Foreign Relations of the United States, 1952–1954, Western Europe and Canada, Volume VI, Part 1

U/MSA files, lot 59 D 355, “FY 1954 Mutual Security Program”

No. 270
Memorandum by the Director of the Budget Division of the Mutual Security Agency (Lawson) to the Assistant Director for Programs, Office of the Director for Mutual Security (Ohly)

secret

[Washington,] November 13, 1952.

Subject:

• Recapitulation of FY 1954 Title I (Europe) Defense Support Requirements

The purpose of this memorandum is to summarize and clarify our FY 1954 requirements for Title I (Europe) Defense Support as expressed in numerous MSA papers and Bureau of the Budget hearings. As indicated in the table below, our total requirement is $1,561 million, which is $300 million higher than the statement included in my memorandum of November 10, 1952.¹ The additional amount consists of (a) $150 million for U.K. to cover the contingency of full “pay as you go” for U.K. forces in Germany, and (b) $150 million for France to take into account the omission in the Defense Department submission of $150 million of offshore procurement in France for Indo-China.

The contingent amount for full “pay as you go” for U.K. forces in Germany is in accord with the memorandum from Mr. Ohly dated October 31, 1952¹ in which it was stated that for Mutual Security budget planning purposes no German support should be assumed for British forces in Germany. It is estimated that additional aid to U.K. would be required in nearly the full amount, i.e., $150 million, assumed in our August 25th submission as the amount of German contribution to the support of British forces. This item is clearly a contingency in that we still believe some German support is likely.

As we have pointed out on numerous occasions, our estimate of French requirements assumed the placing of $150 million of offshore procurement contracts in France for Indo-Chinese equipment needs, presumably from Title III military funds. Our latest information regarding Department of Defense assumptions indicates that no such funds have been included in the Title I or Title III military submissions. As indicated in our latest paper on France, dated November 6, 1952,² we have reprogrammed the original $350 million earmarked for EDC. Two hundred million dollars of this amount would be furnished to the EDC for defense production purposes without any earmarking as to the ultimate recipient of these funds. The remaining $150 million, plus the $150 million originally assumed to be provided as offshore procurement from Title III military funds, is proposed for France to support the Indo-China operations. While we believe it would be more appropriate to include the latter $150 million as offshore procurement in the Title III military budget, it is indicated in this paper as a defense support requirement in the absence of this assumption in the Defense Department submission. Our total requirements are as follows:

FY 1954 Title I (Europe) Program Requirements
(in million dollars)
United Kingdom	400
United Kingdom Contingency	*150
European Defense Community	200
France (procurement for Indo-China)	150
France Contingency	†150
Southern Italy	35
Berlin	75
Greece, Turkey, Yugoslavia	139
Austria	35
Spain	50
Technical Assistance	24.5
Moody Amendment	50
Basic Materials	‡26.5
DOT Development Program	76
Total	1,561.0

G. W. Lawson Jr.

1. Not found in Department of State or Mutual Security Agency files.
1. Not found in Department of State or Mutual Security Agency files.
2. Not found in Department of State or Mutual Security Agency files.
3. Included, in accord with the Ohly Oct. 31 memorandum, as a contingency against full pay-as-you-go for U.K. forces in Germany. [Footnote in the source text.]
4. Include in absence of provision in Title III military budget of $150 million for offshore procurement in France for Indo-China. [Footnote in the source text.]
5. An additional $22.5 million equivalent of 10% counterpart is programmed for basic materials (exclusive of DMPA requirements), comprising a total program of $49 million of dollars and dollar equivalents. [Footnote in the source text.]