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

212. Memorandum of Discussion at the 272d Meeting of the National Security Council, Washington, January 12, 1956¹

Washington , January 12, 1956

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

1. Defense Mobilization Planning Assumptions Applicable to Stockpiling (NSC 5414/1; NSC 5501, par. 55; 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, 1955, and January 6, 1956;² NSC Action No. 1471³)

Mr. Anderson briefed the Council on the prior history of its consideration of the reference item (copy of briefing note filed in the minutes⁴ of the meeting). In the course of his briefing he explained the split recommendation which had come to the Council from the NSC Planning Board. The majority of the members of the Planning Board recommended that NSC 5414/1, on stockpiling planning assumptions, should be revised to indicate that, with respect to the minimum stockpile of strategic and critical materials, the planning assumption for the achievement of the stockpile objectives should be changed from a period of five years to a period of three years. The so-called long-term stockpile could be computed on a longer but lower priority basis so as to take account of other than the minimum requirements for general war. Contrary to this recommendation of the majority of the Planning Board was the recommendation of the Treasury and Budget members of the Planning Board, who recommended that 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. Mr. Anderson also briefly summarized Dr. Flemming’s report to the Council called for by the Council at its previous discussion of this subject and titled “Effects of a Change in the Stockpile Planning Period from Five Years to Three Years” (copy filed in the minutes of the meeting).

Before Mr. Anderson had completed his briefing of the Council, the President interrupted to state his conviction that there could be no possible objection to keeping the five-year planning assumption on the length of a future general war as a guide for stockpile objectives, provided the materials deemed requisite for a war lasting three years were accorded priority in procurement. The President went on to explain his view that we would make money on this kind of a deal when we were in a position to buy commodities for the stockpile when they were relatively cheap—that is, by having recourse to selective buying for the stockpile. For our policy to state simply that from now on we were going to purchase for the stockpile only on the basis of an assumption of a three-year war⁵ was, according to the President, simply “nuts”.

In support of the President’s position on the preservation of the five-year basis for the stockpiles, the Secretary of State reminded the members of the Council that in the State of the Union message the President had called for an exchange of U.S. agricultural surpluses for non-perishable hard goods. In view of this statement it would be very unfortunate to change the policy on the stockpile in the National Security Council at this time.

Secretary Wilson said that while he was all in favor of measures which would assist in stabilizing markets, this was separate from the problem of stockpiling materials against the possibility of a future war. With respect to the strictly military aspects of the stockpiling program, Secretary Wilson said there were strong arguments against maintaining the five-year basis. Retention of the five-year basis, he pointed out, would certainly involve adverse influences on our military plans, which were all geared to the assumption that a future general war would not last longer than three years. It would be unfortunate if there were one planning assumption with respect to stockpiling for a future war and a quite different assumption with respect to the length of the war for every other phase of our military planning.

The President replied pointedly to Secretary Wilson that the mere fact that we were striving to get sufficient raw materials in the stockpile to see us through a war which might last five years, provided no excuse whatever for fabricating ships and guns on the assumption that a future war would last five years. These were quite different problems and fields of planning. There ensued an exchange of views on this point between the President and Secretary Wilson. In the course of this exchange Dr. Flemming reminded the President that at an earlier discussion of this subject the President had specifically informed Admiral Radford that he was not to use a five-year planning assumption as the basis for JCS formulation of our military plans for carrying on a war.

In concluding this exchange of views, the President asked the National Security Council to imagine a situation in which the United States had actually won a thermonuclear war. With so much destruction heaped on the country and with our ports in ruins, it might well be a matter of three or four years before the United States was once again in a position to import the raw materials of which it had need from foreign sources. Indeed, having these raw materials in the stockpile constituted a kind of insurance for the United States, and it was particularly advantageous to obtain these needed raw materials at a time such as the present, when the country was loaded down with surplus perishable goods. He again insisted that stockpile assumptions as to the length of a general war could readily be separated from the assumptions which were to guide our military planning in the strictest sense of that word. Finally, said the President, he could not forbear to state that those who argued that a future thermonuclear war would be won or lost in a period of thirty days were crazy. A modern war is not going to be won simply by destroying the enemy’s cities.

Secretary Humphrey then asked the President if he could be allowed a certain period of time to state his view. The President agreed, and Secretary Humphrey began to state his view. He said he believed that there was a lot of confusion surrounding the Council’s discussion of the stockpile policies. We dealt too much in broad generalities. Instead, we should actually look at the facts and figures. He was here referring, he said, to figures on the stockpile which had been supplied to him last evening by Dr. Flemming (copy filed in the minutes of the meeting). In looking at these figures the first distinction to be made was between items acquired for the stockpile which are produced in this country and on this continent, and items which are produced abroad. As for the latter materials, there was no particular difficulty involved in acquiring them in exchange for our surplus perishable materials. Items thus acquired from abroad would not overhang our own markets and have an adverse effect on the domestic economy, but this was only a small part of the problem. In the second place, it would be desirable now to see what these figures said about the status of the minimum stockpile of critical and strategic materials. Of the items in this stockpile there are only four or five which were actually produced in this country or on this continent, and in each case only relatively small amounts of such materials remained to be acquired to complete stockpile objectives. Accordingly, the minimum stockpile likewise presented no serious problem.

Turning to the long-term stockpile, Secretary Humphrey pointed out that if it were calculated on the basis of the requirements for a three-year war, there were very few items which would have to be imported from overseas. Moreover, on the same three-year assumption, there would not be very much which would have to be bought for the long-term stockpile in this country.

Secretary Humphrey then warned the Council of the dangers involved in buying too much for the stockpiles as a means of easing the burden of our agricultural surplus and in order to assist agriculture in this country. It might well turn out that, by use of the stockpile to assist our agriculture, we would end up by ruining our mineral industry. If you gave an administration an unwarranted right to acquire indefinite amounts of minerals and other items for the stockpile, you were in effect handing such an administration the equivalent of a despotic power over the United States economy. Naturally such powers would not be abused by the present Administration, but a different administration might seek to take advantage of these opportunities.

When all was said and done, concluded Secretary Humphrey, it was the long-term stockpile, whose objectives were calculated on the assumption that a future war would last five years, that offered the Council the only problem of real significance. Of the items in this stockpile, about half were or would be acquired in this country and half from foreign sources. Moreover, copper accounted for half the total figure in the long-term stockpile. This large domestic industry should be protected from the unfortunate effects of government interference or subsidy by use of the stockpile. The remaining items in this stockpile did not present serious problems.

With respect to Secretary Humphrey’s warning of the dangers to which the U.S. copper industry might be exposed if it were in effect subsidized by the Government through large purchases for the stockpile, the President pointed out that the zinc and lead industries in the United States had been helped in a period of dire distress by Government purchases of zinc and lead for the stockpile. In the course of a lively exchange between the President and Secretary Humphrey on this issue, Secretary Dulles broke in to point out that had we not recently purchased considerable amounts of zinc and lead from Mexico, our relations with that country might have deteriorated almost to a breaking point. Secretary Dulles invited Secretary Humphrey’s attention to the importance of the foreign policy aspect of our purchases for the stockpile.

In reply to Secretary Dulles, Secretary Humphrey said that if we were proposing to subsidize industries for foreign policy purposes or otherwise to help our foreign friends, we owed it to the Congress and the people to tell them the truth about the matter and not to cover up by saying that we are purchasing foreign materials for a stockpile as insurance against a future war. If the Council was really concerned only with acquiring stockpile items as insurance against a future war, there was very little indeed for the Council to talk about. What was left to be acquired amounted to a very small figure.

The President recollected various occasions in the past when he had been troubled by serious shortages of strategic and other materials. He said he believed that Secretary Humphrey’s views on the value of stockpiled materials was rather shortsighted. He insisted, as he often had in previous discussions, on the real value to the country of these stockpiled materials.

Governor Stassen said that the issues in the argument seemed to him to boil down to the following. Was it or was it not in the U.S. national interest to have on hand a five-year supply of materials in the stockpile? If the war proved to be short, such stockpiled items would prove very useful in rebuilding and rehabilitation after the war. If, on the contrary, the war proved to be long, it was obviously advantageous to have a large stockpile of necessary materials. Accordingly, on balance, Governor Stassen answered his own question in the affirmative as to the desirability of a five-year supply in the stockpiles.

Secretary Humphrey said that he had one last point to make. There were rumors going around of an intention to expand the size of the long-term stockpile by as much as fifty percent in order to help relieve the United States of the burden of its accumulated agricultural surpluses. Secretary Humphrey said that he was violently opposed to such a proposal, and that if it were carried out it would put the country in an “awful fix”.

At this point Dr. Flemming said that he would like an opportunity to place certain facts bearing on the problem before the National Security Council. After explaining the figures which he had sent to Secretary Humphrey the previous evening, Dr. Flemming stated that with regard to the question of insulating the stockpiles from the market, he felt that Congress had tied the stockpiles up about as tight as it was humanly possible to do. No sales could be made of materials from the stockpile unless the President of the United States specifically certified that such sales were to be made in the interests of the national defense. Dr. Flemming said that he and Secretary Humphrey were in complete agreement on the wisdom of this Congressional directive.

Secretary Humphrey endorsed the feelings of Congress, but said that he had a vivid recollection of the Blue Eagle days. What would President Roosevelt and General “Iron Pants” Johnson⁶ have cared about what Congress directed if they had decided that it would be advantageous to dump materials from the stockpile onto the market? We would do well to remember that in a year and a half’s time we may well have the New Dealers back in control.

Secretary Wilson said that our difficulties with the stockpile problem were that there were at least three different objectives in our minds with regard to the stockpile. Some wanted it primarily for war insurance purposes, others for foreign policy purposes, and still others for internal economic purposes. All of these objectives were sound, but they were intermingled and confused.

The President said that he was entirely convinced that the biggest trouble which faced the Council when it discussed the problem of stockpiles, derived from the fact that none of the members of the Council had withdrawn into a quiet room and contemplated for a period of time the real nature of a future thermonuclear war. We were simply unequal to imagining the chaos and destruction which such a war would entail. Moreover, the notion that such a war would last for only thirty to sixty days was just about as specious as the idea of a race between himself and Secretary Humphrey to the moon. After the first exchange of thermonuclear blows between the United States and the Soviet Union in any future war, the United States would have to pick itself up from the floor and try to win through to a successful end. In support of this point of view the President cited various wiseacres in the past who had proved to their own complete satisfaction that wars could either not be begun or that, if begun, would last only a short time, because the contestants could not afford to fight long wars. In point of fact, however, this had not been the case in the first and second World Wars, and would certainly not be the case in any future thermonuclear war. The President said he might be nuts in his views on the value of the stockpile, but the recollection was still vivid in his mind of the desperate efforts to get necessary tin, manganese and the like during the dark periods of World War II.

At this point Secretary Wilson said that he was going to take his back hair down and explain to the Council his real reasons for opposing a continuation of the five-year basis for calculating the stockpiles. It was simply that he did not wish to put $500 million into procurement for the stockpile if such a sum had to come out of funds available to him for manufacturing weapons designed to prevent this damned war. Indeed, he continued, General Twining and he were in a few minutes going down to the Hill to take a beating from the committees of Congress with respect to alleged inadequacy of the Defense Department’s weapons procurement policies.

Replying to this argument, the President observed that every member of Congress on the Hill would readily find arguments to throw at the Secretary of Defense if such a Congressman proved to be a partisan in his attitude toward our defense program. In point of fact, said the President, we are now spending roughly $35 billion a year on the defense of the United States, and I say that in the long run if we spend much more than this we will actually reduce rather than enhance our chances of preventing a war. We will do so because we will have aroused genuine doubt, both among our own citizens and among our allies, as to the essential stability of the United States economy.

Turning to Dr. Flemming, the President stated that despite everything said, he would like to have the problem of copper purchasing for the stockpile looked at carefully again. Copper was an industry that produces at home. On the other hand, if we do not buy copper from Chile, Chilean copper would be sold to the Soviet Union. For the time being, at any rate, we should continue to take Chilean copper against the chance of a long war.

Secretary Humphrey wondered at this point whether the Council should not take one more look at the problem of stockpiling, from the point of view of examining all the stockpile items which are, on the one hand, produced in this country and on this continent, and, on the other, are acquired from foreign sources. After such an item-by-item look, the Council would be in a position to decide how to resolve the differences of view. Secretary Humphrey was confident that a way existed to work the problem out which will secure all that we needed against the possibility of a future war without at the same time upsetting our whole national economy.

Dr. Flemming said that he would be very glad to undertake to provide the President with a special report on copper as a substantial domestic industry. He noted, however, that no copper had been bought for the stockpiles for some little time. Turning to Secretary Humphrey in particular, Dr. Flemming reminded him that the setting of the requirements for the stockpile was done by an interagency group. It was essential that the heads of each agency give clear instructions to their representatives on this group if the group were expected to carry out its responsibility.

Secretary Humphrey again repeated his proposal for a specific study of each item in the stockpile, and again assured the Council that if this were done the Council would quickly be able to reach agreement. The President in turn again stated his extreme annoyance with those who entertained the opinion that a future thermonuclear war would last only thirty days and that, accordingly, it was foolish to have any significant stockpile. He likewise repeated his conviction of the desirability of purchasing for the stockpile during periods when the items desired could be procured cheaply. He added his conviction that, to date at least, the Administration had pursued a sound policy course with respect to the stockpile, although he said he was willing to go along with Secretary Humphrey’s recommendation for a case-by-case study of each item in the stockpiles.

Secretary Wilson in turn once more raised his objection to the existence of different assumptions for military planning and stockpile planning for the contingency of a future war. With some warmth the President replied to Secretary Wilson that the only thing we could really know about the nature of a future war was that it would be completely different from any wars fought in the past. About the only sensible plan, accordingly, which could be carried out in the Pentagon would be plans to survive the initial round of thermonuclear blows. For the period which followed this first exchange, there was virtually nothing that could be realistically planned in advance.

Dr. Flemming then inquired from the President whether the best solution of the stockpile problem would not be to leave it that we stay on the five-year-war planning assumption as the basis for procuring items in the stockpile, but actually instruct the Defense Mobilization Board, an interagency committee, to study the desirable rate of procurement of each item in the stockpile. Secretary Humphrey opposed Dr. Flemming’s proposal, and called for a broader approach and a postponement of decision. Dr. Flemming, however, pointed out that this problem had already been kicked around for many months, and that some solution must promptly be reached. He accordingly repeated his proposal and expressed the opinion that it was quite unnecessary to cause a rumpus on Capitol Hill by formally changing the planning assumptions for setting the stockpile objectives from a five-year to a three-year basis. We could achieve the objectives of such a change equally well by slowing down the rate of purchase of materials for the stockpile.

In reply, the President said that while he wanted to establish clearly a system of priorities for acquisition of stockpile materials, he did not wish to drop the present five-year basis. Mr. Anderson pointed out to the President that the view he expressed was almost identical with the majority proposal made by the Planning Board, together with the amendment to this proposal offered by the Department of the Interior. In response to this, the President said he still wished to retain the five-year planning assumption.

Dr. Flemming said that as he understood the President’s desire, it was that the stockpile policy continue to use the five-year-war assumption in setting the ultimate objectives of stockpile procurement, but that the rate of procurement of items for the stockpile should depend on the circumstances.

The President added that we should stick to the letter of the original law setting up the stockpiles. If we did this, we could not go far wrong and we would insulate the stockpiles from the market. Beyond this, there was really not very much that the present Administration could do to meet the Secretary of the Treasury’s worries about misuse of the stockpile by some future President and Congress which was New Deal.⁷ Secretary Humphrey replied that at least we did not have to provide such a future President and Congress with the tools by which they could corrupt the national economy (laughter).

The National Security Council: ⁸

a. Discussed the recommendations on the subject circulated by the reference memoranda of November 2 and 9, 1955, in the light of the report prepared by the Director, Office of Defense Mobilization, pursuant to NSC Action No. 1471–b, circulated by the reference memorandum of January 6, 1956.

b. Adopted the following revision of paragraph 4 of NSC 5414/1, subject to a review of purchase schedules for each material by the Defense Mobilization Board, with a report from that Board to the National Security Council in the case of materials that have a major impact on national security:

“4. General war may last for an extended period up to four years. Although the first few months of conflict may be crucial in determining its outcome, planning for its duration should be based upon all assumptions herein stated, with particular emphasis on paragraph 18. For planning the stockpile objectives for strategic and critical materials, a period of five years may be used. However, only the stockpile objectives based upon the planning period of three years currently used in Military Mobilization Planning should be completed on a priority basis, the remainder of the five-year objectives to be achieved on a longer and lower priority basis. (This language modifies paragraph 55–b of NSC 5501 and should be taken into account in the current revision of that paper.)”

Note: The action in b above, as approved by the President, subsequently transmitted to all holders of NSC 5414/1 and referred to the Director, Office of Defense Mobilization, for appropriate implementation.⁹

[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 January 13.
2. This memorandum transmitted the recommendations of the ODM Director. (Department of State, S/P–NSC Files: Lot 62 D 1, NSC 5414 Series)
3. See footnote 9, Document 209.
4. Minutes of this NSC meeting have not been found.
5. On the source text, “was” is underlined and a marginal notation indicates the correction to be “war”.
6. General Hugh Johnson, head of the National Recovery Administration, 1933–1935.

7. In a diary entry of January 12, Eisenhower wrote:

   “I was amazed at the National Security Council meeting to find some of our people rather bitterly opposed to the plan for continuing build-up in our raw materials reserve. Their fear is inspired by a simple thing—that at some future date the government might, through unwise release of these materials on the domestic market, do untold damage to the American producers of these same items. This to me is specious reasoning. If we have a government, and a Congress, that would be guilty of this kind of action, then there would be little hope for any kind of business in America. Yet the Congress would have to be a party to such action, because the law specifically provides that items from our mobilization stock pile can be used only for emergency purposes.

   “On the other hand, our present stock pile program does seem to me to include a few projects that are unwarranted. One example is titanium; another is the amount of copper we are planning to obtain. I think both of these could be cut back.” (Eisenhower Library, Whitman File, Eisenhower Diaries)

8. Paragraphs a–b that follow constitute NSC Action No. 1498. (Department of State, S/S–NSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council, 1956)
9. A copy of NSC 5501 incorporating the language modifying paragraph 55–b is in Department of State, S/S–NSC Files: Lot 63 D 351, NSC 5501 Series. NSC 5501 is scheduled for publication in volume XIX.