Foreign Relations of the United States, 1951, European Security and the German Question, Volume III, Part 1

CFM files, lot M–88, box 159, NATO papers.

Progress Report by the Chairman of the Temporary Council Committee (Harriman)¹

confidential

[Rome,] 26 November 1951.

Mr. President, Members of the Council.

The Council Resolution of September 19th creating the Temporary Committee of the Council called for a progress report at the next meeting, or this meeting, of the Council. The Committee has directed me, as its Chairman, to make to you an informal progress report. It is hoped that both of my colleagues of the Executive Bureau of the TCC could also be present today and that they would supplement my report with statements of the points that they believe should be emphasized. I regret that Monsieur Jean Monnet is not here. He has asked me to express his personal regrets and to explain that his absence is required in Paris in connection with a forward step towards the important Schuman Plan. I am glad to say, however, that Sir Edwin Plowden is here and he will make a statement immediately following this report. Now the Council gave our Temporary Committee the task, as your Chairman, the President has said, of analysing, and I quote “the issues involved in reconciling on the one hand the requirements of external security, in particular of fulfilling a militarily acceptable NATO plan for the defence of Western Europe, with, on the other hand, the realistic political economic capabilities of member countries.” It seemed to us, within those words were very deep meaning and that we would have to interpret to considerable extent exactly what your Council had in mind. The Committee has been at work since its first meeting in Paris on October 9th. It has brought together a large volume of information and has begun to identify the key problems involved in the analysis called for by the Council. Today’s progress report will indicate some of the major problems emerging from our studies. The Committee has not yet come to considered conclusions on these problems and therefore this progress report does not state conclusions of the Committee. Moreover, in view of the time available our final report itself will not be able to provide precise recommendations on all of the issues within the scope of our survey. It is our intention to identify, however, the issues with the greatest possible precision to make recommendations to resolve certain of them and in other cases to recommend means by which they may be resolved through permanent agencies of NATO. When the Committee first assembled in Paris on October 9th we agreed as a basic principle that our task was a collective one in which all members must participate. This principle has been consistently maintained. Now as was envisioned in the Article of Resolution the Committee elected its Chairman and two Vice-Chairmen and created an Executive Bureau. In addition to these three members of the Executive Bureau serving on a full-time basis the Bureau has been expanded to include the TCC member of the country concerned whenever we have reviewed the programmes and capabilities of a particular nation. Also when the programme and capabilities of one of the three full time members has been under review then a fourth country has served as a member of the Bureau. Our Staff has been organised on an international basis. Our Secretary, Mr. Sivert Nielsen of Norway, has been drawn from the Deputies Central Secretariat. Our economic analysis staff consists of professional personnel borrowed from the international staff of the Deputies, the FEB and from the OEEC. The Screening and Costing Staff is headed by a Directorate including General Leboutte of Belgium who is from General Eisenhower’s command, General Coudraux of France, Mr. Richard Powell of the United Kingdom and General McNarney of the United States who serves as Director-General. Each nation has staff representatives working as part of the Screening and Costing Staff. The Defence Production Staff is doing valuable work in the appraisal of production and supply problems. This of course is the permanent NATO Defence Production staff. The permanent NATO agencies have been most helpful to the TCC, in fact we could not have undertaken our work without their help. The Standing Group and the North Atlantic Ocean Regional Planning Group has assigned liaison officers, full-time SHAPE liaison officers and in addition many members of General Eisenhower’s staff are giving us essential assistance in our work. The twelve members of the TCC have been continuously informed between meetings through the distribution of papers and also through informal contacts with their representatives in Paris. We have kept the Council Deputies fully informed of all phases of our work and also of the NATO agencies on matters which relate to their activities. In accordance with established NATO policy, the TCC has assumed that there will be a German contribution to Western defence, to be made through the European defence community in addition to such support as may be made directly to forces in Germany of NATO countries who are not EDC members. The necessary information concerning German contribution has been provided through the Chairman of the Powers’ Conference on the European Defence Community, with the assistance of SHAPE, and through tripartite agencies of the Occupying Powers. The TCC adopted, during its first session, a plan of work which has been followed throughout by the Committee and the Executive Bureau. At its meeting of October 26 the Committee outlined certain general principles to serve as guide lines in carrying out this plan of work. Both the plan of work and the general principles were drawn with the objective of furthering accepted NATO principles. The guiding principles stem from the conviction that the central objective of the TCC must be the most rapid, practicable build-up of balanced collective combat forces. In order to achieve these objectives it was considered that the guide lines for our work should include, first, appraising the present status of the NATO defence position, both individually and collectively. This includes the developments immediately in prospect resulting from actions already under way. This was what we have called stock-taking and was subject of one of the TCC questionnaires to member countries. Second, defining a politically and economically feasible programme for a progressive build-up towards an acceptable security position for the North Atlantic Community. This should take into account possible economies and requires an outline of contribution in forces, production and finance among member countries and Germany. We should seek to determine a phased, balanced build-up from present levels which will make the most efficient use of the available resources and provide at all times for the most effective possible defence position. Third, reflecting throughout the basic NATO principle adopted at the London Council Meeting in May of 1950, of balanced collective forces in which contributions of members are mutually independent and each country’s contribution is most appropriate to its position. Four, outlining the concerted and cooperative actions in both the military and economic fields which are required to achieve NATO objectives. Now our analysis is being conducted on the basis that each country should make the maximum contribution consistent with the country’s political and economic capabilities, taking into account the present international tensions, but not going so far as to imply the need for general economic mobilisation.

Since the TCC is a temporary agency, which will cease to exist in early December, we have recognised that our report cannot cover all problems finally and with precision. Much of our work should be carried forward on a permanent basis hence, TCC will have to consider arrangements for carrying on these necessary activities through the strengthening of the NATO as an operational organisation.

We are then much impressed with the loyal and effective work done by the permanent NATO agency so far. The changing situation, however, appears to require organisational tightening and the TCC will be considering this problem.

Now on the basis of the countries’ submissions to TCC the executive bureau has had an informal conference of a full day with representatives of each neighbour member country. These conferences have not been hearings but rather have been periods of informal and free discussion. They have started from an analysis of the country’s defence effort and military policy and proceeded through considerations of infrastructure and production problems to economic and financial considerations. The Executive Bureau Reviews have been supplemented by staff level conversations on both the economic and military side. I should stress again that there has been a high degree of cooperation and mutuality of approach throughout.

While we have not yet begun the formulation of our conclusions and recommendations certain of the key problems and requirements are already apparent. One field involves the necessary measures to get military resources we now have into the most effective condition, and to press forward with the development of additional military strength. These measures include determination of:

(a) The military units that can be brought to a state of combat readiness in 1952; and I may say that process is to attempt to take the brackets out of the chart that General Gruenther showed you a few minutes ago; and those units whose manning, training and equipment in 1952 should be given precedence in order to become effective during the progressive build-up to an acceptable security situation;

(b) A realistic build-up by time theories: this includes the phasing of equipment supply and infrastructure in concert with the development of manpower and training;

(c) Specific actions to achieve these goals of combat readiness and phase build-up.

One of the most important policy considerations in achieving these objectives is a system of priorities and allocations of equipment related to specific military units. We have discussed this matter with each country. There appears to be general accord that recommendations from General Eisenhower and other NATO Commanders should be given priority consideration in the allocation of equipment as between units within each country in order to attain the maximum defensive strength with the limited resources available. For my own country, I can say, that we have accepted this concept and are reviewing the administration of our end item aid so as to relate priorities and allocations of these items to the developing military capabilities of Western Europe, principally on the basis of recommendations from NATO commanders.

Now speaking for myself, I hope that at the appropriate time, the Council will take definite action on this principle.

The TCC Screening and Costing Staff has already identified some of the general problems. It is apparent to them that NATO military planning ought now to be moving into the operational phase and this means further organisation development. The SCS has pointed out difficulties from an operational standpoint due to the failure to appoint the commander and establish the command in the North Atlantic and also due to the lack of NATO planning and organisation in the field of logistic support. They have stressed the necessity for more attention to producing currently balanced collective forces and also for some provision in NATO for periodic reviews and re-assessment of defence costs, particularly when there is a significant change in NATO plans or in other circumstances.

The studies and discussions have also brought out problems involving national military policies and these and their possible modifications if we are to attain our objectives of effective combat forces and an ultimate acceptable security situation.

These problems include improved training, length of service, particularly for specialists and officers, improved conditions to attract capable individuals to the regular service, improvements in organisation, and particularly, in combat and logistic support, and the allocation of reserves as between different parts of the country’s military programme. There is the problem of keeping related efforts in balance, for example, there may be a shortage in production of aeroplanes in the early stages, but there may be an even greater shortage in training arrangements for pilots and other personnel. Moreover, failure to provide airfields and other necessary installations on time would be a critical defect in planning and programming for NATO defence.

Another problem in the planning and carrying through of infrastructure and the lack of knowledge as the priority of the construction in relation to timing of requirements for the support of specific units on a realistic basis. These are all problems which we see as requiring consideration by the TCC as a whole both in their military, political and economic aspects. And again, I want to make it plain, that I am not speaking of any conclusions of the TCC but only some of the problems that are being placed before us by our Staff.

We recognise that the TCC will not be able to provide a full solution to the difficult problems of producing and supplying of equipment. We are, however, attempting to relate currently programme production to the particular urgent acquirements of a phase build-up. This work must be continued within the NATO and should include consideration of production for the necessary maintenance and replacement, a study of the detail of which is not yet available, and has never yet been analysed. The offshore procurement programme of my own country will be of considerable assistance in the activating capacity on this side of the Atlantic but it alone cannot provide a solution of the production problems of Europe. As indicated earlier, the TCC has taken into account the present international tensions without implying the need for general economic mobilisation. With this approach the analysis of the political economic capabilities is being carried on, both on a comparable basis as among the member countries and with respect to each country in terms of the realistic, political and economic problems, which the member countries face in expanding defence efforts. Economic analysis has been focused on current action to implement national military programmes presented by each country, the nature of the limiting factors, internal or external, ways and means of overcoming these limitations by national or co-operative action. The lines along which increased effort might most readily be realized and would best contribute to collective defence, the extent to which proposed programmes are comparable in degree of effort and represent the most useful type of contribution to NATO as a whole.

The countries’ submissions have revealed in all cases considerable increases, and in some cases large increases, in defence efforts of a pre-Korean level. The countries’ submissions have shown both the internal and external economic problems involved in the partial economic mobilisation necessitated by our common programme. On the internal side the problems vary in character and in degree among member countries. They include problems arising from internal inflationary pressures, difficulties in diverting physical resources to defence without undue curtailment of necessary civilian investment or reasonable consumption levels, and financial problems to cover expanded budgets without generating excessive inflationary pressures and with the negligible social distribution of the increased defence burdens.

On the external side the major problems are two-fold in character. First the deterioration of the dollar position in a number of countries due to the worsening terms of trade and to loss, in some cases, of export potential through the diversion to defence, coupled in all cases with continued high import requirements to sustain a high level of production.

The second serious dis-equilibria in the intra-European balance of payments which threaten the effective operation of the EPU and have an important bearing on defence capabilities. On the dollar side, we believe that the United States programme off-shore procurement should make a substantial contribution in providing for an exchange of necessary dollar imports, as well as stimulating the development of European munitions production. Other American military expenditures in Europe for infrastructure and for the direct support of our forces stationed on the Continent should also be of material assistance in relieving the short-term dollar problem. Measures to accelerate infrastructure and off-shore procurement will thus serve the double purpose of speeding the physical defence build-up and assisting the dollar payments balance problem.

The maintenance of a high and expanding general level of production is indispensable for the success of the NATO defence programme. The TCC’s economic analysis staff is directing an important part of its work towards the identification of major bottlenecks to overall production and we hope to be able to recommend national and cooperative measures to alleviate these limitations. They involve in part stimulation of production and improved distribution of critical raw materials in the free world as a whole. But one point of paramount importance is the grave shortage of coal in Europe: And coal is one of Europe’s greatest natural resources. Every means must be used to increase the output of European coal and to ensure its conservation if Europe is to avoid a waste of its dollar resources or a set-back in both general production and production for defence. Speaking for myself I urge that the highest priority attention be given this problem by each member country and on a co-operative basis among the member countries of NATO and the OEEC.

Another major problem is the effective use of manpower and the related issues of surplus manpower especially in Italy, because I deal with this only in a sentence it is not because the TCC does not understand that it is of major importance in developing the defensives situation which we must in Europe as a whole.

While we cannot now predict the precise scope and detail of our final report as regards political and economic capabilities we hope to point towards both national and co-operative measures in these fields to promote the successful achievement of an adequate defence position and the maintenance of a healthy political and economic foundation both for the period of build-up and for the longer term future. I am sure that our recommendations will reflect the NATO principle that only through economic as well as military cooperation can our common interests, or individual national interests, be effectively realized.

1. This document, circulated at the Council session as Council Document C8-D/8 of November 26, 1951, is a verbatim record of the interim progress report given by Harriman at the third meeting of the Eighth Session of the North Atlantic Council on November 26, 1951. For a record of the entire meeting, see telegram Secto 88 from Rome, November 27, p. 730. Harriman’s remarks were largely based on a preparatory paper, Rome D-24a of November 26, 1951 (CFM files, lot M-88, box 159, Rome).