June 2, 1951
I HAVE today approved H.R. 3587, the Third Supplemental Appropriation Act for the fiscal year 1951. This act provides urgently needed funds for carrying on important activities of the Government.
Unfortunately, the act also contains a legislative "rider"--that is, a piece of legislation quite unrelated to the major purpose of the act, which is to appropriate funds. This rider--section 1302--makes broad and sweeping changes in our procedures for restricting trade between the free world and the Soviet Union and its satellites. It is thus a major piece of legislation affecting our foreign policy, but it was never considered by the House Foreign Affairs Committee or the Senate Foreign Relations Committee.
This rider is seriously defective. However, I have signed this act because the appropriations it carries are so urgently needed, and because section 1302 does authorize exceptions from its provisions in the interest of national security. Unless the power to make exceptions is broadly used, this rider will result in weakening, rather than strengthening, the security of the United States and the collective security of the free world. I strongly urge the Congress to replace this hasty rider with more workable legislation at the earliest possible moment.
Briefly, section 1302 provides, first, that no economic or financial assistance (other than military assistance) may be given to any country which exports to the Soviet Union and its satellites arms, armament, or military materiel. Second, such aid may not be granted if a country exports any article or commodity which "may be used in the manufacture of arms, armaments, or military materiel." And, third, aid must be withheld if a country exports to the Soviet bloc any article or commodity the shipment of which to the Soviet bloc from the United States is prohibited.
The section further provides that in order for any country to be eligible for economic assistance from the United States, it shall certify monthly that it has not shipped any of these items to the Soviet bloc since the 15th day after the enactment of the act. The National Security Council is authorized to grant exceptions to these provisions in the security interests of the United States. Such exceptions are to be reported to six committees of the Congress.
I am sure that the Congress intended, in enacting this section, to strengthen the security of the United States and the rest of the free world by preventing the Soviet bloc from acquiring goods, through trade, which will enlarge Soviet military strength in relation to that of the free world.
With that purpose, everyone agrees. The United States and other free nations have been pursuing this objective for a long time, and much greater progress has been made than has generally been realized.
Section 1302 is of little practical importance insofar as it applies to the shipment of arms, ammunition, implements of war, and atomic energy materials. Long before the Korean conflict, shipments of these items to the Soviet bloc were prohibited by the United States, by the Western European countries, and by most of the other free nations of the world. Prohibitions on the shipment of these items are effective and complete.
The difficulties with section 1302 arise out of its application to ordinary items of trade and commerce. As to these items it is not well designed to achieve its ostensible purpose. In fact, in several important respects it will make it more difficult to achieve that purpose.
First, the section fails to recognize that trade is a two-way street.
Today, the free nations get from the Soviet bloc substantial amounts of such commodities as coal, grain, timber, manganese, chrome, asbestos, and iron and steel products which are of major importance to the common defense of the free world. Principal exports to the Soviet bloc consist of such things as textiles and textile fibers, machinery and equipment of some kinds, various foods and raw materials, and a diversified list of miscellaneous commodities. It is obvious that many of these items "may be used in the manufacture of arms, armaments, or military materiel," in the words of section 1302. But that is not sufficient reason for prohibiting their export to the Soviet bloc, if the free world receives in return goods of greater value.
Some free nations, as a result of trade patterns of many years' standing, are more dependent on imports from the Soviet bloc than others. Those free nations most dependent upon the Soviet bloc for imports contributing substantially to their food supply and defense effort naturally have great difficulty in reducing exports to the Soviet bloc. They are in a much more difficult situation than are countries like the United States, which are not so dependent upon imports from the Soviet bloc.
The problem of trade between the Soviet bloc and the free world is thus a matter of evaluating, in terms of relative importance, what the free world gets from the bloc for what it must give in return. The oversimplified approach of section 1302 is clearly wrong.
Second, section 1302 attempts to achieve by coercion what must be achieved by cooperation. No one nation can successfully force its own system of controls upon every other nation. Our experience so far shows that effective controls can be accomplished by cooperation.
The United States strictly controls its own exports to the Soviet bloc. The shipment of many items is embargoed. All exports of any kind from the United States to any country in the Soviet bloc require licenses. Their type and quantity are carefully scrutinized to make sure that they will not be of strategic value to the Soviet bloc. In addition to the controls that apply generally to exports to countries in the Soviet bloc, shipment of all commodities to China is forbidden and United States ships are not allowed to call at Chinese ports.
The United States has also been a leader in urging other free nations to join in international control of exports to the Soviet bloc.
Of necessity, publicity concerning control methods and results has been restricted. Much progress has been made, however. The countries of Western Europe which are cooperating with us in the common defense program have taken action to prohibit or control exports of strategic goods to the Soviet bloc. These nations, together with Canada and the United States, substantially control most of the industrial products of the free world.
When aggression broke out in Korea, approximately 145 categories of articles had already been embargoed to the Soviet bloc from these Western European countries as well as from the United States and Canada. Many of these categories include dozens of individual articles. The quantities which could be shipped in numerous other categories were limited.
Through continuing cooperative efforts since that time, further restrictions have been worked out. At present, about 90 percent of the items which the United States regards as being of primary strategic significance are subject to virtual embargo by the Western European countries.
In addition to these steps, the United Nations on May 18, 1951, by a vote of 47 to o, agreed to a complete embargo on the shipment of strategic materials to Communist China. The United States will continue to work in the United Nations for increasingly effective international action to deny materials of value to the Chinese aggressors.
We have come a long way in our efforts to achieve international controls over exports to the Soviet bloc, and these controls are becoming increasingly effective.
A third major defect with section 1302 is that if we cut off our aid to a friendly country, we might hurt ourselves more than we hurt the Soviet Union.
The indiscriminate approach of section 1302 for cutting off economic aid to other countries ignores the vital interest which the United States has in the contribution that aid makes to the security of the whole free world. Cutting off this aid could strike a death blow at the tremendous defense effort in which the free nations are now engaged.
The success of our defense effort depends upon the ability of the free world to maintain and expand its economic strength. Our programs for economic and financial assistance are directed to that end. In some countries, they are directed toward helping other nations build the industrial facilities required to produce weapons for defense. In certain underdeveloped countries they are directed to assuring the basic economic stability which is essential if those countries are to resist both internal and external threats to their independence. In other countries they are aimed at expanding the capacity of the free world to produce vitally needed strategic materials--for example, copper, steel, aluminum, and uranium. The security of the United States, as well as the other free nations, is deeply involved in the success of these efforts. The defense structure we are striving to create--both here at home and in Europe under General Eisenhower-will rot and topple unless it rests on a sound economic foundation.
In addition to these major defects, section 1302 also contains certain technical provisions which are unfortunate. For example, the provision for certification is complicated and difficult to apply and does not add to our ability to carry out the ostensible purpose of the section.
Because of the defects I have described, section 1302 will make it more difficult for this country to make further progress in its effort to bring about effective international controls over trade with the Soviet bloc.
The National Security Council has been guiding the work of the executive agencies in this effort. The Council has been carrying on a continuous scrutiny of the trade of every country in the free world with the Soviet bloc. Information on the quantities and types of commodities shipped to and received from the Soviet bloc by every free country has been examined. The trade controls exercised by these countries have been considered.
Against this background, the Council has decided the actions that the United States should take. In doing so, the Council has viewed the United States security in its broadest terms. It has taken into account the security value of imports received from the bloc, the contribution of each country to the collective security of the free world and the importance of United States aid in facilitating their defense efforts.
For the most part there are very few articles left of any real strategic importance that are moving to the Soviet bloc in any significant quantity. There are still a number of trade situations with which we are not yet satisfied. Control of trade at certain transshipment points is difficult of solution. As would be expected, not all friendly nations agree with us precisely as to which articles are of the most strategic value to the Soviet bloc. We are constantly endeavoring, however, to correct all of these weak spots--and progress is constantly being
made.
We will continue these endeavors and will make every possible effort to administer section 1302 to accomplish the purposes which the Congress intended without impairing the security interests of the United States. In order to do this, I think it likely that the National Security Council will find it necessary to make exceptions on a broad scale until the Congress has an opportunity to give this matter further consideration.
I am sure that the Congress and the Executive have the same general objective in mind in prohibiting trade that is injurious to the security interests of the United States and in finding the most practical and effective method of doing so.
Because of the compelling objections to section 1302 in its present form, I urge the Congress to enact improved legislation to replace it at an early date. Such improved legislation should be based, I believe, on the following principal considerations:
1. The purpose of the legislation should not be blindly to cut off as much trade as possible, but to cut off trade only when such. action will add to the security of the United States and the rest of the free world.
2. The legislation should take account of the offsetting value of what we receive from the Soviet bloc as compared with what we send to them; it should take account of the differing importance of different commodities and not treat all commodities alike; and it should take account of the value to us of the increased strength for freedom which our economic aid brings about.
3. The legislation should provide for simple, effective and straightforward administration.
Legislation of this type would be helpful to the Nation's security. I strongly urge that the Congress enact such legislation to replace section 1302.
NOTE: As enacted, H.R. 3587 is Public Law 45, 82d Congress (65 Stat. 52).
On June 15, 1951, the President suspended operation of the amendment for a period of 90 days on the advice of the National Security Council.
Provisos in section 1302 of the act authorized the granting of exceptions following a determination and report by the National Security Council. On June 15 the White House made public the Council's determination and report on the granting of an interim general exception under section 1302, together with determinations and reports relating to the trade of Austria and Norway with members of the Soviet bloc. Subsequent National Security Council actions under section 1302 were also made public by the White House. They are listed Appendix A under the following dates: August 3, 31, September 12, 14, 20, 24, October 1, 4, November 5.
I HAVE today approved H.R. 3587, the Third Supplemental Appropriation Act for the fiscal year 1951. This act provides urgently needed funds for carrying on important activities of the Government.
Unfortunately, the act also contains a legislative "rider"--that is, a piece of legislation quite unrelated to the major purpose of the act, which is to appropriate funds. This rider--section 1302--makes broad and sweeping changes in our procedures for restricting trade between the free world and the Soviet Union and its satellites. It is thus a major piece of legislation affecting our foreign policy, but it was never considered by the House Foreign Affairs Committee or the Senate Foreign Relations Committee.
This rider is seriously defective. However, I have signed this act because the appropriations it carries are so urgently needed, and because section 1302 does authorize exceptions from its provisions in the interest of national security. Unless the power to make exceptions is broadly used, this rider will result in weakening, rather than strengthening, the security of the United States and the collective security of the free world. I strongly urge the Congress to replace this hasty rider with more workable legislation at the earliest possible moment.
Briefly, section 1302 provides, first, that no economic or financial assistance (other than military assistance) may be given to any country which exports to the Soviet Union and its satellites arms, armament, or military materiel. Second, such aid may not be granted if a country exports any article or commodity which "may be used in the manufacture of arms, armaments, or military materiel." And, third, aid must be withheld if a country exports to the Soviet bloc any article or commodity the shipment of which to the Soviet bloc from the United States is prohibited.
The section further provides that in order for any country to be eligible for economic assistance from the United States, it shall certify monthly that it has not shipped any of these items to the Soviet bloc since the 15th day after the enactment of the act. The National Security Council is authorized to grant exceptions to these provisions in the security interests of the United States. Such exceptions are to be reported to six committees of the Congress.
I am sure that the Congress intended, in enacting this section, to strengthen the security of the United States and the rest of the free world by preventing the Soviet bloc from acquiring goods, through trade, which will enlarge Soviet military strength in relation to that of the free world.
With that purpose, everyone agrees. The United States and other free nations have been pursuing this objective for a long time, and much greater progress has been made than has generally been realized.
Section 1302 is of little practical importance insofar as it applies to the shipment of arms, ammunition, implements of war, and atomic energy materials. Long before the Korean conflict, shipments of these items to the Soviet bloc were prohibited by the United States, by the Western European countries, and by most of the other free nations of the world. Prohibitions on the shipment of these items are effective and complete.
The difficulties with section 1302 arise out of its application to ordinary items of trade and commerce. As to these items it is not well designed to achieve its ostensible purpose. In fact, in several important respects it will make it more difficult to achieve that purpose.
First, the section fails to recognize that trade is a two-way street.
Today, the free nations get from the Soviet bloc substantial amounts of such commodities as coal, grain, timber, manganese, chrome, asbestos, and iron and steel products which are of major importance to the common defense of the free world. Principal exports to the Soviet bloc consist of such things as textiles and textile fibers, machinery and equipment of some kinds, various foods and raw materials, and a diversified list of miscellaneous commodities. It is obvious that many of these items "may be used in the manufacture of arms, armaments, or military materiel," in the words of section 1302. But that is not sufficient reason for prohibiting their export to the Soviet bloc, if the free world receives in return goods of greater value.
Some free nations, as a result of trade patterns of many years' standing, are more dependent on imports from the Soviet bloc than others. Those free nations most dependent upon the Soviet bloc for imports contributing substantially to their food supply and defense effort naturally have great difficulty in reducing exports to the Soviet bloc. They are in a much more difficult situation than are countries like the United States, which are not so dependent upon imports from the Soviet bloc.
The problem of trade between the Soviet bloc and the free world is thus a matter of evaluating, in terms of relative importance, what the free world gets from the bloc for what it must give in return. The oversimplified approach of section 1302 is clearly wrong.
Second, section 1302 attempts to achieve by coercion what must be achieved by cooperation. No one nation can successfully force its own system of controls upon every other nation. Our experience so far shows that effective controls can be accomplished by cooperation.
The United States strictly controls its own exports to the Soviet bloc. The shipment of many items is embargoed. All exports of any kind from the United States to any country in the Soviet bloc require licenses. Their type and quantity are carefully scrutinized to make sure that they will not be of strategic value to the Soviet bloc. In addition to the controls that apply generally to exports to countries in the Soviet bloc, shipment of all commodities to China is forbidden and United States ships are not allowed to call at Chinese ports.
The United States has also been a leader in urging other free nations to join in international control of exports to the Soviet bloc.
Of necessity, publicity concerning control methods and results has been restricted. Much progress has been made, however. The countries of Western Europe which are cooperating with us in the common defense program have taken action to prohibit or control exports of strategic goods to the Soviet bloc. These nations, together with Canada and the United States, substantially control most of the industrial products of the free world.
When aggression broke out in Korea, approximately 145 categories of articles had already been embargoed to the Soviet bloc from these Western European countries as well as from the United States and Canada. Many of these categories include dozens of individual articles. The quantities which could be shipped in numerous other categories were limited.
Through continuing cooperative efforts since that time, further restrictions have been worked out. At present, about 90 percent of the items which the United States regards as being of primary strategic significance are subject to virtual embargo by the Western European countries.
In addition to these steps, the United Nations on May 18, 1951, by a vote of 47 to o, agreed to a complete embargo on the shipment of strategic materials to Communist China. The United States will continue to work in the United Nations for increasingly effective international action to deny materials of value to the Chinese aggressors.
We have come a long way in our efforts to achieve international controls over exports to the Soviet bloc, and these controls are becoming increasingly effective.
A third major defect with section 1302 is that if we cut off our aid to a friendly country, we might hurt ourselves more than we hurt the Soviet Union.
The indiscriminate approach of section 1302 for cutting off economic aid to other countries ignores the vital interest which the United States has in the contribution that aid makes to the security of the whole free world. Cutting off this aid could strike a death blow at the tremendous defense effort in which the free nations are now engaged.
The success of our defense effort depends upon the ability of the free world to maintain and expand its economic strength. Our programs for economic and financial assistance are directed to that end. In some countries, they are directed toward helping other nations build the industrial facilities required to produce weapons for defense. In certain underdeveloped countries they are directed to assuring the basic economic stability which is essential if those countries are to resist both internal and external threats to their independence. In other countries they are aimed at expanding the capacity of the free world to produce vitally needed strategic materials--for example, copper, steel, aluminum, and uranium. The security of the United States, as well as the other free nations, is deeply involved in the success of these efforts. The defense structure we are striving to create--both here at home and in Europe under General Eisenhower-will rot and topple unless it rests on a sound economic foundation.
In addition to these major defects, section 1302 also contains certain technical provisions which are unfortunate. For example, the provision for certification is complicated and difficult to apply and does not add to our ability to carry out the ostensible purpose of the section.
Because of the defects I have described, section 1302 will make it more difficult for this country to make further progress in its effort to bring about effective international controls over trade with the Soviet bloc.
The National Security Council has been guiding the work of the executive agencies in this effort. The Council has been carrying on a continuous scrutiny of the trade of every country in the free world with the Soviet bloc. Information on the quantities and types of commodities shipped to and received from the Soviet bloc by every free country has been examined. The trade controls exercised by these countries have been considered.
Against this background, the Council has decided the actions that the United States should take. In doing so, the Council has viewed the United States security in its broadest terms. It has taken into account the security value of imports received from the bloc, the contribution of each country to the collective security of the free world and the importance of United States aid in facilitating their defense efforts.
For the most part there are very few articles left of any real strategic importance that are moving to the Soviet bloc in any significant quantity. There are still a number of trade situations with which we are not yet satisfied. Control of trade at certain transshipment points is difficult of solution. As would be expected, not all friendly nations agree with us precisely as to which articles are of the most strategic value to the Soviet bloc. We are constantly endeavoring, however, to correct all of these weak spots--and progress is constantly being
made.
We will continue these endeavors and will make every possible effort to administer section 1302 to accomplish the purposes which the Congress intended without impairing the security interests of the United States. In order to do this, I think it likely that the National Security Council will find it necessary to make exceptions on a broad scale until the Congress has an opportunity to give this matter further consideration.
I am sure that the Congress and the Executive have the same general objective in mind in prohibiting trade that is injurious to the security interests of the United States and in finding the most practical and effective method of doing so.
Because of the compelling objections to section 1302 in its present form, I urge the Congress to enact improved legislation to replace it at an early date. Such improved legislation should be based, I believe, on the following principal considerations:
1. The purpose of the legislation should not be blindly to cut off as much trade as possible, but to cut off trade only when such. action will add to the security of the United States and the rest of the free world.
2. The legislation should take account of the offsetting value of what we receive from the Soviet bloc as compared with what we send to them; it should take account of the differing importance of different commodities and not treat all commodities alike; and it should take account of the value to us of the increased strength for freedom which our economic aid brings about.
3. The legislation should provide for simple, effective and straightforward administration.
Legislation of this type would be helpful to the Nation's security. I strongly urge that the Congress enact such legislation to replace section 1302.
NOTE: As enacted, H.R. 3587 is Public Law 45, 82d Congress (65 Stat. 52).
On June 15, 1951, the President suspended operation of the amendment for a period of 90 days on the advice of the National Security Council.
Provisos in section 1302 of the act authorized the granting of exceptions following a determination and report by the National Security Council. On June 15 the White House made public the Council's determination and report on the granting of an interim general exception under section 1302, together with determinations and reports relating to the trade of Austria and Norway with members of the Soviet bloc. Subsequent National Security Council actions under section 1302 were also made public by the White House. They are listed Appendix A under the following dates: August 3, 31, September 12, 14, 20, 24, October 1, 4, November 5.