561.00/3–1452: Circular telegram

The Secretary of State to Certain Diplomatic Offices1


786. 1. Psychological Strategy Board (Director Central Intelligence, UnSecState and DepSecDef) is considering possible ways of countering effectiveness of E-W trade aspects of Sov peace propaganda campaign. As indicated Dept circ agam on Moscow Econ Conf dated Feb 1,2 Sov econ propaganda has been steadily increasing. Staff of Psychological Strategy Board has now requested Dept’s views on proposal outlined para 2 below. Dept’s prelim reaction is that project wld not be particularly effective in Eastern Eur and because of limited nature of goods which we wld be prepared to see included in any such offer wld not be saleable to Western Eur Govts, Dept feels that offer of this kind if too limited in scope wld only serve purposes of Moscow propaganda and intensify Western dissatisfaction current security trade policy and if sufficiently broad in scope to avoid these dangers wld lead to renewed domestic pressure for more sweeping controls. However before giving final reply to staff of Psychological Strategy Board Dept wld appreciate comments from posts receiving this msg and in particular any suggestion posts may wish to offer on alternative means countering current Moscow propaganda line.

2. PSB proposal is essentially for Western Eur Govts to make concerted well-publicized offer in near future to satellite govts to expand trade beyond existing levels in food and other non-strategic consumer goods now rpt now available in Western Eur. It is estimated that there might be $300 to $400 millions worth of consumer goods and light textile and farm equipment (not on any internatl security list) which Western Eur cld offer to export to Eastern Eur for traditional imports of grain, timber and coal. Since there are no [Page 831] security controls on these goods, it is apparent from fact that they are not being exported to East that trade negotiators for satellite countries are not genuinely interested in expanding trade in these commodities. Furthermore satellites are specifically discouraged from trading with West except for strategic goods. Therefore probable that any such offer wld be rejected by East. By overt and covert means rejection cld then be played up to peoples rpt peoples of Eastern Eur and emphasis placed on fact that they were being denied needed goods by their govts altho Western Eur ready and able to export, thus making mockery of current Moscow line.

  1. Drafted by Cox and Camp and cleared with Robert W. Barnett of the Office of Western European Affairs, Julius Katz of the Office of Eastern European Affairs, Wilson T. M. Beale of the Office of British Commonwealth and Northern European Affairs, and J. Robert Schaetzel and Edwin G. Moline of the Bureau of Economic Affairs. Sent to Moscow, Prague, Warsaw, Paris, London, and The Hague.
  2. Not printed; it reiterated the position taken by Ambassador Spofford in the North Atlantic Council discussions in October 1951. (398.00 MO/2–152)