DEPARTMENT OF STATE Memorandum of Conversation
DATE: July 21, 1952
SUBJECT: U.S. Procurement in France
PARTICIPANTS: Ambassador Bonnet S - The Secretary EUR - Mr. Perkins S/NSA - Mr. Martin
COPIES TO: S EUR RA Embassy Paris
Ambassador Bonnet described the conversations he had had during his recent visit to Paris, emphasizing the strong feeling he found everywhere in the Government that production in France of those items contained in the lists submitted by Pleven to us May 6th must go forward. He indicated that our reply, offering to place contracts for about $186 million from a total request of about $625 million, had resulted in great disappointment and concern on the part of the French Government. Bonnet, Pleven and Schuman did not see any alternative but to report to their Parliament that they had tried to work out a defense program to meet their NATO commitments, relying on U.S. help in do so; that help had not been forthcoming and therefore the program could not be carried out, and the Parliament would presumably wish to select another government to take their place.
Ambassador Bonnet emphasized that the great effort undertaken by the French at Lisbon had only been agreed to on the assumption that the U.S. was in a position to pick up the contracts which the French Government could not finance in view of the size of forces they had to raise. He believed there has been a great misunderstanding between the two governments on this point, as the U.S. reply represented less than a third of the amount the French Government needed.
In addition, Ambassador Bonnet complained about the way in which the negotiations had been conducted. It had been understood there would be a careful working out of the program bilaterally with the U.S. Embassy and in
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particular with the MAAG. However the aircraft part of the program had been taken out of these hands and reliance placed on Mr. Batt of NATO. With respect to the other parts of the program, discussions had not been pursued to the ___ between French and U.S. authorities and our conclusions appeared to have been arrived at on other grounds. It would appear there had not been a careful consideration of the proposals on an item by item basis, or an appreciation of v[arious] political factors, including the effect on the ratification of the EDC. Ambassador Bonnet seemed particularly concerned about U.S. failure to approve procurement of the Nord aircraft.
I made clear to Ambassador Bonnet that the U.S. had considered with great care, on an item by item basis, the proposals submitted by the French Government. At the time of the Lisbon agreement there had been no discussion of the dollar amount which might be involved. The U.S. was not in any sense committed to a specific figure. We had done the very best we could in the light of the importance of the items in question to the NATO buildup and in the light of the availability of funds. The Congress had reduced the amount available for Europe for end items by a billion dollars and for defense support by over half a billion. The U.S. was already spending large sums in France for off-shore procurement under the Lisbon program and on regular off-shore procurement. It was not possible to find in addition the money to pick up the whole $625 million. There were still problems to be worked out on a number of items which might result in further contracts and, in addition, there would be, under the regular OSP program, additional contracts let to France without question during the coming fiscal year.
However, I agreed to discuss the matter with Secretary Lovett to see if there were any parts of the French proposals which would justify reconsideration. Ambassador Bonnet was urged not to encourage his government to expect too much from this agreement to take another look.
Ambassador Bonnet volunteered that he had already discussed the problem with Foster and he felt sure the answer from Defense would be that there were no funds. He found it hard to believe that from unobligated money left over from FY 1952 and from the other sources of funds available to us, the U.S. could not find additional money to spend in France on this program and thus prevent the political catastrophe which he believed to be impending.
S/MSA: EMMartin:bfo July 23, 1952