Foreign Relations of the United States, 1951, Europe: Political and Economic Developments, Volume IV, Part 1

Secretary’s Memoranda, lot 53D444, Memoranda of conversation

No. 185

Memorandum of Conversation, by the Acting Secretary of State¹

confidential

Washington, October 26, 1951.

Subject: US–French aid discussions

Participants:	Ambassador Bonnet
	Mr. Schweitzer, Financial Counselor
	Mr. Francfort, Counselor of Embassy
	The Acting Secretary
	Mr. Stinebower, OFD
	Mr. Beigel, WE

Ambassador Bonnet explained that his government is most concerned with programming the French military effort and the budget for 1952. He recalled that Finance Minister Mayer, during his visit here last month,² had proposed that technical conversations be held as soon as possible regarding US aid in FY 1952. It was understood that such talks would start during the second half of October.

The Ambassador referred to the letter from M. Mayer to Mr. Harriman (text received as Toeca 1335, October 25³), and emphasized that the French Government may have to reconsider its import programming for the last quarter of 1951 unless there is some indication of how it will cover its 1951/52 dollar deficit. He said that the French Government wishes to have some idea not only of the magnitude of economic aid that will be available, which will cover only a small part of the French deficit, but also some idea of the magnitude of likely dollar receipts that will be available in the form of off-shore procurement and other US military expenditures in France.

I indicated that we are equally concerned about the French situation, and that a group representing all the interested agencies is giving urgent attention to it. I explained that Mr. Harriman has new responsibilities for the coordination of all foreign assistance. I said that any decisions with regard to the French problem must necessarily reflect his views, and we intend to discuss the matter with Mr. Harriman as soon as he returns.⁴

I said that we have also been very concerned over the delay in the aid appropriation, as well as over the reduced amount. In response to a question from the ambassador, I said that any decision to transfer end-item funds to economic aid must also reflect the views of Mr. Harriman. I said that we are making real progress with regard to the off-shore procurement program. In conclusion, I emphasized that we will work as rapidly as possible to prepare for the discussions which the French Government has requested.

James E. Webb

1. On October 25, Acheson departed by ship for Paris (Sixth Session of the U.N. General Assembly) and Rome (Eighth Session of the North Atlantic Council).
2. For a memorandum of Mayer’s conversation with Lovett on September 13, see Document 182.
3. Supra.
4. Harriman was in Paris at this time attending meetings of the Temporary Council Committee (TCC) of the North Atlantic Treaty Organization.