Eisenhower Library, Eisenhower papers, Whitman file

No. 224
Memorandum of Discussion at the 164th Meeting of the National Security Council, Thursday, October 1, 1953 1

top secret eyes only

Present at the 164th Meeting of the Council were the President of the United States, presiding; the Vice President of the United States; the Secretary of State; the Secretary of Defense; the Director, Foreign Operations Administration; the Director, Office of Defense Mobilization. Also present were the Secretary of the Treasury; the Director, Bureau of the Budget; the Chairman, Joint Chiefs of Staff; the Director of Central Intelligence; Sherman Adams, The Assistant to the President; Robert Cutler, Special Assistant to the President; C. D. Jackson, Special Assistant to the President; Brigadier General Paul T. Carroll, Acting White House Staff Secretary; the Executive Secretary, NSC; and the Deputy Executive Secretary, NSC.

There follows a summary of the discussion at the meeting and the chief points taken.

[Here follows discussion of item 1, significant world developments affecting United States security.]

2. United States Position With Respect to Germany (NSC 160/1; NSC Action No. 8812)

Mr. Cutler refreshed the Council’s memory as to the last discussion of this subject by reading paragraphs 10 and 11–b of NSC 160/1. He then informed the Council of the view of the NSC Planning Board that the policy in NSC 160/1 should not be revised at present. He then asked the Secretary of State to explain to the Council why the State Department believed it unwise to revise this policy at this time.

Secretary Dulles pointed out that since NSC 160/1 had last been considered by the Council a month ago, a number of developments had occurred which pointed to favorable action on the EDC concept. In fact, these developments were still going on and we were not in a position, therefore, to make any decision to revise the existing [Page 541] policy. Secretary Dulles pointed out, in illustration, that Europe had not yet wholly absorbed the effect of the recent German elections. New thoughts were stirring both in Bonn and elsewhere in Europe. The approaching French presidential elections were stirring up the new forces in France. Italy presented a pessimistic picture but the State Department was engaged in trying to reach a satisfactory settlement of the Trieste issue. If this effort were successful there was real hope that the Italian Parliament would eventually ratify EDC.

While Secretary Dulles thus thought the situation too fluid to suggest revision of the substance of NSC 160/1, he expressed the view that we should push on to complete the financial appendix to this report.

Mr. Cutler then reminded the Council that at its previous consideration of this paper, Governor Stassen had expressed doubts as to the validity of the financial appendix because it appeared to him that the United States was paying too much to re-arm Germany. Mr. Cutler reported that as yet no new financial appendix had been prepared and that the Planning Board recommended that Governor Stassen be requested to take the lead in providing a revised financial appendix. Governor Stassen pointed out that the original appendix had set the cost of German rearmament at approximately five billion dollars and that he had thought that the United States contribution was too high. He believed that the Germans should be able to finance this five billion dollar outlay with no more U.S. assistance than had already been appropriated. So remarkable was the German economic recovery that Governor Stassen believed that the Germans would be able to put out as much as 10% of their gross national product to the account of their own rearmament.

Governor Stassen admitted, however, that the Departments of State and Defense did not wholly agree with the above view. Defense was not ready to state categorically that five billion represented the total cost of German rearmament. The State Department was not prepared to agree that the Germans could safely devote 10% of their gross national product to rearmament. Governor Stassen assured the Council, however, that an agreement could be worked out with these two departments and a satisfactory financial appendix provided for Council consideration.

Governor Stassen then said he wished to call the Council’s attention to another aspect of this problem. We had accumulated a vast amount of military matériel for re-arming the German units at such time as they came into existence. A serious log jam could be anticipated if the day when these German units came into existence was postponed beyond the end of the calendar year. If the [Page 542] German units would not be ready to take over the equipment which we were providing then Governor Stassen wondered whether it might not actually be sent to Germany and distributed prior to to the actual ratification of EDC.

The President inquired whether these military items could not be sent to Germany in the guise of reserve stocks for U.S. occupation forces stationed in Germany. Admiral Radford and Governor Stassen thought that this suggestion might be followed but Secretary Wilson expressed the opinion that there was just too much equipment to be disguised in this fashion.

Secretary Dulles predicted that definitive action on the ratification of EDC could not be anticipated until after the first of next year and that the scheduling of production for the rearmament of the German units should be geared to some such date as the end of January. Governor Stassen then inquired of the Secretary of State as to whether in the event of an adverse decision on EDC, at the beginning of 1954 the State Department would be prepared to suggest alternatives to a re-armed Germany with membership in the EDC. Secretary Dulles replied in the affirmative but the President expressed strong skepticism as to whether there was any really effective alternative to French membership in the EDC. We had, said the President, worked very hard on the French to induce them to support the EDC but the issue certainly seemed in doubt. Governor Stassen replied that the recent German election and the Spanish agreement with the United States on bases might well have changed favorably the prospects for EDC. The President agreed that these were hopeful developments but went on to express anxiety that while the West was floundering in indecision as to the best means of defending itself, the Russians might well decide to take a long chance and make a really attractive offer to the Germans. This might take the form of an offer to permit the re-unification of Germany coupled with a very favorable trade treaty. The result of such an offer was not happy to contemplate.

In reply to the President’s speculation, Secretary Dulles expressed the opinion that for the moment, at least, the Soviets would not consent to the unification of Germany under any circumstances. At present the situation was so unsettled in East Germany, Czechoslovakia and Poland that the Russians could anticipate a general reaction if they allowed Germany to be unified. Furthermore, said Secretary Dulles, the Russians would do everything to avoid any meeting of the powers to discuss the German problem, a fact which was supported by Ambassador Bohlen.

The President replied that at least this gave the United States a little breathing spell and Governor Stassen added his view that for the next two years the Soviets would not be in a position to launch [Page 543] a massive attack on the United States. The great question, therefore, was how the United States should use this two year interval. Should we devote it to an attempt to roll back the Russian power. This was the question.

The Council then resumed its discussion of the problem of scheduling the flow of American arms to Germany and the choice of a planning date for EDC ratification as a guide to the production and delivery of this equipment.

The National Security Council:

Reaffirmed the statement of policy on the subject in NSC 160/1, pending review by the Council in 30 days.
Requested the Director of the Foreign Operations Administration, in collaboration with the Departments of State and Defense and the Bureau of the Budget, to prepare for Council information in 30 days a revised financial appendix on the subject.
Requested the Secretary of Defense to report for consideration at the Council meeting on October 13, 1953, as to the desirability of establishing a revised planning date for EDC ratification later than November 1, 1953, as a guide to the scheduling of production and delivery of equipment for the German military forces.

Note: The actions in b and c above subsequently transmitted to the Director of Foreign Operations Administration and the Secretary of Defense respectively for implementation.

[Here follows discussion of items 3–5, Berlin (see Document 587), the decline of United States prestige abroad, and the current budgetary situation and outlook.]

  1. Drafted on Oct. 1.
  2. NSC 160/1, Document 214; NSC Action No. 881 is not printed.