62. Memorandum of Discussion at the 282d Meeting of the National Security Council, Washington, April 26, 19561
Present at the 282nd NSC 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 Acting Director, Office of Defense Mobilization. Others present were the Secretary of the Treasury; the Attorney General (for Items 2, 3 and 4); the Secretary of Commerce (for Items 2, 3 and 4); Mr. Amos J. Peaslee for the Special Assistant to the President for Disarmament; the Director, Bureau of the Budget; the Director, U.S. Information Agency; the Director, International Cooperation Administration (for Items 2, 3 and 4); the Chairman, Council on Foreign Economic Policy (for Items 2, 3 and 4); the Under Secretary of State; the Deputy Secretary of Defense; Assistant Secretary of State Bowie; Assistant Secretary [Page 183] of Defense Gray; Admiral Donald B. Duncan for the Chairman, Joint Chiefs of Staff; the Director of Central Intelligence; the Deputy Assistant to the President; the 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 main points taken.
[Here follow discussion of agenda items 1 and 2: “Significant World Developments Affecting U.S. Security,” and “Pattern of International Trade Between the Free World and the Soviet Bloc.”]
3. Disposal of Surplus Agricultural Commodities to the Soviet Bloc (NSC Action No. 1536–b;2 Memo for NSC from Executive Secretary, same subject, dated April 18, 19563)
Mr. Dodge made reference to the adverse opinion offered recently by the Attorney General in connection with the disposal of agricultural surpluses to Iron Curtain countries. He also pointed out that the President had recommended, in his farm message to Congress, that the latter repeal the sections of Public Law 480 which prevented the United States from trading its agricultural surpluses to Iron Curtain countries. The Congress had failed to act on the President’s recommendation.
The Attorney General said that upon receipt of the Council’s request pursuant to NSC Action No. 1536–b, he had checked with the General Counsels of the Departments of Defense, Treasury, and other responsible agencies. No response had come from the State Department, but none of the other departments had been able to perceive any way by which the Attorney General’s adverse opinion on the possibility of legally trading our agricultural surpluses behind the Iron Curtain, could be changed. On the other hand, Mr. Prochnow in the State Department believed that there was one means of avoiding this restriction on trade in agricultural surpluses without having recourse to new legislation. Mr. Prochnow had suggested that it would be legal to sell our agricultural surpluses to the Soviet bloc in return for dollars, buying with these dollars strategic materials from the Soviet bloc countries. The Department of Justice did not agree with Mr. Prochnow on the feasibility of this course of action.
[Page 184]Speaking with great warmth, Secretary Dulles deplored the fact that the United States Government was so bound up with red tape that it was now unable to seize and exploit an unique opportunity from the point of view of U.S. foreign policy objectives. The situation in the satellites, he said, was probably more precarious than it had been in a very long time, as a result of the de-Stalinization campaign and other matters just mentioned by Mr. Allen Dulles. If we were now in a position to make up an attractive shopping list and present such a list, for example, to the Czechs, this would raise absolute hell in the Soviet bloc. What would the Soviets have to do in response to such an initiative? They would probably be obliged to try to match the U.S. offer. It was unlikely that they would permit a satellite to accept such a U.S. offer. They had not permitted this in the case of the Marshall Plan. Nevertheless, such a refusal would strain to the utmost relations between the USSR and its satellites. Indeed, it might even produce a complete collapse of the satellite relationship. In point of fact, therefore, we have been presented with a magnificent cold war opportunity and we are unable, as a government, to find a way to capitalize on the opportunity. It might be necessary to seek legislation. This problem had never really been understood by the Congress. In any event, some way must be found to make use of these vast U.S. surpluses in the interests of our national security.
The President smiled and said that it was extremely encouraging to him to have someone else make his speech for him. Referring to the restrictions in P.L. 480 as “damned foolishness”, the President indicated that he believed we should go to the Congress for legislation if this were necessary. In so doing the President speculated whether we could not deal initially with the problem in the Foreign Affairs Committee and the Foreign Relations Committee, rather than the Agriculture Committee. Secretary Dulles commented that this was a fine idea if it proved feasible, although the Agriculture Committee would be jealous of its prerogatives. Both the Attorney General and General Persons thought the President’s suggestion well worth a trial.
The Vice President said that such new legislation would, of course, normally be referred to the Agriculture Committee, but if enough matter dealing with foreign policy were included in the resolution or the legislation, a diversion might be made to the Foreign Affairs Committees.
Secretary Humphrey turned to Secretary Dulles and asked him what he had in mind that the United States would buy from the satellite countries in return for the agricultural surpluses we sold to them. Secretary Dulles replied that he had not given the matter much thought, and didn’t believe it to be very important. Secretary [Page 185] Humphrey replied that he thought the matter of great importance from the point of view of getting Congressional approval of the proposal suggested by the Secretary of State for disposing of our agricultural surpluses behind the Iron Curtain.
The Vice President pointed out that in the first instance what we would be seeking from the Congress was authority to make an offer of surplus agricultural materials to the Iron Curtain countries. Once this was obtained there would be the problem of determining what we would buy from them with the dollars we received for the agricultural commodities. This would undoubtedly be a problem with those members of Congress and others who dreaded competition from abroad.
Secretary Weeks stated that he assumed that all around the table knew that the so-called “Fountain Committee” was currently investigating reports which were getting around to the effect that large amounts of our surplus agricultural commodities were actually reaching Iron Curtain countries through the agency of certain Western European countries. We in Commerce, he said, believe that it would be highly desirable that we have authority to sell such commodities rather than have them reach the Iron Curtain countries through these devious channels. Time, added Secretary Weeks, was of the essence, because we would soon be hearing screams from the Fountain Committee.
The President commented that it was his belief that we have got to work up a resolution and get it before the Foreign Affairs and Foreign Relations Committees, stressing the fact that what we were doing was strictly in the context of achieving our foreign policy objectives. The Attorney General agreed, and suggested that such a resolution might be so phrased as to suggest an emergency basis with a duration of only a year or two. The President went on to say that in any case the resolution must be made to appear in the right light before the Congress. We must make clear that we were simply dangling some carrots before the satellite governments in order to increase the strength of their pull away from the USSR. As he had often said before, the President reiterated his belief that trade was the greatest weapon in the hands of the diplomat. On the other hand, the President did express agreement with Secretary Humphrey that we should give some thought to what we would buy from the satellites in return for the agricultural commodities we sold them. The President speculated that we might conceivably buy arms from Czechoslovakia, which we could then proceed to give to our needy friends and allies.
[Page 186]The National Security Council:4
- a.
- Noted and discussed a report by the Attorney General, prepared pursuant to NSC Action No. 1536–b and transmitted by the reference memorandum of April 18, on the extent to which the Executive Branch, under existing law, has authority to dispose of surplus agricultural commodities to the Soviet bloc.
- b.
- Agreed that the Secretary of State should prepare an appropriate legislative proposal, based on means of furthering U.S. foreign policy objectives toward the Soviet bloc, for submission to the Congress, which would authorize greater flexibility in making trade offers to the Soviet bloc involving the disposal of surplus agricultural commodities.
Note: The action in b above, as approved by the President, subsequently transmitted to the Secretary of State.
[Here follows discussion of agenda items 4–8, “Multilateral Export Controls on Trade With Communist China,” “Suggestions by the President’s Board of Consultants on Foreign Intelligence Activities,” “United States Policy Toward South Asia,” “U.S. Policy on French North Africa,” and “Estimated Receipts and Expenditures for Fiscal Year 1956.”]
- Source: Eisenhower Library, Whitman File, NSC Records. Top Secret. Drafted on April 27 by Gleason.↩
- See footnote 2, Document 59.↩
- This memorandum forwarded a letter of April 17 from Assistant Attorney General Rankin to Lay which responded to the Council’s request in Action No. 1536–b. Rankin noted that the President recommended repeal of section 304 of Public Law 480 in a message of January 9 to Congress, but that Congress had taken no action on the recommendation. He concluded that “the lifting of the limitations in existing law on the disposal of surplus agricultural commodities to the Soviet Bloc rests with the Congress.” (Department of State, OCB Files: Lot 61 D 385, USSR and Satellites, 1953–56)↩
- Paragraphs a–b and Note constitute NSC Action No. 1539.↩