Foreign Relations of the United States, 1952–1954, National Security Affairs, Volume II, Part 1

Eisenhower Library, Eisenhower papers, Whitman file

Memorandum of Discussion at the 138th Meeting of the National Security Council, Wednesday, March 25, 1953¹

[Extract]

top secret
eyes only

March 25, 1953

Present at the 138th meeting of the Council were the President of the United States, presiding; the Vice President of the United States; the Secretary of State; the Secretary of Defense; and the Director for Mutual Security. Also present were the Secretary of the Treasury; the Director, Bureau of the Budget; the Deputy Secretary of Defense (for Items 3 and 4); the Secretary of the Army (for Items 3 and 4); the Secretary of the Navy (for Items 3 and 4); the Secretary of the Air Force (for Items 3 and 4); the Chairman, Joint Chiefs of Staff; the Chief of Staff, U.S. Army (for Items 3 and 4); the Chief of Naval Operations (for Items 3 and 4); the Chief of Staff, U.S. Air Force (for Items 3 and 4); the Commandant, U.S. Marine Corps (for Items 3 and 4); Assistant Secretary of Defense Nash (for Items 3 and 4); Captain Paul L. de Vos, USN, Joint Chiefs of Staff (for Item 3); the Acting Director of Central Intelligence; the Special Assistant to the President for National Security Affairs; the Special Assistant to the President for Cold War Planning; the Military Liaison Officer; the Executive Secretary, NSC; and the Deputy Executive Secretary, NSC.

There follows a general account of the main positions taken and the chief points made at this meeting.

. . . . . . .

4. Review of Basic National Security Policies: The Military and Mutual Security Programs (NSC Action No. 730–c;² Memos for NSC from Executive Secretary, subject: “Review of Basic National Security Policies: The Mutual Security Program”, dated March 20 and 24, 1953; Memo for NSC from Executive Secretary, subject: “Review of National Security Policies: The Military Program”, dated March 24, 1953³)

With respect to this item on the agenda, Mr. Cutler called the Council’s attention to two memoranda which had just been distributed, one of which constituted the views of the Joint Chiefs of Staff with respect to the military effects of the proposed reduction of expenditures for military assistance in the FY 1954 and 1955 programs of the Mutual Security Administration, and the second of which set forth the effect of proposed budget cuts in FY 1954 and 1955 on the military program, as called for in NSC Action No. 730–c. Mr. Cutler informed the Council that the forthcoming oral briefing would be given by the Chiefs of Staff, to be followed by General Bradley and the Secretary of Defense. Mr. Cutler also noted that the three Service Secretaries would be on hand to answer any detailed questions which might arise from the presentation.

General Collins spoke first on the effect of the proposed cut on Army programs, concluding that the proposed cut would have not only grave military implications for the national security, but would give rise to equally serious political and diplomatic difficulties.

Admiral Fechteler followed with a description of the effect of the cuts on the Navy program, which were depicted as hardly less serious than for the Army. It might be possible, Admiral Fechteler concluded, to maintain under these cuts the immediate operational capability of the naval forces in being on D-day, but only at the expense of the sustaining power of the Navy’s forces.

General Shepherd, speaking for the Marine Corps, concluded that the effect of the proposed reductions on the contribution of the Marine Corps to the national security, was such as to deprive the proposed reductions of any justification.

General Vandenberg indicated the particular difficulties which the proposed reductions would inflict on the Air Force, since it had been compelled to start out from a lower point than the other services and had the furthest to go in achieving the goals set forth for it. His general conclusion as to the danger of the cut was similar to that of the other Chiefs of Staff.

When the Chiefs of Staff had finished their oral presentation, the President observed that perhaps the Council should have a report as to whether national bankruptcy or national destruction would get us first.

General Bradley followed with a short statement dealing first with his own judgment as to the very serious results which could be anticipated from acceptance of the reductions proposed for the military program, as well as the serious effects on our allies of the proposal to cut drastically military assistance for them, as set forth in the Mutual Security Program.

The Defense Department presentation was then taken over by Assistant Secretary Frank Nash, who commented orally on the memorandum and chart prepared at the President’s request for information on the comparative costs of equipping and maintaining a United States division and certain foreign infantry divisions. Mr. Nash’s presentation gave rise to considerable discussion about the “divisional slice”. General Collins explained that the problem of the much larger divisional slice for a U.S. division, as compared to various foreign divisions, was under constant study in the Defense Department and indeed was being constantly reduced.

The President betrayed some impatience with General Collins’ exposition of this problem, and said: “Explain it away as you will, the cost of maintaining an American soldier in the field is fantastically higher than the cost of maintaining a foreign soldier.” This fact at any rate is undeniable, said the President, and we have got to do something about it. There might be a good deal in Governor Stassen’s argument that it was cheaper to provide assistance to create and maintain foreign divisions in the field than to go ahead so rapidly in the development of additional U.S. divisions.

The last speaker for the Defense Department was Secretary Wilson, who in the first instance warned that the written and oral reports which the Defense Department had provided were not to be thought of as final conclusions or recommendations. Everything that had been discussed would have to be looked at again before the magnitude of the reduction could be determined. The whole problem, said Secretary Wilson, was extraordinarily difficult, and much of the difficulty arose from the mobilization base concept and the assumption that you can only have sufficient resources to win a war if you have this mobilization base in being and ready to produce. Not less difficult was the problem of the critical period and the estimate of when an enemy attack might be expected. Both of these problems, thought Secretary Wilson, would have to be looked at carefully again.

At the conclusion of the Defense Department presentation, the President turned to General Collins and told him that he ought to have had his people provide an estimate to indicate that the impact of the proposed cuts might be considerably less serious if the heavier cuts were planned for 1955 or thereafter, rather than in 1954.

General Collins, Secretary Wilson, and General Vandenberg all replied to the President by pointing out that it was precisely the cut in 1955 which would have the most serious effect on our military capabilities.

Secretary Humphrey said that for purposes of argument the Council assume for the moment that our permanent posture of defense, beginning with 1956, would be one-half the figure in the Truman budget for FY 1954, and that further, this posture would have to be held for the next ten years. With this assumption in mind, continued Secretary Humphrey, will it be easier to build on the basis of the old program up to FY 1956 and xhen scale down abruptly, or to begin to scale down with the FY 1954 budget? This seemed the essence of the problem to him and the point to which the Council should address itself.

Secretary Wilson expressed serious doubts as to the reality of the antithesis presented by Secretary Humphrey, who replied, however, that the only alternative seemed to him to look forward to an unbalanced budget for the indefinite future.

The President expressed sympathy for Secretary Humphrey’s position, and added that if we must live in a permanent state of mobilization our whole democratic way of life would be destroyed in the process.

The Director of the Budget reinforced Secretary Humphrey’s arguments with a projection of the deficit figures which lay ahead if the present and projected programs and Treasury receipts continued. With some heat, Mr. Dodge explained to the Council that in raising the issues and suggesting an investigation of the effect on the national security programs of an attempt to balance the budget, he was innocent of any charge that the Bureau of the Budget was attempting to establish foreign and military policy by means of budget restrictions. He had no desire whatever to frame such policy. He was merely looking at the facts which confronted the Bureau of the Budget, and asserted that whatever decision was reached by the Council to solve this dilemma must be based both on the fiscal and budgetary facts on the one hand and the effects on the national security on the other.

The President replied that Mr. Dodge could consider himself exonerated from the charges he had mentioned.

Governor Stassen reverted to a position which he had taken on the subject at previous Council meetings, by noting the importance of investigating the question of the potential income growth and the capabilities for expansion of the American economy.

In reply to Governor Stassen’s familiar position, the President said that he was glad to defer to Governor Stassen’s political acumen and experience, but he was sure that Governor Stassen realized what a terrific problem would be created on the Hill if the present Administration went to the Congress with a program of tax increases instead of tax reductions. It was all the more exasperating, said the President, that as nearly as he could determine, more Americans were travelling de luxe style to Europe than ever before. People were spending money at an extraordinary rate and at the same time yelling about the burden of their taxes. It seemed to the President extraordinarily difficult to get Americans to see clearly the relationship between a balanced budget and decreased taxes, on the one hand, and the threat to the national security, on the other.

Secretary Humphrey then explained to the Council in some detail the difficulties that the Treasury faced in paying bills to the amount of $3 billion which were coming up on June 30 of this year. Even bonds bearing an interest rate of 3½% apparently would provide only $375 million to pay these imminent debts of the Government. Yet if it proved impossible to finance this $3 billion debt, we would presently find ourselves starting all over again on an inflationary cycle which could only end with a resort to controls and a planned economy along New Deal lines. As the Secretary of the Treasury saw it, the money and resources required by the great security programs which had been developed since Korea to the present time, simply could not be borne by the United States unless we adopted essentially totalitarian methods.

The President said that the oral presentations by the Defense Department, and the subsequent discussion by the Council, gave rise to two questions in his mind. The first of these he addressed to Secretary Humphrey, inquiring whether the Treasury Department had given any thought to setting forth the facts that bore on the situation which the Treasury faced in its efforts to find the $3 billion which it would owe on June 30. The President thought that such facts should be made available to the public.

Secretary Humphrey replied that the Treasury had not as yet undertaken to draft such a report to the people, nor did he feel that it would be profitable or even possible to make such a report until he was more certain of the direction that the country would take at the beginning of the next fiscal year and after we had got over the hurdle represented by the $3 billion.

The President said that what he had in mind was that Secretary Humphrey make as clear as possible the significance of the immediate problem the Treasury faced in meeting the $3 billion in obligations, but to touch rather more lightly on the long-range implications of continued expenditure at such levels. Perhaps, suggested the President, what he really had in mind was an educational program which would inform the American people as to the philosophy and policy of the former Administration, and what the change of policy which the present Administration hoped to effect really meant. This would at least have the advantage of indicating the great difficulties which the Republican Administration faced in this area.

The President directed his second question to Secretary Wilson. This was a reiteration of the point made on several earlier occasions as to the feasibility and desirability of cutting overhead and duplication in the military program. When, asked the President could Secretary Wilson give him a study of the economies that could be anticipated in this vital area?

Secretary Wilson replied by pointing out the difficulty of effecting economies in this area sufficient to meet the problem of assuring the security of the nation and approaching a balanced budget. While Secretary Wilson stated that he was quite certain that economies could be carried out without producing quite such drastic effects on the nation’s security as those which had been described by the spokesmen for the Defense Department, he nevertheless felt compelled to warn that this was far from an easy task.

The President adjourned the meeting at 12:45, saying facetiously that the “Williamsburg”⁴ was clearly in jeopardy.

The National Security Council:⁵

a. Noted and discussed the reference memoranda of March 24 on the subject, in the light of the following oral briefings;

(1) The Army Program, by General Collins.

(2) The Navy Program, by Admiral Fechteler.

(3) The Marine Corps Program, by General Shepherd.

(4) The Air Force Program, by General Vandenberg.

(5) The Joint Chiefs of Staff comments on the Military and Mutual Security Programs, by General Bradley.

(6) Approximate Costs of Equipping and Maintaining U.S. and Foreign Infantry Divisions, by Assistant Secretary Frank Nash.

b. Noted the President’s desire that the Secretary of Defense make a tentative estimate of the savings that might be made in the military program by reducing overhead and duplication.

Note: The action in b above subsequently transmitted to the Secretary of Defense for implementation.

. . . . . . .

S. Everett Gleason

1. Drafted by Deputy Executive Secretary Gleason on Mar. 26.
2. Regarding NSC Action No. 730–c, see the editorial note, p. 244.
3. The two memoranda from the Executive Secretary to the NSC entitled “Review of Basic National Security Policies: The Mutual Security Program” dated Mar. 20 and 24, 1953, neither printed, transmitted the statement prepared by the Director for Mutual Security in conformity with NSC Action No. 730–c and the views and comments of the Joint Chiefs of Staff thereon. For an undated summary of the statement prepared by the Director for Mutual Security circulated to the NSC by Lay on Mar. 30, see vol. i, Part 1, p. 596. The memorandum from Lay to the NSC entitled “Review of National Security Policies: The Military Program” dated Mar. 24, not printed, transmitted the statement prepared by the Department of Defense in conformity with NSC Action No. 730–c. Copies of all three of these memoranda are in S/S–NSC files, lot 63 D 351, NSC 142 Series.
4. Reference is to the Presidential yacht.
5. Paragraphs a–b constitute NSC Action No. 752. (S/S–NSC (Miscellaneous) files, lot 66 D 95, “NSC Record of Actions”)