Evening star. [volume] (Washington, D.C.) 1854-1972, 1952-01-29
$500 Million Granted
To Britain 70 Prevent
Armament Cutback
By Edword E. Bonner
A..;...I De-. S..ts NJr;..r

\ Associated Press StoH Writer
/ Dollar short Britain is being
given an emergency $500 million
slice of Mutual Security Funds to
prevent threatened cutback of
its defense effort.
The grant was announced last
night by Mutual Security Director
/ w. Averell Hartman, who said
that without it Britain would be
forced to reduce its contribution
to the Western arms buildup by
twice as much.
The money will be used up to
July / to buy raw materials and
lcomponents" which have to be paid
for in dollars. The purchases will
be made largely in the United
States.
Emergency Transfer Authorized.
/ For the purpose. President Tru-
man approved a dip into military
funds which otherwise might have
been used for arms and supplies
made in this country. The shift
was necessary because Congress
made no specific provision for aid
to Britain in the new 1885, 903,-
976 arms aid legislation, although
authorizing an emergency transfer.
/ The action came less than two
weeks after Prime Minister
Churchill assured Congress Il
have not come here to ask you
for money"
Actually, Mr.. Hartman dis
closed, negotiations for assistance
were in progress before Mr..
Churchill sailed for the United
States.
Except for an assist Of some
$40 million last month, the aid
was the first extended the British
since Britain voluntarily waived
further Marshall plan help more
than year ago. That was when
things were looking up and Brit
ish dollar reserves were rising.
\ However, in the last half of
1851, Mr.. Hartman said, "a very
serious drain" reduced the re-
serves by 81 .532, 600, 900 to $685.
100000 at the end of the year.
He said 1t was due in large part
to imitation resulting from the ef-
forts of the West to shore I'D de-
lenses against the threat Of Com
munist aggression.
The allotment was only half of
what Britain originally sought.
France expects to get some 5000
million in direct grants and in
dollars spent by the United States
there for military installations and
similar purposes.
4 Mr.. Hartman made a brief an
|nouncement of the administra-
tons decision. He released at the
same time a letter he wrote Sun
day to Chairman Connally of the
Senate Foreign Relations Commit
lftee, and on January 8 to heads of
the Senate and House Foreign
Affairs. Armed Services and APP
preparations Committees.
Essential to Imports.
| Noting that Britain has sought
recently to curtail defense
imports and hold back civilian
consumption in order to conserve
dollar earnings and reserves, and
ALSO that the commonwealth coun-
tries are considering similar ac-
ltion, Mr.. Hartman wrote Senator
| Connally that "these measures can
mot alone suffice to meet the pres
lent crisis"
I He said the United Kingdom is
: dependent on its dollar earnings
flor many essential imports and
| these must be maintained il
,lBritain keeps UP its defense pro-
llduction.
\ The raw materials and COM
rlponents to be financed by this $500
million will be directly related to
1.-THE defense program" Mr.. Harri-
rlman said. I'm addition, the Gov
,lernment Of the United Kingdom
sEhas agreed to apply the sterling
sIcounterpart to the maintenance OF
Its defense production program.