Office of the Historian

751.5 MSP/9–1454

No. 658
Memorandum by the Director of the Foreign Operations Administration (Stassen) to the Secretary of State1

secret
[Washington,] September 13, 1954.
  • Subject: The Various Aid Programs with France
[Page 1447]

The major pending questions with France are of large magnitude and require renegotiations with France, and the decisions cannot long be delayed.

It is my suggestion that the United States now notify France that in view of the past Congressional attitude and in view of the fact that the contemplated program is not being carried out in either Indo-China or EDC, it is necessary that the United States aid program be suspended with France until such time as we can obtain an appropriate concurrence from the United States Congress.

This solution would have the effect of stopping the flow of dollars to France, which should be stopped for many reasons, and accomplishing this without a final sharp issue on these two complex interrelated aid problems.

The payments which would then be suspended would be those involved:

a.
In the Fiscal Year 1954 $400,000,000 Indo-China War program.
b.
In the Fiscal Year 1954 $385,000,000 Indo-China program.
c.
In the end item deliveries from the United States for French national forces exclusive of spare parts which would be delivered nonetheless.
d.
In the suspension of the substantial offshore procurement contracts which have been let for munitions and armaments intended for delivery to the French national army after production.

This action would keep faith with Congress and would place the Administration in a position to obtain better results from Congress in the future than any other procedure.

An essential part of this action would be the prompt movement of substantial aid direct to the Associated States of Indo-China—South Vietnam, Cambodia and Laos.

  1. Attached to this memorandum was a covering note indicating that copies were circulated to Merchant, Waugh, and Nolting, with the latter given responsibility for coordinating action for a reply.

    At the Secretary’s staff meeting on Sept. 15, Dulles mentioned this memorandum which Stassen had left with him during their meeting on Sept. 13 proposing a cutoff in aid. Dulles said that the memorandum did not cover many considerations, although he noted that both he and Stassen agreed that the United States must give some type of shock treatment to the French. (Secretary’s Staff Meetings, lot 63 D 75, “September 1954”)

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