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

No. 196

751.5–MAP/11–2951: Telegram

The Director of the Planning Staff of the Bureau of European Affairs (Labouisse) to the Economic Cooperation Administrator (Foster)¹

secret   priority

Paris, November 29, 1951—4 p.m.

Toeca 1543. Ref: (a) Paris Toeca 1503 (Repto 1801) Nov 22.² (b) Washington–Paris telecon Nov 26.³ (c) Paris Toeca 1526 (Repto 1828) Nov 27. (d) Paris Ecato 1612 (Torep 8954) Nov 28.⁴ Toisa.

1. After full discussion with Harriman, Gordon, Tannenwald and Tasca, it was agreed that, in order to press forward with discussions here—particularly those involving military program and budget—it was important for us to submit tentative estimates to French.

2. Harriman of opinion that more preferable politically to pick up check on OSP for Indochina than to increase economic aid by same amount. Harriman felt, however, that we should not pick up check for OSP for France. (As indicated para 6, Toeca 1503, Item 2(c) of that tel could have meant picking up latter check or not, as we should decide.)

3. Harriman also of opinion that, in light of his understanding with Lovett and others here in Paris, it was preferable to show one item of $300 million as estimate of US expenditures in connection with air fields, infrastructure, LOC, etc. (As stated in refs (a) and (b) and as indicated in Toeca 1523,⁵ I have serious doubts that such an amount can in fact be spent before end fiscal year. However, Harriman believes this point should be developed further, based on analyses by Defense Dept and French.)

4. In view of above, we handed to French yesterday afternoon an aide-mémoire as set forth in immediately following telegram (Toeca 1544⁵). I regret very much that circumstances were such as to make this action necessary before final clearance of views with Washington.

5. Guindey expressed great appreciation on receipt of estimates, and clearly understood tentative nature and that we may wish to change them as time goes on. It was agreed that every precaution should be taken against publicity. Guindey expressed doubts re likelihood of realizing $300 millions expenditure estimated in Item 2(c) of aide-mémoire. He also said may be technical difficulties in working out procedures to handle financing of Items 2(a) and 2(b) of aide-mémoire, but on first impression he did not seem to think these difficulties insurmountable. French will consider further and will discuss in more detail in day or so.

6. Guindey asked about relationship between possible OSP for French or other NATO forces and estimated expenditures under Item 2(c) of aide-mémoire. We informed him intent last para aide-mémoire was to make sure that if dollar payments are made for OSP this fiscal year we might wish to consider those payments as constituting part of estimated dollar receipts under Item 2(c). We pointed out that if French did necessary things to expedite work on air fields and other facilities and to expedite OSP orders, the $300 million in Item 2(c) would not serve as a ceiling and slow up our willingness to press forward in these fields.

7. Working on basis our estimates, Guindey stated expected to work out new import program by end of week. Will telegraph it when received.

8. With respect military program and budget, Guindey said French should now be able prepare realistic program for discussion in TCC framework. I said our estimates were that the defense program should be in the neighborhood of 1,250 billion francs, having in mind indicated dollar availabilities and our very substantial end-item program, as well as possible savings by French elsewhere in budget. Guindey expressed doubts as to the amount, but indicated could be somewhat larger than 1,070 billion francs estimated. He indicated this naturally Ministerial decision.

9. We then discussed our need to know what French plans were for internal fiscal and economic measures to help stabilize situation. Guindey said they could give us statement concerning taxes, credit controls, anti-trust, and possibly trade liberalization. Will discuss further at later date.

Labouisse

1. Repeated to Paris.
2. Document 193.
3. Not found in Department of State files.
4. Telegram Toeca 1526, November 27, from Labouisse in Paris reported that negotiations with French officials on the nature and timing of dollar availabilities were hampered by American failure to make even a tentative commitment. Telegram Ecato 1612 from Bissell to Labouisse later that same day agreed that such a tentative commitment to dollar availabilities for France must be made for the purposes of negotiation at the soonest possible moment and that such a commitment from Washington would be forthcoming “within next day or two.” (ECA message files, FRC 53A278, Paris)
5. Not printed.
5. Not printed.