Foreign Relations of the United States, 1964–1968, Volume XI, Arms Control and Disarmament

42. Memorandum of Conversation¹

Washington, August 12, 1964, 5 p.m.

SUBJECT

• Recommended Content of a Joint Statement Relating to a Reduction of Military Expenditures—Discussed by the Committee of Principals²

PARTICIPANTS

• See Attached List³

Secretary Rusk asked two preliminary questions: first, whether, barring unforeseen developments such as possibly might occur in the Far East could one foresee the shape of next year’s military budget? (Secretary McNamara replied the DOD budget would be about the same as this year’s and Mr. Palfrey said the same applied with respect to AEC); secondly, what are the Soviets doing about expenditures, are they reducing? (Mr. McCone replied they were not.)

Mr. McCone continued that he had a summary to read from which shows that Soviet public statements and actions in this field are contradictory. It appears that the Soviets are engaging in a dynamic expansion of their weapons program by steps such as the following: testing of the new ICBM types and launch systems; continued expansion of fissionable materials capacity, including new reactors; construction of fourteen large reactors; increase up to thirty, of the number of nuclear submarines, and conversion of old submarines; expansion of aircraft plants. In summary, this was not a crash program but a consistently expanding one, despite public statements designed to mislead world opinion. In reply to a question, Mr. McCone said his statement was based on a study which had just been prepared by a special group and general distribution had not been made.⁴

Secretary McNamara generally agreed with the substance of Mr. McCone’s report but said its significance depended to some extent on interpretation. The facts are not new; the Soviets are building new missiles, including Polaris types, are engaged in hardening of sites, etc. It was obvious that the Soviets are trying to strengthen their position, faced as they are with U.S. overall superiority. On the other hand, economic pressures may be working on them to reduce expenditures. We should try to lead them toward this objective but Secretary McNamara doubted whether this could be done by a public statement of the kind envisaged which he felt might have unfavorable effects on Vietnam, our European allies, etc.

In reply to Mr. Foster’s question regarding the two plutonium reactors which the Soviets said they would not complete,⁵ [less than 1 line of source text not declassified]. It was possible, of course, that they may have decreased by that number the new reactors they plan to build. If two were actually shut down, they would probably be earlier types.

Mr. Foster thought it would be valuable to obtain more knowledge about Soviet military expenditures and an attempt to secure records would be useful. The question is, and the answer would seem to be affirmative, whether it would be advantageous to the U.S. to have a commitment from the Soviets, proceeding from the Geneva discussions, to reduce their military expenditures. A statement along the lines proposed might have a good effect on the smaller nations, might furnish the Soviets an opportunity to make reductions, strengthening their hand in their dispute with the Chinese communists. Some kind of understanding on how to deal with budgets was probably the only hopeful area for progress at this session of the ENDC. Essentially the decision before the Committee of Principals was a political one and it should be examined in the light of a balance between potential advantage and disadvantage to the U.S. Mr. Foster informed the Committee that he intended to return to Geneva during the first week of September for the remainder of the session which is due to end September 17.

Secretary Rusk thought that paragraphs 5 and 6 of the draft statement offered the best possibilities and were the only things really requiring agreement.⁶ We favor these ideas, the Soviets do not. As regards paragraph 6, we make this information public anyway and perhaps we should try to get the principle accepted as a minimum; later we might examine other avenues. We should not “express satisfaction” with Soviet budgetary announcements, since we don’t know their meaning.⁷ Secretary Rusk suggested the Committee approve paragraphs 5 and 6 which could be set forth in a speech and might lead to the setting up of a useful technical mechanism for the examination of budgets.

Mr. Bundy was reluctant to encourage disclosure beyond existing budgets since we would not wish to give supplementary information in some fields. Secretary Rusk pointed out our foreign military aid programs were mostly public knowledge; we should try to engage the smaller countries in doing something about disarmament. Among the non-aligned Eight at Geneva, Mexico was probably the most sincere since many of the others were expanding their military establishments. Secretary McNamara approved paragraphs 5 and 6 but opposed any suggestion there should be a mandatory reduction.

In reply to Mr. Foster’s question whether a revision of the paragraphs preceding 5 and 6 in the draft statement might be acceptable, Mr. Bundy expressed doubt about the usefulness of a statement. Reductions were important but the suggested timing and place for a statement of this kind seemed inappropriate. As regards the reported feeling of malaise among the non-aligned at Geneva, this might possibly be confined to the delegates only and might not apply to their Governments as such. Since it might merely be a question of personal feelings, the matter did not seem to be of major substantive importance.

Mr. Foster said a statement might benefit the work of the Geneva conference. At any rate, the Soviets had shown some interest, even though we had been unsuccessful in obtaining their agreement to a technical working group on budgetary matters. An understanding at Geneva might be helpful in easing tensions which could arise in the General Assembly and among the Africans with respect to difficult questions such as non-dissemination, MLF, etc. It might be possible to avoid the bad effects which a statement on budgets might produce on NATO. In any event, we should not let the decision as to whether a statement was useful or not go by default.

Secretary Rusk indicated the Committee could agree on something along the lines of paragraphs 5 and 6 as the basis for a statement at Geneva which could be helpful in mitigating crisis tensions. The statement should not exaggerate the limited progress achieved but could expand on the objectives we are seeking through our disarmament discussions.

1. Source: Department of State, S/S-RD Files: Lot 68 D 452, Committee of Principals, August-December 1964. Secret. Probably drafted by Jacob D. Beam, who is listed as reporting officer on the attached list of participants. The meeting was held in the Secretary of State’s Conference Room. The source text is also attached to the summary of action taken at the meeting, Document 43, which provides the time and place of the meeting.
2. A draft position paper, transmitted under cover of an August 11 memorandum from Foster to the Committee of Principals; not printed. In his memorandum Foster explained that a statement of this kind, if approved, might be issued at the time of the recess by Eighteen-Nation Disarmament Committee or in the Committee’s report to the United Nations. (Department of State, S/S-RD Files: Lot 68 D 452, Committee of Principals, August-December 1964)
3. Not printed.
4. This study has not been further identified.
5. Reference is to Khrushchev’s statement in his April 17 message to President Johnson and repeated publicly in his April 20 statement that the Soviet Union was stopping construction of two large plutonium reactors. See Documents 23 and 24, respectively.
6. Paragraph 5 called for a joint statement on the technical questions involved in establishing commonly understood budgetary procedures. Paragraph 6 was a recommendation to the U.N. Assembly that all nations submit to the U.N. Secretary-General annual reports on their actual military expenditures for the preceding year, planned military expenditures for the following year, and supplementary data to permit evaluations of the scope of and changes in expenditures devoted to the military effort.
7. An apparent reference to paragraph 2 of the draft joint statement: “An expression of satisfaction at the announcement by the Soviet Union and the United States of reductions in their current military budgets.”