ABSTRACT
Although the Korean War had stabilised by 1952, America's defence institutions had expanded in preparation for fighting a long-tenn Cold War. American military manpower strength had increased substantially, producing a combined military force during the financial year of 1952 of 3,627,029 personnel. This was distributed over the four military arms as follows: al111Y 1,552,000, navy 810,000, marines 204,029, air force 1,061.000. The recruitment of another 1,554,000 personnel was expected for 1952 and much of this was to be drawn from the draft under the Universal Military Training and Service Act of 1951. It was expected that these numbers would be accommodated in the available facilities plus others to be constructed as authorised in the Public Works Bill then before Congress. I Finances were readily available for meeting the expanded munitions and defence production levels. The amount of $94 billion was allocated to fund defence manufacturing production, the purchase of raw materials and the expansion of munitions engineering capacity. The stockpiling of resources for use in a long-term war had proceeded satisfactorily and by 1952 purchases had been completed for 100 per cent of the uncommon items such as quinine, bismuth (used in alloys) and jewel bearings. Natural rubber purchases had reached nearly 60 per cent of requirements, and zinc and sperm oil 80 per cent, but copper was at 30 per cent. It was expected that by the end of 1952 the purchasing targets for all the items would be achieved with the final cost amounting to $8.304 billion.c
Financing this large defence expansion presented little problem for the US, but the British and French governments faced great difficulty in matching it. At a Tripartite Meeting of leading NATO countries in September 1951, Hugh Gaitskell, Chancellor of the Exchequer, explained that Britain would not be able to maintain the annual defence expenditure previously planned at £4.7 billion. Rising import prices for raw materials and a large trade deficit with the US (amounting to over SI billion) compelled the UK to increase its exports of manufactured goods and decrease its production of defence equipment and defence expenditure generally. General Eisenhower's plans for expansion in NATO, added the Chancellor, would place further strains on Britain's overstretched military capacities. Rene Mayer. France's Deputy Prime Minister, reported similar problems for France. It too faced a large US trade deficit and had been seriously
Cold War tensions and the trade war 41
affected by the termination of Marshall Aid in 1951. Other financial strains were the continuing expenses of waliime reconstruction, but particularly the costs of meeting France's colonial war in Indochina. Involvement in that war, he said, meant that in considering the expcnditure on military expansion, France 'must divide its resources between its forces in Indochina and those in Europe'.'
