751.5 MSP/7–2552: Telegram
No. 534
The Ambassador in France (Dunn) to the Department of State
priority
588. Cotel. This afternoon I presented to Prime Minister a memorandum, text of which is given in mytel 571, July 25,1 on the subject of additional offshore purchases in Fr. When he realized from reading the memorandum that this represented no modification in US position given Pleven in my June 12 letter, he said that this would mean a most disastrous blow to entire Fr economy and to programs and policies of Fr Govt, both in domestic affairs and in the internatl defense situation. He said that Fr which is now undertaking an expenditure of 40 percent of its budget for military purposes, would have drastically to revise its whole military expenditure. He said that France could not continue its military expenditures, including IC, at present rate, particularly since to do so it had been necessary to cut back expenditures essential to its internal economy such as housing and other necessities. He said that this meant that France was expected to supply only the soldiers and not to participate in production for military purposes, although it had vast facilities and large numbers of men presently employed in those industries. He said that the allocations for Great Britain were greater than for France. He also said that even at this very moment the US is expending large sums for the building of destroyer escorts in France which as far as he can see are not essential [Page 1235] needs and certainly not as essential as some of the armament equipment which had been offered in May 6 list.
He added that this struck at the very heart of the present Govt’s program, which is to stabilize the economic situation, provide prospects of steady employment for the Fr population, and to combat Communism in the country. He said that this would be a real blow to Govt’s efforts to offset the Communist propaganda against the Fr position in the North Atlantic Treaty Organization.
I did take the occasion to point out that there is no intention or policy on our part not to have Fr manufacture military equipment. He said that he recognized this was not intentional but that the result of lack of assistance at this critical time would be the same. I also said that, as pointed out in the memorandum, as we go forward with the evolution of the FY 1953 military aid program for France we would study every possibility that might arise to make additional offshore purchases. He said that while he appreciated that this would be done, it would of course have no effect upon the present critical situation of the govt in connection with its obligations under present budget. He concluded by saying that the Fr Govt in facing this situation would have to take decisions of the gravest character, and he hoped that our govt would understand when it became necessary for the Fr Govt to decide to take the most drastic measures to carry out its present internal program. He was obviously very deeply shaken and disturbed by our communication.
At the Prime Minister’s request, I have also transmitted copy of our memorandum to MinDef Pleven.