S/S Files: Lot 63 D 351: NSC 104 Series
Memorandum by the Deputy Assistant Secretary of State for Economic Affairs (Linder) to the Secretary of State
Subject: NSC 104/2: “United States Policies and Programs in the Economic Field Which May Affect the War Potential of the Soviet Bloc”
NSC 104/2 contains a revised version of the substantive recommendations which were originally included in the Department’s recommendations to the President on “United States Policies and Programs in the Economic Field Which May Affect the War Potential of the Soviet Bloc” (NSC 104). You will recall that the National Security Council at the time NSC 104 first came before it approved the recommendation that all United States exports to the Soviet Union be brought under export licensing control and referred the remainder of the recommendation to the Special Committee on East-West Trade. As a result of the discussions in the East-West Trade Committee and in the Senior Staff, a number of recommendations have been spelled [Page 1951] out in considerably greater detail. The recommendations as they now stand in NSC 104/2 represent full agreement of the departments and agencies represented on the Committee. Although in revising the recommendations certain modifications were made to meet the views of other agencies, it is believed that all essential points in the Department’s original recommendation have been retained.
The one issue on which there has been disagreement (the treatment of United States exports to Hong Kong) has been omitted from NSC 104/2 and will be the subject of a separate report to the National Security Council. This problem is currently under discussion with the Department of Commerce pursuant to Mr. Sawyer’s letter of March 30, attached as Tab A. It appears likely that a satisfactory solution to the Hong Kong problem will be possible in the near future.
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III. Economic Sanctions Against China (Recommendation 9)
This recommendation has been revised since it originally was placed in NSC 104. It now expresses a general goal for action to be sought in obtaining international control measures to diminish the Chinese Communist military potential. While the recommendation specifies steps that should be taken through the United Nations, the action is not intended to be limited to the United Nations channels. Since our objective is to obtain as wide an agreement as possible over controls affecting China, it seems more effective to limit our approach to controlling a selective group of strategic commodities which would enable a large number of countries to join in a common security effort, rather than to propose a complete embargo which would be so severe a measure that it would probably not command wide support by a large number of other countries.
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