Foreign Relations of the United States, 1952–1954, National Security Affairs, Volume II, Part 1

S/S–NSC files, lot 63 D 351, NSC 5422

Statement of Policy by the National Security Council ¹

top secret
NSC 5422/2

[ Washington ,] August 7, 1954.

Note by the Executive Secretary to the National Security Council on Guidelines Under NSC 162/2 for FY 1956

References:

A.

NSC 5422/1 and Annexes to NSC 5422²

B.

NSC Action Nos. 1125, 1169 and 1194³

C.

NSC 162/2⁴

D.

NIE 11–5–54 and NSC 13–54⁵

The National Security Council, the Secretary of the Treasury, the Attorney General, the Director, Bureau of the Budget, the Chairman, Atomic Energy Commission, the Federal Civil Defense Administrator and the Chairman, Council of Economic Advisers at the 209th Council meeting on August 6, 1954, adopted the statement of policy contained in NSC 5422 with the exception of Section III thereof and subject to the changes which are set forth in NSC Action No. 1194–b. The Council referred Section III of NSC 5422/1 to the Office of Defense Mobilization in collaboration with the Department of Defense, the Foreign Operations Administration, and the Bureau of the Budget for revision and resubmission to the Council by September 10, 1954.

The President has this date approved the statement of policy contained in NSC 5422/1, as amended and adopted by the Council and enclosed herewith and directs its implementation as guidelines under NSC 162/2 for the development of national security programs by the appropriate departments and agencies for FY 1956, including the preparation of budget requests for normal budgetary review.

James S. Lay, Jr.

[Here follows a one-page table of contents.]

[Enclosure]

Statement of Policy by the National Security Council

top secret

[ Washington , undated.]

Guidelines Under NSC 162/2 for FY 1956

i. politico-military guidelines

1. There have been substantial changes in the intelligence estimates of certain current and future Soviet capabilities since the adoption of NSC 162/2, particularly in regard to the estimates of increased Soviet nuclear capability in weapons and delivery systems. Also, since the adoption of NSC 162/2, unity of action among the free world allies has been increasingly strained by conflicts of interest and by divisive forces. It is estimated that such factors and an increasing fear of Soviet nuclear capabilities will continue to influence adversely the cohesion of our alliances for the foreseeable future, and that the Communist powers are likely to devote greater attention to expanding their control by penetration and subversion, particularly in the underdeveloped areas of the free world. A more complete analysis of the world situation and outlook is set forth in Appendix A to this paper.

Effect of Increased Nuclear Capabilities

2. 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.

3. 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 decisive military advantage from such an exchange of nuclear blows.

4. This situation could create a condition of mutual deterrence, in which each side would be strongly inhibited from deliberately initiating general war or taking actions which it regarded as materially increasing the risk of general war. However, the free world powers are becoming increasingly cautious about joining in actions which they believe will enhance the risk of war. Because Soviet action under this situation cannot be accurately predicted, the free world will have to be especially vigilant.

5. The situation described in pars. 2 and 3 could also tempt the Soviets into attacking the United States if they believed that initial surprise held a prospect of destroying the U.S. retaliatory power before it could be used.

Prevention of Soviet Nuclear Attack

6. To ensure Soviet fear that strategic nuclear attacks upon the U.S. would be followed by the nuclear devastation of the USSR and the destruction of the Soviet regime, the U.S. should:

a. Maintain the striking forces necessary for such retaliation.

b. Take all practicable measures to protect this retaliatory capacity against any foreseeable Soviet attack.

7. The U.S. should accelerate its military and non-military programs for continental defense set forth in NSC 5408⁶ to the fullest extent deemed feasible and operationally desirable and give to these programs very high priority, having in mind that it is estimated the Soviets will reach a high capability for strategic nuclear attacks by July 1957.

Disarmament

8. Despite serious question whether any safe and enforceable system can be achieved in the foreseeable future, the U.S. should nevertheless continue to explore fully the possibility of reaching a practicable arrangement for the limitation of armaments with the USSR. The U.S. should therefore continue to reexamine its position on disarmament, especially (a) whether a promising climate for effective disarmament negotiations can be developed, (b) whether a system of safeguards can be devised entailing less risk for U.S. security than no limitation of armaments, and (c) whether, if a safe and enforceable system for assuring effective nuclear disarmament, which might be acceptable to the USSR, can be devised, the U.S. would be willing to accept it in the absence of conventional disarmament. Meanwhile, the United States should continue to refuse to accept nuclear disarmament except as part of general disarmament.

General War

9. Planning should be on the assumption that, if general war should occur, the United States will wage it with all available weapons.

10. There is increasing possibility that an important part 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 self-sufficiency for the conduct of offensive operations exploiting the use of nuclear weapons, consistent with sound military concepts.

Local Communist Aggression

11. 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 Communist believe that such aggression could eventually lead to general war.

12. To permit appropriate flexibility in the capability of deterring or defeating local aggressions, the U.S. should be prepared to defeat such aggressions without necessarily initiating general war. For this purpose the U.S. should be prepared to assist, with U.S. logistical support and if necessary with mobile U.S. forces, indigenous forces supplemented by available support from other nations acting under UN or regional commitments. However, the U.S. must be determined to take, unilaterally if necessary, whatever additional action its security requires, even to the extent of general war, and the Communists must be convinced of this determination.

Communist Expansion Other Than by Overt Aggression

13. An immediate and most serious threat to the free world is further Communist expansion through subversion, indirect aggression, and the instigation or exploitation of civil wars in free world countries, as in Indochina, rather than direct armed aggression. The advantages of this 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. Moreover, these methods make it very difficult for the U.S. to respond primarily by military means. The U.S. can best meet this threat of piecemeal conquest by a flexible combination of political, psychological, economic and military actions. In view of the loss of Northern Vietnam, the U.S. cannot passively 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. Seek more than military solutions to the varied aspects of the Soviet-Communist threat, and create an understanding in the free world that such is the U.S. objective.

b. Make increased efforts to develop and carry out cooperative programs, not necessarily overtly anti-communist, designed to advance the political and economic strength of underdeveloped areas, along lines indicated in Section II below.

c. Take all feasible political, economic and covert measures to counter the threat of groups or forces responsive to communist control to achieve dominant power in a free world country.

d. Provide military aid and training and defense support to threatened areas where such aid can effectively contribute to internal stability or the creation of strength in regional areas.

e. In instances of civil war, be prepared, with maximum free world support, to take military action in support of friendly free world governments or forces fighting against elements under Communist control, the decision whether to take such action being made in the light of all the circumstances existing at the time.

Program Guidance Under Section I

14. Present and planned implementation of programs should continue to be guided by paragraphs 9, 10, 34 and 40 of NSC 162/2; recognizing that increased efforts in certain programs, involving increased expenditures, should be made as required to support national security policies and to meet anticipated increases in Soviet-Communist capabilities. Final determination on all budget requests will be made by the President after normal budgetary review.

ii. guidelines for maintenance of the Cohesion of the free world

Relations with Allies and Uncommitted Countries

15. Major allies will continue to be essential to the U.S. to prevent the loss of major free areas to Communist control and the gradual isolation of the U.S. However, increasing elements of division and weakness in free world alliances may make it difficult to take decisive collective action to halt further Soviet expansion, particularly in Asia.

16. In these circumstances, and recognizing the necessity to create, prior to the achievement of mutual atomic plenty, conditions under which the United States and the free world coalition are prepared to meet the Soviet-Communist threat with resolution and to negotiate for its alleviation under proper safeguards, the U.S. should take action as practicable:

a. To overcome the divisive factors mentioned in paragraph 5–b of Appendix A and to strengthen the cohesion of the alliances under U.S. leadership.

b. To convince its allies that U.S. policies and actions take due account of their security as well as its own and that the U.S. and its allies will be able to meet the threat of aggression even in case of nuclear balance.

c. To seek to persuade its allies of the necessity to halt further significant Communist expansion, direct or indirect.

17. The U.S. should continue to help build political, economic, and military strength and cohesion 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.

18. The relative susceptibility of much of free Asia to the Communist tactic of creeping expansion requires that the U.S. devote greater efforts than heretofore to this region. The U.S. should exert its leadership in the Pacific toward the creation of a position of strength calculated to block Communist expansion in the Far East and Southeast Asia. In its Pacific role, the United States should be less influenced by European allies than in respect to Atlantic affairs.

19. The U.S. should direct its efforts in areas of the free world, other than Europe and Asia, on a selective basis aimed at influencing for the better situations potentially adverse to its important security interest.

20. Although the time for a significant rollback of Soviet power may appear to be in the future, the U.S. should be prepared, by feasible current actions or future planning, to take advantage of any earlier opportunity to contract Communist-controlled areas and power.

21. The U.S. should attempt to gain maximum support from the free world, both allies and uncommitted countries, for the collective measures necessary to prevent Communist expansion. As a broad rule of conduct, the U.S. should pursue its objectives in such ways and by such means, including appropriate pressures, persuasion, and compromise, as will maintain the cohesion of the alliances. The U.S. should, however, act independently of its major allies when the advantage of achieving U.S. objectives by such action clearly outweighs the danger of lasting damage to its alliances. In this connection, consideration should be given to the likelihood that the initiation of action by the U.S. prior to allied acceptance may bring about subsequent allied support. Allied reluctance to act should not inhibit the U.S. from taking action, including the use of nuclear weapons, to prevent Communist territorial gains when such action is clearly necessary to U.S. security.

22. With respect to those uncommitted or underdeveloped areas of the free world which are the most likely targets for Communist expansion, particularly in Asia, the U.S. should:

a. Undertake a new initiative designed to improve the political and economic stability of those nations, to enhance their will and ability to maintain their independence against Communist pressures and possible aggression, and to counter the influences exercised by the Communist powers.

b. Seek their cooperation on a basis of mutual self-respect without attempting to make active allies of those not so inclined, and refrain, so far as feasible, from taking or supporting actions which run counter to the forces of anti-colonialism and legitimate nationalism.

Economic Policies and Programs

23. Economic Development. The U.S. should, as a major objective of its policy, help accelerate present rates of economic growth in the under-developed areas, particularly in South and Southeast Asia and parts of Latin America. Measures to assist and guide economic development should include continuing technical assistance, exchange programs, encouragement of U.S. private investment in these countries, and greater self-help on their part. With respect to important development programs which cannot be financed by local or foreign capital or U.S. private capital, the U.S. Government should assist countries where accelerated rates of growth are required for the attainment of U.S. objectives and where such assistance will be used effectively. Such assistance may be required on a larger scale than the present country programs. However, the total level of U.S. economic assistance worldwide should be progressively reduced so far as is consistent with U.S. security objectives.

24. Regional economic action. In addition to bilateral actions and existing multilateral institutions, 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 port 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.

25. 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. Apply the principles relative to U.S. imports contained in the President’s March 30 message to Congress on the Randall Report.⁷

26. The U.S. stockpiling program should not normally 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. Exceptions should be made in instances where, after appraisal on a case-by-case basis, it is determined that there would be a clear advantage in terms of over-all U.S. interests.

Military Assistance to Friendly Countries

27. The United States should continue military assistance, including economic aid for military support, in accordance with current policies, taking account of the need for developing and maintaining the strength of foreign forces indicated in pars. 12, 13–d, 17 and 18 above, pending the scheduled review of this subject by the National Security Council. Such review will include the development of more flexible over-all procedures for providing U.S. military assistance to foreign nations to meet changing world conditions and in accordance with the availability of end items; relative priority among recipient nations; and the extent to which such nations can meet their needs from their own resources. The U.S. should also determine the extent to which the national interest requires that post D-day military aid requirements of our allies be included in national security programs.

iii. guidelines for mobilization

28. By NSC Action No. 1194–b (13) Section III of NSC 5422 was referred to the Office of Defense Mobilization in collaboration with the Department of Defense, the Foreign Operations Administration, and the Bureau of the Budget, for revision and resubmission to the Council by September 10.⁸

iv. fiscal and budgetary outlook

29. The Treasury Department and the Bureau of the Budget have prepared a budget outlook for fiscal years 1956 and 1957, which assumes continuance of major national security programs and foreign economic aid, as heretofore formulated under currently established policies, and continuation of the present policy of reducing all other expenditures to the maximum extent possible (see Appendix B). [The figures appearing in item 3 of the table in Appendix B are considered to be only rough orders of magnitude.]^*

Appendix A

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)

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 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:

			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	40*	50 (mid ’55)	200 (mid ’55)*
						600–900 (mid ’59)*
	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
Air Defense
	All-weather fighters with A–I				A few by ’55	200 (mid ’55)
		Radar.				2100 (mid ’59)
Submarines
	Improved Ocean Patrol Submarines.		20	65*	100	295

Note. This table necessarily involves substantial simplification of National Intelligence Estimates, existing and pending. Items marked with an asterisk (*) represent revisions since the similar table presented with NSC 5422.

3. Soviet Bloc Capabilities for Political Warfare, Subversion and Local Aggression

a. Present and future Soviet Bloc capabilities for expansion by action short of general war appear, in the light of developments in Indochina and at Geneva, greater than a year ago. Throughout most of the free world, especially in Asia, the Communists have the capability through hardcore activists to engage in a wide variety of forms of penetration and subversion, ranging from organized civil war (as in Indochina) through persistent guerrilla activities (as in Malaya) to inflammatory demonstrations, propaganda, “popular fronts,” and parliamentary harassment. The Communists will therefore increase their emphasis on a “creeping expansion” in preference to overt aggression, and 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, more especially, of its allies to general war will correspondingly increase, and that the Kremlin will therefore have greater freedom to take certain actions, including local military actions, without running substantial risk of general war [in situations where the allies would be likely to act as a brake on the United States.]^† The Kremlin may employ the threat of nuclear devastation as an instrument of political warfare. 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 to maintain relative numerical and qualitative superiority in nuclear weapons and the means for their 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 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 the Far East resulted in a suspension of planned redeployments from that area. 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 has become 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 and causing, in the continued absence of effective countermeasures, loss of confidence, particularly in the Far East, as to the willingness and ability of the free world to prevent further losses 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 Communist penetration and subversion by reason of nationalism and anti-colonialism, deep-seated distrust of the West, retarded economic growth, military weakness, political ferment. Strong pressures will result from impatience to achieve political and economic aspirations. Failure of the local governments to provide some satisfaction of these aspirations will create additional trouble and disunity in the free world while benefiting the Soviet bloc and will increase the dangers of Communist take-over of independent countries without armed aggression from outside. 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.

Appendix B

Fiscal and Budgetary Outlook

1. The Treasury Department and Bureau of the Budget have prepared the budget outlook for fiscal years 1956 and 1957 as follows, assuming continuance of major national security programs and foreign economic aid, as heretofore formulated under current established policies, 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‡	$58.5	$60.0
Budget Expenditures (Bureau of the Budget estimates)
	2.	Estimate for non-NSC programs:
		a. Relatively uncontrollable	14.2	14.6
		b. Other	6.1	6.3
		c. Total	20.3	20.9
3. Major NSC programs (based on expenditure trends under existing policies)			40.4	38.4
4. Indicated total (2 plus 3)			60.7	59.3
Indicated Gap
	5. To balance budget (4 minus 1)		2.2	-.7
		If Additional Desirable Tax Cuts Are Passed§
	6. Increase in gap		2.9	6.1
	7. To Balance budget with tax cuts (5 plus 6)		5.1	5.4

2. Actual receipts in fiscal 1954 were $64.6 billion. Revised estimates for fiscal 1955 are $58.7 billion.

3. The revenue estimates in the table are based on an assumption that practical full employment (approximately 2.5 million unemployed) will be restored by the middle of calendar year 1956, that personal income will be $300 billion in the calendar year 1955 and $315 billion in 1956, and that corporate profits will be $39 billion in 1955 and $40 billion in 1956.

4. Personal income in 1953 was $286 billion and was at the rate of $285 billion in May, 1954. Corporate profits were $39.4 billion in 1953 and at the rate of $34.5 billion in the first quarter of 1954. They are assumed to be $36.4 billion for the calendar year 1954 for purposes of the fiscal 1955 receipts estimate.

5. The economic assumptions underlying receipts for fiscal 1956 and 1957 have been agreed upon by the Treasury Department, the Bureau of the Budget, and the Council of Economic Advisers, except for the rate of recovery to a practical full employment level and the projected level of corporate profits for calendar 1955 and 1956. On the basis of an assumption by the Council of Economic Advisers of a recovery which would result in full employment on the average during calendar 1955 and a higher level of corporate profits for 1955 and 1956 than that assumed by the Treasury Department and the Bureau of the Budget, estimated receipts for fiscal years 1956 and 1957 would be increased by $2.3 billion and $2.2 billion, respectively over the figures decided upon for use in budget forecasts.

6. The expenditure estimates in the table represent the best judgment of the Bureau of the Budget as to expenditure levels that would result from a continuance of existing policies. It has been necessary to make assumptions as to final congressional action on appropriation bills not yet enacted and on pending legislation, which might affect the figures materially. In accordance with established procedure new projections will be made after Congress adjourns to give the President the budget outlook based on final action by the Congress.

7. Estimates for relatively uncontrollable and other non-NSC programs are based on the present policy of reducing expenditures to the maximum extent possible. They assume that the administration will successfully resist pressures to increase certain Government activities and benefit payments. The increase from 1956 to 1957 results from programs initiated in 1955 (e.g., expanded highways and merchant ship construction) which involve larger expenditures in later years.

8. The levels of expenditure for national security and foreign aid programs are estimates by the Bureau of the Budget under present established policies and programs. The momentum of reductions under present policies will, of course, carry forward to a certain extent through 1956 and 1957, but no other adjustments or reductions have been assumed for these years.

1. Copies to the Secretary of the Treasury, the Attorney General, the Directors of the Bureau of the Budget and of Central Intelligence, the Chairmen of the Atomic Energy Commission and of the Joint Chiefs of Staff, and the Federal Civil Defense Administrator.
2. For information on NSC 5422/1, see footnote 1, p. 699. For the Annexes to NSC 5422, see p. 667.
3. For information on NSC Action No. 1125, see footnote 4, p. 648; for information on NSC Action No. 1169, see the editorial note, p. 698; for NSC Action No. 1194, see footnote 19, supra.
4. Dated Oct. 30, 1953, p. 577.
5. For information on NIE–11–5–54 and NIE–13–54, see footnote 5, p. 648.
6. Dated Feb. 11, p. 609.
7. For text of President Eisenhower’s Special Message to the Congress on Foreign Economic Policy, Mar. 30, 1954, see Public Papers of the Presidents of the United States: Dwight D. Eisenhower, 1954 pp. 352–364.
8. See the memorandum from Lay to the National Security Council, Oct. 5, p. 731.
9. Proposed by Defense, FOA and ODM. [Footnote and brackets in the source text.]
10. Proposed by State. [Footnote and brackets in the source text.]
11. Based on recommendations in Budget Message of January 1954 and subsequent action by Congress. Assumes congressional action next year to extend the present excise taxes on liquor, tobacco, gasoline and automobiles, which under existing law will be reduced on April 1, 1955 with resulting tax losses of $1.2 billion in 1956 and $1.1 billion in 1957. The figures do assume, however, that the 52 percent corporate tax rate will not be extended beyond April 1, 1955. Allowance is made in these figures for the anticipated growth of the economy. [Footnote in the source text.]
12. Reduction in individual income tax rates when the corporate tax rate is reduced on April 1, 1955 and additional individual and corporate rate reductions during 1956. [Footnote in the source text.]