that Defense’s entire attitude vis-à-vis the importance of NATO requires modification. I sought to point out that this low priority given to the importance of our multilateral defense effort was at the root of all specific difficulties with Defense. This, of course, ties in with our project of last summer which we never completed, i.e., strengthening NATO through achieving greater recognition for it in the U.S. Government and going to the President if necessary on this subject.