751.5–MAP/8–851
No. 177
Memorandum by the Assistant Secretary of State
for European Affairs (Perkins) to the Counselor of the
Department (Bohlen)1
secret
[Washington,] August 8,
1951.
Subject: Economic assistance to France in fiscal
1952.
With reference to my memorandum of July 24,2 copies of which were
sent to Messrs. Cabot,
Thorp, Porter, Gordon, Willis and General
Scott, there is attached a draft
telegram to Ambassadors Bruce, Katz, Spofford and Mr. Parkman
regarding economic assistance to France in fiscal 1952 which I
would like to send out before the end of this week. I would
appreciate receiving your comments in the near future.
[Enclosure]
Draft Telegram by the Assistant Secretary
of State for European Affairs (Perkins) to
the Embassy in France
3
secret
[Washington,
August
8, 1951.]
Toisa. Presently considering draft instruction to you to
inform Fr re econ aid in fiscal 51/52 along fol lines, after
new Fr cabinet formed. Your comments desired.
[Page 412]
- 1.
- US firmly hopes in coming year there can be clearer
understanding and mutual agreement re most urgent
requirements placed upon Fr Govt and Fr economy in
mutual defense effort.
- 2.
- US welcomes statement contained Fr note June 26 [29]4 drafted
by Petsche for
Harriman and
expressed by Clermont–Tonnere
before FEB July 6, that
Fr expect future dol aid in terms bal payments deficit
and not in relation domestic budget requirements. This
position is in line views contained US note July 7 paras
2–4.5 Although para
IV(4) a June 1 MiNatDef
memo6
given Gen Bradley maintains that US aid shld not
be bound to Fr bal payments deficit with US, we conclude
from subsequent Fr statements and from Fr note June 26
that Fr presently understand such position to be
unrealistic. We are anxious that this be understood
within Fr Govt since MiNatDef even now appears take budget
approach to aid for added jeep production (Embtel 790 Aug 37).
- 3.
- As matter fact US will have fon econ aid funds
available to cover only bal payments needs of Fr and
other MSP participants.
As Fr were informed by ECA, illustrative figures in Congressional
presentation show 290 million dols econ aid to Fr during
51/52 in addition to estimated Fr earnings 220 million
dols from Def Dept
appropriations (for pipeline, LOC, troop pay, infra-structure, etc.). We
note from para 9 MinFin May memo given Bradley that Fr
realize possibility latter earnings may reach total 100
billion francs (290 million dols) in coming year. US
hopes shortly be able inform Fr with greater precision
re amounts and rhythm such Def Dept expenditures in Fr.
- 4.
- For import planning purposes, Fr shld count on
receiving from US Govt sources during 51/52 some 400–500
million dols, ultimate amts depending upon (a) actual
level Def Dept
expenditures in Fr monetary area. (b) level
Congressional appropriation for MSP, (c) development by Fr of realistic
import program for entire fiscal 51/52 period, (d)
relative dol needs of Fr and other participating
countries. Moreover, above estimates exclude possible
further dol earnings from US offshore procurement
military end-items in Fr.
- 5.
- Re import program planning, developing world shortages
and worsening terms of trade for Fr require that US
become increasingly concerned with utilization Fr
resources and relation Fr imports to production,
consumption and exports. US therefore desires begin
immediate review Fr import plans for entire period 51/52
on basis production-imports-exports-consumption
analysis.
- 6.
- US desires impress on Fr that necessity reach 1954
military goals requires mobilization and conversion in
short-run, that in this regard US will be giving fullest
attention Fr tooling arid materials problems, that US
desires full conversations re Fr policy plans and
intentions re industrial mobilization and conversion,
and that this is an immediate problem from which Fr and
US cannot afford be deflected by longer-range
productivity drive.
- 7.
- US notes emphasis in June 1 MiNatDef memo that development of schedules
for delivery military goods from Fr production lines and
from abroad constitutes number one problem of Fr
rearmament. US hopes undertake continuous and more
precise review of production plans and end-item delivery
schedules, and hopes do this in Paris, in CD and DPB, in SG, and in any other
effective forum. To begin with US desires obtain clearer
and more complete picture than it now has of status of
present and contemplated Fr production lines.
To summarize, FYI: We believe
US cannot satisfy any Fr anticipation of aid to cover Fr
budget requirements, and that sooner we have understanding
with Fr on this score the better will be our relations
during 51/52. Similarly, we do not propose to bargain with
small amount econ aid available under MSP Act for Fr performance
involving many times that amt in Fr expenditure. We propose
that in future we deal in context that Fr will implement its
obligations in good faith and as full partner in NATO effort. On this premise
believe frank discussion with Fr will be considerably more
availing than carrot and stick approach, particularly since
latter approach has had limited impact during past two
years.
