Foreign Relations of the United States, 1952–1954, East Asia and the Pacific, Volume XII, Part 1

S/S–NSC files, lot 63 D 351, NSC 5429 Series

Memorandum Prepared for the National Security Council¹

confidential

[Washington,] October 1, 1954.

Note on Revision of Annex A to NSC 5429/2

1. At its 215th Meeting² the NSC noted that the information as to dollar amounts of Far East programs included in Annex A to NSC 5429/2 was generally out of date.

2. When the Planning Board undertook to revise Annex A, it found that at this time (a) it was not practicable to prepare the usual type of Financial Appendix (showing funds available and expenditures) for NSC 5429/2, and (b) even meaningful program information could not be presented; for reasons, the most important of which are:

a. Discussions are currently under way with the French and Associated States with respect to the revision of military and economic assistance programs for the Associated States, directly or through France. It is also not yet known how much of the military supplies and equipment already provided to the Associated States through France will be recaptured by the U.S.

b. The uncompleted portions of world-wide military assistance programs for FY 1954 and prior years are now being reviewed and revised to reflect the major changes in Country programs, and shifts in funds from military to economic assistance, which have taken place during FY 1954 but which were not reflected in this year’s Congressional presentations. This review will take about a month to complete. The development of the FY 1955 military assistance programs is dependent upon completion of this revision of FY 1954 and prior year programs.

c. Planning for the forces for Korea, Japan, Formosa and the Philippines has been held up awaiting the report and recommendations of General Van Fleet.³ His recommendations were formally submitted to the Secretary of Defense on September 30, 1954, and will be reviewed and taken into consideration in the planning for FY 1955 and beyond.

d. For the first time funds for military assistance have been made available by Congress on a world-wide basis. As a result of Congressional action, the total amount available for military assistance programs is less than was requested in this year’s presentation to Congress. Programs for the Far East can be shaped only in relation to world-wide programs, and cannot be fully shaped until such questions as the fact and rate of German rearmament are more definitely answered.

e. Under the Appropriation Acts for 1955 the amounts of unexpended funds to be available in FY 1955 are not yet precisely known. This is due to the fact that funds to be available include funds to liquidate existing obligations but only after those obligations have been examined and certified as meeting certain new legal requirements established by statute.

3. While it is certain that considerable modifications will take place in the amounts shown in Annex A, it is not possible at this time to estimate whether the total shown for FY 1955 will increase or decrease. It is probable that the amounts shown for every country listed in Annex A will be modified.

4. As soon as reasonably possible, a Financial Appendix in normal form (showing funds available and expenditures) will be submitted to the Council.

1. The source text is attached to Annex A to NSC 5429/2, Aug. 20, p. 774. This memorandum apparently was prepared by the NSC Planning Board.
2. Held Sept. 24, 1954. Discussion of this subject is not recorded in the memorandum of discussion at the meeting. (Eisenhower Library, Eisenhower papers, Whitman file)
3. The “Report of the Van Fleet Mission to the Far East”, submitted to the President through the Secretary of Defense on Sept. 30, is not printed. (Attachment to covering note, dated Oct. 7, from Maurice W. Roche, Administrative Secretary to Secretary Wilson, to the Secretary of State; 611.90/10–754) For a memorandum concerning the Van Fleet report from Robertson to Dulles, dated Oct. 25, see p. 953.