Foreign Relations of the United States, 1952–1954, Eastern Europe; Soviet Union; Eastern Mediterranean, Volume VIII

Eisenhower Library Eisenhower papers, Whitman file

No. 687
Memorandum of Discussion at the 183d Meeting of the National Security Council, Washington, February 4, 1954¹

top secret
eyes only

Washington, February 4, 1954

The following were present at the 183rd Meeting of the Council: The President of the United States, presiding; the Vice President of the United States; the Acting 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 Secretary of Commerce (for Item 2); the Acting Director, Bureau of the Budget; the Chairman, Atomic Energy Commission (for Item 2); the Chairman, Joint Chiefs of Staff (for Items 3 and 4); the Director of Central Intelligence; the Assistant to the President; Robert Cutler, Special Assistant to the President; Mr. Max Lehrer, Department of Defense (for Item 3); the Executive Secretary, NSC; and the Deputy Executive Secretary, NSC.

Following is a summary of the discussion at the meeting and the chief points taken.

1. Significant World Developments Affecting U.S. Security

[Here follow a briefing by Director of Central Intelligence Dulles on developments in Indochina and a lengthy discussion.]

After this considerable digression, the Director of Central Intelligence resumed his briefing, and said that since the Council was considering a new policy report on Yugoslavia,² the CIA had been addressing itself to the question whether the “new look” in the Kremlin had had any significant impact on Yugoslav policy. CIA had reached the conclusion that there was no likelihood of any basic change in Yugoslavia’s present pro-Western orientation, and it was not thought likely that the Yugoslavs would go back into Moscow’s fold.

Mr. Dulles then discussed the Djilas affair, which he described as an effort to redirect Yugoslavia along more liberal lines. Since the hard-core Communists in Yugoslavia thought that Djilas was going too far, he had been purged. As a result, we could anticipate a tightening of discipline in the Yugoslav Communist Party and a check of the recent trend toward liberalization.

In conclusion, Mr. Dulles stated that the only really disturbing factor in the current situation in Yugoslavia was the prolonged drought. This could be very serious.

Secretary Smith said that he had talked yesterday to the Ambassador from Yugoslavia, who had said that his country was going to be seriously short of wheat. Secretary Smith had intimated to the Ambassador that the United States would be willing to consider a purchase of U.S. wheat with Yugoslav currency if the Yugoslavs asked for it.³

Secretary Humphrey said that we would be delighted at the prospect of such a transaction, and the President commented that he would be glad to send the Yugoslavs all the wheat they wanted if they would agree to a settlement of the Trieste problem.

Secretary Smith warned that, unhappily, the Yugoslavs were very sensitive as to any suggestions of bribery to settle Trieste. He then discussed briefly the status of the negotiations on this subject in London.⁴ He believed that there was one very important factor of a favorable nature. The boundary between Zones A and B was a purely arbitrary boundary drawn by the U.S., British and French solely for the purpose of achieving a modus vivendi. Accordingly, the boundary could be altered in various ways which would permit both the Italians and the Yugoslavs to save face. He believed that our negotiators were getting very close to agreement on a permanent boundary.

With respect to the serious crop situation in Yugoslavia, Secretary Smith pointed out that drought conditions involved not only Yugoslavia but the Soviet satellites in the Balkans as well. It was accordingly particularly urgent that we assist Yugoslavia so that it would look good in any comparison with conditions in Rumania or Bulgaria. It was unfortunate, added Secretary Smith, that U.S. domestic pressures, notably from the Catholics, made it difficult to do this.

After this further interruption, the Director of Central Intelligence concluded his briefing with a comment on the difficulties facing the Shishakli regime in Syria, which had an incipient revolt on its hands.

2. United States Policy Toward Yugoslavia (NSC 5406 and Annex to NSC 5406; Memo for NSC from Executive Secretary, same subject, dated February 3, 1954⁵) Mr. Cutler started to explain the report which the Planning Board had prepared on Yugoslavia, by noting that the policy rested on the assumption that the Trieste issue would be settled harmoniously.

The President interrupted to inquire why, at the time that the negotiations to settle Trieste were in full swing, the Planning Board had presented a policy paper on Yugoslavia. Mr. Cutler explained that this was pure coincidence, and that the Planning Board had begun its consideration of our policy toward Yugoslavia well before the Trieste controversy had become so serious.

Mr. Cutler then proceeded to analyze the contents of the policy paper, in the course of which he pointed up the dilemma which was inherent in U.S. objectives toward Yugoslavia. Our immediate objective was to keep Yugoslavia independent and out of Soviet control even though it was a Communist dictatorship. Our long-term objective was a government in Yugoslavia freely chosen by the people of Yugoslavia. This, said Mr. Cutler, addressing Secretary Smith, represented quite a tight-rope for him to walk on. Secretary Smith replied that he had a simple formula to overcome this problem. You simply didn’t let the right hand know what the left was doing.

After further discussion, in the course of which minor revisions were made in the policy statement and the Financial Appendix was analyzed, Secretary Wilson expressed the view that when the Trieste problem was finally settled there should be a new study of our policy in this area. Pointing out that the British and French have moved out most of their forces from Austria, Secretary Wilson inquired whether it was really to the advantage of the United States to move our forces from Trieste into Austria to replace the French and British contingents. The President suggested that a brief comment on the military situation in Austria be presented at next week’s Council meeting.

Secretary Smith then undertook to brief the Council on the current status of the attempt to draw an agreed boundary between Zones A and B, and indicated that he had made broad hints to the Yugoslavs that they should proceed to annex Zone B as soon as the Italian flag went up over Trieste. They seemed, however, to be afraid to undertake this action.

The National Security Council:

a. Adopted the statement of policy contained in NSC 5406, subject to the following changes:

(1) Paragraph 17: Delete “acceptable both to Yugoslavia and Italy.”

(2) Paragraph 24: Insert “military and” before “technical personnel”.

(3) Paragraph 25–c: Change “authorizing” to “recommending”.

b. Noted that the Financial Appendix to NSC 5406 should be amended by the revision of paragraph 5 thereof to read as follows:

“5. Based upon this planned program, deliveries will continue high through FY 1956, decline in FY 1957 and level off in FY 1958.”

Note: The statement of policy in NSC 5406 as amended and approved by the President, subsequently circulated as NSC 5406/1 and referred to the Operations Coordinating Board as the coordinating agency designated by the President.

[Here follows discussion of United States objectives and courses of action with respect to Formosa and the Chinese National Government.]

S. Everett Gleason

1. Prepared by Gleason on Feb. 5.

2. Reference is to NSC 5406, “United States Policy Towards Yugoslavia,” dated Jan. 26, prepared by the Planning Board of the National Security Council and circulated to the members of the Council under cover of a memorandum of the same date from Lay. It consisted of a Statement of Policy and a Staff Study. (S/S–NSC files, lot 63 D 351, NSC 5406 Series) NSC 5406 had been based on a draft Statement of Policy and Staff Study prepared in EUR/EE and circulated within the Department of State for comment under cover of a memorandum of Aug. 10, 1953, by Leverich. (768.00/8–1053)

   NSC 5406/1 is infra.

3. A memorandum regarding this part of Smith’s conversation with Ambassador Popović on Feb. 3 is in file 868.00/2–354.
4. For documentation on the secret negotiations regarding Trieste between representatives of the United Kingdom, the United States, and Yugoslavia, which began in London on Feb. 2, 1954, see Documents 163 ff.
5. This memorandum transmitted to the members of the Council a memorandum from Radford to Wilson, giving the Joint Chiefs of Staffs brief comments on NSC 5406. (S/S–NSC files, lot 63 D 351, NSC 5406 Series)