740.4/3–3051: Telegram
The Secretary of State to the Embassy in the United Kingdom 1
4419. For Ambassadors Batt and Spofford from State–ECA. Webb, Foster, Thorp discussed assistance UK defense effort Franks.2 Discussion declared informal and for purpose US side indicating direction our thinking. Fol points made by US side:
- 1)
- US considers UK program realistic comprehensive. While susceptible expansion nevertheless represents sacrifice part Brit people.
- 2)
- In view Brit present strong dol position unable request Congress direct econ assistance other than certain mil end-items. Favorable conditions leading suspension ECA assistance continue and apply equal validity to econ assistance to defense program. We recognize unforeseen developments may create strains but cannot ask Congress now to provide contingently for possible later difficulties.
- 3)
- We recall discussions re burden-sharing and realize UK in effect reserves its position request further assistance in event favorable determination to it.
- 4)
- We expect Congress will appropriate without establishing rigid country by country basis for expenditure. This will provide flexibility permit us relieve in part shld strains develop or burden-sharing exercise favor UK.
- 5)
- In Congressional presentation we prepared say Brit program comprehensive and realistic but not requiring US econ assistance under present conditions. Admin will point out, however, there are factors which cld develop strains which might necessitate reconsideration UK needs. Also that UK needs will be reconsidered if decided expanded or accelerated UK effort required meet NATO deficiencies.
- 6)
- Above decision without prejudice to question indirect aid on account intra-European transfer mil items or through EPU mechanism. If such arrangements decided upon further flexibility re strains and burden-sharing exercise wld be provided.
- 7)
- We prepared this fiscal year consider additional $28 million AMP in lieu of funds same magnitude suggested by UK for specific off-shore procurement proposal.
- 8)
- US aware magnitude non-dol problem that may arise from surplus exports sterling area to UK and continent. UK may wish approach certain members Commonwealth to suggest as contribution to security free world and under principles mutual assistance and share defense burdens at least some members might consider grants to UK or long-term funding arrangements of percentage of future accumulations sterling.
- 9)
- We aware Brit program heavily dependent access critical materials and machine tools. Problem being given urgent attn with discussion Def and production authorities re priorities which can be assigned consistent requirements our own defense effort.3
- 10)
- Additionally, Webb stressed fact future burden-sharing closely related to burden assumption and if NAT effort shows vigorous progress this wld be most helpful fact in making possible US provide relief for strains UK shld such develop.
Franks indicated personal agreement that dols probably not main problem but thought UK Treas wld vigorously dissent and also not share our optimism re dol position. Franks stressed Brit effort commencing at time when fon obligations heavy which will make UK hesitate embark on course which will increase them from present high levels. There is great concern in UK re build-up of substantial fon obligations both European and sterling balances. Franks felt this wld probably not cause UK to cut back its planned mil program but it might cause policy be adopted of reducing exports from sterling area to West Europe to keep balances down which Franks himself wld view with great concern.
Franks felt our thinking wld be considerable shock in London view history negots especially discussions re burden-sharing. He pointed out many Mins under impression US resources inexhaustible and had expected considerable US assistance present program. Franks also stressed UK uneasiness re raw materials situation.
Franks is recommending Robert Hall be sent Washington review figures with us. We indicated wld be pleased have this done.
If you approached by UK authorities follow line indicated above pointing out this represents direction US present thinking. Franks will undoubtedly renew discussion after he reports London and receives [Page 927] reaction and for present we believe you shld not take initiative London re discussion. [State–EGA.]
- Drafted by Raynor and cleared with Foster and Thorp. A copy was sent to Paris for Katz.↩
- A memorandum of the conversation with Ambassador Franks on March 29 is in file 741.5/4–251.↩
- The nine points summarized here were taken from an undated memorandum prepared in the Department of State. (741.5/3–3051)↩