Foreign Relations of the United States, 1961–1963, Volume IX, Foreign Economic Policy

112. Memorandum of Conversation⁰

Washington, May 26, 1961.

SUBJECT

• Meeting on Marshall Study of Military Assistance Program

PARTICIPANTS

• [Here follows a list including Secretary Rusk, Dean Acheson, Charles Marshall, Roswell Gilpatric, and officials from the White House, ICA, Department of the Treasury, and CIA.]

1. Secretary Rusk opened the meeting by expressing appreciation for the excellent study of the Military Assistance Program conducted by Mr. Marshall. He noted that it dealt with one of the most complex of problem areas. Mr. Rusk stated that it was to be expected that military assistance would be vigorously attacked by the Congress, with members of the Foreign Relations Committee having given notice to this effect. There would undoubtedly be criticism concerning: too great an emphasis in the past on the military effort without proportionate success, of our military aid supporting regimes which cannot survive because of lack of popular support; of its effect in projecting a militaristic image of the United States, etc. Despite the foregoing, the Secretary noted that dealing with the Sino-Soviet threat around the globe presented very serious problems which at least in part could perhaps only be met through use of the military aid technique. With this introduction, he asked Mr. Marshall for a brief synopsis of the major points covered by his study.

2. Mr. Marshall alluded to the fact that his last previous association with the military assistance program was in 1949 when he assisted in the writing of the Congressional Report on the first military assistance program. He thus undertook the current study without prejudice to the past and without compulsion either to endorse or to reject previous policies and programs. Mr. Marshall stated the point of departure for the study represented the enduring aim of U.S. policy, specifically the need for preserving an environment compatible with a continuing vitality of the political propositions summed up in the preamble of the Constitution. He noted that U.S. policy aims vary from one stage to another, were by no means fully subject to our dictate and only in part subject to our influence.

3. He then turned to our present circumstances which set the frame of reference for the study. He referred to the fading away of the imperial colonial order which formerly served as the basis of order between peoples of highly different cultures and levels of development living great distances from each other. This together with the heightening awareness of disparities in economic and political equality between states and among various portions of the populations within states, the growth and power of the world communist movement, and the effect of invention and weapons systems having such a redundancy of power as to place them out of all balance with rational political ends, all contributed to the problems with which US foreign policy and military assist-ance as a tool of that policy were required to deal. The general lines of the objective should be to attempt to proceed with a new order reflecting collaboration among juridically free and equal states. This would require a development of communities of outlooks and interests. But it would also require the countering of the military threat and the preventing of communist pre-emptions, whether they be military or political. He noted that it was important to understand that our aims were not logically distinguishable as between the long and short term since all of the undertakings required of us begin now and all carry into the far future. The point is that the objectives of countering the military threat and preventing pre-emptions must be realized if we are to have a chance at developing the new order and developing a community of outlook.

4. Mr. Marshall then turned to a discussion of the Communist threat with its total claim on the future and on legitimacy related to its version of a law of history which dictated the inevitable triumph of its point of view. To pursue its aims the Communists had many assets stemming from its inter-continental deterrent force through its large conventional war making capabilities, to its far-flung underground organ-ization and, indeed, even in its internal organization which permitted a short response time in decision making, a monopoly of information channels and the possession of the revolutionary mantle. For the calculable future the threat would continue. A key point in his study was the recognition that the threat of communism may be expected to continue, restrained only by considerations of prudence relating to countervailing factors. The prolongation of the cold war, however undesirable in itself, is preferable to the alternatives of unleashed violence on the one hand or capitulation on the other.

5. As described by Mr. Marshall the threat ranged from internal security through external aggression and over this spectrum there existed a wide range of varying scope and intensity of effort. The requirement for U.S. policy, therefore, was to provide a matching continuity of response, a matching wholeness. Mr. Marshall noted that there did not exist a hierarchy among the options available to us but rather a set of concurrent and linked necessities. There were the needs of internal security in its various forms, beginning with economic development and proceeding through para-military and military forces, to counter guerrilla actions. Similarly with regard to the external threat, there was involved both country military forces and US support, for coping with and deterring limited hostilities, through the series of collective security preparations for local wars, finally into requirements related to US strategic forces. In his statement, Mr. Marshall pointed out that he attempted to classify countries into three major categories: (1) the single threat countries, (2) the double threat countries and (3) the asset countries, i.e., largely NATO. In considering the situations which affected these various countries, Mr. Marshall found it necessary to put aside the distinction between military and political as not representing a meaningful division. All military assistance programs contain elements of both and to be properly understood must be considered as totalities.

6. As to the single-threat countries, these being along the Asian littoral, Africa and Latin America, these were typified by internal political malaise and by being removed in terms of logistic proximity from the Sino-Soviet heartland. Here the root problem was that of a peoples being thrust into modernity without habits and institutions for coping with it. This situation was aggravated by such factors as cultural dislocation, population growth, the power of modern communications, etc. In such situations there was the danger on the one hand of the development of oppressive regimes or of forces gaining an ascendancy having aspirations beyond capacity for fulfillment. In either case, the eventual absorption by the Communists was a clear threat. Military assistance along with diplomatic activities, cultural and information programs and assistance in economic development could provide a useful means for dealing with this problem. Military assistance represented one of the ways of reaching significant elements of these societies. Moreover, without the stability provided by military force, economic and political development was not possible. Mr. Marshall found that there existed a concern on the part of many that the development of military forces in these countries would be economically counter-productive. He also noted an opposite tendency on the part of some to believe that the production of military forces was the absolute and sole consideration. In fact, Mr. Marshall found that the relationship was much as a fence to a cornfield where an increase in the acreage planted did not suggest a decreased necessity for fencing or alternatively that it would be a sign of wisdom to put all efforts into the fence and none into the cornfield. The relationship should be mutually supporting. In fact, Mr. Marshall pointed out that the relationship of defense expenditures to economic productivity could be either retarding, neutral or, in some instances, positive depending upon how they influence the growth of capital, labor, skill and technology. In sum, in the single threat countries there was an essential role for military assistance to play: it provided a linkage between military proficiency and other factors, making for success in economic and political development.

7. In such countries, Mr. Marshall pointed out there was a high importance to be placed on military assistance in complementing civil responsibilities, i.e. so-called civil action programs. He pointed out that the military assistance program represented the largest exchange of persons activity which we conducted, that it had a direct relation to individuals and groups in sensitive positions within the societies concerned and that the military could and did play an important role in developing and imparting special skills to the society. He pointed to the importance of keeping the role of the military activities and civic action activities in correct perspective. Military activity must be considered as auxiliary but not as a substitute for the civilian components of government. Moreover, it was important that the essentially military character of military forces be recognized. They should be military forces with a civic action capability and not vice versa. He noted in passing that there would probably be certain resistances on the part of the countries to translating their military forces into civic action and police units, particularly as this impinged on the symbolic importance of military forces as a sign of sovereignty. Nevertheless, this was an important objective to be sought with the military forces entering into activities of recognizable utility to the society such as transport, communication, health, sanitation, etc. In doing so, it should be understood that the military forces and thus military assistance was getting very close to the heart of the relationship between regimes and peoples. The requirement therefore was for the closest of coordination both in the field and in Washington between the political, economic and the military aspects of US government programs and policies.

8. In conclusion, on the singly threatened countries, the question is not whether we believe that these countries should have armed forces or even whether we agree that these countries shall have military assist-ance. The question is how to best meet the Communist competition in providing such assistance. We have no choice since as in poker coming out second best is to lose the entire stakes.

9. Mr. Marshall then turned to the doubly threatened countries, noting that the internal threat posed a situation similar to that described in the singly threatened countries. But in addition, these other countries, in the vulnerable arc from Southeast Asia through the Middle East, by virtue of being adjacent to the Sino-Soviet heartland, were, as indicated by Mr. Khrushchev’s own pronouncement, the targets of “legitimate wars”. To such countries, the problem of meeting internal security requirements becomes all the more difficult because of the press of the external threat. None of the countries involved can count on an independent future without US support and each of them recognize this to be the case. The question is how to effect such support which can be effective and persuasive only if manifestly enforceable. In his study, Mr. Marshall discussed the idea of guaranties to such nations which would give them protection of forces from external aggression. Quite aside from the political questions which this involved, he questioned the persuasiveness and effectiveness of such guaranties unless they could be manifestly enforceable. For this condition to prevail indigenous forces were required unless we wished to resort to nuclear weapons which in themselves presented such serious problems as to make their use in such situations of highly questionable utility. Indigenous forces were required for a variety of reasons: To provide perimeter defense; for holding key areas essential to providing points of ingress for US forces; for complementing US forces after deployment; and for fighting a guerrilla action if overrun. Thus Mr. Marshall pointed out that in meshing the local forces with those of the US lies the heart of the joint defense in countries of the vulnerable arc. It was essential that this be reflected not solely in conceptual terms but as a specific reality in US planning.

10. Mr. Marshall then turned to the NATO area. Here he briefly reviewed the essential premises of the Acheson report which he stated he accepted as a point of departure for his military assistance study. He noted that this area represented the base for a relationship with all the areas of the world; without it the US would be at bay in its continental position.

11. With the withering of the nuclear deterrent, there was a necessity for forming a strategy better adapted to the new situation and specifically having greater emphasis on conventional capabilities. To accomplish this new strategy would require a consensus of the NATO allies. The cost of the undertaking was not yet defined in detail; however, initial studies indicated an order of magnitude of some additional $20 billion over a five year period. While from a theoretical point of view this was within the economic capabilities of the Europeans themselves, the difficulty was that we cannot deal with situations as if they represented pure economic theory. In fact they turn on a complex of considerations going to the question of public will, strength of governing authority, comprehension and acceptance of new strategy, etc. Mr. Marshall pointed out that an attempt to establish an equitable and feasible formula for burden sharing was a fruitless endeavor. Clearly, both we and the Europeans could do more. One way of looking at the problem was to weigh the alternatives foreclosed by accepting a bigger burden, in other words, who was hurt more by making an additional sacrifice. Here the Europeans might well believe that moving back from cars to bicycles, or bicycles to walking was more of a sacrifice than the Americans would be called upon to make if we contributed more of our resources to the common defense effort. It was necessary to recognize that the US was cast in the role as leader and as exemplar. It would be necessary therefore to combine persuasion with inducement. In order to demonstrate the importance with which the US views the necessity for an adequate NATO defense, we would have to share in the increased burden of the defense effort. Mr. Marshall described other methods of inducing an increased NATO effort such as US willingness to provide the nuclear support for NATO, the modernization and filling out of US forces; or even an increase in US forces in Europe. While all were significant, none singly nor combined provided a sufficiently rapid, sufficiently dramatic and irretractable contribution to serve the purpose. Mr. Marshall indicated that he would not favor simple unencumbered grants of increased military aid but would tie such assistance to conditions which resulted in specific increases in European defense budgets. This might be left to negotiation through our Ambassador to NATO.

12. Mr. Marshall concluded his presentation by indicating that his study had suggested that there would be a total requirement, above and beyond the approximate $1.6 level previously requested by the Administration for the maintenance of existing military forces, which would approach three-quarters to a billion dollars annually if the totality of the US national security objectives as presently identified were to be successfully accomplished. This was a need which he foresaw extending for an indefinite period into the future.

13. The meeting was then opened to discussion. Mr. Gilpatric stated his general agreement with Mr. Marshall’s report though noting certain reservations. With regard to the value of a US guaranty, Mr. Gilpatric stated if it were to be collateralized on certain specifics such as the provision of airlift as was contemplated in SEATO, we should be able to exercise a greater degree of control. Secondly, he questioned whether, in connection with NATO, we could not induce an increased effort given the fact that this Administration had withdrawn the previous threat of force reductions left by the Eisenhower Administration, had agreed to provide a nuclear submarine commitment and was undertaking a buildup of conventional capabilities of U.S. forces. Mr. Acheson interjected that he agreed with the Marshall study that such inducements as those cited by Mr. Gilpatric simply would not be sufficient. There was no question that the Europeans had the requisite economic capability, this was unchallenged. But it was also unchallenged that the military requirement for more adequate forces, particularly with a conventional capability, existed and had existed for some time. Yet this requirement had not been met. We believe the Europeans have a capability for doing more but similarly they believe we could do more. The fact of the matter is, Mr. Acheson pointed out, the requirement will not be met until and unless the US accepts the role of the leader and shows the way. Unless we are prepared to undertake such an action which will mean a greater amount of military assistance for NATO, we shall be left with nice sounding policy statements but without the military forces which are absolutely essential to our own security.

14. Mr. Rusk commented on the inherent “witchcraft” in nuclear weapons where the temptation was to gamble that the threat to employ them will deter war. We have been telling our NATO allies for the last eight years that this was our policy. Now we want them to shift to a more effective conventional buildup and it is difficult to get them to do so. He then turned to Iran, pointing out the difficulty which would ensue in attempting to hold this area against the Soviets. [4-1/2 lines of source text not declassified] Mr. Marshall referred to his report stating that he felt Iran to be something of a special case where perhaps lesser numbers and lighter equipped forces might be possible. However, he noted that his study simply was much too abbreviated to permit the careful investigation that this situation would require. Mr. Nitze challenged the view that Iran was essentially different from other of the doubly threatened areas. In the first place, he pointed out that it was important to attempt to deter the Russians, and in this connection the existence of Iranian forces obviously played a role. The alternative was to have small forces which would clearly increase the pressures on Iran to accommodate to the Soviets. [4-1/2 lines of source text not declassified] As to the internal problem raised of the existence of large forces in Iran, this essentially was a political problem which would have to be solved as best we could but which did not invalidate the other arguments for Iranian forces.

15. Mr. Rusk commented that there was a danger in our commitments not being credible because of our own failure to believe in them ourselves. In this connection, he commented on the recent Laos history noting how little weight had been given to the fact that we had provided a commitment to Laos which we never really honored. Granting that Laos was a bad place in which to put US troops, Mr. Rusk noted that this was a matter which we knew before we made the commitment. Thus he noted that it was a bad idea to take on a commitment on which we have no intention of following through. If, however, in such places as Vietnam and Thailand we really were prepared to take our commitment seriously and combine our forces with theirs then the resulting situation was a quite different one. Mr. Gilpatric raised a question as to whether the act of prepositioning US forces didn’t gain credibility for a guaranty. Mr. Rusk agreed that it did and cited an example of Korea. Mr. Rusk asked Mr. Acheson whether prepositioning of US forces in Iran would not make clear, as was clear with Europe, that we intended to engage the Soviets in the event that an invasion was attempted. Mr. Acheson stated that he thought there was a vast difference between the Iranian and the European situation, primarily because Europe was vital to the U.S., and Iran, however important, was not. Mr. Rusk, however, pointed out that a chain reaction could be expected—if we lost Iran. Mr. Nitze supported Mr. Rusk noting that while Berlin might very well be the key to the North, Iran could be the key to the Middle East and the South. Mr. Hilsman noted that there was considerable significance attached to manner in which an area such as Berlin or Iran was lost. If it is lost through a Munich-type negotiation, the entire alliance structure could be undermined. If, however, it is lost through military action, through being “kicked out”, the result is more likely to be a solidification of resistance to the aggression. Mr. Nitze pointed out that there was a danger of a gradual, step-by-step takeover which moves slowly from neutralism to Communist absorption with each succeeding action being so gradual as not, in and of itself, to warrant counter-military action on the part of the United States.

16. Mr. Rusk questioned as to whether it would not be possible to consider the establishment of priorities in the programming of military assistance which took into account the relative importance of various areas to the United States. We might, for example, cite as a first priority areas needed for the support of the US strategic retaliatory capability; secondly, NATO which would be on an almost equal plane; thirdly, the Pacific basin; fourthly, the doubly threatened areas; and lastly, the single-threatened areas. Mr. Nitze stated that the biggest threat which we had to face was the political one and that this was true now and had always been the case. As a result, one might with some justification reverse the order of priorities cited by Mr. Rusk. Mr. Dulles said that he wished to comment on the fact that most of the underdeveloped countries could not afford an army, police force and an internal security/FBI type of force. He noted that considerable time had been given in the past to considering this problem, referring to the 1290d studies,¹ but that he felt that additional consideration was required. Mr. Rusk noted that a different situation existed in each country even though we had a tendency to try to generalize about them. In returning to the question of priorities, Mr. Marshall questioned whether this was a feasible way to approach the problem. For example, were the requirements for countries in priority one to be completely filled before any attention was to be given to countries in lesser priorities? The problem really was that, if over an extended period we applied an inadequate level of resources, it would be impossible to carry out the policies which were currently stated to be in the vital national interest.

17. In turning to the disposition of the report, Mr. Gilpatric suggested that a more specific series of recommendations be developed by a smaller group. Mr. Rusk noted that there were a few questions which were perhaps not completely treated in the report, such as defining how far we go in competing with the Russians. Mr. Bundy returned to the question of priorities, noting that in many of the areas which created great problems of a political nature there was really not much money involved. The real money was required for Korea, Turkey, Formosa, and perhaps Vietnam and Thailand. These together with NATO were where the big dollar signs are. He noted that the Department of Defense planners had developed a draft proposal consistent with the Marshall Report which indicated a resource requirement distribution. He suggested that a working group be established (a) to identify the necessary policy decisions which were required and (b) to show the financial implications of such decision, this job to be completed in the immediate future. Mr. Nitze indicated that the line organizations of the Department of State and Defense should be ready to review the Marshall paper and proceed with its implementation which might well include requirements for NSC approval. Mr. Fowler raised the question of balance of payments considerations. Mr. Bundy pointed out that this was only slightly applicable to military assistance programs since the items procured for the program were procured in the US. Mr. Fowler asked about the problem as it related to prepositioning of US forces. Here it was agreed that this could have an important balance of payments impact and that this was a matter which should be identified in any subsequent proposals involving pre-positioning. Mr. Rusk returned to the subject of moving the report to a more definitive stage indicating that he thought a paper should be submitted to the NSC. He stated that the Marshall study should be covered by an appropriate transmittal indicating that general agreement had been reached on the study by the Departments of State and Defense. This might then be followed up by a more specific agency development of programming guidance as required for the development of subsequent military assistance programs. Mr. Wilson indicated the need for an NSC official sanction of the general policy guidance in order to permit the line organizations to proceed with the detailed programming operation.

0. Source: Department of State, Secretary’s Memoranda of Conversation: Lot 65 D 330. Top Secret. Drafted by Weiss on May 31. Not submitted to the Secretary for approval but cleared by S/S on June 2.
1. Reference is to NSC Action No. 1290-d, approved December 21, 1954, in which the National Security Council: “Requested the Operations Coordinating Board to present to the Council a report on the status and adequacy of the current program to develop constabulary forces to maintain internal security and to destroy the effectiveness of the Communist apparatus in free world countries vulnerable to Communist subversion.” See Foreign Relations, 1952–1954, vol. II, Part 1, p. 844. At its meeting on April 11, 1957, the National Security Council discussed a progress report of the Operations Coordinating Board on the “Overseas Internal Security Program,” formerly called the “1290-d program.” See ibid., 1955–1957, vol. XIX, pp. 475–477.