868.00/12–1748
Memorandum by the Coordinator for Aid to Greece and Turkey (McGhee) to the Under Secretary of State (Lovett)
discussion
The Department has been advised that $225,000,000 is being included in the President’s budget for the fiscal year 1950 to provide for the [Page 216] program of “Assistance to Greece and Turkey”, Public Law 75, as amended. It is felt very strongly that the needs of the program justify an appropriation of $300,000,000 in 1950, in carrying out present policies, if the U.S. is to render substantially the same level of aid to Greece and Turkey in fiscal 1950 as was made available in fiscal 1949.
[Here follow paragraphs numbered 1 and 2, giving justifications for appropriation of $200,000,000 for Greek aid and $100,000,000 for Turkish aid.]
3. The cost of maintaining the same level of aid to Greece and Turkey has been materially affected by the following factors:
- (a)
- In fiscal year 1948, and to a lesser degree in fiscal year 1949, the Army was able to supply Greece and Turkey with considerable Army surpluses at a small fraction of the cost of purchases in the open market. Due to heavy demands of this program and other aid programs this source has been exhausted, items needed in the 1950 program must be bought in the open market at the full cost.
- (b)
- With respect to other basic items it has been estimated the costs will increase over the fiscal year 1949 between 5% and 10%.
- (c)
- Similarly, the Military estimates that the cost of handling, packing and shipping will also increase from 5% to 10%.
Mr. Hall of OBP advises that the Bureau of the Budget has told him that there is enough slack in their budget to expand the Greek-Turkish figure to $275,000,000, if necessary. However, it is believed that the importance of our programs in Greece and Turkey is such that the Department should hold out for the $300,000,000 figure. The Bureau has advised that final decision can be deferred until after the hearings before the Bureau now scheduled for December 22–23. However, it is desirable to clarify the position of the Department with respect to the request as soon as possible, certainly before the hearings. The JCS is expected to approve the full amount in meeting to be held this date and Secretary Forrestal is expected to recommend the full amount in his reply to the Department’s letter to him of December 10, 1948.1
recommendation
It is recommended:
That the Department take a strong position vis-à-vis the Bureau of the Budget for inclusion of the full $300,000,000 request for aid to Greece and Turkey in the President’s budget.
- Not printed; Secretary Forrestal did so recommend in his letter of December 23 to the Secretary of State (867.20/12–2348).↩