Foreign Relations of the United States, 1952–1954, China and Japan, Volume XIV, Part 1

Eisenhower Library, Eisenhower papers, Whitman file

No. 147
Memorandum of Discussion at the 169th Meeting of the National Security Council, Washington, November 5, 1953¹

top secret
eyes only

Washington, November 5, 1953

[Extracts]

The following were present at the 169th meeting of the National Security Council: The President of the United States, presiding; the Under Secretary of State; the Secretary of Defense; the Director, Foreign Operations Administration, and the Acting Director, Office of Defense Mobilization. The Vice President was not present at the meeting because of his absence from the country. Also attending the meeting were the Secretary of the Treasury; the Secretary of Commerce (for Items 2 and 3); the Director, Bureau of the Budget; the Secretary of the Army; the Secretary of the Navy; the Acting Secretary of the Air Force; General Ridgway for the Chairman, Joint Chiefs of Staff; the Acting Chief of Naval Operations; the Acting Chief of Staff, U.S. Air Force; the Acting Commandant, U.S. Marine Corps; the Assistant Secretary of Commerce (for Item 3); Robert R. Bowie, Department of State; the Director of Central Intelligence; the Deputy Assistant to the President; Robert Cutler, Special Assistant to the President; C.D. Jackson, Special Assistant to the President; the Assistant to The Assistant to the President (for Items 1, 2, 3 and 4); the Acting White House Staff Secretary; the Executive Secretary, NSC; and the Deputy Executive Secretary, NSC.

There follows a summary of the discussion at the meeting and the chief points taken.

1. Significant World Developments Affecting U.S. Security

The Director of Central Intelligence informed the Council that no fundamental change in Sino-Soviet relations had occurred since Stalin’s death. He pointed out that China’s position in the Soviet bloc was not that of a satellite, but that the great dependence of the Chinese on Soviet assistance made it likely that the alliance would remain firm. Mao Tse-tung, Mr. Dulles noted, had a very special status among the heads of the Soviet-bloc states, and Soviet personnel in China, which probably numbered between 20 and 30 thousand, made every effort to avoid direct interference in Chinese affairs.

Mr. Dulles went on to point out that the Soviet Union no longer seemed to be disputing Peiping’s authority in such border regions as Manchuria, Sinkiang, and the like. The exception, of course, was Port Arthur, which, however, was covered by a special agreement.² Mr. Dulles further pointed out that the Kremlin did not really need to exercise direct control over China. The latter was Moscow’s only voluntary and genuine ally. It willingly follows the Soviet lead in foreign affairs. There were no discernible differences in this area between the two powers, who actually, for the time being, had common aims in Asia. There was no evidence of any dispute between the Soviets and the Chinese Communists as to the direction of the Vietminh cause in Indochina. Although Chinese Communist aid to the Vietminh had risen to a level of 1000 tons a month, no military adventure along Korean lines by the Chinese Communists seemed in prospect. Mr. Dulles thereafter discussed in some detail, and with the assistance of a chart, the very considerable Soviet deliveries to Communist China of military equipment, industrial equipment, and petroleum products. Of total Communist Chinese imports for 1952 and 1953, Soviet Russia had supplied 53%, the Soviet satellites 10%, and the West 28%. The one remaining difference to be observed in the propaganda lines of the USSR and Communist China was on the status and stature of Mao Tsetung and the latter’s contribution to Marxist-Leninist theory and practice. This difference, which had once been notable, was now much less significant, thanks to concessions made by the Soviets to Mao’s contributions. From these facts and judgments, Mr. Dulles deduced as conclusions that no early weakening in the Sino-Soviet alliance was to be anticipated. There was little prospect of Titoism in China. . . . .

The National Security Council:³

Noted an oral briefing by the Director of Central Intelligence on the subject, with specific reference to Communist China and its relationship with the USSR.

2. U.S. Economic Defense Policy Toward Hong Kong and Macao (Memos for NSC from Executive Secretary, same subject, dated October 19⁴ and November 4, 1953;⁵ NSC 152/2 and NSC 122/1)

Mr. Cutler explained the purpose of the new policy, and called the Council’s attention to the comments thereon by the Joint Chiefs of Staff, who had stated their preference for the more detailed guidance on this subject provided by NSC 122/1, which would be superseded if the present paper were adopted. He then called upon the Secretary of Commerce⁶ to speak to the report.

Secretary Weeks replied that the Department of Commerce looked with favor on the greater latitude which would be permitted by adopting the present report as presented by the NSC Planning Board. He then suggested that Assistant Secretary Anderson⁷ would provide specific details.

Secretary Anderson said that he had two points to make an illustration of Secretary Weeks’ general position. The first of these was that the Government of Hong Kong was now acting in a much more effective manner in exercising the necessary controls over trade with Communist China. Secondly, the more detailed policy set forth in NSC 122/1 contained a directive to determine the domestic requirements of Hong Kong. In practice it had proved extremely difficult to make such a determination.

Governor Stassen also stated that he was satisfied with the manner in which the authorities in Hong Kong cooperated with the objectives of the United States, and with the manner in which they were imposing the controls over trade with China which the United States thought requisite.

Secretary Wilson said that the Defense Department regarded the problem of trade between Communist China on the one hand and Hong Kong-Macao on the other, as inherently a detailed and complicated problem. For this reason, he preferred the detailed guidance which had been provided by NSC 122/1, and feared that if it were superseded by the present more general statement, the United States would drift into ways of dealing with Hong Kong which were more lax.

The President repeated the position which he had often taken earlier on such problems, namely, that the only sensible course of action for the United States was to apply the criterion of “the net gain”. What do we get out of this policy in terms of what we put in? Trade, said the President, was one of the most powerful weapons of the diplomat. Since Mr. Allen Dulles had just been stressing the importance of trying to weaken the Sino-Soviet alliance, it seemed to the President that trade might be a very useful tool in accomplishing this purpose. In any case, he continued, there was no profit in blindly adhering to a rigid set of rules and methods of dealing with trade with Communist China. We should instead have freedom to act in such a manner as would contribute most to our own advantage in any transactions with Communist China. In fact, the President recommended such a procedure not only with respect to China, but throughout the world. Indeed, he said facetiously and in order to make his point, he would be willing to send jet aircraft to the Chinese Communists if it could be shown to our net advantage, although of course, he added, he could not conceive of any return to the United States which would suitably balance jet planes. The President said also that we could not afford to forget about Japan and its need for economic viability in any discussion of Communist China. If, said the President, we could get the Japanese to send harmless manufactured goods, such as crockery, knives and forks, and wholly non-strategic materials, and sell them to China, this would serve the dual purpose of relieving Communist China’s dependence on the USSR and Japan’s dependence upon our own Treasury. In conclusion, the President emphasized once again his desire to see, in this and in all similar policy reports, the concept of “net advantage”. Papers on such subjects should, of course, strictly control trade with Communist countries in items of clearly strategic significance, but should otherwise provide maximum freedom in permitting a good bargaining position for the United States.

Secretary Wilson continued to state his preference for the statement of policy in NSC 122/1, even though Mr. Cutler pointed out that if experience proved that the new policy was disadvantageous, the Defense Department should feel free to come back and report its findings to the Council. Secretary Wilson also explained his anxiety lest a considerable resumption of trade between Communist China and Japan eventuate in Japanese recognition of Communist China.

The President replied that he was not greatly concerned about this prospect, and Mr. Cutler attempted to reassure Secretary Wilson that the new paper contemplated maintaining a strict embargo on U.S. exports to Communist China, at least until such time as satisfactory settlements were achieved with the Communists in Korea and in other areas around Communist China.

The President expressed doubt as to whether such a strict embargo made sense even in the current situation, but Secretary Wilson stated that although he was a free trader in principle, we were, after all, fighting the Chinese Communists. It was pointed out to Secretary Wilson that the Department of Defense, together with all the other interested departments and agencies, had representation on the Economic Defense Advisory Committee,⁸ which had prepared the new policy in the first instance.

The President said to Secretary Wilson that there seemed little purpose in setting up committees such as this, on which Defense was represented, if you cannot anticipate good judgment in the decisions and recommendations of such a committee. All that was needed to carry out a wise policy in this field was general guidance, and the President was convinced that the EDAC report and the Planning Board recommendations provided the requisite guidance.

The National Security Council:⁹

Adopted the recommendations with respect to NSC 152/2 and NSC 122/1 contained in the reference memorandum of October 19.

Note: The recommendations referred to above subsequently approved by the President. NSC 152/2, as amended, subsequently circulated as NSC 152/3.¹⁰

3. United States Policy Toward Communist China (NSC 166; Memo for NSC from Executive Secretary, same subject, dated November 4, 1953)¹¹

Mr. Cutler gave a detailed legislative history with regard to the problem of formulating U.S. policy on Communist China. He read and summarized the general considerations and the policy conclusions and courses of action in the current report, and referred to the two main proposals by the Joint Chiefs of Staff for a revision of the paper, including their suggestion that the paper would benefit by the inclusion of a statement that the United States had as an ultimate though not an immediate objective the removal of the present Chinese Communist regime and its replacement by a regime not hostile to the United States.

Secretary Smith said he had no objection to the policy “Carthago delenda est” or, in other words, to the long-range objective which the Joint Chiefs desired to include. The only reason for its omission was that the paper addressed itself to the current situation in Communist China, which offered very little prospect of upsetting the present regime.

The President said it was unfair of Secretary Smith to quote Latin at him when he was already suffering from a severe head cold. He nevertheless endorsed the introduction of the Joint Chiefs’ suggestion, as Secretary Smith recommended, in paragraph 3.

General Ridgway stated that General Smith’s language met the point raised by the Joint Chiefs of Staff.

Secretary Weeks said he felt it necessary to point out clearly to the members of the Council that the United States was meeting with increasing difficulties in its efforts to prevent our allies from expanding rapidly the volume of their trade with Communist China. Furthermore, businessmen and exporters in the United States were becoming restive as they watched businessmen in other countries gaining economic advantages from this trade, from which they themselves were excluded by their Government. Secretary Weeks said that Assistant Secretary Anderson would subsequently amplify and illustrate what he meant. Meanwhile this was a fact of life which the Council would do well to recognize as it discussed the problem of Communist China.

Mr. Cutler asked Secretary Weeks if his statement amounted to a proposal that we change our policy and ease our present restrictions on trade with Communist China, even before we had achieved a settlement in Korea. Secretary Weeks replied that he was making no proposals whatever, but merely calling the Council’s attention to an indisputable fact.

Secretary Smith commented that Secretary Weeks was quite correct in calling the Council’s attention to the virtual impossibility of forcing our allies to shun trade with China, and he thought it best to recognize this hard fact by revising paragraphs in the paper which seemed to anticipate a continuation of strict trade controls by our allies.

Governor Stassen concurred, and pointed out that it was going to be very difficult, for example, to prevent the export of antibiotics to Communist China by the nations of the free world. The Department of Commerce would presently have to make a decision as to whether the United States should not do likewise.

Secretary Wilson expressed himself as wholly confused by the trend of Council discussion on “this whole business”. He was completely at a loss, he said, as to how you could love the Chinese Communists and fight them at one and the same time.

Secretary Humphrey replied that this was a matter of timing. East-West trade would ultimately have to be opened up. It would be disastrous to do this now in the light of the situation, but in due course we would have to contemplate it.

Secretary Wilson replied that he didn’t know very much about these affairs and probably lacked experience, but as far as the Communists were concerned, he was willing to settle for the proposition that if they would stop aggression we would stop trying to undermine their regime. As for the rest of all this, it was too involved for him to see any clear guide.

Mr. Stassen pointed out that naturally this was a complicated problem, and that our policy vis-à-vis the Communists had to distinguish between our attitude toward the peoples of the Communist states and their governments.

The President, directing his remarks to Secretary Wilson, pointed out that things could not be as black-and-white as the Secretary wished. This was one more instance of the validity of the President’s view of the “net advantage”. The great difficulty, of course, was in the public relations aspect of any policy which involved trading with Communist China. Demagogues would raise a hue and cry about building up the economies of nations who would use their resources to kill our soldiers. Nevertheless, said the President, he shuddered to contemplate the hard and fixed rules which this Government was setting up to guide its policy on trade with the Communist powers.

Secretary Smith, speaking to the issue of trade between Japan and China, pointed out that we must ultimately contemplate a revival of this trade on a considerable scale, unless Secretary Humphrey was prepared to pay the bill for the support of Japan’s economy and for the maintenance of her military defense.

Secretary Anderson then offered to illustrate the general point of the need for reviewing our stringent prohibition of trade with Communist China by special reference to antibiotics. If, said Secretary Anderson, we were prepared to loosen up on trade in these items, which the Chinese were desperately anxious to obtain and which our allies were anxious to sell them, it might result in our being able to induce our allies to restrict more effectively their trade with Communist China on items of genuine strategic importance. On the whole, this exchange, said Secretary Anderson, had much to recommend it in terms of the genuine advantage to the United States.

To this argument Secretary Smith added that the State Department was now very greatly concerned over the humanitarian aspect of our embargo on antibiotics. Now that the actual fighting in Korea had ended, the United States was going to be very hard pressed to withstand propaganda that it was deliberately withholding needed drugs from China.

The discussion ended with the proposal by Mr. Cutler for the insertion of language in a new paragraph 5–i to meet the point raised by Mr. Allen Dulles at the conclusion of the intelligence briefing.

The National Security Council:¹²

a. Adopted the statement of policy contained in NSC 166, subject to the following changes:

(1) Revise the introduction to paragraph 3 to read as follows:

“3. It would be in the interest of the United States to secure a reorientation of the Chinese Communist regime or its ultimate replacement by a regime which would not be hostile to the United States. However, in the absence of further Chinese Communist aggression or a basic change in the situation, the following policies are currently unacceptable to the United States:”

(2) Page 8, subparagraph 5-g: Delete the words “free world”.

(3) Page 8, subparagraph 5-h: Insert, after “Government of China”, the words “and the representative of China in the United Nations and other international bodies;”.

(4) Page 8: Insert a new paragraph 5–i to read as follows, and change the present 5–i to 5-j:

“i. Employ all feasible means, covert and overt, to impair Sino-Soviet relations.”

b. Agreed that the Economic Defense Advisory Committee should review, in the light of the discussion, current policy in NSC 152/3 with respect to U.S. controls on transactions with Communist China, and report to the Council the results of such review.

Note: The statement of policy contained in NSC 166, as amended, subsequently approved by the President, circulated as NSC 166/l,¹³ and referred to OCB as the coordinating agency designated by the President. The action in b above subsequently transmitted to EDAC.

4. United States Objectives and Courses of Action With Respect to Formosa and the Chinese National Government (NSC 146/1;¹⁴ Memos for NSC from Executive Secretary, same subject, dated November 3 and 4, 1953¹⁵)

Mr. Cutler sketched the background of previous Council efforts to formulate a policy on this subject, and briefly explained the main points and chief issues in the present draft report.

At the conclusion of Mr. Cutler’s remarks, Secretary Wilson inquired whether the proposed policy statement on Formosa was to be viewed as a temporary policy of expediency or a long-term policy. Mr. Cutler replied that of course every policy recommended to the President by the National Security Council was subject to review, but that the present policy would presumably stand, if approved, until the Council decided to change it. It was only in that sense that it could be described as an interim policy.

Secretary Wilson said that he thought the present policy had more of an interim character than Mr. Cutler had ascribed to it. What, for example, would the United States do when Chiang Kai-shek disappeared from the scene?

Mr. Cutler expressed some hesitation in answering this question, but said he presumed that we would recognize whoever turned out to be Chiang’s successor as head of the Chinese National Government. Secretary Wilson answered that of course we could recognize Chiang Kai-shek as the ruler of the Island of Formosa, but we would soon have to take a more realistic view of the status and power of the Generalissimo, who, in Secretary Wilson’s view, was very much like the Pretenders to various vacant thrones in Europe and no more likely than these ever to recover his lost power and position in China. In other words, said Secretary Wilson, we have just got to get ourselves off the hook of imagining and treating Chiang Kai-shek as the potential ruler of mainland China. Mr. Cutler said he thought he had better ask State to speak to this point.

Secretary Smith stated that while there was much realism in the views that Secretary Wilson had expressed, there was for the time being no good alternative to our continued recognition of Chiang Kai-shek. To this remark, Secretary Humphrey added, speaking to Secretary Smith, “You mean, in other words, that we are stuck with it.” Secretary Smith said yes, and the President said that we could not afford to restrict our recognition of Chiang Kai-shek to the mere leadership of Formosa.

Mr. Cutler then pointed out that the most controversial issues which had arisen in the Planning Board during the formulation of the present report had concerned paragraphs 12–a and 23, on the subject of military and economic assistance. To emphasize these issues, Mr. Cutler invited the Council’s attention to the total figures for proposed U.S. assistance in these fields as set forth in the Financial Appendix to the report.¹⁶ Some $50 million of added military assistance was proposed for Formosa in Fiscal 1955, and the question which had disturbed certain members of the Planning Board was whether this increase in military assistance was justified by what the Chinese National Government would be able to do in advancing United States objectives.

With respect to the Financial Appendix, the Director of the Budget¹⁷ expressed doubts as to its completeness and validity. He pointed out that the Financial Appendix included no estimate to cover the costs of raids on shipping or on mainland China. Moreover, there was not even an assumption as to when the military forces we were equipping in Formosa would be ready for action or, indeed, where such military forces could be used outside of Formosa itself. Finally, Mr. Dodge said he was inclined to dispute the statement that 350,000 men would be available when equipped by the United States. He believed the number considerably less.

Secretary Wilson expressed the firm opinion that we should start to slow down the rate of our assistance in building up these forces in Formosa. It might well prove eventually that the money being expended there was money being poured down a rathole.

Governor Stassen, however, took issue with Secretary Wilson on the value of Formosa, stressing among other things its symbolic value. It was, in his opinion, the Berlin of Asia, and should not be given up.

The President observed that as it seemed to him, and as he had said before, none of these policies should be based on any concept of working towards a specific date for D–Day readiness. Instead, we should attempt to build up over a long term. As for the Formosa paper, the considerable hike in the funds allocated for Formosa in Fiscal 1955 seemed to him to contemplate just such a D–Day readiness concept.

Agreeing with the President, Secretary Wilson suggested that instead of adding another $50 million for assistance to Formosa in Fiscal 1955, such an amount should be subtracted from what we were currently giving. The President said that this was more or less what he meant.

The President inquired what, precisely, we hoped to get as a result of the additional $50 million of assistance, and Governor Stassen replied that we hoped to be able to provide more jet aircraft and destroyer escorts for the Chinese Nationalist air force and Navy.

Mr. Dodge again expressed his concern over the lack of firmness in the Financial Appendix, and his added anxiety that the maintenance of such a considerable military establishment would completely upset the balance of the economy of Formosa.

It was pointed out that the Council did not actually give its approval to the figures in a financial appendix, and that the final figure would evolve from the normal budgetary process.

Secretary Humphrey then inquired whether Chiang Kai-shek really represented anything more substantial than a vague threat to mainland China. The President replied that in effect that was about it, but Mr. Cutler pointed out that this was perhaps not quite accurate, since in case of general war there were 350,000 Chinese Nationalist soldiers who might be very useful to the United States.

Secretary Smith warmly supported the point made by Mr. Cutler, and stressed the deterrent value of the threat posed by the existence of these armed forces on the Island of Formosa. He was certain that their mere existence was sufficient to hold down a considerable number of Chinese Communist divisions on the mainland opposite Formosa. These divisions were at least not available for further aggression in Asia and on the whole, said Secretary Smith, he thought it would be cheaper for the United States to arm and maintain 500,000 soldiers on Formosa if that number of men were available. He said that he was not impressed with the argument that these Chinese Nationalist troops might never actually engage in combat. After all, we hope to God that the armed forces of the United States, which we maintain at such great cost, will never have to fight. So it was in the case of the Chinese Nationalists.

The President said that he realized the relevance of Secretary Smith’s argument, but he still questioned whether we needed to increase the figure which we proposed to pay out in military assistance to Formosa. Would it not, he inquired, be better to leave the actual figure hazy and indefinite until such time as we can see something concrete in the way of a return for the money we propose to spend?

Mr. Cutler pointed out that there were really three choices open to the Council with respect to this issue of the amount of military assistance to be provided to Formosa. One, we could leave paragraph 12–a as it was now written. Two, we could revise the paragraph in order to stretch out the time at which we would achieve the desired goals or, three, we could fix on the precise amount of money which we would provide for military assistance.

Mr. Dodge thought none of these alternatives particularly desirable, and suggested a much more general phraseology which would prescribe the amount of military assistance to be provided Formosa in terms of “the U.S. national interest.”

The President speculated that there presumably was a real need to increase the naval and air capabilities of the Chinese Nationalists. Just how much good this would do was not wholly clear to him, he repeated, but it would at least increase their capabilities for raids. General White¹⁸ added, in response to a query of the President, that this would also provide a needed capability to assist in the air defense of the island.

Mr. Cutler again pointed out that the Council must decide whether it wished this military assistance continued at the present rate, at an increased rate, or at a lesser rate. Mr. Dodge’s suggestion of a rate commensurate with the national interest, said Mr. Cutler, would be subject to so many different interpretations that it scarcely seemed practical.

Secretary Wilson, however, said he was inclined to agree with Mr. Dodge’s general point of view. He was particularly concerned, he went on, that there was no prospect of replacements for this Chinese Nationalist army, which was, of course growing old; nor were there any reserves of consequence.

The President commented that it was vital to induce natives of Formosa to join this army; otherwise the whole thing would go to pot after a certain number of years. Nevertheless, said the President, he did not see how Mr. Dodge’s suggestion would work as guidance for those in the departments and agencies of the Government who were charged with detailed planning.

After further discussion, Mr. Cutler suggested that the problem be met by the addition of a footnote to paragraph 12–a which would indicate that paragraph 12–a and the rate of military assistance to Formosa would be subsequently reviewed after the receipt of recommendations from the Secretary of Defense and the Joint Chiefs of Staff as to the level of forces and expenditure to be provided the Chinese National Government after the end of this fiscal year.

The National Security Council:¹⁹

Adopted the statement of policy contained in the reference report (NSC 146/1) subject to the following changes:

a. Page 3, paragraph 11: Revise the 2nd line to read as follows: “Government to develop and extend logistical support of”.

b. Page 3, subparagraph 12-a:

(1) Delete the word “present” in the first line.

(2) Insert an asterisk after the period at the end of the subparagraph.

(3) Insert a footnote to this subparagraph reading as follows:

“This subparagraph is subject to review in the light of recommendations by the Department of Defense regarding Chinese Nationalist force levels and the rate of military assistance to be provided the Chinese National Government beyond Fiscal Year 1954.”

Note: The statement of policy contained in NSC 146/1, as amended, subsequently approved by the President, circulated as NSC 146/2,²⁰ and referred to OCB as the coordinating agency designated by the President. The Secretary of Defense subsequently requested to submit for Council consideration the recommendations referred to in the above footnote to subparagraph 12-a.

. . . . . .

S. Everett Gleason

1. Drafted by Gleason on Nov. 6.
2. See footnote ‡, Document 50.
3. The following paragraph constitutes NSC Action No. 950. (S/S–NSC (Miscellaneous) files, lot 65 D 95, “Record of Actions by the National Security Council, 1953”)
4. Lay’s Oct. 19 memorandum has not been found in Department of State files, but references to it indicate that it recommended that NSC 152/2 (see Document 131) should be amended by the addition of three paragraphs and that the amended paper should supersede NSC 122/1 (Document 6). The proposed paragraphs were included in NSC 152/3, “Economic Defense,” Nov. 6, 1953; see footnote 10, below.
5. Lay’s Nov. 4 memorandum enclosed a memorandum of Nov. 3 from the Joint Chiefs of Staff to the Secretary of Defense endorsing the proposed additions to NSC 152/2 but recommending that NSC 122/1 should not be superseded. (S/S–NSC files, lot 63 D 351, NSC 152 Series)
6. Sinclair Weeks.
7. Assistant Secretary of Commerce for International Affairs Samuel W. Anderson.
8. The Economic Defense Advisory Committee (EDAC) was an interdepartmental committee representing 11 agencies; its functions were to develop recommendations for U.S. security export controls and U.S. policy concerning the security export controls of other countries and to coordinate U.S. activities in this area.
9. The following paragraph constitutes NSC Action No. 951. (S/S–NSC (Miscellaneous) files, lot 65 D 95, “Record of Actions by the National Security Council, 1953”)

10. NSC 152/3, “Economic Defense,” Nov. 6, is identical to NSC 152/2 except for the addition of three paragraphs.

    Paragraph 17 reads as follows:

    “Hong Kong and Macao are colonies of friendly countries and their economic needs should be viewed in that light. However, the relationship of the economies of Hong Kong and Macao with that of Communist China is so close that the risk of the circumvention and frustration of economic defense controls toward Communist China is greater through transactions with these western colonies than through similar transactions with other free world countries. This danger is greater in the case of Macao because of its history of uncontrolled trade and the unreliability of its export controls. It is therefore necessary to take special care in the control of transactions with Hong Kong and Macao.”

    Paragraphs 37 and 38 read as follows:

    “In applying controls, accord to Hong Kong treatment consistent with that generally accorded cooperating countries while employing such special care as may be necessary to prevent frustration of economic defense controls on transactions with Communist China.

    “To the same end apply more stringent controls on trade with Macao as may be appropriate.”

    The only copy of NSC 152/3 in Department of State files includes additions and revisions made between Nov. 6, 1953, and June 18, 1954, but related documentation in the NSC 152 file indicates that no changes were made in these paragraphs during that time. (S/S–NSC files, lot 63 D 351, NSC 152 Series) For text of NSC 152/3 as revised on June 18, 1954, see vol. i, Part 2, p. 1207.

11. See footnotes 1 and 2, Document 145.
12. The lettered subparagraphs below constitute NSC Action No. 952. (S/S–NSC (Miscellaneous) files, lot 65 D 95, “Record of Actions by the National Security Council, 1953”)
13. Dated Nov. 6, Document 149.
14. See footnote 2, Document 144.
15. Lay’s memorandum of Nov. 3 enclosed a Financial Appendix to NSC 146/1, prepared by the Department of Defense, with figures on aid to Formosa during fiscal years 1951–1956; his Nov. 4 memorandum enclosed a JCS memorandum of Nov. 3 to the Secretary of Defense stating that they found NSC 146/1 satisfactory from the military point of view and recommended his concurrence in it. (S/S–NSC files, lot 63 D 351, NSC 146 Series)
16. According to the Financial Appendix, the total amounts programmed for military and economic assistance for Formosa (in millions of dollars) were as follows: FY 1951–1953, 802.6; FY 1954, 497.4; FY 1955, 410.8; FY 1956, 371.7; the total value of the actual and projected assistance to Formosa (in millions of dollars) was as follows: FY 1951–1953, 462.8; FY 1954, 333.7; FY 1955, 380.4; FY 1956, 347.7.
17. Joseph M. Dodge.
18. Lt. Gen. Thomas D. White, Vice Chief of Staff of the Air Force.
19. The paragraphs below constitute NSC Action No. 953. (S/S–NSC (Miscellaneous) files, lot 65 D 95, “Record of Actions by the National Security Council, 1953”)
20. Dated Nov. 6, Document 150.