Memorandum of Conversation with Secretary of State Dean Acheson, President Harry S. Truman, Secretary of Defense Louis Johnson, and Averell Harriman

off at the W. . accord H. meeting FOP SEAME 196 July 21, 1950 The President received the Secretary of Defense, Mr. Harriman and me for the purpose of our presenting to him the attached memorandum dated July 21, 1950. The President read the memorandum. At the request of the others, I then stated to the President that the purpose of bringing this matter before him was to give Mr. Spofford instructions and guidance for his negotiations. His purpose would be to try and get the European members of NAT to make a very greatly increased military effort. In order to do this, it was necessary for him to have some measurement of the size of the effort we hoped that they would make; (2) some measurement of the amount of help which we would give them in attaining this goal, and (3) an idea of what we could do to make available to them designs of weapons. 2 REGORDS The President said that he thoroughly understood the purpose SERVICE << and of it and asked whether there were any furthur comments. Mr. Johnson then underlined the fact that of the sum of money mentioned in the second paragraph, $ 4 billion should be devoted strictly to military materiel and should not be used for general economic support. However, he developed the idea E that it was quite possible that some of the $4 billion could be advanced to European countries as funds to finance the manufacture of military equipment. He was not prepared to say how much could be handled in this way. Mr. Harriman stated that he had not understood this and that if substantial amounts were advanced in this way, it changed the economic problem of these countries. However, the point was that regardless of the amounts involved, the Europeans would require (1) physical materiel manufactures in the United States; (2) dollars to enable them to make the necessary defense effort since they would be losing essential dollars on which to live and produce on which to make the effort. The President said he thoroughly understood this and was prepared to and did approve the memorandum.