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

20. Memorandum of Discussion at the 290th Meeting of the National Security Council, Washington, July 12, 1956¹

Washington, July 12, 1956.

[Here follow a paragraph listing the participants at the meeting and item 1. The Vice President presided.]

2. Report by The Vice President

The Vice President said that as originally planned, his trip was to be confined to the Philippines.² New responsibilities had been gradually added, so that he had ended up with visits to six different countries, each one of which was an ally of the United States receiving U.S. military and economic support.

In general, said The Vice President, it seemed to him that as far as these allies were concerned the trip had served a useful purpose. He had talked either to the chief of state or to the chief of government in each of these countries, and in no case had the conversation lasted less than two or three hours. He found that the people of these countries were greatly in need of reassurance as to the attitude of the United States. The current confusion with respect to our position on neutralism had caused a great deal of disruption in these allied states. They had got the idea, except in the case of the Turks, that the United States considered it better for the country to be a neutral than to be an ally of the United States. The Vice President had been able to provide reassurance, he said, on this matter, and the people in these governments had responded well to the reassurance. All of them were good, firm, stout people on the side of the United States. In the future, however, we must bear in mind the absolute necessity for a tough, unequivocal U.S. line which would leave no doubt as to where we stood and where these allies stood in our joint resistance to Communism. Any doubts about this, particularly doubts in Asia, could have a catastrophic effect on the entire U.S. position.

Speaking again, he said, on the “plus side”, every single one of the nations that he had just returned from visiting seemed to him stronger economically, politically and militarily than on his earlier visit three years ago. For this happy situation much of the credit was due to the policies which the Eisenhower Administration had adopted and carried out.

[Here follows discussion of the lease of military bases in the Philippines (see volume XXII, page 657), Pakistan, and Cyprus (see volume XXIV, page 378).]

In the remaining portion of his remarks, The Vice President said that he would deal with matters concerning U.S. programs which would be of particular interest to the people around the table. The first of these problems had been particularly well laid out by Ambassador Karl Rankin in Taiwan, though the problem he discussed was common to the whole area and not confined to Taiwan. In essence, Ambassador Rankin’s complaint was that we have far too many Americans in Formosa and far too many conflicting programs. It was Ambassador Rankin’s conviction that, in addition, all these programs must be coordinated under the Ambassador. The Vice President said he was throwing out this statement for what it might be worth, because the reality of Rankin’s complaint was borne out by the situation in practically all the other countries he had visited.

Admiral Radford said that he had brought back the identical impression from his last visit to the Far and Middle East. There were simply too many Americans in all of these countries. Secretary Wilson said that he had been doing his very best to make it clear to the top military man in each foreign country that he must work in closest harmony with the Ambassador. Moreover, added Secretary Wilson, the Defense Department is doing its best to see how many Defense Department officials we can bring back home.

Secretary Humphrey observed that the criticisms made by Ambassador Rankin had been made by everyone who goes anywhere to visit our foreign missions. The problem had been with us ever since the new Administration took over. We had been talking about it insistently, and had done nothing.

The Vice President said he would like to suggest that Ambassador Rankin’s report be considered a pilot study. The large number of American officials was a serious problem. All of these oriental countries have their pride. It was probably better to let them do things their own way, even if they were done less effectively than we Americans would do them. Secretary Wilson commented that the best way to get rid of-these excess Americans was to cut off the flow of money so that they couldn’t go to these foreign areas.

The Vice President said he wished to emphasize one exception to this problem of excessive personnel. The personnel of the Department of State in the areas he visited was in general too scanty. He could not emphasize too much the essentiality of seeing to it that the Ambassador was the boss. After all, the Ambassador must represent the United States in these countries.

Secretary Dulles commented that, as it happened, he, Mr. Hoover, Mr. Murphy and Mr. Henderson had had a meeting on this very topic only yesterday. The International Cooperation Administration planners and groups are practically out of control from a policy point of view. Top decisions as to assistance to foreign countries are, of course, made by State Department officers. But the specific programs are handled by ICA personnel in the field, and these latter often refuse to have any dealings whatsoever with the Ambassador. As a result, there is a lot of boondoggling and very little political supervision in the foreign field. We wondered whether we couldn’t put in a rule that no recommendations from ICA personnel in the field could be sent to Washington for decision until these recommendations had been approved by the appropriate U.S. Ambassador.

The Vice President said he agreed heartily with this thought of the Secretary of State, and supposed this was why the Administration had determined to put ICA in the State Department. Secretary Dulles went on to state that in any event we must get our house in order, for we are about to undergo a Congressional investigation of all our foreign assistance operations. Accordingly, we must be sure that all of these assistance activities are carefully supervised by our Ambassadors, and that we have eliminated excess personnel, and that our programs are designed to achieve some concrete and useful result and not merely to keep certain people busy in foreign areas.

Secretary Humphrey again commented that the Administration had been talking about this problem for nearly three years and as yet had not done a damn’ thing about it. The worst influence of all, he believed, came from representatives abroad of the Department of Agriculture. The banks were also troublesome. What we need, therefore, is some kind of a system designed to accomplish our objectives. The Attorney General commented that if we didn’t get such a system we were going to lose our whole foreign assistance program through Congressional hostility.

The Vice President said he had one more point to make on this subject. The ICA officials repeatedly insisted that they never did anything by way of carrying out programs in these countries unless and until the governments of these countries agreed as to the desirability of these programs. The trouble here, said The Vice President, was that of course any of these foreign governments would agree to almost any program provided the United States paid for it. Instead of this system, it was the Ambassador who ought to talk to the appropriate officials of the foreign government and find out what the country really needed, rather than simply what it was willing to take.

Admiral Strauss said that the ICA was also beginning to parallel his organization, and that this was going to cause trouble in the future for the Atomic Energy Commission. Mr. Peaslee commented that on the basis of his own experience as Ambassador, he heartily agreed with the views expressed around the table on this problem.

The Vice President then turned to the Secretary of State and asked him whether he did not possess sufficient authority in himself to issue orders which would put an end to this problem. Secretary Dulles replied that he probably did have such authority, but it would be more effective if he could secure NSC or Cabinet backing for the necessary reforms. He added that he would come up in a week or so with concrete proposals for consideration by the National Security Council. Secretary Humphrey said that everyone would agree that this was what should be done. Director Brundage added that a practical way to meet this problem would be for the Bureau of the Budget to refuse to provide funds for these programs unless they had received specific State Department approval. Secretary Dulles remarked that Mr. Hollister, head of the ICA, was just as unhappy about the situation as he was, but Mr. Hollister found it very hard to control his farflung organization.

The Vice President pointed out that there are a lot of officials out in the field who have a vested interest in their programs. Some of these were, of course, very competent officials. Others, however, were altogether useless. Secretary Dulles agreed with Director Brundage that perhaps the best thing to do was to fix the situation by cutting off the supply of funds.

The Vice President then added that on the military side also some of our MAAG’s (Military Assistance Advisory Groups) were too big. The military assistance people, as well as the economic assistance people, could profit from a little self-examination. Secretary Wilson commented that there was no question about the truth of this point.

In the matter of our aid programs, The Vice President said that he had one other thought. The political effects of our assistance projects were obviously of great importance. Generally speaking, on the economic side The Vice President felt that we should emphasize big “single shot” projects as opposed to scattered or very long-term projects. In general, the impact of the single-shot projects was much greater locally. Of course, however, the choice is one which requires the exercise of judgment.

The Vice President added that a particularly bright spot was provided by the much improved job being done by the personnel of USIA. An exception to this was Thailand. The USIA man there had been there too long and seemed tired. Mr. Streibert commented that he was aware of the situation.

. . . . . . .

The Vice President said that as his final observation he would comment on the controversy between Nehru³ on the one hand and himself and Secretary Dulles on the other. In this respect, he said, he could not emphasize too strongly that at this time in our history it was extremely important that the United States follow the line which it had long since adopted, and that we not appear to court neutrals and to abandon our allies. We will not gain in the long run by assuming a servile attitude and glossing over the difference between the Communist world and the free world. Our policies of the last three years have been the right policies, and we should continue to carry them out. If we seem to suggest that we think that the Russians have changed greatly in recent months and that there is now no real danger from Communist imperialism, we should be making a fatal error. On the contrary, this is the time to press even harder rather than to relax. Of course, we should continue to court Prime Minister Nehru and the neutrals rather than let them go down the drain. Nevertheless, we should not hesitate to point out firmly and courteously the difference between accepting assistance from the Communist countries and accepting aid from the United States. If we do not make this clear, our friends will gradually have been nibbled away.

The National Security Council:⁴

Noted and discussed a report by The Vice President on his recent trip to the Philippines, Taiwan, South Vietnam, Thailand, Pakistan, and Turkey.

[Here follow items 3–6]

S. Everett Gleason

1. Source: Eisenhower Library, Whitman File, NSC Records. Top Secret. Prepared on July 13 by Gleason.
2. Nixon visited Vietnam, Thailand, Pakistan, Taiwan, and Turkey as well as the Philippines, where he participated in ceremonies commemorating the 10th anniversary of Philippine independence on July 4. Documentation on the visit is in Department of State, Central File 033.1100–NI.
3. Pandit Jawaharlal Nehru, Prime Minister of India.
4. The paragraph that follows constitutes NSC Action No. 1581. (Department of State, S/S–NSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council, 1956)