The detailed studies of the world outlook and national security problems
facing the United States through Fiscal Year 1959, with conclusions and
possible courses of action, prepared by various departments and agencies,
are contained in the Annexes to this report which are being circulated
separately.
Based upon Council discussion of the enclosed study, and following further
review by the respective departments and agencies, the NSC Planning Board will prepare and submit for
early Council consideration such further report or reports as the Council
may direct.
[Enclosure]
Study Prepared by the National Security Council
Planning Board
top secret
[Washington,] June 14, 1954.
Tentative Guidelines Under
NSC 162/2 for FY 1956
i. elements of the world situation and
outlook
The Soviet Threat Through
Mid-1959 (NIE 11–5–54; NIE 13–54; and “Explanation of Table of
Comparisons of Estimated Soviet Military Capabilities in Key Respects”
in Annex 4 of NSC 5422)6
1. Status of the Soviet Bloc
- a.
- The internal stability of the Soviet Union and its control of the
European satellites have not diminished and may be expected to
remain intact through 1959.
- b.
- However, the Soviet bloc is faced with internal problems such as
popular discontent in the satellites, agricultural shortages and
[Page 650]
opposition to
collectivization, rivalries within the collective leadership and
serious defections from the secret services.
- c.
- Communist China has gained prestige more rapidly than anticipated;
its power will continue to increase. Despite potential conflicts of
interest, the present close Sino-Soviet collaboration will
persist.
2. Soviet Bloc Military Capabilities
Estimates of certain current and future Soviet military capabilities have
been raised substantially since the adoption of NSC 162/2. Key examples are shown in the following table:
[Page 651]
|
|
|
Current |
Future |
|
|
|
’53 Estimates of ’53
Situation |
’54 Estimates of ’54
Situation |
’53 Estimates of ’57
Situation |
’54 Estimates of ’59
Situation |
| Nuclear Weapons (Energy yield) |
|
|
|
|
|
Largest Weapon |
500–1000 KT |
1000 KT |
500–1000 KT |
10,000 KT |
|
Total Stockpile |
6 MT |
25 MT |
25 MT |
172 MT (tested technology) |
|
|
|
|
|
|
860–4300 MT (possible technology) |
| Long-Range Bombers |
|
|
|
|
|
Prop. Medium (TU–4) |
1000 |
1270 |
1200 |
400 |
|
Jet Medium (“39”) |
1 Prototype |
20 |
50 (mid ’55) |
120 (mid ’55) |
|
|
|
|
|
|
600 (mid ’59) |
|
Turbo-Prop Heavy (“31”) |
1 Prototype |
10 |
some possible |
300 |
|
Jet Heavy (“37”) |
— |
1 Prototype |
— |
100 (possibly 300) |
| Surface-to-Surface Guided
Missiles |
|
|
|
|
|
450–500 mi. (V2 type) |
— |
— |
Future Obscure |
Operational by ’56 |
|
Inter-Continental |
|
|
|
|
|
|
a pilotless bomber |
— |
— |
Future Obscure |
Possible in ’59 |
|
|
b ballistic |
— |
— |
— |
— |
[Page 652]
| Air Defense |
|
|
|
|
|
All-weather fighters with A–I Radar |
— |
— |
A few by ’55 |
200 (mid ’55) |
|
|
|
|
|
|
2100 (mid ’59) |
| Submarines |
|
|
|
|
|
Improved Ocean Patrol Submarines |
20 |
47 |
100 |
295 |
Note. This table necessarily involves substantial
simplification of estimates. A supporting memorandum, with full
explanations and citations to National Intelligence Estimates, is
included in Annex 4 of NSC 5422.
[Page 653]
3. Soviet Bloc Capabilities for Political Warfare,
Subversion and Local Aggression
- a.
- Present and future Soviet Bloc capabilities for pursuing their
objectives by action short of general war appear at least as great
as, and possibly greater than, a year ago. Throughout most of the
free world the Communists have the capability through hardcore
activists to engage in a wide variety of disruptive tactics, ranging
from organized civil war (as in Indochina) through persistent
guerrilla activities (as in Malaya) to inflammatory demonstrations,
propaganda, “popular fronts”, and parliamentary harassment.
Preferring a “creeping expansion” over resort to overt aggression,
they will continue to take over spontaneous movements bred of
nationalistic fervor or economic discontent and to exploit free
world disunity.
- b.
- In the period through 1959, the Soviet rulers will almost
certainly believe that, as Soviet nuclear capabilities increase, the
aversion of the U.S. and of its allies to general war will
correspondingly increase, and that the Kremlin
will therefore have greater freedom to take certain actions without
running substantial risk of general war. It may employ the threat of
nuclear devastation as an instrument of political warfare. It may
attempt to gain some of its objectives by local military actions,
calculating that the U.S. and its allies will be more anxious than
before to keep such local conflicts from expanding into general war.
The Kremlin will, however, continue to be
extremely reluctant to precipitate a contest in which the USSR would
be subjected to nuclear attack. At the same time, the
Kremlin would probably not be deterred by
the risk of general war from taking counteraction against an action
by the U.S. or its allies which the Kremlin
considered an imminent threat to Soviet security. The extent to
which the Kremlin uses the increased freedom of
action which its increased nuclear capabilities appear to give it,
and the success which it achieves, will depend primarily on the
cohesion of the non-Communist world, and the determination and
strength of the major free world powers.
Trends in the Free World Through
Mid-1959
4. Military (JCS
study on “Estimate of the Military Posture Throughout the Free World,
FY 1956 Through FY 1959,” in Annex 2 of NSC 5422)
- a.
- The U.S. will achieve atomic plenty during the early part of
this period and prior to like achievement by the Soviets. The
U.S. [is expected] [should be able]7 to maintain relative numerical and qualitative
superiority in nuclear-weapons and the means for their
[Page 654]
delivery. As the
Soviets approach the absolute atomic capability of inflicting
critical damage upon U.S. and other allied targets, however,
there could result a condition of mutual deterrence to [the
deliberate initiation] [actions materially enhancing the risk]
of general war.
- b.
- Free World forces will be confronted with quantitative
superiority in ground and tactical air forces in the
geographical areas contiguous to the Soviet Bloc. However, the
superior tactical atomic support which can be provided our
Allies during this period will, if accepted by them, partially
offset Allied deficiencies in conventional forces. Taken as a
whole, effectiveness of European forces is considered fair to
good. There has been no progress in forming West German forces
and limited progress in forming Japanese forces. Events in
Indochina have resulted in a suspension of planned
re-deployments from the Far East. D-day NATO commitments of U.S. forces in Europe remain
unchanged. No progress has been made in forming a strategic
reserve based generally on U.S. territory, with a high degree of
combat readiness and a capability of being moved to any
threatened area.
5. Alliances
- a.
- There have been serious instances of an unwillingness of important
free world nations to take concerted action which the U.S. considers
necessary to oppose communist expansion, particularly as regards
Indochina, East-West trade, and EDC.
West Germany is becoming restive because of protracted delay in
recovering its sovereignty. The long-term alignment of Japan with
the free world is less certain. The situation with respect to
Indochina has deteriorated with unexpected rapidity, confronting the
free world with the possible loss of Southeast Asia to
communism.
- b.
- The alliances of the free nations will continue to be strained by
divisive forces and conflicts of interests which will be vigorously
exploited by the USSR. In particular, unity of action will be
impaired by:
- (1)
- Increasing fear of the effects of nuclear weapons.
- (2)
- Differing estimates of the nature and imminence of the
Communist threat.
- (3)
- Distrust of U.S. national purposes and leadership.
- (4)
- Political instability and economic weakness of some of our
allies.
- (5)
- Conflicts regarding trade policy and economic
integration.
- (6)
- Historic hostility between certain of the allies.
- (7)
- Differing approaches to “colonial” problems.
6. Underdeveloped Areas
The underdeveloped areas of the free world will be especially vulnerable
to Soviet penetration and subversion by reason of nationalism
[Page 655]
and anti-colonialism,
deep-seated distrust of the West, retarded economic growth, military
weakness, political ferment. This danger will be most acute in Asia, in
dependent areas such as French North Africa which are still under
European rule, and in parts of Latin America.
ii. issues posed by nuclear
trends
The Problem
7. With the growth both in Soviet nuclear capabilities and in the power
of nuclear weapons themselves, in the period 1956–59, a total war
involving the strategic use by both sides of nuclear weapons would bring
about such extensive destruction as to threaten the survival of Western
civilization and the Soviet regime.
8. Under these circumstances, the freedom of either side to initiate the
use of strategic nuclear bombing against the other may be circumscribed
by:
- a.
- The fear of the effects of retaliatory use of such strategic
bombing; and
- b.
- The possibility that neither side would gain a [net]
[decisive] military advantage from such an exchange of nuclear
blows.
9. This situation could create a condition of mutual deterrence in which
both sides would be strongly inhibited from [deliberately initiating]
[actions materially enhancing the risk of] general war.
Prevention of Soviet Nuclear
Attack
10. To ensure Soviet fear that strategic nuclear attacks upon the U.S.
would be followed by the nuclear devastation of the USSR, the U.S. must
maintain the striking forces necessary for such retaliation.
11. Even if this is done, however, the deterrent to Soviet strategic
nuclear attack would be eroded if the Kremlin came
to believe that it could, through surprise nuclear strikes, destroy U.S.
retaliatory capacity.
| The U.S. must, therefore, take whatever measures are necessary
to protect this retaliatory capacity against any foreseeable
Soviet attack. The expenditures necessary for this purpose are a
prerequisite to U.S. survival. |
It is, therefore, essential that the United States take all
practicable measures to protect this retaliatory capacity
against any foreseeable Soviet attack. |
12. To enhance the deterrents to, and defense against, Soviet nuclear
attack, active and passive continental defense programs should be
carried out to reduce [to manageable proportions] the damage and
casualties likely to result from such attack.
[Page 656]
Disarmament
| 13. The U.S. should explore fully the possibility of
reaching a practicable arrangement for the limitation of
armaments with the USSR. Such an arrangement would be a more
certain and economical method of meeting the threat posed by the
growing Soviet nuclear capabilities than any other course of
action discussed in this paper. The U.S. should therefore
continue to reexamine its position on disarmament, especially
(1) whether a system of safeguards can be devised entailing less
risk for U.S. security than no limitation of armaments and (2)
whether the U.S. should be willing to agree to effective nuclear
disarmament in the absence of conventional disarmament. |
10.8 a. The question of
limitation of armaments should not be treated in this paper
because it is currently being considered under NSC Action No. 889–c.9 |
| b. In the light of the Soviet production of fissionable
materials which has already taken place, there is serious
question whether any safe and enforceable system for the
limitation of armaments can be achieved, so long as the Soviet
regime and objectives remain substantially as they are
today. |
General War
14. If general war should occur, the U.S. must be able to wage it with a
maximum prospect of achieving U.S. objectives. At present, the U.S.
ability to do so depends, in part, on its determination and ability to
mount massive nuclear attacks upon the USSR.
[Page 657]
| In the face of possible nuclear balance in 1956–59, there is
serious question whether the U.S., while maintaining maximum
strategic nuclear capabilities, can continue to place major
reliance thereon as a means of waging general war. Consequently,
the U.S. should undertake to increase the forces and
mobilization potential which the U.S. and its allies would need
to wage war effectively without strategic use of nuclear
weapons. |
Despite the advent of nuclear balance, the U.S. must accept
the risks involved in relying upon strategic nuclear
capabilities as a means of waging general war, and must employ
its scientific knowhow and industrial superiority to maintain
qualitative advantage over the Soviets. The U.S. must continue
to make clear its determination to meet Soviet attack with all
available weapons. Only in this way can there be a maximum
deterrent to general war, which if it comes will in all
probability involve the unrestricted use of nuclear
weapons. |
15. The expected nuclear balance is unlikely to create a permanent
stalemate in the arms race. Therefore a sustained effort must be made to
invent and develop capabilities which will provide decisive
preponderance to U.S. power.
16. There is increasing possibility that part or all of the U.S. overseas
base complex, may become ineffective in the event of general war,
because of political reasons (including susceptibility of the local
government to atomic blackmail) or military reasons (exposure to
immediate destruction by enemy action). The U.S. should, while exerting
continued efforts to strengthen collective defense arrangements
including the ability to use such bases for nuclear attack in the
collective defense of the free world, also increase emphasis on
developing the maximum self-sufficiency for the conduct of retaliatory
operations consistent with sound military concepts [with commensurate
reduction in future overseas base construction programs].
| 17. Because of increasing Soviet nuclear capabilities and the
increasing possibility of attempted peripheral expansion, which
might precipitate general war by miscalculation, it is necessary
for the U.S. to make greater efforts than are presently
contemplated to: |
17. Present and planned implementation of programs under
paragraphs 9, 10, and 34 of NSC
162/2 are considered fully adequate to meet the risks of
increasing Soviet nuclear capabilities and the increasing
possibility of attempted peripheral expansion. |
[Page 658]
| a. Develop war reserves of materiel and develop and maintain a
broad mobilization base adequate to (1) support the U.S. forces
in general war and (2) provide substantial support to allies who
do not have an adequate mobilization base. (See IV) |
|
| b. Move more rapidly to develop reserve forces capable of
bridging the gap between M–Day and the creation of new units
from the raw manpower pool. |
|
| c. Establish an adequate strategic reserve in being, in
addition to the forces deployed abroad in support of existing
commitments, together with sea and air transportation to give
this reserve adequate mobility. |
|
Local Soviet Bloc Aggression
18. U.S. policy to deter or defeat overt Communist aggression will be
accomplished, in part, by the programs described above to maintain and
enhance the U.S. capability to wage general war. This capability will
continue to be a deterrent to identifiable overt aggression so long as
the Communists believe that such aggression could eventually lead to
general war.
19. As a nuclear balance is approached, however, the wisdom and necessity
of avoiding general war will become increasingly apparent to both sides.
Under such circumstances, the Communists may believe that the U.S. would
be unlikely to respond to certain local aggressions by initiating
general war. Accordingly, the U.S. should be prepared to defeat such
aggressions without necessarily initiating general war. To accomplish
this result will require the use of a U.S. strategic reserve and
indigenous defense forces, supplemented as required by U.S. forces and
logistical support. However, the Communists must be convinced of U.S.
determination to take [, unilaterally if necessary,] whatever action its
security position requires, even to the extent of general war.
Communist Expansion Other Than by
Overt Aggression
20. Aided by their increasing nuclear capabilities, especially as a state
of atomic balance with the U.S. is approached, the Communist powers are
likely to pursue a strategy of further expansion through subversion,
indirect aggression, and the instigation or exploitation
[Page 659]
of civil wars in free world countries, as
in Indochina. The advantages of such a strategy, if successful, lie in
the continued accretions to Communist strength and prestige and the
progressive weakening of the free world coalition, both politically and
militarily, while the involvement of the main sources of Communist power
is avoided. This Soviet threat of piecemeal conquest can be countered
only by an integrated and flexible combination of political, military,
economic and psychological actions participated in by many nations and
given determined leadership by the United States. In view of the
threatened loss of Indochina, the U.S. cannot possibly accept further
significant extension of Communist control; it must act, both in
relation to the Communist powers and to the peoples of threatened areas,
so as to prevent such extension of control. In particular, the U.S.
should:
- a.
- Take political and economic measures to strengthen the
countries exposed to such indirect aggression, as indicated in
Section III below.
- b.
- Provide military aid and training to friendly governments
threatened with or fighting armed Communist local forces.
- c.
- Take all feasible political, economic and covert measures to
counter the threat of any such groups or forces responsive to
Communist control to achieve dominant power in a free world
country.
- d.
- In instances of civil war, be prepared to take military action
in support of friendly free world governments or forces fighting
against elements under Communist control; [the decision to take
such action would depend on all the circumstances existing at
the time, including the risk of intervention by Soviet or
Chinese Communist forces.]
iii. maintenance of the cohesion of
the free world
Relations with Our Allies
21. The growth of Soviet nuclear power and the increasing destructiveness
of nuclear weapons will make our allies more fearful of war and more
cautious of action that might lead to war. In the imminence of general
war some of them might choose a position of neutrality and default on
their alliance obligations.
22. Factors of division and weakness in the alliance may make it
difficult to take decisive action, on a basis of full agreement, to halt
further Soviet expansion in the Free World, particularly in Asia.
23. Nevertheless, major allies will continue to be essential to the U.S.
to prevent the loss to Communist control of major free areas and the
gradual isolation of the U.S.
24. In these circumstances the U.S. should take action to strengthen the
cohesion of the alliances under U.S. leadership:
- a.
- By convincing its allies, by its conduct, that:
[Page 660]
- (1)
- The U.S. retaliatory capacity will continue to be
maintained as a deterrent to Soviet power.
- (2)
- The U.S. and its allies will be able to meet the
threat of aggression in case of nuclear balance.
- (3)
- The U.S., as a leading member of the alliances, will
act responsibly and with due regard for their security
as well as its own.
- b.
- By continuing to build political, economic and military
strength in Western Europe, which is a major source of free
world power, provides our principal allies, and plays an
essential role in preventing Soviet expansion, especially by:
- (1)
- Promoting European integration based on Franco-German
cooperation and German association with the West and
participation in Western defense.
- (2)
- Strengthening NATO
despite temporary setbacks such as a failure to achieve
EDC.
- (3)
- Economic measures to help Europe meet its need for
wider markets and an expanding economy.
- (4)
- Consideration of closer U.S. association with Europe
if necessary to achieve our objectives.
25. The U.S. should attempt to gain maximum support from the free world,
particularly from allies and uncommitted countries most interested in
the threatened area, for the measures necessary to prevent Communist
expansion by direct (paras. 18–19 above) or indirect (par. 20)
aggression. Any decision to act without our major allies would be made
according to the factors present in the particular situation. As a broad
rule of conduct:
| The U.S. should undertake unilateral action only when the
anticipated benefits thereof will clearly and materially
exceed the lasting damage to the alliance. The U.S. cannot
afford the loss of major allies unless vital security
considerations leave us no alternative. |
The U.S. should exercise maximum freedom of action in
pursuing U.S. objectives consistent with maintaining the
alliances. In this connection it must be realized that the
vital importance of the U.S. to the security of Western
Europe makes it unlikely that our major allies will shift
allegiance lightly. |
Allied reluctance to act should not inhibit the U.S. from taking action,
including the use of nuclear weapons, to prevent significant Communist
territorial gains when such action is clearly necessary to U.S.
security.
Relations with the Uncommitted
Areas
26. The underdeveloped countries of Asia and the Middle East have
important resources, strategic positions and manpower which the free
world cannot afford to lose to Communist control, although
[Page 661]
they will not provide
important elements of free world power or major U.S. allies.
27. U.S. policies should include:
- a.
- Appropriate warning to the Communist powers that the U.S. will
react with military force in the event of their overt unprovoked
armed aggression.
- b.
- Measures to enhance the will and ability of the free nations
of the area to defend their independence against Communist
subversion and to resist Communist aggression.
28. The U.S. should mobilize government and public support for a new
initiative to strengthen the nations of Asia and the Middle East along
the lines of 27–b above. To this end the U.S. should:
- a.
- Assist these nations to meet their pressing economic problems,
as indicated in paragraphs 29 and 30 below.
- b.
- Seek their cooperation on a basis of mutual self-respect
without attempting to make active allies of those not so
inclined.
- c.
- Refrain, so far as feasible, from taking or supporting actions
which needlessly run counter to the forces of anti-colonialism
and legitimate nationalism. In particular, be willing to act
more independently of our European allies on non-European
questions, especially where this will enlist the cooperation of
non-European peoples.
Economic Policies and
Programs
29. Economic Development. It should be a major
objective of U.S. policy to help accelerate present rates of economic
growth in the underdeveloped areas, particularly in South and Southeast
Asia and parts of Latin America. While economic growth alone will not
assure political stability in the under-developed countries, its
continued absence will contribute to increasing instability and
opportunities for Communist subversion. There is general agreement on
many of the steps to be taken to hasten economic development (such as
continuing U.S. technical assistance and exchange programs,
encouragement for private investment abroad and greater self-help), but
a major issue arises concerning the scope, size and duration of the use
of public funds (both loan and grant). Where important development
programs cannot be financed by local or foreign capital, or U.S. private
capital, U.S. public funds
| should be made available in progressively reduced amounts
and should be limited to a few countries where such use
would appear to make an unusually important contribution to
U.S. security. |
should be made available in countries where accelerated
rates of growth are required for the attainment of U.S.
objectives and where such funds can be used
effectively. |
[Page 662]
30. U.S. stockpiling program [should] [should not] be used to help
stabilize international markets for the exports of under-developed
countries in order to enhance their foreign exchange position and assist
in their internal development.
31. Regional economic action. The U.S. should
encourage regional economic actions and groupings to promote increased
trade, technical cooperation, and investment, and to concert sound
development plans. Specifically, the U.S. should take the initiative in
free Asia by encouraging free Asian countries to form ties of closer
economic cooperation and to prepare a sound regional economic program,
based upon mutual self-help and the cooperation and support of the U.S.
and other industrialized countries. The U.S. should assist in the
carrying out of such a program and encourage such industrialized
countries to participate in and support such programs. In connection
with such regional groupings:
| Regional trade and payments arrangements should not
involve discrimination against the U.S. and other areas of
the free world. |
Within certain regions, special trade and payments
measures, even including some discrimination, may be more
effective in the short run than uniform world-wide
arrangements and better prepare the way for later
participation in such arrangements. |
32. Promotion of freer trade and payments. To lead
the free world to the reduction of restrictions on trade and payments,
the U.S. should:
- a.
- Support sound moves toward convertibility, with appropriate
action on related trade matters.
- b.
- Urge and bargain with other free world countries to reduce
barriers to their imports.
- c.
- Support continued effective action in OEEC on intra-European and dollar trade and, prior
to moves to convertibility, on intra-European payments.
- d.
- Reduce barriers to U.S. imports
| in line with the President’s March 30 Message to Congress on
the Randall Report.10 |
to an even greater extent than recommended in the President’s
March 30 Message to Congress on the Randall
Report. |
[Page 663]
U.S. Assistance to Military Forces of
Friendly Countries
33. a. With regard to forces now planned by allied countries with U.S.
concurrence, most of these countries will not be able to bear the total
costs (local budget and foreign exchange) of bringing such forces to,
and of maintaining them at, a high degree of combat effectiveness.
b. Present estimates indicate a need from the U.S. for:
- (1)
- End-item aid. Certain additional
programs of build-up items; some continuing provision of spare
parts and replacement items; and a limited contribution toward
modernization.
- (2)
- Economic aid for military support. For
some countries limited economic aid will also be necessary to
support the planned level of forces; this aid can probably
decline from the present level in Europe; the level in Asian
areas, while apt to remain high, is dependent on current
developments.
c. The levels of U.S. aid cannot be finally determined, however, until
judgments are available as to whether there are any changes in the size
and degree of effectiveness of allied forces which the U.S. desires and
in the extent to which allied countries can meet their needs from their
own resources.
iv. mobilization
34. The U.S. mobilization potential to provide arms and military
equipment consists of (a) active and inactive facilities for military
end item production, (b) general industrial capacity, including new
supplies of materials, which can be put to defense and defense
supporting use and (c) military reserves of end items. The U.S.
mobilization potential is stronger than ever before in peacetime.
35. The facilities actively producing non-nuclear military end items have
declined in number in FY 1954. Under
current plans this decline will continue through FY 1956. Thus the time required to get back into large
scale production will be lengthened. This delay may be offset in part by
maintaining the production equipment and some of the facilities in the
best possible standby or readiness status for future use.
36. Although general industrial capacity may be expected to continue to
grow during the period ahead, immediately available capacity for many
secondary products used either directly or in support
[Page 664]
of military production may decline as
specialized military demand declines.
37. Military reserves of end items have been built up in the past four
years. Some items will be further added to reserves in FY 1955–56. There will be obsolescence of
some items in the reserves. This latter trend is accelerated in periods
of rapid change in military plans and technology, such as the
present.
38. The net effect of the factors outlined above appears to be that
through FY 1956, our net matériel
mobilization potential for meeting the rapid increase in military needs
in the early stages of a global war will decline.
39. The capacity to produce certain types of military end items (e.g.,
aircraft and guided missiles) and certain types of general industrial
products (e.g., common components), may not be adequate to meet the
requirements of global war.
40. In view of the fact that about two-thirds of the general industrial
capacity of the country is concentrated in fifty key target areas, its
availability in the event of global war must be measured against the
increasing capability of the USSR for direct attack on the U.S.
41. New weapons, in certain respects, constitute a special problem in
relation to industrial capacity. Normally, latent changes accumulate
between crises. Introduction of major modifications or entirely new
weapons at the onset of war may create a large new demand for capacity
in a relatively narrow sector of the industrial system. Where new major
weapons are likely to render existing types obsolete, the risk of
critical bottlenecks and delays can be minimized by developing
facilities and techniques for their production, and by production, as
rapidly as economically feasible.
42. The advantages of mobilization capacity as opposed to reserves of
military end items are generally held to be (1) slower obsolescence rate
and (2) lower pre-war cost. For established weapons which have had, and
it appears will continue to have, a low obsolescence rate the first
advantage is reduced. In light of the increasing Soviet capabilities for
direct attack, the war risk of not having the items in adequate
quantities must be weighed against the prewar costs. In some cases
pre-war procurement of a high proportion of war needs may be
indicated.
43. Finally, to be meaningful, estimates of the adequacy of the
mobilization potential must be set against an agreed and tested set of
requirements and factored for probable attack damage.
[Page 665]
| 44. To maintain the mobilization potential, the U.S.
should: |
44. Maintenance of the mobilization potential should be
achieved within the framework of present and planned programs
for implementation of paragraphs 9, 10, and 34 of NSC 162/2. |
| a. Place increased emphasis on acquisition of reserves of
selected low-obsolescent end items in order to offset the
vulnerability of our industrial base. |
|
| b. Give much greater emphasis to programs, over and above
those now contemplated, designed to secure the safe location of
at least that industrial capacity essential to the most vital
weapons systems (e.g., guided missiles, aircraft, etc.). |
|
| c. Give increased emphasis to (1) procurement and safe storage
of long-lead-time tools and (2) processing of important
materials to the most advanced possible stage, to reduce the
period of loss of military end item production as well as
industrial production generally. |
|
| d. Rapidly establish in safe areas additional capacity for
those military and civilian products for which severe
deficiencies are known to exist. |
|
| e. Accelerate both the current production of important new
weapons and the establishment in safe areas of adequate capacity
for important weapons in order to minimize the production delays
in time of war. |
e. So for as practicable, encourage the dispersion in safer
areas of new building of productive capacity important to the
mobilization base, and, where this is infeasible, plan on
duplicate production. |
[Page 666]
| f. Provide for adequate maintenance of existing mobilization
capacity, including maintenance of production of primary
hard-goods items at levels adequate to support a general
war. |
|
v. fiscal and budgetary
45. Level of future U.S. national security expenditures:
a. The budget outlook for fiscal years 1956 and 1957 would be as follows,
assuming projection at 1955 levels of expenditures for major national
security programs and foreign economic aid, and continuation of the
present policy of reducing all other expenditures to the maximum extent
possible.
| (In billions) |
1956 Projection |
1957 Projection |
| Budget Receipts |
|
|
|
1. |
Indicated Total (under President’s tax program and subsequent
action by Congress) |
*$59.0 |
*$59.2 |
| Budget Expenditures |
|
|
|
2. |
Estimate for non-NSC
programs: |
|
|
|
|
a. Relatively uncontrollable |
14.5 |
14.1 |
|
|
b. Other (goals) |
5.3 |
5.0 |
|
|
c. Total |
19.8 |
19.1 |
|
3. |
NSC programs at 1955
level |
46.0 |
46.0 |
|
4. |
Indicated total (2 plus 3) |
65.8 |
65.1 |
| Indicated Gap |
|
|
|
5. |
To balance budget (4 minus 1) |
6.8 |
5.9 |
|
6. |
Additional desirable tax cuts |
2.9 |
6.1 |
|
7. |
To balance budget with tax cuts (5 plus 6) |
9.7 |
12.0 |
b. In the 1955 Budget Document, security expenditures for FY 54 were programmed at $50 billion and for
FY 55 at $46 billion. Continued
reduction in security expenditures, at this approximate rate, would
result in FY 56 security expenditures of
approximately $42 billion and FY 57
security expenditures of approximately $38 billion. This would reduce
the indicated gap figures (lines 5 and 7 in para. (1) above) by
approximately $4 billion in FY 56 and
approximately $8 billion in FY 57.
[Page 667]
c. From the standpoint of total security expenditures the following
represent alternative courses of action:
- (1)
- Increase expenditures for NSC
programs above FY 55
level.
- (2)
- Continue expenditures for NSC
programs at approximately FY 55
level.
- (3)
- Continue to reduce expenditures for NSC programs at the current rate of reduction from
the preceding year.
- (4)
- Reduce expenditures for NSC
programs at greater than current rate of reduction from the
preceding year.
46. The money which would be required above anticipated revenues to
finance expenditures in excess of receipts could be raised by (a)
borrowing; (b) increased revenues (chiefly increased taxation); or (c)
some combination of (a) and (b). The decision on the most desirable
methods of financing would depend upon other circumstances that might
exist or develop. Such circumstances would include the state of the
economy, the impact upon it of various contingencies and of other
measures which might be put into effect including controls, and the
extent to which receipts from existing taxes might be expected to be
affected.
vi. u.s. economic outlook
(For a report by the Council of Economic Advisers on the subject see
Annex 5)11
