Office of the Historian

MSA files, lot W–3127, “Congressional Presentation”

No. 286
Memorandum by the Assistant Regional Director of the Office of European Operations of the Foreign Operations Administration (Hopkinson) to the Deputy Director for Operations of the Foreign Operations Administration (FitzGerald)

confidential
Washington, November 13, 1953.

Subject:

  • Congressional Presentation for Europe

In terms of the reactions of Budget Bureau representatives to our preliminary FY ’55 presentation, statements of Congressmen who have shown an interest in foreign economic programs, the tone of the daily press, and our own feeling of the public pulse, we believe it is now clear that prudence requires us to avoid attempting to sell a program of economic aid to Western Europe for FY ’55.

At present there are eight support programs under consideration for the Title I area which fall within FOA’s jurisdiction. We do not yet have adequate information on the nature of the loan to be requested [Page 592] by the C.S.C. but have asked for a cable preview thereof promptly. The eight programs are:

  • Greece
  • Turkey
  • Spain
  • France
  • U.K.
  • Yugoslavia
  • West Berlin
  • Finland

These particular programs do not fit within the definition of economic aid to Europe. It is suggested that the term be dropped entirely, and that we switch to the approach described in the following paragraphs.

1.
In accordance with our revised organizational pattern, Greece and Turkey could be removed from Title I of the appropriation and grouped with the other Middle East countries for which economic support is requested on the basis of their propinquity to the USSR and the desirability of meeting, in part, expectations of an improved scale of living by their populations.
2.
The French program would be justified on the limited basis that it supports the Indochina war. The statement could be made that, in the absence of this extraordinary burden (and with the present flow of dollars from other sources) France would need no outside economic support. Alternatively, the French support program could be removed entirely from the FOA budget, on the grounds that the support was for military purposes and should be shown in the military aid budget.
3.
The U.K. program would likewise be justified on a strictly limited basis, i.e., that the U.K. would not be able to raise the minimum air force needed for NATO purposes without this marginal support. Alternatively, again, the possibility exists of transferring this item to the military budget since it serves an immediate military end.
4.
Funds requested for Spain could also be justified on the basis of their relationship to an immediate military objective, i.e., the base construction program. In this instance the economic phase would be part of, but incident to, the military package and not a program for economic development in the normal sense.
5.
The other three programs—Yugoslavia, Berlin and perhaps Finland—would be grouped under a new legislative title which would give to the President discretionary authority to spend up to, say, $200 million to aid and encourage the peoples living under the immediate threat of Soviet encroachment. (State Department advice would be necessary on the suitability of this within the cold war strategy.) Such discretionary authority would permit the U.S. to move with great speed to exploit weaknesses wherever and whenever they appeared in the frictional areas on the Soviet’s borders. If Mayor Reuter was correct in remarking that the June 17th riots in East Germany were only a beginning, we should be prepared for further cracks in the Soviet periphery. But the fact that [Page 593] the East German riots came as a surprise illustrates the difficulty of planning to meet them 18 months in advance. Funds appropriated under a discretionary title such as that proposed would not be limited to use in Europe, but would be available to cover in Europe the Yugoslav and Berlin programs. They could also be used in Finland if a program were begun there, and to cover extraordinary new needs which might arise similar to the East German food relief program. The flexibility inherent in this method of countering the Soviet threat should have an appeal which is impossible to achieve in static country programs. The program could probably also contain a heavy element of agricultural surplus items.

Handling the European program in the method proposed would serve a dual purpose; it would permit continued support in certain cases related to immediate U.S. objectives and deny to critics of the program the opportunity to press the charge of large-scale giveaway to Europe in general. It would get the program off the defensive and onto a positive and offensive concept related to Eastern Europe, where it now should be.

I understand that Mr. Stassen will present his views regarding the FY ’55 presentation to the Budget Bureau around the end of this month. It might be worthwhile to take an early opportunity to discuss with him the problems involved this year in attempting to present a European program along the lines previously used, and to explore the alternatives proposed in this memorandum.