DEPARTMENT OF STATE Memorandum of Conversation
Date: December 14, 1949
Subject: Proposed Bilaterals Under MAP
Participants: Sir Oliver Franks, The British Ambassador Mr. Dean Acheson, The Secretary of State Mr. George W. Perkins, Assistant Secretary of State for European Affairs
Copies to: S, U, G, S/MDA, EUR, BNA, American Embassy, London
Sir Oliver stated that the British Cabinet was deeply concerned about the proposed bilaterals in connection with the Military Assistance Program. He explained that since the war the United Kingdom had made substantial contributions to the defense of other European countries, the total running to approximately £400 million, more than half of which was in the form of gifts, loans, or sales at greatly reduced prices. In addition, they were proposing to continue such expenditures at the rate of about £40 million a year for the next two years. They felt that they had done and were doing all that they could do in assisting other countries. He stated that the British Government had originally misunderstood the amount of assistance which would be available to the United Kingdom under the Military Assistance Program and that this was now reduced to B-29 airplanes (which some part of the British air force is not too keen to have)* and about $25 million worth of machine tools. This was far less than they had expected and did not make a substantial contribution to their preparedness program.
He stated that there were two difficulties presented in the bilaterals which he wished to enumerate: (1) the provision in Article I, paragraph 4, of the proposed bilateral covering the transfer of military material to other countries; and (2) Article I, paragraph 1, covering mutual assistance. He stated on Article I, paragraph 4, that they did not believe that it was practicable or desirable to provide for such controls and that it would simply result in a White Paper situation.
I agreed that that was undesirable, and that we would be satisfied with stipulating the provisions contained in the Military Assistance Act.
Sir Oliver referred to Article I, paragraph 1, and said that the British Government felt it was doing everything that it could do and that they presumed that Article I, paragraph 1, implied at least that they should take on additional burdens to those which they now had and which they were unable to do.
*Material in parentheses is additional comment not contained in conversation. It was explained to him that Article I, paragraph 1, covered the requirements of paragraph 402(d) in the Military Assistance Act, and that it was not intended to increase the amount of assistance which the British should supply over and above what they could supply. I emphasized in particular that predominant in all of these arrangements was the paramount importance of economic recovery and that nothing was intended which would in any way jeopardize economic recovery.
Sir Oliver summarized the British position by stating that the advantages to be obtained by military assistance from the United States would not offset the disadvantages in the bilaterals.
I told him that we felt it would be most unfortunate if the United Kingdom did not sign a bilateral, and that we would take his points under advisement and see if it would not be possible to produce language which would be more satisfactory.
There is attached a memorandum which had been prepared for Sir Oliver prior to his presentation of the situation. There is also attached, also for his personal information, a paper giving background guidance. Neither of these are official documents. They were simply handed over to assist in understanding the situation.
EUR:GWPerkins:elm