Eisenhower Library, Eisenhower papers, Whitman file

Memorandum of Discussion at the 197th Meeting of the National Security Council on Thursday, May 13, 19541

top secret
eyes only

The following were present at the 197th Meeting of the National Security Council: The President of the United States, presiding; the Vice President of the United States; the Secretary of State; the Acting Secretary of Defense; the Director, Foreign Operations Administration; and the Director, Office of Defense Mobilization. Also present were the Secretary of the Treasury; the Attorney General (for Items 1, 2, 3, 4 and 5); the Postmaster General (for Item 2); the Secretary of Commerce (for Items 2 and 9); the Director, Bureau of the Budget; the Chairman, Atomic Energy Commission (for Items 1 [Page 1160] and 5); the Federal Civil Defense Administrator (for Item 1); Assistant Secretary of Commerce Anderson (for Item 8); Marshall Smith, Department of Commerce (for Item 8); Newman Smith, Department of Commerce (for Item 2); Walter S. Delany, Foreign Operations Administration (for Item 8); the Chairman, Joint Chiefs of Staff; the Director of Central Intelligence; the Assistant to the President; Robert Cutler, Special Assistant to the President; James C. Hagerty, Secretary to the President; the White House Staff Secretary; the NSC Representative on Internal Security; the Executive Secretary, NSC; and the Deputy Executive Secretary, NSC.

There follows a summary of the discussion at the meeting and the main points taken.

[Here follows discussion concerning organizational arrangements for continental defense, importation of Communist propaganda, covert acquisition of strategic intelligence information (unclassified) by Soviet Embassy representatives in the United States, internal security, a report by the American Society of Newspaper Editors on “Freedom of Information”, the preparation and use of financial appendices in connection with policy recommendations by the National Security Council, NSC Progress Reports, and the reassignment of responsibility for defense of crops against biological warfare.]

9. Economic Defense: Report on Tripartite and COCOM Review of International Lists (NSC 152/32)

Mr. Cutler indicated that the report which Governor Stassen would now make supplemented the report on the subject which he had made to the Council in April3 after his return from London. He also indicated that the Commerce Department had some views which Secretary Weeks would wish to present to the Council.

Governor Stassen reminded the Council that the agreement between the United States and the United Kingdom reached at London in April called for a trilateral review (U.S., U.K. and France) of the international control lists, as well as a review of these lists by the COCOM Committee in Paris. Some progress had been made in both sets of reviews, although many problems had arisen with the British in the trilateral review. The result to date of the trilateral review was the cutting down of the international lists by about 40%, although other U.S. officials might deem the cut to be closer to 50%. There was some satisfaction to be derived from the fact that the reduced lists would be more strictly policed and enforced.

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Further difficult issues with the British, said Governor Stassen, were to be anticipated. He therefore desired the guidance of the National Security Council with respect to items on the lists which promised to raise the sharpest issues: copper, nickel, scrap iron, natural rubber, railroad rails, merchant shipping vessels, and certain grades of bearings.

Governor Stassen said there was bound to be controversy on all of these items, and he pointed out his belief that nickel and copper should remain on the embargo list for obvious strategic and security reasons. Scrap iron should continue to be embargoed for domestic political reasons, since the Congress would remember well the results of the shipment of scrap iron to Japan in the months before Pearl Harbor. On the other hand, Governor Stassen thought it would be necessary to yield to Britain and decontrol natural rubber and railroad rails. With respect to cargo vessels, he hoped to be able to retain ceilings of 7000 tons and 15 knots if possible, and he also hoped to induce the British to cut down on the number of vessels under this size and speed which the West would ship to the Soviet bloc.

The President inquired of Admiral Delany why we were concerned about how many merchant vessels were delivered to the Soviet Union if they were small enough and slow enough. Admiral Delany replied that it was the category of vessels above the ceilings referred to by Governor Stassen that the United States was particularly anxious to restrict.

The President then asked Admiral Radford for his opinion. Admiral Radford replied that if the Russians were permitted to obtain cargo vessels outside Russia, they would use their own shipyards for the construction of war vessels. This process would also enable them to circumvent the lack of certain critical materials. In sum, they would secure a big advantage.

The President answered that he still did not see how the shipyards of England, Holland, Norway, and our other allies, could be allowed to remain idle. Admiral Radford continued to support his view, and noted that cargo vessels, of which the Soviets were very short, constituted a critical strategic area. Right now, he added, the Soviets were building a number of large cruisers in addition to submarines and destroyers. Their shipyards were operating at 100% capacity.

Governor Stassen then reminded the Council that he would like to hear its reaction to his proposal for dealing with this and the other critical items at issue with the British.

Secretary Dulles stated that his people in the State Department felt that we should not yield to the British in the matter of cargo [Page 1162] vessels, but should carry the fight into COCOM, where we might be able to secure a better bargain.

Governor Stassen replied that if we scuttle the agreement we had made with the British for prior agreement at the trilateral negotiations, and instead proposed to negotiate our disagreements in COCOM, such a decision should be communicated to the British at the governmental level. We had earlier induced the British to agree to present a joint position on the control lists in COCOM. Furthermore, Governor Stassen doubted whether any gains we might secure by deciding now to take such issues as the cargo vessels directly to COCOM, would be worth another row with the British.

Mr. Cutler then called upon Secretary Weeks to give the views of the Department of Commerce.

Secretary Weeks prefaced his remarks by pointing out that of course the Department of Commerce was 100% in favor of expanding international trade. There were, however, some red flags in the path. The Commerce Department felt that we had been too liberal in our negotiations with the British and that as a result, “some horses had been stolen from the barn door.” We have let down the bars on certain items in these tripartite discussions with serious results. This was especially true of the so-called “elephant” machine tools. As far as the over-all picture was concerned, if we followed our present course Secretary Weeks was sure that the result would be to build up Soviet and Chinese war potential.

Secretary Weeks then stated that of course Commerce had only one interest—that is, the interest of defense. If, nevertheless, we were going to let down the bars, the Commerce Department would need new directives and policy guidance from the National Security Council with respect to American traders and exporters who would be penalized if our controls remained at a higher level than those of our allies. Secretary Weeks said that he would ask Assistant Secretary Anderson to outline this problem. Meanwhile, with regard to the international lists, he would recommend that the United States abandon the current tripartite review and take its problems directly to COCOM. Unless the United States holds the line, he repeated, the result will be to build up dangerously Chinese and Soviet war potential.

Governor Stassen denied that our negotiators had yielded to the British on the item of “elephant” machine tools. On the contrary, these tools had been the subject of a last-ditch struggle, and the United States had won.

Secretary Anderson pointed out that in actuality we had reached an impasse on this category of machine tools. It was true that we had made a last-ditch stand, but the British had not yet agreed to [Page 1163] retain these tools on the embargo list. Moreover, we were far from agreement with the British on the whole question of quantitative controls as opposed to embargoing. The trilateral negotiations had in fact whittled away much more of the U.S. position than that of the British. We had made many concessions with respect to reducing the embargo lists, but the British had made no concessions in return regarding either quantitative or transaction controls. It was for this reason that the Council should consider taking our problems directly into COCOM, as Secretary Dulles had suggested. Secretary Anderson predicted that we would get much greater support for our position if we took it into COCOM.

Governor Stassen again pointed out the substance of the interdepartmental agreement to the trilateral discussions, which had been confirmed before he went to London in April. As a result of his visit, the British had backed down and had agreed not to go to COCOM with proposals for a drastically reduced international list of controlled items. We thus won our major first point at London, and we have started on the trilateral review. If we now decide to throw the whole problem into COCOM, Governor Stassen thought there was not much likelihood of stronger support for the U.S. view, and it would risk a severe breach with the United Kingdom.

Dr. Flemming inquired what happened if the United States failed to reach agreement with the British and the French for the control of any item at the trilateral review. Were we then permitted to take the case into COCOM? Governor Stassen replied in the affirmative.

Mr. Cutler then asked whether, in such instances of disagreement on the embargo of a given item, we could get the British to compromise by agreeing at least to a quantitative control of the item in question. If this were possible, should not the National Security Council adopt this course of action as policy guidance rather than to go into COCOM with an open split with the British?

The President said, with considerable heat, that he constantly reverted to the public position which he and the Secretary of State must always take. Both of them kept stressing the necessity for cooperation with our allies and both emphasized that the best defense against Communism was a policy of cooperation among the free world nations. There must continue to be such cooperation, said the President, or else each of the nations in the coalition would go to pot one by one. He had detected very little support for such sentiment in the course of the discussion at this Council meeting. Of course, said the President, he was not in favor of giving everything it wanted to the Soviet Union; but we had simply got to decide on the general kind of war we believe we will have to fight if there is a war, and on the basis of this decision determine specific [Page 1164] policies such as those which concerned East-West trade. We must base these decisions firmly on our basic security policy. Otherwise our efforts to defend ourselves would prove sterile.

Mr. Cutler summarized for the Council the position taken by Governor Stassen and his request at the outset of the discussion for policy guidance. Mr. Cutler suggested again that when we had to “give way” to the British and release an item from the embargo list, we should insist that the British agree to at least a quantitative control of this item.

The President stated with great emphasis his dislike of the phrase “give way”. In his judgment, said the President, our objective was to find the line of action most generally advantageous to ourselves and our allies. This was not a matter of “giving way”.

Dr. Flemming professed to find some of the British proposals very confusing indeed; for example, taking nickel, which was in such short supply, off the embargo list. Governor Stassen suggested that the British were in effect trying to reestablish the London Commodity Market as it had existed before the last war. If they succeeded there would at least be the advantage that many critical items which found their way to the Soviet bloc by devious routes could be adequately policed. The President said that we should certainly stick to our position that nickel remain on the embargo list.

Dr. Flemming then suggested that what the Council really needed was a comprehensive staff paper analyzing the specific materials at issue with the British in the light of our basic policy. The President said that he found himself largely in agreement with the position taken by Governor Stassen in the course of the discussion.

At this point Mr. Cutler said he understood that the merits of the “peel-off” method of removing items from the international control lists, as opposed to the en masse method of removing categories of items from these lists, should be discussed. Governor Stassen, however, said that the British had substantially agreed to abandon their support of the peel-off system and to accept the en masse method. He explained this concession as the result of pressure on the British by most of the other nations.

Mr. Cutler said if that question was settled, the Council should proceed to consider what action we should take on our own U.S. control lists and with respect to the Battle Act in the light of what was occurring at the trilateral negotiations in London.

In response to this, Secretary Anderson explained that Commerce would like the National Security Council to undertake a review of U.S. export policy (NSC 152/3) on the assumption of a considerably reduced international list eventuating from the COCOM review. He explained that Commerce had prepared a proposed revision of NSC 152/3 which it was prepared to submit to the [Page 1165] NSC Planning Board whenever requested. Mr. Cutler suggested that Commerce submit its report to the Planning Board prior to July 1, when the review of the international lists at COCOM would have been completed.

Secretary Humphrey, turning to the President, said that the latter had made an observation of considerable importance earlier in the meeting, and that this observation had subsequently been overlooked. He thoroughly agreed with the President that our specific policies—for example, that on East-West trade—were all dependent on our conception of the kind of war we may have to face in the future; that is, a traditional or a new type of war. Certainly the United States could not be prepared to fight every kind of war. If we could make up our mind on the kind of war, many of these difficult policy issues would fall into place.

The President replied that while, of course, we could decide in a general way the kind of war for which we must prepare, we could never be sure of all the details. It was a tricky matter, but let us not think only of what the United States can do to hurt the Russians most, but also of what is best for the whole community of free world nations on which our security so largely depended.

Governor Stassen then said he wished to commend warmly the working groups in the several executive departments who have been involved night and day for many weeks in trying to solve the problems that have been discussed at the meeting. If any of these departments felt that things were going wrong at the trilateral negotiations, they should feel free to bring the issue before the National Security Council for discussion. The President replied that he always assumed this to be the right of each executive department.

Dr. Flemming strongly seconded Governor Stassen’s suggestion and said that when departments or agencies disagreed among themselves on the desirable position with respect to any specific item, or when we have difficulties with the British on the control or decontrol of a strategic item, a staff study should be prepared and brought to the Council for resolution. The President agreed with this proposal, but said that he was pleading for “a broad view-point”.

The Vice President then inquired whether, in view of the developments regarding the export control lists, there was likely to be any necessity for new legislation. The general view was that no new legislation would be needed, but Governor Stassen warned of the likelihood that the Administration would be attacked in Congress for its handling of the East-West trade problem.

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The President said that in that event we would stand on our basic position in favor of the “maximum net advantage” for the United States.

There then ensued a discussion as to the appropriate action to be recorded for this item. At the conclusion of this discussion Mr. Cutler asked the Council if it agreed to continue to embargo copper, nickel, scrap iron, and “elephant” machine tools. This question was answered in the affirmative, and the Council also agreed that the remaining “hot” items between the U.S. and the U.K.—namely, natural rubber, railroad rails, merchant ships, bearings, and petroleum—should be studied further by ACEPEDAC and the results presented to the Council for subsequent consideration.

The National Security Council:

Discussed an oral progress report by the Director, Foreign Operations Administration, on the tripartite and COCOM review of international control lists.
Agreed that copper, nickel, scrap iron, and “elephant” machine tools should remain on the international control list for embargo.
Agreed that the Director, Foreign Operations Administration, should submit for consideration at the next Council meeting a report on:
The results of ACEPEDAC deliberations regarding retaining on or removing from the international control lists such items as natural rubber, railroad rails, merchant ships, bearings, and petroleum.
The possibilities of retaining under quantitative international control those items on which the U.S. is unable to obtain international agreement to embargo.
Noted the President’s statement that, whenever agreement on specific items cannot be reached through ACEPEDAC, or disagreement with the U.S. position on important specific items cannot be resolved in international negotiations, any responsible department or agency may always submit a staff paper on the subject for consideration by the National Security Council.
Noted that the Department of Commerce would submit, through the NSC Planning Board, proposed changes in those portions of NSC 152/3 relating to U.S. controls on trade with the European Soviet bloc based upon a reexamination of U.S. policy in the light of changes in the international control lists.

Note: The action in c above subsequently transmitted to the Director, Foreign Operations Administration.

[Here follows discussion of significant world developments affecting United States security, developments regarding the Geneva Conference and the Indochina situation, and National Security Council status of projects.]

  1. This memorandum of discussion was prepared on May 14 by Deputy Executive Secretary of the National Security Council Gleason.
  2. For text as revised, see p. 1207.
  3. See the memorandum of NSC discussion of Apr. 1, p. 1143.