EDC files, lot 57 M 44, “NATO Documents”

Supplementary Report of the Temporary Council Committee 1
secret

Provisional Text

introduction

1. The Report of the Temporary Council Committee which includes the report of its Screening and Costing Staff as an annex, was forwarded to Member Governments for their consideration on December 18, 1951.2 The Committee requested comments from Member Governments on these reports. The comments of Member Governments, which indicate their measure of agreement with the policies set forth in the Report and the suggestions contained in the country annexes, are attached to the present Report.* The purpose of this Supplementary Report is to make these comments available to the Council together with a summary thereof and an indication of their effects on the general plan of action and forces build-up proposed. It will also serve as an opportunity for re-emphasizing some of the general problems which, although discussed in the Report, are of continued concern to many Member Governments and which must be passed on to the permanent NATO organization for continued study and action.

2. The replies of Member Governments indicate that there is strong support for the principles, method of approach, and general plan of action proposed in the TCC Report and the SCS Annex. The essentials of this plan are the adoption of firm goals for 1952, provisional goals for 1953, and for 1954 of goals to be used for planning purposes, these goals taking account of politico-economic capabilities and of the principle that the development of a sound economic structure in the North [Page 212]Atlantic Community must go hand in hand with the build-up of the required defensive force. A further element of the TCC plan is the proposal for close follow-up of the forces build-up, and for an annual review of defence programs in the light of changing requirements and changing politico-economic conditions.

3. There have been comments regarding certain aspects of the procedures followed by the Committee. For the unprecedented task performed by the TCC special procedures and techniques had to be evolved by the Committee. Experience has shown that the task given to the Committee is a continuous and important one, and should be made an integral part of the functions to be performed by NATO. This should ensure that governments will have adequate information and time to consider problems, formulate their views, and discuss difficult points with or within the appropriate NATO agency.

4. The TCC Report reaffirmed a major principle of NATO, that there should be an equitable sharing of the burden of the joint defence effort. A first effort was made to apply this principle, while giving full consideration to limitations cited by countries on their politico-economic capabilities. Work on relative defence burdens should be continued in accordance with accepted NATO principles, in order to accomplish their more effective application.

summary and general analysis of military replies

5. The country comments were concerned mainly with the proposed build-up for 1952 and the problems incident to achieving the goals proposed therefor by the TCC Report. This concern is consistent with the Committee’s proposed system of military programming in which firm goals are set for the coming calendar year only, while the goals for succeeding years are provisional and defined only to the extent necessary to establish a positive basis for the short-term actions necessary to achieve the longer-term provisional goals.

6. Countries generally agree to the Committee’s concept of firm goals for 1952, including such steps as are necessary in that year for the further build-up. The comments indicated that many military recommendations of the Committee are already being implemented. Examples are accepted increases in length of national service, increases in regular content of forces, and additional training of reserves.

7. The impact of problems now envisaged, if these problems are not resolved successfully during the year, is generally to be measured in terms of time as well as number of combat units. Moreover, since 1952 is only the first step toward a larger buildup in 1953, failure to achieve a force target in divisions can be measured either in terms of the added number of days after mobilization (M +? Days) required for each affected unit to reach combat readiness as of 31 December 1952, or alternately the number of weeks or months in 1953 before the particular [Page 213]unit will develop to the standards of combat readiness programmed for it in the TCC Report.

8. The principal causes of concern expressed by countries in relation to 1952 appear to be the timely delivery of MDAP end-items and the financial and economic problems incident to the essential support of the defence programs. Another factor recognized as affecting the NATO force build-up is the existence of combat priorities in other parts of the world. As to MDAP the United States comment shows that the United States Government is now giving a very high priority to delivery of MDAP end-items. Sufficient equipment has been included in current MDA programs, in conjunction with quantities on hand and European production, to provide the major items of equipment for units of the European countries in the proposed build-up for 1952; however, no firm guarantee can be given, primarily owing to combat priorities, that all the equipment will be delivered during 1952.

9. As to the economic difficulties in 1952, some countries have indicated that, while accepting the 1952 build-up, the defence programs to implement the build-ups are dependent upon the solution of economic problems. Any unfavourable impact of economic factors in 1952 would affect more the level of readiness of forces than the actual existence of units. The economic and financial problems affecting the build-up, as presented in the country comments, are discussed in more detail later in this supplementary report.

10. The information provided in the comments indicates, assuming adequate and timely deliveries in 1952 of MDAP end-items as presently programmed, the following estimate as to forces build-up:

a)
Army. The status, largely one of combat readiness, of approximately one quarter of the divisions programmed by the Committee in 1952 is dependent on successful solution of a variety of problems, most of them stemming from economic and financial difficulties.
b)
Navy. Country comments showed that under present plans on the basis of SCS recommendations the 1952 build-up for naval forces will be achieved.
(c)
Air Forces. All countries have indicated that they accept the SCS recommended build-up for 1952 in number of units, assuming MDAP deliveries as scheduled. The possible total “slippage” in relation to present plans should not be greater than 10%. One of the major problems in achieving or exceeding the 1952 air targets is neither units nor delivery of equipment, but provision of adequate air infrastructure to make the units operationally effective. Unless the infrastructure keeps pace with equipment and provision of trained units, the statement of availability of operational aircraft loses its meaning. It is noted that, while pilot training will not seriously affect the air build-up in 1952, the deficiency in training this year can have very serious effects on the continuing build-up in 1953 and 1954. It is understood that certain steps are being taken toward strengthening the pilot training program.

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11. While country comments did not emphasize difficulties presently foreseen for 1953 and beyond, it is obvious that the main ones will almost certainly be the solution of economic and financial problems. There were problems mentioned in other categories, but not of the degree of difficulty of the foregoing. Replies indicated that some of the problems now interfering with achievement of force goals might be overcome or eased later.

12. As regards the further build-up in 1953 and 1954, country comments differ considerably in the extent to which governments are now prepared to accept the force goals recommended in the TCC Report. Some countries have made specific exceptions relating to particular items of the TCC proposals for 1953 and 1954. While the general tenor of the replies seems to justify the assumption that countries intend to put in hand the action needed in 1952 if the provisional force targets for 1953 and later are to be achieved, the information provided is not sufficiently explicit on this point. Further clarification is therefore necessary.

13. Nearly all of the NAT European countries call attention in their replies to the existence of additional indigenous military production capacity. The prospective shortage of major military equipment in these countries for the years of build-up after 1952 appears, on present information, to be a major limiting factor in the attainment of the SCS target forces within an acceptable time limit. Country replies are, however, with two exceptions, silent on the question of what measures they propose to take in the field of production to reduce this shortage. In all cases emphasis was on activation of the available production capacity by United States off-shore procurement. The estimate in the TCC Report (paragraph 43) that European countries might be able, from self-financed additional production, to reduce the equipment gap after 1952 by about $1.6 billions does not appear likely to be fulfilled.

14. The TCC plan of action has requested a considerable reorientation in the military programs of some countries. Reports indicate that important steps along the line of the proposed reorientation have been taken already by some countries even in the short period since the TCC Report was presented.

15. The proposed force build-up, if it is to be achieved on the time schedule programmed, necessitates close control of the disposition of available equipment. This is true even if units are held to the minimum equipment standards, such as 75% of major equipment for M–Day divisions. It is essential that, at an early date, the NATO authorities know the total equipment needs, the equipment already available to nations and in the hands of troops, and the time-phasing of equipment needed to meet at least the minimum standards—all to be related to potential equipment availabilities. Until a NATO supply plan is available [Page 215]there will be inefficient distribution of equipment even with the adoption of the essential system of priorities in assignment of end-item equipment. No nation expressed objection to the proposed system of priorities.

politico-economic capabilities

16. The comments by Member Governments which most directly affect the TCC plan for build-up of forces are those concerning the suggested levels of defence expenditure. In weighing requirements on the one hand, and politico-economic capabilities on the other, the TCC had put before governments for their consideration certain assumptions for an increased defence expenditure above existing country plans. The following assumptions were made in the TCC report for additional expenditure for the consideration of European NATO governments: (in $ million) 576 in 1951/52, 817 in 1952/53 and 1033 in 1953/54. Additional expenditure accepted by countries in their replies amounts to 223 in 1951/52, 469 in 1952/53 and 529 in 1953/54. The Canadian Government has decided to ask Parliament for an additional sum of $ Can. 100 million to be added to the existing provision for mutual aid ($ 225 million) for the year 1952/53, such additional assistance to be made within its declared budget for defence, and to be governed by the needs and priorities existing at the time. This would not interfere with the accomplishment of the physical defence program of the Canadian Government. The total financial gap shown in the TCC Report will present an increasingly important problem for which solutions must be found, and this gap has been somewhat increased by the fact that the financial suggestions made in the Report have been only partially accepted.

17. The overall reconciliation between politico-economic capabilities on the one hand, and defence requirements on the other, can be made on a country by country basis only if a means exists for transferring resources among countries where this is required to maximize the defence effort. The United States and Canadian military aid programs are the most important means of achieving this result. However, it is desirable that if possible, arrangements be worked out for transfers from other countries.

Dollar Balance of Payments

18. Certain countries have pointed out that some further deterioration in the dollar balance of payments position has occurred since the TCC Report was prepared, and hence that the size of the dollar gap may be larger than was forecast earlier. Furthermore, it is emphasized that the prospects for relief of the dollar shortage through the offshore [Page 216]purchase program or through dollar contributions to international infrastructure in Europe are not likely to be very large in the immediate future. The comments of the United States Government make it clear that it fully recognizes the desirability of activating the production potential of European industry and of pressing on with the common infrastructure program. It therefore intends to give the fullest consideration to the recommendations of the Committee for accelerating these programs. Many directives have already been issued to procurement officers and it is expected that the volume of contracts placed will increase rapidly. The fullest cooperation is needed from European member countries in concluding bi-lateral agreements and in simplifying administrative and contracting procedures, so that the targets for off-shore procurement and expenditures by United States authorities can be realised.

19. Many of the country replies re-emphasize the need to maintain flexibility and to avoid delay in the application of the means available for dealing with the dollar balance of payments problem. In this connection the United States Government indicated that it intends to administer its military and economic assistance programs so as to maximize collective defensive strength on a sound economic basis.

European Payments Union

20. Certain European countries have stressed that if there were any fundamental change in the arrangements for the liberalization of trade and payments brought about by the efforts of the OEEC or if the problem raised by the present situation of the European Payments Union remained unsolved, the resulting economic situation might be such as to impair the defence effort as a whole.

Raw Materials

21. The conclusions and recommendations of the TCC Report with respect to basic materials found general acceptance in the country comments. In respect of coal, the European shortage of which seriously affects both the general level of production and the dollar balance of payments deficit, a specific recommendation in the TCC Report was for an increase in exports by the United Kingdom. Its reply states that such exports will be increased immediately by 2 million tons a year. With regard to steel, the agreement recently negotiated between the United States and the United Kingdom will substantially alleviate the steel problem for the United Kingdom described in the TCC Report, and will ease the aluminium and tin shortages in the United States. None of the countries, except the United Kingdom, mentioned any additional steps they planned to take for the conservation of raw materials.

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Manpower

22. The Italian reply (TCC–CC/93) shows the increasing concern of the Italian Government with the problem of surplus man-power. It is noted that, with some exceptions, the replies of the other countries were not addressed to this problem. It is therefore suggested that governments and the North Atlantic Council give early and earnest consideration to the problem as recommended in the TCC Report and stressed in the Italian reply by reviewing their immigration policies and regulations, where necessary, in order to facilitate labour mobility in and between NATO countries and by considering what further practical steps they can take to make more effective their cooperation in other international bodies in this field, of which they are members, such as OEEC, the Provisional Committee set up in Brussels, the ILO, etc.

Financial Stability

23. The comments of the governments indicate that a difficult and continuing inflationary problem is anticipated. They explicitly support the Committee’s conclusion that the avoidance of inflation is necessary since inflation accentuates the difficulties of diverting resources to defence, puts additional pressure on the balance of payments, and causes social discontent. Particular emphasis has been laid by some countries on the importance of budgetary problems in connection with the possibility of carrying out the defence effort.

Maintenance Costs

24. The problem of the length of the build-up period for the rearmament effort and of the cost of maintenance of military forces in the future is emphasized in the replies of several governments. The time has not permitted adequate study by the Committee of this problem, and it will require early attention by the appropriate NATO bodies.

Annex A

Infrastructure

1.
The analysis of country comments on the TCC Report has developed very clearly a major deficiency in country plans for the implementation of the basic TCC concept of “the most rapid practicable build-up of balanced effective forces.” This deficiency reflects the fact that several countries have not provided, within the resources available for their defence programs, for the financing and construction of essential common infrastructure.
2.
The availability of a minimum of airfields needed for the operational deployment of tactical air forces, is essential to the effectiveness [Page 218]of all NATO forces in the field. Construction required to provide these airfields is a lengthy process. Failure to provide such airfields would have the effect of wasting resources put into military forces which cannot be adequately supported by tactical aircraft. The fact that the start of planning for the airfield infrastructure program has been belated and thus far been so complicated that it has fallen badly behind the planning for other elements of the defence effort, makes it imperative to provide urgently the minimum number of airfields required to maintain a proper balance with the build-up of military force.
3.
The obligations of commonly financed funds required in calendar year 1952 for the “third slice” airfields infrastructure program recommended by SHAPE is under $500 million. Of this amount, SHAPE has indicated that, according to the best estimates available, actual expenditures involved in the calendar year will be substantially less. The specific airfields required, their location and technical layout, their approximate cost, and their relation to the build-up of tactical operative air forces in 1952 though not yet finally clear can readily and rapidly be clarified. The immediate initiation of work on the program is, however, held up by the budgetary and balance of payments difficulties, and by failure to arrive at an agreement on the sharing of the cost.
4.
The magnitude of probable expenditure on the “third slice” of infrastructure is, however, small in relation to other elements of the build-up and it should therefore be possible to agree on the necessary initiation of work on the high priority parts of the program in advance of a final and definitive allocation among nations of their cost. The TCC is therefore recommending to the North Atlantic Council, in paragraph 10 of the Draft Resolution on the TCC Report, urgent action by governments to enable the immediate initiation of needed construction, even though this may require, on the part of some countries, a deferment of other elements of defence efforts, in order to bring infrastructure and other elements of the forces build-up into appropriate balance.
  1. This report 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 in the afternoon of Feb. 23; see telegram Secto 59, Feb. 23, p. 150.
  2. For a summary of the report of Dec. 18, 1951, see p. 203.
  3. They have been circulated separately under the serial reference TCC–CC [Footnote in the source text. None of the comments or suggestions is printed.]
  4. Revised figures based on latest information from member Governments will be submitted to the TCC at its meeting in Lisbon. [Footnote in the source text.]
  5. Not printed.