Foreign Relations of the United States, 1958–1960, Foreign Economic Policy, Volume IV

248. Draft National Security Council Report⁰

NSC 5916

November 24, 1959.

[Here follow a cover sheet and a note from Lay transmitting the paper to the National Security Council.]

STATEMENT OF POLICY ON COMMITMENTS FOR GRANT MILITARY ASSISTANCE TO CERTAIN FREE WORLD NATIONS WITH WELL-DEVELOPED ECONOMIES

Majority

Treasury-Budget

1. As a matter of general policy, new commitments for grant matériel military assistance should not be made to the United Kingdom, Germany, Austria and France; future programs for grant matériel military assistance to Italy, Belgium/Luxembourg, the Netherlands, Portugal and Japan should not be undertaken unless they include cost sharing or other similar efforts designated to elicit from such nations greater contributions than they would otherwise make, both in the form of defense expenditures and in other forms such as manpower and bases which are important to the security of the United States.

1. New commitments for the provision of military equipment on a grant basis should not be offered to nations which are financially able to pay for such equipment.1

2. This policy does not preclude assistance in accordance with prior commitments,² nor the provision of grant assistance for training programs.

Majority	Treasury-Budget
3. Exceptions may also be made with respect to selected nuclear delivery or advanced weapons and support equipment when deemed by the Secretaries of State and Defense to be of fundamental importance to the security interests of the United States.	3. Exceptions in the case of military equipment may be made where, in the judgment of the President, overriding political considerations require a phasing-out period for U.S. grant aid.

[Here follows an annex comprising a table showing Department of Defense Military Assistance Program estimates for fiscal year 1960 for the United Kingdom, Germany, Austria, France, Italy, Belgium/Luxembourg, the Netherlands, Portugal, and Japan.]

0. Source: Department of State, S/S–NSC Files: Lot 63 D 351, NSC 5916. Secret. The source text indicates a revision of the proposals for paragraph 1 had been substituted for the original texts on December 1.
1. “Financially able to pay” is determined on the basis of economic criteria, without regard to political willingness—including such considerations as total output, balance of payments, and budget. At the present time the countries considered to have this financial ability are the United Kingdom, Germany, Austria, France, Italy, Belgium/Luxembourg, the Netherlands, Portugal and Japan. [Footnote in the source text.]
2. The commitments referred to are those which involve the good faith of the United States in relations with the countries concerned, but do not include unilateral U.S. programming which does not represent a commitment. [Footnote in the source text.]