Transform EGA

August 21, 1950

It obviously makes no sense today, as Senator Byrd has pointed out, to convert our own economy to a restricted wartime basis, and at the same time to continue to spend nearly $4,000,000,000 to build up Europe’s economy on a peacetime basis. Yet this is still substantially what we are planning to do.

As late as June 21, the Senate committees of Foreign Relations and the Armed Services, “after hearing the testimony of Administrator Hoffman concluded it would be unwise to divert” any EGA funds from their original civilian-welfare purpose to the military aid program.

Tucked away in the table of this report are two columns of extremely significant figures whose significance the joint committee apparently did not consider great enough to call attention to in the text. I reproduce them here. The column TNI represents the percentage relationship of the military expenditures of each country to its total national income. The column TGE represents the percent of military expenditures of each country to its total government expenditures:

These Western European countries are in far greater and more immediate peril from Russian aggression than the United States. Yet they have been spending only an average of 5 percent of their national incomes on defense. Even more indicative of the dream world in which they have been living is the second comparison. While 36 percent of our own government expenditures were going into defense, even prior to the Korean war, these nine countries were devoting to military defense an average of only 18 percent of theirs.

In the face of their country‘s obvious peril, in other words, these governments have been devoting less than a fifth of their expenditures to defense and spending the other four-fifths largely on socialistic experiments—especially to cover the deficits of their nationalized industries.

It may be politically and diplomatically impossible to terminate EGA now. But at least it must be converted at once into an exclusively arms-aid program. And we must ask in return for far better assurances that so-called arms-aid funds will actually add to the might of European armaments.

For our arms-aid funds, of course, do not necessarily add to Europe‘s defense simply because they are specifically earmarked for defense. If an aided European government merely spends the same amount on defense that it would have spent out of its own funds anyway, this means that our arms aid has simply released that government‘s own resources for additional nondefense expenditures. To assure that we are not throwing our arms aid away on nations with no will to use it, a good rule might be to make only those governments eligible that agree to devote at least as great a proportion of their total expenditures to defense as we do. It is impossible for us to help defend Europe unless Europe is determined to defend itself.

If any European country is unready to give evidence, right now, that it is willing to fight Communist aggression, by sending at least token aid, including men, to Korea, or if it complains that it cannot afford to increase its armament expenditures just now because it must first improve its standard of living, we can simply suggest that it will have to do that without our help.

By importuning the European governments to rearm with our money, we are giving some of them the dangerously perverted impression that they are rearming not for their own survival, but as a favor to us. The governments of Western Europe, even more than our own, need to awaken to realities before it is too late.