Eisenhower Library, Eisenhower papers, Whitman file
Memorandum of Discussion at the 207th Meeting of the National Security Council on Thursday, July 22, 19541
eyes only
Present at the 207th meeting of the Council were the President of the United States, presiding; the Vice President of the United States; the Secretary of State; the Secretary of Defense; the Director, Foreign Operations Administration; and the Director, Office of Defense Mobilization. Also present were the Secretary of the Treasury; the Director, Bureau of the Budget; the Chairman, Atomic Energy Commission (Item 2); the Chairman, Joint Chiefs of Staff; the Director of Central Intelligence; the Assistant to the President; Robert Cutler, Special Assistant to the President; the White House Staff Secretary; Bryce Harlow, Administrative Assistant to the President; 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 of the possible use of ROK forces in Indochina, of the large ship reactor program, and of the disposition of material being diverted from Indochina.]
4. East-West Trade Controls (NSC Action No. 11702)
Mr. Cutler asked Governor Stassen to report briefly to the Council on the final phases of his negotiations in Paris with respect to [Page 1233] the International Lists for export controls on strategic materials exported to the European Soviet bloc countries.
Governor Stassen stated that as a result of the talks here with the British over the 4th of July week-end, and the talks just completed in Paris, we had moved through the remainder of the International Lists. Of the items in question, the result had been that 43 items had been designated for embargo, 17 for quantitative control, 6 for decontrol, and 3 deferred pending further study. The three deferred items would remain embargoed until the issue came up for decision next December. Governor Stassen commented that the items described as most vital to the United States from the security point of view, in the NSC papers, had remained on the controlled lists. There was the additional advantage that agreement had been reached on transshipment and transaction controls. These latter were to be put on by the individual countries, but would be the subject of a subsequent general review.
Governor Stassen said that the revised lists would go into effect on August 16, 1954. These revised lists would consist of 176 items embargoed, 24 items designated for quantitative control, 55 items assigned to the watch list, and three items deferred but meanwhile embargoed. These three items were tinplate rolling mills, electric generators of a certain power, and strategic ball bearings.
With respect to shipping controls there had been no final word, but Governor Stassen expressed the opinion that we would have to yield to some degree with regard to the tonnage and the speed of vessels which the free world could build for the Soviet bloc.
The sum total of these negotiations, concluded Governor Stassen, was that we now have an 18-nation agreement with respect to the most significant strategic items. In addition, we have an 18-nation agreement with respect to transshipment and transaction controls.
When Governor Stassen had completed his report, Secretary Dulles complimented him on the manner in which he had conducted a very difficult series of negotiations. The results achieved had been much better than we had at one time believed possible.
The National Security Council:
Noted an oral report by the Director, Foreign Operations Administration, on the final results of the reexamination of the International Lists, which included the following major points:
- a.
- All items considered by the U.S. to be in the highest priority were retained on the Lists.
- b.
- Transshipment and transaction controls were agreed.
- c.
- The new lists will go into effect on August 16, 1954, approximately as follows: 176 items on the embargo list; 24 items on the quantitative list; and 55 items on the watch list.
- d.
- Deferred, pending further study, removal from the embargo list until December 1954 of tinplate rolling mills, electric generators of 10,000 to 60,000 KW, and ball bearings.
- e.
- The U.S. agreed to yield to a small extent on the total tonnage and the speed limitations under shipping controls on a three-year basis.
[Here follows discussion of significant world developments affecting United States security.]
6. Coordination of Economic Warfare Activities
The President inquired whether there was anyone in the United States Government whose responsibility it was to undertake studies and to formulate plans for economic warfare. It seemed to him that there was no one in the entire Government whose job it was to figure out how to embarrass the enemy in this field. While Russia had been refusing to buy Asiatic natural rubber, China was buying it at twice the market price. The President said he could see no explanation of this except that it was designed to embarrass United States policy in the free Asian countries. Accordingly, we ourselves needed a man to think about this problem and nothing else.
Dr. Flemming expressed full concurrence with the President’s view, and stated that the United States conducted its economic warfare activities on a “crisis basis” rather than in terms of an over-all strategy for economic warfare. Dr. Flemming’s point was illustrated by several members of the Council, and the President again repeated his fear that “what was everybody’s business, was nobody’s.” He said that what he had in mind was no plan that would deprive the existing agencies of their responsibility in this field, but an individual who would see to it that the agencies discharged their responsibilities. Mr. Cutler suggested that the Bureau of the Budget be asked to prepare recommendations to meet the President’s point with regard to economic warfare.
Returning to the subject of the copper situation, Governor Stassen expressed the opinion that the alleged considerable movement on the copper market was deceptive. Secretary Humphrey, however, insisted, nevertheless, that there had been a very considerable movement in recent weeks. Mr. Allen Dulles said that such reports were not correct in so far as he could determine . . . . The probable explanation of the activity in the copper market was that several free world countries were at last beginning to build up more normal inventories of this metal.
. . . . . . .
Admiral Radford did not reply to this point, but indicated that he had received a number of interesting reports with regard to Soviet bloc, and especially Polish flag, tankers in the Far East. [Page 1235] When all the reports were in, he proposed to summarize their content for the benefit of the Council. Meanwhile, Admiral Radford endorsed heartily the proposal for more effective prosecution by the Government of a program for economic warfare. Admiral Radford also adverted to the view of General Franco, who believed that if the United States undertook to supply the appropriate financial assistance it would be quite possible to build up markets in the free world for supplies and materials which were now perforce being sold by the free world to Soviet bloc countries. The President expressed the view that this was something which certainly should be studied as providing a possible way out of the dilemma of East-West trade.
The President then inquired why the United States did not do everything in its power to promote the sale of Middle East oil in Europe. Admiral Radford pointed out that 90% of Middle Eastern oil was already going to Europe and that the amount was increasing rapidly, an estimate confirmed by Mr. Allen Dulles.
The National Security Council:
Noted the President’s request that the Bureau of the Budget study and prepare recommendations for Council consideration as to placing responsibility within the Executive Branch for coordinating all U.S. economic warfare activities.
Note: The action above subsequently transmitted to the Director, Bureau of the Budget.
[Here follows discussion concerning the United States objectives and policies with respect to the Near East, Iceland, and the Geneva Conference.]
- This memorandum of discussion was prepared on July 23 by Deputy Executive Secretary of the National Security Council Gleason.↩
- NSC Action No. 1170 was the directive issued by the NSC at its meeting of July 1, 1954, pursuant to agenda item 5; for the memorandum of discussion of that meeting, see p. 1218.↩