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

740.5/12–1751

Briefing Memorandum Prepared for the Secretary of State¹

top secret

[Washington, December 17, 1951.]

Summary of the Temporary Council Committee Report

The Temporary Council Committee was created to reconcile NATO military requirements with national politico-economic capabilities. The Committee worked in two directions: screening down requirements and building up country contributions where possible. The Executive Bureau of TCC submitted a draft report on December 9 for consideration by TCC beginning December 14. A U.S. position is required on various recommendations, including expression by JCS on revised force requirements. Early U.S. action is essential to tie in recommendations with 1953 aid program estimates.

Force Requirements

Screening and Costing Staff of TCC has developed revised program of forces build-up, based on country submissions, reviews of country efforts, MC 26/1, and consultation with SHAPE. Proposes force standards and targets for end of 1952, 1953 and 1954. Recommends that 1952 targets be accepted as firm for planning purposes—those for 1953 and 1954 be regarded as provisional.

One major aim of SCS recommendations (in accordance with Eisenhower desire for maximum effective force at earliest possible date) is to provide force by end of 1952 which, while inadequate, will be combat-worthy and will have considerable deterrent effect. To this end, proposes increase in effective divisions available M plus 30 from 34 at present to 54 and ⅔ at end 1952. Increase in aircraft from 2907 to 4230 during same period. Believes these goals can be met if other recommendations in report are adopted.

SCS schedule contemplates continued build-up to 69⅓ divisions, 7005 aircraft by end 1953 and to 86⅔ divisions, and 9965 aircraft by end 1954. These final 1954 figures compare with MC 26–1 recommendations of 98 divisions and 9285 aircraft. Naval build-up (virtually non-existent for 1952) would increase from present M-Day strength of 361 major and 359 small vessels to 402 large and 447 small by end 1954. This compares with MC 26/1 requirements of 642 large and 752 small vessels by 1954. Thus the SCS exercise resulted in general reduction of requirements.

Divisions visualized by SCS will be equipped and maintained on “austerity” basis but with assumption of full combat-readiness at times indicated. Total four-year European costs of build-up estimated at 73.9 billion dollars, as compared 92.7 billion costs estimated prior SCS screening.

Expenditures and Financial Shortfall

The report recommends that European (including Germany) defense expenditures through the FY’s 52–54 be raised $2.8 billions, along with a Canadian increase of $.7 billions. The total proposed increase would provide $41.8 billions of NATO financing, exclusive of U.S., to meet the revised European requirements costed at $66.5 billions. This three-year program of military expenditure would require $7 billions to meet dollar balance of payments needs, and is considered the maximum feasible political economic effort without semi-or full emergency mobilization.

European expenditures of $41.8 billions plus U.S. end item assistance of $18.6 leaves a financial shortfall of $6.1 to be met. However, programmed European production of $7.6 plus U.S. end-items leaves an equipment gap of $11.6. The report indicates that the European over-financing of costs other than major equipment could go in part to support additional production, but intimates that the major portion would be needed to finance qualitative improvement in troop programs. A residual equipment gap of around $10 billion can be expected which can only be met by increased U.S. military assistance. This gap would be negligible in FY ’52, but around $5 billion each in FY ’53 and FY ’54.

Production and Supply

The Defense Production Staff estimates that the annual maintenance and replacement cost of major equipment for the five years after 1954 may well exceed $4 billions. Since programmed European production of major items will only reach $3.4 billion in FY 1954 there is urgent need to immediately expand the European productions base. The report recommends extensive use of U.S. off-shore procurement. It also underlines the need for NATO logistical plans which will ensure the allocation of produced equipment to meet on a priority basis the most urgent troop needs. And further, the fulfillment of the equipment plan would require a favorable priority for NATO in distribution of U.S. production.

Economic Conditions

The Executive Bureau report assumes that the European NATO countries have the economic capabilities to meet the revised military targets on schedule. However, this assumption is predicated upon the following conditions:

1. An over-all increase of GNP of about 14%, providing a basis for a 5.7 billion increase in defense expenditures over 4 year period, and leaving a balance allowing for a 7–8% increase in consumption over same period. (The Executive Bureau considers this possible on basis of present facts.)

2. The provisions of an adequate supply of raw materials and sources of energy. Report urges special attention to critical coal problem, and also emphasizes to lesser degree the current steel and electricity shortages.

3. Solution of the manpower problem. Report recommends special attention to migration of labor, especially from Italy.

4. Equitable allocation of basic raw materials at stable prices.

5. Internal measures to halt inflation.

6. Achievement of dollar balance of payments. Report concludes continuation present level of economic aid, plus expanded off-shore procurement, plus U.S. expenditures in Europe for infra structure, bases and military supplies can solve this problem.

7. Continued effective functioning of EPU.

The Report notes that, even after defense build-up, continuing cost of maintenance will be heavy burden for Europeans, and urges decisions now which will enable them to meet burden at later date. Believes expansion of off-shore procurement will assist in building long-term armament industry capable of sustaining forces in future, and regards general GNP expansion as essential condition of future maintenance.

Military Conditions

TCC recommends two types of measures as essential military conditions for fulfillment revised program. First aims at achieving maximum immediate standards of readiness through such means as increasing personnel on active duty, improving training of specialists, improvement of training techniques, allocation of equipment in terms of potential combat-readiness, etc. Second aims at maximum economy in use of resources, with countries using SCS screening criteria as guidance, setting military priorities in terms recommendations NATO commanders, keeping forces in balance, and avoiding expenditures not essential to NATO plans.

NATO Organization

TCC draft report indicates improvement of NATO operation is essential to fulfillment of its other recommendations. Believes inadequacies in organization have delayed government decisions both on policies and technical matters and have been important factor in limiting progress toward defense goals. Also points out that shift in emphasis toward “most rapid practical build-up of effective combat forces” makes it necessary that NATO organization structure be modified to provide more emphasis on operations rather than planning.

Report makes two specific recommendations re organization: (1) appointment of a Director-General of NATO to head an international planning and coordinating staff and execute decisions reached by governments through Council and Council Deputies; (2) The institution of an annual re-analysis of defense plans and capabilities along lines of TCC procedure, in order to provide periodic readjustments. In addition, report suggests that many other readjustments may be necessary in NATO structure, including improved machinery for prompt reconciliation of government differences, which might involve improvement of Council Deputies set-up as well as DPB and FEB. At same time, report recognizes sudden, wholesale reorganization would interrupt progress and recommends appropriate time-phasing.

1. As noted on the cover sheet which was attached to the source text, this memorandum was prepared by the staff of the Office of European (Regional Affairs. During the Secretary of State’s daily meeting of December 17, he mentioned that he did not fully understand the summary of the “Harriman report” (presumably the source text). During the regular staff meeting on the following day, the Secretary again expressed his desire for some clarification on the TCC report and plans were made for a briefing to be given by Martin that afternoon. No record of this briefing has been found in the Department of State files.