the war to a group of thriving nations, now among our best customers and strongest allies, many of whom are now joining with us in assistance to the newly independent nations.

Our military and economic aid has been indispensable to the survival and gradual progress of nation after nation around the perimeter of Asia from Greece to Korea and others in Africa and our own hemisphere. When I hear this program described as a "giveaway" or "aid to foreigners at the expense of domestic programs," I wonder what sort of America we would have today-whether any funds would be available for any domestic programs-whether all of our substance would not today be devoted to building a fortress America-if we had not had such a program: if the key nations of Europe had been allowed to succumb to communism after the war, if the insurrectionists had been allowed to take over Greece, if Turkey had been left to stand alone before Soviet threats, if Iran had been allowed to collapse, if Viet-Nam, Laos, and Cambodia were now in Communist hands, if the Huks had taken control in the Philippines, if the Republic of Korea were now occupied by Communist China.

That none of these tragedies occurred, that all of these nations are still among the free, that we are not a beleaguered people is due in substantial measure to the mutual security program.

CONCLUSION

The realities of this era indicate all too clearly that the course of our country will be deeply affected by forces at work outside our borders. These forces, if left to exploitation by extremists, will inevitably lead to changes destructive to us. Yet with wisdom and tenacity it lies within our power to frustrate or to shape these forces so that the peoples directly concerned and our own Nation may be benefited.

We cannot safely confine Government programs to our own domestic progress and our own military power. We could be the wealthiest and the most mighty Nation and still lose the battle of the world if we do not help our world neighbors protect their freedom and advance their social and economic progress. It is not the goal of the American people that the United States should be the richest Nation in the graveyard of history.

In the world as it is today-and as it will be for the foreseeable future our mutual security program is and will be both essential to our survival and important to our prosperity. It not only rests upon our deepest self-interest but springs from the idealism of the American people which is the true foundation of their greatness. If we are wise we will consider it not as a cost but as an investment-an investment in our present safety, in our future strength and growth, and in the growth of freedom throughout the world.

THE WHITE HOUSE,

March 13, 1959.

DWIGHT D. EISENHOWER

582. REVIEW OF THE MUTUAL SECURITY PROGRAMPRELIMINARY ANALYSIS OF MILITARY ASSISTANCE AND RELATED ECONOMIC ASPECTS OF THE MUTUAL SECURITY PROGRAM: Letter From the President's Committee To Study the United States Military Assistance Program (the "Draper Committee") to the President (Eisenhower), Transmitting Its First Interim Report, March 17, 19591

DEAR MR. PRESIDENT: Your Committee has completed its preliminary analysis of military assistance and related economic aspects of the Mutual Security Program. We have advised you informally of our preliminary conclusions and we now present them in written form. You will note we unanimously recommend that an additional amount should be made available for military assistance in Fiscal Year 1960, mostly for the area of the North Atlantic Treaty Organization (NATO). In our judgment, the economic assistance requested for the same year is the minimum required, and increased funds for economic development will be needed in subsequent years.

In our final report we will deal with what we think needs to be done over the longer term in organizing a more effective mutual security effort and will outline the desirable scope and nature of that effort.

2

In transmitting our interim conclusions we invite your attention to our unanimous belief that a basic issue of foreign policy underlies the questions that you have submitted to us, and that there is an urgent need for its early resolution.

Simply put, the issue is whether we intend to seek survival in isolation-a state of siege-as the world continues to shrink. This would be the inevitable result if we fail to take vigorous action on mutual security. The positive course-much more in the nature of our people would be to accept fully the great responsibilities which our generation has partly inherited and partly earned.

This is not a new issue. It is an old one, but the new feature is that time to settle it is running out.

What we do this year is an important step in one direction or the other. By forthright and affirmative action we can set the example expected of us. The penalty for failure to do so can well be the beginning of the end of the free world coalition, and the gradual isolation of America. For there can be no doubt that the free world is gravely threatened by the aggressive onslaught of a powerful and determined opponent-the Sino-Soviet communist bloc. There is no precedent in history for the enormity of the threat.

Our strong military forces, supported as they are and must continue to be by a sound economy, constitute but a portion of the total resources which oppose the communist threat. The remaining ele

1Attachment to a White House press release dated Apr. 29, 1959 (text as printed in the Department of State Bulletin, June 1, 1959, pp. 797-798). "Not reprinted here; see ibid., pp. 798–804.

ments are the capabilities of the other nations of the free world whose clear and obvious desire is to remain free. These nations have varying degrees of ability to support enough military strength to resist communist take-over. For a number of years our nation has aided many of them in their efforts to strengthen their military forces and to develop economies which could ultimately support their own forces. There is indeed no precedent in all history for what our country has done under the mutual security programs.

This course of action has involved the employment of substantial U.S. resources for military and economic uses in other countries. This now amounts to somewhat less than one per cent of our annual gross national product.

The increasing intensity of repeated and bitter attacks on the foreign assistance programs by their articulate critics raises the basic question as to whether these programs are more useful implements of national security policy than equivalent efforts and resources devoted to other uses. The only alternative we can see to the interdependent allied free world, strengthened by our aid where needed. would be the Fortress America concept-taking our first stand in the last ditch.

We are all convinced that the Mutual Security Program both in its military and in its economic aspects is a sound concept. What is needed is the determination to continue it and the ability to administer it well.

The administration of this Program has been imperfect in some respects. We in America are novices at many of the tasks which befall us in our unprecedented position in world affairs, for in history's perspective these tasks have occupied us for a relatively few years. We have not developed the well trained corps of personnel required to carry out such a far flung program with absolute efficiency. Some projects have been imperfectly conceived, inadequately planned and poorly executed. On the other hand most projects have been well conceived and successfully carried out. Additionally, we have developed many competent administrators, though it may be years before there are enough such people in the program to provide a level of efficiency comparable to that which we see in business affairs and in other American endeavors. Meantime, while each blunder seemed worth a headline, the successes have made little news.

Nevertheless, we have seen, with substantial contributions from the Marshall Plan and from our mutual security and other efforts, the rebuilding of Europe and Japan, the development of powerful allies in NATO and the strengthening of the nations around the periphery of the Sino-Soviet bloc. We have seen slow but heartening progress in some parts of the less developed third of the world. With better internal security and a greater ability to defend themselves, peoples in these areas have acquired a growing confidence in their future. This is indispensable to economic development. Thus, despite inperfections of the programs, we have seen greater strength come to free world nations with the help of our aid. We do not now stand alone.

The choice our country faces is very real and near at hand. In our fascination with our own mistakes, and the constant use of foreign aid as a whipping boy, we may be gradually choking this vital feature of our national security policy to death.

The United States should commit itself to go ahead with a constructive program in this whole field, both military and economic, or alternately determine that we should no longer undertake the program.

We believe strongly that the doubts about the program and the policy it supports should be resolved affirmatively in the context of a longer term outlook, and not be left to year-by-year uncertainty as to what course our country will follow.

At the same time all of us must realize that ultimate success depends on something more than the dollars and military equipment of our aid programs. It also depends on our ability to maintain and strengthen, along with other nations, the political and economic bases of our free world relationships. We can truly succeed only if we have the full confidence and willing cooperation of our friends and allies.

We recommend, Mr. President, that every effort be made within the legislative and executive branches of the Government to bring clearly before the American people the relationship between the Mutual Security Program and the national interest, and the need for continuity of this program if it is to make its required contribution toward our world position of strength.

Respectfully yours,

DILLON ANDERSON

WILLIAM H. DRAPER, Jr.
Chairman

ALFRED M. GRUENTHER

JOHN J. MCCLOY

JOSEPH T. MCNARNEY

JAMES E. WEBB

THE PRESIDENT,

The White House,

JOSEPH M. DODGE
MARX LEVA
GEORGE MCGHEE
ARTHUR W. RADFORD

Washington 25, D.C.

583. THE UNITED STATES ECONOMY AND THE MUTUAL SECURITY PROGRAM: Report of an Interdepartmental Group, Submitted April 1959 (Excerpts) 1

I. INTRODUCTION

1

This Report is concerned with evaluating the impact of the Mutual Security Program upon the United States economy. It is one of the studies undertaken pursuant to Section 413 (c) of the Mutual Security

'The United States Economy and the Mutual Security Program: A Report Pursuant to Section 413(c) of the Mutual Security Act of 1954, as Amended (Department of State, Washington, D.C., April 1959), pp. 1-16.

2

See post, doc. 601.

Act of 1954 as amended (Public Law 85-477, 85th Congress), which directed that

Under the direction of the President, the Departments of State and Commerce and such other agencies of the Government as the President shall deem appropriate, in cooperation to the fullest extent practicable with private enterprise concerned with international trade, foreign investment, and business operations in foreign countries, shall conduct a study of the ways and means in which the role of the private sector of the national economy can be more effectively utilized and protected in carrying out the purposes of this Act., so as to promote the foreign policy of the United States, to stabilize and expand its economy and to prevent adverse effects, with special reference to areas of substantial labor surplus. Such study shall include specific recommendations for such legislative and administrative action as may be necessary to expand the role of private enterprise in advancing the foreign policy objectives of the United States.

Special emphasis is given in the frame of reference of this study to two problems: (1) the possible adverse effects on the U.S. economy of the growth of foreign enterprise made possible by the Mutual Security Program, and (2) any possible adverse effects on the U.S. economy of procurement policies under the Mutual Security Program. This study therefore is directed essentially to the economic assistance programs under the Mutual Security Act.5

Because of the interrelationship of all parts of the economy it was thought important to summarize operations under all sections of the Mutual Security Act which directly affect the domestic economy.

This report was prepared by an interagency group consisting of representatives from the Departments of Agriculture, Commerce, Defense, Interior, Labor, State, including the International Cooperation Administration, and the Development Loan Fund. Studies relating to this report, as prepared by individual agencies, are appended."

III. THE OVERALL EFFECT OF THE MUTUAL SECURITY PROGRAM
EXPENDITURES UPON THE U.S. ECONOMY

Over the last 10 years, during which the United States has been providing substantial aid to other countries, the American economy has grown at an average rate of 32 percent a year. Total output in terms of real value has increased more than 40 percent and output per capita has increased about 20 percent. These are increases which are reflected in a significant expansion of home ownership, in a growing number of life insurance polices to provide family security, in the wider ownership of consumer durable products including automo biles and washing machines, in increased school enrollment through the college level, in increases in vacation with pay, and in higher outlavs for library construction, in book circulation and publication, and xpenditures on educational buildings. Civilian employment has

doc. 588.

American Foreign Policy: Current Documents, 1958, pp. 1566–1583 cy procurement and production assistance under the Mutual Security discussed in detail in Appendix D. [Footnote in source text; Appendix reprinted here.]

Appendix E. [Footnote in source text; Appendix E is not reprinted here.]