ECA–MSA–FOA Executive Secretariat files, FRC 56 A 241, box 95, “DMS Documents”
Memorandum by the Assistant Director for Program of the Mutual Security Administration (Gordon) to the Special Assistant to the Secretary of State for Mutual Security Affairs (Merchant)
secret
Washington
, 31 January 1952.
- Subject:
- FY 1953 Program—Basic Programming Figures
The President’s budget included $7.9 billion in new obligational authority for the FY 1953 Mutual Security Program. Based on (1) this over-all figure, (2) the original agency requests, (3) the mark-up by the Bureau of the Budget, (4) the appeals filed by the agencies with the Bureau, and (5) subsequent inter-agency discussions, firm figures have been developed for the several major component elements of the Mutual Security Program. These figures, which we discussed together and which were conveyed to you informally some days ago, are set forth in Annex A hereto and, subject to the qualifications and comments noted below, will serve as the broad basis for developing the specific programs to be submitted to the Congress.
- 1.
-
The military aid figure of $5.4 billion has not
yet been distributed among the different geographic areas and, within
each area, among the several prospective recipient countries, nor
between military end-items and training. The Department of Defense has
the responsibility for developing a proposed distribution, for
coordinating [Page 464] this proposal
with the Department of State from a political standpoint, and for
submitting a coordinated position, or any differences in position, to
the Director for approval or decision. It is understood that this
process is already well under way in the Department of Defense and that
the recommendations of the Joint Chiefs of Staff on the subject will be
available by the end of this month. In reaching a final decision as to
this distribution the following factors, among others, must be kept in
mind:
- a.
- $1,000,000,000 should be programmed for offshore procurement in Europe. (In this connection, consideration should be given as to whether all of this amount should be included as new obligational authority under the European title of the bill or whether some part thereof should be included in Titles II and/or III to reflect, if this be the fact, the possible offshore procurement in Europe of items required in other MDAP programs—Indochina, as a possible example.)
- b.
- The $5.4 billion of new obligational authority should be so
programmed and distributed in relation to the obligational
authority which has heretofore been made available as to permit:
- (1)
- Not less than $12,000,000,000 in MDAP expenditures during the period between June 30, 1951 and June 30, 1953, such expenditures to be reflected to the maximum extent practicable in goods actually delivered and training furnished.
- (2)
- Deliveries to the NATO countries (not including Greece, Turkey, or Germany) during the period between June 30, 1951 and June 30, 1953 in a total amount of not less than $9,800,000,000 (including therein the value of any deliveries under offshore procurement, the cost of packing, handling, crating and transportation of items delivered, and the value of excess equipment furnished).
- (3)
- Deliveries as among the several NATO countries and Germany on a basis which, when taken in conjunction with each such country’s anticipated indigenous efforts, will best carry out the recommendations of the TCC report1 (flexibility will of course be maintained for subsequent adjustments required to reflect any agreed changes in these recommendations).
- (4)
- Deliveries to non-NATO recipient countries (including Greece and Turkey) as a whole, and to each of such countries, in amounts which, among other things, reflect, within the limits of mutual assistance funds, the appropriate application to the requirements of each of these countries of the priority and allocations policy established in the President’s letter to the Secretary of Defense of January 9, 1952.
- (5)
- The placement of those contracts which, because of lead-time factors, must be placed in FY 1953 in order to permit the timely fulfillment of post-FY 1953 requirements for items peculiar to MDAP.
- (6)
- Provision of the training required to complement, and assure the effective utilization and maintenance of, the equipment to be delivered as indicated under (2), (3) and (4) above.
- 2.
- The economic aid figure for Europe is composed of the following three major categories: (a) country aid for NATO countries and Germany—$1400 million; (b) country aid for Greece, Turkey, Yugoslavia and Austria—$370.2 million; and (c) miscellaneous aid (movement of European people, technical assistance and CARE)—$34.8 million. Item figures in the third category, as well as the total of the third category, are to be considered as firm for presentation programming purposes. The total for the first category and the total for the second category are also to be considered as firm unless very strong considerations can be presented to the Director2 which would justify an adjustment between the two. In the cases of both the first and the second category, the distribution among the individual recipient countries should be developed as part of the programming process. The Mutual Security Agency has the responsibility for developing a proposed distribution, for coordinating this proposal with the Department of State from a political standpoint, and for submitting a coordinated position, or any differences of position, to the Director for approval or decision.
- 3.
- The economic aid figure for the Middle East and Africa is composed of the following five categories: (a) Iran—$25 million; (b) Israel—$25 million; (c) Palestine refugees—$65 million; (d) Arab States—$17.5 million; and (e) Independent African nations—$3.5 million. The total for each of these categories is to be considered firm for presentation programming purposes. In the cases of both the fourth and fifth categories, no final distribution has as yet been made among the individual recipient nations. The Department of State (the Technical Cooperation Administration in conjunction with the appropriate political divisions) has the responsibility for developing, and submitting for the approval of the Director, a proposed distribution.
- 4.
- The economic aid figure for South Asia is to be considered firm for presentation programming, but no final distribution of this amount has as yet been made among the individual recipient nations. The Department of State (the Technical Cooperation Administration in conjunction with the appropriate political divisions) has the responsibility for developing, and submitting for the approval of the Director, a proposed distribution which should not, under any circumstances, allocate an aggregate in excess of $1 million to Afghanistan, Ceylon and Nepal.
- 5.
- The economic aid figure for Southeast Asia and the Pacific consists of the following three categories: (a) Southeast Asia—$130 million; (b) Formosa—$115 million; and (c) UNKRA—$55 million. The total for each of these categories is to be considered as firm for presentation programming purposes unless, in the case of the first and second categories, strong reasons can be presented to the Director which would justify some small adjustment between these [Page 466] two categories. No final distribution has as yet been made of the total figure for the first category among the individual recipient nations, except that $35 million thereof is to be programmed for common use items for Indochina. With respect to the balance of the first category ($95 million), the Mutual Security Agency has the responsibility for developing a proposed distribution, for coordinating this proposal with the Department of State from a political standpoint, and for submitting a coordinated position, or any difference of position, to the Director for approval or decision. In the case of the second category (Formosa), $35 million of the $115 million is to be programmed for common use items.
- 6.
- The economic aid figure for Latin America is to be considered firm for presentation programming, but no final distribution of this amount has as yet been made between the U.S. contribution to OAS and country aid, and among the individual recipient nations. The Department of State (the Technical Cooperation Administration in conjunction with the appropriate political divisions) has the responsibility for developing, and submitting for the approval of the Director, a proposed distribution.
- 7.
- The figures for multilateral technical assistance and basic materials development are to be considered as firm for presentation programming.
- 8.
- The figure for Administration can be considered as firm for presentation programming but has not been allocated among the several participating agencies. Such allocation will be made by the Comptroller, Mutual Security Program, after consultation with these agencies.
- 9.
- The amount for Israel has not yet been finally determined. In the event that it is increased beyond the $25 million indicated in paragraph 3 above, and that no increase is made in the grand total, offsetting adjustments will be required in other portions of the program.
- 10.
- The Office of the Director will discuss with the agencies concerned problems incident to the application of the foregoing. This includes in particular arrangements between the Department of Defense and the Mutual Security Agency to insure proper integration in the programming of military and economic assistance in Europe and in those countries of South East Asia where there are substantial military programs.
Lincoln Gordon
- For documentation concerning the work of the Temporary Council Committee of the North Atlantic Council and its several reports, see vol. v, Part 1, pp. 1 ff.↩
- Reference is presumably to the Director of Mutual Security, W. Averell Harriman.↩
- Does not include $40 million for basic materials development which is listed separately. [Footnote in the source text.]↩
- Economic aid for Greece and Turkey are included in the non-NATO figure. [Footnote in the source text.]↩
- Economic aid for Greece and Turkey are included in the non-NATO figure. [Footnote in the source text.]↩
- Does not include any specific allowance for economic aid to Spain. [Footnote in the source text.]↩
- Does not include $40 million for basic materials development which is listed separately. [Footnote in the source text.]↩