Foreign Relations of the United States, 1958–1960, Foreign Economic Policy, Volume IV

239. Memorandum of Conference With President Eisenhower⁰

April 23, 1959, 10:30 a.m.¹

OTHERS PRESENT

• General Draper, Mr. McCloy, General Gruenther, Mr. Voorhees, Mr. Merriam, General Goodpaster

The President said he had asked to talk with the group as a means of assisting him in making up his mind in just what way to act on the recommendations of Mr. Draper’s committee. He commented that what is principally lacking in his mind at the present moment is an assessment of whether the NATO countries, on their side, are doing enough to advance the modernization of their forces. He recalled also the criticism of waste in the administration of the program that has been made, and said that Defense is looking into all possible ways to tighten up and streamline the program. In addition, he noted that the report indicates that the carrying out of its recommendations would not involve substantially increased expenditures in FY 1960.

With regard to Mr. Draper’s appearance at the Congress today,² the President said he saw no reason why the Mutual Security story cannot be told in just the way it was submitted to him in the report of the Committee. He added that he wants to send the report down to the Congress today or tomorrow with a letter which is not inconsistent with the recommendations of the report.

The President said he is very mindful of the necessity to maintain the soundness of the American dollar, and referred to reports made to him by Secretary Anderson on his return from New Delhi some months ago.³ Secretary Anderson had told him that more than twenty of the national representatives in New Delhi for the World Bank meeting said that the most critical element in the whole world economic picture is the soundness of the American dollar. The President said that he has the responsibility of keeping demagogues from attacking his whole budgetary effort, as well as this program, on the basis that, in submitting the new recommendations he was unbalancing the budget. He said he would, of course, stress that this is not correct and that expenditures under the recommended increase will not come until fiscal year 1961.

Mr. Draper said his group felt that if the Administration doesn’t ask for the $400 million increase his group has recommended, the Congress will cut the program much more than would otherwise be the case. He said that in the view of his Committee a “four square” acceptance of the recommendations of the Committee by the President could have real effect in strengthening Western European resolve at the time of the forthcoming negotiations. On the other hand, not to come out four square and ask for the additional appropriations will look fuzzy and will damage the program, in his judgment. He assured the President of the support of the Committee nevertheless. He commented that the program is in difficulty. There is a strong drive under way in the Chamber of Commerce to have that body come out against the program in its meeting next week. He reiterated his fear that failure to recommend the additional appropriations now will weaken the whole program.

Mr. McCloy, at Mr. Draper’s request, spoke next. Regarding the President’s point on the adequacy of the Europeans’ own contribution, he agreed that there is much in this. These countries are gaining substantially in economic strength. At the same time only the United States is in position to provide, technologically, the newest types of weapons. There is a feeling in Europe that they are on the verge of having a real deterrent force of their own, rather than a “trip wire” type of force which is inadequate to give real confidence.

The President recalled that when he went to Europe he exerted himself to have U.S. troops brought over on an emergency basis while the Europeans formed their own forces. Now the British have cut their forces on the Continent to a fraction of what they were; the Belgians have cut down on their training period; the French have removed the bulk of their forces from Europe to North Africa. He felt that there should be some stimulation of mutual effort on their part. Instead we are the only ones who have kept up our strength there. Mr. Draper suggested that the President include in his message a passage to the effect that now is the time for the Europeans to make a greater contribution. The President indicated some sympathy with this suggestion. Mr. Draper also suggested that the President stress the difference between appropriations and expenditures in order to preclude charges that he has upset his own budget. The President said he had in mind to point out that the added expenditures would be very small in FY 1960 but that it is hard to put across the difference between appropriations and expenditures, even if he “read a lesson to the Congress” in the letter to them.

In concluding the President said he agreed with the conclusions of the Draper Committee. He is somewhat uncertain on the best way to act on them, since he noted that Mr. Draper seemed to think it would weaken the program not to submit a recommendation for the full additional appropriations now. He said he would give further thought to this matter.

G.
Brigadier General, USA

0. Source: Eisenhower Library, Whitman File, Eisenhower Diaries. Secret. Drafted by Goodpaster.
1. The meeting took place at the White House.
2. For Draper’s testimony, see Mutual Security Act of 1959: Hearings Before the Committee on Foreign Affairs, House of Representatives, Eighty-sixth Congress, First Session (Washington, 1959), vol. 2, pp. 1269–1301.
3. Not found.