740.5/2–2352: Telegram

The Secretary of State to the Department of State 1
secret

Secto 53. Dept pass Defense and MSA.

1.
On basis TCC recommendations and supplementary report and CD report stressing urgency of providing financing for high priority third slice infrastructure program, Council at Feb 20 mtg referred problem of reaching agrmt on division of cost to Comite of Mins of ten nations concerned, Lovett representing US.2
2.
Estimated total cost on obligations basis of “hard core” prog submitted by SHAPE is pounds 162 million of which pounds 130 million is est obligation auth needed for 1952.
3.
In series of subsequent mtgs of ten nation Ministerial Comite and of CD special comite on infrastructure, participants have stated amts each is prepared to contribute. Total reached pounds 97 million on basis US share of one-third. With some minor increases in offers by others and a US share of 40 percent of pounds 162 million, total reaches about pounds 115 million.
4.
Expedients, such as requesting host govts to proceed with work on basis of funds now obtainable, were explored but discarded.
5.
Most formidable initial obstacle is firm British position that UK contribution must be limited to free provision of equipment for signals prog (no direct UK contribution in kind to airfields), plus financing of pounds 780 thousand of facilities for which UK is host govt. This results in British contribution of pounds 9 million, whereas a 16 to 20 million pound UK contribution seems indispensible to further progress in negot. At working level we have informally suggested UK might offer to take larger share making contribution in sterling to be [Page 193] made available to host govts for purchases related to infrastructure program. If such arrangement were agreed it wld have to be carefully formulated to avoid conflict with EPU. Working along lines “UK will provide goods and services for this program to the value of” might accomplish this. We have had no British response to this suggestion.3
6.
If Brit problem were resolved and Fr contributions increased from present offer of pounds 12 million to pounds 25 million, we will face need for increasing Belg share from present offer of pounds 3.5 million to contributions in neighborhood of pounds 12 million, and need for further increased contribution from others.
Acheson
  1. This telegram was repeated for information to London, Paris, and Bonn.
  2. Regarding the Council decision referred to here, see telegram Secto 28, Feb. 21, from Lisbon, p. 114.
  3. Telegram Secto 68, Feb. 24, 4 p.m., sent priority to London as 111, reaffirmed that British acceptance of a share of 18–20 million pounds of the projected 162-million-pound third slice infrastructure program was indispensable to further progress in reaching a settlement of the infrastructure negotiations. The Embassy in London was asked to take any action considered appropriate to induce the British to accept a higher share of the program prior to the conclusion of the Lisbon Conference. (740.5/2–2452)