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

291. Memorandum of Discussion at the 392d Meeting of the National Security Council⁰

December 23, 1958.

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

1. Certain Aspects of U.S. Relations With Canada (NSC 5822;¹ NSC Action No. 1964;² Memo for NSC from Executive Secretary, subject: “U.S. Relations with Canada”, dated July 16, 1958;³ Memo for NSC from Executive Secretary, subject, “A National Petroleum Program,” dated December 17, 1958⁴)

Mr. Gray presented NSC 5822 to the Council. (A copy of Mr. Gray’s Briefing Note is filed in the Minutes of the Meeting and another is attached to this Memorandum.)⁵ After explaining the background of the paper on Canada, Mr. Gray turned to Section A thereof, “U.S. Restrictions on Imports of Oil Which Affect Canada.”⁶

In the course of analyzing Section A, Mr. Gray referred to the alternative versions of paragraph 12 and to the JCS proposal offered as a third possibility.⁷ Secretary Herter said the JCS proposal might serve as a basis for paragraph 12, provided it could be amended. He then read his suggested amendments, which were endorsed by Mr. Strauss and Mr. Seaton; and the paragraph was adopted in the form shown in the Action below.

Mr. Strauss said the President’s Committee on Oil Imports had yesterday recommended an extension for two months of the present voluntary arrangements in the field. This action was fortunate in the light of events in Venezuela. Some members of the Committee questioned the basic national security finding on which future action is to be based. After Christmas, the Committee will consider this finding and the action which should be taken after expiration of the two months’ extension of voluntary arrangements.

The President felt that if we tried to give preference in oil imports to Canada and Venezuela, we would find ourselves in trouble in the Middle East, and in addition we would be violating a fundamental principle of U.S. foreign relations. Secretary Herter observed that national defense considerations provided the only excuse for such preferences. The President noted that the law conferred on the President an arbitrary power in this field; but when the President attempts to use this power, great obstacles are revealed.

Mr. Dillon said that there was some possibility of giving preference to Venezuela without violating our principles, provided a five or six year average was used in computing oil imports. Venezuela had always had a large share in our oil imports, while the Middle East share had only recently increased. The President wondered whether preferential arrangements had not always been on a voluntary basis. Mr. Dillon said the lead and zinc arrangements were not voluntary. In response to a query from the President, Mr. Dillon added that Canada would have to be a special exception with respect to oil imports.

Mr. Quarles pointed out that the Department of Defense had a special interest in Canada and was engaged in frank discussion with Canadian defense officials on U.S.-Canadian relations. From the defense viewpoint, it was important to handle the problem of Canadian oil properly. The Canadian oil problem was even more important than the Venezuelan problem, because Canadian oil is more important to the U.S. than Venezuelan oil and because Canada is more important than Venezuela in the defense of the U.S.

Mr. Seaton wondered whether “preference” had been defined. The President said such definition was the task of the Committee.

The President then remarked that some day the Attorney General might find the constitutionality of preference arrangements being tested. In case such a question were raised, the fact that a national security finding like the one under discussion had been adopted by the President on the advice of the JCS might help make the preference arrangements constitutional.

[Here follows discussion of NSC 5822 unrelated to restrictions on Canadian oil.]

The National Security Council:⁸:

a. Discussed the draft statement of policy on the subject contained in NSC 5822; in the light of the views of the Joint Chiefs of Staff and of the Council on Foreign Economic Policy⁹ (transmitted by the reference memoranda of December 22), and an oral statement at the meeting by the Secretary of Commerce regarding the work of the President’s Special Committee to Investigate Crude Oil Imports.

b. Adopted the statement of policy in NSC 5822; subject to the following amendment:

Page 7, paragraph 12: Delete alternatives A and B, and substitute therefor the following:

“12. In the interest of national security and consistent with a healthy and dynamic domestic industry, the continued development of petroleum resources readily available to the Western Hemisphere must be encouraged. In order to promote this development, the objective of the United States should be to give preference, in any system of import restrictions, to imports of petroleum from Canada and other Western Hemisphere countries.

Note: The President took the following actions with respect to the statement of policy in NSC 5822, as amended and adopted by b above:

(a) The President approved Section A as guidance from the standpoint of national security and directed that it be taken into account by the President’s Special Committee to Investigate Crude Oil Imports and by other appropriate Executive Departments and Agencies of the U.S. Government;

(b) The President approved Sections B–D and directed their implementation by all appropriate Executive Departments and Agencies of the U.S. Government under the coordination of (1) the Secretary of Defense for Sections B and C, and (2) the Director, Office of Civil and Defense Mobilization for Section D.

NSC 5822, as amended and approved by the President, subsequently circulated as NSC 5822/1.

[Here follows agenda item 2.]

3. A National Petroleum Program (NSC 97/6;¹⁰ NSC 5810/1;¹¹ NSC Action No. 1554–a;¹² NSC 5822; Memo for NSC from Executive Secretary, same subject, dated December 17, 1958)

Mr. Gray requested the Council to consider a draft NSC Action on the subject which had been distributed to Council members. After Mr. Gray’s explanation of the reason for bringing this matter up (see last paragraph of Mr. Gray’s Briefing Note on “Certain Aspects of U.S. Relations with Canada”),¹³ the Council adopted the draft Action as follows, without discussion.

The National Security Council:¹⁴

a. Because the programs established in NSC 97/6 are based in large part on information and considerations that are no longer current, agreed to recommend to the President that NSC 97/6 be rescinded.

b. Noted that the Director, OCDM, is responsible, in collaboration with other interested departments and agencies, for the development, review, and coordination of mobilization programs for petroleum and petroleum products, in accordance with approved national security policies.

Note: The above action, as approved by the President, subsequently circulated to all holders of NSC 97/6, and referred to the Director, OCDM, for appropriate implementation of b above.

[Here follow agenda items 4–7.]

Marion W. Boggs

0. Source: Eisenhower Library, Whitman File, NSC Records. Top Secret; Eyes Only. Drafted by Boggs.
1. NSC 5822, “Certain Aspects of Relations With Canada,” December 12, 1958, is in Department of State, S/S–NSC Files: Lot 63 D 351, NSC 5822 Series. The paper as approved, NSC 5822/1, December 30, is printed in volume vu, Part 1.
2. This NSC action, approved by the President on August 18, directed the NSC Planning Board to prepare for the Council’s consideration a statement on certain aspects of U.S.-Canadian relations including the issue of U.S. restrictions on Canadian oil imports. The President’s Special Committee To Investigate Crude Oil Imports was to assist the Planning Board in preparing the statement on possible restrictions on Canadian oil. (Department of State, S/S–NSC (Miscellaneous) Files: Lot 66 D 95)
3. This memorandum transmitted the result of the Planning Board’s work, “List of Problems With Respect to Canada,” which included as its second item a discussion of U.S. import restrictions which affect Canada. (Ibid., S/S–NSC Files: Lot 63 D 351, NSC 5822 Series)
4. This memorandum transmitted to the NSC a draft Record of Action which was approved without discussion as item 3 below.
5. Not printed.
6. Attachment to Document 289.
7. The JCS proposal, as amended, is in the Action section below.
8. Paragraphs a and b and the note constitute NSC Action No. 2025, approved by the President on December 30. (Department of State, S/S–NSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council)
9. Document 290.
10. See footnote 6, Document 289.
11. See Document 279.
12. This NSC action, May 16, referred NSC 97/6 to the Director, Office of Civil and Defense Mobilization, for the development of mobilization programs and for possible future reports to the NSC. (Department of State, S/S–NSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council)

13. The last paragraph of Gray’s briefing note reads as follows:

    “Before we leave this paper to take up the annex on nuclear weapons, I’d like to ask the Council to look at the Action we have drafted to clarify the status of the last policy paper on petroleum, NSC 97/6, which was approved in November 1953. You may recall that that paper was extremely programmatic, and the Council took an action in May 1956 that referred it to the Director, ODM, but left its status somewhat ambiguous. The draft action would formally rescind the policy so that OCDM, in collaboration with other agencies, will be completely free to bring programs in the field up to date. The Joint Chiefs of Staff concur in the draft action.”

14. Paragraphs a and b and the note constitute NSC Action No. 2027, approved by the President on December 30. (Department of State, S/S–NSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council)