Foreign Relations of the United States, 1950, Central and Eastern Europe; The Soviet Union, Volume IV

460.509/10–3050

Memorandum of Conversation, by the Department of State Member of the National Security Council Staff (Bishop)

top secret

[Washington,] October 30, 1950.

Participants:	The Secretary of State
	Secretary of Commerce, Mr. Sawyer
	Under Secretary of Commerce, Mr. Blaisdell
	Administrator of Economic Cooperation Administration, Mr. Foster
	Mr. Bishop

The Secretary of State opened the conversation by referring to the present NSC action, No. 347, which was drawn up by Mr. Lay to express the action taken by the Council at its last meeting on this subject, August 24, 1950.¹ The Secretary said that only recently had this particular record of action been brought to his attention. He went on to review what had been his understanding of the agreement at the Council meeting on August 24, and emphasized the difficulties which had arisen as a result of the Department of Commerce Order No. 381, September 18.² Some 22,000 applications are outstanding, around 1500 of these applications being for important ECA shipments. Mr. Sawyer in general agreed with the Secretary’s interpretation of the meeting, but said that he did feel, however, that his order was designed only to carry out the policy as he thought it had been established by the National Security Council. Mr. Sawyer emphasized that he was not making policy and that he would, of course, execute whatever policy the Council or, in fact, the President laid down.

Secretary Acheson, in summary, said that what he would like for the Council to do was to reach agreement to the three following general points:

1. First, that we should finish the negotiations which are now underway and which we are confident will give us agreement on something like 90 per cent of the 1A items and 50 to 60 per cent of the 1B items;

2. Having finished the negotiations, we could then proceed to lay down some rules. We could say to the Western European countries that those items which we decide we will continue to classify as 1A and upon which we have not obtained agreement, will not be shipped to the Western European countries unless they actually give us assurances that these items will not be shipped on eastward. We can work out language to cover “equivalent” and “identical” items. We would not insist that these other countries put these items on the agreed international list for export controls but we would insist on their giving us proper assurances. On the 1B items which we decide to continue on our 1B list and upon which we have not obtained agreement of the Western European countries, we would then say to them that unless they give us assurances that they will not ship certain quantities of these items, we, in turn, will not furnish the items to them; and

3. That in the meantime, we should break the log jam and use the old criteria which were in effect before Commerce Order No. 381 and get these critical items moving.

Secretary Acheson and Secretary Sawyer were in full agreement that in any event we would continue to stop any highly strategic shipment which we knew was itself going to be transshipped to the Soviet Union or its satellites.

Mr. Foster of ECA emphasized that most of the pending ECA applications were for machinery and basic equipment, some of which were needed in the military rearmament program.

Mr. Sawyer said that he would immediately go back to the Department of Commerce and in consultation with Mr. Blaisdell take action to release the applications which are now being held up and to “break the log jam”. He added that he would like the Secretary of State, however, to clear this action with the President for the reason that Mr. Sawyer felt that in holding up these applications, he was carrying out a policy which was approved by the President.

Secretary Acheson said that this would be most helpful and that he, Secretary Sawyer and Mr. Foster would go to the President tomorrow and get approval.³ Mr. Acheson went on to suggest that at the NSC meeting on Thursday, they point out to the Council that this emergency action has been taken and the log jam broken, and therefore the Council might refer the proposal made by the Department of State to the Senior Staff of the NSC in order that careful study and full coordination could be given to this problem and a statement evolved which would be satisfactory to and understood by all of the members.⁴ Secretary Sawyer and Mr. Foster agreed fully with this suggestion.

[Max W. Bishop]

1. See the Record of Actions of the National Security Council Meeting of August 24, p. 179.
2. Regarding the Department of Commerce policy under reference here, see telegram 1498, September 23, to Paris, p. 194, and telegram 1962, October 16, to London, p. 208.

3. A handwritten marginal notation on the source text at this point, by Barbara Evans, Personal Assistant to the Secretary of State, reads as follows: “In subsequent telephone call it was decided that Sec. Sawyer would telephone President. Sec. Acheson therefore does not have this commitment. BE”

   A memorandum of conversation of October 30, not printed, indicates that Foster later telephoned the Secretary of State to report that he had just talked with Sawyer who was going ahead with the issuance of licenses for some $40 million in projects and who promised to review other license applications promptly (S/P–NSC Files, Lot 61 D 167, East-West Trade).

4. Under reference here is the proposed statement of policy on East-West trade prepared by the Department of State and circulated as NSC 91, October 30, infra, NSC 91 was considered by the National Security Council at its meeting on November 2; see the Record of Actions of that meeting, p. 225.