142. Memorandum of Discussion at the 334th Meeting of the National Security Council, Washington, August 8, 19571

Present at the 334th Council meeting were the President of the United States, presiding; the Vice President of the United States; the Secretary of State; the Secretary of Defense; and the Director, Office of Defense Mobilization. Also present were the Secretary of the Treasury; the Director, Bureau of the Budget; the Special Assistant to the President for Atomic Energy; the Acting Director, U.S. Information Agency; the Director, International Cooperation Administration; the Deputy Secretary of Defense; the Counselor, Department of State (acting for the Secretary in Items 1 through 6); the Vice Chief of Staff, U.S. Army (for Item 7); Admiral H. D. Felt, USN, Department of Defense; the Chairman, Joint Chiefs of Staff; the Acting Director of Central Intelligence; The Assistant to the President; the Deputy Assistant to the President; Special Assistants to the President Cutler, Randall and Dearborn; the Acting White House Staff Secretary; the Naval Aide to the President; the Acting Executive Secretary, NSC; and the Director, NSC Secretariat.

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

[Here follows discussion of agenda item 1: “U.S. Policy Toward South Asia.”]

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2. US. Policy Toward South Asia: Ceylon (NSC 5701; Progress Report, dated July 24, 1957, by OCB on NSC 5701;2 Memo for NSC from Executive Secretary, same subject, dated July 31, 1957;3 Memo for NSC from Acting Executive Secretary, same subject, dated August 7, 19574)

Mr. Cutler briefed the Council, and explained the reasons which had prompted the NSC Planning Board to propose a change in paragraph 80 of NSC 5701, as follows:

“Continue to impress upon the Government of Ceylon that the provision of U.S. economic aid will be reconsidered should Ceylon expand its trade in rubber or strategic commodities with the Communist bloc, and continue to urge that Ceylon discontinue its rubber exports to Communist China, endeavor to minimize rubber exports to the Communist bloc.”

He pointed out that the Planning Board was unanimous in its support of this revision, but that the Joint Chiefs of Staff were opposed to the revision on the ground that no such change should be made until completion of the forthcoming review of U.S. economic defense policy by the National Security Council. (A copy of Mr. Cutler’s briefing note is filed in the minutes of the meeting.) He then asked Admiral Radford for further comments.

Admiral Radford replied that it didn’t seem to him to make very much difference whether paragraph 80 was revised or not. In point of fact, this Government was already following the course of action set forth in the proposed revision of paragraph 80 prepared by the Planning Board. The Joint Chiefs of Staff simply felt it desirable to point out the forthcoming review of U.S. economic defense policy and its bearing on the revision of paragraph 80.

The President inquired whether Ceylon was now finding itself in greater need of rice than had been the case when Ceylon made its first contract to exchange Ceylonese rubber for rice from Communist China. Mr. Cutler replied that this was probably not the case, but that Ceylon must nevertheless find a market for its rubber.

The President then stated that this seemed to be one more instance of the Communist practice of exporting food which was in [Page 274] short supply at home. Accordingly, it might be a positive advantage to the Free World to encourage Communist China to sell rice, even though this vital commodity was in short supply. This would prove harmful to Chinese Communist government policy in China.

Admiral Radford again repeated that he felt it was of no particular consequence whether paragraph 80 were revised or not. The President indicated that he believed the revision should be made, and that the proposed new policy would probably represent no loss to the United States in any case. Secretary Wilson expressed agreement with the President’s view.

The National Security Council:5

Discussed the proposed revision of paragraph 80 of NSC 5701, prepared by the NSC Planning Board, and the Planning Board’s justification for such revision (transmitted by the reference memorandum of July 31, 1957) in the light of the views of the Joint Chiefs of Staff (transmitted by the reference memorandum of August 7, 1957).
Adopted the revision of paragraph 80 of NSC 5701 referred to in a above.

Note: The action in b above, as approved by the President, subsequently circulated to all holders of NSC 5701.

[Here follows discussion of agenda items 3–8, including consideration of United States policy toward Hong Kong, Iran, and Korea.]

S. Everett Gleason
  1. Source: Eisenhower Library, Whitman File, NSC Records. Top Secret. Drafted by Gleason on August 9.
  2. Document 6.
  3. In this memorandum the proposed revision of paragraph 80 of NSC 5701 was enclosed along with a brief rationale for the proposed change which is fully explained in this memorandum of discussion. (Department of State, S/S Files: Lot 63 D 351, NSC 5701 Memoranda)
  4. This memorandum enclosed the views of the Joint Chiefs of Staff on the proposed revision of paragraph 80 of NSC 5701. In a memorandum to the Secretary of Defense, dated August 6, the Joint Chiefs recommended the proposed revision be held in abeyance pending completion of an NSC study on the whole question of COCOM/CHINCOM controls. (Ibid.)
  5. NSC Action No. 1767. (Ibid., S/SNSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the NSC, 1957)