Foreign Relations of the United States, 1951, National Security Affairs; Foreign Economic Policy, Volume I

S/S-NSC Files, Lot 63 D 351, NSC 114 Series

Report to the President by the National Security Council

top secret

Washington , August 8, 1951.

NSC 114/1

Status and Timing of Current U.S. Programs for National Security

Note by the Executive Secretary

References: A. Memo for NSC from Executive Secretary, subject, “United States Objectives and Programs for National Security”, dated July 12, 1951¹ B. NSC 68 Series²
C. NSC 114 and Annexes to NSC 114³
D. NSC Actions Nos. 487-a and 518⁴
E. Three Memos for NSC from Executive Secretary, same subject, dated July 31, 1951⁵
F. Memo for all holders of NSC 114 and Annexes to NSC 114 from Executive Secretary, dated July 31, 1951⁶
G. Memo for NSC from Executive Secretary, same subject, dated August 6, 1951⁷

At the 99th meeting,⁸ with the President presiding, the National Security Council, the Secretary of the Treasury, the Deputy Attorney General, the Secretary of Commerce, the Director of Defense Mobilization, the Economic Cooperation Administrator, the Federal Civil Defense Administrator, the Director, Bureau of the Budget, and the Chairman, Council of Economic Advisers considered a draft report on the subject (Reference G) and adopted it subject to corrections in paragraph 18 a and paragraph 55 proposed by the Department of Defense. The report, as corrected and adopted, is contained in the enclosure.

Also enclosed for information in this connection is Appendix A, “Changes in the World Situation Since the Completion of NSC 68/4.” Eight related annexes, prepared by the respective departments and agencies indicated in each annex, are being circulated under separate cover for information in connection with the enclosed report.⁹

The National Security Council, the Secretary of the Treasury, the Attorney General, the Secretary of Commerce, the Director of Defense Mobilization, the Economic Cooperation Administrator, the Federal Civil Defense Administrator, the Director, Bureau of the Budget, and the Chairman, Council of Economic Advisers, submit the enclosed preliminary report to the President for his consideration with the recommendation that he note it and the annexes thereto as indicative of the status of the present programs, approve the “Conclusions” contained in Part III of the report, and direct their implementation by all appropriate executive departments and agencies of the United States Government.

James S. Lay, Jr.

[Enclosure]

Preliminary Report by the National Security Council on Status and Timing of Current U.S. Programs for National Security

part i—changes in the world situation since the completion of NSC 68¹⁰

1. As anticipated in NSC 68 (April 1950), the Soviet rulers have continued in relentless pursuit of the Kremlin design. In Korea they have demonstrated a willingness to take actions which involve grave risk of precipitating global war. Such risk-taking appears to be closely calculated; the USSR has exercised considerable care and restraint to avoid open and direct involvement. Nevertheless, the Kremlin’s willingness to accept such risk has been greater than was foreseen in NSC 68.

2. Since April, 1950 the USSR has intensified its deliberate and systematic campaign to prepare the Russian people psychologically for possible war with the United States. A similar campaign is being carried out in the European satellites and China.

3. The USSR is militarily substantially stronger than it was in April, 1950. Furthermore, the increase in military strength-in-being of the Eastern European satellites since April, 1950 has been large, and alone probably offsets the increases which have been achieved in Western Europe. The Chinese communist regime has considerable military capabilities at its disposal, has undertaken military action in the Soviet interest, and thus far, at least, has made progress in consolidating its control in China. Evidence from various sources during the past year shows that Soviet military production is of high quality—and of higher quality than had previously been estimated. The ability of the USSR to develop large military capabilities where none existed a few years ago, as in North Korea, has been shown in the Korean war and this has required a revision of earlier judgments regarding satellite military potentials. On all these counts, NSC 68 presented a prospect which was more favorable for the United States than now appears to have been warranted.

4. Nothing has occurred within the Soviet empire which requires a revision of earlier judgments that the regime is capable of maintaining its control over the Russian people and its satellites.

5. Notably in Korea, and elsewhere as in Iran and the Balkans situations have developed which could more easily issue in general war by accident or miscalculation than was foreseen fifteen months ago.

6. As anticipated in NSC 68, the Kremlin regards most seriously the prospect of United States and Western rearmament generally. It is highly sensitive to German and Japanese rearmament and the establishment of American bases overseas. Its principal immediate purpose is to frustrate these programs. Its presently indicated course of action to that end is to exploit all opportunities to split the Western Allies, particularly the United States and the United Kingdom, and to conduct a specious peace campaign designed to exploit both fear of a new general war and reluctance to make the sacrifices necessary to redress the balance of power. There is a serious danger, which may become acute if a cease-fire in Korea is agreed to, that by such wiles the USSR may yet lull the free world into a false sense of security, with adverse effect upon both its military posture and its political cohesion. If, however, the United States demonstrates determination and progress in meeting its commitments to build the strength of the free world to the level at which it can deter or defeat Soviet aggression, and if Soviet conciliation is seen to present no real assurances of peace and security, it is likely that the alignment of the West can be maintained and its strength further developed.

7. If and when it becomes apparent to the Kremlin that the Western alliance and projected rearmament cannot be disrupted and frustrated by political and psychological means, the danger of Soviet preventive action will become acute.

8. The free world has made important progress in organizing itself to meet the Soviet threat. UN action to counter Communist aggression in Korea, the development of NATO, progress with respect to the Schuman and Pleven plans, the successful conference of American foreign ministers, progress on the Japanese peace treaty and on Pacific security arrangements, all indicate in some degree a developing cohesion and awareness of common peril. This progress is impressive in relation to normal expectation, but has been slow and unsatisfying in relation to the abnormal exigencies of the situation. The United States and its allies have moved less rapidly than envisaged in NSC 68/4¹¹ toward exploiting their vastly superior economic potential to improve their over-all power position vis-à-vis the Soviet system. NATO planning has yet to be translated into effective military strength in being. Tangible support for the UN cause in Korea has left much to be desired. In general, Far Eastern issues have tended to divide the free world. Moreover, the situation in Iran and the Arab states has deteriorated beyond all expectation.

9. The level of military production in the United States is not currently meeting the military readiness targets indicated in NSC 68/4, which moved forward the military readiness level contemplated for July 1, 1954, to July 1, 1952. The detailed matériel programs developed subsequent to the approval of force levels on December 14, 1950, were finally approved when the military budget for FY 1952 was approved on April 19, 1951. In the interim, however, available funds were used to expand the production base and to get long lead time items into production on an expanded basis. The flow of military assistance to allied countries has lagged behind the targets contemplated in NSC 68/4, in part because of the matériel requirements needed to support United Nations forces in Korea. The level of military production in Western Europe has been inadequate to support the objectives of our economic and military assistance programs. In the earlier phases of our build-up, the output of military equipment has been a more serious limitation on the building of military strength than the first drafts upon our manpower resources. The limitation on the availability of military equipment stems from such as the following: the recent date of final approval of the detailed matériel programs; the practical problem of reducing long lead time required for military equipment such as tanks, aircraft, ships, tactical radio, motorized equipment, and heavy construction items; delay in administrative actions which could have made tools and facilities available at an earlier date; organizational problems in production facilities; the decision to expand the production base and concurrently to secure delivery of end items; as well as a psychological situation less favorable than that existing at the time of adoption of NSC 68/4.

10. The estimates of Soviet atomic capabilities contained in NSC 68 have been revised upwards. It is now estimated that the USSR will have in mid-1953 the atomic stockpile formerly estimated for mid-1954. The date when a surprise attack on the United States might yield decisive results is correspondingly advanced.

11. Although a thorough examination of the subject is not now available, the strength-in-being of the United States and its allies has probably increased in absolute terms less than that of the Soviet system since April 1950. The mobilization effort of the United States and its allies has brought them closer to the actualization of their potential than in April 1950. The date at which this mobilization effort will enable them to achieve the capability of supporting the objectives outlined in NSC 68 is still some time off, certainly later than was expected when the NSC 68/4 programs were developed. The question of comparative capabilities and the rates of increase in capabilities is of such importance that a careful assessment should be obtained as rapidly as possible.

12. Review of the world situation shows that the danger to our security is greater now than it was in April 1950. It is greater now than it was then thought it would now be. Fifteen months ago 1954 was regarded as the time of maximum danger. It now appears that we are already in a period of acute danger which will continue until the United States and its allies achieve an adequate position of strength.

part ii—current programs for national security

The Military Program

13. The military program contained in the enclosure to a Memorandum for the National Security Council from the Executive Secretary, subject, “United States Objectives and Programs for National Security,” dated December 14, 1950,¹² with certain augmentations is the present target program. This program is set out in detail in Annex No. 1. This program is explicit with respect to military personnel strength and units; it is not explicit with respect to materiel objectives, outlining them broadly by implication in terms of active forces, tasks to be supported, and establishment of a mobilization base capable of rapid expansion. The Department of Defense FY 1952 procurement objective was evolved for the purpose of defining the matériel and mobilization base objectives and was finally approved by the President on April 19, 1951. This objective was to have on hand by June 30, 1952, or as soon thereafter as they could be produced, sufficient major end-items of material to meet the following requirements:

a. Training consumption through FY 1952 and Korean combat consumption through December 31, 1951.

b. Full modern equipment for the active forces.

c. Necessary training equipment for civilian components up to 50% of the amount authorized the active forces. This will be partly modern type equipment except that 11 wings of the Air National Guard and 50 Naval Air Reserve Squadrons are to have all modern aircraft.

d. Except for aircraft, stock levels and war reserves equal to from 3½ to 6 months (dependent upon the item) combat consumption of the augmented forces to be in combat one year after the start of an “all out” war together with 6 months training requirements of all units to be mobilized and in training by that date.

It is also planned that in the production of equipment according to the above criteria, production capacity will be established sufficient to be readily expanded, if necessary, to support combat operations and mobilization requirements if hostilities should break out on a total basis on or after June 30, 1952.

The Department of Defense program further contemplates that, subject to further changes in force levels, the procurement program after FY 1952 shall be sufficient to complete any of the above objectives which could not be completed by that date due to limitation of productive capacity, and, where the above objectives have been attained, further procurement for war reserves and continued peacetime usage will be at the minimum level necessary to keep such expanded capacity in operation and available for rapid expansion to mobilization requirement. It is further contemplated that in carrying out the production program maximum utilization will be made of machine tool reserves without replacement.

14. The military personnel strength and units fixed on December 14, 1950, have been increased as shown in Annex 1. These strength and unit targets as thus increased will be met by June 30, 1952.

15. a. At the time of approval of NSC 68/4 on December 14, 1950, it was recognized that the requirements for war reserves of certain long lead time matériel and equipment, originally contemplated for delivery by June 30, 1954, could not be attained by June 30, 1952. Furthermore, the sharp increases in the production program as a whole, which would have been involved in meeting the specific materiel objectives implied by the interim force goals set in NSC 68/4 as subsequently increased, would have led to a peaking of production across the board followed by a sharp curtailment of the production flow. After consideration of these opposing factors and of production limitations, procurement objectives for the initial accumulation of war reserves were fixed on April 19, 1951. In order best to achieve the production objective the Department of Defense is currently reviewing planned production schedules in line with the President’s statement of April 27, 1951. This review is under way with a target date for completion of September 1951.

b. As to requirements for an adequate base of command facilities (e.g., training and communications facilities, troop housing, etc.) for mobilization, no specific objectives to be reached by June 30, 1952 were established on December 14, 1950. While such requirements could have been met by June 30, 1952, it was decided that the rate of their establishment should be in phase with the remainder of the military program. Specific objectives for military construction were set on April 19, 1951, to accommodate the forces to be raised and equipped by June 30, 1952. Provided the appropriations requested to cover these objectives are made available by Congress in time, and if the required structural steel is furnished, these construction objectives will be met on June 30, 1952. Subject to adequate and timely funding, command facilities to launch a full mobilization could be created in the period of approximately 12 months.

c. As to the requirement for reserve productive capacity the Department of Defense FY 1952 procurement objective sets forth a general statement of the policy to be followed. It is not possible to make any worthwhile generalization as to the implementation of this policy. In the case of each type of end-item, the decision as to the relative importance of reserve production capacity, maintenance of a flow of production indefinitely, obtaining requirements at an early date, as well as many other factors, is different, and produces a different result as to the size of the reserve production capacity for that item.

16. There will be a wide variation among end-item programs in the dates at which the Services complete the equipment and modernization of approved active forces and get a start on the accumulation of a minimum level of war reserves. A review of major Army, Navy and Air Force programs leads to the following conclusions, based on the assumptions that there are no further slippages in production schedules, that adequate funds, materials, and facilities are available, that prices remain stable, and that Korean operations will cease in the very near future:

a. For the Army:

(1) The units, with minor exceptions, and the personnel strength to support these units, as increased since December 14, 1950, have been activated and are now in being and by June 30, 1952—as to initial equipment—will be fully equipped and substantially but not fully modernized.

(2) Troop facilities will be sufficient by June 30, 1952 to support these forces, but will be inadequate to support mobilization and deployment of forces to certain overseas areas.

(3) Present estimates indicate that under the assumptions stated above, the Army can, in the event of global war, sustain combat operations at the planned level early in the calendar year 1953. On the other hand, if all the foregoing conditions are met, except that with reference to the Korean operations, the continuance of those operations until the end of calendar year 1951 will delay Army readiness for global war until late in calendar year 1953.

b. For the Navy:

The build-up toward total personnel and combat units is proceeding substantially on schedule. The approved end FY 1952 active forces will be in glace and operational by July 1, 1952. However, modernization of equipment of the active forces and the accumulation of a minimum level of war reserves will not be completed in all cases until calendar years 1953 and 1954, with dates varying widely for individual items.

For Naval Aviation combat forces, the degree of modernization that would be achieved with funds now requested, in accordance with the Munitions Board “Combined Aircraft Working Schedule” (A–14) is as follows:

	Date equipped with late model (if funds are available)	Percent to be equipped with late model by December 31, 1953 (with funds now requested)	Percent to be equipped with late model by June 30, 1952
Fighters (VF)	1 June 1954	77.3%	29.5%
Attack (VA)	1 Aug 1954	73. 9%*	79. 0%*
Carrier Anti-Submarine (VS)	1 Apr 1954	85.8%	69.0%
Patrol Anti-Submarine (VP)	1 Dec 1953	96. 3%†	31.1%
Helicopters (HS)	1 Dec 1953	91. 1%‡	10.6%

A delivery after December 1953 of the remainder of the aircraft required to modernize the active forces and one-third of the Organized Reserve Units is contingent upon decision to finance the remainder of the program. This decision was deferred during the FY 1952 budgetary review process until October-November 1951.

Full accomplishment of the presently approved ships conversion and construction program will extend into calendar year 1954 as originally scheduled, in view of the inevitable long lead time of items of this nature. Current progress as judged by preliminary schedules indicates an average slippage of about three months. Thus those portions of these programs scheduled for completion in the fourth quarter of FY 1952 will be completed in the first quarter of FY 1953. With complete budgetary and controlled material support it is expected that those portions of the programs scheduled for 1953 and 1954 can be completed as planned.

c. For the Air Force:

The 95-Wing Program will be substantially in being by June 30, 1952, although at that time the initial requirements of certain types of equipment will not be fully supplied with what are presently considered first-line aircraft. It is impossible to set one date by which all Air Force units of any strength can be completely modernized since improved versions of various aircraft models come into production at different dates. The following are the dates by which all 95 wings of the Air Force’s current program will be “modernized” in the sense of being substantially 100% equipped with late model aircraft; most of the wings will be capable of fulfilling their missions well in advance of those dates:

Aircraft Type	Date equipped with late model	Percentage to be equipped with late model by June 30, 1952
Heavy Bomber§	June 1953	72%
Medium Bomber	September 1953	52%
Tanker for Medium Bombers||	June 1954	20%
Light Bomber	September 1953	31%
Fighter Bomber	March 1953	62%
Fighter Interceptor	December 1952	77%
Troop Carrier and MATS	September 1953	46%
Trainers¶	December 1952	62%

Eleven of the twenty-seven Air National Guard wings, programmed for modernization, will be equipped with modern aircraft by March 1953.

The combat reserve aircraft in the relatively small numbers included in this program will be available by December 1953 except for the medium bomber portion, which will be available in calendar year 1954.

17. For certain segments of the munitions program, it was never contemplated that the target dates established in the NSC 68 Series would be met. In the case of aircraft, it was always recognized that, in view of the necessity of organizing a whole new group of industries, it would be physically impossible to meet the mid-1952 target dates for the large number of aircraft of the specified types involved. This is also true of certain long lead time items for both the Army and Navy. For many other end-items, including segments of the tank-automotive program, the attainment of the required volume of production by mid-1952 was never scheduled since this would be incompatible with establishment of a broad mobilization base by the same date.

18. However, output has fallen below estimated production for many important end-items. This condition is accounted for by a number of factors:

a. The shortage of machine tools has been a major factor in the inability of all three Services to reach desired production objectives. The necessary expansion of tool facilities has not been proceeding at a sufficiently rapid rate. Recent action by the Office of Defense Mobilization to remove price and material bottlenecks should improve this situation.

b. Design delays and changes and engineering difficulties as, for example, in the aircraft and electronics field, have contributed to “slippage.” Steps already taken by the Air Force to restrict design changes to a minimum should improve this situation in the aircraft field.

c. Although there has been no over-all shortage in basic materials for particular items, lead times have measurably increased due to difficulties in the effective distribution of critical materials to munitions production. The imposition of Controlled Materials Plan (CMP) should improve this situation as noted hereafter.

d. Additional factors accounting for “slippage” in recent months are set forth in Annex 1.

19. Substantial improvements in these problem areas will require, in addition to the specific solutions mentioned above, the concerted effort of all agencies involved, backed by strong public support engendered by a sense of national urgency that has heretofore been lacking, and backed by timely and adequate financing.

20. In general, the military services met their military personnel objectives for June 30, 1951 and expect to meet the target for June 30, 1952. The military strength on June 30, 1951 was 3,252,000. Due to the extremely limited mobilization base of the Air Force with respect to housing and troop facilities, it has been necessary to control very carefully the personnel input. Inadequate troop housing and a drop in voluntary recruiting during April and May necessitated readjustment in the manning program which, in turn, resulted in a deficient FY 1951 end strength amounting to approximately 62,000 (7%). Providing funds contained in the Public Works Bill now before Congress and necessary construction materials are made available without undue delay, this deficiency can be made up and the manning objective of 1,061,000 can be attained by June 30, 1952.

21. The approved FY 1952 military strengths are listed below. They are subject to revision to meet increased force requirements and, as a result, the status of the manpower pool may change.

Army	1,550,000
Navy	805,000
Marine Corps	204,029
Air Force	1,061,000
Total	3,620,029
[Army figures exclude West Point cadets; Navy figures exclude officer candidates.]13

This will require a gross input of 1,554,000 men during the year, of this number the significant elements are 376,000 to build up to authorized strength and about 400,000 to provide for the release of Reserve and National Guard personnel now on active duty. 413,000 of the total input will be through induction.

22. The manpower pool, adjusted for the changes made by the Universal Military Training and Service Act of 1951, is estimated as 850,000 on July 1, 1951. Gains to the pool are expected to be 549,000 with losses of 838,000 through enlistment, induction and recall of reserves. The pool at the end of FY 1952 is therefore estimated as 561,000. The status of the manpower pool, under existing selective service legislation, is shown by the following table:

Status of Manpower Pool at Beginning of Each Fiscal Year To Support Military Force of 3.6 million

Entering Position	Conservative Estimate	Optimistic Estimate
1952	850,000	950,000
1953	561,000	661,000
1954	414,000	514,000
1955	384,000	484,000
1956	273,000	373,000
Note: The Director of Selective Service recommends that the minimum level of the Selective Service Pool be fixed at 300,000. The Department of Defense believes this figure is too high.

23. The command facilities now on hand and which will be provided by the Public Works Bill now before Congress are sufficient only through FY 1952 for the military strengths planned for July 1, 1952, but are inadequate for mobilization and deployment of forces to certain overseas areas.

The Mobilization Program

24. The application of the Controlled Materials Plan (CMP) to the distribution of steel, copper and aluminum, in place of the priorities system in effect up to June 30, 1951, should assure to the munitions production and facilities programs the materials needed. For CMP to succeed the greatest care must be taken to avoid excessive issuance of CMP authorizations, especially for materials for non-military production and construction projects, and particularly to limit drastically the use of overriding directives. This is a matter of the utmost importance. In addition, and of equal importance, the initial military programs must be assured the necessary civilian-type components (so-called “B products”). In certain cases, however, it is becoming evident that difficulties will be encountered in maintaining both a large defense program and high levels of civilian output. A notable case is copper, where the supply is considerably less than was expected a year ago. Under these circumstances it has been necessary to reduce automobile production, for example, for the fourth quarter of 1951 to 60% of the first half of 1950 in order to provide the copper required for defense. A number of alloying metals important to the defense program have been placed under full allocation. The operation of CMP, placing as it does a high premium on proper production scheduling, is expected to ease considerably the tight supply situation in component parts and materials not directly included in the plan.

25. The cutback in the amount of materials permitted in the production of passenger cars has brought, in the Detroit area, the first significant unemployment directly traceable to the mobilization program. As in the case of other areas where cutbacks in civilian production may be necessary, defense contracts may be expected to ease the transition.

26. The essential controls for stabilization of the economy have been set up, and together with high levels of civilian production have reversed, at least temporarily, the inflation which accompanied the early stages of mobilization. Many of the controls, dating, as some do, from last September, are based on substantially higher security programs, and further substantial slippages in these programs may warrant a review of some elements of the program. For the intelligent management of the mobilization program it is important that FY 1952 production schedules be made fully realistic immediately and that firm schedules for 1953 be available as soon as possible.

27. To deal with the longer run problems of stabilization and materials supply, there is being developed an industrial expansion program of very large proportions. Present plans call, during the next two or three years, for a 100% increase over existing capacity in primary aluminum capacity, a 13% increase in steel capacity, a 14% increase in petroleum supply and an ambitious program for locating and developing domestic sources of a wide variety of materials. Attendant increases in transportation and electric power and other areas of the economy are also under way in order to support higher levels of defense production without cutting back to emergency levels of civilian goods production. Many of these projects, however, require the same scarce materials and components as needed in munitions production and generally in consumers durable goods output, with defense output having first call on resources. The speed with which these expansion projects can be carried forward will be determined largely by the speed with which munitions output rises and the degree to which it is felt practicable to reduce civilian output in this period.

28. Even less than when the original NSC 68 programs were prepared is there reason for concern that the economy cannot, without serious hardship, carry a load of the magnitude represented by these programs. In general, the economy has responded well to the stimulus of the defense program. Additions to the labor force have been greater than hoped for and over-all production is higher than expected. Considerable ingenuity in the use of substitute materials has already been evidenced. Particularly in view of the additional aluminum and steel capacity expected to be available next year, there can be no doubt of the ability of the economy to support a level of military production somewhat higher than that projected in the NSC 68 programs together with civilian consumption levels comparable with those prevailing in the period 1947–1949.

Foreign Military and Economic Assistance

29. No development in the world situation is considered to have diminished the importance or urgency of completing the foreign economic and military assistance programs by the target dates outlined in Annex 2 of NSC 68/3.¹⁴

a. With respect to the European NAT countries, the Medium Term Defense Plan (MTDP) continues to be the basis for programming military and related economic assistance.

b. Prompt and adequate measures need to be taken to arrest the general deterioration of the situation in the Near East, particularly in Iran, the Arab States and Israel.¹⁵

c. In the Far East the United States aid programs together with the struggle against aggression in Korea have played an important part in stemming the tide of Russian-inspired subversion and conquest; but much remains to be done and it is too early to predict that the favorable developments will continue.

30. United States end-item assistance already programmed through FY 1952 to meet requirements of the MTDP totals about $10 billion and is related primarily to the unit equipment requirements for forces to be available by July 1, 1952.

a. Deliveries of equipment, for many reasons, have been slow but are now accelerating; and deliveries of Army equipment financed with FY 1950 and 1951 appropriations, are expected to be completed by June 1952.

b. The FY 1952 program includes about $1.0 billion to meet the military equipment requirements of the non-NATO countries. Deliveries to these countries, with the exception of Indochina, are slow due to the shortage of matériel in relation to global commitments.

c. In FY 1951, $1.23 billion of direct economic aid was allotted to the European NATO countries, while their military efforts totaled $6.0 billion dollars; and for FY 1952, $.86 billion of direct economic-aid has been requested to be used primarily to support a $9.0 billion military effort by the European NATO countries. About $712 million is proposed to be furnished in FY 1952 to other European countries, including Yugoslavia, which are not members of NATO.

d. Other economic aid programs for the non-European countries total about $600 million in FY 1952; and the major portion of these funds will be directly applied to strengthening the capabilities of these countries to resist internal and external aggression.

31. The primary difficulties being encountered in completing programs include:

a. Insufficient political cohesion and resoluteness on the part of many governments to take the necessary measures constitute a serious barrier to realizing in full the objectives of our economic and military assistance programs. In Europe, these factors are reflected in the caution with which defense expenditures are being undertaken; while in many non-European countries, they enfeeble efforts to improve the internal security situation and to execute programs of economic improvement.

b. In continental Europe, a significant difficulty in completing the MTDP in successive annual installments arises from the inadequacy of the efforts of these countries to increase their military equipment production. Munitions production capacity is available; but financing is not available in sufficient amounts. The ISAC ¹⁶ considers this problem one of the most urgent facing it.

c. The volume and rate of military equipment deliveries from the United States have been below expectations and still further below the level of essential requirements. As a result, the incentives to raise the forces on schedule are being weakened. Recently established targets, however, call for deliveries of the FY 1952 program by December 31, 1952, with the exception of certain aircraft and other items requiring long periods of production. The ability to hold these delivery schedules depends greatly on the trend of defense production in the United States and on the absence of new competing requirements of higher priority.

d. In the non-European areas, shortages of United States trained personnel, as well as export goods, are becoming acute and are inhibiting the rate of program accomplishment.

32. As to adequacy and timing of our foreign military and economic assistance programs, the judgments which emerge from a preliminary re-examination of present objectives and programs of United States foreign economic and military assistance, initially outlined in NSC 68/4 and Annex 2 of NSC 68/3, indicate that:

a. The central issue concerns the position which the United States should take toward the accomplishment by the target date of the North Atlantic Treaty Medium Term Defense Plan.

(1) Recent study by the United States of the cost of the MTDP indicates that the plan, if carried out as scheduled, together with non-NATO military costs of the European NATO countries, would involve a total cost over the four years from mid-1950 to mid-1954 of approximately $72 billion, divided into $40 billion of major materiel requirements and $32 billion of other costs. These estimates include costs of German participation and exclude costs of United States and Canadian troops that would be included in the MTDP forces under Joint Chiefs of Staff plans. These recent estimates show a significantly higher cost than did the study contained in NSC 68/3.

(2) Total United States assistance for FY 1953 and 1954, even if provided at the annual rate requested of the Congress for FY 1952, would, together with any present reasonable expectation of European defense efforts, leave a substantial deficiency in the completion of the MTDP requirements.

(3) If the over-riding objective is the military build-up of the size and by the dates contained in the MTDP, the United States should be prepared to furnish assistance after FY 1952 in an amount whose outside limit can now be estimated at about $25 billion. Until the re-examination of the MTDP, now under way, has proceeded further no estimate can be given of the extent to which adjustments and economies in that plan may reduce the size of the deficiency. To the extent that adjustments in the military plan permit cost reductions or extended target periods, this amount can be less; to the extent that European morale and political cohesion improve, it may also be less. Nevertheless, it is probable that the United States assistance will be required during FY 1953 and 1954 at an average annual rate greater than that requested of the Congress for FY 1952 if the program is to be substantially accomplished on schedule. Moreover, the bulk of the funds should be obligated during FY 1953 in order to permit the necessary flow of deliveries in 1953 and 1954. Therefore, the funds required to be obligated by the end of FY 1953 would be substantially larger than the appropriations requested for FY 1952.

b. Little scope is available either for significant reductions in the magnitude or for postponing the target dates of our aid programs to the non-European countries. Economic and military assistance requirements for the non-European countries, while substantial in the aggregate, approach the minimums in terms of both magnitude and timing which are needed to arrest deterioration in the situation, particularly in the Near East, and, in the cases of Asia and the Pacific, and Latin America, to lay a firm base on which more far reaching development and increased military strength can be built in the near future. Particularly for the Near East and Asia regions, United States assistance requirements should not be delayed as to timing.

The Civil Defense Program

33. The civil defense program should contribute to a reasonable assurance that, in the event of war, the United States would survive the initial blow and go on to the eventual attainment of its objectives. Civil defense programs are designed to serve to minimize casualties in the event of attack, to provide emergency relief immediately after attack, and to help preserve the productive core of the nation. The basic responsibility for civil defense is local, resting with the States and their local subdivisions. The present civil defense program is a State-Federal program in which the Federal Civil Defense Administration develops plans and programs for the guidance and assistance of the States.

34. Present plans which will be implemented during the fiscal year 1952, if funds are available, provide for the development of Federal stockpiles of supplies and equipment and a system of warehouses for the storage of such reserve stocks; the procurement of organizational equipment in financial collaboration with the States; and the development of a national attack warning and communications system. Studies are being made of types of shelters, traffic control, public attitudes and the need for shelters and other protected facilities in critical target areas.

35. The Federal Civil Defense Administration has in operation its Washington, D.C. office, eight of its thirteen regional offices, its Staff College and one of its three training schools. Almost all States have civil defense legislation, and funds provided by State and local governments considerably exceed Federal appropriations. Federal funds are at present made available to local governments primarily for medical supplies, and equipment for training and education. State and local organizations are in some cases in complete operation, but in most instances, are only skeleton organizations which are being filled in as rapidly as possible.

36. The principal difficulties involved in completing the program are the lack of appropriations, attitudes of indifference toward civil defense on the part of the public whose interest often fluctuates in accordance with military successes and reverses. Subject to substantial financial support by the Congress, the Civil Defense program can be well under way by June 30, 1952, but it will not be complete or adequate.

Stockpiling

37. The ultimate targets for the stockpile program originally established on December 8, 1950 have not been substantially modified. Attainment of those objectives by June 30, 1954 or earlier for most items is still the objective, but it was always recognized that this date was not feasible for many commodities.

38. However, since December 1950 the intermediate targets set for mid-1951 and mid-1952 have been revised downwards for many commodities for which current military and civilian requirements are in excess of the supply. For most of the more important materials, deliveries during FY 1951 were not adequate to meet the lower targets for that date and in most of these instances the deliveries now scheduled for FY 1952 will not be sufficient to make up the difference.

39. The $1.8 billion in supplemental FY 1951 funds recommended on December 8 have been appropriated but the $1.0 billion in new funds recommended for FY 1952 has been reduced to $.6 billion in the request to the Congress. This may well be adequate in view of the materials shortages for current production to be expected over the next year or more. The total cost of the program remains about $4.1 billion of new authority, which was estimated to be required as of December 8, with recent increases in prices about offsetting minor target reductions.

40. As of June 30, 1951 all funds available as of December 8 had been obligated but $.8 billion of these had not been spent. Only $.9 billion of the $1.8 billion supplemental for 1951 have been obligated and none has been spent.

The Information Program ¹⁷

41. The purpose of the information program is to bring home to the peoples of the world the psychological implications of the cold war in such a way that we will benefit and the Kremlin will suffer. This is done through a variety of media and methods. The Department of State has for a number of years had facilities designed to accomplish this task. Annex 5 of NSC 68/3¹⁸ set forth an information program which called for increases over the “Campaign of Truth” program (approved by the Congress and the President in the summer of 1950). Annex 5 provided for an increased number of broadcast hours and languages in the Voice of America, and additional booklets, leaflets, magazines, pictures, press releases, information centers, exchange of persons, documentary films, intelligence research facilities, etc. The most important change was the acceleration of the ring program to assure its completion within a two year period (rather than five years) by providing all the financial requirements in FY 1951. This was a radio ring of 14 one-megawatt (1 million watts) medium-wave transmitters to be established overseas for greater penetration of Iron Curtain countries and areas of the sub-Asian continent, supported by 5 one-megawatt short-wave transmitters in the United States.

42. This expanded program set forth in Annex 5 has fallen seriously short of what was planned. The principal shortcomings are the failure to provide for (a) the completion of the ring of radio transmitters; (b) additional personnel and facilities for information centers in certain critical areas; (c) exchange of additional persons and (d) discreet support of indigenous activities.

43. Due to the refusal of Congress to appropriate funds there has been an indefinite postponement of the completion of the radio ring. This and other difficulties can be said to stem directly from lack of sufficient understanding, on the part of the American people and their representatives of the significant role an adequate information program can and must play in the defense of the United States.

44. The current program is inadequate on two scores: (a) the United States has less time to prepare its defenses than was thought a year ago, and (b) the United States has lost time in expanding its efforts, particularly in acquiring the radio ring. To compensate for this, appropriations previously recommended should be made with an increase of 15% in the appropriations for radio facilities so that the radio ring can be more rapidly constructed.

45. Funds presently available make it necessary to postpone target dates. It is recommended that sufficient funds be sought to permit advancing target dates. The program can operate at maximum effectiveness in approximately 24 months from the date adequate funds are made available.

Foreign Intelligence and Related Activities

46. The Director of Central Intelligence and the agencies represented on the Intelligence Advisory Committee¹⁹ have taken and are taking action directed toward the improvement and intensification of foreign intelligence and related activities. For reasons of security, the specific programs undertaken and contemplated and their budgetary requirements are not set forth here. It has been determined, however, that even the substantially increased budgets required are inconsiderable in relation to the grand total of the other programs described in NSC 68/4.

47. Since September 1950 there has been substantial progress in the development of cooperation and coordination among the several intelligence agencies through the active utilization of the Intelligence Advisory Committee as a means to that end. Although detailed problems remain to be solved, an effective system of coordination has been established and that aspect of the program may be said to have been completed.

48. An intensification of intelligence and related activities, to the extent feasible with the means available, has also been accomplished. Further progress depends on the augmentation of personnel and facilities. The projected expansion of CIA and the departmental agencies is, in general, about half completed.

49. All intelligence agencies have experienced difficulty in finding and recruiting properly qualified personnel. Only the intelligence organization of the Department of State has had notable difficulty in obtaining adequate budgetary provision for personnel expansion. Lack of adequate and suitable office space has hindered development responsive to NSC 68.

50. Present programs for the improvement and intensification of intelligence and related activities are deemed to be the most practicable in the circumstances. Their substantial completion by mid-1952 is anticipated.

The Internal Security Program

51. Although new problems are arising continuously in this field, the present basic internal security program is virtually identical with the accelerated program which was recommended by the Interdepartmental Committee on Internal Security (ICIS) and the Interdepartmental Intelligence Conference (IIC) and which was adopted by the National Security Council (NSC 68/4). While the fundamental elements applicable to the internal security program of the ICIS and the IIC are of a continuing natnsive progress relating thereto has already been made by both Committees. This progress has been manifested by the initiation of additional needed measures in areas relating to such problems as the provision of a more adequate legal basis for insuring the internal security, the coordination of internal security planning with plans for the military and civil defense of the United States, the increase in domestic intelligence and counter intelligence coverage in the internal security field, the expanding of investigative, prosecutive and related programs designed to neutralize the activities of individuals and groups who constitute potential and actual dangers to the nation’s security, the preparation of appropriate measures for industrial and port security, the protection of classified information as well as certain types of nonclassified strategic information, the establishment of preventive measures relating to defense against unconventional attack, the establishment of entry and exit safeguards, etc.

52. There has been almost unqualified cooperation by the various departments and agencies in support of ICIS-IIC activities. At present IIC is encountering no major difficulties and none is anticipated by that Committee, if funds are approved with which to provide the essential manpower and supplies for its program. In the case of ICIS, however, several of the programs and projects advocated by that Committee have met with the obstacle of lack of funds, and it is contemplated that, as further planning progresses in this body similar obstacles of a monetary nature may be encountered.

53. The accelerated internal security program previously recommended is considered adequate. The threat to the internal security of the United States from communism has not changed since this program was prepared and it is anticipated that the threat will continue even if hostilities in Korea are brought to a successful conclusion. With respect to timing, the entire program is an immediate one both from the standpoint of measures currently being employed and those which are earmarked for implementation only in the event of hostilities. Both require urgent attention on a current basis. Since the ICIS—IIC program is considered to be urgent and immediate the target date for readiness is now and not in the future. Accordingly no target date modification is recommended and as a consequence the Committees are continuing to impart a sense of urgency to their deliberations in their efforts to more adequately assure the internal security of the nation.

part iii—conclusions ²⁰

54. Review of the world situation shows that the danger to the national security of the United States posed by the USSR is greater now than was anticipated during the development of the NSC 68/4 programs. It now appears that the United States and its allies are already in a period of acute danger which will continue until they achieve a position of strength adequate to support the objectives defined in NSC 68.

55. Review of the status of current United States programs for national security indicates that, while there is variation among the several programs, the target dates for the NSC 68/4 programs generally will not be met at the present pace and scale of effort. Of importance is the current estimate that although United States Armed Forces will reach the approved active force and personnel levels by June 30, 1952, they will not by that date achieve, particularly with respect to critical, hard-to-get, and long lead time items of military equipment, the total matériel position contemplated in NSC 68/4, or in some cases the FY 1952 procurement objectives evolved therefrom. Moreover, without a great increase of pace and scale of political, economic and military effort on the part of all NAT members, including the United States, the July 1954 goals of the NATO Medium Term Defense Plan will not be met. Finally, the information program and preparations for civil defense are not advancing as rapidly as necessary.

56. It is vital to our national security that the objectives of the NSC 68/4 programs be achieved at the earliest practicable date. It is apparent that some important elements of these programs cannot be completed by the target dates set in NSC 68/4 under any circumstances. On the other hand, the current estimates of completion dates for many of the elements of these programs, assuming the present pace and scale of effort, are inadequate to the needs of our national security. Substantial advancement of currently projected completion dates can and must be accomplished.

57. It is not now possible to state the desirability of reaffirming or modifying the approved target dates for readiness under presently approved programs. In any event, however, the gravity of the world situation now demands that as much of all programs essential to national readiness as is practicable be accomplished by or before the approved target dates for the NSC 68/4 programs.

58. Pending further recommendations in the report to the President by the National Security Council due on October 1, 1951,²¹ responsible departments and agencies should be directed to increase their efforts to meet the target dates for their presently approved programs, and, with particular respect to the program for the production of military equipment, to accelerate presently planned rates for critical, hard-to-get, and long lead time items, in order to advance currently projected completion dates as far as feasible toward the target date of June 30, 1952, and to review for each item the problem of achieving accelerated production while at the same time securing an adequate mobilization base.

Appendix A

Changes in the World Situation Since the Completion of NSC 68/4

part one: the position of the soviet bloc

1. Objectives. The U.S.S.R. has given no indication that its objectives have changed since April 1950. Indeed all available evidence leads to the conclusion that the Soviet rulers are as convinced as ever of the basic correctness of their policy and are still intent upon unyielding pursuit of the following goals:

a. The eventual establishment of a Communist world dominated by the U.S.S.R. This basic objective, in addition to traditional Marxian “world revolution” motivation, probably arises from a Kremlin conviction that the vital interests of the U.S.S.R. can be assured over the long run only by the elimination of all governments it cannot control. This conviction is probably based in turn on a Kremlin belief that peaceful coexistence of the U.S.S.R. and its empire, on the one hand, and the U.S. and its allies, on the other, is impossible and that an armed conflict between them is eventually inevitable.

b. As essential steps toward realization of this basic objective, the Soviet rulers in the current situation appear to be seeking to:

(1) Maintain an advanced state of war-readiness and offset any increase in the capabilities of the U.S. and its allies.

(2) Prevent the development of any threat to the vital interests of the U.S.S.R. or to Soviet control of the satellites;

(3) Expand the territorial limits of the Soviet orbit;

(4) Undermine and secure control of governments not yet under Soviet domination;

(5) Divide the U.S. from its allies and cause the countries of the free world generally to deny their resources, including strategic sites, to the U.S.

c. Developments since April 1950 and growing in part out of the Korean war have apparently caused the Soviet rulers to place primary emphasis in their foreign policy on those of the above immediate aims that relate to preventing Western (notably, West German and Japanese) rearmament and implementation of the U.S. overseas bases policy.

2. Military capabilities. The U.S.S.R. since April 1950 has substantially improved the capability of its military forces in being. It has brought Soviet and satellite military units to an advanced state of battle readiness and has so deployed them in advance positions that they could, in any critical area of continental Europe or Asia, move virtually without further mobilization and concentration and without additional logistical, organizational, and training preparations; it has accelerated the modernization of the Soviet armed forces—including the conversion of the air force to jets, the construction and extension of airfields in the U.S.S.R. and the satellites, and the extension of its radar net within both the U.S.S.R. proper and the satellites; and it has taken further important steps toward placing the Soviet and satellite economies on a war footing. Military forces of the European satellites, including East Germany, have been increased from 671,000 in the spring of 1950 to 947,000 at present, and substantial progress has been made toward Sovietizing them in weapons, organization and training. Present Soviet military capabilities are estimated as follows:

a. The Soviet and satellite armed forces retain the capability of overrunning continental Europe and the Near and Middle East (except India and Pakistan) within a relatively short period. Both military and non-military stocks, with the possible exception of aviation fuel, are in sufficient quantity and so distributed as generally to permit sustained military operations during that period even though U.S. atomic capabilities were fully exercised against strategic targets in the U.S.S.R.

(b). In the Far East, North Korean and Chinese Communist forces, with Soviet logistical and technical support, have demonstrated a military capability greater than had been previously estimated. In the event of general war, it would not be in the over-all security interests of the United States to commit our forces to the defense of the mainland of Asia. Communist forces must therefore be credited with the ability to overrun East and Southeast Asia, and threaten the security of the off-shore island defense line.

c. The U.S.S.R. does not have, and, even if it should seize the Eurasian continent and the U.K., would be unlikely to secure adequate naval forces and sufficient shipping to permit it to mount a successful invasion of the Western Hemisphere.

d. The Soviet Air Force continues capable of providing adequate tactical support to all ground campaigns which the U.S.S.R. might launch against continental Europe and the Near and Middle East (except India and Pakistan) and simultaneously of attempting a strategic air offensive against the United Kingdom and the North American continent.

e. Soviet atomic capabilities have increased roughly at the rate anticipated in April 1950, but are expected to increase more rapidly in the next three years than was previously estimated. These capabilities, while substantial, remain inferior to those of the U.S. It is impossible, however, to estimate with assurance the Kremlin’s conclusion with regard to the relative effectiveness of the Soviet and U.S. atomic warfare capabilities or with regard to the relative importance of atomic and conventional weapons in determining the issue of a future general war.

3. Economic capabilities. The U.S.S.R. has not succeeded since April 1950 in reducing the overwhelming economic superiority of the West. At the conclusion of the recently completed Fourth Five-Year Plan, total Soviet-satellite industrial capacity remained approximately one-fourth that of the NATO powers. Moreover, the trend during the past year indicates that in the short run at least the existing gap will widen. However, the U.S.S.R. has continued and even extended measures that enable it to translate its own and satellite economic resources into military power in being. In consequence, Soviet strength, at least for immediate military purposes, continues largely unaffected by the economic inferiority of the U.S.S.R. and the satellites.

4. Psychological capabilities. Although developments since April 1950, particularly those related to Korea, may have served to weaken somewhat the impact of Moscow’s propaganda on free peoples, Soviet capabilities for psychological warfare—both offensive and defensive—have not been materially reduced. The combination of the Soviet propaganda apparatus with the world-wide network of local Communist parties and front societies continues to give the Soviet Union an organizational advantage for its propaganda efforts. Soviet control of all informational media within the U.S.S.R. and Soviet jamming of foreign broadcasts gives the Kremlin a near monopoly in moulding the thinking of the Soviet peoples on international affairs. By alternating “war scare” techniques and appeals to the universal longing for peace, the U.S.S.R. has demonstrably produced during the past year disruptive effects on Western efforts to deal collectively with basic security problems. Domestically, a new trend has appeared in the Soviet anti-American campaign. This trend has been marked by charges (1) that the U.S. has moved from preparation of aggression to acts of aggression, and (2) the U.S. has committed “unforgiveable” crimes against the Russian people and plans to repeat these crimes. These charges have been principally pegged on accounts of alleged U.S. atrocities in Korea and on the U.S. “intervention campaign” against Russia of 1918–20. The effect of this new development is obviously to increase the psychological preparation of the Soviet people for possible war.

5. Internal stability of the Soviet regime. Evidence received since April 1950 indicates that tensions continue within the U.S.S.R. Moreover, developments with regard to a collective farm merger program suggest that the regime may be encountering unusual peasant opposition. However, the Kremlin, through utilization of police state techniques, appears capable of successfully suppressing any difficulties that may arise. It must be concluded, therefore, that the regime will continue in power and will not be compelled to modify any of its external policies because of internal pressures.

6. Stability of and degree of Soviet control over European satellite regimes. It is apparent that since April 1950 stresses and strains have developed in the European satellites. These are principally economic in nature, but appear to have some political potentialities, particularly as regards increasing anti-Russian sentiment. The difficulties seem to result from the combined impact of the military preparedness effort, Western trade restrictions, over-ambitious industrialization programs, and agrarian problems. There are no indications that the difficulties are sufficiently serious to jeopardize the Communist regimes, to reduce the firm grip of Soviet control over these regimes, or to prevent them from undertaking any action demanded by the Kremlin. The military capabilities and the general war readiness of the European satellites have substantially increased since April 1950, the rate of increase being in fact greater than was estimated at that time.

7. Stability and degree of control over Far Eastern satellites

a. Since April 1950 the Kremlin has been able to secure large-scale military action furthering its own interests from its satellite regime in North Korea and from the Chinese communists. During the Korean war the size of the Chinese communist military establishment has been increased. However, deployment to Korea and Manchuria of major portions of their best forces, increased internal police requirements, and the logistic strain of the Korean war have reduced present Chinese communist capabilities for additional external military operations.

b. While the Korean war has not yet posed a critical threat to the economic stability of the Chinese communist regime, the war has subjected and will continue to subject the regime to increasingly serious economic difficulties. These difficulties are almost certain to increase during the next year if Western trade restrictions are rigorously applied.

c. The Korean war has increased the dependence of the Chinese Communists on the U.S.S.R., but apparently has not materially changed Sino-Soviet relations. There are areas of conflicting interests which make rumors of mutual dissatisfaction plausible, but we have no firm evidence to substantiate these rumors. The Korean war has placed strains upon the internal political, military and economic position of the Chinese communist regime. While these strains have not yet become critical, they might well become so if the war were prolonged. Whatever may have been the economic and internal political consequences suffered by the Chinese as a result of taking such military action, there is as yet no firm indication that the Chinese communist regime has been jeopardized or that Soviet influence over the regime has been reduced.

8. Threat of the U.S.S.R to U.S. security. The Soviet rulers since April 1950 have shown through their actions in Korea a greater willingness to assume risks in the pursuit of their objectives than was estimated at that time. Moreover, the Soviet rulers have revealed during the same period intense sensitivity over efforts of the West to strengthen its military position and have increasingly resorted to threats over the consequences likely to ensue from continuation of these efforts. The threat to U.S. security posed by Soviet policies and capabilities appears therefore, to have increased since April 1950.

a. The Kremlin has since April 1950 stepped up its drive to destroy the freedom of the Western world through political warfare and has given every indication that it will further intensify this drive in the future. For example, with the immediate objective of dividing the Western powers, undermining U.S. mobilization, obstructing the NATO program and frustrating prospective German and Japanese rearmament and with the ultimate objective of paralyzing opposition to communism, the Kremlin may adopt the tactic of encouraging the West to hope for a settlement of outstanding issues by mutual agreement, without, however, intending to surrender any present element of Soviet strength or abandoning its objective. The Kremlin will continue to press its “peace” campaign, to exploit the fear of war in Europe, to raise hopes of German unification, and to use the communist parties of France and Italy in an attempt to confound the political situation and obstruct effective government. Similarly, wherever in the world non-communist governments are weak, as in Iran, Indochina, and Burma, the Kremlin will continue efforts to strengthen the communist position and, if favorable situations develop, will support communist coups.

b. The Kremlin through its action in Korea has made clear that there is a continuing possibility that it may supplement political attack by the employment of satellite military forces to secure local objectives. In such cases the U.S.S.R. would give technical and logistic support to the satellite forces involved. If necessary, Soviet “volunteers” might be provided. In addition, it must be considered a continuing possibility that where no satellite forces are available, as in Iran, Soviet forces themselves will be employed for local purposes. Any such aggression would involve risk of general war developing or of the West suffering losses that would undermine its power position.

c. There continues a possibility that the U.S.S.R. may at any time deliberately resort to general war against the U.S. It appears that the most important immediate objective of the Kremlin is to divide the West and to halt Western, West German, and Japanese rearmament. If the Kremlin should fail to make sufficient progress toward that end by methods short of general war and if in addition it should become convinced that its superiority in conventional forces was about to be offset, the Kremlin would seriously consider resort to war. It is apparent that for some time U.S., NATO, West German, and Japanese rearmament is unlikely to progress to the point where the Kremlin would need to regard it as an immediate threat to Soviet vital interests. However, in evaluating the prospect of the Kremlin’s actually resorting to war, recognition must be given to (1) the fact that Soviet forces are in an advanced state of war-readiness and could initiate general war at any time with little or no warning, and (2) the possibility that the Kremlin might at any time misinterpret Western defensive measures as an effective threat to the vital interests of the U.S.S.R.

d. There continues a possibility of general war developing at almost any moment from an action or series of actions not intended to produce that result. The Kremlin might, for example, miscalculate the degree of risk involved in a particular action or underestimate the cumulative effect of several actions. Or, it might regard a particular local action as so necessary or so advantageous as to warrant assuming even a serious risk of general war. In any event, the international situation is so tense that some issue might develop to a point beyond control.

e. Particularly is it possible that the Korean situation will get out of hand. If the conflict in Korea continues, or is renewed after a cease fire, the U.S.S.R. will probably continue to aid the Communist forces in ways which the Kremlin estimates would not involve serious danger of a break between the U.S.S.R. and U.S./UN. If, however, the communist forces in Korea were threatened with decisive defeat, the Kremlin would probably intensify its aid. This aid might well include the introduction of “volunteer” forces. It might even include the employment of Soviet forces to such an extent that a de facto local war between the U.S./UN and the U.S.S.R. would exist. At every stage the Kremlin would probably endeavor to keep open the possibility of ending the Korean conflict by political negotiation if the global interests of the U.S.S.R. would be served by disengagement in Korea.

part two: the position of the free world

1. Western Europe

a. Military Effort. As is the case in the United States, the provision of military equipment presents the major problem in raising the effective strength in being of the Western European countries. MDAP deliveries have been slower than was anticipated. As of April 30, 1951, only 53% of the material programmed in fiscal 1950 and 2% of that programmed in fiscal 1951 had been shipped to port. The personnel strengths of the NATO countries have shown some increases due to lengthened conscription periods and increases in military budgets. National defense expenditures of the European NATO countries, based on budgetary allocations, have increased approximately 35 percent (from 5.3 billion dollars in the calendar year 1950 to an estimated 8.2 billion in 1951). However, the rate of expansion has not been as extensive as was desired or hoped for by the United States.

b. Internal Economic Conditions. The speed-up in Western rearmament programs has required the European countries to expand the proportion of their increasing total output which is directed to military purposes and to augment their total budgetary expenditures. At the same time, it has raised the prices and put pressure on the supplies of the raw materials that Western Europe must import. It further appears that the reduction in living standards associated with the speed-up of European rearmament programs will be rather inequitably distributed through mounting inflationary pressures. Although these economic problems have raised obstacles to developing and maintaining popular support for European rearmament programs, they have not critically affected the political or economic strength and stability of Western Europe.

c. Internal Political Strength. Popular communist strength increased in recent Italian municipal elections²² and remained formidable in the French national elections and some strength also accrued to extreme right-wing groups in both elections.²³ The extreme Right is, at the same time, becoming more powerful in West Germany, where it derives support from large refugee elements, whose plight presents a continuing problem.²⁴ On balance, it can be said that the process of political polarization has continued in Western Europe since April 1950, but has not seriously affected such leadership as the present center political groups have been able to provide in the major countries of this area. Continuation of this trend toward polarization would have an adverse effect on the internal strength and stability of such countries.

d. Political Cohesion. The U.S. leadership and U.N. solidarity shown in the initial Western reaction to the invasion of the Republic of Korea stimulated anti-communist morale in Western Europe. Faith in U.S. leadership was subsequently somewhat shaken by the pressure for a more aggressive policy in Korea that developed in this country but has probably been restored by the recent full public explanation of the U.S. policy in the Far East and by the negotiations for an armistice. Progress has been made in carrying forward the NATO program. The U.K. and France also displayed an ability to stand against Soviet pressures at the Paris Deputies’ meeting.²⁵ Some progress has, in addition, been made in implementing policies which would eventually render West Germany an equal, independent, and willing ally of the West. On balance, therefore, it can probably be said that the cohesion of Western Europe as an element in the world wide anti-Kremlin front has been strengthened since April 1950.

2. Africa and the Near East

As against the situation in April 1950, the Western position in the Near East has, except in Greece and Turkey, deteriorated. The problems arising from Israeli-Arab hostility, colonial-Western antagonism, and backward economic conditions have not approached solution and have in some cases grown more critical. The readiness of the Near Eastern countries, once against excluding Greece and Turkey, to accept Western leadership is even less in evidence than was the case in the spring of 1950.

a. The Arab Near East. Tensions between Israel and the Arab states have, if anything, heightened over the past 15 months, and anti-Western sentiment among the Arabs has solidified. British relations with Egypt, which involve among other things the issue of traffic through the Suez Canal, have worsened substantially, as have prospects for stability in Egypt. As an aftermath of developments in Iran, the British and American position in other oil concession countries, notably in Iraq, is more vulnerable to nationalist attack. In general, pro-Western political forces in the entire Arab area have lost ground since the spring of 1950.

b. Greece and Turkey. The passage of time since April 1950 has brought some accretion of strength in Greece and Turkey. In both countries, military forces have had an additional period of training and have absorbed additional U.S. equipment. Turkey has demonstrated an impressive degree of political maturity under its new government and political instability in Greece is certainly no more an upsetting factor than it was at the earlier date.

c. Iran. The present crisis in Iran threatens the free world with the loss of a large quantity of oil products, the U.K. with the loss of substantial revenues, and Iran with political anarchy and a possible Communist assumption of power.

d. Morocco.²⁶ The French show no signs of abating their opposition to the nationalist movement in Morocco or of trying to forestall it by timely concessions; nor have French repressive measures been successful in reducing the amount of native support accorded the nationalist movement. It must thus be said that the continued confrontation of colonial and nationalist forces in Morocco has, since April 1950, worsened the prospects for political stability in this strategic area.

3. South Asia and the Far East

a. India’s foreign policy, as unfolded in connection with the Korean war and related issues, is further removed from that of the West than was the case in April 1950. More importantly, the position of the Congress Party in India has been weakened by a strengthening of both leftist and rightist elements.

Tension between India and Pakistan over Kashmir has increased to the point where actual hostilities threaten the entire subcontinent. The obscure dispute between Afghanistan and Pakistan is as far from being settled as ever and, because of Pakistan’s suspicions that India is acting in support of Afghanistan, it further contributes to the unsettled political situation in South Asia.

b. The prospects of the present moderate government in Burma appear, on the whole, less favorable than in April 1950. The Chinese communists are extending, and have the capability of increasing military aid to communist insurgent forces. Should these forces succeed in allying themselves to other rebel groups in Burma, the position of the government might become untenable, at least in the absence of greatly increased external military aid.

c. In Malaya, the Philippines, and Indo China, the internal struggles that were underway in April 1950 are continuing. In the Philippines, the government has been somewhat more effective lately in its anti-Huk operations, but has made no appreciable progress in coping with the basic and, if anything, worsening economic problems of the Islands. In Malaya, the relative positions of the government and guerrilla forces remain approximately the same. This in itself may be taken as a deterioration in the position of the government, which has expended large resources in an effort to repress a military movement whose indefinite continuation would eventually pose a threat to British rule. In Indo China, after the initial improvement in the French position associated with the change of military command, the struggle is once more apparently stalemated. If increased Chinese communist intervention should materialize after an end of hostilities in Korea, it could tip the present precarious military balance of power in this area against the French.

d. In Korea, the hostilities beginning in June 1950 have ravaged and disorganized the country. The Republic of Korea will need considerable U.S. economic and military aid if even part of the war damage is to be rehabilitated, if political stability is to be maintained, and if the ROK is eventually to be rendered capable of defending itself against future subversion or attack by North Korea.

e. Japan. Progress has been made toward a peace settlement with Japan without U.S.S.R. or Chinese communist participation, and with a continuation of U.S. military protection. A basis for Japanese rearmament is thus being provided, although Japanese will and ability to solve the political and economic problems involved in rearmament have yet to be demonstrated.

4. Latin American Republics ²⁷

In spite of readjustments occasioned by increased rearmament of the U.S. and Western Europe, the economic position of Latin America has considerably improved since April 1950. Political stability of the area has in general remain unchanged. With respect to the East-West struggle, the Latin American countries have, with a few exceptions, notably Guatemala, evinced greater willingness to collaborate with the U.S. and the U.N. in the fields of economic and political warfare as well as in matters of military preparedness.

1. Ante, p. 101.
2. For reports in the NSC 68 Series and related material, see Foreign Relations, 1950, vol. i, pp. 126 ff.
3. Draft report NSC 114, “Status and Timing of Current U.S. Programs for National Security,” and its annexes, July 27, 1951, are not printed.
4. In Action No. 487a, June 6, the National Security Council directed the Senior Staff to prepare the reports recommended on June 1 in paragraphs a) (l) and (2) on p. 88. In Action No. 518, August 1, the Council noted the President’s approval of the request of the Acting Secretary of Defense that consideration of NSC 114 be deferred for one week. The NSC referred the report back to the Senior Staff for preparation of a revised report in the light of any revisions suggested by the Department of Defense or other departments and agencies, for consideration at the 99th Meeting of the NSC, August 8. (S/S–NSC Files, Lot 66 D 95, NSC Actions)
5. None printed.
6. Not printed.
7. In this memorandum, not printed, the Executive Secretary circulated the revised draft report, which, with the minor corrections cited below, became the body of NSC 114/1. (S/S–NSC Files, Lot 63 D 351)
8. August 8.

9. The annexes to NSC 114/1, circulated as one document dated August 8, consisted of the following:

   • Annex No. 1—The Military and Mobilization Programs (Prepared by the Department of Defense and the Office of Defense Mobilization.)
   • Annex No. 2—Foreign Military and Economic Assistance (Prepared by the Committee on International Security Affairs.)
   • Annex No. 3—The Civilian Defense Program (Prepared by the Federal Civil Defense Administration.)
   • Annex No. 4—The Stockpiling Program (Prepared by the Department of Defense and the Office of Defense Mobilization.)
   • Annex No. 5—The Information Program (Prepared by the Department of State.)
   • Annex No. 6—Foreign Intelligence and Related Activities (Prepared by the Central Intelligence Agency.)
   • Annex No. 7—Internal Security (Prepared by the Interdepartmental Committee on Internal Security and Interdepartmental Intelligence Conference.)
   • Annex No. 8—General Economic Considerations (Prepared by the Council of Economic Advisers.) Annexes, 1, 3, 4, 6, 7, and 8 are not printed. Annex 2 is printed on p. 360. For the text of Annex 5, see p. 923.

10. NSC 68, a report on “U.S. Objectives and Programs for National Security,” April 14, 1950, is printed in Foreign Relations, 1950, vol. i, p. 234.
11. NSC 68/4, a report on “U.S. Objectives and Programs for National Security,” December 14, 1950, is printed in Foreign Relations, 1950, vol. i, p. 467.
12. Reference is to NSC 68/4.
13. Conversion to turbo-jet model between June 30, 1952 and December 31, 1953 accounts for decrease in percent modernization at the later date. [Footnote in the source text.]
14. Conversion to turbo-jet model between June 30, 1952 and December 31, 1953 accounts for decrease in percent modernization at the later date. [Footnote in the source text.]
15. While funds for 100% had been requested by the Navy, a reduction of 45 VP planes was made by the Bureau of the Budget. If the funds for these planes were provided, 100% completion could be reached by December 1, 1953. [Footnote in the source text.]
16. Subsequent to the presentation of the budget, the HS program was increased. As of December 31, 1953, the funds now requested cover the % indicated. If additional money were made available, 100% could be reached by December 1. This amounts to less than 20 HS and envisages an increased production rate. [Footnote in the source text.]
17. Acceleration of B–47 production above that in the A–14 schedule is a resultant of Air Force action since June 1, 1951. [Footnote in the source text.]
18. In interim B–29 Tankers will be used to make up any deficit. [Footnote in the source text.]
19. Advanced Multi-Engine—February 1954. [Footnote in the source text.]
13. Brackets appear in the source text.
14. Annex 2 (Foreign Military and Economic Assistance Programs) of NSC 68/3, December 8, 1950, is printed in Foreign Relations, 1950, vol. i, p. 433.
15. For documentation on the dispute between Israel and the Arab States, see volume v .
16. For documentation on the operations of the International Security Affairs Committee, see pp. 266 ff.
17. For documentation on the United States information program, see pp. 902 ff.
18. Annex 5 (Foreign Information Programs) of NSC 68/3, December 8, 1950, is printed in Foreign Relations, 1950, vol. i, p. 452.
19. The Intelligence Advisory Committee consisted of the Director of Central Intelligence (Chairman) and the principal intelligence officers of the Departments of State, Army, Navy, Air Force, the Joint Chiefs of Staff, the Federal Bureau of Investigation, and the Atomic Energy Commission. Its function was to effect interdepartmental coordination of intelligence activities and advise the Director of Central Intelligence.
20. These conclusions were approved by President Truman on August 9; see memorandum, p. 157.
21. For information on the request for the report due October 1, see memorandum by Executive Secretary Lay and the attached directive by President Truman, July 12, p. 101. The report submitted to the President, NSC 114/2, October 12, is printed in part on p. 182.
22. For documentation on Italian political conditions, see volume iv .
23. For documentation on French political conditions, see ibid.
24. For documentation on political conditions in the Federal Republic of Germany, see vol. iii, pp. 1747 ff.
25. Reference is to the meetings of the Deputy Foreign Ministers of the United States, United Kingdom, France, and the Soviet Union, March–June 1951; for documentation on this subject, see vol. iii, pp. 1086 ff.
26. For documentation on U.S. policy with respect to Morocco, see volume v .
27. For documentation on U.S. policy with respect to the Latin American Republics, see vol. ii, pp. 925 ff.