October 11, 1963

EAST-WEST RELATIONS

A. <u>The Communist Threat</u>

<u>Statement presented to Republican Platform Committee</u>

July 19, 1960

"The very principles of freedom that inspired the creation of America as a nation, today call upon this nation to prove -- by its creative leadership in the world -- the relevance of these principles to the lives and the future of all other peoples. Our great concern and purpose, ultimately, is not merely to frustrate the forces of tyranny -- but to brace, and to hearten, the forces of freedom. In the deepest sense, what matters to free men everywhere is not the combativeness -- but the creativeness -- of what we, as a nation do.

"Yet, as the 1960's begin, this moment of challenge and opportunity is darkened by a threat of world communism not lessening but mounting -- a threat today, more effectively than ever, exploiting world upheaval, endangering American security, imperiling freedom itself.

"The proof of the increasing vigor of the communist challenge is visible almost everywhere in the world. Thus, for example:

"The security of the Western Hemisphere faces its clearest menace in the Twentieth Century -- with the danger of communist ascendancy in <u>Cuba</u> and its spread to other American Republics.

"The power of organized communist minority groups, even in allied nations, has been demonstrated in <u>Japan</u> -- with such vigor that the President could be prevented from making his scheduled visit to our most powerful ally in the Far East.

"The stubborn aggressiveness and growing might of <u>Communist China</u> obviously pose a threat to world peace that not even more cautious Soviet Communists can be confident of controlling.

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"All such political facts have their meaning and their warning underscored by the increasing military capacity of the communist world, in terms of both nuclear warfare and limited warfare."

## B. East-West Negotiations

### *Purposes and Policy, Foreign Affairs, April 1960*

1. "I suggest that we, as a nation, do not have to make some theoretical choice between these abstract alternatives -- the so-called 'soft' or so-called 'hard' interpretation of events. Our national task is to shape our national conduct to serve our purposes, not merely to defeat someone else's. Thus, because peace is a basic national purpose we should pursue policies striving to encourage, and to enable, Soviet leaders to end the political conflict that they have imposed upon the world -- if they wish, in all political seriousness, to do so. At the same time, effective negotiation presupposes an understanding on the part of the free nations of the nature and elements of a peaceful world. Without this, we shall never know whether Soviet offers are 'sincere'. We will confuse bargaining technique with purpose. If we are clear about our national goals we can move boldly to establish the framework of negotiations by developing a concrete and imaginative program. Instead of passively awaiting Soviet initiatives, we can place the Soviet leaders in the position of having to respond to ours."

"Similarly, we must realize that, since the cold war is essentially a Soviet creation, it can end only by substantive change in Soviet conduct. A change in Soviet manners or Soviet tone is heardly enough. And thus there are two attitudes of mind, equally, equally to be avoided. One is pretending that the conflict can be ended simply by a wish. The other is imagining that the prolongation of political conflict is an end in itself."

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2. "No doubt the Soviet leaders would like us to give up what we regard as vital moral values: our belief that each nation has a right to define its own destiny, and that within each nation man should be the master, not the servant, of the state. Here we cannot accommodate them. We cannot stand for self-determination in Asia and Africa -- as we do and must -- while denying it in Europe. Our values are a threat to Soviet rule only in so far as they reflect the universal aspirations of people and only in so far as Soviet policy disregards such aspirations. And whatever reassurance we can and may give the Soviets against any military threat to themselves, they cannot ask us to protect them from the moral and political consequences of their own acts of oppression."

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3. "A few principles of policy follow:

"We must not confuse tactical improvement in diplomatic table manners with a serious political settlement.

"We must not be weak or timid about our principles and about the rights of peoples to pursue their own destinies in freedom.

"We must not weaken our own national security in the mere hope that the Soviet Union may soon reduce its own political ambitions.

"And there are equally important things that we can do.

"We can stand ever ready to welcome and encourage any Soviet steps that move in the direction of a just peace.

"We can and must be imaginative and creative in devising proposals for a stable and developing world.

"Even while Soviet policy continues committed to a notion of peace that does not seem just, we should stand ready to negotiate about measures to slow and discipline the race in arms."

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4. "Open End," David Susskind, June 12, 1960

On Summit Conferences:

"The summit concept has been used by the Soviet as a propaganda platform to further their own propaganda objectives, and they have evidenced by the results of the last two that they did not view this as a very significant vehicle for achieving results and therefore I think that before we could enter into arrangements for another summit conference there would have to be very concrete, tangible evidence of agreements that had been pretty generally arrived at in advance."

"I don't think we want to rule it out. There might be an approach or an initiative of our own, carefully prepared over a period, which could be accomplished through this channel, but I think we have got to recognize the realities. I think that one of the good things that came out, if you can put it this way, of this last debacle, was that it did awaken us to the tricky approach and dangers of the Soviet techniques and objectives."

5. Issues and Answers, WABC-TV, February 11, 1962

"This business of thaw and easing tensions is, to me, one that is a very dangerous one for the public, and one our leaders can get caught with, because Soviet history is one of a hard line and a soft line, tough and friendly, and it's the old treatment of the Pavlov dog -- you frighten them, treat them nicely, and finally break them down. And I think it's a very dangerous thing, because if they wanted to thaw -- and the Soviets sincerely think this for instance -- why wouldn't they pay their share of the cost of the U.N. efforts in the Congo? If they wanted to show good faith, that was the kind of thing they could show good faith on. They don't have to make a gesture on the cultural front or on some other front, which is purely a gesture."

7.

C. Modification of Soviet Goals

1. Statement, July 8, 1960

"We cannot and should not presume that Soviet policy will forever remain so stubborn -- until we ourselves have gotten our own principles in clear order, our specific purposes defined and put before the world, and our military forces strengthened to sustain these purposes. Until we have done all these things, it would be foolish and faint-hearted to prejudge the impact of doing them upon Soviet policy. It would be defeatism -- and deference, if not retreat -- before one of the most grim dangers that has ever threatened humankind.

"There are, moreover, realistic factors that can -- as America's own strength grows -- make Soviet conduct more rational and responsible. One such factor is the continuing strain on the Soviet economy imposed by its struggle to meet the three-fold needs of consumer goods, satellite supply, and modern weaponry each year more costly to any nation. A second such realistic factor is the evident awareness of Premier Khrushchev -- despite all his arrogance and belligerence -- that modern nuclear weapons pose a danger to communist as well as to free nations, a danger quite beyond the rigid and ruthless calculations of a Lenin wholly ignorant of modern means of destruction. And a third such controlling factor must be the concern felt by Soviet no less than American policy at the prospect of nuclear weapons being spread to the arsenals of almost all nations on earth.

"There are, thus, factors that can work to temper and discipline Soviet policy in the future.

"We can hope for these factors to become effective or decisive, however, only as we take the measures necessary to our own security."

8.

D. East-West Competition

1. "Purpose and Policy," Foreign Affairs, April, 1960

"Our historic role is clear. It is not defined by our ability to find this or that expedient to deal with a particular crisis. Rather it depends on our ability to muster the intellectual and spiritual resources to enable us to deal confidently with the challenges of our time.

"Sometimes it is argued that the future will be settled by the productive capacity of the two opposing systems. Obviously, we are deeply concerned about increasing the well-being of men everywhere. But we are not interested only in material advancement, either for ourselves or for other peoples. The real issue of our time is that two principles of political order are in fateful conflict. One maintains that the citizen is the creature of the state and that the collective is more important than the individual. The other insists upon the intrinsic value of each human being. This is the true basis of the contest, not the relative productive capacity of two systems.

"We hear a great deal in these days about competition. We are told that Communism will soon surpass us. We are warned by Mr. Khrushchev that war has become unnecessary -- because he will defeat us peacefully. It would be wrong to be complacent about this. But it would be equally dangerous to gear all our actions to our opponent's threats or ambitions. The essential American task does not consist in matching the devices perfected by another system. Our essential task is to design and to pursue our own goals, appropriate to our values and circumstances.

"It is possible, indeed probable, that Communism is showing its true inner weakness in the obsessive reiteration of its notion of competition. It may mean that, -- for all its mono-lithic appearance -- the Communist state has difficulty in generating its own positive and distinctive goals.

"In any case, we face tasks which would be essentially the same even if Communism had never existed. We are required to work with the peoples of the world to develop a real world community."

2. World Affairs Council, Philadelphia, Pa., April 22, 1960

"We must seek to change the character of great international

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meetings from forums where the West grapples with Communist
proposals to forums where Communism must cope with the initiatives
of free peoples."

3. Statement, July 8, 1960

"The deepest source of peril today is not only the strength
of Soviet arms, but also the secrecy of Soviet society.

"The greatest hope today -- the only truly practical hope --
is a world allowing men and ideas to move freely across all
frontiers, to know what all nations and peoples believe -- and
what they plan.

"Let us, therefore, challenge the Soviet Union to prove its
serious intent and good faith by abjuring the secrecy that defies
and frustrates arms control.

"In practical terms, this is the way toward security and
peace.

"In terms of principle -- American principle -- this is the
kind of belief in the world that alone expresses our belief in
the individual and his freedom."

10.

E. East-West Trade

"Even at its present meager levels, Soviet bloc trading methods have demonstrated a considerable capacity to disrupt -- selectively -- the orderly functioning of free-world markets. If we were to stand by passively, the eventual result could be a serious undermining of our trading system, far surpassing the relatively minor annoyances that have been experienced to date.

"This is the challenge of expanding East-West trade. Nevertheless, if the free world is clear about its goals and sufficiently cohesive, it can make expanding East-West trade work for the free world. If we insist that expanding East-West trade be conducted according to the rules for trade to which the free nations adhere, we can make sure that the Trojan Horse of Communist commerce carries no lethal weapons through our gates, and we can trade with the Soviet bloc to the benefit of all our peoples. Specifically, there are four principles for the conduct of East-West trade that we must abide by to protect our interests and those of the free world as a whole.

"First, we must insist that all trade with the Soviet bloc conform to the regulations against price discrimination and dumping subscribed to by the 36 nations in GATT.

"Second, we should seek agreement among the nations belonging to NATO, SEATO and the Rio Pact to apply to East-West trade the GATT rules designed to prevent discrimination and dumping.

"Third, Congress should give the Executive Branch adequate funds and power to deal with any Soviet bloc disruptions or domination of free-world markets.

"Fourth, the whole question of Soviet compliance with free-world trading rules should be on the agenda of any forthcoming summit conference as an essential condition of the expansion of East-West trade.

"This, it seems to me, is the way to deal with East-West trade. Increased East-West trade can be valuable if it conforms to rules designed to strengthen the integrity and freedom of the economies of nations. But it can be disastrous if we let the Communists use trade to penetrate and disrupt the economies of free countries."

11.

F. The Communist Threat in the Underdeveloped Areas

"We must not become so obsessed with the Soviet challenge that we neglect the areas where achievement depends primarily on our own creativity, dedication and imagination.

"The central fact of our time is the disintegration of the nineteenth century political system, which for all its failings provided order, economic exchange and a means for settling disputes. One of the main tasks of this period is undoubtedly to fulfill the aspirations of peoples in the underdeveloped countries for economic and social growth. But the problem is not purely economic. The great opportunity of our time is not the idea of competition but of world cooperation. The free nations, while respecting diversity, must create a community based on shared values and common goals. Basic to any specific solutions to the economic problem is political understanding and the sustained attitude and spirit with which we approach our task.

"The International Bank for Reconstruction and Development and the Export-Import Bank have been useful in dealing with many specific problems. But they are inadequate for the major challenge of setting in motion the cumulative forces of self-sustaining economic growth throughout the less developed areas.

"This field may well provide the area of major conflict between East and West in the 1960s. We should not shun the conflict, for this is ground on which the West has great advantages. The Soviet system can produce growth, but only at the heavy cost of sacrificing freedom, human dignity and the values the West holds dear. The West can, if it mobilizes its resources and knowledge, produce growth while expanding the area of freedom. Moreover, the West should not conceive the economic development of the new nations in terms of opposition to Communism. Quite to the contrary our traditions and our concern for human dignity would impel us in this direction even if Communism had never been heard of. We could make this fact dramatically apparent by inviting the Soviet Union to join us in a number of specific programs designed to promote the growth of the developing areas."

Rest to make sure to relief them past, homestay to either, in case
I. The pig coldax item can't be received now or else.

really only working guidelines -- put both sides accept them

look at the ones that have replaced them. They're tentative --
To see just how dead all these relief assumptions are now.

would get stronger as time went on and successes multiplied.

"Altogether" work outside. Relief was also that fed pioe nuth
right. It people a better life and have enough left over for its
... they fed fed pioe model grow, feed upped in production.

Scientific & technological skills necessary to compete abroad.

Relief was that West fected computer, Giff, was started
again. Western's computerized buildings toward the Committee model.

Committee model was made with mass, seven matrixes, ten rows
and columns, and was started in the Committee model.

...that Bowler-fad Red Power would prevail, put the heat.

Commentary assumptions were made, now also biased out:

Could join the Market. WTO would mature into political unity
and the whole underdeveloped world. Ideas was that Great Britain
strong & confident, an attraction for both the East, own people
...that the Affricate Community would grow into a unit.

That the objection of cabaretiers should become interchangeable.
Relief was that the whole Red White World crew, control itself,
would prevail over the West. Force real concessions from them.

...that U.S. business -- written, economic and political --

have are the U.S. assumptions that have some by the board.

Wether has any real light of what is next, where is Go from here?
the past conceives that figured them over 12 years of cold war...
Both sides have seen the end of much politicalbjolty, transitions
The present, shift, is also different in this key respect:

Wood now is open, cautions, made of relief than manufacturing size,
no man to own each other's countries, no man to a new summit.

There is no great antithesis among top officials on either side,
not the entire shift -- Geneva (.22); Crumb Ward (.22).

This is surprising note from a Reg-trust: won't last or mean much.
But for the time being the late '40's, it's hard to claim
there are no final answers to these questions, only losses.

How far will the reference of tension has How long will it last?
How real is the defense between the U.S. & the Soviets?

Friday, October 4, 1981

COPYRIGHT © 1981 by A. RESEARCH INSTITUTE OF AMERICAN STUDY, INC. All rights reserved.

Research Institute Recommendations

We have been spending more money in the rest of the world than the rest of the world spends with us, for goods and services. Result is that each year several billion dollars more piles up in outstanding IOUs -- held as long- and short-term debts.

Even this rising total wouldn't be a pressing problem alone, except that some creditors want to cash their IOUs -- for gold.

So, first aim of U.S. policy has to be to stop gold outflow.

Second aim must be to reverse, or at least sharply reduce, the piling up of IOUs -- so-called balance of payments deficit.

The problem: In the tangled web of international finances, pulling a string at one point can tighten a knot elsewhere -- steps taken to ease one problem aggravate the other. For example:

*   **Pushing up short-term interest rates** to keep funds here makes it higher for higher costs for U.S. businessmen, hurts their ability to compete on prices -- against imports and in world markets.

*   **Cutting foreign aid outlays** seems to cut the deficit -- but it out of $6.1 billion are spent for U.S. goods & services, so any move in this direction would cut U.S. exports, too.

*   **Programs to push U.S. exports run into retaliatory moves**, either in the form of tariff walls or international price-cutting, as well as pressures on us to admit more imports in exchange.

*   **Restrictions on American capital investment abroad** -- indirectly by taxes, or directly by legislation -- could help cut the deficit but might make foreign gold-holders more nervous.

Then what IS the answer? CAN the dollar crisis be eased? All the U.S. can do is continue the remarkable balancing act that the Treasury has been performing for five years now -- making small moves in several directions at the same time.

**Is there any REAL danger of devaluation of the dollar?** For many reasons, the only answer must be a very definite NO. This doesn't mean there won't be some international agreement to move away from gold-backed dollars in settling balances -- but any unilateral action by the U.S. can be flatly excluded.

Prices of things business buys continue to bump upward. Higher tags this week include more steel & aluminum products, folding cartons, envelopes & stationery, sugar, fiber glass, etc.

The steel hikes cesser products widely used in machinery, automobiles, appliances. Increases announced since last April now apply to about 2/3 of all steel tonnage shipped by mills.

Aluminum increases also affect most big-volume products, including those used in cans, cars, airplanes, building, etc.

Paper, paperboard prices have been inching up right along, raising packaging and overhead costs for just about everybody.

Refined sugar price is still well below the 16c-a-pound peak