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

No. 433

ECA message files, FRC 53A278, London: Telegram

The Economic Cooperation Administrator (Foster) to the ECA Mission in the United Kingdom¹

secret

Washington, April 6, 1951—8 p.m.

Ecato 397. Reference: Toeca 275, rptd Torep 215.² I. The Situation: 1) Details discussions with Rowan, Clark, Hall following Webb–Franks meeting being sent separately.³

2) Brit being told:

a) On present analysis here will be no direct country allotment of aid FY 51/52, this without prejudice to continued participation other ERP activities.

b) Certain end-item aid will be continued.

c) Reconsideration present decisions wld follow changed circumstances.

d) US not denying possible obligation that might arise from burden sharing exercise but Brit were told objective of not increasing gold and dollar reserves still major consideration in our approach to problem.

3) When time comes for definite public announcement, we assume Brit Govt will accept responsibility of presenting possible US assistance limited to mil end-items in most favorable light.

II. What can be said: You are in better position to decide what response should be made to Brit officials on subject of aid, but any statements should be made in light of situation as described above. We inclined believe Brit public would accept decision on limited aid to Britain in whatever spirit is indicated by Brit Govt. Hope treatment will be as with suspension EGA aid last fall when Brit given psychological boost by this evidence ability to stand on own feet. Re your statement no distinction made between end-item and AMP programs, presumably announcement continuation end-item aid would go long way satisfy public. Some of following points might be made. These and others have undoubtedly already occurred to you.

1. Obviously, finance and production problems of meeting NATO defense requirements are being discussed both bi-laterally in terms of current economic and financial situation in UK and multi-laterally among NATO members.

2. No final decision yet on quantity end-items but substantial flow in FY 51/52 may be considered most likely.

3. Even if it were decided in full consultation with Brit and other NATO powers that in its present econ circumstances, Brit required no direct US financial aid, such decision wld not preclude sympathetic consideration of stresses and strains in Brit econ which might develop in future but do not exist at present, including those which might arise from increase or acceleration of Brit mil program.

4. If decision in 3 is adopted it will be made clear that it does not imply inadequacy of Brit effort which US recognizes as substantial and realistic.

5. Shld be matter of pride for Brit that within their own means they are able to mount program of this magnitude as contribution to security free world.

Foster

1. Repeated to Paris.
2. Not printed.
3. The report on the meeting held April 4 was transmitted in telegram Ecato 398 (741.5/4–651); regarding the meetings on April 5 and 6, see the memorandum of conversation, infra.