112. Memorandum of Discussion at the 317th Meeting of the National Security Council, Washington, March 28, 19571

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

1. Review of Basic National Security Policy: U.S. National Strategy (NSC 5602/1;NIE 100–3–57; Memo for NSC from Executive Secretary, subject: “Review of Basic National Security Policy: Proposed Council Agenda”, dated February 19, 1957; NSC 5707;NSC Action No. 1675; NSC 5707/1)2

Mr. Cutler commenced his briefing, pausing to explain the difference of view which had arisen in the Planning Board with regard to the statement of the basic threat to U.S. security in paragraph 1 of NSC 5707/1, reading as follows:

“1. The basic threat to U.S. security is presented by the combination of:

  • “a. The continuing hostility of the USSR and Communist China and their growing military and economic power;
  • “b. The unrestricted development of nuclear weapons systems; and
  • “c. Weakness or instability in critical areas where there is strong pressure for economic or political change.

“Some members believe that the basic threat is expressed in paragraph 1–a; that the development of nuclear weapons systems would not constitute a basic threat were it not for the continuing hostility of the Sino-Soviet bloc; and that the weakness or instability in critical areas, while posing serious problems to the United States, does not constitute a basic threat to U.S. security.”

The President said that personally he found himself in a position half-way between the two sides. Certainly, he said, the fundamental threat to the United States was constituted by the continuing hostility of the USSR and Communist China. However, this fundamental threat was intensified by the considerations in subparagraphs b and c. Secretary Dulles expressed his agreement with the President’s position. He added that hostility to the United States from a militarily impotent nation was a matter of no anxiety. Moreover, if a friendly country developed nuclear capabilities, that wouldn’t worry him very much [Page 447] either. The President ended the discussion by complaining that there was danger that we would be picking nits with boxing gloves; let the text stand as written.

Mr. Cutler continued his briefing (copy of briefing note filed in the minutes of the meeting),3 and apologized for NSC 5707/1 as not being in form or content likely to be very provocative and as calling essentially for a continuation of existing national strategy. He then asked the Secretary of State if he had any views on NSC 5707/1.

Secretary Dulles said he thought the paper was excellent, and that a great deal of information had been compressed into a small space. However, said the Secretary, he was not quite clear on the meaning of paragraph 8.

This paragraph reads as follows:

“8. Disengaging from overseas involvement: This strategy would:

  • “a. Curtail U.S. overseas influence and decrease the visible deterrent.
  • “b. Surrender the initiative.
  • “c. Permit concentration of resources in continental defense and retaliatory capability.
  • “d. Permit the reduction of overseas deployments and bases.”

In response to Secretary Dulles, both the President and Mr. Cutler pointed out that paragraph 8 seemed to call essentially for a “Fortress America” strategy. Still not satisfied, Secretary Dulles inquired whether paragraph 8 actually recommended that we renounce our treaties—such as NATO and SEATO—and otherwise abandon the Free World and our security commitments overseas. Or, on the other hand, was it merely a question of the location of our armed forces? Secretary Dulles went on to say that you could make a very good argument that you did not actually need to station U.S. armed forces in countries covered by SEATO.

The President commented that, as far as he could see, to carry out the alternative in paragraph 8 meant that the United States abandoned everything that it had believed in, and withdrew to the continental United States. Secretary Dulles pointed out that it would be perfectly possible to carry out the courses of action in subparagraphs 8–c and 8–d without abandoning our security commitments to our allies overseas. Indeed, you could carry out these two courses of action under existing national security policy without impairing our worldwide security and political commitments. The President paraphrased Secretary Dulles’ words by stating that the Secretary meant that we could [Page 448] be just as deeply involved morally in Europe as ever, even though meanwhile we had redeployed our forces from Europe to the continental United States.

Mr. Cutler inquired of Secretary Dulles whether he was recommending serious consideration of the courses of action set forth in subparagraphs 8–c and 8–d. Was the Secretary considering the possibility of bringing more of our military personnel back home? Secretary Dulles replied in the affirmative, and the President agreed that this course of action was a good idea when we were in a position to carry it out. He added that a great many of our forces stationed abroad were deployed for political as well as for military reasons.

Secretary Wilson said he had a somewhat different slant on the national strategy problem, and one that was rather hard to express. He wondered if we could state a position along these lines: The United States should make every effort to find a common ground with the Soviet Union, which common ground would be mutually advantageous, “in order to take some of the heat off the world.” In other words, we should not just try to negotiate with the Soviet Union in order to secure advantages for ourselves, but instead try to achieve objectives in negotiation which would be advantageous both to the United States and the USSR.

Mr. Cutler reassured Secretary Wilson that the Planning Board had his point in mind, and that the forthcoming discussion paper on Political Issues would contain an exposition of this point.

The National Security Council:4

Noted and discussed the reference report on the subject (NSC 5707/1) as guidance to the NSC Planning Board in its review of basic national security policy.

2. Review of Basic National Security Policy: National Security Costs in Relation to Total National Resources (NSC 5602/1; Memo for NSC from Executive Secretary, subject: “Review of Basic National Security Policy: Proposed Council Agenda”, dated February 19, 1957; NSC 5707;NSC Action No. 1675; NSC 5707/1; NSC 5707/2)5

Mr. Cutler briefed the National Security Council in very great detail with respect to the contents of NSC 5707/2, and also, in the course of his briefing, covered the series of charts and tables which [Page 449] had been transmitted to the Council in connection with the discussion of NSC 5707/2. (Copies of Mr. Cutler’s briefing note and of the charts and tables6 are filed in the minutes of the meeting.)

At one point in Mr. Cutler’s briefing, the President interrupted to point out, in connection with Chart No. 2 (entitled “Summary of Budget Expenditures by Function,FY 1950–FY 1958”), that in case any members of the Council were looking back with nostalgia to the low levels of defense expenditure just prior to the Korean war, these people should be aware that one of the reasons why the defense expenditures are so high now is because they were so low in the period 1949 and 1950.

When Mr. Cutler had finished his lengthy briefing, he called upon the Chairman of the Council of Economic Advisers.7

Mr. Saulnier proceeded to speak in connection with Charts 7 and 8, entitled “Gross National Product in 4th Quarter 1956 Prices”. He said he would concentrate on the two models set forth in NSC 5707/2 with respect to the two assumptions underlying projections of the budget through Fiscal Year 1961. The objective here was to try to see what lies ahead. Accordingly, Mr. Saulnier explained, with reference to the chart, developments in the event of an uninterrupted growth in the gross national product through FY 1961, and what the situation would look like if allowance were made for an interruption of economic growth beginning in mid-1958 of about the severity of the 1953–54 recession.

In the context of the implications of these projections, Mr. Saulnier pointed out that he hadn’t tried any other models than the two set forth on the chart in paragraph 4 of NSC 5707/2, for one very good reason. What was the point of charting a more serious recession or depression, in view of the fact that the budget outlook is grim enough even under the assumption of the uninterrupted growth of GNP through FY 1961?

Mr. Saulnier recapitulated the budgetary outlook as follows: There was no substantial outlook for improvement in the balance of receipts and expenditures, even assuming uninterrupted growth of the economy.

Mr. Saulnier concluded with remarks directed to paragraph 6 of NSC 5707/2. He said that with respect to the vitality of our economy being enhanced by a tax reduction, he believed that while our economy was carrying today a very heavy load of taxation, the economy was able to bear this burden and, indeed, could carry an even heavier burden if we were willing to a make the sacrifices which would be [Page 450] entailed. This was not to say, he cautioned, that the American economy would not be greatly stimulated if the tax burden could be reduced. It was for this reason that, in the Planning Board discussion of the problem, he had lined up on the side of those in the Planning Board who sponsored alternative 6–a. The case for tax reduction, continued Mr. Saulnier, could be stated in brief as follows: Greater incentives, the release of funds for financing the expansion of the economy, and improvement in our present tax structure, which has many inequitable and awkward features. The best way to eliminate such inequities would be through a tax reduction rather than by efforts to tinker with the existing tax structure.

Mr. Cutler then called on Secretary Humphrey for an expression of opinion on NSC 5707/2 and the charts which had accompanied it.

Secretary Humphrey replied that he thought that all these figures were interesting as an exercise. Nevertheless, they were much more of an exercise than they were a guide to action. He explained that he believed this to be the case because initially what we were trying to do here at this meeting on this problem was to correlate two unknown quantities, the first of which was the magnitude and character of the Soviet threat to the United States. This threat was constantly changing, as were the methods of the United States in attempting to meet the threat. For example, a few years ago the National Security Council had adopted a policy (the new look) which called for a substantial reduction in the level of our armed forces and a substantial redeployment of U.S. forces abroad back to the United States. But nothing had ever really been done to carry out this new look policy.

Secretary Wilson interposed to object and to point out what had been accomplished by the Department of Defense in implementing the so-called new look policy.

Secretary Humphrey then went on to describe the other unknown quantity. No one, he said, could really tell you precisely what the American economy can stand in the way of expenditures over a long-run period. He agreed that we could raise taxes if an actual emergency required this course of action. He could not prove that our present tax levels are now so high as to be certain to harm the American economy if these levels are maintained over a number of years. Nevertheless, he believed this as an article of faith.

Quite apart from all this, Secretary Humphrey insisted that we must take account of the practicalities of the situation. Short of a greatly increased and more obvious threat of war, it was going to be almost impossible for the Administration to avoid a tax reduction over the next couple of years. Domestic politics makes this almost certain. Indeed, only yesterday, on the floor of the Senate, a tax reduction had [Page 451] almost been voted. The reduction had been avoided yesterday, but we are certain to get a tax cut in the United States in the near future unless there is another real war scare.

Secretary Humphrey also warned the Council that if we go back to deficit spending the result would be to impair popular confidence in the Government and turn any mild recession into something a good deal worse. Thus, in summary, none of the sets of figures in NSC 5707/2 and its accompanying charts really proved anything, although we can certainly discern a trend. In the light of the circumstances, the only safe course for the Administration to pursue is to reduce both taxes and expenditures.

Mr. Cutler then invited the Director of the Bureau of the Budget to comment on Annex C to NSC 5707/2, which consisted of projected increases in total Federal expenditures from FY 1958 through FY 1961 which would result if present policies and programs were maintained but no new programs were added. Mr. Cutler commented that the large increase in projected expenditures to carry on existing approved programs had probably been the most startling information coming to the Planning Board in the course of their study of these issues.

Mr. Brundage replied that the budget projections were not “extremes”, but simply forecasts of increasing expenditures under existing approved programs. Since the situation envisaged was so serious, Mr. Brundage expressed the hope that the National Security Council would take action at this meeting to correct the situation. He went on to say that, regardless of the various individual policy directives, the Bureau of the Budget was anxious for each department and agency to come up with budget projections for the next several years which would keep expenditures at a level not higher than the level of FY 1957 or FY 1958. Mr. Brundage admitted that this would be hard for the departments and agencies to do, but said that it would be extremely helpful in achieving a consistent budget policy throughout all the departments and agencies of the Executive Branch.

Secretary Dulles pointed out at once that NSC 5707/2 was a discussion paper only, and not a per [paper] which called for Council action at the present time. Secretary Dulles also noted that there had been an abundance of non-security expenditures figures in NSC 5707/2 and its accompanying charts. The National Security Council should concern itself with these non-security expenditures as well as with expenditures for major national security programs.

Mr. Brundage replied that he had already asked the departments and agencies responsible for other than our security programs to make the budget projections which he had mentioned. He was now asking the departments and agencies responsible for our national security programs to follow suit.

[Page 452]

Secretary Wilson said he agreed with Secretary Humphrey that we were certainly skating on very thin financial ice at the present time. On the other hand, he couldn’t quite bring himself to agree with the idea that we must project present levels of national security expenditures forever into the future.

Secretary Humphrey expressed the opinion that if one looked carefully at the figures showing the yearly increase in gross national product from 1939 to the present, one would find that the increase was almost exactly in relation to the depreciation in the value of the dollar during this same period. Mr. Brundage disagreed, and said that perhaps 50% of the increase in GNP would be accounted for by the depreciation in the value of the dollar. Mr. Saulnier also argued that there had been at least a modest increase in real GNP. Secretary Dulles expressed skepticism that the figures set forth in the paper and in the charts proved that a high level of taxation necessarily deprived the economy of a healthy growth. In certain years the economy seemed to grow most rapidly when taxes were heaviest.

Secretary Wilson thought that the big problem was how to stabilize the American economy in order to avoid either inflation or deflation. He then proceeded to defend the size of the Defense Department budget for Fiscal Year 1958. In accordance with the President’s wishes, Secretary Wilson said, he had tried to keep projected expenditures down to the absolute safe minimum. He had even slashed over a billion dollars from the budget at the last minute. Thereafter, he was suddenly confronted with increased wages for civilian employees of the Defense Department. In addition, there were steady price rises, particularly in steel. This was followed by the Hungary and the Israeli-Egyptian outbreak. Under the circumstances, he had done the best he could.

The President suggested that Secretary Wilson was getting off the question. The question, said the President, is whether expenditures for a machine tool are more useful than expenditures for a tank, so far as a healthy American economy is concerned. Certainly we in this Administration have done our utmost to keep expenditures down. We now feel a certain sense of defeat. Yet no one had ever really suggested to the President any program that he would willingly abandon—schools, medical services, national security, or anything else. Accordingly, the President concluded that the objectives suggested by Mr. Brundage were, for the present, the most we could hope for.

Secretary Wilson said he certainly did not wish to quarrel with his good friend Secretary Humphrey, but he did feel rather defensive about the Defense Department budget. Nevertheless, neither he nor Admiral Radford could see how in the future we could afford to carry out presently-approved Department of Defense programs if we were to follow Mr. Brundage’s suggestion that expenditures through 1960 [Page 453] be maintained at levels no higher than obtained in FY 1957. If this level were to be maintained, we should have to cut or eliminate presently-approved programs.

In reply, Secretary Humphrey said that of course he was not criticizing any single individual. On the other hand, we as a group must realize that we have got to stand for the interests of all the American people against vocal pressure groups of all kinds. These vocal groups, which began in the Roosevelt Administrations, made demands both in the military and the non-military fields and thus pushed expenditures upward.

The President reminded Secretary Humphrey that no Administration programs had been sent to the Congress without the President’s own explicit approval. In many instances he had given his approval to an Administration program simply in order to head off a worse program which would have been formulated by the Congress itself. The President went on to comment about the unhappy situation with respect to the severe Congressional cut in the budget of the Federal Civil Defense Administration. In view of what Congress had done to this comparatively modest program, the President invited the members of the Council to imagine what would happen if an atomic bomb were dropped on Kansas City. Indignation would be furious and bitter because the Government had not adequately protected the civilian population.

The Vice President pointed out that the effect of the present economy drive in Congress was unlikely to mean in the long run a very substantial budget cut—certainly not over $1 billion. Nevertheless, this economy drive would serve to put a brake on enlarged future programs. Accordingly, if we could achieve the objective mentioned earlier by Mr. Brundage, of placing a ceiling on future expenditures, there would be great advantages.

Secretary Humphrey stated that there were two things which the National Security Council should clearly realize before it left this subject. The first was how do we and other nations keep working toward the objective of living together in this world without transforming the world into an armed camp? Secondly, how can we make genuine progress toward disarmament so that the costs of armaments can properly be less? The President commented that we still have not exploited trade as much as we might in finding an answer to the first of Secretary Humphrey’s questions.

Before the discussion ended, the Vice President said he wished to underline one more point. The darkest aspect of the present economy drive in Congress is Congressional insistence on cutting the budget for foreign assistance and for informational and cultural exchange. These, said the Vice President, are the fields for which expenditures should be increased rather than cut.

[Page 454]

The National Security Council:8

Noted and discussed the reference report on the subject (NSC 5707/2) as guidance to the NSC Planning Board in its review of basic national security policy.

[Here follows agenda item 3, “Significant World Developments Affecting U.S. Security”, an oral briefing by Allen Dulles.]

4. Ballistic Missiles Programs (NSC Actions Nos. 1433–a, 1484, 1615–c and 1653)9

Mr. Cutler briefed the Council on the reference problem (copy of briefing note10 filed in the minutes of the meeting). He then called on Secretary Quarles to make his report to the Council.

Using the same charts which the President had seen in Bermuda,11 Secretary Quarles first discussed the Thor (IRBM) program. He indicated the timing and the quantities of missiles which would be involved if Thor were finally chosen as the intermediate range missile. He explained that missiles which would be produced under this program for inventory and actual use would be “peeled off” from the missiles produced for testing. The missiles for inventory would provide nothing more than an initial operating capability. There was an admitted risk, said Secretary Quarles, in the beginning to place into the inventory weapons like the Thor before they were completely tested out, but this was a matter of saving time. The totality of the present program for obtaining an initial operational capability for the IRBM consisted of four squadrons, each squadron containing fifteen weapons.

The President indicated that he clearly understood the program which had been described by Secretary Quarles, who then went on to discuss in a similar fashion the two ICBM programs—the Atlas and the Titan. The initial operational capability for the ICBM was eight squadrons, with ten missiles in each squadron.

Secretary Wilson interrupted to point out the great difficulty at present of trying to decide between the Atlas and the Titan missiles, and why for the present the Defense Department was developing programs for both these missiles.

[Page 455]

The President called for a report from the Department of Defense which would assume reasonable success in both the long-range and the short-range ballistic missile programs. Under this assumption the President asked that a report be prepared which would set forth the military advantages, as opposed to the psychological advantages, which would derive from having these missiles in place of the manned aircraft which would exist at the same time.

Secretary Humphrey said he supposed the President was aiming at what we would feel safe in cutting out if the missile programs proved a success.

Mr. Cutler then invited Secretary Quarles to read to the National Security Council his recommendations for Council action, which Secretary Quarles proceeded to do. The President expressed approval of Secretary Quarles’ recommendations, but directed an addition to these recommendations which would state clearly that if any changes were deemed necessary in the currently-approved program, such changes must be brought back to the National Security Council for consideration prior to being put into effect.

The National Security Council:12

Noted and discussed a briefing by the Secretary of the Air Force on the status of the current plans of the Department of Defense for the Intermediate Range Ballistic Missile (IRBM) and the Intercontinental Ballistic Missile (ICBM), supplementing the second annual briefing on the subject at the 309th NSC Meeting (NSC Action No. 1653).
Noted the President’s approval of the plans presented by the Department of Defense (as outlined in the three charts displayed at the meeting, copies of which are made a part of this Record of Actions in the official NSC files)13 to achieve initial operational capability for the IRBM and the ICBM at the earliest practicable date, in accordance with NSC Actions Nos. 1433–a and 1484, under the following conditions:
These plans shall make use of available Research and Development facilities and production for test purposes, and shall be flexible to the end that missiles earmarked for inventory in present plans may be diverted to further development programs if a technical problem should arise requiring such change in plans.
In order to avoid delays in operational capability, this approval includes initial arrangements for training or operational personnel and for the deployment of missiles involved in this initial operational capability.
Presidential approval is not sought at this time for production arrangements beyond those provided for development purposes nor for the accumulation of inventories beyond those set forth in the initial operational capability plan.
Whenever it is deemed necessary to make substantial changes in these plans, such changes must be submitted to the National Security Council for Presidential consideration.
Noted the President’s request that the Department of Defense prepare a report, assuming reasonable success in carrying out the plans for the IRBM and the ICBM, which would set forth the relative military advantages (excluding psychological considerations) of these missiles in comparison with manned aircraft and with non-ballistic missiles assumed to be available at the same time.14

Note: The actions in b and c above, as approved by the President, subsequently transmitted to the Secretary of Defense for appropriate action.

S. Everett Gleason
  1. Source: Eisenhower Library, Whitman File, NSC Records. Top Secret; Eyes Only. Prepared by Gleason on March 29.
  2. NSC 5602/1 is printed as Document 66. NIE 100–3–57 was not declassified. (Department of States, INRNIE Files) The February 19 memorandum is not printed. (Ibid.,S/SNSC Files: Lot 63 D 351, NSC 5707 Memoranda) NSC 5707, “Review of Basic National Security Policy: Basic Problems for U.S. Security Arising Out of Changes in the World Situation,” dated February 19, is not printed. (Ibid.) Regarding NSC Action No. 1675, see footnote 13, Document 110. NSC 5707/1, dated March 18, is not printed. (Department of State, S/SNSC Files: Lot 63 D 351, NSC 5707 Memoranda)
  3. The briefing note was not filed in the minutes.
  4. The paragraph that follows constitutes NSC Action No. 1687, approved by the President on April 1. (Department of State, S/SNSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council)
  5. NSC 5707/2, “Review of Basic National Security Policy: National Security Costs in Relation to Total National Resources,” dated March 19, is not printed. (Ibid.,S/SNSC Files: Lot 63 D 351, NSC 5707 Memoranda)
  6. Cutler’s briefing note and the charts are not filed in the minutes. Copies of Charts 1, 1A, 1B, 2, 3, 4, 5A, 5B, 6, 7, and 8 were transmitted as enclosures in a memorandum from Marion W Boggs to the NSC Planning Board, dated March 21. (Ibid.)
  7. Raymond J. Saulnier.
  8. The paragraph that follows constitutes NSC Action No. 1688, approved by the President on April 1. (Department of State, S/SNSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council)
  9. Regarding NSC Action No. 1433, see footnote 9, Document 34. Regarding NSC Action No. 1484, see footnote 8, Document 45. Regarding NSC Action No. 1653, see footnote 4, Document 105.
  10. The briefing note is filed in the minutes.
  11. Reference is to the meetings between President Eisenhower and Prime Minister Macmillan at Bermuda, March 21–23. Documentation is scheduled for publication in volume XXVII.
  12. Paragraphs a–c and the Note that follow constitute NSC Action No. 1690, approved by the President on April 1. (Department of State, S/SNSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council)
  13. Not found in the Eisenhower Library or Department of State files.
  14. The Department of Defense report was discussed at the NSC meeting on June 20; see Document 123