Foreign Relations of the United States, 1952–1954, Western Europe and Canada, Volume VI, Part 2

751.5 MSP/9–1152: Telegram

No. 539
The Ambassador in France (Dunn) to the Department of State¹

secret
priority

Paris, September 11, 1952—6 p.m.

1522. Cotel. This is a country team message. Subject is US budget-supporting assistance to France from FY 1953 funds.

1. Previous tels, notably Paris Tomus 101, Aug 8,² Embtels 941, 942 and 943 Aug 12,³ and Paris Tomus 173 Sept 4,⁴ have expressed strong view that in light Lisbon and Letourneau assurances regarding level of US budget-supporting assistance in FY 1953, US interests would be best served and French defense effort maximized if French informed soonest re firm and final US decision as to maximum amount such assistance France can expect in support French CY 1953 military budget, subject to French undertaking milit program acceptable to NATO and US. Necessity to reply to Pinay ltr of Aug 8 (Embtel 879 Aug 9⁵) which is still unanswered, and which places us on explicit notice of French assumption that total US commitment is $650 million, makes it a matter of real urgency that US decide what course of action it will pursue with French with respect to FY 1953 budget-supporting assistance. In this connection, MinDef Pleven yesterday emphasized to Ambassador importance French Govt attaches to early reply Pinay ltr.

2. Pinay ltr indicates that Fr CY 1953 budget being framed on assumption of $650 million US aid, and we have reason to believe that Fr plan their presentation to NATO AR on basis this amount of aid. Consequently, we feel it absolutely essential to be frank and firm with French Govt now while budget is still in planning stage in order to avoid misunderstandings such as have arisen in recent past.

3. During past few days, we have had extensive consultations on this subject with Amb Draper and his staff, and have been informed of the problem in the multilateral context which SRE feels wld be likely to arise if other NATO partners were to learn that France had been singled out for definite advance notice US intentions without reference to negotiating leeway in NATO AR. This tel therefore contains draft of proposed reply to Pinay ltr which takes account these circumstances.

4. For reasons indicated in previous messages cited above, country team feels that provision of full $650 million would offer best possibilities for maximizing French mil budget in CY 1953. Consequently we still feel very strongly that this figure or as close to it as possible should be considered as level of aid to be made available to French out of FY 1953 funds conditional upon satisfactory defense effort by French and that French shld be advised of this decision.

5. However, SRE has informed us of its view that because of Congressional cuts it does not appear possible consistent with needs other countries to envisage level of budget-supporting assistance for France in fulfillment Lisbon and Letourneau assurances in excess of $575 million. SRE has also expressed opinion that because of multilateral problem referred to in para three above it would be most undesirable to mention a firm figure to French at this time. Both SRE and country team agree that minimum amount which French could expect to receive under Lisbon and Letourneau assurances is in neighborhood of $500 million (22 per cent reduction of Lisbon $500 million plus minimum Letourneau figure of $100 million). Consequently, if Washington does not consider it possible to increase maximum figure above the $575 million indicated by SRE, then range for aid figure would fall between minimum of $500 million and maximum of $575 million. Country team feels that if it is not possible to mention firm figure in reply to Pinay ltr, it would be of definite advantage to provide Fr with an indication of this range, and SRE has indicated its view that such a step cld safely be taken without causing unmanageable problems in the multilateral field.

6. If Washington concurs with above analysis, we recommend we be authorized to despatch ltr substantially as follows to Pinay in reply his Aug 8 ltr:

Begin draft text. I have the honor to refer to Your Excellency’s ltr of Aug 8, 1952, concerning plans for the Fr military budget for the calendar year 1953, which indicates that included in present estimates is an external contribution of approximately $650 million.

At the time of the conversations in February 1952 at Lisbon, US reps indicated that in the light of anticipated French defense effort in calendar year 1953 provision had been made in the projected US budget for the fiscal year 1953 whereby the amount of funds available as budget-supporting assistance to France would be comparable to the amount made available from fiscal year 1952 funds, which was $500 million. During the conversations with M. Letourneau in Wash last June, the US reps indicated that the US was prepared to consider additional aid for Indochina of from $100 million to $150 million. However, it was made clear both at Lisbon and to Mr. Letourneau that the US could not take any engagement with regard to fiscal year 1953 funds pending action by the US Congress. As Your Excellency is aware, the US Congress made cuts of approximately 22 per cent in the appropriations requested for the mutual security program in fiscal year 1953, and as a consequence, it will not be possible to make available to France the full amount of $650 million referred to in your ltr.

However, in order to assist the French Govt in developing plans and programs for its 1953 military budget, I have been authorized to inform Your Excellency that, in fulfullment of the assurances given at the time of the Lisbon conference and during the conversations with M. Letourneau in Wash as related to the establishment by France of adequate programs both for Indochina and in support of the NATO defense effort as determined during the annual review, it is anticipated that the range of US budget-supporting assistance from fiscal year 1953 funds will be between $500 million and $575 million and that it is the intention of the US within that range to provide the maximum amount consistent with the French effort.

In this connection I have requested the appropriate members of my staff to hold themselves at the disposition of your govt for conversations regarding these matters.

The exact breakdown of the final budget-supporting assistance figure between defense support budget-supporting offshore procurement, and purchases in the US for Indochina is not yet known. However, in order to permit the Fr Govt to cover immediate dollar needs, the US Govt is now prepared to allocate and to make available as required, against the final figure of budget-supporting assistance, certain defense support funds, the exact amount and timing of such immediate assistance to be fixed by mutual consultation.

With respect to the budgetary support assistance which will be in the form of offshore procurement as well as purchasing in the US for Indochina, we wld urge that the Fr Govt draw up at the earliest possible date, lists of items which will be included in the 1953 military budget and for which US financing under offshore procurement is desired. Early mutual consultation will provide adequate time for the selection of items satis as to prices, types, specifications, deliveries, etc., in anticipation of the final allocation of funds.

I also wish to confirm to Your Excellency that the offshore procurement referred to in my letter of July 12, 1952, in the amt of $186 mil, is separate and distinct from the budgetary support assistance referred to above.

Any offshore procurement by the US in addition to that referred to above wld be considered on the merits of individual cases and to the greatest extent possible wld be in accordance with NATO recommendations. End draft text.

7. As Wash aware, Pinay letter asked for info re breakdown of proposed assistance between def support and budget-supporting OSP. Consequently, if Wash decision as to this point wld not delay reply this tel, we wld appreciate being informed of proposed breakdown in order that an appropriate sentence re this subject cld be included in fifth para proposed letter.

8. Pinay letter has now been in our hands for over a month, we believe it essential that we delay no longer in making reply. Authority therefore urgently requested to send foregoing letter to Pinay at earliest possible date, if this is in accord with Wash decision.⁶

Dunn

1. Repeated to SRE and London eyes only Draper.
2. See footnote 6, Document 535.
3. All are summarized in Document 537.
4. This seven-page telegram, dated Sept. 4, contained the text of a memorandum prepared by the MSA Mission in Paris concerning assistance to France from fiscal year 1953 funds. (MSA telegram files, lot W–130, “Paris Tomus”)
5. Document 535.
6. For the revised text of this letter which was approved by the relevant agencies in Washington, see Document 542.