Office of the Historian

162. Telegram From the Embassy in Norway to the Department of State1

Oslo, April 27, 1955— 6 p.m.

701. Paris for NAMA and for information CINCEUR. Country team deeply concerned about impact 1955 OSP program on maintenance momentum Norwegian defense build-up. Country team considers US overall interests require 1955 directed procurement orders to Norway and strongly recommends assignment about $9 million to such purpose. If such procurement is directed, it will be possible to use $1.7 million in section 550 counterpart funds.2

Due to current Norwegian economic situation anything US can do to improve Norwegian foreign exchange prospects will find direct reflection in greater willingness and capabilities to sustain domestic defense expenditures. Further deterioration foreign exchange outlook would constitute direct threat to maintenance current defense levels and might preclude plan to adopt vitally needed additional air wing.

In connection current re-appraisal defense establishment, Norway urgently needs continued public indication US understanding and assistance. Proposed directed procurement could provide psychological stimulus which country team feels would be of great significance.

At considerable joint US-Norwegian expense, small but efficient defense production industry has been developed in Norway. As indicated in Embassy despatch 534, April 20,3 production capacity exceeds requirements of indigenous military establishment. Current production levels cannot be maintained and production base will be endangered unless additional OSP orders obtained. Consider direct procurement should be in form of 105 shells, propellant charges, scabbards and blades. Believe Norwegian bids for these items within zone of competition and believe further reduction possible through negotiation.

Country team convinced recommendation for directed procurement merits most careful consideration in view of the possible consequence failure sustain Norwegian Government at current critical stage.

Strong
  1. Source: Department of State, Central Files, 757.5–MSP/4–2755. Secret; Priority. Sent to Paris and repeated to Washington. The source text is the Department of State copy.↩
  2. Reference is to Section 550 of the Mutual Security Act of 1955; for text, see 69 Stat. 288.↩
  3. Not printed. (Department of State, Central Files, 757.5–MSP/4–2055)↩