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

S/P–NSC files, lot 61 D 167, “Review of Basic Natl Sec Policy, Sept–Nov, 1954”

Paper Prepared by the Director of Central Intelligence (Dulles)¹

top secret

[Washington,] November 18, 1954.

The Director of Central Intelligence submits his comments for the Review of Basic National Security Policy in two parts, one dealing with key elements of intelligence bearing on the over-all problem, and the second indicating a recommendation for organization in the field of cold war activities.

I. Elements of Intelligence Entering Into a Review of Policy Vis–à–Vis the Soviet Bloc

Relative Soviet Military Power

1. The Soviet Bloc’s power to launch military action against the US will be substantially greater five years hence when it will probably have completed the re-equipment of its long-range air force with high-performance jet aircraft and have accumulated a substantial arsenal of assorted tactical and strategic nuclear weapons (including multi-megaton bombs). At the same time its air defenses will be substantially improved, and its conventional armaments, particularly submarines and the ground forces of itself and China, will be thoroughly modernized.

2. Against these developments we must balance the continued improvement of the NATO forces plus the probable introduction of important German units, the possibility of some rearmament in Japan, and the progressive development of new defensive weapons and measures. On balance, it is believed that the USSR will have a net capability to inflict increasingly serious injury on the US from 1957 on. And if, as we estimate, the Soviets can develop an intercontinental ballistic missile by early in the 1960’s, it will confront the US with a further physical insecurity, for which there may be no practical countermeasure.

3. The USSR already possesses the net capability to inflict crippling damage on this country’s principal industrial allies, specifically the major nations of Western Europe and Japan. No improvement in defensive measures presently contemplated will be sufficient to prevent this net capability from becoming greater with the passage of time, especially as Soviet capabilities in medium-range missiles improve. This growing vulnerability of our Allies has already visibly reduced their willingness to incur any appreciable risk of war in order to prevent Soviet successes in third areas, notably in Asia. We must expect that our Allies will show increasing reluctance to engage in diplomatic or military action which seems to involve a risk of war. With certain exceptions where their own vital interests are directly concerned, their willingness to stand firm will decline in the face of new acts of subversion, minor communist advances, and acts of Soviet intimidation.

Political and Economic Situation of the Bloc

4. Based on present trends, political and economic developments within the Bloc may be expected to continue favorable from the Soviet standpoint. Despite discontent in the European Satellites, there is little chance of Soviet control being shaken by internal revolt in the next few years, though there is the possibility that unrest and economic difficulties might tend increasingly to reduce their net contribution to the strength of the Bloc. Within the USSR itself the succession crisis has to date been surmounted with surprising ease, and there is evidence that the Soviet people are less dissatisfied with the regime than in years past.

5. For the next few years, the economic growth of the USSR can be expected to continue at a rate (expressed in percentage terms) almost double that of the US. The total output of the US economy will, of course, continue to greatly exceed that of the USSR, and the growth of output in absolute terms should be greater in the US in most years. These comparisons in terms of total output are, however, misleading from the military viewpoint, because Soviet efforts have been concentrated on heavy industry and on the production of capital goods and military end items, with the consequence that a far larger proportion of the USSR’s smaller total output is of a sort that contributes to the nation’s war potential. There is currently some increased emphasis on consumer goods and on agriculture, which is still a weak point. Nonetheless, the Soviet margin of advantage in growth rates will be greater in the industrial sector than in the economy as a whole, and the Soviets will certainly devote to capital investment a far higher proportion of their output than the US.

6. Except for specialized items of direct military importance, Free World restrictions in trade with the USSR are likely to produce only minor nuisance effect and to be less and less effective in view of increasing Bloc self-sufficiency. There will be growing opposition to the maintenance of controls on trade with the Bloc in both Free Europe and Asia (especially Japan).

Communist China

7. Red China has emerged as a powerful junior partner in the Bloc—a nation more vigorous and cohesive than at any time since the 17th century. At the present time the Red China regime is definitely oriented toward the USSR not only for ideological reasons but because it has nowhere else to turn for help in attaining its industrial and strategic goals. It seems unlikely that the US will continue to find a majority with it for opposing the entrance of Communist China into the United Nations. Moreover, most other Asians (including the Japanese) and most Europeans will continue to be highly sensitive to actions by the US which seem to be designed to render peacful coexistence with Red China impossible. We may therefore face a further degree of isolation on the UN and other issues related to Communist China, as time goes on, which would adversely affect our relations with other friendly countries and neutrals, and hence the carrying out of our policy in the Far East.

Possible Lines of Soviet Policy

8. While we continue to estimate that the Soviet leaders ultimately envisage “(a) the elimination of every world power center capable of competing with the USSR, (b) the spread of Communism to all parts of the world, and (c) Soviet domination of the other Communist regimes,” we have increasing evidence that the top Soviet leadership realize that this is a long-term objective and may be genuinely desirous of a considerable period of “coexistence”, that is, a period of some years in which tensions and risks of war are reduced. Recent statements by Malenkov added to concrete steps with respect to Yugoslavia and other neighbors, and unrest in certain of the satellites, suggest that the USSR would like to “make a deal” (or series of deals) that would secure Western acquiescence to the approximate present area of their domination, in exchange for their undertaking not to expand the Communist orbit by force. Such a Soviet desire would be motivated in part by fear of war, in part by the already clear belief that a return to the Stalinist level of tensions would be counterproductive and that the Western alliance can be better split by soft than by hard tactics, and in part by domestic preoccupations in both the USSR and Communist China. Whether the Soviets might again turn to a tough policy, and the lengths to which they would then go, would depend largely on the firmness and stability of the Free World in a developing situation of effective atomic plenty.

9. Though we assume that the Western coalition is resolved to proceed with the ratification of the Paris agreements² despite any Soviet diplomatic maneuvers, there is throughout Europe an impatience to explore the possibilities of “coexistence” that will be increasingly difficult to resist once the agreements are accomplished. The UK, French, and German governments will press strongly for efforts to reach a general settlement with the Soviets. The US may be able to restrain this urge for a while. However, if the Soviet “peace offensive” continues, sometime in 1955 the US will probably have to choose between increasing isolation from its major Allies and participation in such a move, with a review [view] to debunking the Soviet “peace offensive” to the degree it turns out to be phony.

10. On the other hand there are some indications that the Soviet “peace offensive” might taper off, as at least some of the leaders of the USSR apparently advocate a decidedly tough reaction to the ratification of the German rearmament agreements. Thus during the months ahead the US might well prepare alternative policies depending on whether or not the Soviet “peace offensive” continues after the Paris pacts are ratified.

11. We estimate that the USSR will not deliberately initiate, and will try to restrain its Far Eastern allies and satellites from deliberately initiating, a hot war or overt military aggression within the next five years provided the US and the Free World maintain an adequate military posture. On the other hand, even if Soviet leaders genuinely desire the period of relaxation mentioned above, such a period would take some time to develop. Notwithstanding the pendency, or even the actual existence, of a “deal” or “deals” covering overt aggressive action, the Soviet leaders will not expect subversive movements to diminish, nor will they plan in fact to abandon their initiation, direction and covert support of such movements. Thus, the Soviet Bloc will not hesitate to seize opportunities to exploit weaknesses and division in the rest of the world, with all of the techniques of political, psychological, economic and subversive warfare at which they are adept, and will devote major financial and other resources to this effort.

12. As the lines between the Soviet Bloc and Western coalition have come to be more and more clearly drawn over the last seven years, a situation has come into being in which any further Soviet Bloc gains of territory (whether through aggression from without or subversion from within) would have an impact which might be out of all proportion to the strategic, economic, or political significance of the territory lost. The US is challenged by an aggressive enemy with the capability of organizing opposition in virtually all parts of the world, and this enemy’s strategy of reliance upon excessive promises and of exploiting every disruptive local issue places it in a position to exploit as a victory almost every breakdown that occurs in the machinery of society outside of the Soviet Bloc. Unlike Britain in the 19th century, therefore, the US today must take seriously, as a potential threat to the cohesion and determination of the Free World, every situation of weakness that develops anywhere in the non-communist world from Chile to Vietnam.

II. Recommendation

Need for Additional Counter-Subversive Activity

1. The Soviets enjoy a substantial advantage in the field of integrated subversive warfare. They have effective assets in most free countries in the form of communist political parties, front organizations and underground nets, as well as the tightly coordinated mechanisms of a dictatorial government to control and direct the use of these assets. We should face the fact that some of these advantages will persist. These are largely inherent in the nature of the Soviet system, which has no scrutiny from a free press and is not subject to the pressures generated by democratic political and legal processes. The communists enjoy, too, the immense advantage of being bent upon destruction and disruption everywhere outside their own border with no responsibility for the infinitely more difficult task of construction and conservation.

2. Despite the difficulties that confront the US Government by reason of its devotion to freedom and democracy at home and to constructive purposes abroad, there are shortcomings in our counter-subversive effort which could be overcome. It goes without saying that the US will need to employ in a closely coordinated fashion all the cold war weapons at its disposal, including specifically economic measures, military programs designed to achieve cold war objectives (rather than to contribute significantly to allied strength in the event of a hot war), and covert operations. Yet this Government has not developed the coordination, flexibility, and decisiveness in resolving internal differences that would make possible the utilization with maximum effect of all the assets which the US does possess. Furthermore the US gets precious little help from its Allies in this field.

3. These shortcomings will not be overcome merely by the creation of additional administrative machinery. What is required for the more effective carrying out of NSC directives in the field of countersubversion is the decisive coordination of political, military, economic and covert actions, greater flexibility in integrating into specific covert operations assets already available in our military, diplomatic and economic organizations, and possibly more effective utilization of assets outside of government in the business and academic fields. Consideration should also be given in appropriate instances to seeking the cooperation of our Allies so that their assets would also be available in specific covert counter-subversive programs.

1. A covering memorandum of transmittal from Lay to the National Security Council, dated Nov. 18, notes that the “enclosed comments of the Director of Central Intelligence” were being circulated to members of the NSC in anticipation of consideration by the Council at its meeting on Nov. 24.
2. For documentation on the “Paris agreements”, see vol. v, Part 2, pp. 1294 ff.