Memorandum from Secretary of State Dean Acheson to President Harry S. Truman

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memo, Ans. Nov.22,1951 November 20, 1951 MEMORANDUM FOR THE PRESIDENT Subject: Economic Assistance for France The Secretary has reported about the general agreement that he and Mr. Harriman reached with the French Government on November 16, to provide United States economic assistance to France in an amount adequate to make possible the French defense effort in the conding year. The Secretaryis report to you is contained in the attached telegram 2967 from Paris, dated November 17. The agreement reflects the results of two weeks of negotiations with the French. Our approach to the French in the aid negotiations has been that United States economic support for France in one form or another would be in an amount adequate to finance imports into France required to support the French defense effort and maintain a healthy Fronch econonty The French believe that the military situation in Indo- china requires that they increase their military expenditures in that area by one-third next year. The French are also anxious, as are we, that they carry out a substantial program to increase their forces in Europe committed to Eisenhower. This latter program is not only essential to NATO defense plans in Western Europe but is also considered by the French to be a necessary prerequisite to the creation of German forces of the size which our military planners desire. It is the judgment of the United States negotiators that the French programs in Indochina and in Western Europe for the coming year are reasonable ones and justify our support. ARCHIVES AND RECORDS to The French Governnent is now presenting its calendar 1952 budget to Farliament. The budget presented, particularly as it rolates to defense expenditures, is to a large excent dependent on how many dollars the French can count on having to cover their balance of payments deficit. Mr. Harriman and Secretaries Acheson and Lovett have agreed that the legitimate French dollar DECLASSIFIED requirements E.O. 12065, Sec. 3-402 SEGRET State Dept. Guidelines, March 6, 1982 By He NLT, Date 3-16ty