Office of the Historian

751.5 MSP/7–2654: Telegram

No. 651
The Ambassador in France (Dillon) to the Department of State

top secret
priority
Paris, July 26, 1954—1 p.m.

332. Dept pass Stassen and Defense. Ref: Deptel 298 to Paris, July 23.1 Subj: Offshore procurement in France.

1.
Re para 2 reftel, the course of action which I have recommended is designed to encourage development of idea that French armament industry cannot expect go on profiting from OSP contracts if there is no EDC. The withholding of OSP contracts in present critical period is obviously necessary to implement this policy objective. As far as OSP operations are concerned, I suggest that no new discussions or negots with French contractors be instituted, that current discussions be put into suspense wherever possible, and, where suspension not feasible, they be slowed down as much as possible.
2.
There is presently a fairly widespread belief in French Govt and industrial circles that placing of OSP contracts is already affected by EDC situation. This will be accentuated if French act on Stassen’s suggestion to Faure during July 13 talk (para 8, Paris Tousfo 24, July 142) that OSP contractors be warned they cannot in present circumstances count on future contracts.
3.
I do not see why we must assume that positive evidence of a stop order on OSP contracts for France will leak. I fully agree that suspicion will develop that a stop order has been issued, and this is necessary for desired effect, but all necessary measures must be taken to prevent any official confirmation of fact from U.S. sources.
4.
Re para 4 reftel, I agree.
5.
Director OSP, USRO, has raised question whether recommendation contained Embtel 2753 was intended cover service-funded contracts as well as MDAP-funded contracts. Answer is no, although [Page 1439] I hope that volume of former will be kept as low during the next month or so as operational requirements permit.
Dillon
  1. Supra.↩
  2. This telegram summarized the conversation between Stassen and Faure in Paris on July 13. (FOA telegram files, lot W–130, “Paris Tousfo”)↩
  3. Document 649.↩