740.5/12–1751: Telegram
The United States Delegation on the Temporary Council Committee to the Secretary of State 1
priority
Repto 6249. UsDel Tcc 82. This cable reports TCC a. m. and p. m. meetings, 15 Dec.
1. Meeting opened with statement by Gen Eisenhower followed by questions and discussion. This covered in cable from Lincoln through Defense channels (not to all addresses).2
2. After Eisenhower departure, Chairman gave oral outline in some detail of summary of findings being worked on by EB. Stated summary of findings being incorporated with introduction to form new part 1 of report. (See US TCC tel 79, to Wash only.3) At close this statement of findings, Chairman indicated he was encouraged by [Page 382] prospects. Expressed hope that TCC wld go as far as possible in sharing this view. If TCC report not positive and only points up all difficulties, effect on govts wld be bad. Must express confident tone in report.
3. In afternoon session, meeting began detailed consideration draft report. Part 1 not yet circulated so started on part 2. No comments on section 4. On section 5, discussion centered on references to country efforts with which Belgium, Italy and Canada cld not agree. Belgium desired take out table 1 (financing table). Chairman stated had assumed wld be reservations re recommendations on individual country efforts, but pointed out some countries already implementing and hoped country annexes wld stay in report for govt consideration. Pella suggested TCC discuss general problems and assumptions, considering final handling country’s recommendations and annexes in a later meeting prior to the meeting just before Lisbon. Chairman stated wld be disastrous if TCC left this meeting without making report to govts and NATO. Report already overdue. Pella proposed TCC agree on substance of report and leave drafting to EB for future adoption.
3.4 Plowden recalled timetable established Rome, requiring MC comments before Lisbon. Suggested TCC agree general lines, with final drafting if necessary by EB, and report go to govts with necessary reservations. If necessary there cld be supplemental report as result TCC meeting pre-Lisbon. Chairman agreed. Kristensen agreed, but suggested expand foreword to include statement that individual TCC members not committed recommend to own govts all recommendations of report. Agreed.
4. Chairman commented must bear in mind have made many assumptions, including German participation. If take out assumptions, wld have no report. Assumption US will appropriate aid funds over next two years same amount as this year, one of biggest variables. On country budget recommendations, understand can not be precise now.
5. Hirschfield agreed govts must have report as soon as possible in order have time to discuss in govts before Lisbon. Will never be ready if discuss all national difficulties, but must be sure do not attempt prejudge govt decisions. Shld consider now on basis will finish in three or four days, and decide later in meeting exact formula for handling country commitment problem.
6. Brofoss strongly urged we go ahead with report for govts consideration. Pointed out must keep uppermost basis need for defense and not overemphasize budgetary aspects. Stated was personally prepared advocate report.
7. Portugal agreed shld complete report and transmit on basis amended foreword. TCC agreed proceed in this manner.
[Page 383]8. Pella raised question of inconsistency between tables 1 and 2 in section 5. Marjolin admitted apparent discrepancy, which superficially suggested financial surplus. However, four billion consisted of assumed German surplus. Table 1 assumed this surplus shared only by European occupying powers, a questionable assumption. Ger contribution of assumed sum doubtful. Also assumed all SCS recommendations carried out, with no waste resources and no use defense budgets except for essential requirement costed. Stated additional production certainly underestimated, consideration given only 45 of 75 items covered by DPB, no consideration additional production in UK or plant conversion from non-defense production. Under circumstances actual financial deficit will certainly be higher, but can only say between 6 and 11 billion.
9. McNarney commented that shld go ahead with plans for next two or three years even with financial and equipment gaps. Will provide effective fighting forces which is object of the exercise. To allow to be perturbed by possible residual gap and not go forward wld be grave mistake.
10. Agreed annex to part 2, “summary force build-up” classified Cosmic Top Secret and will be circulated as separate part report.
11.5 Gen Marras (Italy) raised number of technical questions which agreed should be raised in MC meeting. Also raised Ital peace treaty question proposing inclusion statement recommendations Ital forces cannot be carried out unless restrictions not existent. McNarney pointed out was statement on this matter in SCS report.
12. Wilgress stated Canada considers SCS conclusions as most valuable. Approach entirely correct, and first realistic approach. Expressed hope MC will bear this in mind, stating would be wrong to consider SCS apart from TCC report as whole.
13. No comments on sections 9 thru 11.
14. On section 12, Kristiensen agreed supply survey vital and urgently needed. Wanted know who would do it. Chairman stated first step would be for military to determine detailed requirements, then civilian side NATO survey production financial aspects.
15. Discussion part III. Kristiensen attacked conclusions of economic expansion section as being too optimistic, arguing impossible hold down civilian consumption and investment to indicated levels of 7 or 8 billion out of total production increase of 18 without severe inflation. Supported by Hirschfield, who suggested that precise figures be deleted. Monnet vigorously supported estimates, as being both feasible and essential precondition for achieving defense build-up planned in report. Hirschfield stated that preferable have courage [Page 384] tell peoples consumption cannot be raised, rather than accept optimistic figures and that, if necessary, consumption could be cut as alternative to cutting defense expenditures. Monnet stated that public opinion would be against program if in fact substantial increase in production permitting increase in consumption not realized.
16. Marjolin explained estimates of increase GNP based on country figures with some staff estimates. Requires effort, but is feasible. Pointed out that means standard of living wld show some increase, but incomes wld increase more, which is measure of problem which Finan Mins must face.
17. Chairman recalled that the Council at Ottawa had endorsed OEEC manifesto and remarked that he had assumed that TCC members wld not wish to do less. Expressed confidence TCC wld get behind concept that production must be increased. Meeting adjourned to resume 10 a. m., 16 Dec.
- Repeated to all NATO capitals and to Heidelberg for Handy.↩
- The question-and-answer period as well as the statement by General Eisenhower are reported in telegram Har 153 from Paris, December 17 (Military cable files, lot 52-246, TCC, 1951).↩
- This TCC message was transmitted to the Department of State in telegram Repto 6246 from Paris, December 15 (740.5/12–1551).↩
- In the source text this paragraph was also no. 3.↩
- Paragraphs 11 through 15, which were omitted from the original source text, were subsequently sent to the same recipients in telegram Repna unnumbered from Paris, December 17 (740.5/12–1651).↩