Foreign Relations of the United States, 1952–1954, General: Economic and Political Matters, Volume I, Part 1

Eisenhower Library, White House Central files, 1953–61

Memorandum by the Director of Foreign Operations (Stassen) to the Special Assistant to the President (Persons)

confidential

Washington, July 3, 1953.

• Subject:
• Mutual Security Appropriations for Fiscal Year 1954

1. The Appropriations Committees’ hearings on the Mutual Security Program for 1954 will begin on Monday, July 6th, in the House and on Thursday, July 9th, in the Senate.¹ We are prepared for thorough detailed documented presentation to both Committees.

2. The most difficult issues are the following:

a. The general resistance which springs from understandable concern over the total level of U.S. appropriations, irritation at delay in ratification of EDC,² and anger at criticism of American positions by European and Asiatic statesmen.

b. Disinclination to appropriate for production contracts for aircraft and other items which cannot be produced and delivered for two or three years in view of the impossibility of foreseeing what the situation will be two or three years from now.

3. Detailed difficulties are as follows:

a. Opposition to providing $200 million of support for the U.K. when U.K. has made a tax reduction. (3%).

b. Opposition to providing $110 million for India in view of India’s attitude in the UN.

c. Disagreement over the approach to the Arab-Israel situation with partisans on each side, and some tendency to say a “plague on both houses”—and appropriate no money for the area.

d. Impatience with France and an inclination to cut down sharply on the recommendations for support of the French effort in Indochina.

4. The President and you are well aware of the reasons in support of the President’s 1954 program in these matters. I simply restate some of the salient points to pull them together in this memorandum.

a. Western Europe is of such crucial importance in the world balance industrially, psychologically and militarily, that regardless of impatience or complexity of problems, we must follow through with determination. Our faltering could cause a tragic loss of impetus that could never be regained. The U.S. as the leader cannot fall back to wait to see what Europe does. If the leader hesitates, the odds on the loss of the entire cause becomes seriously adverse.

b. If India falls through economic distress and Communist infiltration, all of Asia becomes much more difficult to hold. The amount programmed of $110 million is less than half of the $250 million recommended by Truman and Bowles. The Administration believes by very careful management this reduced amount can see India through but to further cut it would be taking a very grave risk.

c. The strategic location and resources of the Near East, regardless of individual feeling on either side of the Arab-Israeli dispute, is such that we cannot turn our backs on the region. We should follow through in a moderate, carefully administered, program to build economic stability and gradually increase military strength, while retaining essential U.S. air base rights and access to oil resources in the area.

d. It is in the U.S. interest to have a strong, economically sound, Britain. They are carrying a heavy world-wide commitment of defense forces in strategic locations. The fact that this conservative government has turned the adverse tide and is beginning to show some evidence of a more favorable economic build-up should not cause us to drop aid too abruptly. The program for 1954 drops from $400 million down to $200 million as a phase out. It was carefully studied by the Secretaries of Treasury, Defense, State, and DMS. It would be penny wise and pound foolish to make further cuts and prejudice this careful economic strengthening now being conducted by the British Government.

e. France is a problem but is in a crucial location both as respects Europe and Southeast Asia. We are endeavoring to bring about the constructive changes necessary for success for France in both Europe and Indochina. But we need the backing of Congress and the resources available from the Appropriations measure to have a chance to bring about these results.

5. In the overall situation, the East German riots, the Polish and Czech resistance are significant evidence that we may be on the edge of extremely favorable developments in the U.S. national interest, vis-à-vis the Soviet strength. We may also be within reach of developing German and Japanese units to take a part of the world security burden. This, above all, is not the time to handcuff U.S. efforts. Even though there is a feeling that money has been wasted in past years, this Administration should have, for the sake of the basic security of America, a full opportunity for this next fiscal year to carry out its careful, conservative, essential plans in the world situation.

If there is any further information you wish, be sure to let me know.

1. The hearings under reference are printed in U.S. House of Representatives, Mutual Security Appropriations for 1954, July 1953, 83d Cong., 1st sess. and U.S. Senate, Mutual Security Appropriations for 1954, July 1953, 83d Cong., 1st sess.
2. For documentation on U.S. interest in the ratification of the treaty establishing a European Defense Community, see vol. v, Part 1, pp. 571 ff.