BUSINESS ADVISORY COUNCIL HOT SPRINGS, VIRGINIA 10 MAY 1958

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80M01009A001502510008-8
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 11
• Document Creation Date: December 23, 2016
• Document Release Date: April 24, 2013
• Sequence Number: 8
• Publication Date: May 10, 1958
• Content Type: REPORT

Declassified an Approved For Release 2013/04/24: CIA-RDP80M01009AO01 02510008-8
BUSINESS ADVISORY COUNCIL
Hot Springs, Virginia
10 May 1958
I. Subject given -- "World situation" too expansive. Shall cut
down to size and discuss.
A. Nature of challenge of Communist Bloc.
B. Resources of the Bloc movement;;; military, economic,
subversive, etc.
C. Likely Soviet tactics and strategy for the near future.
D. Prospects and prospective.
II. Nature of the Challenge.
A. International Communist movement has set as its goal
conversion by force or guile of the entire world to its
way of thinking.
B. I. C. believes and preaches other type of social organizations
incompatible with its aims; believes that in time Capitalist
governments will disappear and Socialism will prevail. In
Declassified and Approved For Release 2013/04/24: CIA-RDP80M01009A001502510008-8
 Declassified: Approved For Release 2013/04/24: CIA-RDP80M01009AO01 02510008-8
2.
own camp Permits no heresies. (Y..S. and Mao's many flowers
doctrine.) Abandoned "many roads to Socialism".
C. In Leninist-Stalinist days, tactics portrayed as ruthless
struggle admitting tactical retreats, but coexistence not
preached.
D. In today's nuclear age goals remain the same, now stressing
possibility periods of. coexistence between the two systems.
War too dangerous a weapon. Nuclear thrown them off stride.
E. Interim agreements possible but viewed by Soviet as mere
temporary truces to consolidate gains and furnish springboard
for future program. (Austria, Viet .Nam)
F. Prospect of permanent settlement with Communist ideology
as represented by Kremlin leaders is mirage. Have stated
their aims;; best to believe them (Hitler - Mein Kampf).
Disengagement takes two - Neutral zones - If stand on own
feet OK. Don't deceive ourselves can "buy" quick and easy
-peace.
Declassified and Approved For Release 2013/04/24: CIA-RDP80M01009A001502510008-8
 Declassified: Approved For Release 2013/04/24: CIA-RDP80MO1009AO01 02510008-8
3.
III. Great world movements of the past: Greek, Roman, Moslem, European
religious wars; Napoleon, Hitler, etc.
A. All these had high ambitions, periods'of great power, None
had combination of a secure land mass, great population,
base and economic and military power of I. C. None the
universality of goal. The incompatibility of a way ' of life.
B. In face of military force or through the erosion of conquering
and pioneering spirit, all earlier movements eventually con-
tained. (Though brought.Dark Ages)
C. What will be fate of I. C.? (Leave to end -speculation)
IV. Resources. (Basis of power and strategy).
A. Military.
Soviet military machine now thoroughly reorganized, and
based on nuclear weapons and means of delivery, while
maintaining large conventional arms.
Nuclear strength is sophisticated -- with variety nuclear type
weapons from lowest yi'eld to megaton- range with war-heads for
Declassified and Approved For Release 2013/04/24: CIA-RDP80MO1009AO01502510008-8
 Declassified and Approved For Release 2013/04/24: CIA-RDP80MO1009AO01502510008-8
1t.
quantity
ballistic missiles, inferior to us in and quality
but sufficient to wreak great damage. We had head start.
(1) Delivery vehicles.
(a) Aircraft. Heavy long-range bombers -- Bisons
and Bears. Modest potential and probably cutting
back. Probably not equal to USA B-52's in quality
and quantity. Medium bombers about as good as
our B-47's and nearly as many but range insufficient
to reach US except on desperate one-way missions.
(b) Guided missiles -- long testing program in short
and intermediate. ranges and presumably in
production of weapons with ranges sufficient to
cover European target from USSR and satellites.
Have apparently successfully tested several ICBM's
ICBM Horse Race.
(Give general comparison)
Declassified and Approved For Release 2013/04/24: CIA-RDP80MO1009AO01502510008-8
 Declassified and Approved For Release 2013/04/24: CIA-RDP80MO1009AO01502510008-8
5.
What needed 10 years ago. Bill Mitchell for Ballistic
Missiles.
(c) Submarines -- (1175). Change-over to new program
(d) Stressing defensive capabilities against air attack
due decade of nuclear inferiority.
.(e)Maintains foot soldiers, tanks, conventional
weapons, far..'in excess of free world. Though
have cut back considerably from peak strength
reached at end of Korean war. (also Chinese army
and Bloc - refer China)
Approaching military statements - Each destroy the
other.
B. Economic Base - (Douglas Dillon)
While Soviet GNP only about 40 percent of the USA annual
growth of industrial sector over 10 percent. Percentage of
GNP devoted to defense expenditures about double that of USA,
and total defense effort in amount of goods and service about
Declassified and Approved For Release 2013/04/24: CIA-RDP80MO1009AO01502510008-8
 , Declassified and Approved For Release 2013/04/24: CIA-RDP80MO1009AO01502510008-8
6.
equal to our own. (Explain)
As a corollary, Soviet consumer received less than one-half
of the total production as compared with over two-thirds of
the total in the U.S. While means individual new releiver
4-5 times in value of consumer goods.
Discuss consequences.
Even though consumer "short changed" Soviet has aggressive
foreign economic aid program.. ($2 Billion in 3 years, etc.)
Large numbers of technicians particularly aircraft
personnel which appearing Egypt, Syria, Indonesia, Yemen
for training and support purposes. (Using Czechoslovak arms
and technicians at least "offensive" to free world). More
likely use technicians and trainers than actual volunteers.
Trade,- increasing - manipulative by great Socialist State -
itw dangers.
C. Subversion.
Through Communist parties and front organizations, maintains
nucleus for subversive action in large part of free world.
Declassified and Approved For Release 2013/04/24: CIA-RDP80MO1009AO01502510008-8
 Declassified and Approved For Release 2013/04/24: CIA-RDP80MO1009AO01502510008-8
Particular targets: Europe, France, Italy, Middle East,
Egypt, Syria, Yemen, South Asia, India, Burma, Laos, South
Vietnam, (In countries from Burma east, Chicoms play the
larger role.) (Constitutions built by Communists proportional
representation Types)
Indonesia today major Soviet Chicom target, (but view
unpopularity of Chinese generally in Indonesia latter playing
minor role here.)
Japan an obvious target particularly through Communist
dominated labor union.
Emphasis on Illegality" as opposed to revolutionary and
violent underground activities that characterized Stalin's
era. Kerala -- 13 million people "voted" for Communist
government. Laotian election as illustration new tactics.
New Commie Parties fight each other.
Use and abuse our democratic processes to undermind us and
destroy these processes.
Declassified and Approved For Release 2013/04/24: CIA-RDP80MO1009AO01502510008-8
 Declassified and Approved For Release 2013/04/24: CIA-RDP80MO1009AO01502510008-8
?
8.
V. Soviet Techniques
A. Soviets will avoid initiating war or get into a situation
where war inevitable. Accidents always possible from
chain reactions and miscalculations. Mutual nuclear threat
has changed Soviet time-table and techniques. Present
leaders aghast at risk that Stalin took as clearly expressed
in Khrushchev's denunciation of Stalin. Will not repeat
this error in near future.
B. IC will use weapons of subversion. Try to wreck structure
of democractic governments through use of the Communist
Parties, penetrating labor unions and employing their massive
front organizations, trying to make democracy fail in ,France,
Italy. Also, Indonesia, Japan, etc. Evidenced in South
America of penetration of student and youth groups by Vice
President's trip. Getting foothold in Venezuela. where in
S. A. they can hurt us most.
C. By developing own production, oil, aluminum, other metals;
by purchasing from time to time surpluses, agricultural
Declassified and Approved For Release 2013/04/24: CIA-RDP80MO1009AO01502510008-8
 Declassified and Approved For Release 2013/04/24: CIA-RDP80MO1009AO01502510008-8
9.
products, cotton, rice, grain, etc. Attempt to bring
single crop countries - Brazil with its coffee, Egypt with
its cotton, Burma with its rice, under increasing control.
D. By military aid to the trouble spots of the Middle East,
Indonesia, etc., will promote internal and external wars.
Will have engineering and technical skills for export on a
larger scale and promote help in industrialization for the
newly developing states.
E. Such in general are the techniques we?will have to meet
in the years immediately ahead.
VI. Prospects and Prospectives.
Free world still has predominant industrial economic position
and trained manpower and we developing mighty military deterent.
The challenge is not unbeatable but free world is badly divided;
insufficiently coordinated; lacks the ability for quick connected
decision and prompt and continuing action. Each budgetary year
with us is a new struggle for the tools to meet the Communist
Declassified and Approved For Release 2013/04/24: CIA-RDP80MO1009AO01502510008-8
 Declassified and Approved For Release 2013/04/24: CIA-RDP80MO1009AO01502510008-8
10.
But the Communist world itself has critical problems.
Keeping subject nations in line. Maintaining the ideological
fervor which slowly dying out at the center. The problem
of leadership and the succession (Khrushchev). To continue
to maintain their vast military establishment and their
wbrld-wide efforts - trade and aid - will mean denial to the
people of the Soviet Union in terms of living standards.
their fair share of production.
There are signs of some internal uneasiness as the managerial
class gains power, as the educated classes become much more numerous
and as knowledge of the outside world reaches down to the people
of the Soviet Union and the people of China. If we can have a
period of peace, these factors will grow in importance and the'
Russian people may ask with insistence, "Why the sacrifice -
for what?" Must disabuse people of encirclement idea.
If we maintain strength of economy and the will to meet
the challenge, the future not discouraging. But there is
Declassified and Approved For Release 2013/04/24: CIA-RDP80MO1009AO01502510008-8
 Declassified and Approved For Release 2013/04/24: CIA-RDP80MO1009AO01502510008-8
0 is
no trick formula; disengagement unreal; alluring but meaningless.
Toynbee, "Challenge and response"
For the immediate furture great share of the response will be
in the Economic and Industrial field - in which you must and
will play a highly decisive role.
Declassified and Approved For Release 2013/04/24: CIA-RDP80MO1009AO01502510008-8