Foreign Relations of the United States, 1955–1957, Foreign Aid and Economic Defense Policy, Volume X

13. Memorandum of Discussion at the 269th Meeting of the National Security Council, Camp David, Maryland, December 8, 1955¹

Maryland, December 8, 1955

[Here follow a paragraph listing the participants at the meeting and item 1.]

2. Review of Military Assistance and Supporting Programs (NSC 5525, Part 2;²NSC 5434/1; Memos for NSC from Executive Secretary, same subject, dated November 29³ and December 7, 1955;⁴NSC Action No. 1290–d; NSC 5517/1;⁵ Memo for NSC from Executive Secretary, subject: “Constabulary Forces in Countries Threatened by Subversion”, dated November 28, 1955⁶)

Mr. Dillon Anderson briefed the Council on the reference item, and called attention to two large charts. The first of these was entitled “Priorities Relative to Pre-D-Day Allocation of Military Equipment”. The second was entitled “Foreign Aid and Other National Security Expenditures with Breakdown as to Countries”.

Thereafter Mr. Anderson introduced Mr. John Hollister, Director of the International Cooperation Administration in the Department of State. He said that Mr. Hollister had a few introductory remarks to make on the over-all mutual security program.

In his introductory remarks Mr. Hollister covered the following matters with the assistance of charts: First, trend of mutual security appropriations in billions of dollars from 1952 through 1957; second, trend of mutual security expenditures for the same period of years; third, mutual security programs by functions, which provided definitions of the different types of U.S. assistance; and fourth, mutual security programs by functions, which provided the relative size of the different assistance programs for FY 1956 and FY 1957.

Following Mr. Hollister’s introductory remarks, Assistant Secretary of Defense Gordon Gray introduced the presentation of the Department of Defense on the status of the military assistance program. He pointed out that the information to be given by those who followed him would not stop as of June 30, 1955, as in the written status report, but would go down to the end of August. Secretary Gray then introduced Mr. E. Perkins McGuire of the Department of Defense, who, with the assistance of charts, covered the following topics: First, MDAP participants; second, major MDAP items delivered since the beginning of the MDAP program; third, allied and Communist forces, indicating the destination of major items delivered to allied forces by the U.S.; fourth, NATO forces, 1950 and 1955, being a comparison of the strength of NATO forces in these two years; fifth, a recapitulation of FY 1955–56 MDAP funds; and sixth, the FY 1957 budget request for military assistance programs.

Mr. McGuire in turn introduced Brigadier General James K. Wilson, who indicated that he would discuss MDAP deliveries and programs for the entire period FY 1950 down to the program now being carried out. This, he said, he would do in three parts. The first part concerned the period FY 1950 to 1955. This included comment on the world-wide programs and results for the Fiscal Years 1950 to 1955 together with area programs and results for the Fiscal Years 1950–55.

As the second of the three parts of his presentation, General Wilson discussed the FY 1956 military assistance program, which he pointed out was only now ready for final review and implementation. He explained the difficulties by referring to charts indicating the lead times and the screening process through which military assistance programs slowly progressed.

The third part of General Wilson’s presentation was devoted to a discussion of the development of the FY 1957 program. This process, said General Wilson, had started in March 1955 and would not be completed until Congress finally appropriated the necessary funds some time between May and August 1956. It was estimated that if one added up all the requirements necessary to achieve the objectives of the military assistance program, the cost would be in the neighborhood of $6.7 billion. In point of fact this latter estimate had already been refined down to a budget request figure of about $3 billion.

In conclusion, General Wilson dealt briefly with each of the three major problems which the military assistance programs presented to the United States—namely, (1) lead times, (2) policy vs. funds, and (3) flexibility. At the conclusion of General Wilson’s remarks, Secretary Wilson said that it was perfectly clear to him that we were not going at this problem in the right way. We were getting involved in a lot of trouble as a result of requests from the field for programs of military assistance at least twice as large as we were going to attempt to carry out. These programs outlined in the field must henceforth be more accurately tailored to what is available in the United States to finance them.

Mr. Dillon Anderson then called on Mr. Hollister for the presentation by the International Cooperation Administration of the ICA program of non-military assistance to friendly foreign nations. Mr. Hollister stated that the presentation on these programs would be given by Mr. John B. Ohly of the ICA. Again with the use of charts, Mr. Ohly covered first the subject of ICA programs by area, including FY 1956 appropriations and the FY 1957 proposed program. His second topic covered non-military programs by area. This, said Mr. Ohly, was designed to illustrate trends in these programs. The subject covered all obligations through 1955, the program for FY 1956, and the program proposed for FY 1957. Thirdly, Mr. Ohly covered what he described as the high-cost programs for FY 1957. He explained that six countries—namely, Korea, Indochina, Turkey, Taiwan, France and Pakistan—accounted for something over 50% of the total assistance costs undergone by the U.S. assistance programs.

Thereafter Mr. Ohly said that he would like to analyze the programs in some detail for two or three significant countries, to illustrate how programs were developed to accomplish U.S. objectives. Mr. Ohly first described Korea, which he said was in a sense the most difficult case, thanks to a combination of many problems. Nevertheless, Korea was like these other countries in that the programs there indicated that the United States was making no progress whatsoever in getting the load off its own back and directing Korea in the path of future stability and self-support.

Mr. Ohly said he would next turn to a quite different type of problem, illustrated by India. For that country we were proposing in FY 1957 a total program involving about $81 million, of which approximately $10 million would be for technical assistance; the remaining $70 million of developmental assistance was designed to help carry through India’s second five-year plan. The big problem for India, explained Mr. Ohly, was the tremendous foreign exchange gap between the $1 billion of foreign exchange available to India and the several additional billions which would be required to complete successfully this second five-year plan. The purpose of our program was to help bridge the gap.

At the conclusion of Mr. Ohly’s presentation, the President said he had a question to address to Mr. Hollister with respect to India. Did Mr. Hollister think that the United States should, for its own good, spend more than the proposed $71 million for economic assistance to India? Mr. Hollister replied that he did not think so, although he said there were two schools of thought on this issue within the Administration. The President said that he felt that it was clearly to the security advantage of the United States to have certain important countries like India strong enough to remain neutral or at least “neutral on our side”. For one thing, such neutral countries were less exposed to attack by the Communists. Secretary Dulles pointed out that had Korea been stated to be a U.S. ally, it was very unlikely that Korea would have been overtly attacked by the Communists.

Mr. Hollister then said that he would like to make a few general observations with respect to the assistance programs for which the ICA was responsible. It seemed obvious, said Mr. Hollister, that the United States cannot do more by way of extending assistance than we have money available for that purpose. The prime problem, therefore, was the problem of priority. Military and economic assistance programs were closely intertwined and interdependent, but the entire resulting program was of enormous magnitude. The U.S. Ambassadors in particular foreign countries, not to mention the local authorities in these countries, were all pushing as hard as they could to get the assistance programs for these countries carried through to their conclusions. In point of fact, however, there was simply not enough money available to carry out all these programs. The problem remained of what we should spend and how much assistance we can afford to give.

Among the special problems he wished to single out, Mr. Hollister mentioned the problem of providing economic and budgetary support to countries which were unable with their own resources to maintain military establishments at the required levels. Such economic support programs were of course necessary. We cannot forever stay on the defensive, and this economic aid helped us to take the offensive in various countries so that they could make progress in the direction of the goal of standing on their own financial feet. In many countries, however—notably in Korea—it required all the money that the United States could pour in by way of assistance, simply to enable Korea to stand still and not recede into worse economic difficulties. Accordingly, Mr. Hollister again stressed the need for a study of the type of problem illustrated by Korea. In such countries we had no option but to reduce our sights or else to increase our expenditures if such countries were ever to be in a position to stand on their own feet.

Mr. Hollister then said that there was also need of an over-all study of where the United States was going in the field of assistance to the underdeveloped countries of the free world. If their problems were to be met successfully, a very different solution would have to be sought than the solution in Europe achieved by the Marshall Plan. Marshall Plan aid would simply not work in the underdeveloped areas of the world as it had worked in highly industrialized Western Europe. Accordingly, a different approach must be studied, and this approach was made the more urgent because of the recent Russian maneuvers in the field of economic and technical assistance in the Near East and South Asia. Many people were saying that what we needed were new and dynamic programs for these underdeveloped areas. With this view Mr. Hollister said he had complete sympathy, but what kind of programs were actually envisaged? Of one thing he was certain: We could not meet the needs of the underdeveloped areas by simply spending lavishly.

Finally, Mr. Hollister said that he was also in agreement with those who stressed the importance of greater flexibility in the management of our foreign assistance programs and on the desirability of larger contingency funds to meet emergencies which might occur in countries which we were assisting. It was a real question, however, whether Congress could be induced to agree to place more of the funds it appropriated for foreign assistance in the category of contingency funds. Moreover, the countries who were beneficiaries of our assistance programs would not welcome a cut in the funds appropriated for the regular assistance program in order that larger sums could be reserved for unforeseen contingencies.

At the conclusion of Mr. Hollister’s comments, Mr. Dillon Anderson said that the third portion of this review of military assistance and supporting programs would consist of a presentation by the Executive Officer of the Operations Coordinating Board, of the report on “Constabulary Forces in Countries Threatened by Subversion”, prepared by the OCB pursuant to NSC Action No. 1290–d. Mr. Staats summarized the aforementioned report, and concluded with an estimate that it would cost approximately $15 million, in addition to the $50 million now being spent annually on the internal security aspects of the mutual security program, to carry out the objectives set forth in the report.

After Mr. Allen Dulles had spoken briefly on aspects of the internal security program for these foreign countries, … Mr. Dillon Anderson pointed out that the 1290–d study had been considered by the NSC Planning Board. Although the Planning Board had no comments to offer to the Council on the subject, it had taken into consideration this study when it had made its recommendations to the National Security Council on the over-all problem of our military assistance and supporting programs. He then called on Admiral Radford to give the views of the Joint Chiefs of Staff with respect to this study on constabulary forces.

Admiral Radford read from the memorandum which the Joint Chiefs had sent on December 6 to the Secretary of Defense,⁷ giving their views as to the 1290–d study on constabulary forces in countries threatened by subversion. In general, said Admiral Radford, the Joint Chiefs of Staff were in strong agreement as to the desirability of professional police forces in such countries. They believed, however, that the present report conveyed the misleading impression that provision of such internal security and police forces offered a possibility of considerable savings in the military programs for the countries in question. On the contrary, the Joint Chiefs of Staff believed that implementing the proposed program for police and constabulary forces would involve an additional expense.

The President commented that the fact of the matter was that three different parts of the Executive Branch were presently engaged in executing programs to help these threatened countries to maintain their internal security. These three were the Defense Department, … and the ICA. In the light of this situation, the National Security Council had every right to know how effectively these departments were doing the job. The report presented by the OCB did not contain any recommendations on which the NSC was obliged to act, and accordingly the President could perceive no reason why the Joint Chiefs of Staff should have become so excited about it.

Admiral Radford pointed out that the Joint Chiefs would not have been excited had they been aware that no action on this report was contemplated by the Council. Meanwhile, the President went on to express his growing conviction that in many parts of the free world all that the United States could possibly hope to do militarily was to build up strong and stable governments in nations who would be neutral and accordingly on our side. Admiral Radford replied that the great fear of the Joint Chiefs of Staff was that these programs to build up internal security and stability might appear to provide a basis for effecting savings on the military programs designed to prevent these countries from falling victim to outside aggression as opposed to internal subversion.

The President went on to state his firm belief that the provisions in many of our treaties with other countries, to the effect that an attack on one constituted an attack on all, were wise provisions. Nevertheless, we should do everything we can to assist these countries to reach a position where they can help themselves, especially by building up strong internal political and economic stability. The President said that he had in mind the spectacle ….

Mr. Dillon Anderson pointed out that it was thanks to such considerations as the President had emphasized that the OCB report merely called for noting by the National Security Council. Secretary Dulles asked Mr. Anderson whether he was to deduce from this last remark that the study was to be treated as if it were merely academic. For one thing, said Secretary Dulles, there was no clear delineation of responsibility for carrying out programs designed to enhance the internal security of these states threatened by Communist subversion. At the present time such responsibility was divided among a number of different agencies. Secretary Dulles expressed the hope that the Council might at least issue a directive assigning this responsibility to one man or one agency. The President replied that he did not believe that any action by the National Security Council was necessary to assign such responsibility. Mr. Dillon Anderson suggested that the Operations Coordinating Board itself was the obvious agency to coordinate this program. After all, it was the OCB which had made the study.

Mr. Staats said he appreciated the problem which Secretary Dulles had emphasized, and said that the OCB had tried to approach the problem by spelling out in its report the agency or agencies who were responsible for action on this program in each of the 18 countries. He said he also believed that over-all leadership in carrying out this program should be assigned to Mr. Hollister. Mr. Hollister added that a special office had been set up already in the International Cooperation Administration for the precise purpose of providing this over-all leadership.

Governor Stassen expressed the opinion that the NSC might at least contemplate doing more than merely noting the completion of the OCB report on constabulary forces. Might not the NSC also indicate its anticipation that the programs analyzed in this report would be effectively carried out? In reply to Governor Stassen, the President said that when he had originally requested the OCB to make this report, all that he had in mind was need for information on the subject of constabulary and police forces. He had not intended to agree or to disagree with the findings of the report. Responsible agencies exist whose job it was to carry out this program. He accordingly could perceive no need for further action along this line by the National Security Council. Governor Stassen, however, returned to his point and said that in view of the fact that the struggle between the free world and the Communist world was likely to be fought in the future in the area of internal subversion rather than in that of overt aggression, it was more important than ever to pay attention to the problems raised by the OCB report. This might mean that we would proceed to cut down the military force goals which we had set up for countries like Korea, and substitute for them new guidelines more in keeping with the character of the struggle which we were likely to face. The President replied that Governor Stassen’s point was part of a much larger problem. To this Governor Stassen answered that there was an obvious need to indicate clearly that we are shifting to a new form of the long struggle against Communist totalitarianism. The President said that on this point, at least, he couldn’t agree more. Mr. Dillon Anderson said that the recommendations of the Planning Board on the general subject of military assistance certainly touched on the matter which Governor Stassen had emphasized.

Secretary Dulles indicated that he wished to be heard on this subject. He pointed out that the National Security Council had in this report a study which was very thorough, very important, and very enlightening in character. He would therefore like to hope that the Council would not treat the report on constabulary forces as a mere matter of academic interest, but that the result of the Council’s consideration of the report would at least be a greater concentration of effort to achieve a higher degree of internal security in countries exposed to subversion. In short, he hoped that this report would not result in the program becoming a step-child. Secretary Dulles explained that he was not calling for any specific NSC endorsement of the OCB report, but at least some expression of the necessity that some one individual or agency be charged with responsibility for carrying out this program. After Mr. Staats had pointed out again that in each country covered by the study, recommendations had been made by the OCB report as to what agency or agencies should be responsible for carrying out the program in that country, Secretary Dulles said that he would be satisfied if the International Cooperation Agency were clearly charged with over-all coordination of this program. Mr. Allen Dulles said he thought it would be eminently sensible to have Mr. Hollister act as general coordinator of this program.

The President said that this proposal was perfectly agreeable to him; but after all, in the military circles in which he had spent so much of his life, it was normal to expect that after a report was made there were people on hand who were expected to carry out its recommendations. That was the kind of staff work that the President said he had been used to. If the expected action did not occur, some officer or officers found themselves reduced a grade or two.

Mr. Anderson then stated that he thought the point had been reached in the Council’s discussion of the general problem of military assistance and supporting programs, for it to take action on the recommendations of the NSC Planning Board. He accordingly read the first recommendation, which noted the high proportion of U.S. assistance being received by Turkey, Iran, Pakistan, Vietnam, Formosa and Korea, and which suggested that an appropriate group or agency proceed with an urgent study of the assistance programs for these six countries. Thereafter the Planning Board would be directed to review the NSC policies relating to these countries. After he had read these recommendations, Mr. Anderson described the make-up of a new interdepartmental group⁸ which was in a position to make the studies called for and which Mr. Anderson recommended to the Council should be designated to make the studies. Mr. Anderson then read to the Council the terms of reference of this new interdepartmental committee.⁹

The President then asked Mr. Anderson how long the new interdepartmental committee had been meeting. Mr. Anderson replied that the committee had been set up in the first instance last July or August to study the financial situation in Turkey. The President then expressed his approval of the interdepartmental committee, but said he wished to emphasize the need for recognizing that the character of the struggle between the U.S. and the USSR was clearly changing. Accordingly the philosophy behind some of the earlier courses of action in this struggle was likewise changing. The Republic of Korea might constitute an example of what he meant, said the President. In any case, the United States must keep abreast of the changing circumstances in which the struggle against Communism was being conducted. Whether or not we needed studies of these six countries was open to question. It might be better if the National Security Council itself should sit down and talk over these countries. In any event, the guidelines must issue from what the National Security Council thought about the changing situation now represented by the new Russian tactics. After further explanation by Mr. Anderson, the President stated that he had no objection to the proposed interdepartmental committee making its studies, provided there was clear realization of the change in tactics that has overtaken us.

Secretary Dulles said he believed that the studies proposed in the Planning Board recommendation ought to be made. It was important, however, that the interdepartmental committee approach its function with the highest policy considerations in mind. Soviet policy had shifted, as the President had pointed out, but the precise direction of the shift was not yet wholly clear. It is also necessary to realize why the Soviets have shifted, namely, because the free world has found military formulas which have compelled them to shift to less violent and militarily aggressive policies. It should also be borne in mind, however, that the Soviets are really not cutting down the size of their own military forces, and accordingly the United States must be careful not to lower its own military guard lest, after doing so, the Soviets should suddenly revert to their old tactics employing aggressive military force. It was quite possible, thought Secretary Dulles, that it was not necessary to maintain as many as 20 active divisions in the Army of the Republic of Korea. Nevertheless, we must be very careful not to assume that the only danger facing the free world is the danger of cold war.

The President replied that of course he didn’t want extremes, either the extreme of all military and no economic assistance for these countries, or all economic and no military. We should strike a mean and realize that we are playing this game of trying to outwit the Russians on something like a 40-year basis. Accordingly we could not always use the same tactics in trying to win the game. We must be ready to adjust to changes in the situation.

Secretary Dulles commented that the biggest single difficulty that the United States faced in administering its assistance programs was the unwillingness of many of these countries who were beneficiaries of these programs genuinely to rely on the deterrent power of the striking force of the United States. What they wanted were visible military forces on their own soil. We therefore had the problem of educating the peoples and governments of these countries as to the effectiveness of our deterrent force, and to convince them that this deterrent will work even if they have much smaller military forces of their own. This might well, for instance, apply to Korea. Secretary Dulles warned, however, that we could not hastily change the situation in Korea by urging a sudden reduction of the level of South Korean military forces to a point where they would be more nearly supported by the South Korean economy. Sudden action of this sort might well break the morale of South Korea. Secretary Dulles recalled the President’s statement when the first American divisions were called back from South Korea. It had been a fine statement, but it had been very hard “to sell to the Koreans”.

Secretary Wilson counselled building up more reserve divisions in South Korea and reducing the number of active divisions. He cited figures which indicated that the United States was putting into the South Korean economy each year a sum equivalent to the Gross National Product of South Korea. No wonder, he said, there was a 25% inflation in South Korea. We must take a look at this situation, especially in view of the new Russian economic challenge.

The President pointed out that the Russian challenge was not a genuine challenge, inasmuch as it was not the real intention of the Russians to assist the economies of the countries they professed to aid. Nevertheless, it was a very difficult job to meet the new Russian tactics—almost as hard, said the President, as it had earlier been to meet the military challenge.

Mr. Anderson then referred to the views of the Joint Chiefs of Staff in opposition to the recommendations of the Planning Board for a study of the assistance programs in these six countries, but suggested, in view of the hour, that the Council adjourn for lunch and begin its afternoon session with a statement by Admiral Radford of the views of the Joint Chiefs of Staff. This proposal was accepted.

When the National Security Council reconvened at 1:45, Admiral Radford was asked to give the views of the Joint Chiefs of Staff on paragraph 1 of the Planning Board recommendations. Admiral Radford stated that the Joint Chiefs of Staff had had but limited time in which to prepare comment on these recommendations, and that they had not actually been discussed by the Joint Chiefs of Staff. The Chiefs felt, however, that while the studies called for in the Planning Board recommendation might provide certain interesting information, the real difficulty with our military assistance programs emerged from the fact that the level of military forces maintained in these countries derived directly from national security policies of the United States vis-à-vis these countries. Accordingly, the Chiefs recommended against singling out these six countries for special studies.

Admiral Radford then went on to give the Chiefs’ views with respect to the second recommendation of the NSC Planning Board¹⁰ on the subject of greater flexibility and, in particular, the use of a larger contingency fund as opposed to specific appropriations for military and economic assistance. Noting that there was a split in the Planning Board recommendation between the majority proposal, which called for an additive contingency fund of several hundred million dollars, and the proposal of the Budget and Treasury, which would simply earmark a certain proportion of the total funds appropriated by Congress for FY 1957 foreign aid programs, Admiral Radford said the Joint Chiefs of Staff favored the majority proposal with the additive contingency fund. The Chiefs did not believe it wise or feasible to reduce the size of the regular programs through the agency of larger contingency funds, as proposed by Budget and Treasury.

On the subject of the views of the Chiefs of Staff on the first recommendation, Mr. Anderson said that the Planning Board was well aware of the relation between national security policy and the level of forces in these six countries. It was for this very reason that the Planning Board had suggested that after the interdepartmental committee had studied the military and economic assistance programs in these six countries, the Planning Board should review the policies of the United States toward these countries in the light of the interdepartmental committee studies.

Admiral Radford pointed out that the great problem in countries such as Korea, Taiwan and Turkey, was the difficulty of persuading them that their national security could be adequately maintained even if we suggested cuts in force levels when we had initially insisted that these were the minimum levels which were required for the maintenance of security.

Secretary Wilson said that while this was certainly a difficulty, it was essential to do something about the situation in these countries. He agreed with the Secretary of State that the deterrent power of the United States was the real shield for these countries, and he repeated his view that Korea should have 15 regular and 15 reserve divisions rather than the current 20 regular divisions and 10 reserve divisions.

Secretary Humphrey said that whatever the merits of the views of the Joint Chiefs of Staff, he was at a loss to understand why there could be any objection to a study of the military and economic assistance programs of the United States in these six countries. Admiral Radford replied by stating again the Chiefs’ view that most of the information we needed about these programs and the ability of the economies of the six countries in question to maintain them, was already available. He also pointed out that we are reducing our strength in Korea while the enemy is building up his. The Koreans would tend to rely for their national security on such forces as they can actually see on hand and in the field.

The President commented that the real question was whether our national security policies vis-à-vis Korea and these other countries should be looked at once again. He said he believed a review of our policies was clearly in order every time we saw a significant change in the international scene. It was simply a matter of taking a new look, although the President said he must admit that he would hate to have the job of convincing Synghman Rhee¹¹ that he didn’t really need 20 active divisions to protect his country.

Dr. Flemming inquired whether, if these studies should bring us to the conclusion that we cannot change our policy toward these six countries, the military and economic assistance funds we had asked for would prove to be adequate to carry out our existing national security policies. Or were we anticipating changes in policy and reductions in the level of military and economic assistance in calculating the FY 1957 budget requests.

Secretary Wilson replied to Dr. Flemming by stating that it was simply impossible to achieve our current military and economic assistance objectives with funds presently available. It had been a very tough squeeze this time, and we just couldn’t do it. Accordingly, we must either make changes in our policy objectives or else go above the $36 billion level for the Defense Department budget for FY 1957.

Mr. Anderson said that he deduced from the character of the discussion that the National Security Council agreed with the Planning Board’s first recommendation and authorized it to be carried out. The President said that was his idea.

Mr. Anderson then directed the Council’s attention to the second recommendation of the NSC Planning Board, which called for greater flexibility in the provision of military and economic assistance by the United States to friendly countries. He explained the majority proposal, which called for a contingency fund of several hundred million dollars in addition to the specific appropriation for military and economic assistance, and also pointed out the view of the Budget and Treasury that no additive contingency fund should be sought from the Congress, but that, instead, a substantial portion of the total FY 1957 foreign aid funds should be earmarked to form a contingency fund.

Secretary Wilson expressed surprise that the issue of the size and form of the FY 1957 foreign aid program should have come before the National Security Council, inasmuch as he believed that he had already committed himself on this point prior to the meeting.

Secretary Humphrey inquired whether there was any reason in the world why we should not seek greater flexibility in our funding of all our programs. Was there any conceivable objection to greater flexibility? Admiral Radford replied by pointing out that those who were responsible for developing and executing the regular programs for military assistance over a period of years had to know precisely how much money was available to them for each program in each country. This knowledge for planning purposes would be denied to these people if the funds for the regular programs were cut down by the creation of large contingency funds. He predicted that to do so would get us into trouble with various friendly countries where we were carrying out military assistance programs on a basis of continuity.

Secretary Humphrey said he still favored the principle of flexibility, and we should not let ourselves be got into a vise with regard to these assistance programs if the Congress did not force us into a vise by specifying precisely how much could be spent in each country for each program. Admiral Radford said he feared we were already in a vise with respect to many of our programs. Secretary Wilson said our objective should be to keep down our new aid commitments to a very austere basis, and put enough money aside to permit real flexibility. Secretary Humphrey pronounced himself as strongly opposed to any additive contingency fund.

The President reminded the Council that of course they were not discussing the content of the FY 1957 budget. This matter had already been decided. Nevertheless, the President believed that Admiral Radford had emphasized a significant point, namely, that a large proportion of the costs of our military assistance programs in various countries derived from our obligation to provide maintenance and spare parts for equipment which had already been shipped to these countries. Naturally this situation got us into a box, and there would be inevitable inflexibility if the United States was bound to maintain the equipment earlier delivered under military assistance programs. This was why, when he had been Commander in Chief, he had urged the European nations to assume greater responsibility for maintenance and spare parts. This was likewise why he had consistently favored offshore procurement programs.

Secretary Gordon Gray interposed to remind the Council that in discussing the problem of maintenance it should remember that maintenance in the sense of keeping vehicles running was one kind of problem, but that program maintenance was a much larger thing. As for the contingency fund, Secretary Gray said that he strongly supported the views of the Joint Chiefs of Staff in favor of the additive proposal.

Dr. Flemming again inquired whether this discussion had any reference to the FY 1957 budget. He judged, from the wording of the Planning Board’s recommendation, that it must have. Mr. Anderson, however, explained that the budget-making process had probably gone too far to permit the inclusion of an additive contingency fund at this time.

Director Hughes pointed out that ever since he had sat with the National Security Council he had clearly understood that you could not settle on the size and character of a budget if you concentrated your attention on one single item, such as foreign aid. This was especially true with regard to the FY 1957 budget.

The President thought that we should hang on to the existing $100 million provided in the budget for contingencies which might affect the military assistance programs. This was of particular value when the Congress was not in session. If, when it was in session, some unforeseen emergency arose, it was always possible to go to the Congress and ask for additional funds.

Dr. Flemming said that in that case it seemed to him that the principle behind this recommendation of the Planning Board had already been incorporated in the FY 1957 budget. The only remaining question was whether or not $100 million was enough to provide for contingencies affecting the military assistance program. The President said he believed it was enough.

Mr. Hollister advocated an attempt to induce Congress to provide larger discretionary funds at the same time that it cut down on the specific funds to be allotted to the regular assistance programs. He admitted, however, that it would be hard to get Congress to provide very extensive discretionary funds.

The President said that in defense of the views of the Joint Chiefs of Staff on this subject, it should be realized that a military assistance program does not consist only of military matériel and munitions. Such programs have to allow for training and a lot of other things. The military units must be planned and activated on the spot so that they can be ready to use guns and equipment when they arrive. These foreign forces must know, accordingly, what they can expect from us and approximately when they can expect it. If we did not keep our promises we could get into trouble. Accordingly the President did not believe it was practical to follow Mr. Hollister’s proposal of larger discretionary funds and smaller regular appropriations for the military assistance programs. It would be impossible to plan armies on such a basis.

Secretary Wilson said that be was greatly troubled by growing maintenance costs as against the need for having funds to provide new matériel and new weapons to our allies. He was also uneasy because the United States itself had too many men in uniform scattered in too many parts of the world. The Joint Chiefs of Staff recognize this as one of our main problems. The President agreed, and said that of course there was not really a modern weapon in NATO.

Mr. Anderson then asked the Council whether either the majority or the Budget–Treasury proposal on flexibility was acceptable to the National Security Council. The President replied by stating that the second recommendation should be revised and put in very general terms, namely, that the United States should seek maximum flexibility while at the same time recognizing the need for some degree of fixity in developing its military assistance programs.

Mr. Anderson then asked the Council to express an opinion on the third recommendation of the NSC Planning Board, as to the desirability of seeking greater latitude in the granting of military and economic assistance than was currently permitted by existing statutory requirements relating to commitments or policies of the recipient countries. The President replied that he thought everyone present would agree on this recommendation, but that they had all better start hiring their lobbyists to work on the Congress.

(At this point the Secretary of State, who was obliged to leave shortly to make a speech in Chicago, introduced the subject of export controls on trade with Communist China, discussion of which is covered under the next item.)

After discussion of the issue raised by the Secretary of State, the National Security Council resumed discussion of the fourth recommendation of the NSC Planning Board, with respect to the review of military assistance and supporting programs. The Council agreed to accept the fourth recommendation, which consisted of a request that the responsible departments and agencies devise programming, clearance, and allocations-of-funds techniques for military assistance programs aimed at reducing the time-span involved between the initiation of new fiscal year programming and clearance for delivery of the first items to be shipped.

Secretary Wilson commented that the Defense Department was engaged in doing this anyhow, but that no doubt it could be done more effectively.

Mr. Anderson then read the fifth and last recommendation of the NSC Planning Board, which called for a request on the International Development Advisory Board, chaired by Eric Johnston, to review U.S. economic aid programs and to report to the Council through the Director, ICA, on the level and types of economic assistance required in the underdeveloped areas in order best to achieve the long-range objectives of the United States.

Secretary Dulles immediately expressed doubt as to the desirability of Council approval of this recommendation. It seemed to him that the considerations which determined the level and character of our economic aid were matters of high policy involving classified information, and should not, therefore, be farmed out to an outside group which had no responsibility for administering this assistance. Secretary Dulles suggested instead that the study of U.S. assistance to underdeveloped areas be done by the staff of the International Cooperation Administration. If any outside assistance should be needed, the group headed by Mr. Johnston would be useful. The Board could be asked from time to time to give their views on certain specific problems. The Johnston group was advisory in character and not self-starting.

The President said that provided officials in the Government could find time to make such studies as were called for in this recommendation, they were best fitted to do so. But it was sometimes difficult for busy officials to take time out to make such long-range studies.

Secretary Humphrey and Mr. Hollister also expressed concern lest an outside study group come back with recommendations regarding long-range assistance to underdeveloped countries which would be completely out of line with existing U.S. policy and with available funds for such a program. It was particularly likely to be embarrassing if the results of such outside studies became public knowledge.

The President, however, said that we had had pretty good luck thus far with our outside groups, and that they had mostly kept the secrets which had been entrusted to them. On the other hand, the President said he was willing to defer action on this recommendation, and that a decision could subsequently [be] made after discussion with the responsible agency heads. It would probably be OK for this Board to consult with Mr. Hollister as the Secretary of State had suggested.

Secretary Dulles commented that the great difficulty with such problems as long-range assistance to underdeveloped areas, was the necessity of solving them in the light of all the many considerations of policy, It was quite easy to solve them in isolation. Thus the problem of assistance to Afghanistan, while apparently economic, was really largely political in character. For the solution of such problems, Secretary Dulles said, he generally opposed outside groups and committees.

Secretary Wilson said that he agreed with the Secretary of State. We knew, said Secretary Wilson, more now than we know what to do about. (Laughter)

The President, addressing himself to Secretary Dulles, defended outside committees, and spoke very warmly of the services which the Randall Commission¹² had rendered to him and to the Administration. He again insisted that the real question was that of time available to overworked Government officials. Outside groups can often give the requisite time when responsible officials cannot do so. Secretary Humphrey said he believed that the Randall Commission report was largely window-dressing for an Administration policy already adopted. The President, on the other hand, credited the Randall Commission with actually setting forth a new policy in its area of study.

With respect to the problem of availability of time, Secretary Dulles pointed out that the setting up of a study by Eric Johnston’s group would actually constitute a heavy drain on his time rather than saving it. The Secretary of State would have to spend a lot of hours educating the Board if he was to be sure that its final report would not be partial or incomplete.

The Vice President said that if the Director of the ICA could, in accordance with the usual practice, ask Mr. Johnston and the International Development Advisory Board to study certain specific problems and suggest any new ideas to the responsible departments or to the National Security Council, this might be a useful contribution.

Mr. Hollister was then asked to list the membership of the International Development Advisory Board. When he had got part way through the list of its members, Secretary Humphrey interrupted to say that he had heard enough, and that he was still opposed to the use of this Board. The President observed that it looked to him as though those around the table did not wish to make direct use of the International Development Advisory Board as suggested by this recommendation, although of course Mr. Hollister was free to use this group in any manner he himself saw fit. Mr. Anderson commented that this seemed to complete Council consideration of this recommendation, and that there had been “no sale” on this one.¹³

The National Security Council:¹⁴

a. Noted and discussed the subject in the light of:

(1) A statement by the Director, International Cooperation Administration, on the over-all trends of the mutual security program for Fiscal Years 1952 through 1957.

(2) A presentation by the Department of Defense on the military assistance program.

(3) A presentation by the International Cooperation Administration on the ICA program.

b. Noted and discussed: (1) The report of the Operations Coordinating Board in response to NSC Action No. 1290–d, transmitted by the reference memorandum of November 28 and summarized at the meeting by the Executive Officer, OCB; and (2) the views of the Joint Chiefs of Staff thereon, transmitted by the reference memorandum of December 7.

c. Noted the President’s statement that he expected each responsible department or agency to implement its program of U.S. assistance to free world countries vulnerable to Communist subversion in developing and improving the effectiveness of their internal security forces:

(1) Along the lines indicated in the OCB report pursuant to NSC Action No. 1290–d.

(2) In accordance with approved policies.

(3) Under over-all leadership to be assumed by the Director, International Cooperation Administration, pursuant to his responsibility for the Mutual Security Program under Executive Order 10610, dated May 9, 1955.¹⁵

(4) In coordination with other responsible departments and agencies through the Operations Coordinating Board.

d. Discussed the recommendations of the NSC Planning Board on the subject, transmitted by the reference memorandum of November 29, in the light of the views of the Joint Chiefs of Staff thereon transmitted by the reference memorandum of December 7.

e. (1) Noted that a high proportion of U.S. military and economic assistance is received by Turkey, Iran, Pakistan, Vietnam, Formosa and Korea; and that in each of these countries the armed forces (a) do not represent total military requirements, (b) can not be supported by the local economy now or in the foreseeable future, and (c) require U.S. subsidies at an annual cost ranging from $100 million to $1 billion to each of these countries.

(2) Directed the existing State–Defense–Treasury–ICA interdepartmental committee to proceed urgently with studies of the assistance programs for the above-mentioned countries pursuant to its terms of reference set forth in the Annex hereto as read at the meeting, reporting the results of each such study to the National Security Council; and directed the NSC Planning Board, in the light of such studies, to review the relevant NSC policies. It was agreed that such studies and review should not delay preparation and presentation of the FY 1957 budget now in progress.

f. Agreed that maximum flexibility in the administration of the foreign assistance programs, through the use of contingency funds and otherwise, would best serve the security interests of the United States; bearing in mind the necessity for a reasonable measure of continuity in planning military assistance programs.

g. Agreed that in present circumstances, it may be desirable to seek greater latitude in the granting of military and economic assistance than is permitted by existing statutory requirements relating to commitments or policies of the recipient countries; and accordingly request the departments and agencies concerned, without delaying preparation and presentation of the FY 1957 legislative program, to study existing restrictions applicable to their respective programs and advise the Council of the results of such study.

h. Requested the responsible departments and agencies to devise programming, clearance and allocation-of-funds techniques for military assistance programs aimed at reducing the time span involved between the initiation of a new fiscal year programming and the clearance for delivery of the first items to be shipped.

Note: The above actions, as approved by the President, subsequently circulated for implementation by all responsible departments and agencies. The above specific actions referred for implementation as follows:

• c–(3): Director, International Cooperation Administration
• c–(4): Operations Coordinating Board
• e: State–Defense–Treasury–ICA Committee and NSC Planning Board.

[Here follow the Terms of Reference for the Interdepartmental Committee, Document 12 and item 3, “Multilateral Export Controls on Trade With Communist China”. For text, see volume III, page 209.]

S. Everett Gleason

1. Source: Eisenhower Library, Whitman File, NSC Records. Top Secret. Prepared on December 9 by Gleason.
2. Document 6.
3. Document 11.
4. Not printed. The memorandum transmitted two memoranda to the Secretary of Defense from Admiral Radford, dated December 6, concerning military assistance, supporting programs, and constabulary forces in countries threatened by subversion. (Department of State, S/S–NSC Files: Lot 63 D 351, NSC 5525 Series)
5. NSC 5517/1, “Priorities Relative to Pre-D-Day Allocation of Military Equipment,” July 13, 1955, approved by the President, August 11, is ibid.
6. The memorandum of November 28 has not been found in Department of State files. It transmitted to the NSC an OCB report of November 23, entitled “Report to the National Security Council Pursuant to NSC Action 1290–d.”
7. See footnote 4 above.
8. The Interdepartmental Committee on Certain U.S. Aid Programs under the chairmanship of Deputy Under Secretary of State Prochnow.
9. Supra.
10. Reference is to Majority Proposal No. 2 in the Enclosure to Document 11.
11. President of the Republic of Korea.
12. The Commission on Foreign Economic Policy, composed of both private citizens and members of Congress under the chairmanship of Clarence Randall, was established by President Eisenhower in early 1953 to examine and make recommendations on international economic policy. The Commission presented its Report to the President and Congress in January 1954. Documentation on the Commission’s work and its general impact on U.S. foreign policy is in Foreign Relations, 1952–1954, vol. I, Part 1, pp. 49 ff.
13. The International Development Advisory Board nevertheless submitted a report to President Eisenhower on March 4, 1957, entitled A New Emphasis on Economic Development Abroad (Washington, 1957). It focused on technical assistance and economic development rather than military aid.
14. Paragraphs a–h that follow constitute NSC Action No. 1486. (Department of State, S/S–NSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council, 1956)
15. Executive Order 10610, “Administration of Mutual Security and Related Functions,” May 9, 1955, is printed in 20 Federal Register 3179, and in Department of State Bulletin, May 30, 1955, p. 889.