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

751.5 MSP/9–2954

No. 662
Memorandum by the Director of the Foreign Operations Administration (Stassen) to the Secretary of Defense (Wilson)¹

secret

Washington, September 29, 1954.

• Subject: Aid to France

The controlling National Security Council policy in the matter of aid to France² is that it be slowed down and that no new commitments be made under present circumstances. The Secretary of State has given further definitive guidelines as to the manner of carrying out this policy.

In the coordinated implementation of this policy, it is suggested that during the months of October and November, 1954, not more than approximately $15 million be paid to France in each month for offshore procurement outstanding contracts of all types.

It is suggested that the Department of Defense divide this $15 million ceiling each month among Army, Navy and Air, and that any claims for payment totaling more than this amount be delayed.

It is further suggested that the Foreign Operations Administration be advised at the end of each month as to the total of claims for payment that have been presented and on which the payment has been delayed.

It is also suggested that no new commitments for offshore procurement be made to France during October and November, 1954, unless it be very special items of small amounts, such as a spare parts follow-on contract and similar unusual circumstances involving small dollar payments.

It is anticipated that prior to the first of December, a further specific program of implementing the NSC policy will be prepared. It is also anticipated that the policy itself or the guidelines under the policy may be affected by new developments in the interim.

It is further suggested that payments for United States military construction or similar items be kept at a minimum during the months of October and November.

For your information, the payments to the Government of France on the Indo-China aid matter will be limited to approximately $10 million per month during the months of October and November by the Foreign Operations Administration.

If there are any questions regarding this coordinated action, please advise promptly. The entire situation was thoroughly discussed at the Department of State in a conference participated in by Admiral Carney and other representatives of the Department of Defense on September 25th and September 26th.³

1. Copies of this memorandum were also sent to Secretary Dulles and Director of the Budget Hughes.

   In a memorandum to FitzGerald, dated Sept. 29, Stassen instructed him to limit payments to France under the Indochina aid program during the months of October and November 1954 to $10 million each month and to delay any other requests for payments that are presented. (DMS files, lot W 1444, “France”)

2. Reference is to NSC 5433/1, “Immediate U.S. Policy Toward Europe,” Sept. 25, 1954. For text, see vol. v, Part 2, p. 1268.
3. No record of these meetings has been found in Department of State files.