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1961-1963 Volume V Soviet Union |
90. Editorial Note
On June 5, 1961, Secretary of State Rusk, who had returned to Paris the previous evening, briefed the North Atlantic Council and President de Gaulle on the meetings in Vienna. At the restricted meeting of the Council at 10:15 a.m. Rusk circulated copies of the two Soviet aides-memoire, reviewed in some detail the progress of the talks, stated that they were not intended to be negotiations but rather a preliminary exchange of observations on U.S.-U.S.S.R. relations, and concluded that they had produced no surprises. (Polto Circular telegram 7, June 5; Department of State, Central Files, 611.61/6-561)
At 3 p.m. the Secretary of State briefed de Gaulle at the Elysee Palace. After brief reviews of the discussion of Laos and disarmament, Rusk went into some detail on the conversations on Berlin, stating that Khrushchev had been "quite firm on all questions dealing with Berlin," and adding that it seemed to be the main one for the Chairman. The Secretary added that Khrushchev had become quite emotional at some points in the discussion of Germany and seemed "to greatly fear a unified and rebuilt Germany which would be an ally of the West." When asked why he thought the Chairman wanted to see President Kennedy, Rusk speculated that there was some curiosity on both sides, and that the President wanted to show that the United States was prepared to defend its interest. (Ibid., Conference Files: Lot 66 D 110, CF 1901)
On June 5 Assistant Secretary of State Kohler went to Bonn to brief Chancellor Adenauer. After an initial report on the President's talks in Paris with de Gaulle, Kohler immediately noted that the discussions at Vienna "had scarcely contributed towards détente," and added that it had been a "hard" meeting. The Assistant Secretary then summarized the talks on Laos and disarmament before concentrating on Berlin. He concluded by stating:
"If any conclusion could be drawn . . . it was the possibility of a developing crisis on Berlin, probably after the Soviet Party Congress in October. This was, however, pure speculation. The tone of the meeting was civil and reasonably courteous, but the substance of what was said was hard on both sides." (Ibid., Central Files, 611.51/6-561)
While Rusk and Kohler were in Paris and Bonn, the President had flown to London to brief the British. The President explained the Soviet view on Berlin and also gave Prime Minister Macmillan an extensive account of his talks with de Gaulle on the future of Europe. (Notes on a Private Discussion, June 5; ibid., Conference Files: Lot 66 D 110, CF 1901) At a second meeting the President and the Prime Minister discussed how to proceed on Berlin. For a record of this conversation, see Foreign Relations, 1961-1963, volume XIV, pages 98-102.
91. Memorandum of Conversation/1/
Washington, June 6, 1961, 4:30 p.m.
/1/Source: Kennedy Library, National Security Files, Countries Series, France. The source text bears no classification or drafting information. Printed in part in Declassified Documents, 1986, 2256.
MEMORANDUM OF CONVERSATION WITH THE
PRESIDENT AND THE CONGRESSIONAL LEADERSHIPPRESENT
The Vice President, Senators Mansfield, Humphrey, Russell, Fulbright, Dirksen, Saltonstall, Hickenlooper, Wiley
The Speaker, Congressmen McCormack, Albert, Vinson, Morgan, Arends, Chiperfield, Hoeven, Byrnes (Wisconsin)
[Here follows discussion of Kennedy's meeting with de Gaulle.]
II. Khrushchev
The President reported that the most important subject discussed on the first day had been Laos; that he and Khrushchev had agreed that Laos should be neutral in the same fashion as Cambodia and Burma, but that Khrushchev had not appeared really much interested in Laos. The most ominous discussion of the first day had been Khrushchev's doctrine of the three wars. In the President's judgment, Khrushchev now feels that there is a balance in the nuclear field which prevents us from using nuclear weapons for local purposes. He feels further that in local engagements the shorter lines of communication and the large manpower of the Sino-Soviet bloc will give it a decisive advantage--whatever number of men we put in, they can put in several times as many. Moreover, Khrushchev insists upon the validity of his third kind of war, namely, the war of liberation, or sacred war. The President reported that in Khrushchev's view Iran and South Korea were going to collapse, and his own riposte with respect to Poland. The President believed that this very militant Soviet effort will continue.
Returning to Laos, the President said that there had been some language agreed on in the communiqué,/2/ and that perhaps something would come from it. He also expressed his view that Khrushchev was partly right in saying that not all weaknesses in governments and danger of Communist take-over could be attributed to the Communists themselves. The President reported that Khrushchev seemed uninterested in Cuba. Khrushchev said that Castro was not a Communist but we were making him one. The President reported Khrushchev's view that the present situation was like the period during the decline of feudalism and the rise of capitalism. The President had answered that in that period there had been a lot of wars, and we should try to prevent such a situation now, to which Khrushchev replied that if we want war we can have it. To a question from Senator Fulbright, the President replied that Khrushchev seemed rather bitter on Nasser and that he (the President) had written three letters to Nasser,/3 which seemed to produce some improvement in Nasser's feeling toward the United States.
/2/For text of the joint communiqué, see American Foreign Policy: Current Documents, 1961, p. 574.
/3/Gamal Abdel Nasser, President of the United Arab Republic. Copies of the letters are in Department of State, Presidential Correspondence: Lot 66 D 204, UAR.
Senator Humphrey commented that perhaps we ought not to jump to the conclusion that all people of this sort are going Communist, and referred to the example of Qasim/4/ in Iraq. The President then read excerpts from the minutes of the conversation after lunch on Saturday, beginning on page 1 and continuing through page 3. (The President specifically omitted reference to his own remarks about the Cuban situation.)
/4/Abdul Karim Kassim, Premier of Iraq.
Senator Dirksen asked whether there was discussion of CENTO, and the President said there was not, and repeated his view of the Soviet sense of a change in the power balance. The President then read a passage relating to the Soviet view of the sacred war and how the United States used to be in favor of such revolution but was not any longer.
Asked about the Congo, the President reported Khrushchev's statement that his experience in the Congo was what confirmed in him the necessity for the Troika. To a question from Senator Fulbright about arms limitation in Africa, the President replied that the matter had not been discussed. The President read from the memorandum of conversation to explain Mr. Khrushchev's remarks about Taiwan.
To a question from Senator Dirksen, the President commented that there had been only a brief reference to U.S. bases.
On Sunday the discussion began with nuclear testing and Mr. Khrushchev had insisted on the Troika, stating that there was no such thing as a neutral person. Control in such circumstances was a form of espionage. There could be no serious control or inspection until after the decision for complete and general disarmament had been accepted. Mr. Khrushchev had urged that the President should agree to a merger of the test talks with disarmament, and the President's conclusion was that either from Chinese pressure or for other reasons the Soviets have lost interest in a test ban agreement. The President replied that in his view it would be wrong to merge the test ban with general disarmament since for fifteen years discussion of the latter subject had gotten nowhere. Khrushchev said that when we start to test, he will start to test. The main question now was how to disengage from these negotiations. Macmillan and the President had talked about this matter, which was a hot issue in England. Gaitskell/5/ had also expressed his hope that we could wait until the autumn, until after his own contest for control in his own party, which he expected to win. This was a problem in Canada, too, and in general a major question of propaganda values. The question was how to break it off so that the Soviets would seem to be responsible.
/5/Hugh T.M. Gaitskell, Leader of the British Labour Party.
Discussion then turned to Germany, which was what, in the President's judgment, Khrushchev had come to talk about. He gave us an aide-memoire on Germany/6/ and it was on this subject, for the first time, that his voice began to rise. The President read at length from the memorandum of conversation to show Khrushchev's position on Germany and his own response. Senator Fulbright asked whether there was a time limit on these discussions, and the President replied, "He said December." Then he read further from a memorandum of conversation and particularly emphasized this sentence of Khrushchev's: "The USSR would never under any conditions accept U.S. rights in Berlin after a peace treaty had been signed." Senator Dirksen asked three questions: (1) What is Khrushchev's physical condition? The President said it was good. (2) Was there any other arrogance about him? The President said no. (3) Should we expect a recognition of East Germany before December? The President said that in his view there might well be a signing of a peace treaty at some such time, and that the Soviets would say that all rights reverted to the East Germans, although they might in fact not do anything to interfere with our access (which the President noted was Prime Minister Macmillan's belief). And as far as military access was concerned, our own troops could be supplied with four air sorties a day. To the question whether Khrushchev had described the period of time for which the Free City would have the rights he offered, the President said that the answer was not clear.
/6/For text of the aide-memoire on Germany, see Department of State Bulletin, August 7, 1961, pp. 231-233.
The President then quoted again from the aide-memoire to explain the Soviet proposal on a Free City, and also the Soviet view that a peace treaty would formally end occupation rights.
Senator Humphrey asked whether East Berlin had been mentioned. The President answered no.
Senator Humphrey commented further that the Soviet position seemed identical with what Khrushchev stated before, and the President commented that the only new point was the time limit. Senator Humphrey rejoined that even the time limit was not new, in the sense that there had been time limits before. The President stated that in his judgment Khrushchev was talking in cold terms of a genuinely vital present interest.
Senator Saltonstall asked whether Khrushchev seemed moved by fear of West Germany. The President answered that this was what Khrushchev said, but really he was interested in the build-up of East Germany.
In response to a question, the President said that Khrushchev claimed his relations with China were very good.
Senator Dirksen found four propositions in this report: (1) two Germanys, (2) Berlin in the middle of one of them, (3) concessions on troops and access, (4) in the future, when the sovereign power says that you have to take your troops home, you are sunk.
The President said that in his own speech that evening/7/ he would say the situation was serious, but not press it home too sharply. We shall soon send back an aide-memoire on our own rights,/8/ and we must consider what else we can do.
/7/For text of the President's radio and television report to the American people on his trip to Europe, see Public Papers of the Presidents of the United States: John F. Kennedy, 1961, pp. 441-446.
/8/For text of the U.S. reply, July 17, see Documents on Germany, 1944-1985, pp. 753-760.
Senator Russell said that at present he would be against an airlift. The President replied that we can decide when the time comes. The President further reported that after lunch on Sunday, he had come back to speak to Khrushchev again because he thought he ought to know that this matter of rights of access was a most vital matter to the U.S. The President said that he thought Khrushchev would indeed probably sign a Peace Treaty, and we would then say simply we do not accept it.
Senator Saltonstall asked whether Macmillan and the British were as strong as de Gaulle on this question. The President answered that the British were not as precise. Macmillan was ready to meet his commitments, but de Gaulle seemed harder--ready for war if necessary.
Senator Russell asked how long we have to decide. The President said we would answer the aide-memoire which had much superficial attractiveness. We must get our own position clear on the rights of the people of West Berlin to be free. Then he thought the matter would go along until after the German elections.
Senator Saltonstall asked if Khrushchev seemed confident. The President answered that he thought Khrushchev probably had a knife in himself a little on this one. Not all the advantages are on his side. He will have to initiate the blockade, and it will not be easy for him to give the appearance of right on his side.
Senator Dirksen asked if the Germans were all out of Austria now. The President said yes.
Senator Humphrey said that the danger in a peace treaty is that Khrushchev can disclaim responsibility so that in the event of an incident--if, for example, we should have to shoot down Germans--he would be peacefully out of it, and we would be appearing to start warlike action.
The President said we should continue to hold the Russians responsible. We have to show them that there is a very serious chance that this could lead to war.
Senator Dirksen said that this was the one place where Lucius Clay/9/ fumbled--we had no easement--we had to go to an airlift. There followed some discussion of how a country lawyer would handle the matter.
/9/General Lucius D. Clay, U.S. Military Governor for Germany during the Berlin blockade, 1948-1949.
The President asked Senator Russell what the U.S. should do if after a peace treaty the East Germans should deny access. Senator Russell said this was a big decision. He believed that if we are firm, it would not come to that point. He asked whether a Free City could be absolutely free and independent of the GDR.
Senator Dirksen asked what the timetable was. The President said we ought not to indicate. Senator Dirksen said the leadership ought to have time to puzzle over it a couple of weeks and then give its views to the President. The President said this was all right, since all we needed now was to send back an aide-memoire stating our own position.
The Vice President asked if it was not fair to state that Khrushchev's position as stated to the President was as it has always been, while the President in turn had restated our position.
Congressman McCormack asked for the President's basic impression of the man Khrushchev. The President replied that he was very tough. The President had read all of his conversations with President Eisenhower and felt that Khrushchev then, and now, was a persistent counter-puncher. He had not been disagreeable. He came to talk on Germany. He wanted "to know whether we would fight" and that was why the President went back after lunch to make our position very plain. Then Khrushchev had said that if there was to be war, then let it come now, and the President "gave him a box of Sandwich glass and left." The President felt it was going to be very close, and awfully tough. The Soviets feel that our edge is gone on the nuclear side.
On Laos, the President had asked Khrushchev how we could talk on any matter if we could not agree on Laos.
The President said that in his speech he would give no sense of a time limit, that what he would try to communicate was how the Soviets were planning to operate with patience from their inside lines, hoping to pick up countries which would tumble from interior weakness. In this situation, SEATO and CENTO were not worth a damn, and we must face a different problem.
The President discussed privately with Senator Fulbright a call to the UAR Ambassador.
Senator Dirksen asked about public comment. After some discussion, there seemed to be agreement with the Speaker's view that all concerned would simply say that the President had given a preview of what he was going to say that evening. The Vice President summarized his sense of the Vienna meeting by saying that "he expressed his view and we re-expressed ours." The President agreed, and there was further agreement that we should say nothing that would seem to put Khrushchev in a corner where he must fight back.
Senator Humphrey suggested that the President might presently stress the notion of reunification of Germany--our strong point in the argument.
92. Record of Meeting of the Policy Planning Council/1/
Washington, June 7, 1961, 3 p.m.
/1/Source: Department of State, S/P Files: Lot 70 D 199. Secret. Drafted and initialed by Curtis.
PARTICIPANTS
George McGhee
John Curtis
Leon Fuller
Robert Packard
Henry Ramsey
Ambassador Bohlen
Edward Rice
Carlton Savage
William Webb
Howard WrigginsMr. McGhee asked Mr. Bohlen to give the Council a brief account of the President's recent trip to Europe.
Mr. Bohlen began by stating that President Kennedy had made a great impression on de Gaulle, his understanding of French problems, and that the President had stood up to de Gaulle "full face". He mentioned that about all that was really accomplished, however, was a decision to work out a mechanism for consultation.
Mr. Bohlen gave a brief account of the proceedings of the talks in Vienna. (This account followed the lines of information presented in the Secretary's cables on the meeting.) He discussed the details of the Soviet aide-memoire on Berlin and said that nothing had really been gained or lost on the problem of Berlin. He mentioned that Khrushchev was willing to hold the Vienna meeting because he wanted to get across the contents of the aide-memoire and to inform us that his policy had not changed with regard to the Troika inspection formula. He said that the meeting had gone off rather much as expected and that it was worthwhile from the standpoint that (1) it had solidified positions that needed to be solidified; (2) Adenauer had been very pleased at our standing up to Khrushchev; (3) Kennedy had made a great hit among the Europeans; and (4) Khrushchev had, undoubtedly, been impressed with President Kennedy's popularity. He said that he also thought that Khrushchev had been impressed with President Kennedy's general ability.
Mr. McGhee asked Mr. Bohlen whether President Kennedy had discussed the Washington-Moscow direct telephone link with Khrushchev, to which Bohlen replied in the negative.
Mr. Bohlen went on to say that the Russian position on Berlin was essentially a very weak one and that he thought that S/P should submit a proposal for handing over the Berlin question to the ICJ to test whether a war-time power could unilaterally hand over its treaty responsibilities to a non-participant. He mentioned that considering Khrushchev's various deviations from his firm statement in 1958 on the Berlin situation/2/ it was difficult to tell whether he was now bluffing or how, but that if the Russians set a time limit at the Party Congress in October on settlement of the Berlin question, this would be a sign that they were not bluffing.
/2/Presumably Bohlen is referring to Khrushchev's interview in Pravda, February 8, 1958.
Mr. Bohlen said that there was no hint of a USSR-Chinese schism at the meeting. He said that nothing had been mentioned about another meeting. He ended by saying that on the whole this meeting had a great psychological impact and benefit in Europe.
93. Circular Telegram From the Department of State to All Diplomatic and Consular Posts/1/
Washington, June 8, 1961, 2:32 p.m.
/1/Source: Department of State, Central Files, 611.61/6-861. Confidential; Priority. Drafted by Davies et al.; cleared with P, AF, SOV, and S; and approved by Kohler. Not sent to Libreville.
1972. In discussing Kennedy-Khrushchev meeting with local officials and diplomatic colleagues, US officials should draw on President's radio and TV address June 6, stressing particularly following points:
President's Assessment of Meeting
Talks somber but useful. No advantage or concession gained or given. No major decisions taken. Views two leaders contrasted sharply. However, channels of communication between governments opened more fully. Chances of dangerous misjudgment on either side should now be less.
Future US-Soviet Contacts
a. Joint communiqué June 4 noted agreement "maintain contact on all questions of interest to two countries and for whole world."
b. Khrushchev did not, however, extend formal invitation to President to visit USSR. While he did say President "would be very welcome" to come to Moscow he did not place invitation in time context. USG, therefore, does not regard this as invitation and no plans exist for such visit.
c. US expects contacts will continue through normal diplomatic channels, including, from time to time, Rusk-Gromyko meetings like that of March 18,/2/ but two parties did not attempt schedule specific future meetings.
/2/See Document 47.
Germany-Berlin
Both sides restated their positions on Germany and Berlin, without narrowing differences. In particular, President made clear US determination uphold all Western rights, including that of access, in Berlin. President emphasized rights Western powers in Berlin not exercised on sufferance USSR and could not be terminated unilaterally. Interference with access would be belligerent act. Security Western Europe and of US deeply involved.
Geneva Test-Ban Negotiations and Disarmament
Hopes for end to nuclear testing, spreading of nuclear weapons, and slowing down arms race "struck a serious blow" by Vienna discussions. Although President strongly pressed case for concluding nuclear test ban treaty both for its own sake and as important contribution to future progress in broader areas of disarmament, Khrushchev made it clear present test-ban talks appeared futile and showed no interest in responding to initiatives taken by US since these talks resumed in March.
Khrushchev indicated Soviet "three-headed monster" concept basic element of Soviet policy. This raises fundamental questions as to feasibility reliable control measures in disarmament field, whether test ban or general disarmament. From discussions evident secrecy continues to be of strategic importance to Soviets. Khrushchev made it clear that until there is sweeping general disarmament, he regards our insistence on far-reaching control provisions pretext for espionage.
President did not encourage Soviet suggestion that testing problem be merged with general disarmament negotiations due begin July.
Laos
Soviets concurred in joint communiqué reaffirming two parties' support "of neutral and independent Laos under Government chosen by Laotians themselves, and of international agreements for insuring that neutrality and independence," and reluctantly agreed to recognize "importance of effective cease-fire." While these statements commit Soviets publicly, they do not guarantee change in Soviet policy or mean Soviet influence will be used energetically with Pathet Lao to bring about genuine cease-fire. US watching Soviet and Pathet Lao actions closely and will shape policy and actions in light actual conduct Soviets and Communist forces Laos.
Rusk
94. Memorandum From Secretary of State Rusk and the Director of the U.S. Information Agency (Murrow) to President Kennedy/1/
Washington, June 8, 1961.
/1/Source: Department of State, Central Files, 761.00/6-861. Official Use Only. Drafted by Armitage.
SUBJECT
An Effective Countertheme to "Peaceful Coexistence"In the period since early 1956 the Soviets have transformed the concept and phrase, "peaceful coexistence," into a useful political tool by assiduous and continuous propagation at all levels of the government and party apparatus. They have gained abroad a substantial measure of acceptance of this concept as a legitimate objective, not only of their foreign policy but of other countries. It appears as such in repeated joint communiqués of the Soviet Union and other countries and all too frequently in the speeches and conversations of leading political figures, particularly but not exclusively, from the uncommitted countries.
We have attempted to combat it by pointing out both the hypocrisy and true meaning of its major tenets and by indicating that it is nothing more than a Soviet rationalization for using every measure of struggle against the free world except nuclear warfare. Toward this end we have made occasional public speeches and have instructed our posts abroad to disseminate our views of it. This has been manifestly inadequate. In the field of propaganda one simply can not beat something with nothing.
We have needed a single, simple countertheme if we are to do the job. After a long study of the possible alternatives, we have concluded that "peaceful world community" is the most effective phrase we can find. Although this phrase seems to embody the essence of our basic foreign objectives, we recognize that neither it nor any other single phrase will magically accomplish our purposes. If, however, we devote the same degree of attention and effort to it that the Soviets give to "peaceful coexistence," we should be able to invest it with meaningful content, achieve an increasing measure of understanding of the difference between our and the Soviet concept and have some success in associating other countries with our view. "Peaceful world community" also helps us in our efforts to emphasize that "general and complete disarmament" is not an end in itself but an important component of a larger aim. John McCloy quite independently used the exact phrase for that purpose in his conversation with Gromyko./2/ USIA is instructing all its media to employ the term whenever it is appropriate.
/2/Not further identified.
If you approve of this phrase and of its employment in the manner indicated, we will give some thought as to how it can be most auspiciously launched.
Dean Rusk
Edward R. Murrow/3//3/Printed from a copy that bears Rusk's stamped signature and Murrow's typed signature with an indication that both signed the original memorandum.
95. Paper Prepared in the Department of State/1/
Washington, June 12, 1961.
/1/Source: Yale University, Bowles Papers, Box 300, Folder 535. Secret. The source text bears no drafting or clearance information, but according to another copy it was drafted by Armitage and cleared by Bohlen and Kohler. (Department of State, Central Files, 611.61/6-1261) The Department of State prepared this paper in response to a request by Bundy for a talking point paper to debrief the National Security Council on the Vienna talks. (Memorandum, June 10; ibid., 611.61/6-1061)
TALKING POINTS REVIEWING CONVERSATIONS BETWEEN PRESIDENT KENNEDY AND CHAIRMAN KHRUSHCHEV
(June 3-4, 1961)Overall U.S.-Soviet Relations
1. President began talks with expression of hope conversations would be useful and provide better understanding of problems confronting the two countries.
2. President said common objective should be to conduct competition of two systems without endangering peace. Problem is to find means of avoiding situations in which two countries become committed to actions involving their security. President stressed this point repeatedly.
3. Khrushchev stated desire for improved relations but not at expense other people. Referred to lack of direct conflict in economic field. Stressed need for solution basic questions, failing which tensions would continue: West must recognize de facto that Communism exists and has won right to develop. In luncheon toast Khrushchev decried idea of mutual concessions in negotiation, asking what could he concede and saying concession of even a portion of peace would mean no peace at all.
4. Khrushchev expounded on eventual Communist triumph through spread of ideas; claimed challenge lay in force economic example and in political arena; gave "guarantee" USSR would not try to propagate ideas by use of nuclear missiles; denied intent to use force of arms or impose its system on others.
5. President said USSR seeks to eliminate free system while objecting to any efforts of others to eliminate Communist system in the bloc. Rejected idea of historical inevitability of Communist triumph, defended the right of free popular choice.
6. Khrushchev tried to interpret the President's position as an effort to justify resort to arms to oppose the spread of Communist ideas.
"Miscalculation"
1. President outlined mutual danger of miscalculation. Cited historical examples and emphasized importance of considering views and positions of other side before embarking on a course of action.
2. Khrushchev said miscalculation is vague term, Soviets can not guarantee Communist ideas won't spread. Term can be applied to both sides. USSR will defend its vital interests, can not be intimidated. USSR appreciates loss to both sides which war would bring but use of term "miscalculation" does not affect the USSR.
China
1. Khrushchev brought up China but stated he was not authorized to speak for the Chinese Communists. Urged the President to adopt a "reasonable" course by recognizing the Chinese Communists. Termed Chinese Communists' exclusion from the UN "unrealistic" but said Chinese Communists would never join the UN if the Chinese Nationalists were still there.
2. He termed present U.S. policy toward Chinese Communists unreasonable and said it might ultimately lead to war. Urged the U.S. to settle its problems with the Chinese Communists and end the "occupation" of Taiwan.
3. Khrushchev probed for possible changes in U.S.-China policy but President left him under no illusions that change could be expected. The President cited the constant hostility of the Chinese Communists towards the U.S. and acknowledged U.S. relations with Chinese Communists were indeed bad. He stressed that U.S. strategic interests were involved in the U.S. position on Taiwan and said that he considered the security of the U.S. involved as well.
Underdeveloped and Uncommitted Areas
1. Khrushchev denied responsibility for popular uprisings against "tyrannical regimes" and charged U.S. supported military dictators and opposed social change. Cited Cuba, Iran, Pakistan, South Korea, Turkey, Spain, Angola. He said USSR supports the aspirations of the people.
2. Khrushchev referred to Cuba, said Castro is not a Communist but U.S. policy could make him one. Termed President's statement that U.S. security threatened dangerous. If U.S. free to act in Cuba, what of Turkey and Iran; miscalculation possible in such situation.
3. President explained U.S. attitude toward Cuba, stressing Castro's destruction of right of free choice and his stated intent to use Cuba as base for expansion in neighboring area.
4. President asked Soviet attitude should West-oriented government be installed in Poland, said social and political changes in the world should take place in ways not involving national security, treaty commitments or prestige of two countries.
5. Khrushchev said Castro would be removed as Batista was if he failed to give the Cubans freedom. Our countries should not intervene. Added that under influence of Soviet aid Castro might turn Communist but Khrushchev could not now see which way Castro would go.
6. President sketched three U.S. interests: free choice through elections for all people; defense of our strategic interests (Spain, Yugoslavia); events in next decade not greatly disturbing the balance of power (referred to effect of Chinese Communist development of military potential).
Colonialism
1. President expressed support for liberation movement in Africa, noted we had rankled allies to sustain this position.
2. Khrushchev replied U.S. position is basically anti-liberation, pro-allies.
3. President referred to Khrushchev's January speech and support of wars of national liberation. Stated that problem was how to avoid direct contact between two countries as we support respective groups; referred to Viet-Nam guerrilla activity and said we do not believe they represent popular will.
4. Khrushchev said people's only recourse often to arms, cited Algeria and Angola. Called them "sacred" wars. Affirmed Soviet support but tried to deny direct Soviet participation.
5. President said we were concerned also with what followed nation-hood in such areas. Balance of power could be disturbed if they associated closely with USSR.
6. Khrushchev charged this meant U.S. could not recognize neutrality unless it followed U.S., said that if some African country went Communist this would be expression of popular will and our interference could set off chain reaction and lead to war.
7. President said situation in Burma, India and Yugoslavia satisfactory to us.
8. President referred again to Poland to illustrate problem of close association of neighboring country with antagonistic power. Mentioned the question of popular support and this led to pointed exchange with Khrushchev on question of popularity of Polish Government.
Laos
1. Khrushchev said both sides supplying arms in Laos. Side USSR supporting has popular support and would win out, like Mao vs. Chiang in China.
2. Both agreed Laos not strategically very important, but President noted our treaty commitments in the area and with reference to Laos.
3. Khrushchev took exception to reference to commitments, said U.S. could not assert special rights and dispense indulgences, as forces in world now in balance.
4. President noted U.S. and USSR had expressed desire for neutral and independent Laos, referred to Cambodia and Burma to illustrate meaning of those terms. Khrushchev assented.
5. President emphasized primary need for effective verification of cease-fire, citing reports of violation and need for new instructions to ICC.
6. Khrushchev digressed on anti-popular regimes again and said U.S. talks too much of anti-guerrilla warfare and such talk dangerous. Said guerrilla success dependent on local support, could not be gained from outside the country. Interference from outside could bring war and terrible prospect of mutual destruction.
7. Khrushchev said USSR would not agree to ICC becoming a kind of supra-government; three sides must agree among themselves regarding a cease-fire and U.S. and USSR could use influence to bring agreement about. Gromyko added ICC could act by agreement of Laotian parties. Khrushchev said basic question of formation of Laotian government should not be contingent on a cease-fire.
8. Khrushchev alleged and President denied U.S. had ordered and then recalled order for a Marine landing in Laos.
9. President stressed need of avoiding a situation which could lead to retaliation and counter-retaliation and thus endanger peace.
Nuclear Testing
1. Khrushchev said two basic questions were: (1) number of suspicious events to be inspected and (2) organization of control.
2. Since events in the Congo the Soviet Union cannot accept proposed controls. Single administrator could set policy and Soviet Union could not accept neutral chairman as no person truly neutral.
3. Khrushchev said three inspections a year sufficient, greater number would be gathering of intelligence.
4. Khrushchev favored linking nuclear test question with disarmament. If disarmament agreement reached, USSR could accept any controls and would then drop Troika proposal and the requirement for unanimity. Two years should be sufficient to develop general and complete disarmament agreement.
5. President said testing treaty along lines Khrushchev proposed would not provide reasonable deterrent against violations and he could not send it to the Senate.
6. Khrushchev said test ban alone not important to national security if weapons production continued.
7. President stressed effect on proliferation of nuclear weapons and Khrushchev said this was why USSR had entered negotiations.
8. Khrushchev said in absence of link between test ban and disarmament other countries may say they are in unequal position and test weapons like France is doing.
9. President stressed treaty provisions for abrogation if other parties tested and noted relevant ease of controls on testing because they are based on scientific instrumentation.
10. (Gromyko defended the Soviet proposals for a tripartite administrator at great length in separate conversations with the Secretary.)
11. President said test ban would at least be very significant step and would facilitate disarmament agreement.
12. President said prospect of indefinite continuance of uncontrolled moratorium is a matter of great concern to U.S. Difficult to see how test ban could be included in disarmament negotiations which will probably require a long time. Perhaps we should make another effort at Geneva or recess the conference.
13. The President stated we would begin bilateral discussions on June 19 whether or not there was an agreement on nuclear testing. Khrushchev agreed to continued Geneva negotiations but reiterated USSR could not accept controls tantamount to espionage if weapons themselves were not eliminated.
14. In response to Khrushchev's question, President said he would not agree to tie test ban question to disarmament unless there was assurance disarmament agreement could be reached speedily. He said espionage problem insignificant in comparison with consequences of development of nuclear capability by other countries.
Disarmament
1. In response to President's question, Khrushchev said Soviet disarmament proposals provided for proceeding by stages and for control in each stage.
2. President inquired whether if general and complete disarmament accepted as a commitment of national policy and a nuclear test ban was included in the first stage would test ban be subject to inspection without veto.
3. Khrushchev replied that he would try to persuade President not to start with test ban as it not the most important measure. He said any measures, such as prohibition nuclear weapons, prohibition of manufacture of such weapons or elimination of military or missile bases, could come first.
4. In separate luncheon conversation Khrushchev said cooperation in outer space projects would be impossible without disarmament.
Germany and Berlin
1. Khrushchev attacked German militarism and said no delay in signature of a peace treaty was justifiable. USSR wanted agreement with U.S. but in its absence would sign a separate peace treaty with GDR, the state of war would cease and all commitments, including rights, institutions and allied access would become invalid. U.S. troops could stay in Berlin under certain conditions; Soviet troops should also be there and neutral troops under UN guarantee would be acceptable.
2. The President contrasted Berlin with Laos. He said we fought to get to Berlin. Our national security is affected by what happens there, and we have contractual rights to which every President involved has reaffirmed his obligations. If we allowed ourselves to be expelled from Berlin no one could have confidence in our commitments and this deeply involves our national security. He, no more than Khrushchev, is prepared to preside over isolation of his own country.
3. President rejected Khrushchev's charge that reference to national security signified U.S. wanted to improve its position. The U.S. was not pushing but was interested in maintaining position in and access to Berlin. Situation might be unsatisfactory but situations elsewhere unsatisfactory and this not the right time to change Berlin situation. Neither U.S. nor USSR could accept the change in balance of power that would result from Soviet proposal.
4. Khrushchev defended peace treaty as restraint on German revanchists. Said no force could prevent USSR signing treaty. GDR sovereignty would then be established and its violation regarded by USSR as open aggression.
5. In reply to President's question, Khrushchev specifically said allied access to Berlin would be blocked by peace treaty. President reiterated that our views and interests should be carefully considered and said Khrushchev had laid down a most serious challenge with unforeseeable consequences. Expressed hope Khrushchev would consider both his and President's responsibilities toward their own countries.
6. Khrushchev maintained USSR wished only to formalize existing situation and gain recognition as a fait accompli of the existence of the GDR socialist state. Continuance of U.S. occupation rights after a peace treaty was impossible to imagine.
7. President said Soviet Union cannot give U.S. rights to the GDR.
8. Khrushchev said USSR prepared to accept interim agreement not involving prestige of two countries right now. Agreement could set six months time limit for Germans to solve question of reunification. Then U.S. and USSR could disavow responsibilities and anyone would be free to conclude a peace treaty. He expressed confidence that our people would not start cutting each other's throats for ideological reasons. Said USSR can delay no longer, will probably sign peace treaty at the end of the year. He later specifically referred to December.
9. Later Khrushchev said that USSR would be defending peace if the U.S. started a war in Berlin. U.S. should avoid miscalculation, but if U.S. wants war over Germany let it be so. He was confident common sense would gain the upper hand and peace prevail.
10. The President denied any wish to precipitate a crisis but stressed our profound commitment in Berlin. It is strategically important that the world believes the U.S. a serious country whose commitments one could rely on. Said signing of a peace treaty not a belligerent act but denial of our contractual rights would be.
11. Khrushchev said USSR would not accept U.S. rights in Berlin after a peace treaty and was convinced the world would understand the Soviet position.
12. The President said our position in West Berlin was strongly supported by the people there. President is prepared to discuss any problem between us but we should take carefully into account each other's views and interests. He did not assume office to accept arrangements totally inimical to U.S. interests.
13. Referring to an interim agreement Khrushchev said it would be a formal factor giving the semblance of turning the problem over to the Germans. He referred to the aide-memoire (later handed to U.S. officials) and concluded U.S. could study it and perhaps return to the question later if it wished./2/
/2/At its meeting on June 13 the National Security Council discussed Berlin based on this paper. Although no NSC record of the meeting has been found, General Lemnitzer's handwritten notes on the meeting read as follows:
"Vienna--
"Difficult time in store on Berlin.
"Sec State--reviewed pol. situation. 1st step--answer aide-memoire, timing is rather
vague. cannot abandon. Western position is difficult."Pres--status of supplies. Sec reviewed. civil defense? reorg on CD--costs, $300m. $50m to be used for shelters. $100m for new buildings.
"Pres--We must get in touch with every American--he must be resp--what can he do--etc." (National Defense University, Lemnitzer Papers, Box 29, L-215-71)
96. Current Intelligence Weekly Review/1/
Washington, June 15, 1961.
/1/Source: Central Intelligence Agency: Job 79-S01060A. Secret; Noforn. Prepared by CIA's Office of Current Intelligence. Concurred in by CIA's Office of Scientific Intelligence. The source text comprises pp. 7-8 of the Weekly Review section of the issue.
Nuclear Test Talks
Soviet delegate Tsarapkin at the Geneva test talks has dropped all pretense of serious interest in concluding an agreement and is seeking to induce the US and Britain to take the initiative in terminating the negotiations. He charged on 12 June that the West now is interested only in ending the talks and placing the blame on the USSR.
At the same session Tsarapkin formally introduced the Soviet aide-memoire of 4 June on nuclear testing which was handed to the US at the conclusion of the President's talks with Khrushchev in Vienna./2/ This memorandum proposed that, in view of the failure to reach an agreement on a test ban, the powers take up the "cardinal question" of general and complete disarmament and settle the disarmament and nuclear test problems interdependently.
/2/For text, see Documents on Disarmament, 1961, pp. 162-166.
The Soviet memorandum stated that the USSR would agree to sign a general disarmament treaty including Western proposals on the cessation of nuclear testing and implied that a test ban could be part of the first stage of such a treaty. Tsarapkin contended that these proposals demonstrated the USSR's flexibility and "constructive approach" and denied any intention of issuing an ultimatum. He stressed, however, that the West has the choice of either signing a test ban treaty on Soviet terms or merging these talks with negotiations on general disarmament.
The Soviet proposal is clearly aimed at prolonging the present uncontrolled moratorium on testing. Moscow probably also calculates that the opening of bilateral Soviet-US disarmament talks on 19 June and the international conference on general disarmament scheduled to begin on 31 July in Geneva will act as a brake on any US move to resume nuclear weapons tests this summer.
The Soviet move to terminate separate negotiations on the nuclear test issue by submerging them in the complex subject of general disarmament probably springs from two main considerations. Now that Khrushchev has restored top-level contact with the US by his meeting with the President, which he believes will open the way for negotiations on the key political issues of Berlin and Germany, he has no further interest in keeping the test talks alive as a means of promoting an accommodation with Washington.
Another and probably more important motivating factor is Communist China's long-standing opposition to a test ban without the complete destruction of all existing nuclear weapon stockpiles--a condition which Peiping insists on in order to preclude a test ban agreement. [Here follows further discussion of the nuclear test talks.]
97. Editorial Note
On June 19, 1961, Admiral Burke, Chief of Naval Operations, forwarded to Secretary of State Rusk a memorandum of the same date to the Joint Chiefs of Staff in which he argued that Chairman Khrushchev may have "deliberately raised the alarm on Berlin in order to seek concessions elsewhere. One of the most dangerous areas for seeking such a concession would be Southeast Asia. He may envision a relaxation of the Berlin crisis in exchange for an understanding that the U.S. would not forcefully resist further Communist expansion in Southeast Asia." For text of Burke's memorandum, see Foreign Relations, 1961-1963, volume XIV, pages 129-130.
98. Paper Prepared in the Department of State/1/
Washington, undated.
/1/Source: Department of State, Central Files, 611.614/6-1961. Secret. The source text bears no drafting or clearance information, but is attached to a June 19 memorandum from Ball to Rusk, which states that it had the concurrence of EUR, E, S/P, L, INR, and H. At the Secretary's staff meeting on June 9 Rusk had requested a review of the entire subject of negotiations with the Soviet Union in light of the summit meeting. (Ibid., Secretary's Staff Meetings: Lot 66 D 147) Ball's memorandum stated that this paper should be regarded in the light of that request. A cover sheet and table of contents are not printed.
US ECONOMIC RELATIONS WITH THE SOVIET BLOC
I. Summary
Statement of the Problem
Can US economic policy with respect to the USSR and the dominated countries of Eastern Europe be modified to serve US interests more effectively? If so, what modifications are desirable and how, when and under what circumstances should they be accomplished? Particular attention should be given to the specific trade controls which might be useful in bargaining for meaningful concessions from the Soviet Bloc. All of these questions should be considered in the broader context of economic relations with the bloc, including credits, relationships with our allies, and effect upon our objectives in the less-developed countries. The adamant and militantly aggressive policies of Communist China and the dominated areas of Asia toward the US, leave little room for maneuver in the economic field. Consequently, this paper does not deal with that area.
A. The Basic Factors in the Current Situation
1. Economic relations and the conflict of systems.
The US and the Free World have entered a new phase in relations with the Soviet Union and the European satellites, in which economic competition looms large and in which our use of economic tools has broad political and psychological consequences throughout the world, as well as in the Bloc. The new phase in East-West relations requires a new look at the principal factors of the current situation and the net effectiveness of our economic policy toward the Soviet Bloc in support of other elements in our foreign policy.
2. The long-term struggle.
Given the military, political and other elements of Free World strength which limit the likelihood of total war, this new look must be in the perspective of conflict over the long-run. In practical terms this long-term struggle will be waged in the constantly changing perspective of short-run improvements in global influence and power.
3. Superior US and Free World economic strength.
Superior Free World strength is a dominant factor at the present time. In order to secure the future, US and Western economic strength at home and in the international sphere must be used with confidence and with some calculated risk, to meet Soviet moves to undermine our economic and social institutions.
4. Bloc objectives and tactics.
The timely growth of economic power at home and its extension abroad are regarded by the Bloc as major political objectives. The Soviet Union tends to use its economic power as a deliberate instrument of political influence and world leadership. Its persistent and varied attacks on the US are also designed to undermine world confidence in our good faith and economic capabilities. It attempts to weaken ties between the less-developed countries and the rest of the Free World, and to work over the long-run for isolation of the US from its allies. The dominated countries have shared these objectives and tactics under Soviet leadership.
At the same time there are weaknesses in the Soviet approach not only in the spotty development of its economy, but also in terms of strains on relations within the Bloc, and its dependence on Western technology for accelerated advancement of its economic power base.
5. US economic policies.
US economic policies have served broad US interests, but the instruments in the hands of the Executive Branch have lacked the flexibility to serve US interests in specific cases, particularly in dealings with the European satellites. These policies have advocated increased trade in peaceful goods within the limitations of that inflexibility and the practical difficulties of trading with the Bloc. In general, US economic policies toward the Bloc have been policies of denial. Actual trade has been insignificant.
(a) Effect on the Bloc. Multilateral controls on critical goods and technology have had some effect in delaying development of certain important areas of the Bloc economic power base. Unilateral US controls (with relatively minor exceptions) have had little direct effect. The denial of US credit and the degree to which industrialized countries have limited credits to the Soviet Bloc, have limited Soviet Bloc imports of capital equipment for economic development.
(b) Effect on the Free World. The principal effect of US restrictions and urging our industrialized allies to adopt them, has been one of resentment. Some of them regard US economic policies toward the Bloc as being unnecessarily defensive and restrictive. Differences of view are an increasing cause of friction, particularly with respect to extension of US controls to American-owned firms in their countries.
Our allies in the less-developed world have generally given tacit support to US policies as an integral part of a common policy of resist-ance to Bloc political and economic incursions.
The effect on uncommitted less-developed countries has been largely psychological in the resentment of US controls which some view as infringements on their sovereignty and in the concern aroused as to the possible contribution of such controls to increased world tension. However, on the material side, some less-developed countries are also concerned about the potential injury to their trade if the US were to increase trade with the Bloc.
B. US Objectives and East-West Economic Policy Changes
1. The basic objective.
The basic objective of US policy and actions in East-West economic relations is to strengthen our posture while using economic relations as tools to cope with growing competition from Soviet Bloc economic power and to contribute to sound relations generally with the Bloc and the Free World. Flexibility is an essential ingredient in the successful application of our economic tools in support of our total foreign policy. Flexibility does not mean mere relaxation of restrictions; it means increasing Executive Branch freedom of maneuver so that we can exploit opportunities in different ways from time to time in furtherance of US and Free World interests. It means a change in policy to one of maneuverability by eliminating the rigidities of some of our present laws and administrative restrictions bearing on East-West economic relations. This flexibility is needed for practical effect in the actual bargaining for meaningful short and long-term concessions from the Bloc.
Our objectives in making most effective use of our economic relations should be:
(a) to contribute to the image of US and Free World initiative, confidence, objectivity and integrity;
(b) to reach substantial agreement with our allies on the nature of the Soviet threat, its techniques and the role of Western economic tools in various fields;
(c) to improve the climate for growth of economic and other institutions in less-developed countries, which strengthen their political freedom and foster economic growth; and
(d) to strengthen US presence in selected dominated countries of Eastern Europe and to provide them with an alternative to dependence upon the Soviet Union.
2. Resume of major recommendations.
(a) Trade. It is recognized that there is a limited potential for bringing allied practice on East-West economic controls into conformity with US desires. The maximum possible reconciliation of US and allied policies is imperative for the achievement of broader objectives and for increasing the effectiveness of the Western response to the over-all Soviet Bloc threat. The contribution which the changes proposed would make in reconciling differences between US policies and those of our Western allies is an important element in improving the effectiveness of US actions. With flexibility in the hands of the Executive, and substantial agreement with our allies, trade could be used as one tool in the total confrontation. The estimates of increased US trade with the Bloc (given the elimination of most restrictions, except for Government credits) indicate that it would not be significant in relation to the total trade of the Bloc, but would be to their net technological advantage.
(1) Export Controls
1. The United States' embargo list used by the Department of Commerce should be made identical with the international COCOM embargo list. All other goods (except those on the "general license" list) would still be subject to individual export licensing for shipment to the Soviet Bloc with a general rule for approval except in those special cases covering equipment or technology closely related to military items or to the production thereof where denial by the US would effectively prevent Soviet Bloc acquisition from any Free World source of that equipment or technology, or equipment or technology substitutable therefor. For those commodities which do not meet the COCOM strategic criteria but whose export would constitute so significant a contribution to Soviet economic development and to Soviet potential for economic penetration as to be damaging to broad considerations of Western defense planning, the United States might propose that NATO consider such special situations and, if it agrees that multilateral control action is or might be desirable, request COCOM to develop a program for the institution of controls when judged necessary.
2. In discussions of trade with the USSR and the dominated countries of Eastern Europe, the US should be prepared (taking into account the special circumstances involved in the case of each country of the area) to consider the approval of export licenses up to specified annual levels for certain types of goods in which the particular Bloc country is interested. Such commitments could then be included in any agreements which might be concluded with Bloc countries on trade or other economic matters. The US Government would have no obligation to approve exports of items not listed in the agreement or in excess of the quotas, but might do so if it wished.
3. The export of unpublished technical information should be controlled in a manner consistent with export controls over commodities. Thus, if a commodity is permitted to be exported to the Soviet Bloc, the export of the technical information with respect to such commodity should also be permitted to be exported.
(2) Import Restrictions
The Administration should seek an amendment of the Trade Agreements Extension Act of 1951 which would authorize the President to restore MFN treatment to Soviet Bloc countries and to permit the importation of certain furs from the USSR, if the President determines it to be in the national interest to do so.
The Departments of State and Treasury should undertake joint consultation with a view to developing a more realistic and effective method of applying the Antidumping Law in the case of imports from Soviet Bloc countries. It is desirable that a new and more suitable approach be adopted with regard to the administration of the Antidumping Law in the case of imports from Bloc countries lest the administration of the act prevent legitimate imports from Bloc countries and nullify the effect of other recommendations in this paper.
(3) Surplus Agricultural Disposal
The Administration should seek modification of PL 480/2/ to provide discretionary authority for the President to waive the "friendly nation" requirement of the Act, with respect to the dominated countries of Eastern Europe, when the President considers such action to be in the national interest. Amendment of the Act should also be sought to permit barter of subsidized agricultural commodities to the USSR.
/2/For text of the Agricultural Trade Development and Assistance Act, July 10, 1954, see 68 Stat. 454.
(4) Stockpile Surpluses
The US Government should inform the Soviet Bloc countries, at appropriate occasions, that the United States is prepared to consider bids for stockpile surpluses subject to existing controls on certain strategic materials and continued embargo on goods to the Communist countries of Asia.
(5) Underdeveloped Countries
The Administration should seek legislation which would authorize the President to reduce US tariffs or other import restrictions in order to provide alternative opportunities for exports of a Free World country under Communist economic pressure.
Implementation of the recommendations for increasing trade with the Soviet Bloc should give careful consideration to the effect on the less-developed countries, including those whose products might be affected, as well as those who have stood by us in the period of stronger controls and who would look askance at the calculated easing of such controls.
We should make clear to the less-developed countries that our extension of credits to certain of the dominated countries of the Soviet Bloc is in the common interest and that we intend to maintain the planned general level of assistance to our friends.
(6) NATO
The United States should support a NATO study of economic relations with the Soviet Bloc and the implications thereof to the Free World, in order that a coordinated program may be developed to protect the interests of the Free World. Special problems posed by Soviet Bloc purchase and sales policies in individual commodities should also be examined, and the US should develop specific policies and programs to guide US participation in those studies (e.g., the current oil study).
The United States should seek to extend the concept of contingency planning with our allies to the use of economic levers in conjunction with our diplomatic and other actions in the event of a crisis such as may occur in Berlin and Iran. Initial bilateral consultations with our key allies would prepare for introduction of the subject into NATO. A formula should be developed to bring Japan into these considerations. The United States should also explore in NATO the principle of coordinated action to provide alternative markets to a country subjected to severe Bloc pressure as a result of a sharp reduction in Bloc purchases.
(7) Trade Practices
From time to time the suggestion has been made that it would be desirable to develop general "ground rules" for the conduct of trade and other economic relations between the Soviet Bloc and the Free World.
There are serious problems which Free World countries face in dealing with the Bloc which might be lessened if certain ground rules could be developed. Some of these problems relate to such matters as disruptive pricing practices, resale of primary commodities, inadequate arbitration, patent and copyright procedures, and lack of reasonable access by businessmen.
At the present time the United States Government is seeking to develop a set of ground rules which would provide an effective and realistic basis for governing trade relations between the Soviet Bloc and Free World countries, but has not yet developed such rules. A study of the problem is now underway. When the United States has developed a sufficiently significant number of such rules, it should discuss them bilaterally with certain key countries such as the United Kingdom, France, Germany, Italy and Japan. If such preliminary soundings warrant proceeding further, they should be discussed in the NATO. Pending the possible adoption of such ground rules, an effort should be made to obtain in such individual understandings or agreements on particular economic problems as may be concluded with the Soviet Bloc such general safeguards or rules as it is possible to devise to ensure fair treatment.
(b) Finance. One of the main concerns of the Soviet Union is its desire for credits to finance its rapid power build-up through technically-advanced imports from the West. At the present time, it receives some European credits repayable over a period of up to five years, and is pressing for an extension of the repayment period on future credits. While the US Government should have flexibility in determining the use of credits for the dominated countries of the Soviet Bloc, at the present time it is not appropriate to consider the extension of government credits to the Soviet Union.
The Administration should seek amendment of the Johnson Act/3/ so as to authorize the President to waive restrictions of the Act on private credits when he finds such action to be in the national interest.
/3/For text of the Johnson Debt Default Act, April 13, 1934, as amended on July 31, 1945, see 59 Stat. 516.
We should continue to press for an independent lend-lease settlement. The lack of such a settlement should not necessarily preclude possible United States action on MFN, furs, credits, etc., which would promote the expansion of peaceful trade. Action which might be taken on any of these matters should be considered in the light of advantages we might gain in other fields and in the light of other factors affecting US relations with the USSR.
The extension of public credits or government guarantees on private credits to the dominated countries of Eastern Europe should be considered on their merit on an individual, case by case, basis in the light of US policy toward the country concerned. While public credits to the USSR would be proscribed, the extension of export-import guarantees of normal, short, and medium-term credits to the USSR should be permissible on a case by case basis when it is clear that the assistance involved is to American firms seeking to do business with the USSR and does not constitute assistance to the USSR as defined under the Battle Act.
The United States should continue, bilaterally and in NATO, its efforts to persuade our allies, including Japan, of the need to limit medium and long-term credits to the Soviet Bloc, and to the USSR in particular, bearing in mind the limited total availabilities of Free World development credits for the less-developed countries.
(c) International Economic Forums. International economic forums constitute an area where the Bloc has been increasingly active, presumably for politico-psychological reasons. Despite their efforts, the Bloc has not achieved any significant results. We should make clear our willingness to meet Bloc demands for selected and appropriate representation, when they provide qualified personnel, but resist Bloc pressures for additional key positions or replacement of Western nationals under vicious personal attack from the Soviet Bloc. While we should plan positive initiatives to the extent possible, we should not attempt to counter every Bloc move nor, conversely, fear to take a strongly negative line in opposing Soviet initiatives. The budget for US participation in international forums should be increased to permit more adequate US delegations. The US should actively seek recruitable US and other friendly officials to fill secretariat positions, even to the extent, when necessary, of providing added inducements to attract key personnel.
(d) Civil Aviation. Civil aviation is a major economic element in the day-to-day conflict of systems. Bloc civil air activities assign high priority to the supply of craft, development of airlines, and related facilities as a part of its program of economic penetration and erosion of US and Western strength.
The United States should continue to seek an air transport agreement with the USSR on the basis of reciprocal rights with appropriate safeguards and emphasis on international standards and principles. The United States should continue to encourage our allies throughout the world to follow the same pattern in insistence upon reciprocity and adherence to international standards.
The United States should also promote assistance to, and participation in, national civil air enterprises in less-developed countries by American enterprises and, where appropriate, to assist in the development of regional airlines.
(e) Aid Projects to Less-Developed Countries. The United States should, in developing its own aid program, take into account Soviet aid programs and their competitive objectives. In some cases it may be advisable to give aid in order to compete with Bloc activities. As a general rule US programs should give maximum weight to sound economic development as a guiding principle. However, the political objectives which are a part of broad US objectives should be weighed into the balance especially when through its aid program the United States can prevent the Soviets from achieving a dominant position in a recipient country; or when the success of US efforts can be jeopardized by Soviet influence in key sectors or with key people in a recipient country.
Under present circumstances, the United States should not in general propose joint sponsorship of aid projects with the Bloc. US aid which may relate to Bloc projects should be considered on a case-by-case basis.
(f) International Commodity Problems. The US should in general favor participation by Bloc countries in international study groups and agreements. However, each situation should be considered on its merits and less formal association on the pattern of the Soviet understanding with the International Tin Council, should also be considered.
3. Implementation and timing of recommendations.
Consultation should be undertaken in the near future with key NATO countries in order to obtain greater harmony of policy on economic relations between the Free World and the Bloc.
At the appropriate time, the Executive Branch should begin consultation with the Congress to obtain support for greater flexibility. The foundation should be laid for early request for Congressional action on the key legislative recommendations mentioned in this paper. The manner of presentation of legislative changes should be determined after consultation with Congressional leaders.
Without requiring Congressional approval, certain actions might be taken, should it be determined that they would contribute to our political objectives in respect of the USSR and the dominated countries of Eastern Europe, taking into account the special circumstances of the individual countries to which the actions could apply. Among such possible actions are the development of more flexible procedures with regard to certain Foreign Assets control regulations, and announcement of US readiness to accept bids from the Soviet Bloc for stockpile purchases.
Following is an appendix/4/ which provides a more complete discussion of specific policy changes and actions.
/4/Not found.
99. Memorandum From the Counselor of the Department of State (McGhee) to the Assistant Secretary of State for European Affairs (Kohler)/1/
Washington, June 21, 1961.
/1/Source: Department of State, S/P Files: Lot 67 D 548, HO Chron. Secret. The source text bears no drafting information but was initialed by both McGhee and Kohler.
SUBJECT
US-Soviet Direct Telephone1. This year a Berlin crisis will create heightened tensions and possibly some violence in the heart of Europe. At the height of this crisis, the US and USSR will each be seeking to judge the likelihood of a pre-emptive strike by the opposing side. If either country judges that a strike by the other has become a probability, it may well hit first.
2. It is in the US interest to minimize the risk of such a miscalculation. This purpose might be served by certain consensual arrangements, which might be taken beforehand by the Soviets and ourselves. Secure facilities for direct telephone communication between the heads of the US and Soviet governments would be one such measure. This was proposed to Mr. McCloy by a panel which he assembled under Professor Schelling/2/ to study the problem of war by miscalculation. Mr. McCloy proposed it to the Secretary, who approved it and suggested to the President that he raise the matter at Vienna. I am told the President's failure to do so was due to nothing more than the press of other matters--although you would know more about this than I.
/2/Thomas C. Schelling, Professor at Harvard University and member of the U.S. Air Force Scientific Advisory Board.
3. I would think it useful to press ahead urgently with this direct telephone facility. If and when violence short of general war occurs over Berlin, the ability of the US and Soviet heads of government to communicate rapidly, surely, and directly may be essential to maintenance of peace.
4. I wonder if it would not be useful for Ambassador Thompson to put this proposal directly to Khrushchev, while we are staffing out in the Department the technical steps that would be necessary to install a direct telephone line between the Department and the Embassy which could be used for conversation between the two heads of government.
If Khrushchev approved the proposal, as his past statements suggest that he would, then some US experts could be despatched to Moscow who have studied the problem of war by miscalculation, such as those who have served on Mr. McCloy's panel. These experts could discuss with the Soviets measures that would be needed to make the phone of optimum usefulness.
5. Not the last advantage of raising this matter with the Soviets now would be in indicating to them our expectation that there will be grave risk of a Berlin crisis escalating into general nuclear war, if they precipitate such a crisis. This might give the Kremlin food for thought.
[Continue with Documents 100-109]
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