740.5/11–2053
Memorandum by the Assistant Secretary of State for European Affairs (Merchant) to the Secretary of State 1
Subject:
- Effect of EDC Proviso (Richards Amendment) on the Fiscal Year 1954 Mutual Security Program
Section 540 of the Mutual Security Act of 1953 (so-called Richards Amendment) requires that 50 percent of the equipment and matériel procured for Europe (Title I) with funds appropriated for the Fiscal Year 1954 MDA Program be transferred to the EDC, or to its member countries, unless the Congress, upon recommendation by the President, subsequently provides otherwise. In effect, this means that 50 percent of the equipment and materiel procured for Title I countries from these funds cannot be delivered until after EDC ratification. The funds can be obligated, however, and procurement action is proceeding without hindrance. The EDC proviso does not affect deliveries under prior MDA programs.
The Fiscal Year 1954 program for Title I was developed as follows:
- (1)
- The total funds programmed for materiel for Title I ($1.5 billion) have been divided into two nearly equal portions; one spread among all Title I countries, both EDC and non-EDC (about $748 million of which $264 million is for EDC countries); the other reserved as required by the Richards Amendment for meeting solely EDC country requirements (about $776 million).
- (2)
- To minimize the effect of any possible delay in deliveries, the amounts of the immediately deliverable portion programmed for the EDC countries (the $264 million) are being used primarily for procuring short lead-time items such as spare parts and maintenance equipment; the portion reserved specifically for the EDC program will be used primarily for procuring long lead-time items such as tanks and aircraft.
Using a realistic assumption of April 1, 1954 for EDC ratification, the Richards Amendment will have little delaying effect on the MDA Program and its objectives, except insofar as it renders the administration of the Title I program more complex because of its division into two components. It is anticipated that the negotiation of the MDA Agreements with the EDC and with Germany will be completed in time for them to be signed immediately after ratification. And although there is likely to be a delay of at least several weeks after ratification before the German buildup can begin, arrangements presumably will be made, so that there will be no interruption in the flow of equipment to the EDC countries, including Germany. In view of large undelivered quantities already funded in previous programs, [Page 854] long lead-time items funded from the Fiscal Year 1954 program would not normally be delivered in any quantity until the latter part of Calendar Year 1954.
If, however, there is substantial delay in EDC ratification beyond April 1, 1954 two serious results will occur. First, the long lead-time items, particularly aircraft, which will become available for delivery in quantity in the latter part of Calendar Year 1954, will create an additional demand on U.S. storage facilities which in some instances are already overburdened. Secondly, existing units of the EDC countries will be hindered in achieving the equipment levels and reserves needed to make them fully combat effective. Moreover, if it becomes evident that EDC ratification has slipped to the point where the EDC itself becomes improbable, it will require a Presidential recommendation and legislative action to determine what disposition should be made of this equipment.
- Drafted by Miller of RA. A handwritten notation on the source text reads: “Sec[retary of State] saw. R[oderic] O’C[onnor].”↩