Conference files, lot 59 D 95, CF 101

Background Paper Prepared in the Department of State 1
top secret
[LIS D–4/1a]

summary of the temporary council committee report

The Temporary Council Committee was created to reconcile NATO military requirements with national politico-economic capabilities. The Committee worked in two directions: screening down requirements and building up country contributions where possible. The basic elements of the final report of TCC, issued December 18, 1952 [1951], are as follows:

Force requirements

Screening and Costing Staff of TCC has developed revised program of forces build-up, based on country submissions, reviews of country [Page 204]efforts, MC 26/1, and consultation with SHAPE. Proposes force standards and targets for end of 1952, 1953 and 1954. Recommends that 1952 targets be accepted as firm for planning purposes—those for 1953 and 1954 be regarded as provisional.

One major aim of SCS recommendations (in accordance with Eisenhower desire for maximum effective force at earliest possible date) is to provide force by end of 1952 which will be combat-worthy and will have considerable deterrent effect. To this end, proposes increase in effective divisions, including U.S. and Canadian, available M plus 30 from 34 at present to 54 and 2–3 at end 1952. Increase in aircraft, including U.S. and Canadian, from 2907 to 4230 during same period. Believes these goals can be met if other recommendations in report are adopted.

SCS schedule contemplates continued build-up to 69 1–3 divisions, 7005 aircraft by end 1953 and to 86 2–3 divisions, and 9965 aircraft by end 1954. These final 1954 figures compare with MC 26–1 recommendations of 98 divisions and 9285 aircraft on D + 30. Naval build-up (virtually non-existent for 1952) would increase from present M–Day strength of 361 major and 359 small vessels to 402 large and 447 small by end 1954. This compares with MC 26/1 requirements of 642 large and 753 small vessels by 1954. Thus the SCS exercise resulted in general reduction of requirements.

Divisions visualized by SCS will be equipped and maintained on “austerity” basis but with assumption of full combat-readiness at times indicated. Total four-year costs of build-up by European NATO members and Germany estimated at 73.9 billion dollars, as compared 92.7 billion costs estimated prior SCS screening.

Expenditures and financial shortfall

For FY 1952–1954, the report recommends that European defense expenditures be raised $2.8 billion above the intended levels shown in the country submissions to the TCC; it recommends a Canadian increase of $0.7 billion in the form of assistance to European members. If the recommendations in the report are accepted, the defense budgets of the NATO European members and Germany would total $41.8 billion. This level of defense expenditures is considered to represent a realistic European defense effort consistent with the political-economic capabilities of member countries under conditions short of general economic mobilization.

European expenditures of $41.8 billions plus U.S. end-item assistance of $18.6 leaves a financial shortfall of $6.1 to be met. However, programmed European production of $7.6 plus U.S. end-items leaves an equipment gap of $11.6.

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Production and supply

The Defense Production Staff estimates that the annual maintenance and replacement cost of major equipment for the five years after 1954 may well exceed $4 billions. Since programmed European production of major items will only reach $3.4 billion in FY 1954 there is urgent need to immediately expand the European production base. The report recommends extensive use of U.S. off-shore procurement. It also underlines the need for NATO logistical plans which will ensure the allocation of produced equipment to meet on a priority basis the most urgent troop needs. And further, the fulfillment of the equipment plan would require a favorable priority for NATO in distribution of U.S. production.

Economic conditions

The Executive Bureau report assumes that the European NATO countries have the economic capabilities to meet the revised military targets on schedule. However, this assumption is predicated upon the following conditions:

1.
An over-all increase of GNP of about 14 percent, providing a basis for a 5.7 billion increase in defense expenditures over 4 year period, and leaving a balance allowing for a 7–8 percent increase in consumption over same period. (The Executive Bureau considers this possible on basis of present facts.)
2.
The provisions of an adequate supply of raw materials and sources of energy. Report urges special attention to critical coal problem, and also emphasizes to lesser degree the current steel and electricity shortages.
3.
Solution of the manpower problem. Report recommends special attention to migration of labor, especially from Italy.
4.
Equitable allocation of basic raw materials at stable prices.
5.
Internal measures to halt inflation.
6.
Achievement of offset to dollar deficit estimated at $7 billion for 3 year period ending in July 1954. Report concludes continuation present level of economic aid, plus expanded off-shore procurement, plus U.S. expenditures in Europe for infra-structure, bases and military supplies can solve this problem.
7.
Solution of intra-European balances of payments problems and continued effective functioning of EPU.

The Report notes that, even after defense build-up, continuing cost of maintenance will be heavy burden for Europeans, and urges decisions now which will enable them to meet burden at later date. Believes expansion of off-shore procurement will assist in building long-term armament industry capable of sustaining forces in future, and regards general GNP expansion as essential condition of future maintenance.

Military conditions

TCC recommends two types of measures as essential military conditions for fulfillment revised program. First aims at achieving maximum [Page 206]immediate standards of readiness through such means as increasing personnel on active duty, improving training of specialists, improvement of training techniques, allocation of equipment in terms of potential combat-readiness, etc. Second aims at maximum economy in use of resources, with countries using SCS screening criteria as guidance, setting military priorities in terms recommendations NATO commanders, keeping forces in balance, and avoiding expenditures not essential to NATO plans.

NATO organization

TCC draft report indicates improvement of NATO operation is essential to fulfillment of its other recommendations. Believes inadequacies in organization have delayed government decisions both on policies and technical matters and have been important factor in limiting progress toward defense goals. Also points out that shift in emphasis toward “most rapid practical build-up of effective combat forces” makes it necessary that NATO organization structure be modified to provide more emphasis on operations rather than planning.

Report makes two specific recommendations re organization: (1) appointment of a Director-General of NATO to head an international planning and coordinating staff and execute decisions reached by governments through Council and Council Deputies; (2) The institution of an annual re-analysis of defense plans and capabilities along lines of TCC procedure, in order to provide periodic readjustments. In addition, report suggests that many other readjustments may be necessary in NATO structure, including improved machinery for prompt reconciliation of government differences, which might involve improvement of Council Deputies set-up as well as DPB and FEB. At same time, report recognizes sudden, wholesale reorganization would interrupt progress and recommends appropriate time-phasing.

  1. This was one of a series of background and position papers prepared in the Department of State and other agencies in preparation for the Ninth Session of the North Atlantic Council in Lisbon in February 1952. This paper was drafted by Laurence C. Vass, Officer in Charge of Political-Military Affairs in the Office of European Affairs of the Department of State, and it was approved by the interagency Steering Group which guided the preparation of these papers.

    For documentation on the preparation of the Report of the Temporary Council Committee of Dec. 18, 1951, see Foreign Relations, 1951, vol. iii, Part 1, pp. 1 ff.

    The report of the Committee of Dec. 18, 1951 was presented to the North Atlantic Council at its meeting on the evening of Feb. 20; see telegram Secto 28, Feb. 21, from Lisbon, p. 114. It was discussed and approved by the Council at its meeting on the afternoon of Feb. 23; see telegram Secto 59, Feb. 23, p. 150.