114. Memorandum of Discussion at the 276th Meeting of the National Security Council, Washington, February 9, 19561

[Here follow a paragraph listing the participants at the meeting and agenda items 1 and 2.]

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3. Background and Status of the Small Output Power Reactor (NSC 5507/ 2, paragraph 27–e; NSC Action No. 1424–b; Memos for NSC from Executive Secretary, same subject, dated January 9 and February 2, 1956)2

Mr. Dillon Anderson briefed the Council at some length on the reference report (copy of briefing note included in the minutes of the meeting).3 At the conclusion of his briefing, Mr. Anderson suggested that Admiral Strauss might wish to elaborate on what he had said.

Admiral Strauss said that there was no need to elaborate, but he did feel called upon to make some remarks, because he was facing at the moment what might be described as a “soft impeachment” on grounds of incompetence and insubordination. With respect to the “charge” of incompetence, Admiral Straus said he was led to wonder whether the members of the NSC Planning Board were really qualified to make a decision as to the precise size and character of a power reactor appropriate for use in foreign countries. With further reference to incompetence, Admiral Strauss informed the Council that yesterday afternoon he had concluded a two-day hearing before the Joint Atomic Energy Committee on Capitol Hill.4 At the conclusion of the hearing, Senator Anderson had astonished him by stating that in his opinion the Atomic Energy Commission was doing a magnificent job. This report, said Admiral Strauss, might seem somewhat immodest, but the Council should remember that he was defending himself. (This latter comment was made with a smile.)

As to the other “charge”, of insubordination, Admiral Strauss said that the Atomic Energy Commissioners had considered that the overriding paragraph in NSC 5507/2 was the earlier paragraph, which directed that the development of atomic energy for peaceful uses should be accomplished as far as possible by recourse to private financing. With one exception, continued Admiral Strauss, namely the reactor being built at Shippingsport, Pennsylvania, the Commission had followed this directive and had managed to get private financing for the bulk of the projects designed to advance peaceful uses of atomic energy. As for the program for constructing a small reactor in the 10,000-kilowatt range for use abroad, as directed in paragraph 27–e of NSC 5507/2, it would have been futile to have proceeded on a crash basis to build such a reactor prior to the time when the law [Page 335] permitted the AEC to donate the nuclear fuel necessary to operate such a reactor. The decision permitting such donation had only recently been made.

Admiral Strauss then went on to assure the Council that of the several power reactors now in the course of development by private U.S. companies, some would certainly be suitable for use abroad as envisioned in paragraph 27–e. Moreover, foreign nationals were now being trained in U.S. atomic energy installations to operate such power reactors. Indeed, the Bureau of the Budget had just increased the funds available for such training at the Argonne Laboratory and at Oak Ridge. In summary, Admiral Strauss said he sincerely believed that the Atomic Energy Commission had carried out the directive given it in paragraph 27–e in the most intelligent possible manner and with the least reliance on public financing. Accordingly, he was prepared to “throw himself on the mercy of the court”.

The President said that he was at a loss to understand the difference of view between the majority of the Planning Board and Admiral Strauss with respect to the implementation of the directive on the construction of small power reactors. However, he did recall that when the Council had initially considered the policy set forth in NSC 5507/2, there had been a strong emphasis on the desirability of private financing of the development of atomic energy for peaceful uses.

In order to assist the President, Mr. Anderson read paragraph 27–e and explained the view of the majority of the Planning Board that the Atomic Energy Commission had not literally complied with the directive in this paragraph.

The President nevertheless professed that he still could not comprehend the difference, in view of all the companies which Admiral Strauss had said were planning to develop and construct small output power reactors. Why should this be called a failure to carry out an NSC directive? Was it simply because these reactors would not be developed and built with public funds? In short, the President found it difficult, he said, to define Admiral Strauss’ “crime”. Admiral Strauss said that he too found it hard to define the crime. Moreover, he was now being indicted by his friends (on the Planning Board) at the very time that he had been busy fighting his enemies.

Governor Stassen said that the real problem was the lapse of the long interval of a year when nothing concrete had been done, despite foreign clamor, toward the actual construction of a small power reactor for use overseas. After all, we had only paper plans so far regarding this type of reactor.

Admiral Strauss denied the position advanced by Governor Stassen, and said that the latter should look more carefully into the facts of the situation. He went on to say that in his opinion there was nothing [Page 336] “magic” about a power reactor in the 10,000-kilowatt range. He again wondered about the competence of those behind this judgment on the necessity for a power reactor of this precise range.

The President then stated that the crux of the problem seemed to be this: Was there any possibility that the AEC could speed up the development of a small power reactor which would be suitable for use in foreign countries?

In reply to the President, Admiral Strauss pointed out that the power reactor being built by Westinghouse for the Belgian World Fair would be completed not later than April 1, 1958. This date was likely to be well before any construction would start on power reactors in any foreign country outside the British Commonwealth. Indeed, the power reactors being built or planned in the U.K., Canada and Australia would be powered with our nuclear fuel. Admiral Strauss also emphasized that power reactors were not simple machines which could be turned over for operation to unskilled people. On the contrary, it required considerable training to operate such reactors. He feared that U.S. prestige would suffer a heavy blow if, for example, a reactor provided by the United States for Spain should blow up and kill thousands of people because it was operated by people with insufficient training.

Secretary Dulles said that he did not doubt for a minute that Admiral Strauss and the AEC were doing everything in their power to carry out the NSC directives in this field. However, it appeared to him that this was an instance in which our propaganda had outrun our technical ability. After the President’s famous atoms-for-peace speech, it was essential to move as rapidly as possible in order to avoid disillusionment abroad and to forestall a prior Soviet offer to provide power reactors to foreign nations. The President agreed that this was a most important consideration, and Secretary Dulles renewed his plea that we get ahead with building a small-scale power reactor for use overseas just as rapidly as possible.

The President then turned to Admiral Strauss and asked him how many small-scale power reactors were now being developed or built, and how much help the Atomic Energy Commission was providing for these projects. Admiral Strauss said that the Commission was providing help in the form of research to every one of these projects. Otherwise, the most assistance had been given to the Shippingsport power reactor. There the AEC had provided the nuclear reactor, although the Duquesne Power and Light Company had given $5 million toward meeting the cost of this reactor. Out in Nebraska a cooperative was now engaged in putting up a power reactor in an area where there was no private power company. This project was likewise receiving help [Page 337] from the Commission. In answer to an inquiry of the President, Admiral Strauss stated that this was the only cooperative with which the Atomic Energy Commission was currently dealing.

Admiral Strauss then pointed to the plant which was going to be erected in New England by the Yankee Atomic Power Company. Their application had been approved only yesterday by the Commission. The project had the support of the entire New England delegation in Congress, both Republicans and Democrats. The Atomic Energy Commission proposed to assist the Yankee Atomic Power Company with the sum of about $5 million. The total cost of the plant would be approximately $60 million.

Turning to Admiral Strauss, the President said let’s assume that you succeed in building the perfect 10,000-kilowatt range power reactor. Where would you then locate it? What foreign countries want them? This is part of the problem. If Westinghouse can build such a reactor for Belgium, why can it not build them for Holland or Argentina? Admiral Strauss pointed out that 100% of the expenses of the Belgian reactor built by Westinghouse was to be paid for by the Belgians. They had selected Westinghouse as the lowest bidder. Such a reactor could not actually have been built in Belgium until very recently because our laws would not have authorized our building such a plant in Belgium even if we had had a prototype to follow. At this point Admiral Strauss again reassured the President that small scale power reactors would soon be available in sufficient quantity to meet foreign demands. Moreover, we would be able to assure ourselves of adequate security measures to prevent the diversion of nuclear fuels for possible weapons use.

The President then said that he had another question. He wanted to know, in simple terms, what progress we must make in order to have available those power reactors which the State Department feels we need in order to assist in meeting our foreign policy objectives. Secretary Dulles added the comment that it was his understanding of paragraph 27–e that we were to build and get operating a small-scale power reactor in the United States first. This would constitute the model on which others would be built and shipped to our friends overseas.

Secretary Humphrey said that he was completely unable to comprehend what the argument was all about. He said he thought that Admiral Strauss’ report showed a magnificent record of the development of small power reactors and, moreover, all of these were being developed under our system of free competition. All in all, it was a terrific accomplishment. The President said that he could not understand the fuss either. All he was trying to do was to discover what more we can do in this field than we are currently doing. Secretary Humphrey said that the Council should change the words of the [Page 338] directive in paragraph 27–e and not change our basic policy with respect to the development of atomic energy for peaceful purposes so far as possible with private financing.

Governor Stassen pointed out his understanding that at the time the directive in paragraph 27–e was inserted in NSC 5507/2, this was done with the advice and agreement of Admiral Strauss and the Atomic Energy Commission. On the contrary, replied Admiral Strauss, the Commission had vigorously dissented from the directive in paragraph 27–e. Moreover, he had sent in an earlier report of progress (dated October 28, 1955)5 which was not regarded as satisfactory to the Planning Board with particular respect to paragraph 27–e.

Secretary Dulles said he believed that it had become entirely academic to keep discussing this directive. He repeated that all he wanted to get across was the idea that everything should be done to complete a small-scale power reactor for use abroad as soon as possible. Secretary Dulles added that he did not doubt that this was being done, and he had not a word of criticism of Admiral Strauss. The President added that it was not a question of criticism, but rather of commendation for the manner in which Admiral Strauss had carried out this directive. What precisely, continued the President, did the Planning Board have in mind (a group which the President said he admired) that Admiral Strauss should be doing but was not? Mr. Anderson again attempted to explain the view of the majority of the Planning Board members with respect to paragraph 27–e. He said in effect that the course of action being followed by Admiral Strauss reached the objective set forth in paragraph 27–e, but did not reach that objective by the precise route recommended in this paragraph. Accordingly, he ventured to think that the Council might wish to revise the wording of paragraph 27–e.

Secretary Dulles said that he had always assumed, perhaps wrongly, that the directive in paragraph 27–e contemplated that the small-scale power reactor should be built with the utmost speed and with public rather than private funds. Admiral Strauss agreed with this interpretation of paragraph 27–e, but pointed out that this paragraph was in conflict with the earlier paragraph in NSC 5507/2 which directed that in so far as possible the development of the peaceful uses of atomic energy was to be carried out with private financing. The Commission deduced that from this conflict it was allowed a certain discretion in the course of action which it followed in the matter of developing the small output power reactor.

The President said that, this being the case, the thing to do was to correct the wording of paragraph 27–e. Moreover, said the President, he wished the Council record of action to contain a statement of the [Page 339] importance of developing a small output power reactor as quickly as possible from the point of view of United States foreign policy. The revised wording of paragraph 27–e should omit any reference to the specific power range in kilowatts of the small output reactor.

Governor Stassen said that he recalled readily the circumstances which had led to the inclusion of paragraph 27–e when NSC 5507/2 was considered by the Council. At the time we greatly feared that the Soviets might beat us to the gun and offer a power reactor before we were in a position to do so ourselves. He still believed that it would be a very serious matter if the Soviet Union was in a position to provide such small output reactors before the United States was.

The President said that he was astonished to hear that the Soviets had not already made such an offer and, in any case, he would bet that they would do so soon if they had not done so already.

Admiral Strauss stated that there would be no sense in building a power reactor of the range of 10,000 kilowatts for use abroad if experience showed us that, for example, a reactor of 40,000-kilowatt power output would produce power more cheaply. In reply, Secretary Dulles pointed out that there was nothing in the directive in paragraph 27–e which states that we must build a 10,000-kilowatt range reactor abroad. We [should] build such a 10,000-kilowatt reactor here in the United States, and thereafter decide the best kind of reactor to be built for use overseas.

The National Security Council: 6

Noted and discussed the report on the subject submitted by the Chairman, Atomic Energy Commission, pursuant to NSC Action No. 1424–b, in the light of comments thereon by the Joint Chiefs of Staff, transmitted by the reference memorandum of February 2, and by the NSC Planning Board as summarized at the meeting.
Agreed that the action being taken by the Atomic Energy Commission, as described in the report transmitted by the reference memorandum of January 9, is consistent with and represents substantial progress toward meeting the objectives of paragraph 27–e of NSC 5507/2.
Recommended that paragraph 27–e of NSC 5507/2 be amended to read as follows:

“e. Encourage and facilitate the development in the U.S., as rapidly as possible, of power reactors of an appropriate size and design for use abroad, in order to maintain U.S. leadership in this field in the interests of U.S. foreign policy. While private financing should be sought wherever possible as contemplated in paragraph 1 hereof, this course of action will be pursued with the expenditure of public funds where necessary to maintain U.S. leadership.”

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Note: The action in b above subsequently transmitted to the Chairman, AEC. The recommendation in c above, as approved by the President, subsequently circulated as an amendment to NSC 5507/2.

[Here follow the remaining agenda items.]

S. Everett Gleason
  1. Source: Eisenhower Library, Whitman File, NSC Records. Top Secret. Drafted by Gleason on February 10.
  2. NSC 5507/2 is printed as Document 14. Regarding NSC Action No. 1424, see footnote 6, Document 47. Neither the January 9 nor February 2 memoranda is printed. (Department of State, S/SNSC Files: Lot 63 D 351, NSC 5507)
  3. Neither the briefing note nor the minutes has been found in the Eisenhower Library or Department of State files.
  4. These hearings for February 7 and 8 are printed in Development, Growth, and State of the Atomic Energy Industry: Hearings Before the Joint Committee on Atomic Energy, Congress of the United States, 84th Congress, 2d session, part 1, pp. 1–185.
  5. Not printed. (Department of State, S/SNSC Files: Lot 63 D 351, NSC 5507)
  6. Paragraphs a–c and the Note that follow constitute NSC Action No. 1516, approved by the President on February 19, 1956. (Ibid., Lot 66 D 95, NSC Actions)