103 MSA/3–753
The Secretary of State to the Director of Mutual Security (Stassen)1
My Dear Mr. Stassen: In response to Mr. Dodge’s letter of February 3, 1953,2 and subsequent directions issued by your office, the Department of State has re-examined its FY 1954, Program proposals for those activities of the MSP which are the operational responsibility of the Department. As a result of this review, the Department’s position is that for FY 1954, funds in the amount of $507,175,000 are required to carry out those activities if the successful attainment of our foreign policy objectives is not to be endangered.
In reaching this conclusion, full consideration has been given to the effect on programs and on United States objectives of the illustrative reductions in the FY 1954 MSP Budget suggested by your office. A detailed description of such effects is set forth in the attached documentation.
For the Near East and Africa, the previous FY proposal provided $240 million for technical assistance and economic development aid. Your office proposed illustrative reductions of $90 million and $175 million. The cut of $175 million would require a thorough revision of United States foreign policy objectives in this area. It would set back prospects of strengthening the Arab States along the lines which we consider necessary if this region is not to be lost to the communists by default. It would result in TCA withdrawing from certain countries and, in others, maintaining only a nominal program. This would encourage elements inimical to United States [Page 585] interests to take steps resulting in further TCA withdrawals. In the case of Israel, virtual abandonment of our support to that nation in its efforts to achieve stability and viability might result.
The full reduction of $90 million would prevent this Government from pursuing programs necessary for the achievement of our foreign policy objectives in this area. However, a smaller reduction of $65 million is acceptable to this Department. We propose to achieve this reduction by postponing any request for the actual appropriation of funds for contributions to the United Nations Relief and Works Agency under the Palestine Refugee Aid Act. It will be necessary to seek in FY 1954 an authorization for the appropriation of funds to furnish evidence of our continuing interest in and support of this program.
The Department is not attempting, at this time, to discuss MEDO, a subject of vital concern in this area of the world. The Department of Defense is covering this item in its program review, and the Department of State will fully support the proposal at the appropriate time.
For South and Southeast Asia, the previous FY 1954 proposal provided $270 million for TCA programs in this area. Illustrative reductions of $150 million and $75 million were suggested by your office. These reductions were to be applied in the programs for India, Pakistan and Burma.
In its re-examination of the proposed reductions, the Department found little major change in the political situations. This area’s importance to the free world remains undiminished and would increase if tensions in the Far East mount further. Within each of these countries, the present government has reaffirmed its friendliness toward the western democracies even while maintaining an official position of neutrality in the conflict between East and West. However, important factions, hostile to United States interests, exist in each of the countries in this area and they seek to capitalize on any opportunity to divert their peoples from their present western orientation.
In view of the foregoing, the Department of State is of the opinion that the suggested reduction of $150 million in this program could not be accomplished without seriously jeopardizing the attainment of our foreign policy goals in this area. However, a reduction of $73 million appears, at this time, to be feasible, and the Department of State recommends the approval of $197 million for its programs in South and Southeast Asia.
For Latin America, the previous FY 1954 MSP proposal included $25 million for technical assistance. Illustrative reductions of $10 million and $3 million below this level were proposed.
[Page 586]As an important part of the free world, the Latin American republics, geographically, occupy or control the approaches to critical areas and installations in this hemisphere; economically, they are an important source of many strategic and critical materials; and politically, they exercise a powerful voice in the determination of United Nations policies. At present there is a wide gap between the willingness of these countries to share the responsibility of maintaining the peace by safeguarding this hemisphere, and their ability to carry out this responsibility. The ability to develop their economies to acquire a position of security and to maintain internal order is of prime importance to our own national security. Any reduction in this proportionately small program would have an immediate adverse reaction throughout Latin America. For the same reasons, we support the proposed $1 million for the technical assistance program of the Organization of American States.
With respect to other programs administered by the Department, it is our view that the Escapee Program3 should be increased to $12 million for FY 1954 to enable the program to operate on a global basis, including Yugoslav escapees. At this time, it seems possible that the United Nations Technical Assistance contribution might be reduced to $12,750,000 from the proposed $15,000,000. It should be noted that this estimate is undergoing re-examination in connection with a general review of United States policy with respect to the United Nations Technical Assistance Program. The contribution to the Inter-governmental Committee for European Migration should be continued at the present level of $10 million, leaving open for further study the question of United States contribution to capital needs of emigrants. Pending the outcome of the study being undertaken on Korean economic needs, we should provide for a contribution to the United Nations Korean Reconstruction Agency of $71 million in FY 1954 plus the availability of a military pipeline of supplies up to $40 million in value.
Members of the Department will be available to discuss with your staff the Department’s recommendations.4
Sincerely yours,
- Drafted by Newman. A notation at the end of the source text reads: “Original given to S/MSA for delivery to Stassen on 3/9/53. E. Evans, S/S.”↩
- Ante, p. 569.↩
- For documentation on the escapee program, see pp. 1560 ff.↩
- The source text indicates two enclosures: a table of funds requests and a program submission. The table is printed below. The program submission was not included with the source text and has not been found in Department of State files.↩
- Will require an authorization of funds but no appropriation. [Footnote in the source text.]↩