U.S. AID FOR R.A.F.

Press, Volume XC, Issue 27415, 30 July 1954, Page 11

U.S. AID FOR R.A.F.

Alleged Misuse Of Funds

dec. 12.10 a.m.) , nn WASHINGTON, Julv 28. The investigations division of the Senate Appropriations Committee has charged that United States foreign aid funds were secretly diverted to develop the British aircraft industry, the American “Aviation Daily,” a trade publication, said today. The publication said it had a copy of the staff report which had not yet been released for publication by the committee. The essence of this report, it said, was that American taxpayers had been subsidising the British aircraft industry, which had used the aid to foster a competitive civil jet transport programme to the detriment of the American industry. It said the report was highly critical of United States funds being used to produce three British fighter aircraft which were -iow obsolete, and had also charged that the Foreign Operations Administration was secretly diverting foreign aid funds for use by the British aircraft industry in evasion of the express will of Congress. Among the conclusions and recommendations in the 40-page report according to the publication, were these. G) United States machine tools, worth 126,000,000 dollars, were hurriedly given to the British industry without screening and without proper control over their use. (2) If Congress approves the Administration’s appropriation requests for next year, the total amount of United States funds contributed to the Royal Air Force and to building up the base and the strengthening of the British aircraft industry between 19t>u and 1955, will be in excess of 2.000,000,000 dollars in direct appropriation and counterpart funds. Commercial Jet Programme x (3) The effects of the grants-in-aid to the Royal Air Force was .to release British budgetary funds for the continued subsidisation of the commercial jet development programme. <« The British fighters beinS financed with grants-in-aid -as part, or the Royal Air Force modernisation Programme were still in the experimental stage. , , <5l If dollar aid in support of the British military budget is to be -continued it would be desiraole to explore the possibility of supplying the British Government with the air 'sj m ct a tes the latest types of United States fighters in which British-made engines could be readily installed. . (6) A great nation, capable oi em barking upon a long-range and , costly Programme, largely financed by the Government, to obtain mastery of tne •ir in commercial transportation, should be able to produce, without foreign aid. the military aircraft neces«arv for its national defence and the folfilment of its obligations to the North Atlantic Treaty Organisation.

The President said that shooting* incidents such as these always caused deep concern.

Giving a brief background to the incidents, Mr Eisenhower said that after the destruction of the British airliner, the United States had ordered a task force to conduct rescub operations.

The task force was instructed not to provoke any. incidents, but to take any necessary measure to defend itself while engaged in the work. Two American planes in this mercy mission had been fired on and the two Communist planes which attacked them shot down. The United States had protested at the attack. Mr Eisenhower rejected a claim by the Peking Government that the two United States aircraft were over Communist territory when they were attacked. He said he was perfectly certain the United States planes were where they should have been and were on legitimate business. He said the orders to the United States task force were that it should stay in the area until there was no hope of finding survivors from the destroyed airliner. The President said he assumed that this task was nearly finished, and he expected that the force would be leaving the area momentarily. (A naval spokesman told reporters later that the search might be called off within 24 hours.)

Mr Eisenhower said the United States did not mean to be truculent. But, he said, it did mean to defend its rights. He said Americans would defend themselves if they were attacked when on legitimate business