751.5 MSP/7–2152: Telegram
No. 529
The Ambassador in France (Dunn) to the Department of State
priority
467. Washington for SRE. Cotel. Following is translation of aide-mémoire handed me by Prime Minister Pinay (mytel 466, July 221).
Begin text. [1.] At time of Lisbon conference and bilateral negotiations which took place on that occasion between the US and Fr Govts, an agreement was reached between the two govts as to the military objectives to be realized at the end of December 1952, objectives which could only be reached by arranging Fr budgetary credits in such a way that important war material orders in process of manufacture in France for the Fr Army, Air Force and Navy could not be continued except by being taken up under the offshore procurement procedure.
It is recalled that the TCC report approved by the Atlantic Council at Lisbon2 emphasized the importance of offshore purchases to the attainment of the fixed objectives. It pointed out that “the possibilities of offshore purchases are greater in the case of Fr than in any other country in Europe; they will represent without doubt from 1 to 2 billion dollars for three years.”
It was in taking account of the prospects opened by this recommendation that the Fr Govt was able to accept the commitments agreed upon at Lisbon.
2. The NAC and particularly the American and Fr Govts have recognized that it was indispensable to the interests of the Atlantic community that the potential for manufacture of army, navy and air force armament existing in Europe should be used to the maximum.
It was also provided (Franco-American memo of Feb 25, 1952, para 6, subpara (a)3) “that the Fr Govt would present to the US Govt for the purpose of possible purchases by the latter a list of material whose manufacture is in progress or could be undertaken with a very short delay”.
It is by virtue of these provisions that the Fr Min of National Defense transmitted on May 6, 1952,4 proposals for offshore orders amounting $625 million for three years. These proposals refer solely to material already ordered, in course of manufacture, or which could be made without delay; these remain very much below the figure of the order of 1 to 2 billion dols for three years cited in the report of the TCC, approved by the NAC.
[Page 1228]3. The letter of July 12 from the US Ambassador5 to Mr. Pleven Prime Minister of National Defense puts at $185,540,000 for three years the amount of orders agreed in principle by the US Govt.
As the Fr budgetary credits are absorbed by the implementation of the Lisbon commitments, the Fr Govt would then have to cancel the totality of the orders already placed and which are not included in the July 12 reply; this would result in an immed financial loss estimated at 50 billion francs ($143 million) to which would be added cancellation and dismissal charges estimated at about 20 billion francs ($57 million).
The total loss which the Fr Govt would thus undergo would be in fact greater than the amount of offshore orders agreed upon.
[4.] From the social viewpoint the following aircraft factories: Meaulte, Bourges, Le Havre, Marignane, Anglet, Billancourt, Les Mureaux; and the following armament factories: Le Havre, Saint Etienne, Tulle, Tarves, Chatellerault, as well as the Panhard and Delahaye firms would have to be progressively closed in the course of the next 12 months.
These closings would result in the dismissal of about 25,000 persons engaged directly in the manufacture of materials for which orders would be cancelled, not to mention dismissals which would apply to personnel engaged indirectly in these manufactures through the intermediary of subcontractors.
It is unnecessary to stress the repercussions which such measures would have at the very time when the Fr Govt is trying to improve the economic and social situation of the country.
5. From the military aspect the cancellation of orders in progress, the closure of factories, and the dispersal of their personnel would diminish in considerable proportions and would weaken in an irremediable manner the position of the Fr armament industry. The achievement of projected military objectives would be compromised to the same extent.
This reduction would take place at the very moment when by virtue of the Bonn agreements the Ger armament industry could resume a part of its former activity. This would create between France and Ger a lack of equilibrium incompatible with the principles on which the projects for the EDC are based, and which would be of a nature to very seriously compromise the European policy of the Fr Govt. This political aspect was particularly pointed out to Mr. Acheson during his visit to France last May.
6. From a more general point of view, the limitation of offshore orders to the figure mentioned in the July 12 letter to Mr. Pleven would in fact finally lead not only at present, but in the future, to a condition [in] which almost the entire French armament would be dependent on deliveries from across the Atlantic. Such a situation was never envisaged at the time of the conclusion of the Atlantic treaty. In the view of the French Govt, this is contrary to the fundamental interests of the Atlantic community. It would feed the anti-national propaganda which tries to persuade public opinion that the Atlantic alliance imposes on France the duty of furnishing [Page 1229] men while sacrificing France’s national industry to the profit of the armament industry of the Anglo-Saxon countries.
7. The stopping of the greater part of French defense production now in progress would be the gravest possible blow to the morale of the French forces as well as the French population. No French Govt could accept this and even if it were to attempt to do so, it would without doubt be condemned by the Fr Parliament.
8. The French Govt must then request the US Govt to reconsider, not from the technical point of view but at the highest level, the proposals for offshore purchases presented by the French Min of National Defense in the memo of May 6, taking into account all of the comments presented by the French Govt if the various memoranda which it has presented to the American Ambassador at the same time as the present aide-mémoire.
9. The French Govt would call the special attention of the US Govt to the fact that the Lisbon agreements date from Feb 1952, that the definite proposals which it presented date from May 6, 1952, and that French budgetary credits do not permit provision at the same time for the implementation of the Lisbon agreements and for the continuation of the production proposed for offshore purchase.
The Fr Govt does not doubt that the American Govt, being fully aware, in the light of the above information, of all of the aspects, political, economic and social, of the problem of offshore purchases, will measure the gravity of the situation which will result if the proposals presented in the French memo of May 6 are not received in a positive manner. The Fr Govt therefore attaches the greatest importance to receiving at the earliest possible date a favorable response from the US Govt. End text.
- Supra.↩
- For documentation concerning the report by the Temporary Council Committee and the discussion relating to it during the Ninth Session of the North Atlantic Council at Lisbon, Feb. 20–25, see vol. v, Part 1, pp. 203 ff.↩
- Document 507.↩
- For a summary of the French proposals, see Document 516.↩
- For text of this letter, see Document 526.↩