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

99. Memorandum From the Chairman of the Council on Foreign Economic Policy (Dodge) to the Deputy Under Secretary of State for Economic Affairs (Prochnow)¹

Washington, February 29, 1956.

SUBJECT

• Modification of East-West Trade Controls

You have asked how soon a meeting of the Consultative Group might be called to consider the subject of modifying CHINCOM Trade Controls, as proposed by the British and discussed at the time of Prime Minister Eden’s visit.

Acting under the terms of the memorandums of discussion, an intensive study has been made of the items on the differential list submitted by the British, to determine the implications, at home and abroad, of any changes in the control status of each of these items. This determination is fundamental to any proper consideration of possible changes and subsequent Group negotiations with respect to them. The report is due March 1st. Based on this analysis and appraisal, possible modifications then will be considered, item by item.

Under any circumstances, it would be essential that any positions taken by the United States receive adequate and careful consideration. But, unfortunately, in this instance, there is serious complication in addition to the usual problem of determining the facts and an internally agreed U.S. position.

Since the general announcement that such a modification would be considered, it has been under almost continuous public criticism. In the Congress there has been an attack on the general revision of controls of exports to the Soviet Bloc put into effect on August 16, 1954.

Recent evidence can be found in a speech by Senator McClellan on the floor of the Senate, Thursday, February 23, 1956, reported in the Congressional Record of that date at page 2771. He spoke on East-West Trade, and criticized the relaxation of trade controls that occurred in August 1954, based on executive and public hearings of the Senate Permanent Investigating Subcommittee, of which he is Chairman. The Chairman of the Armed Services Committee² and other members of that Committee participated in the discussion. The Committee investigation is continuing.

For this reason, and at this time, any position the U.S. may take on the proposal must receive especially careful consideration.

I believe that too hasty or ill-considered action could be used to embarrass the Government program of assistance to other nations, not yet approved by the Congress. And, under these circumstances, I further believe the U.S. position will have to be that we can agree to a date for a Consultative Group meeting only when every aspect of the U.S. position has been developed and considered in terms of the need for a complete and successful public and Congressional justification.³

Joseph M. Dodge

1. Source: Department of State, Central Files, 460.509/2–2956. Secret.
2. Richard B. Russell (D.–Georgia).
3. On February 29, Prochnow forwarded a copy of this letter to Dulles with a brief covering memorandum. (Department of State, Central Files, 493.009/2–2956)