Foreign Relations of the United States, 1955–1957, National Security Policy, Volume XIX

132. Memorandum of Discussion at the 331st Meeting of the National Security Council, Washington, July 18, 1957¹

Washington, July 18, 1957

[Here follow a paragraph listing the participants at the meeting and agenda items 1–4. Item 1, “Significant World Developments Affecting World Security,” included an oral briefing on NIE 100–5–57, Document 111, and discussion of the Middle East printed in volume XVII, page 694. Item 4, “Military Implications of Joint Resolution 117 on the Middle East,” is scheduled for publication in volume XII.]

4. Further Application of “New Look” to U.S. Defense Effort Overseas (Draft Memo for the President, same subject, dated June 19, 1957; NSC Action No. 1737; Revised Draft Memo for the President, same subject, dated July 1, 1957; NSC Action No. 1742)²

Mr. Cutler said this item covered a paper which he had drafted following the Council’s discussion in June on the size of the Korean forces supported by U.S. aid. The Korean discussion had broadened into consideration of the U.S. over-all defense effort. The revised draft dated July 1, incorporating suggestions from various sources, was the paper before the Council. In essence, this revised draft proposed that the Planning Board study the Far East with reference to feasible reductions in U.S. forces deployed there and in indigenous forces supported by U.S. aid.

Mr. Cutler then noted that Admiral Radford, after studying the revised draft, had commented as follows:

“While agreeing that there is need for careful review and utmost economy in defense expenditures, I am inclined to the view that the approach indicated in your memorandum is not the correct one. My basis for this belief lies in the decision to adhere to a fixed financial ceiling for the Department of Defense for the next several years. This decision has generated a requirement for the Joint Chiefs of Staff to study the over-all problem of forces and force deployments. Such a study cannot be made of areas in isolation but must be made on a global basis. I further feel that it is incumbent upon the Joint Chiefs of Staff to arrive at their recommendations in this matter at a relatively early date. The recommendations of the Joint Chiefs of Staff, if approved by the Secretary of Defense, would then become the military foundation of such further work to be accomplished by the Planning Board and the National Security Council.”³

Mr. Cutler said that the JCS proposal seemed to him to have the merit of (a) being global in approach, an obvious necessity before decisive action in any one area can be taken, and (b) producing prompt military advice as to U.S. overseas force levels requisite to a Planning Board study.

Mr. Cutler then asked Admiral Radford to comment upon his proposal, and particularly to indicate whether, in addition to the budgetary limitation, the JCS review would take into account (a) the much increased fire power given by modern weapons to smaller forces; (b) a review of the missions and commitments of U.S. forces overseas in the light of the current world situation; and (c) consideration, in addition to U.S. force levels deployed overseas, of indigenous force levels supported by U.S. aid, on the basis not only of military factors and budgetary limitations for fiscal years 1958 and 1959 for foreign military and economic aid, but also taking into account political and economic ingredients (such as keeping a current regime in control, the pride and position of an indigenous regime, outbidding Communist aid offers, indigenous economic capabilities, etc.).

Admiral Radford said the Joint Chiefs’ review would certainly take into account the first question noted by Mr. Cutler. The second and third questions, especially the second, would be taken into consideration to the extent possible. However, the third question involved a difficult consideration. The Joint Chiefs of Staff could recommend that indigenous force levels be reduced because U.S. forces would be used to assist the country attacked. But it is sometimes hard to convince other countries that they can rely upon us. No military man in NATO disagrees with the statement that the U.S. deterrent power is the principal reason for the maintenance of peace. At the same time, all military men in NATO urge us, for political and psychological reasons, not to reduce our forces stationed in Europe.

Admiral Radford then said he had talked to the Joint Chiefs of Staff since he wrote the memorandum from which Mr. Cutler had read. As a result of this talk, he could not guarantee that the Joint Chiefs could produce an agreed paper on the subject.

The President referred to his statement at the Council meeting on December 21, 1956, that except in the event of some unforeseen critical emergency of an international or economic character, he would not request from the Congress during his term in office new obligational authority for the Department of Defense above $39 billion in any fiscal year.⁴ The President said he wanted everyone to note the qualifications in this statement. He didn’t want to create the impression that he was sticking to a flat ceiling regardless of war, disaster, death and disease.

Secretary Humphrey said he was pleased that the President was not establishing a fixed flat sum as a ceiling in defense expenditures. In Secretary Humphrey’s view, inflation could not be controlled if level expenditure programs continued over a long period. Present spending promotes inflationary pressures which cannot be controlled in the absence of a reduction in spending. The President said that an important factor in our disarmament efforts was a possible reduction in military expenditures.

Secretary Wilson said he would like to make a presentation to the Council on the military programs for FY 1958 and FY 1959,⁵ using as a basis a letter he recently wrote to the President and some charts which he was having prepared.⁶ He noted that each of the Services had, in proposals to him, taken more than its share of the $39 billion figure set by the President; in fact, the sum of Army, Navy and Air Force requests was $42 or $43 billion.

In his presentation, said Secretary Wilson, he would like to describe his money plan, his personnel plan, and his redeployment plan. He was afraid he would have trouble getting $38 billion next year for military purposes. Secretary Humphrey also felt it would be difficult to get $38 billion. Secretary Wilson said he did not agree with the Secretary of the Treasury that military spending was causing inflation. The President said perhaps not, but certainly Government spending was a contributory factor in the present inflation.

Secretary Humphrey noted that Treasury was now facing some difficult problems. Another five cents of the dollar had recently been lost, and Treasury was just about to have to pay much higher interest rates. The President said that whatever the cause, inflation was proceeding.

Mr. Cutler suggested that further action on this item be postponed until Secretary Wilson had made his presentation on the military programs for FY 1958 and FY 1959.

The National Security Council:⁷

a. Noted and discussed the revised draft, dated July 1, 1957, of a memorandum for the President on the subject, in the light of the views of the Chairman, Joint Chiefs of Staff, thereon, as presented at the meeting.

b. Deferred action on the subject pending a presentation by the Secretary of Defense on the U.S. military program for FY 1958 and FY 1959 at next week’s Council meeting.

Marion W. Boggs

1. Source: Eisenhower Library, Whitman File, NSC Records. Top Secret. Prepared by Marion W. Boggs on July 19.
2. The July 1 memorandum is printed as Document 125. Regarding the June 19 draft memorandum, see footnote 1 thereto. Neither NSC Action No. 1737, taken by the NSC on June 20, nor NSC Action No. 1742, taken by the NSC on June 26, is printed. (Department of State, S/S–NSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council)
3. Document 127.
4. See Document 101.
5. Wilson’s presentation is summarized infra.
6. Wilson’s letter is printed as Document 129. The charts have not been found in the Eisenhower Library or Department of State files.
7. Paragraphs a–b that follow constitute NSC Action No. 1754, approved by the President on July 22. (Department of State, S/S–NSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council)