Foreign Relations of the United States, 1952–1954, Western European Security, Volume V, Part 1

Secretary’s Letters, lot 56 D 459, “Memo for the Pres, June–Dec 1953”

Memorandum for the President¹

secret

Washington, July 8, 1953.

The Department is sending copies of Mr. Draper’s letter² to our missions in NATO capitals for information and comment. We are stating that the content while not representing an agreed statement of U.S. Government policy is considered by interested Washington agencies to be an extremely stimulating and useful analysis of the political, economic and defense problems confronting the U.S. in Europe. We agree with Mr. Draper’s expressed estimate of Soviet policy and believe he has correctly outlined basic U.S. objectives in Europe.

Political Unity

Mr. Draper emphasizes importance of unified philosophy and action program in NATO and indicates steps should be taken to recover momentum lost during the past two months since the President’s address in April; points up the necessity for informing NATO partners of conclusions reached in conferences of the three major powers, in order to promote a sense of true partnership and obtain general approval; refers with satisfaction to U.S. trend in the direction of reaching agreements and understandings on a multilateral basis.

(1) We continue to believe that progress in NATO is essential to the attainment of our objectives in Europe and are convinced that NATO success depends not only upon full U.S. support but U.S. leadership in NATO. We agree with Mr. Draper that unified support of any projected program by all 14 NATO governments and by Western Germany is highly important. Strengthening of NATO and the imperative necessity of expediting ratification of the EDC Treaty will be stressed at the forthcoming tripartite Foreign Ministers’ meeting.

(2) We agree with Mr. Draper’s estimate of the value of NATO consultation. We are, in fact, informing NATO governments and North Atlantic Council of general topics to be discussed by three Foreign Ministers, prior to July 10 meeting,³ and inviting their comments. We are also informing them we will consult with them appropriately regarding conclusions reached.

Mr. Draper refers to the need for providing our Ambassadors and regional representatives with broad authority to develop, discuss and recommend U.S. policy positions, and feels that the downgrading of our regional representation has raised fears in European countries that U.S. interest in NATO and OEEC is declining.

(1) We agree it is necessary that U.S. Permanent Representative have a large measure of authority to discuss U.S. positions and take decisions. We also agree that the authority and responsibility exercised by the U.S. Permanent Representative will largely determine the importance ascribed by other members to Council deliberations. We believe Ambassador Hughes’ present terms of reference provide the necessary authority.

(2) The so-called “downgrading” of our regional representation is, we believe, only a minor factor contributing to fear in Europe that U.S. interest in NATO and OEEC is declining. The initial and primary cause of this fear, which we recognize, is uncertainty in Europe regarding basic U.S. policy and declining U.S. aid.

Mr. Draper cites ratification of the EDC Treaty as the immediate political battle to be won, then points out that France, with its heavy financial burden in Indochina, constitutional problems, and fear of German revival, is the obstacle.

We continue to look upon EDC as imperative for effective defense of Western Europe. Prospects for ratification are not as bright now as when Mr. Draper’s letter was written. We plan to emphasize at the Foreign Ministers’ meeting the urgent nature of early ratification. The French will doubtless review at that time their difficulties in Indochina and the relationship of its difficulties to France’s position in NATO and the balance of French and German forces in EDC.

Economic Equilibrium

Mr. Draper stresses the importance of balanced trade between Europe and America and contends that without such balance we risk the danger of economic warfare, as well as a reduced defense program and lower living standards in Europe even if political and military unity has been achieved. As offsets to economic aid, Mr. Draper urges an increase in imports from Europe and in our foreign investments, a sharp decrease in our tariffs and reduction of other barriers to freer foreign trade.

(1) The Department accepts entirely Mr. Draper’s analysis of the critical economic situation confronting Europe, especially the need for providing sound alternatives to aid. It is highly important, we believe, that the U.S. formulate and adopt a constructive, forward looking foreign economic policy if we are to meet the problem and avoid a dangerous rift among our partners.

(2) We share Mr. Draper’s sense of urgency regarding the importance of the United States taking the leadership in showing the way to balanced trade, and we concur in most of his recommendations for measures looking toward expansion of imports from Europe to enable our allies to earn their own way.

(3) While we agree in general with measures advocated to create stability with respect to tariffs and to stimulate European production, the Department is inclined to disagree with the suggestion that the U.S. should negotiate a treaty requirement, confirmed by the Senate, that no tariff rates should be increased by either party to the treaty for 10 years.

In recommending that the U.S. take initiative in providing Europe a chance to earn its own way, Mr. Draper appears to confine his suggestions for action almost entirely to national measures to be undertaken by Europe and the U.S. and affecting only those countries.

While we agree generally with suggestions in the letter for a new and dynamic approach to the payments problem, it is well to recall that the payments problem is worldwide, not limited to Europe, and account must be taken of third countries from which Europe could earn dollars. Furthermore, while revision of U.S. import policy is a central and indispensable part of a comprehensive program looking toward solution of the payments problem, additional consideration is required with respect to maintaining sound financial policies to avoid inflation in Europe, and to creating a higher flow of private investment and increased competitiveness in Europe.

Mr. Draper believes that a broad and basic program revising American trade policy toward Europe could be developed on bipartisan basis this fall for presentation to Congress in January, if a special session this year is not feasible.

Development of such a program would be entirely consistent with the Commission on Foreign Economic Policy which is an integral part of the one year extension of the Trade Agreements Program.

Defense Posture

Mr. Draper focuses attention upon the basic questions of (1) whether the U.S. and its NATO allies with their greater industry and resources, as compared with the Soviet, are able and willing to provide the forces needed to deter Soviet aggression or to meet it successfully if necessary on the field of battle, and (2) whether resources presently available for Western defense are being put to the best use for the best weapons, under the best strategy and for a mission which can be successfully carried out.

(1) Basic questions raised by Mr. Draper are valid ones. The Administration has undertaken a number of studies to determine whether resources presently available are being put to the best use, for the best strategy, and for a mission which can be successfully carried out. The SHAPE study on 1956 requirements, taking into account atomic and other new weapons, will be an important factor in the overall study. Early completion of these studies and determination of an effective program based thereupon is essential if a downward spiral in European defense effort is to be avoided.

(2) The objectives of the North Atlantic Treaty defense concept are to deter aggression and to defend all of the home territories of the North Atlantic Treaty area. NATO military strategy is governed by the requirement of defending the whole area. Any new strategy must be consonant with that purpose. Within that framework, the review of strategic and tactical plans, including the optimum utilization of new weapons, is the continuing responsibility of the appropriate military authorities so as to permit the most economic utilization of NATO resources. However, the defense of the whole NATO territory must be based on militarily realistic judgment of military requirements.

The British fear that general realization in Europe that combined defense forces will fall far short of minimum defense requirements for the foreseeable future together with the U.S. stretch-out and reduced appropriations for foreign military and economic assistance, might induce not merely a levelling off but a sharp decline in defense preparations of certain NATO members.

(1) We believe the British fear is well founded and that a decline in defense preparations of certain NATO members is a definite possibility. It is our view, further, that reduction in U.S. forces currently planned for deployment in Europe would add to the difficulty of maintaining present levels of European defense effort and might well present another obstacle to EDC ratification.

(2) As a measure to ensure that the much publicized reduction in U.S. defense appropriations for both its own and foreign military and economic assistance does not precipitate a downward spiral in European defense effort, we are considering provision of U.S. aid projections for at least 1955 and 1956, as well as an estimate of defense budget expenditures for fiscal year 1955.

Mr. Draper expresses the belief that if a careful assessment of the facts should show that to avoid being second best in the race, greater effort, higher taxes and a larger proportion of NATO national wealth is required each year for defense, such a program would and could be supported by governments and peoples concerned if properly explained and justified.

(1) It will be for the Administration to determine, when and if it should become clear that no new strategy can provide adequate security for NATO with presently foreseeable resources, whether the Government is willing to ask the American people to make an even greater effort.

(2) If NATO should fail to respond to a soundly based statement of military requirements to defend NATO homelands, NATO would be in a position where it would have lost the initiative in the field of power to the Soviet. Mr. Draper’s conclusion that a properly explained and justified program designed to remedy such an unthinkable situation would be acceptable to the NATO peoples even if it involved larger effort and taxes is believed to be sound.

1. The source text, which was drafted by Adair and cleared by MacArthur and Schaetzel, was attached to two memoranda. The first, from President Eisenhower to Dulles, dated July 1, stated that the President believed Draper’s letter (p. 401) had been sent to the National Security Council for study, but that he wanted short, succinct comments from someone in the Department of State on each of the points made by Draper. The second, from Dulles to Persident Eisenhower, dated July 11, forwarded the source text and stated that Dulles had gone over the comments hurriedly, was putting a copy of them aside for further study, and stated that many cogent points were raised which should be discussed with the President “at some time in the not too distant future.” No documentation has been found in the Department of State files to show further action by either President Eisenhower or Secretary Dulles on Draper’s letter.
2. Dated June 5, p. 401.
3. For documentation on the Washington Tripartite Foreign Ministers meeting, July 10–14, see pp. 1582 ff.