Foreign Relations of the United States, 1951, Europe: Political and Economic Developments, Volume IV, Part 2

No. 874

ISAC files, lot 53D443

Memorandum by the Foreign Aid Committee to the International Security Affairs Committee ¹

top secret
[ISAC D–10]

[Washington, March 14, 1951.]

Problem:

What approach, if any, should be made to key members of Congress concerning the immediate use of the authority contained in section 408(c) of the Mutual Defense Assistance Act to provide aid prior to July 1, 1951 on a grant basis to Yugoslavia to make up critical deficiencies in its supply of raw materials?

Discussion:

At its meeting on March 12, 1951,² Task Force I of the Foreign Aid Steering Group (which has the same membership as the Foreign Aid Committee of ISAC) considered proposals for further aid to Yugoslavia during FY 1951 and FY 1952 to make up critical deficiencies in its supply of raw materials. Having determined (1) that NSC 18/6³ decided in general the issue of whether, and under what circumstances, further economic aid should be furnished to Yugoslavia; (2) that under the criteria of NSC 18/6, further aid was urgently required to fill raw material deficiencies before the end of U.S. FY 1951 in the amount which cannot now be definitely specified (because of uncertainties as to a British contribution and other factors) but which is likely to be in the neighborhood of $29,000,000; and (3) that such further aid could only be provided at this time (by utilizing MDAP funds under section 408(c) of the Mutual Defense Assistance Act or through special legislation), it was agreed that ISAC should be advised of these conclusions and that ISAC, if it agreed with these conclusions, should immediately make appropriate arrangements for Congressional consultations on the question of whether there was any serious objection to invoking section 408(c) in order to use MDAP funds for this purpose.

Section 408(c) of the Mutual Defense Assistance Act of 1949, as amended, authorizes the utilization of MDAP funds “for the purpose of providing military assistance to any …⁴ European nation whose strategic location makes it of direct importance to the North Atlantic area and whose immediately increased ability to defend itself, the President, after consultation with the governments of the other nations which are members of the North Atlantic Treaty, finds contributes to the preservation of the peace and security of the North Atlantic area and is vital to the security of the United States.”

The authority contained in section 408(c) is available only to the President. The President is not authorized to delegate that authority. When the President makes a determination involving the use of funds under that section, he is required to notify the two Armed Services Committees of the Congress and the Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives.

The authority contained in section 408(c) was used to provide aid to Yugoslavia last fall at a time when Congress was not in session.⁵ This involved the provision of urgently needed food commodities to meet the near famine with which the country was threatened because of drought. The MDAP portion of such aid was measured by the food consumption of the armed forces of Yugoslavia. Since most of the key members of Congress were not then in Washington, they were consulted in writing by the President and asked to provide their views. No objection was heard from the members of Congress who were consulted. Action then by the President under 408(c) was followed by a request to the Congress for specific authority to provide additional amounts of food commodities to Yugoslavia. This request the Congress granted. In the presentation before the Congressional committees of the request for the additional amount of food, it was suggested that a raw materials deficiency in Yugoslavia would sooner or later have to be met, but that the amount and timing of that request could not be established at that point.

Section 408(c) in its present form is essentially a compromise between the firmly held views of certain members of Congress that the Executive Branch ought not to have flexibility to choose the nations which are to be the recipients of aid, and the views of the Executive Branch that such flexibility is essential to meet unforeseen developments. The elaborate conditions on the provision of aid to unnamed countries which include findings respecting the strategic location of the country to be aided, etc., consultation with the members of the North Atlantic Treaty, and the notification to the Congressional committees, all reflect Congressional concern that the authority given should be used sparingly and only under circumstances which make the use of such authority imperative.

Recommendation:

In the light of these circumstances, it is recommended that ISAC approve the conclusions of the Foreign Aid Committee and that appropriate officials of the Executive Branch consult with key members of the four Committees of Congress which are named in section 408(c). In these consultations the nature of the problems confronting the Executive Branch (the background for which is contained in TF I D–15⁶), should be explained and the suggestion offered that section 408(c) provides a means of solving the problem within the time limit involved. Unless the Congressmen consulted are of the opinion that because Congress is in session, new legislation should be obtained, or other comments develop which throw doubt on the wisdom of using section 408(c), the Executive Branch should thereafter understand that no obstacle in terms of relations with Congress exists so far as using section 408(c) is concerned.⁷

1. This document, along with a covering sheet and an attachment, was circulated as International Security Affairs Committee document ISAC D–10. According to the attachment, not printed, this paper was drafted by Alfred G. Vigderman of the Office of the Assistant Legal Adviser for Economic Affairs for submission to ISAC.
2. An action summary of the Foreign Aid Committee meeting of March 12, attached to the source text, is not printed. It briefly noted that the Foreign Aid Committee desired to inform ISAC of the recommendations summarized in this memorandum. For the minutes of the Foreign Aid Committee of March 12, see document TF I M–18 of March 13 in ISAC files, lot 53D443.
3. Not cleared for publication when this volume went to press.
4. Ellipsis in the source text.
5. For documentation on the Yugoslav Emergency Food Assistance Program, see Foreign Relations, 1950, vol. iv, pp. 1459 ff.
6. Task Force I document TF I D–15 of March 7, “Proposed Yugoslav Aid Program”, is not printed, but is in ISAC files, lot 53D443, along with TF I D–15a of March 21, a lengthy ECA paper entitled “Interim Report on Western Aid to Yugoslavia.”
7. According to the minutes of the ISAC meeting of March 16, this recommendation was approved. A committee of four representing the Department of State, the Department of Defense, ECA, and the Executive Office of the White House was designated to consult with the appropriate committees of the Congress immediately. It was also noted during the meeting that the ECA, despite previous reluctance, should administer this new aid program in Yugoslavia. (ISAC files, lot 53D443, ISAC M–12, March 23)