S/SNSC files, lot 63 D 351, NSC 5422 Series

Agency Studies Prepared for the National Security Council 1

top secret
Annexes to NSC 5422

Note by the Executive Secretary to the National Security Council on Tentative Guidelines Under NSC 162/2 for FY 1954


NSC 162/2
NSC Action No. 1125
NIE 11–5–54 and NIE 13–54
[Page 668]

The enclosed annexes containing detailed studies of the world outlook and national security problems facing the United States through Fiscal Year 1959, with, where appropriate, conclusions and possible courses of action are circulated herewith for the information of the National Security Council in connection with its consideration of NSC 5422. These annexes were prepared by the respective departments and agencies as indicated.

The following annexes are being circulated:

  • No. 1. Free World Political Outlook and Problems, FY 1956 Through FY 1959 (Prepared by the Department of State)
  • No. 2. Estimate of the Military Posture Throughout the Free World, FY 1956 Through FY 1959 (Prepared by the Department of Defense)
  • No. 3. Summary Estimate of Economic Outlook for the Free World Nations Through FY 1956–1959 (Prepared by FOA)2
  • No. 4. Soviet Capabilities and Main Lines of Policy Through Mid-1959 (Prepared by CIA)
  • No. 5. Estimate of the Outlook for the United States Economy, Fiscal Years 1956–1959 (Prepared by the Council of Economic Advisers)3
  • No. 6. Basic Assumptions on Alternatives for Maintaining, Broadening and Protecting the Mobilization Base, and for Building up Reserves of Military End Items or Materials (Prepared by ODM)

Annexes 2–6 are enclosed herewith. Annex 1 will be circulated when it is received. Any additional comments prepared by the Department of Defense in accordance with the first paragraph of the transmittal memorandum from the Acting Secretary of Defense contained in Annex 2 will also be circulated when they are received.

It is requested that special security precautions be observed in the handling of the enclosures that access to them be very strictly limited on an absolute need-to-know basis.

James S. Lay, Jr.
[Page 669]

Annex 1

Study Prepared by the Department of State 4


top secret

Free World Political Outlook and Problems Through

FY 1956–59


This paper is designed to direct attention to those issues and areas on which U.S. policy should place primary emphasis during the period 1956–59, and to indicate the main lines of action which the U.S. should pursue in regard to these issues or areas.

Any such analysis must, of course, start from the Communist threat. Between now and 1959, the Communist bloc will markedly increase its military capabilities, especially nuclear power; will probably maintain its political cohesiveness and stability; and will continue its steady economic growth. During this period the bloc can also be expected to remain hostile toward the West, willing to accept whatever risks and costs seem necessary to maintain its security against the West, and anxious to extend its influence throughout Eurasia by the methods promising the greatest success at the least risk.

The Communist bloc’s specific intentions will be largely shaped, however, by the policies of the free world. And its relative capabilities will be significantly affected by the actions which the free world takes to improve its economic, political, and military position.

The free world’s posture, in turn, will be largely determined by its reactions to three major forces: increasing East-West nuclear capabilities, unresolved economic problems, and the force of nationalism in certain regions. These forces are discussed in Part I of this paper.

Part II of this paper discusses four major policy problems which will face the U.S. during the next five years and which arise at least in part from general trends treated in Part I. These are: [Page 670]

the nuclear equation;
U.S. economic leadership;
the maintenance of independent non-Communist governments in Asia;
the maintenance of the alliance in Western Europe.

These problems were selected because they seemed likely to be both of critical importance to U.S. security and susceptible of being substantially influenced by U.S. actions which would materially affect budget planning.

Part III of this paper draws conclusions as to the main lines of U.S. action which would seem to be called for during the period 1956–59 in the light of the foregoing analysis.

. . . . . . .

iii. conclusions

1. The Nuclear Equation. The U.S. should review its present disarmament position to consider how to enhance the prospects for an acceptable system which would reduce or remove the threat of unlimited nuclear warfare.

In the absence of any agreed limitation of armaments, the U.S. military posture should be such as to minimize the likelihood of Communist aggressive action and to maximize support in the free world for U.S. policies. To this end, the U.S. should maintain:

a retaliatory and defensive capacity adequate to deter Soviet nuclear attack;
the ability to respond forcefully to Communist aggression on a scale and in a manner suited to the attainment of our political objectives;
a position which would permit waging general war effectively in defense of vital U.S. interests. The U.S. should begin to consider what measures would be necessary for this purpose if the strategic use of nuclear weapons should become infeasible for military or other reasons.

2. U.S. Economic Leadership. The U.S. must be prepared to assume responsibilities for economic leadership in the free world on a scale commensurate with its political and military commitments.

In order to accelerate present rates of economic development in under-developed countries, the U.S. should:
explore the possibilities for long-term Western European and Japanese financing of development projects that would benefit the under-developed areas and provide a sound basis for increased trade between them and these industrialized regions;
consider programs to help stabilize international markets for the under-developed countries’ exports;
encourage U.S. private investment abroad, and maintain and seek to enhance the effectiveness of U.S. technical aid programs and existing public lending operations;
insofar as the above actions do not produce accelerated rates of growth consistent with the attainment of U.S. political objectives in key under-developed countries, provide public funds on a grant or more flexible loan basis, to the extent that this is warranted by conditions in the recipient countries;
seek to induce the free Asian countries to form ties of closer economic cooperation and to prepare sound regional economic development programs for South and Southeast Asia, to whose fulfillment they could all contribute in varying ways, and whose execution the U.S. could assist through the policies discussed above.
In order additionally to enhance the resources and productivity of the free world generally, and to assist in the solution of Western Europe’s and Japan’s long-term trade problems, the U.S. should press forward vigorously with policies directed toward currency convertibility and the reduction of restrictions on trade and payments in the free world, including the U.S.

3. U.S. Policy in Asia. The U.S. should initiate and support programs to create greater strength and stability in East and Southeast Asia, and should make clear that it would react with military force to any overt Chinese Communist aggression. It should take such increased economic measures and adopt such a political posture toward India and Pakistan as would enhance the possibility of South Asia’s becoming a significant counter-weight to the growing strength of Communist China.

4. U.S. Policy in Western Europe. The U.S. should continue policies designed to bring about greater political, economic, and military strength in all of Western Europe. To this end, it should seek to promote more rapid progress toward integration by the adoption of a flexible series of actions, involving possibly greater immediate emphasis on political and economic than military integration, and, if necessary, should consider closer U.S. association with Western Europe.

[Page 672]

Annex 2

Study Prepared by the Department of Defense 5


top secret

Estimate of the Military Posture Throughout the Free World, FY 1956 Through FY 1959

This study consists of five main sections as follows:

—Anticipated Military Posture of the United States.
—Anticipated Military Posture of the Free World.
—Anticipated Soviet Bloc Military Posture and Intentions.
—Summary of Relative Capabilities During the Period FY 1956–1959.
—Conclusions and Recommendations.

. . . . . . .

conclusions and recommendations

26. Fundamental to the attainment of an effective Free World military posture, under the United States concept of collective security is the development and maintenance of solidarity on the part of our Allies to the point where they will not only unite in the determination of measures vital to the common security, but will support those measures when the need arises. Recent developments indicate that the firm foundation requisite to prompt and effective action in implementation of the concept of collective security has not yet been fully achieved. Failure to achieve the political framework which will permit collective action against Communist aggression could alter appreciably the efficacy of Free World military posture during this period.

27. The deteriorating international situation, as evidenced in Indochina, and the uncertainty over the outcome of negotiations now in progress will probably occasion some changes in the planned U.S. military programs for FY 1956 and FY 1957, as referred [Page 673] to in paragraph 2 above, and in budget estimates for those years.

28. Events in Indochina, which have resulted in a suspension of planned redeployments from the Far East, coupled with our continuing D-day NATO commitments of forces in Europe are delaying the constitution of 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. Prolonged continuance of this situation will require re-examination of the personnel and major force ceilings as presently planned.

29. The United States should continue to maintain its over-all superiority in offensive striking power. In addition to continued emphasis on capability for inflicting massive damage, this will involve carrying out programs to increase the striking power, with and without atomic weapons, of all U.S. forces which can be brought to bear on the enemy.

30. Although the continental defense system will be improved both qualitatively and in scope, a corresponding improvement can be expected in Soviet offensive capabilities, and therefore the degree of adequacy of the continental defense system will be questionable. Measures should be taken to provide a continental defense structure which will insure a reasonable defense of our vital mobilization base. To this end:

Development of equipment and techniques necessary to increase the effectiveness of the continental defense system should be emphasized.
Military programs in support of the policy guidance in NSC 5408 should be implemented as rapidly as possible.
The adequacy of these programs should be kept under continuous review to insure that the highest practicable degree of continental defense is maintained.

31. Free World forces will retain their ability to protect essential air communications and the essential sea communications in ocean areas. In peripheral seas close to the Soviet Bloc they will be unable to exercise the degree of control desirable for most effective offensive action.

32. The 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 partially offset the Allied deficiencies in conventional forces.

33. Prompt action should be initiated to arrest the present trend of limiting our war reserves and of narrowing our mobilization base, in order that the mobilization base of the United States will [Page 674] be capable of the necessary rapid expansion to meet the matériel requirements of a general war, including aid to our Allies.

34. The maintenance of qualitative superiority of our armed forces personnel in light of quantitative requirements will become increasingly difficult under existing draft policies and as the result of the serious decline in the attractiveness of military service as a career. Draft policies should be re-examined periodically. The recommendations contained in the Womble Board Report for increasing the attractiveness of the military career should be promptly and effectively implemented.

35. In order to maintain qualitative superiority in matériel, there should be continuing emphasis on programs for scientific research and development and for the continuous modernization and replacement of equipment for active and reserve forces.

36. A satisfactory Free World military posture will be dependent in large measure on the continuation of military assistance to selected countries and the early establishment of German and Japanese forces.

Effective military assistance on a selective basis should be continued in order to increase the ability of indigenous forces to provide for the security of their national territories, to contribute to the overall Free World capability to resist aggression, and to lessen the reliance of the Free World upon United States military power. Substantial reduction of military assistance, with its possible cumulative reduction in Free World military posture, might require reexamination of the planned U.S. military posture.
Positive measures should be taken in order to attain at an early date a German military contribution to the Free World military posture, preferably through ratification of EDC; otherwise by alternative means. Similar action to insure a sizeable Japanese military contribution is essential.

37. By virtue of the nature of the Soviet political system and the fact that the deployed Soviet forces are considered capable, without further mobilization, of initiating strong ground, naval, and air offensives, the USSR has the capability of achieving strategic surprise. This underlines the necessity of placing greatly increased emphasis on the development and maintenance of the intelligence system called for in NSC 162/2.

38. Technological advances by both the Soviet Bloc and the Free World present problems of defense and opportunities for increased offensive capability. These considerations require that the United States place emphasis on:

Maintaining superiority in weapons and weapons delivery systems,
Reducing the vulnerability of critical elements of our war-making capacity.
Developing and maintaining the intelligence system referred to in paragraph 35 above, and
Developing an adequate combat ready, strategic reserve with a high degree of mobility.

39. The United States is faced today with the problems associated with limited military aggression. Additional instances may arise in the period 1956–1959. NSC 162/2 recognizes that such aggression may compel the United States to react with military force either locally at the point of attack or generally against the military power of the aggressor. This requires a mobile strategic reserve. The U.S. concept of collective security envisages that in countering such aggression our Allies should furnish the bulk of the ground forces required, make available base sites, and furnish certain facilities. The United States should continue to contribute, within its capability, additional military forces and matériel toward meeting requirements.

40. United States reaction to limited aggression should be attended by a degree of national mobilization commensurate with the increased risk of general war.

41. While both the USSR and the United States will enter the era of atomic plenty during the period FY 1956–59, Allied numerical and qualitative superiority in atomic weapons and means for their delivery will continue to be maintained. However, increasing Soviet atomic capability will tend to diminish the deterrent effect of United States atomic power against peripheral aggression. With respect to general war, the attainment of atomic plenty by both the United States and the USSR could create a condition of mutual deterrence in which both sides would be strongly inhibited from initiating general war. Under such circumstances, the Soviets might well elect to pursue their ultimate objective of world domination through a succession of local aggressions, either overt or covert, all of which could not be successfully opposed by the Allies through localized counteraction, without unacceptable commitment of resources. The Free World would then be confronted with a situation in which the only alternative to acquiescence in progressive accretions of territory, manpower, and other resources by the Soviet Bloc would be a deliberate decision to react with military force against the real source of the aggression. This situation serves to emphasize the time limitation, as recognized in paragraph 45 of NSC 162/2, within which conditions must be created by the United States and the Free World coalition such as to permit the Soviet-Communist threat to be met with resolution, to the end that satisfactory and enduring arrangements for co-existence can be established.

[Page 676]

Annex 4

Study Prepared by the Central Intelligence Agency 6

top secret

Soviet Capabilities and Main Lines of Policy Through Mid-1959

1. Reports by the Central Intelligence Agency on “Soviet Capabilities and Main Lines of Policy Through Mid-1959” and “Communist China’s Power Potential Through 1957” have been circulated separately as NIE 11–5–54 and NIE 13–54 respectively.7 The purpose of the following statement is to provide the back-up for the necessarily simplified Table of comparative 1953 and 1954 estimates of Soviet Bloc military capabilities contained on page 2 of NSC 5422.

Explanation of Table of Comparisons of Estimated Soviet Military Capabilities in Key Respects

2. The National Intelligence Estimates of Soviet Bloc military capabilities available to the Council at the time NSC 162/2 was adopted were:

NIE –65, “Soviet Bloc Capabilities through 1957,” published June 16, 19538

NIE –90, “Soviet Bloc Capabilities through Mid-1955,” published August 18, 19539

Appendices to NIE–90, published October 13, 1953. Inevitably, the later estimates overlapped, and in a few cases shaded for comparable periods, the earlier ones. The Table was based on the later estimate in such cases.

3. For the present exercise, the final approved text of NIE 11–5–54, “Soviet Capabilities and Main Lines of Policy through Mid-1959,” published June 7, 1954, was used throughout. This text superseded earlier drafts of this estimate, which were necessarily used for the CIA presentation to the Guidelines Special Committee. For nuclear capabilities, the most complete current estimate is NIE 11–3A–54, “Summary: The Soviet Atomic Energy Program to Mid-1957,” published February 16, 1954.10

4. The explanations and citations in support of the Table are as follows: [Page 677]

Soviet Nuclear Capabilities. In 1953 it was estimated that the Soviets were then capable of producing nuclear weapons with yields up to “approximately one million tons of TNT” and that the Soviets might work toward the “eventual modification” of their stockpile to include “very high yield weapons (e.g. 500–1,000 KT).” No mention was made of production of higher yield weapons, although it was estimated that the Soviets might be in an “advanced stage” of a program having the production of larger weapons as its objective. (Appendices to NIE–90, Appendix B, para. 3.) As to the Soviet stockpile, it was estimated, with a stated margin of error, that it was then 120 weapons of 30–100 KT yield, for which we have used a median average of 50 KT in arriving at the order of magnitude of 6 megatons total. The 1957 order of magnitude was derived by using the same average applied to the 500 weapons tentatively projected in NIE–65, which estimate contained the same figures for earlier periods, as the NIE–90 Appendices. (Appendices to NIE–90, Appendix B, para. 2; NIE–65, para. 50.) For June 1954, the current estimate is from Stockpile Example (b), para. 13 of NIE 11–3A–54, which gives a figure of 24.3 MT for mid-1954. The figures for mid-1959 are based on a median assumption as to Soviet expansion and on the same type of stockpile. (NIE 11–5–54, paras. 30–31.)
Soviet Long-range Air Forces. In 1953, current estimates are from Appendices to NIE–90, Appendix B, para. 32 (c), except that the statement of a prototype jet medium bomber being in existence is based on evidence available at that time and on the estimate (in footnote 10 to para. 32 (c)) that series production would begin in April 1954. For June 1954, all figures are literally from NIE–11–5–54 (paras. 32–33, and table on p. 14) except that the figure of “(possibly 300)” for jet heavies in mid-1959 is based on the contingency discussed in the last sentence of para. 33 and on discussion of expansion capabilities of the Soviets if that sentence were the case.
Surface-to-Surface Guided Missiles. In 1953, statements on the Soviet future were almost entirely in terms of theoretical capabilities, with no adequate data to estimate the priority and pace of the Soviet effort. The strongest statement made was that a ballistic missile with a range of less than 900 nautical miles “could be near the prototype stage of production by 1955.” (Appendices to NIE–90, Appendix A, para. 32 b.; see also NIE–65, para. 41 g.) For June 1954, it is estimated, on the basis of more concrete information, that a V–2 type missile with a 450–500 mile range is “likely” by 1956. It is further estimated that in 1959 the Soviets could start series production of a pilotless-aircraft-type missile capable of reaching the U.S. from Bloc territory. (NIE 11–5–54, paras. 34–36.) No prediction has been made, in either the 1953 or 1954 estimates, of the date by which the Soviets may have intercontinental ballistic missiles. It should be noted that detailed examination of this whole subject is proceeding, from which it is hoped that firmer conclusions will emerge in the third quarter of 1954.
Air Defense. In 1953, it was estimated that a “limited number” of all-weather interceptors “may be” in operation by mid-1955. (NIE–90, para. 24; see also Appendices to NIE–90, Appendix B, para. 50 d.) For June 1954, the figures in the Table, 200 for mid-1955, [Page 678] 2100 for mid-1959, are direct from NIE–11–5–54 (table on p. 14).
Submarines. The category selected for comparison is that of high-submerged-speed long-range types, which were singled out for specific attention in the 1954 estimate (NIE–11–5–54, para. 38 and table on p. 16; note that the 295 figure is reached by applying the building rate of 46 per year to the mid-1954 figure of 65 given in the table, rather than to the early 1954 figure of 47 given in the text.) In the 1953 estimates it is not easy to arrive at a comparable figure. The 20 and 100 figures shown in the table are based on ONI current estimates of the period, with a building rate of 20 per year extrapolated from paras. 37 and 40 of the Appendices to NIE–90, Appendix B.

Annex 6

Study Prepared by the Office of Defense Mobilization 11

top secret

Basic Assumptions on Alternatives for Maintaining, Broadening and Protecting the Mobilization Base and for Building up Reserves of Military End Items or Materials

The mobilization base must be capable of fulfilling military requirements to meet these contingencies:
Involvement with forces using conventional weapons either for or short of all-out war.
The maintenance of superiority in the new weapons systems, particularly nuclear weapons.
A balanced and protected base to make good the necessary functioning of the war economy after attack and to supplement needs for new production beyond the war stocks existing at the outbreak of hostilities.
The combinations of the amounts of reserves required at the outbreak of hostilities in relation to the base, which can be counted upon to continue functioning, depend upon the following assumptions:
That the use of nuclear weapons is either:
decisive—finishing off the war in a few hours, days, weeks, or
crippling, but not decisive, so that the recuperative power of the economy and tenacity of spirit will determine the outcome.
Or that nuclear weapons, though perhaps decisive if used only by one side and certainly basic both for attack and as a deterrent, must necessarily be combined with “mixed power” of conventional weapons and forces in large quantities:
with a number of divisions in being that can deal with peripheral aggression without resorting to nuclear weapons,
with a number of divisions that can hold Soviet and satellite mass land armies where needed until reserves and weapons strength can be brought to bear to victory.
Or that, despite present basic character of nuclear weapons, conventional forces must be kept at a level which would permit fighting a successful war:
with only the “tactical” use of nuclear weapons,
with the elimination of nuclear weapons altogether, either by “outlawry” by:
international action and treaties, or
the fear by either side that to initiate nuclear war would invite retaliation amounting to destruction.
A further assumption is required as to the nature and extent of the damage which present Soviet capabilities are capable of inflicting on the mobilization base in the light of present defensive capabilities with an extension throughout the period. The magnitude of the damage capable of being inflicted would govern the degree to which expense and inconvenience could be incurred in:
Counter-measures to reduce the vulnerability of the mobilization base, and
The degree to which stocks should be ready at the outbreak of hostilities, rather than dependence upon initiating or resuming production lines.
It seems to be generally agreed that damage of more than a substantial character can now be counted on throughout the entire period under consideration. Present intelligence would seem to justify provisions in the mobilization base against massive damage in the way of ready reserve and extreme measures for adding to the protection and for reducing the vulnerability and increasing the capacity of the mobilization base to recuperate.
The mobilization planning of the Office of Defense Mobilization is based upon a combination of assumptions under Section 2–B above which are thought to be not inconsistent; namely, 2–A(2) and 2–B (1) and (2). Although no one has officially advanced 2–C, it has formed the basis for discussions by the Department of State, largely resting on 2–C(2), (with some discussions also on 2–C(1).) ODM, Defense, and, in general, the rest of the Planning Board, appear to have eliminated 2–C. The existing alignment in the Defense Department [Page 680] can only be judged by the official comments in paper dated May 25 from the Acting Secretary of Defense, transmitting JCS study on military posture for guidelines consideration.12 Assumption 2–A(2) is not emphasized by JCS to the point of crippling attack and assumption 2–B(2) is heavily stressed. Budget and Treasury tend to stress 2–A(2) and to feel that less reliance needs to be put upon 2–B(1) and B(2) than is suggested by JCS and by ODM. Arguments by the State Department tend to raise attack danger to the certainty of catastrophe, as a basis for discussing possible moves to take nuclear disarmament more seriously or to increase conventional forces and weapons so as not to put entire reliance on nuclear weapons. A balanced view of total power, of deterrents, and of defense capabilities is the necessary prerequisite of mobilization preparations.
If older weapons are stocked and production phased out, and total hard goods production for FY 1957 is planned at about half of the FY 1953 (end) rate, are we keeping a mobilization base which employs our national resources and scientific capacity at a rate adequate to counter the threat from the Soviet Bloc? Should we not use a stabilized figure at a high level (say $18 billion) to expand new weapon production to equal losses in the old weapon base, transferring added new production to safe areas?
  1. Copies to the Secretary of the Treasury; Attorney General; the Directors of the Bureau of the Budget and Central Intelligence; the Chairmen of the Council of Economic Advisers, the Atomic Energy Commission, and the Joint Chiefs of Staff; and the Federal Civil Defense Administrator.
  2. Annex 3, 16 pages, is not printed. (S/SNSC files, lot 63 D 351, NSC 5422)
  3. Annex 5 is not printed. (S/SNSC files, lot 63 D 351, NSC 5422)
  4. The source text is the first of six numbered annexes mentioned by Lay in his note of June 14, above. As Lay stated therein, the Department of State annex was to be circulated separately, but it has not been determined on which day this took place. For additional information on the extensive background of this paper and the apparent date on which it was completed, see the second footnote 2, p. 647.
  5. This is the second of six numbered annexes transmitted by Lay to the NSC in support of NSC 5422. The source text is accompanied by a covering memorandum to Lay from Robert B. Anderson, Acting Secretary of Defense, dated May 25, 1954, which reads, in part: “Recognizing the comparative urgency of Planning Board work on the general problem of developing guidelines under NSC 162/2, I am forwarding the JCS study before there has been time for adequate discussions between the Office of the Secretary of Defense and the Joint Chiefs of Staff. The study may, however, be provided members of the NSC Planning Board at this time. Any further factors or comments which may be brought out by the joint conversations between my office and the Joint Chiefs of Staff will be transmitted as soon as practicable.”
  6. The source text is the fourth of six numbered annexes transmitted by Lay to the National Security Council in support of NSC 5422. Both Lay’s memorandum and the source text indicate that Annex 4 was prepared by the Central Intelligence Agency.
  7. See footnote 5, p. 648.
  8. NIE–65 is scheduled for publication in volume viii .
  9. For documentation on NIE–90, see ibid.
  10. Not printed.
  11. The source text is the last of six numbered annexes transmitted by Lay to the National Security Council in support of NSC 5422.
  12. Annex 2, above.