GOVERNMENTAL PROGRAMS ON NATIONAL SECURITY AND INTERNATIONAL AFFAIRS FOR FY 1951

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85B00236R000200180008-6
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 17
• Document Creation Date: December 16, 2016
• Document Release Date: December 16, 2004
• Sequence Number: 8
• Publication Date: September 22, 1949
• Content Type: PAPER

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ORE 74-49
Published 22 September 1949
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A
G u" V E R N 'm" ME TAL PROGRAMS
NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS FOR 1951
CENTRAL INTEL LIGENcE AGENCY
ease,
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GOVERNMENTAL PROGRAMS ON NATIONAL SECURITY
AND INTERNATIONAL AFFAIRS FOR FY 1951
PROBLEM
1. Given a proposed substantial reduction
of appropriations for governmental programs
in national security and international affairs
for FY .1951, to estimate
A. The effect upon the non-Soviet world in
FY 1950, FY 1951, and subsequent years to
1955.
B. The effect upon the security position of
the US vis-A-vis the USSR
(1) As of the end of FY 1950.
(2) As of the end of FY 1.951.
ASSUMPTIONS
2. It is assumed
A. That the proposed substantial reduction
for FY 1951 will become public knowledge in
the course of FY 1950.
B. That over-all economic activity within
the US will remain at approximately its
present level for the period under consider-
ation.
C. That existing governmental programs in
national security and international affairs will
be implemented in FY 1950 in approximately
their present form.
D. That the objectives and aims of US
policy with respect to the USSR and the
security interests of the United States are as
stated in NSC 20/4.
FACTS BEARING ON THE PROBLEM
3. It was estimated in CIA 4-49, of April
1949, that the global. security position of the
US relative to the USSR had slightly improved
in twelve months. This conclusion was based
on the favorable trends that had been devel-
oped in Western Europe and which were con-
sidered to have outweighed on balance un-
favorable trends in the Far East. It was
stated, however, that the trends were so un-
certain that they indicated opportunities for
development and not accomplished fact. It
was accordingly considered that the more
favorable position could not be validly pro-
jected beyond the short term.
While no significant positive change. has
taken place in the position between April and
August, 1949, these favorable trends are being
nodif ed by the adverse trends noted in para.
4 below.
Air Force have concurred in this report. It is based on information available to CIA
as of 30 August 1949.
The categorical summary of the position, as
given in CIA 4-49, however, remains approxi-
mately the same: Europe-definitely more
favorable to the US; Near East.--basically un-
changed; Far East (China and Southeast
Asia)---definitely less favorable to the US
(N.B. A slight improvement has taken place
in Southeast Asia since April 1949) ; Far East
(Offshore islands) --slightly less favorable;
Latin America---basically unchanged for the
US, definitely less favorable for the USSR.
4. The following unfavorable trends, which
have originated outside the problem, are con-
sidered now to be overtaking the favorable
trends noted in CIA 4-49. They are:
Note: The intelligence organizations of the Departments of State Army Navy and th
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B. The tendency, enforced by present dollar
shortages, of states or groups of states in the
areas interm:?diate to the US and the USSR to
develop autarchic economic policies, and the
effect of this development on the US security
interest in the economic and political stability
of such states and in the maintenance of the
domestic economy of the US.
}}rr C. The e palidirw Communismrt of the Far
5. For the purpose of estimating, it is as-
suc;led that currently operative forces and
trends continue in effect. The possible modi-
fication of these forces and trends by events
or actions which are conceivable, but not pre-
DISCUSSION
For discussion of 1 A see Enclosure "A".
CONCLUSIONS
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6. The proposed reduction will significantly
reduce, within FY 1951, the capacity of the US
to pursue the objectives and aims stated in
NSC 20/4, and may in the critical years subse-
quent to FY 1951 invalidate those objectives
and aims.
7. Within FY 1.950 the principal effect of
the proposed reduction will be the definitely
unfavorable psychological reaction of the non-
Soviei world and ai concurrent boost to the
Soviet world. This reaction will tend to give
support to already existing adverse trends
such as:
B. The tendency, enforced by present dollar
shortages, of states or groups of states to
develop autarchic economic policies,
Thu expanding Communism of the Far
East.
ii. While it is estimated that there will be
considerable economic consequences in FY
1.950 and FY 1951, it is not considered that
these will inevitably and of themselves lead to
a serious deterioration of the US security posi-
tion within FY 1951, if the countries affected
are given ample time and are able to prepare
dictable, has not been taken into considera-
tion. It is to be noted, however, that the
intensity of the reaction to the proposed re-
ductions, as well as the development of the
unfavorable trends listed in para. 4 above will
be governed to a large extent by (a) the suc-
cess of such action as may be taken to check
these existing unfavorable trends, (b) the de-
gree to which present and prospective recipi-
ents of US aid can be persuaded to accept the
idea that a condition of permanent depend-
ence upon US resources is neither possible for
the US nor dcsirab1-, for the recipients, and
(c) the degree to which the US convinces the
non-Soviet world that its military force and
potential will continue to be available for use
in restraint of Soviet aggression.
compensatory adjustments. It is noted, how-
ever, that such adjustments would probably
take the form of a greater dependence on
bilateral trade agreements, including an in-
crease in East-West trade, some reductions in
standards of living, delays in implementing
investment programs, and firmer patterns of
economic autarchy---courses of action which,
for the most part, would run counter to US
international economic objectives, and the full
development of which might well have an
adverse effect, on over-all economic activity
within the US in FY 1951 and subsequent
years.
9. The interaction of psychological factors
and economic adjustments, initiated in FY
1950, will develop, in the course of FY 1951,
into positive trends unfavorable to the over-
all US security position vis-a-vis the USSR.
These trends will be supported, in part by the
unimpeded development of already estab-
lished trends in the Far East; in part by the
psychological, economic, and political adjust-
ments of Western Europe; in part by the fur-
ther trend toward instability which will have
been introduce([ into the situation in the Near
Arid Middle East; in part by the decline in US
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military strength; and in part by the Soviet-
Communist exploitation of the opportunities
that will have been opened. The deteriora-
tion of the over-all US security position may
not, however, reach a critical point within 1iY
1951, provided that the current situation in
various key strategic areas, such as Germany
and Greece, is kept under control.
10. The years subsequent to FY 1951 will be
critical in terms of the 118 security position
vis-A.-vis the USSR, unless effective counter-
measures have been devised and are being im-
plemented. At that time, the accumulating
effects of unfavorable trends abroad and of
~ovi.et exploitation of enhanced opportunities,
will come into juxtaposition with the full ef-
fects of reductions in programs related to US
national defense.
11. The military capabilities of the US will
begin to depreciate before thw close of FY 1950
and will decline at a.n accelerated rate thereaf-
ter. Comparatively, mobilization capabilities
will be more affected than the forces in being.
The substantial reduction in US military capa-
bilities will heavily tip the international bal-
ance of power in the direction of the USSR
which is expected to maintain its present
capabilities and even to add to them by con-
tinued efforts to improve weapons and produce
atomic bombs.
12. If the adverse developments noted in 10
and 11 above continue unchecked to a point
where the US decides that it is necessary to
attempt to redress the balance vis-, -vis the
USSR, the restoration of the situation in terms
of the aims and objectives of US policy as set
forth in NSC 20/4 would be more difficult and
more costly than the maintenance of the
present situation with respect to those aims
and objectives.
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ENCLOSURE "A"
The effect upon the non-Soviet world in FY 1950, FY 1951, and subsequent years to 1955.
DISCUSSION
1. In FY 1950 the reaction to the proposed
reduction will be primarily psychological. It
will take many variant forms, and it will be
most profound in the countries that, consider
that their interests and objectives have been
equated with US support. Certain common
features will be generally present: an inter-
pretation of US policy as undependable, or
reverting to isolationism; a fear that US mill-
tary strength will decline; a conviction that
national policies, free from dependence on the
US, must be quickly found and vigorously de-
veloped. This initial reaction will guide eco-
nomic and political adjustments. The effiects
of these adjustments will develop slowly and
not become significant before FY 1951. In
general, they will tend to shape up into a
trend unfavorable to the interests and security
position of the US and resistive to the objec-
tives and aims of US policy. In the absence
of counter-measures, they can be expected to
lead, in the years subsequent to FY 1951, to
a critical deterioration of the over-all US
security position.
2. General Reactions, Regionally Considered.
A. 'n the UK, reactions to US foreign eco-
nomic policies will already have been shaped
by the outcome of the September conversa-
tions in Washington, A reduction of appro-
priations according to the terms of the prob-
lem, involving as it would a small amount
of financial assistance in relation to UK re-
gait?emcrits, could not be expected to producc-
any r narked additional popular reaction, nor
any substantial economic effect. Olflcial
analysis will probably conclude, however, that
it has become essential to develop a policy
capable of being largely implemented from
UK-Sterling Bloc and non-dollar area re-
sources.
B. In Scandinavia, there will be a swing
back to the concept of a neutral bloc, accom-
panied by a growing lack of definition : in
foreign policy. However, no drift toward gen-
uine accommodation with the USSR is to be
anticipated.
C. In Western Europe, the reaction will gen-
erally take the form of diminished confidence,
hesitation and circumspection in relations
with the US, less capacity to resist external
and internal Soviet-Communist pressures.
D. In the Near and Middle East, it will gen-
erally take the forin of questioning the de-
pendability of the US as a counter-force to
Soviet expansion.
F. In the Far East, it will generally take
the form of a reduced capacity and will to
resist the Communist pressures which are be-
ing exercised outwards from China and in-
ternally in individual countries. This re-
duced capacity will show in two ways: fatalis-
tic acceptance of compromise by present hold-
ers of authority, and popular identification of
nationalist aspirations with Communist politi-
cal dynamism.
F. l n Latin America, there will be a loss of
confidence in the US, less willingness to accept
US leadership, and a search for independent
c:our::es of action, particularly on the part of
Argentina, and, possibly, Chile.
3. Economic Repercussions and Adjustments,
Regicnaliy _:onsidered.
A. Western Europe.
Economic activity, especially industrial pro-
duction, has probably been sufficiently re-
stored to cushion to some extent the immedi-
ate and short-term effects of the proposed re-
duction. There should be no purely economic
consequences in FY 1950, but in FY 1951 the
effects of the reduction upon the international
financial positions of the Western European
countries would have considerable adverse
economic repercussions. If the proposed re-
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duction were notified in a way that gave time
for compensatory adjustments, the purely
economic changes that would take place
should not produce of themselves a significant
adverse security trend within FY 1951, pro-
vided that the adjustments are not accom-
panied by serious labor troubles. The more
thoroughly and successfully these adjust-
ments are made, however, the greater the
possibility of their working to restrict over-all
economic activity within the US.
The types of adjustment would be:
(1) a reduction of purchases in the dollar
area and an increase in bilateral agreements
and trade restrictions; with a further diminu-
t::,n of the prospect of re-establishing a sys
tem of multilateral trade.
(2) an expansion of East-West trade, essen-
tially as an exchange of industrial goods for
foodstuffs and raw materials; with a conse-
quent weakening of the US policy of control-
ling exports to the Soviet-Satellite Bloc.
(3) an acceleration of the long-standing
trend toward economic autarchy.
(4) and, as far as continental Western
Europe is concerned, economic-military de-
cisions, involving demands for specific com-
pensation from the US for the use of bases
and strategic installations and a lowering of
the presently negligible military potential in-
sofar as it is applicable to the maintenance of
US security.
These adjustments would be accompanied
by a lowering of standards of living, a slowing
down of investment programs, and by con-
siderable competition between social welfare
expenditures and presently projected rearm-
ament programs. In these connections, polit-
ical repercussions will develop and, hence, it
will not be valid for FY 1951 to isolate purely
economic consequences. (See para. 4 A, B
below.)
For example, the reactivation of economic
activity has derived from more than US rna-
terial assistance. One of its conditions has
been the encouragement and security pro-
vided by alignment with the industrial and
military potential of the US. This has given
a reasonable assurance against Soviet military
action and Communist political subversion.
The possible destruction of, or even the intro-
duction of momentary doubts concerning this
intangible factor make it unrealistic, there-
fore, to estimate conscquences in purely eco-
nomic terms.
B. Near and Middle East.
Even in FY 1950, Greece and Turkey will be
faced with major economic problems as a re-
sult of the reduction of US aid. Elsewhere
in the area there will simply be an over-all
slowing clown of the entire process of creating
economic stability. (See para. 4 C below.)
C. Far East.
The economic problems and consequences
of a proposed reduction will be essentially
psychological and political, with the impact
falling chiefly in Japan and Southeast Asia in
FY 1950.
D. Latin America.
More strenuous efforts will be made to de-
velop country and regional economic autarchy
and to enter bilateral and limited area trade
agreements.
E. Inter-regional Stockpiling Programs.
The proposed reduction in stockpiling ex-
penditures would probably result in a curtail-
ment of development programs in the produc-
ing areas. It would also result in a reduction
in dollar earnings of the owning countries
(especially the United Kingdom and the
Netherlands) to the extent that purchases
were curtailed. These reductions would have
unfavorable political repercussions in the pro-
ducing countries and would add to the diffi-
cult adjustments which the European colonial
powers will be obliged to make.
4. Political Repercussions, Regionally Con-
sidered.
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B. Western Europe., In France and Italy
instability would be greatly accentuated in
FY 1950, as the moderate governments, which
have rested upon US subsidies and have main-
tained themselves by US-supported programs
of cooperation, come under serious attack
from both Right and Left. The adjustments
such governments will be required to make
will very probably lead, during FY 1951, to
well-defined political polarization. The prob-
able direction of political change will be, by
way of coalitions, to governments of the Right.
The stage will be set, in the years subsequent
to FY 1951, for an increasing struggle for
power between extremist groups. However,
the basic political struggle in the Benelux
countries, Scandinavia, Western Germany,
and Austria will still be between democratic
elements of the Right and Left (e.g., the CDU
and SPD).
C. Near and Middle East. No generaliza-
t;on is valid for this region. Greece, Turkey,
and Iran, because they are adjacent to Soviet-
Satellite territory, are in a special category.
Israel, as a newly formed State, has unique
problems. The Arab countries are divided
among themselves. The Indian subcontinent
is remote from the operation of regional fac-
tors. It is in the parts of the region bordering
the USSR that an unfavorable reaction in FY
1950 can .most rapidly develop into a critical
situation in FY 1951, and that the security
position of the US can be most speedily under-
mined.
(1) Greece. The situation in Greece is so
potentially unstable that it is considered that
a substantial reduction cannot safely be ap-
plied until six to twelve months after the
guerrillas have been reduced to "manageable"
proportions, i.e., 2,000--3,000. Reduction prior
to this time would stimulate fresh Soviet-
Satellite pressure while reducing Greek abil-
ity to oppose such pressure. The immediate
reaction in the circumstances would be a
breakdown of civilian and military morale, the
fall of any coalition goveriiinent, and probable
attempts to form an authoritarian regime.
The speedy disruption of even the present sem-
blance of political unity would be followed by
further decline in the already low standard of
living, by disaffection among refugees, and by
a deterioration in internal security.
(2) Turkey. The immediate effect would be
a tightening of political controls with power
concentrated in reactionary groups. Eco-
nomic development would be checked and re-
sources allocated on a rising scale to the
armed forces. The value of Turkey as a "bas-
tion" would gradually diminish. A basic shift
to neutrality, with the implication of accom-
modation with the USSR would not occur,
however, unless Greece and Iran fell under
Soviet domination.
(3) Iran. Currently obsessed with obtain-
ing US aid, the government, especially the
Shah, would receive word of the proposed re-
duction with apparent anger and alarm.
Even without US aid, efforts would probably
be made to build the military establishment
to unrealistic proportions at the expense of
programs for economic development. The
present anti-Soviet sentiment, however, would
probably not change. The 'US would find it
much more difficult to exert its influence to-
ward increasing internal stability through eco-
nomic and social development, and Iranian
vulnerability to Soviet pressure would steadily
increase.
(4) Israel. The immediate effect would be
to strengthen pro-Soviet political parties.
MAPAM, the largest, would be in a position to
press to enter the government. The present
policy of neutrality would be increasingly em-
phasized. Of slower development would be
the delayed effect of world-wide economic ad-
justments on the capacity of Israel to become
a viable sta,
(5) Arab Ac:tes. Denial of aid in the maib.-
tenance and resettlement of Arab refugees
would intensify unrest in the area. Denial
of aid to Saudi Arabia would lead to difficul-
ties in connection with the Airbase Agree-
ment, but would not be critical in the long
term. The other states would probably move
to rebuild their relations with the UK and
France. Economic stability and internal se-
curity would probably worsen slowly in FY
1951, with the rate of adverse development de-
pending to a certain extent on the situation
in Turkey and Iran.
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(6) Indian. Subcontinent. No significant
reaction since the area is fairly well condi-
tioned to the idea that large-scale material aid
will not be forthcoming from the US in any
c.ircurnstances. There would, however, be a
d_umnutio.n of US in_(luence.
D. The Far East.
With the exception of the costs of occupy-
ing and assisting Japan, already approved US
expenditures in the region are relatively sinall.
Korea and the Philippines are the other prin-
cipal recipients. The Republic of Korea is
wholly dependent on US economic and mili-
.ary aid for its survival. The severe psycho-
logical effect of a reduction would lead in a
straight line to Communist domination. It
is considered, however, that the ultimate corn-
rxxunization of Korea can only be delayed, not
prevented, and that the essential question
here is the value of delay in relation to the
25X1 general. security position of the US in the re-
gion as a whole.
Although the proposed reductions will be
politically used in the Philippines to whip up
anti-US sentiment, it is not considered likely
that US influence will be significantly affected
during the period under discussion. Present
commitments are contractual or authorized
through FY 11)51,
In Southeast Asia, the psychological re-
action will reduce the US capacity to influence
the course of events, and the tendency to-
ward accommodation with Communism will
increase. (l=or effects of reduced Stockpilingr
Programs, see para. 3 E, above.)
E. Latin America. US influence will dimin-
ish in FY 1951 and subsequent years, more in
consequence of psychological factors than re-
duced expenditures. This lessened influence
will be marked in more remote countries,
scarcely noticeable in those of the northern
area. Diminishing confidence in US power
relative to the USSR will strengthen the ad-
vocates of neutrality in the East-West struggle
and will open the way foe- Argentine leader-
ship of a "neutral" bloc that will tend to trade
its influence in internatiohal organizations in-
stead of uniformly supporting the US in major
US-USSR issues.
5. Soviet-Satellite Reaction.
A. It is considered that the proposed reduc-
tion will be interpreted as indicating that new
opportunities have been opened for vigorous
exploitation.
B. It is considered that such exploitation
will include a fully developed propaganda
campaign with themes designed to.
(1) undermine confidence in US policies,
dependability, and economic strength;
(2) intensify insecurity, distrust, and fear;
(3) create psychological impediments to
rapid and successful adjustments;
(4) vindicate the Communist views of his-
torical development and the superiority of the
Soviet system.
C. It is considered that this campaign will
be accompanied by a maximum use of political
and economic weapons.
(1) Increased political and economic agi-
tation, and industrial subversion by local Corn-
iuunist Parties.
(2) Diplomatic and economic pressures to
conclude political and trade agreements with
the Soviet-Satellite Bloc.
(3) Financial manipulations and commod-
ity dumping, to impede economic readjust-
ment.
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ENCLOSURE "B"
The effect upon the security position of the A. As of the end of FY 19511.
US vis-ii-vis the USSR: B. As of the end of FY 1951.
DEFINITIONS
1. It is considered, for the purpose of this
pr:?o?blem, that the basic security interest of
the US for the indefinite future, as set forth
in NSC 20/4, is to keep the dispersed power
resources of Europe and Asia from being
drawn into a Soviet power system; and that
the maintenance of this interest requires that
states in the areas intermediate to the US
and the USSR should identify to the maxi-
mum their political aspirations and security
interests with those of the US, and that the
economic and social structure of the US
should be kept viable and adaptable.
2. It is further considered that the relative
power of the US and the USSR has been kept
in a state of precarious balance since 1946 by
the fact that Soviet force in being is weighed
against US industrial potential, 'US guaran.
tees abroad, and certain technological advan-
tages, of which the US possession of the atomic
bomb and the ability to deliver it is perhaps
the most important.
DISCUSSION
Estimate as of the End of FY 1950. dependence from the US will probably result.
3. It is considered that, within the terms of
the problem and assumptions, the adverse
trends z ..oted in para. 4, page 1, are likely to
develop more rapidly and comprehensively
than would otherwise be the case. It is not,
however, considered that a fundamental ntoch-
fication of the global security position of the
US relative to the USSR is likely to occur
within FY 1950, provided the existing situa-
tion in certain key strategic areas (Central
Europe, and Greece-Turkey-Iran) is main..
tained in at least its present form. Regional
modifications in relative positions are likely to
occur, most notably in the Far East; and,
while such modifications may have significant
long-term security implications, they do not
necessarily threaten US security in the short-
terin, nor need their short-term effects be re-
garded as representing irrevocable losses or
irreversible trends.
4. In continental Western Europe the com-
bination. of an unfavorable psychological re-
action and the compensatory economic and
security adjustments that will be initiated,
will lay the groundwork for renewed political
instability. In the UK, intensified efforts to
develop a position of maximum economic in-
In Scandinavia, a growing uncertainty in for-
eeign policy will develop, as well as increased
support for a return to the concept of a neu-
tral bloc. In Central Europe, the proposed
reduction will be exaggeratedly interpreted
and will be over-enmphatically reacted to. In
Western Europe, generally, the desire for eco-
nomic and political integration will continue,
but practical progress in this direction will
be checked by the type of adjustment that in-
dividual states will make to reduced US aid.
Although military cooperation at planning
and technical levels is likely to be speeded up,
military readiness will be reduced in propor-
tion to the degree to which US aid is with-
held. Over-all. relations with the US will con-
tinue of necessity in their present pattern, but
will be marked by hesitation, circumspection,
and diminished confidence, The area of prac-
tical cooperation with the US in collective se-
curiy will tend to be narrowed to those inter-
ests that are of immediate concern to the
states of the region.
5. In the Mediterranean region and the
Middle East, it is considered that the relative
US security position will continue in its pres-
ent form, provided the local situation in
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r ece is not permitted to deteriorate. The
present uncertain internal stability of the re-
gion is, however, likely to become more pre-
carious if the factors producing instability
are given freer rein by the development of
doubts about US intentions. While no large-
scale programs designed to check such factors
(excepting ECA in Italy and subsidies in
Greece and Turkey) are in operation, expec-
tations of aid have been created by both US
and UK policy. The proposed reductions will
tend to weaken US, and indirectly, JJK influ-
ence, and thc existing partial checks on pro-
gressive instability will be diminished.
6. In the Far East, although the generally
unfavorable position developing in this region
arises from factors unrelated to the problem,
it is considered that this development will be
given added impetus. An unfavorable psy-
chological reaction will occur, most pro-
nounced in those countries that feel them-
selves directly exposed to Chinese Commu-
nism, more diffusely in those countries that
believe themselves in danger of Communist
subversion. 'I'bis reaction will generally work
to supplement an already adverse trend by
encouraging a tendency to compromise with
a. regionally successful force and by ericourag-
ing nationalist movements to place their hope
in Communism rather than in US promises.
7. The military capabilities of the US will
begin to deteriorate before the close of FY
1950. As soon as news of the proposed reduc-
tion for 10Y 1951 becomes public, the NME will
lose many key and specialized personnel.
This loss of the personnel and the preliminary
preparations for closing out or reducing many
activities and functions of the NME will seri-
ously impair the effectiveness of their opera-
tions even before the beginning of FY 1951.
8. Assuming that specific events or effective
counter measures have not reversed the cur-
rent unfavorable trend, a categorical sum-
mary of the estimated global security position
of the US vis--,c-vis the USSR at the end of FY
1950, can read:
A. There should be no fundamental change
in the basic US security position provided a
limited number of key strategic positions are
maintained.
B. Trends, ultimately unfavorable to the US
security position, will be present and will be
developing at an increasing rate.
C, There will be increasing opportunities
opened to the USSR for exploitation by the,
techniques of a "cold war."
Estirnates as of the End of FY 1951
9. Within the terms of the problem, and in
the absence of comprehensive. counter incas-
ure.s, it is considered that the global security
positiona of the US relative to the USSR will,
in the course of FY i951, begin to approach
the point at which serious deterioration can
set in. It is not considered, again provided
that key strategic positions continue to be
maintained, that obviously significant
changes will necessarily have taken place; but
,~imply that the structure of US security as
presently conceived will have been weakened.
The chief factors working toward this end will
bje the accumulating effects of adverse trends
that have been recognized as operative in FY
1950 and the exploitation of these trends by
Soviet-Communist action.
1.0. In. France and Italy, l.)otitical instability
will probably develop toward political polari-
zation. Political authority will tend to shift
toward the Right. The line of cleavage of
political forces will be between a nationalist
Hight with dictatorial overtones and an inter-
nationalist Left under Communist direction.
The pattern of econurnic adjustment and com-
nu rcial and financial policy will complement
the political tendency. The pattern will
probably be controlled, defensive, and nation-
alistic. The pressure of insecurity may fur-
thcr step up the degree of military coordina-
tion, but the economy will not be able to pro-
vide the equipment needed to make defense
plans realistic. Cooperation with the US may
well be limited to those precise respects in
which US objectives can be equated with local
security interests. The intangible guidance
which the US now gives in answering a col-
lective security problem will become dispersed
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and ineffective, and agreements will more and
more depend upon bargaining and well-
defined quid pro quos.
11. Elsewhere in Western Europe, particu-
larly in the United Kingdom, political insta-
bility will be much less serious than in France
and Italy, and will stem from general eco-
noniic maladjustment rather than from the
reduced appropriations which constitute the
terms of this problem. There will be no sig-
nificant political polarization. Communist
influence will not appreciably increase, nor
will right-wing authoritarianism gain any
substantial following.
12. In the Mediterranean, Near, and Middle
East, regional instabilities will probably in-
crease as the indirect consequences of the pro-
posed reduction are more widely felt. The
decline of US influence will encourage the
states of the region to seek alternative sources
of strength externally or to develop artificial
appearances of strength within themselves.
In Greece, Communist elements, even if the
guerrillas have been liquidated, may be en-
couraged to attempt a new test of strength.
Turkey and Iran will probably interrupt their
plans for economic development and allocate
their resources to military uses. The value of
Turkey as a US "bastion", and the internal
stability of Iran will be reduced by such a
change. The Arab States will probably try
to revive their UK or French connections; but,
even if these were wholly re-established, the
UK and France would not be able to provide
the material assistance needed to check the
forces creating instability. Positive shifts of
alignment toward the USSR are not indicated.
An increase in the opportunities opened to the
1.1
USSR for subversive action designed to make
the region a weaker element in the structure
of US security is :indicated. Political, social,
and economic instability will probably spread
from the Near East along the North African
littoral. The French, particularly if policy is
increasingly directed by the Right, will meet
this challenge to their control with repressive
measures. These developments will tend to
make it more difficult to utilize the Mediter-
ranean region in support of the presently con-
ceived US security. position.
13. In the Far East, where adverse factors
are already in vigorous operation, the most
likely trend. will be toward a more rapid ex-
tension of Communist influence on the con-
tinent. In this connection, the situation in
Japan will become increasingly important.
The re-establishment of Japan as a viable
state becomes essential to the maintenance of
a minimum US security position in the region.
It is recognized, however, that the conversion
of the Asiatic mainland from an area from
which the US has been excluded to an area
constituting an offensive threat to the over-all
US security position will not take place within
the period under consideration.
14. Within FY 1951, there will be a decline
in US military capabilities. The multiple and
diverse activities associated with the reserve
forces, the improvement of weapons and
equipment, and the general plans and opera-
tions in preparation for the expansion of the
NME in time of national emergency will. be
seriously curtailed, Reductions in the im-
portant adjuncts of NME--AEC, the MAP and
the strategic stockpiling programs-would
further adversely affect the military position
of the US and the Western Powers. These
substantial reductions in US military readi-
ness will tend to shift the international bal-
ance of power in the direction of the USSR,
which is expected to maintain its present
capabilities and even to add to then by con-
tinued efforts to improve weapons and produce
atomic bombs.
The Western Powers, which have been en-
couraged by the US' to take a firm stand
against Soviet aggression, will be discouraged
by the prospect of a decline in US military
capabilities and in the amount of direct US
CoNFIDFNTIAT;
 C10''JFIDENTTATr
Approved Fo apg)400 Wt2fti,, lA-RDP85B002 R000200180008-6
assistance in building up their own military
forces. Their determination to resist Soviet
aggression will weaken accordingly, with a
consequent weakening in the basic US secu-
rity position.
1.5. Again assuming that specific events or
effective counteraction have not reversed the
current unfavorable trend, a categorical sum.-
rnaiy of the global security position of the US
vis-A-vis the USSR, as of the end of FY 1951,
can read :
Estimates
A. Indian Subcontinent.
A. A definite reversal of the existing favor-
able situation in Western Europe.
B. A more rapid development of the exist-
ing unfavorable trend in the Far East.
C. A progressive instability in the key stra-
tegic region of the Mediterranean, Near, and
Middle East.
D. An increase in the number and variety
of Soviet-Communist pressures and a constant
probing for points of weakness in the US
security position.
of the Probable Situation in Other Regions
Beyond a reduction in the US capacity to
influence events in this region, no significant
change is considered likely in FY 19:10 or 1951
in consequence of the proposed redid ction.
B. Latin America.
In c'in ection with this region, important
L. , the general support of the US security
position rather than because of any danger of
its falling immediately within a Soviet power
system, it is noted that US influence will grad-
ually diminish through the period under con-
sideration. The most significant consequence
will probably be the development of neutral
positions and a tendency to use the Latin
American voting strength in international
organizations for bargaining purposes rather
than uniformly to support US objectives in
major US-USSR issues.
C. Africa.
Except for the North and West African lit-
toral, which has been considered above, this
region is considered to be comparatively
irrelevant to the problem stated and for the
period under consideration.
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C0NFIDTNTTA'
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WASHINGTON 213, D. C.
OFFICE OF {THE DIRECTOR
2; Augwit .1953
e~','S;~;x~'#;LA3.5 J'aSilltiaM4 roil "i}i . . 131.2'. "1VE BEf. ., i.trnt p
(CFTC. OF TIX. :CIMM? OF DEVE F;1
Wor2.ik>g Pa ars or, 1E 0
I. Coatirr ,.r n telephone conversation between Colonel
D. P. 1 iva axA- the u4ersigraed, it is requested that 1)r.
A th'U,r B. Darling, CIA Historian, be alloyed. accear to the
r_ri..1a,#c?at pa.1iers. Dr. 1 wl.izg is preparing a history of the
er ;k^,n.Iz s ic:;. of tae Ctantx tl Intelligence Agency, and believes
C i #,.er ~.k . T. 1i N r y ?a3 co entc on the Dulles-Jackson-Correa
1 port, would b of uceletance to 'him is his undertaking.
tea. Dkirl.i ; has secturity clearance through TM CC1D
::kecu ,..ve ss stint
to the Lirectoa~
DOCUMENT NO,
NO CR i GE IN CLASS, ^
2< GtBL >SiFi1'3
CLASS, Cr.Zr TO TS S C
NEXT Pic tti . 6?,.Y':.,
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 Approved For Rase 2 =236F30Q0200180008-6
DEPARTM EN E
WASHINGTON, HEADQUARTERS SERVICES
WASHINGTON, D.C. 20301
November 13, 1981
MEMORANDUM FOR THE CHIEF, CLASSIFICATION REVIEW DIVISION, CENTRAL INTELLIGENCE AGENCY
SUBJECT: Request for Declassification Review
During the systematic review of all classified Office of the Secretary
of Defense (OSD) documents over 20 years old, the Declassification and
Historical Research Branch, Records Management Division, Directorate for
Correspondence and Directives, Washington Headquarters Services, turned
up the attached document(s).
The documents were either originated by your agency, contain information
for which your agency is the classification authority, or are otherwise
of interest to you.
It is therefore requested that your agency review the documents and
recommend declassification, continued classification at the present or
lesser level of classification, and/or review by other agencies. If your
agency is recommending continued classification, in accordance with Para-
graph 3-401, Executive Order 12065, it is requested that an authority for
continued classification be specified, along with a date for the next review.
The time permitted by Executive Order 12065 to reach the point where all
OSD documents over 20 years old have been reviewed, and the large volume
of over 20 year'old OSD documents, make it necessary to request your res-
ponse within 60 days. In your response, you may wish to provide guidance
with regard to what categories of information you do and do not wish to
have referred to you in the future.
Your assistance in effecting this review will be most appreciated. Please
return the documents to Mr. Brian V. Kinney, Chief, Declassification and
Historical Research Branch, Records Management Division, Washington Head-
quarters Services, Room 1D517, Pentagon, Washington, D.C. 20301, upon
completion of your review.
Without attachments, this memorandum is UNCLASSIFIED.
E. E. Lowry,
Attachments (4)
Approved For Release 20
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mr
LIST OF ATTACHMENTS
1. Report, 30 Aug 1949, Subj: Governmental Programs on National Security
and International Affairs for FY 1951, ORE 74-49, Copy No. S, Log No. 24356 (TS)
2. Report, 22 Sep 1949, Subj: Governmental Programs on National Security
and International Affairs for FY 1951, ORE 74-49, Copy No. 19, Log No. 022949 (TS)
3. Report, 27 Dec 1950, Subj: NIE-5: "Indochina: Current Situation and
Probable Developments." (S)
4. Memo, 25 Aug 1953, Subj: Working Papers on NSC 50 (C)
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