Memorandum by the Assistant Secretary of State for Economic Affairs (Thorp) to the Assistant Chief of the Policy Reports Staff of the Executive Secretariat (Barnes)1


Subject: Consideration of the Economic Defense Paper at the NSC Next Wednesday.

Mr. Webb mentioned to me this morning that in all probability the Secretary would try to get away from Washington for a couple of weeks beginning early next week. The purpose of this note is to set forth our strong recommendation that he stay at least through NSC consideration of Mr. Labouisse’s paper.2 I shall send you another note on the trade agreement problem (hearings of the Senate Finance Committee are scheduled for Thursday, February 22) shortly. There are a number of reasons why I believe the Secretary’s attendance at the NSC next Wednesday is imperative:

The paper in question is the most ambitious undertaking to date to set forth comprehensively the economic relationships between the Soviet area and the Western world. Implicit in the recommendations are very important political and strategic judgments which must be agreed upon by the NSC before they move on to acceptance of the recommendations themselves.
There may be some discussion of the proposal for establishing an Economic Defense Strategy Board, and particularly whether or not the Department should provide the chairman. The implications on our foreign relations of programs in the economic defense field are such that the Department must maintain policy and planning control over the diverse activities in this field.
In one sense, the NSC meeting on Wednesday will bring to a head running disagreements between the Department and ECA on the one hand and Commerce and the Defense Establishment on the other with respect to East-West trade policy. As the Secretary has represented the Department in earlier discussions, it seems important to me that the continuity of his attendance should not be lost at this critical stage.

  1. Drafted by the Special Assistant to the Assistant Secretary of State for Economic Affairs, J. Robert Schaetzel; a copy was sent to Labouisse.
  2. This is presumably a reference to OIR Report No. 5447R of January 20, 1951, which is Appendix A to the memorandum by Executive Secretary Lay, February 12, p. 1035.