FOREIGN 'RELATIONS, 1950, VOLUME I


MDAP countries with, an over-all shortening of production lead times
Jn fiscal years 1953 and 1954. It is estimated -that the capital equipment
to be procured in the United States will be produced in time to meet
the time-phased force requirements of the European NAT countries.
It is assumed that with respect to the balance of European armament
requirements, the industry of Western Europe will keep pace with
American industry. The estimated costs of supporting European forces
(item 1 (b), except for maintenance parts and replacement equipment
which are time-phased in relation to armament production) follow the
time-phased requirements for the expansion of European NAT forces.
  6. In fiscal and budgetary terms, items 1 and 2 in Table 2 are
expressed in and time-phased according to obligations. Actual ex-
penditures, including the call upon available resources in the economy
of the United States and Western Europe, would come at a later
period. The estimated amount of resources which Western Europe
could make available for defense purposes (item 4, Table 2) is on a
current or an expenditure basis. Since estimated available resources
(mobilizable in Western Europe plus those furnished by the United
States) are only slightly in excess of time-phased requirementsý,
an
unanticipated peaking of defense expenditures in a given year would
run into basic resource shortages. Furthermore, the longer the Euro-
pean NAT countries delay in raising forces and placing contracts for
armament, the greater will be the likelihood of losing resources for
defense use in the early years of the defense effort and encountering
resource shortages in the later years. In addition to the difficulties of
measuring the incidence of defense burdens by countries is not known
in detail, although the required studies are underway in the NAT
organization. It is probable that z these studies will indicate that as-
signed defense tasks will not be distributea by countries in accordance
with economic and financial capabilities to sustain those tasks. Addi-
tional resources will be needed from external sources. Although ac-
count has been taken of the possibilities of transfers of resources
among European NAT countries, it is expected that unmanageable
defense burdens which fall on certain European NAT countries will
have to be compensated in part by additional United States assistance.
For all these reasons, it has been deemed necessary to anticipate sup-
plementary and justifiable requirements for United States assistance
either in the form of armaments or economic aid, in addition to that
needed to meet anticipated dollarbalance of payments deficits. The
amount of aid in other than armaments :is $7.81!billion for the, four
fiscal years (item 7 Table 2).
   7. All United States projected aid,,tolthe EuropeanNA T  -ountries
 (andiWestern Germany) is included in Annex 1. However,-certain
 countries are not directly associated with the defense program.for the


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