Arms and the Money

May 30, 1949

The commitment we have made to defend the integrity of Western Europe has been forced upon us by the Russian threat. It is a grave and tremendous commitment. In return for it, our negotiators had both the right and duty to ask heavy quid pro quos. Instead, they assumed that they had to promise monetary and military aid in addition in order to bribe Western European governments to accept the tremendous pledge from us for which they have been begging ever since 1914!

If Western Europe has a will to defend itself, it will have little trouble in finding the means. The $1,130,000,000 grant that we have promised them for the first year is after all only 3 percent of the present total governmental expenditures of the Atlantic Pact nations. They can easily make that up by cutting less essential things out of their swollen governmental budgets.

On the other hand, as I pointed out in a Newsweek article of April 4, there is no way in which we can insure that either the money or the equipment we contribute would actually result in a net increase of European armament by that amount. To the extent that we free European governments from the necessity for military spending, we release just that much more of their resources for bigger social-security schemes, bigger food subsidies, bigger nationalization deficits, or whatnot.

It is now being argued that we can solve this dilemma by insisting that each beneficiary European government spend on armaments in the next fiscal year, say, at least as much as we contribute, in addition to the amount it has already been spending in the current fiscal year. But it is dubious policy to try to force any country to spend more on defense than it thinks it ought to spend. This could easily give rise to the unwholesome belief in that country that it was spending large sums on defense, not for its own self-preservation but as a favor to us. It might also tend to encourage bookkeeping fictions under which government expenditures were charged to the military budget that did not in fact belong under that budget.

If our Administration is nonetheless determined to go ahead with its $1,130,000,000 military-aid program, then Congress, instead of adding this to the already dangerous burden upon our taxpayers, should take it out either of our proposed military budget of $15,300,000,000 or of the $5,430,000,000 authorized for the ERP.

Consider the military budget first. For a single year it already equals the military expenditures for the entire nineteen years from 1922 through 1940. Must our military budget now be larger still? Does it make any sense to assume that our military expenditures with the Atlantic Pact must be actually higher than without the Atlantic Pact? Even if we do not assume that the Atlantic Pact in effect adds the existing military expenditures of Western Europe to our own, can we not assume that if we transfer a billion dollars of our defense expenditures to Europe, it at least removes the necessity of spending that billion dollars here?

Finally, if the Administration refuses to take this $1,130,000,000 out of the home military budget, Congress could take the whole amount out of the $5,430,000,000 authorized for the ERP. It could simply authorize the beneficiary European governments to use up to this amount of their ERP funds for buying armament from us instead of other things. As it is, we are about to throw most of this $5,430,000,000 away anyhow.

We are turning it over to European governments to meet a trade deficit that they themselves have brought about by exchange control with overvalued currencies. Our ERP funds, in short, are being used in the main to subsidize and prolong a vicious totalitarian device that strait-jackets economies, retards recovery, and makes impossible the free multilateral flow of world trade.

The further burden on our budget involved in the proposed European armament-aid program is without logic or excuse.