Foreign Relations of the United States, 1958–1960, Foreign Economic Policy, Volume IV

262. Memorandum of Conversation⁰

August 1, 1960.

SUBJECT

• 5-Year Military Assistance Plans (FY 1962–1966)

PARTICIPANTS

• State
  • The Under Secretary
  • U—Graham Martin
  • U/MSC—Messrs. John O. Bell, James M. Wilson, Martin M. Tank, Robert L. Burns
• DOD
  • Messrs. John N. Irwin, Wm M. Leffingwell, Henry J. Kuss, Maj.Gen. W.H.S. Wright

The meeting was called for the purpose of obtaining approval by the MSP Coordinator, Under Secretary Dillon, of the FY 1962–66 Military Assistance Plans,¹ which had been submitted by the Unified Commanders and reviewed by the Departments of State and Defense, and ICA.

The Under Secretary stated that he was prepared to approve the Plans for all countries except Greece, and to have them used by the field as the basis for preparation of the FY 1962 Military Assistance program and for MAP planning. He was deferring approval of the Greek Plan for a few weeks pending receipt of further information from the Athens Country Team relating to the large shortfall which the Plan projects in resources available to finance the Greek military effort. The Defense representatives agreed that the Greek Plan presented the most serious problem in this regard and merited further consideration. It was agreed that a State/Defense message should be dispatched to Athens on this matter.

Mr. Dillon noted that, with approval of the 5-year Plans, the annual MAP programs would continue to be reviewed and approved by the MSP Coordinator. He also noted that, as submitted to Washington, the FY 1962–66 Plans were in varying degree deficient in describing the shortfalls in the attainment of U.S. security objectives and that this should be corrected when the FY 1963–67 Plans are prepared.

Mr. Dillon said that, in approving the Iranian Plan, he wanted the Tehran Country Team to re-appraise and report on the complex political and economic requirements which must be weighed in projecting military assistance to Iran. Also, while approving the Plans for Vietnam and Laos, he wanted to establish a special group to review all MSP programs in these countries against the totality of U.S. objectives in them; significant revisions in these plans might be required based upon the findings and recommendations of the group. Mr. Kuss expressed the hope that the group would not “go over the same old ground” and that the result of such an examination would apply to the FY 1963–67 Plans rather than to FY 1962–66; this was agreed.

It was pointed out, with respect to the “FINABIL” statistics shown in the 5-year Plans, that these figures were included as a matter of information and that approval of the Plans by the Department of State should not be interpreted as validating or approving this statistical analysis.

With regard to the special report to the NSC on the significant points revealed through the new planning procedure, Mr. Dillon asked for the assistance of the Defense Department in the preparation of the report, of which he would like a draft to review by mid-August. Mr. Bell said that he felt that such a presentation would be useful for two purposes: (a) to give the NSC, for the first time, a meaningful exposé of “what U.S. security policy costs and what the U.S. can afford, globally”, i.e., a confrontation of “security policy” vs. “budgetary policy”, and (b) if the presentation is done well, it will provide the best possible grounds upon which to base the budget request for the Military Assistance program for FY 1962 and subsequent years. Mr. Kuss said that the Defense Department agreed as to the desirability of such a presentation, but did not wish to be placed in a situation where the NSC expects to receive a report every year following approval of the Plans and would therefore prefer to retain flexibility as to the manner of reporting to the NSC and the nature of the problems or issues to be brought to the attention of the Council and the President. He felt that the essential need this year was to utilize the Plans as the grounds for the FY 1962 budgetary request. Mr. Bell agreed with this thesis. Mr. Dillon suggested the possibility of the report being submitted in September, when the FY 1962 budget request is being formulated. [The Under Secretary subsequently asked that the report be ready in draft form by August 15 for review and early presentation to the NSC.]²

Mr. Dillon then turned to a question on the Italian Plan, in the light of NSC 2158.³ He felt that the Plan’s projection of the Italian defense effort over the period was too low in view of the recorded State/Defense intention to exert pressure on the Italians to make an increased effort; the Rome Country Team should be asked whether it is not reasonable to project an Italian defense effort with increases approaching 8 per cent per year as an initial target in discussions with the Italians. He pointed out that the present 4 per cent constitutes merely an increase comparable to the projected increase in per capita GNP.

With respect to the Japanese Plan and NSC 2158, Mr. Dillon asked whether the military assistance being planned was not intended solely to create a Japanese ability to assume military tasks presently being performed by U.S. forces. Mr. Irwin said that generally speaking, yes. Mr. Kuss noted that Defense had so far not been successful in eliciting a JCS statement that the USAF would be able to withdraw from Japan when the Japanese air force reaches a specified capability, and that this probably is because the missions of the USAF in Japan encompass more than a defense of the Japanese islands.

Mr. Dillon asked the Defense representatives for the reason behind the significant increase in the JCS force goals for Portugal in the ASW field, again in light of NSC 2158; was this because of the withdrawal of the French fleet from NATO? Mr. Irwin said that Defense would provide a quick answer on this point. Those present surmised that the increase was the reflection of SACLANT’s estimate of his current requirements in the eastern Atlantic.

The meeting concluded with an exchange of complimentary remarks concerning the degree of cooperation between State and Defense staffs in the course of the review and approval of the FY 1962–66 Military Assistance Plans.

0. Source: Department of State, Central Files, 700.5–MSP/8–160. Secret. Drafted by Burns, cleared by Bell, and approved in U on August 17.
1. Not found.
2. Brackets in the source text.
3. Regarding NSC Action No. 2158, see footnote 13, Document 250.