December 17, 1949
Subject: Proposed Bilateral Agreements under the Mutual Defense Assistance Act of 1949
Participants: Sir Oliver Franks, British Ambassador Mr. Dean Acheson, Secretary of State Mr. George W. Perkins, Assistant Secretary for European Affairs Mr. Walter S. Surrey, Special Assistant to the Director, Mutual Defense Assistance Program
Copies to: S, U, G, S/MDA EUR, BNA American Embassy, London
Sir Oliver stated that he had communicated to his Government the views expressed by me at our meeting on December 14, 1949. I informed him that we had considered very carefully the ways of meeting the major points raised by Sir Oliver in connection with the terms of the bilateral agreement. In connection with these major points, I advised him as follows:
(a) Article I, paragraph 4 of the proposed bilateral agreement covering the transfer of military materials to other countries could be limited to the express terms of the legislation, covering only the transfer of the actual materials which we supply to them.
(b) With respect to Article I, paragraph 1, covering mutual assistance, I advised him that we had redrafted this Article to make clear that the British contribution to mutual assistance should not be made to such an extent as would cause a conflict with the principle that economic recovery must have clear priority. I advised Sir Oliver that with these changes I thought that Article I, paragraph 1 of the proposed draft bilateral agreement fully met the British objections as noted by Sir Oliver at his previous meeting.
Sir Oliver stated that these changes would be most helpful to his Government in considering the matter.
I elaborated further the question which I had discussed at our previous meeting with respect to the effect which would be caused by the failure of the British to sign a bilateral agreement. I explained that we had encountered serious difficulties in presenting the Military Assistance Program to the Congress, and that the President and I had presented the program to Congress despite strong warnings to us by key Senators and Congressmen that the legislation could not be enacted at the last session. I explained to him that we took this action because in the light of the public requests for assistance made to us, we considered it extremely important that the provision of military assistance should not await action at the next session of Congress. I also referred to the fact that we had presented the full program even though we recognized that the program as originally conceived covered a year's period, whereas in actual fact it would now have to be accomplished within six months. I pointed out that after the strenuous efforts on the part of the President and myself, and other members of the Executive Branch, to obtain the necessary authorizing legislation, and an adequate appropriation thereunder, considerable confusion would result in American public opinion were the British Government now to refuse to sign a bilateral agreement, and as a consequence not be eligible to receive military assistance. I also pointed out to Sir Oliver that the other potential European recipients of military assistance would be seriously concerned by a British failure to sign such a bilateral and would have doubts concerning British intentions in carrying out a multilateral effort to defend the North Atlantic area.
Sir Oliver stated that he thought these views would be extremely helpful in presenting the views of this Government to his Government. He stated that it must be recognized that the British were concerned with the forthcoming British election, and the inherent political difficulties involved in a Government program which maintains the size of the defense budget but reduces certain budgets with respect to the health and security programs.
I stated to Sir Oliver that it might be helpful for him at the conclusion of our meeting to go over in detail with Messrs. Perkins and Surrey the terms of the bilateral agreement as well as the intentions of this Government with respect to the implementation of the Mutual Defense Assistance Program. Sir Oliver agreed to do this immediately upon the conclusion of our meeting.
S/MDA:WSSurrey:mf 12/22/49