Foreign Relations of the United States, 1952–1954, General: Economic and Political Matters, Volume I, Part 2

Eisenhower Library, Eisenhower papers, Whitman file

Memorandum of Discussion at the 206th Meeting of the National Security Council on Tuesday, July 15, 1954¹

top secret
eyes only

July 15, 1954

Present at the 206th Meeting of the Council were The President of the United States, presiding; the Vice President of the United States; the Secretary of State (for Item 2 only); the Under Secretary of State (Items 1 and 3–7); Robert B. Anderson for the Secretary of Defense; the Acting Director, Foreign Operations Administration; the Director, Office of Defense Mobilization. Also present were the Secretary of the Treasury; the Attorney General (Item 1); the Acting Secretary of the Interior (Item 4); the Secretary of Commerce (Item 1); Under Secretary of Commerce Worthy (Item 1); Assistant Secretary of Commerce Anderson (Item 3); the Director, Bureau of the Budget; the Director, Federal Bureau of Investigation (Item 1); the Administrator, Federal Facilities Corporation (Item 3); the Chairman, Joint Chiefs of Staff; the Director of Central Intelligence; the Assistant to the President; the Deputy Assistant to the President; the White House Staff Secretary; the NSC Representative on Internal Security (Item 1); the Executive Secretary, NSC; and the Deputy Executive Secretary, NSC.

Following is a summary of the discussion at the meeting and the main points taken.

[Here follows discussion on restricting diplomatic and official representatives of Soviet bloc countries in the United States in connection with strategic intelligence and a report by the Secretary of State on developments in Europe and Indochina.]

3. U.S. Rubber Policy (NSC 5417/2; NSC Action No. 1097; Memo for All Holders of NSC 5417/2, dated July 9, 1954²)

Mr. Laurence Robbins, Assistant Secretary of Commerce Anderson, and Acting Secretary of the Interior Tudor, joined the Council, and Mr. Lay briefed the members on the background of the policy statement. At the conclusion of Mr. Lay’s briefing, the President inquired whether rubber was raised in all the islands of the Indonesian Archipelago. Mr. Lay replied in the affirmative, but pointed out that nearly all of this rubber was grown by small holders and was of exceedingly poor quality. The President observed that it seemed to him a first-rate idea to sell rubber of low quality to Communist China. Secretary Anderson pointed out that a 6000-ton, shipment of Indonesian rubber was about to go to Communist China. The President commented that it would be best to “turn our blind side to it”.

Secretary Humphrey pointed out the importance of realizing that the Soviet bloc nations had been getting rubber, and particularly copper, in very considerable quantities over the last 90 days.

The President indicated concern over the shipment of copper, and said that if the United States were really waging economic warfare the way he thought it ought to be waged, we would find the money to buy up any copper which was about to be sold to the Soviet bloc. Secretary Humphrey added that it had been very difficult to trace the origin of the copper shipments, but they were certainly going behind the Iron Curtain and the probable origin was Latin America.

Secretary Humphrey inquired of Mr. Robbins as to the probable date when the Government would have sold its synthetic rubber plants. Mr. Robbins replied that unless there were some objection in Congress, the Government would be out of the rubber business by April 1955.

The National Security Council:

Adopted the statement of policy contained in NSC 5417/2.

Note: NSC 5417/2 approved by the President and referred to the Operations Coordinating Board as the coordinating agency designated by the President.³

[Here follows discussion concerning Antarctica, United States policy on Berlin, significant world developments affecting United States security, and the NSC status of projects.]

1. The memorandum of discussion was prepared on July 16 by Deputy Executive Secretary of the National Security Council Gleason.
2. NSC 5417/2, supra. NSC Action No. 1097 was the directive on rubber policy issued by the NSC at its meeting of Apr. 29, 1954; see the memorandum of discussion, p. 1153. The memorandum of July 9 transmitted the revised version of NSC 5417/2 to the members of the NSC.
3. As the implementing agency for NSC 5417/2, the OCB submitted to the NSC on Sept. 24, 1954, a plan, subsequently designated as NSC 5417/3, to use both alternatives C and D to encourage the production and marketing of natural rubber by small producers in Indonesia. When the NSC considered the plan at its meeting of Oct. 14, 1954, Secretary of the Treasury Humphrey expressed strong opposition in principle. Although the NSC approved the plan, its approval was contingent on a determination by Secretary Humphrey that the plan would not damage the sale of U.S. Government-owned synthetic rubber plants. When at the NSC meeting of Dec. 9 Secretary Humphrey reported that such damage would indeed be sustained, the NSC agreed to postpone for six months the implementation of the OCB plan.