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

209. Memorandum of Discussion at the 265th Meeting of the National Security Council, Washington, November 10, 1955¹

Washington, November 10, 1955

[Here follows a paragraph listing the participants at the meeting.]

1. Defense Mobilization Planning Assumptions Applicable to Stockpiling (NSC 5414/1;²NSC 5501, par. 55;³ Memo for NSC from Executive Secretary, subject: “Defense Mobilization Planning Assumptions Applicable to the Stockpiling Program for Strategic and Critical Materials”, dated September 27, 1955; Memos for NSC from Executive Secretary, same subject, dated November 2 and 9, 1955⁴)

Mr. Dillon Anderson briefed the National Security Council, and explained the issues involved in the reference paper. He then called on Dr. Flemming, who had indicated a desire to make a statement.

Dr. Flemming said that he would like permission to make a detailed statement on the problem of stockpile assumptions in order that the National Security Council might proceed to its discussion with a common factual basis. (A copy of Dr. Flemming’s lengthy report,⁵ on which his oral statement was based, is included in the Minutes of the meeting.)

At the conclusion of his formal statement, Dr. Flemming went on to point out that he would now speak bluntly about the implications of the facts and figures he had just given, particularly the domestic political implication of these facts. He reminded the Council that any action it might take with respect to changing the assumptions on which the stockpiles were based, would have to be sent unclassified to the Congress. Problems were bound to be raised by the Governors of the western mining states.

In concluding his remarks, Dr. Flemming expressed the earnest hope that the Administration would never permit the sale of any materials in the stockpile which were in excess of estimated requirements, either for a 5-year or a 3-year war. If the Administration did so, the effect would be to put the United States economy at the mercy of the Executive Branch of the Government. This would be a terrific power, which might readily be abused by some future Administration. In short, the Executive Branch should be denied the authority to dump materials from the stockpiles, no matter what was assumed to be the length of a future war.

Secretary Wilson spoke up and asked whether this last statement meant that Dr. Flemming was never going to correct his mistakes of having bought more materials for the stockpiles than were necessary for fighting the kind of war which we might have to fight.

In reply to Secretary Wilson, Dr. Flemming pointed out that at least as far as the President was concerned, the fact that some of the stockpiles contained more materials than might actually be needed for strictly defense purposes could not be regarded as a mistake. He then referred to the well-known views of the President that the possession of such tangible resources by a nation made a contribution to its well-being and economic health, quite apart from the contribution made to its national security.

Dr. Flemming then expressed his strong personal predilection for doing everything humanly possible to cut back on expenditures in the Executive Branch in order that the budget might be balanced. He insisted, however, that one could cut back expenditures just as effectively under the present stockpile policy, which set objectives on the assumption that a war would last five years, as under the proposed new assumption that the war would last only three years. The desired savings could be effected simply by reducing the amounts of materials to be stockpiled. Accordingly, in Dr. Flemming’s view there was no fiscal issue before the Council, at least as far as stockpile objectives and expenditures for the Fiscal Years 1956 and 1957 were concerned. Moreover, what really worried Dr. Flemming were the severe domestic political implications of changing the objectives of the stockpiles from what would be necessary to fight a 5-year war to what would be necessary to fight a 3-year war. Dr. Flemming asked whether savings would actually result from such a change sufficient to offset the domestic and foreign repercussions. Moreover, did not such a change run counter to the President’s repeated views as to the value to the United States of having a store of raw materials at hand? Lastly, said Dr. Flemming, the President had just requested that a study be made as to the feasibility of bartering surplus agricultural products in return for strategic materials from the Soviet Bloc countries. This proposed policy was presently to be discussed by the Cabinet, and would obviously affect the problem which the National Security Council had before it this morning.

Secretary McKay asked if he might now be excused, in order to make a speech. Before leaving, however, he wished to state his complete agreement with the position taken by Dr. Flemming. Stockpile matters were riding along now in pretty good shape. Rather than make a notable change which would arouse the domestic mining people, he much preferred Dr. Flemming’s proposal simply to cut down on the purchase of certain minerals and metals. As Secretary McKay left, he indicated that Assistant Secretary of the Interior Felix Wormser was extremely well qualified to represent his views.

Acting Secretary of State Hoover inquired about certain of the facts and figures which Dr. Flemming had outlined in his opening statement. As far as Secretary Hoover could see, these figures were based on a technical analysis of stockpile levels estimated on the basis of a 3-year war or a 5-year war, and did not take into consideration the foreign policy aspects of the stockpile problem. Dr. Flemming indicated that the views of the Department of State on the latter subject had been taken into consideration, but that the policy of stimulating production of certain scarce items (in accordance with the Defense Production Act) had not been taken into consideration.

Secretary Wilson said that the assumption that a future war would last five years had originated in 1944 prior to the explosion of the first atomic bomb. He went on to point out that the military requirements under the assumption of a 5-year war were unilateral service requirements which had never been screened by the Department of Defense and were inflated “to beat the band”. The whole problem, therefore, needed thorough reconsideration. At the present time the Air Force was talking in terms of a 60-day war, while the Army based its calculations on a 5-year war. There was a terrible lot of money tied up in this inherited assumption, and the assumption should be studied and changed. Secretary Wilson believed that in its present deliberations the National Security Council should in the first instance consider the stockpile problem on a strictly non-political basis, getting its facts straight first. At an appropriate later time in the discussion the domestic political implications of a change should be cranked in. Secretary Wilson also believed that the Council should realize clearly that if the United States ever got into a nuclear war there would be no business as usual. The U.S. civilian economy simply would not be able to absorb and use the vast quantities of materials stored in the stockpiles.

In replying to Secretary Wilson, Dr. Flemming stated that he too was not very happy about the requirements set by the military for fighting a future war. Nevertheless, he felt impelled to point out that in December 1953, for the first time in the history of mobilization planning, the Department of Defense had given the Office of Defense Mobilization firm requirements figures, even though these were unilateral service figures. Since that date the Joint Chiefs of Staff had developed the Joint Mid-Range War Plan, and this could provide the basis for putting requirements on a sounder basis. Unhappy as he was, therefore, about the requirements, the ODM was obliged to take whatever estimates on the subject were provided to the ODM. Moreover, he added his doubt that the National Security Council could ignore the domestic political aspects of the stockpiling problem.

Secretary Humphrey then stated that in his view this problem was not nearly as complicated as it had been made to sound by the discussion up to this point. The Council should not concern itself about placing contracts with the objective of stimulating the production of scarce items under the Defense Production Act. This was a separate problem and not in the stockpile picture. Nor was the Council talking about the exchange of agricultural surpluses for strategic materials except in the rare cases involving the transfer of cash from the Department of Agriculture to the Office of Defense Mobilization. The Department of Agriculture can go ahead and complete all the transactions it wants of this sort. In essence, therefore, all the Council was concerned with was whether the stockpile should contain sufficient materials on hand to fight a 3-year war or to fight a 5-year war. Secretary Humphrey emphasized that he could see no reason whatever for the assumption that a future war would last five years. To judge from the report of General George’s Net Evaluation Subcommittee,⁶ a likely period for the duration of a general war between the Soviet Union and the United States was sixty days. Either the United States is going to have a Maginot Line or else it is going to fight an atomic war. It cannot operate under both assumptions. Accordingly, in Secretary Humphrey’s opinion, we must stop buying materials for the stockpiles in excess of the estimated requirements for a 3-year war. He added that he was particularly anxious to stop the further acquisition of materials for the long-term stockpile in excess of the materials estimated to be required for a 3-year war. He did, however, state his emphatic agreement with the position taken by Dr. Flemming, that we must never let any materials out of the stockpiles and onto the market. If such a practice were permitted, the Executive Branch could control our free economy.

Secretary Wilson said he was inclined to take issue with Secretary Humphrey’s last remark. In certain circumstances it might be desirable for the Government to sell materials out of its stockpiles. However, Secretary Humphrey insisted that at the present time there are no excess materials in any of the stockpiles which could be sold. On the other hand, if we keep on buying for the stockpiles, they would soon be in excess of their objectives, and it was for this reason that he was so strongly opposed to further acquisition for the stockpiles. With respect to contracts now in force, the policy proposes that where the stockpiles have achieved their objectives such contracts may be cancelled if three conditions are met: (1) that the cancellations can be effected at only nominal expense to the Government; (2) that the cancellations will have no detrimental effect on our foreign policy; and (3) that the cancellations can be made without detrimental effect on the U.S. mobilization base.

Secretary Humphrey then proceeded to read to the National Security Council his proposed revision of paragraph 4 of NSC 5414/1, as follows:

“No additional strategic and critical materials in excess of three-year objectives should be purchased for the stockpile except to complete existing contracts which cannot be cancelled at relatively nominal cost, and without detrimentally affecting either the domestic mobilization base or U.S. foreign relations.”

Secretary Humphrey concluded with the statement that if we limited ourselves to the above policy we would begin to put a stopper on something that is about to run wild. There was, in fact, no excuse for any purchasing over and above that estimated on the basis of a 3-year war.

Secretary Wilson suggested that the proposed revision by the Secretary of the Treasury might be more acceptable if the words “at this time” were inserted after the word “purchased”.

Secretary Humphrey said that he was opposed to Secretary Wilson’s suggestion. Moreover, he expressed the view that this meeting of the National Security Council ought not to try to make a final decision. Instead, its deliberations should be submitted to the President for decision. Secretary Wilson added his own view that the President was completely wrong in his theory that a nation could never go wrong by accumulating large stores of raw materials. Furthermore, continued Secretary Humphrey, the present period constituted a very good time to make the shift from the 5-year to the 3-year basis for computing stockpile objectives. At the present time there was virtually no pressure at all by industry to induce the Government to make purchases for the stockpile. On the other hand, such pressure was sure to come at some later date. Accordingly, he would like to see this door closed before we get ourselves in a position where the Government is subsidizing industry through the use of the stockpile.

Dr. Flemming observed that as far as the long-term stockpile policy was concerned, the President had issued to him a very firm directive. Changing the objectives from a 5-year to a 3-year basis would have very little effect from the point of view of this directive. What the President had told Dr. Flemming in the directive was to compute the long-term stockpile objectives on the assumption that all foreign sources of supply, outside of Canada, Mexico, and the Caribbean countries, could not be counted upon in the event of war. It was this assumption, rather than any assumption as to the length of a future war, that accounted for the expenditures rate and acquisition of materials for the long-term stockpile.

Secretary Humphrey requested Dr. Flemming to state explicitly just what materials in the long-term stockpile were at the present time in insufficient quantity to permit the country to fight a 5-year⁷ war. Secretary Humphrey doubted if there were many such items, and insisted that the long-term stockpile be operated on the same 3-year basis as the minimum security stockpile. In point of fact, he said, this is the whole issue now before the National Security Council.

Dr. Flemming replied that at least he could say that the National Security Council would encounter no particular difficulty in formulating a purchasing program for the stockpiles during the Fiscal Years 1956 and 1957, except perhaps in relation to the problem of stimulating production under the Defense Production Act.

Secretary Humphrey agreed with Dr. Flemming, and then said that he would like to see us start with the assumption that all resources would be denied the United States except from North America and the Caribbean countries, and then proceed to see what contracts for materials for the long-term stockpile could be cancelled because the objectives for these materials had been achieved on the basis of a 3-year war. In short, he wished to see precisely what materials were lacking for the prosecution of a 3-year war.

The Vice President commented that if the change from a 5-year to a 3-year basis for computing stockpile objectives were made with a lot of fanfare, the Council could be sure that this course of action would cause severe domestic political repercussions. He did agree, however, with Secretary Humphrey that it would be a highly useful exercise to get down to specifics and to make a determination of what precisely would be involved if we made a change from the 5-year to the 3-year basis. Only as a result of knowledge of specifics would we be able to estimate the effects, foreign and domestic. The Vice President added that he thought there might be an advantage if the Council, instead of deciding to shift from the 5-year to the 3-year basis, should decide on a policy which stated that we would work gradually toward the 3-year basis.

Secretary Wilson said that as far as the whole problem was concerned, he would simply rather use some of the money devoted to stockpiling to disperse and make more secure our SAC bases. The Vice President then called on Admiral Radford.

Admiral Radford noted that the problem of stockpile objectives went back at least as far as 1944. As late as July 1954 the Joint Chiefs of Staff had reiterated their position that the national stockpile should be sufficiently large to cover four years of general war. They had offered no views at this time on the current policy problem because of their view that the stockpile problem was a good deal larger than the specific issue of the probable duration of a future war. Nevertheless, the Joint Chiefs of Staff had asked him to make clear to the Council that as far as they were concerned, mobilization planning was not currently based on any assumption whatever as to the length of a future war. The Joint Chiefs of Staff did not know what an atomic war would be like, although they felt that if we had reserves for six months the country would be reasonably safe.

Admiral Radford then said that there was another very important issue that was causing a great deal of trouble for the Joint Chiefs of Staff and the Pentagon generally—namely, that our national policy objectives in the event of general war had not been clearly stated. In particular, the current paper on this subject fuzzed up the question of whether or not the United States would use atomic weapons in a future general war.⁸ It was essential that this issue be faced and resolved. Secretary Humphrey interrupted to express the heartiest agreement with Admiral Radford, who went on to state that the Joint Chiefs of Staff were inclined to feel that computation of stockpile objectives on the basis of three years of general war would probably be ample, particularly if we cranked in an estimate of bomb damage. Admiral Radford concluded his report on the views of the Joint Chiefs by stating their feeling that the most important effect of any action taken to change the basis for the national stockpile policy would be the effect of such a change on the allies of the United States.

Secretary Humphrey asked Admiral Radford what the Chiefs meant, and Admiral Radford explained that the political and economic problems which would be raised for our allies if we suddenly curtailed purchases of raw materials from them for the stockpile, would inevitably have repercussions on the U.S. military situation vis-à-vis our allies. Secretary Humphrey said that he thought that the language of the proposed change covered this point, since no existing contracts were to be cancelled if such cancellation detrimentally affected U.S. foreign relations.

Admiral Radford said that in any case he would say that if considerable savings could be made as a result of a shift from a 5- to a 3-year basis for the stockpiles, such savings would be enormously helpful in terms of the over-all U.S. military program, which was bound to cost more and more money in the future.

The Director of the Budget stated that the problem of financing the stockpile policy for the Fiscal Years 1956 and 1957 could be handled as a practical matter without any difficulty under either the 5-year or the 3-year assumption. On the other hand, for the years beyond FY 1957 the 3-year assumption would be much more desirable. It was in these future years, and not the present years, that considerable savings would be realized if we shifted from the basis of a 5-year war to a 3-year war.

Dr. Flemming commented that as far as he could see, Mr. Hughes’ remarks amounted to inquiring why we should stick out our necks at this time by coming to a formal public decision to shift from the 5-year to the 3-year basis, when the amount of saving we would realize over the next couple of years was going to be so very small. Instead of changing the assumption from five years to three years, Dr. Flemming believed that the proper procedure was to decide the amounts of materials we wished to stockpile on a strictly case-by-case basis.

Secretary Humphrey explained that he was opposed to this ad hoc treatment. All it meant was that we were passing the buck to another fellow who would be in a much tougher position than Dr. Flemming was now to make the decision. What we wanted to do, said Secretary Humphrey, was to stop adding anything more to the long-term stockpile on the basis of the assumption that war would last five years. For the most part, the objectives of the long-term stockpile had been realized.

Secretary Hoover said that he wished to make two points for the record. In many places around the world, purchases of raw materials for the stockpile were made with the sole objective of bolstering the defense of the United States. It was for this reason, for example, that we were purchasing Turkish chrome. The second point, continued Secretary Hoover, was that the Secretary of State was inclined to believe that what the United States faced in the future was the possibility of peripheral limited wars rather than a general war involving an attack on the continental United States. If the Secretary of State were correct, and we faced a number of peripheral wars in the future, the drain on our resources would be very great. This provided strong justification for the extensive stockpiling of raw materials.

After further discussion, The Vice President said that while he was certainly no authority on the stockpiling problem, it seemed to him that you could make very good arguments in favor of the proposed change from the 5- to the 3-year basis, or for reaffirming our present policy. On the other hand, the resources of the United States were not unlimited, and we must select and choose the objectives which we believed to be most important for the defense of the United States.

Dr. Flemming again argued for the wisdom of a case-by-case approach to the various materials in the stockpile, rather than a blanket change from the 5-year to the 3-year period for estimating stockpile objectives. Secretary Humphrey likewise reaffirmed his opposition to this proposal, although he now said that he was willing to agree to the insertion of the language proposed by Secretary Wilson, viz., the phrase “for the time being”.

The Vice President wondered whether it would be a fair approach for the Council to propose a policy which would affirm the 5-year basis for the computing of stockpile objectives where this longer basis was required by reason of foreign policy and mobilization base requirements. Otherwise the stockpile objectives would be calculated on the assumption of three years of general war.

After further discussion, the Council requested, and Dr. Flemming undertook over the next few weeks to make, a report on the effects of using an assumed period of three years, as compared with five years, for both the minimum and the long-term stockpiles. Secretary Humphrey commented that if such a study were made the problem would solve itself.

The National Security Council:⁹

a. Discussed the subject in the light of the reference memoranda.

b. Requested the Director, Office of Defense Mobilization, to study and report upon the effects, both in the immediate future and subsequent years, of using an assumed period of three years, as compared with five years, for (1) the minimum stockpile and (2) the long-term stockpile; assuming that existing contracts will be completed which cannot be cancelled at relatively nominal cost, and that actions arising from the use of the new base period should avoid detrimental effects upon either the domestic mobilization base or U.S. foreign relations.¹⁰

c. Noted that the Office of Defense Mobilization would meanwhile prepare its budget estimates relating to stockpiling programs for Fiscal Years 1956 and 1957 so that programs based on the existing policy in paragraph 4 of NSC 5414/1 will result in budget estimates which will not vary significantly in total from estimates using an assumed period of three years, as opposed to five years, for such programs.

Note: The actions in b and c above subsequently transmitted to the Director, ODM.

[Here follows discussion of the remaining agenda items.]

S. Everett Gleason

1. Source: Eisenhower Library, Whitman File, NSC Records. Top Secret. Drafted by Gleason on November 11.
2. NSC 5414/1, “Defense Mobilization Planning Assumptions,” April 30, 1954, is not printed. (Department of State, S/P–NSC Files: Lot 62 D 1, NSC 5414 Series)
3. NSC 5501, “Basic National Security Policy,” January 6, 1955, is scheduled for publication in volume XIX.
4. None printed. (Department of State, S/P–NSC Files: Lot 62 D 1, NSC 5414 Series) All are covering memoranda that transmitted to the NSC reports and recommendations of, respectively, the ODM Director, the Planning Board, and the Department of the Treasury.
5. Not found in Department of State files.
6. Not printed.
7. A marginal notation on the source text at this point reads “?3”.
8. Reference is to NSC 5501, January 6, 1955, scheduled for publication in volume XIX.
9. Paragraphs a–c that follow constitute NSC Action No. 1471. (Department of State, S/S–NSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council, 1955)
10. This report was sent to the National Security Council by James S. Lay under cover of a memorandum of January 6, 1956, and was presented in summary form during the Council’s meeting on January 12, 1956; see Document 212. A copy of the ODM report and Lay’s memorandum of January 6 are in Department of State, S/P–NSC Files: Lot 62 D 1, NSC 5414 Series.