2. Letter From C.D. Jackson to the President’s Special Assistant (Rockefeller)1

Dear Nelson : After reading the final drafts of the Quantico II papers2 over the weekend, and telegraphing the requested concurrence to General Parker, I thought I ought to send you this letter, for two reasons:

First, to congratulate you on having organized and carried through to successful conclusion such an important operation. There is an awful lot of good stuff—important and concrete proposals—in those papers, and I hope that you will be able to get this thinking into the official “think-stream” of the Administration.

My second purpose is to take one of the items in these papers and put the magnifying glass of urgency on it.

The item is the matter of our international economic plans and policies for the immediate future.

Many of the events of the past few months, even the past few days, are such as to give this matter top priority.

In bluntest terms, this seems to be what has happened:

Although occasional warning signals have gone up over the past two years on the possibility of the Soviets shifting from the military to the economic weapon, we never seemed to take this possibility very seriously, and as a result we have been toying with the idea of a world economic policy, but not doing much more than responding to economic fire alarms on an “ad emergency” basis.

It will serve no useful purpose here to recite again the many attempts which have been made to get out of an emergency frame of mind and into a “planned growth” concept.

What is useful to say, is that none of them have really worked, and now all of a sudden the Soviets have in the past few months executed a brilliant series of economic forward passes, while we are still in our huddle trying to work out some elementary signals.

As a result of these Soviet forward passes, a new and monumental threat today exists in the Middle East, and the pistol is at our heads in India, Burma, Japan, and portions of Southeast Asia.

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Besides the spectacular arms sale to Egypt by Czechoslovakia, it is common journalistic knowledge that Syria, Saudi Arabia, Lebanon, and Afghanistan are considering similar offers. A Soviet treaty of friendship has just been signed with Yemen, and Libya is being promised Soviet support for a seat in the UN. The Hungarians are shipping locomotives and freight cars to Egypt. Some kind of hanky-panky is going on between Poland and Ceylon. Spare parts for guns are going from Czechoslovakia to Afghanistan, Czech trucks are getting into Jordan, and Czech tractors into the Sudan. Soviet agents are working night and day to get Nasser to give them the Aswan Dam contract, and stand a reasonable chance because the Egyptians don’t seem to be able to get the money from the World Bank with which to go ahead on the contract they have already signed with a British engineering firm. Etc., etc.

U Nu,3 having turned down U.S. offers of economic aid, is now making economic googoo (gu gu) eyes at Moscow, and Moscow is willing to buy rice, not dump it. And in India Nehru4 finally appreciates that no matter how he slices it, there is an economic gap of over a billion dollars in his second five-year plan, a gap which he is going to close with help from somewhere, because he is going to have his second five-year plan or bust. Significantly, he has made overtures to us first.

Now the interesting, and in a sense terrifying thing, about every single one of these cited situations, past, present, and future, is that all of them are definitely within the economic orbit, and had we seized the initiative with a world economic policy of imaginative proportions rather than emergency rations, we might have been ahead of the situation in each one of these cases. Some of them are by now clearly in the broken china class, and we will just have to do the best we can. But some of them are not—notably India.

The moment of decision is upon us in a great big way on world economic policy. So long as the Soviets had a monopoly on covert subversion and threats of military aggression, and we had a monopoly on Santa Claus, some kind of seesaw game could be played. But now the Soviets are muscling in on Santa Claus as well, which puts us in a terribly dangerous position.

I can see no effective course other than thinking this one through immediately and coming up with a long-term world economic policy and plan which can be dramatically stated in the State of the Union message, and behind which every ounce of Administration pressure must be put.

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An essential element of such a plan is that it should not be niggardly. In Max Millikan’s5 word, there is a “threshold” short of which the money had better not be spent at all, but at which or slightly beyond which the money achieves maximum effective impact.

I have talked to quite a few economists to try to see what such a program might cost, and almost all agree that an additional two billion dollars a year for three to five years—mostly investment money—would be adequate; but it is not worth acting on any scale much less than that.

This is big money, but it is time to think straight and hard. When we have waited until crises were upon us, we have had to spend very large sums just to avoid final debacle—as in South Korea and Indo-China. And these sums, spent late in the game, have not guaranteed success. Vast areas not yet in crisis still lie in the Free World, stretching around from the Middle East to Japan. If we act before crisis is upon us it will not only cost us less, but we have a better than even chance of moving these areas forward as strong elements in the Free World alliance. This is a well-grounded hope; but time is very very short to make good on it.6

Sincerely yours,

C.D. Jackson 7
  1. Source: Eisenhower Library, Whitman File, Administrative Series, Rockefeller, NELSON, 1952–1955. C.D. Jackson, former Special Assistant to the President, February 16, 1953–March 31, 1954, was a member of a panel of leading Americans of various backgrounds to study psychological aspects of U.S. political, military, and economic strategy in the world. The panel’s work began in August 1954 principally as a result of Rockefeller’s urging.
  2. Reference is to the final draft of the panel’s report, “Psychological Aspects of U.S. Strategy.”
  3. Premier of Burma.
  4. Jawaharlal Nehru, Prime Minister of India.
  5. Max F. Millikan, Professor of Economics at the Massachusetts Institute of Technology.
  6. Under cover of a letter of December 2, Rockefeller forwarded this letter and a copy of the panel’s report to President Eisenhower. He wrote in a footnote that he thought the President would find the Jackson letter “interesting reading.” (Eisenhower Library, Whitman File, Rockefeller, NELSON, 1952–1955)
  7. Printed from a copy which bears this typed signature.