Special Message to the Congress on the Mutual Security Programs.

To the Congress of the United States:

The safety of our country, the preservation and strengthening of world peace, the minimizing of risk to American lives and resources in future years, all imperatively demand that we hold fast in our world-wide collective security effort.

In supplementing our country's defense, the tested and proven mutual security programs give the American people more security per dollar invested than any other expenditure they make.

In our most important task of all--the waging of peace--these programs lay firmer foundations than any other effort of our country.

For almost a decade every objective analysis has supported these views. This past year they have been convincingly reaffirmed. Congressional Committees, the Executive Branch and distinguished private citizens have just examined these programs anew. On two fundamentals these groups have unanimously found:

First, that both the military and economic elements of our mutual security programs are essential to the security of the American people and to world peace.

Second, that these programs will continue for some years to come to be indispensable to the attainment of our country's goals in the world.

These recent studies again substantiate that these programs--

--strengthen our own defenses;

--advance our own interests through the stimulation and growth of the economies of less developed countries; and,

--provide a necessary, powerful weapon with which to meet political and economic crises abroad that endanger our own vital interests.

Our grave responsibility, therefore, in this session of the Congress, is not only the continuance of these programs but also their continuance at a level dictated by the dangers we face--and the opportunities we have to counter them.

The recent studies have also generally agreed that these programs will be strengthened by a clearer identification of their principal elements with their purposes. I shall first refer to these elements of the programs and then discuss specific changes which I ask the Congress to adopt to improve their effectiveness.

First is defense assistance--our and other free nations' common effort to counter the Soviet-Chinese military power and their drive to dominate the world. That power continues to grow--in armaments, in nuclear capability, in its economic base. The Communist goal of conquering the world has never changed.

For our nation alone to undertake to withstand and turn back Communist imperialism would impose colossal defense spending on our people. It would ultimately cost us our freedom.

For other free nations to attempt individually to counter this menace would be impossible.

We in our own interest, and other free nations in their own interest, have therefore joined in the building and maintenance of a system of collective security in which the effort of each nation strengthens all. Today that system has become the keystone of our own and their security in a tense and uncertain world.

Only if truly mutual--with mutual acts building mutual strength--can this system of collective security succeed.

On our part, in addition to our own forces at home and abroad, we provide military equipment and training for many countries as well as economic assistance to some to supplement their support of enlarged forces required in the common defense.

On their part, friendly nations man their forces and, in most cases, provide the greater part of their direct financial support. These nations also provide strategic sites for our own as well as their air, ground and naval forces--sites essential to our combined capacity to deter aggression and defend our homelands.

In the last eight years this nation has furnished direct military assistance to these nations' forces in an amount approximating $17 billion. In the same period free world nations have put $107 billion into their own and the common defense.

Through this $ 17 billion we have helped develop and equip a free world strength of 200 divisions of friendly military forces.

They have some 27,000 aircraft.

They operate some 2,500 active combatant naval vessels.

This assistance which we have furnished and are furnishing our friends increases their ability to defend themselves against subversion from within and aggression from without.

It substantially strengthens the security of the United States.

By helping to stabilize world affairs, it heightens the prospects for a just and lasting peace.

This collective security effort has proved its value to the protection of America and the prevention of war. I give here a few of the historical incidents in which failure to give aid could have meant ultimate disaster for our country and world peace.

Had it not been for American assistance in 1947, Greece and Turkey would have succumbed to Communist power.

Had it not been for our assistance since 1948, the determination of Yugoslav leaders and people to develop their nation independently of Moscow might not have survived.

Had it not been for our assistance in 1954, strategic Vietnam and Southeast Asia would probably be lost today to the free world.

Today in Korea and Free China our assistance helps preserve national will and independence under the very muzzles of Communist guns.

Today in the Middle East our assistance helps to preserve the integrity of one of the most vital regions in the world as well as the independence of some of the nations in that area.

At this very time, when our prior efforts are bearing good fruit, while Soviet intrigue and power continue their probing and pressure in every critical area in the world, it would be supreme folly for our country either to stop these efforts or to cripple them through an overweening zeal to scrimp at their expense.

The second major element of our mutual security programs is economic development assistance and technical cooperation.

This part of the programs helps less developed countries make the social and political progress needed to preserve their independence. Unless these peoples can hope for reasonable economic advance, the danger will be acute that their governments will be subverted by Communism.

To millions of people close to the Soviet and Chinese Communist borders political freedom is still new. To many it must still prove its worth. To survive it must show the way to another and equally essential freedom--freedom from the poverty and hopelessness in which these peoples have lived for centuries. With their new freedom their desire and their determination to develop their economies are intense. They are fixed upon raising their standards of living. Yet they lack sufficient resources. Their need for help is desperate--both for technical know-how and capital.

Lacking outside help these new nations cannot advance economically as they must to maintain their independence. Their moderate leaders must be able to obtain sufficient help from the free world to offer convincing hope of progress. Otherwise their peoples will surely turn elsewhere. Extremist elements would then seize power, whip up national hatreds and incite civil dissension and strife. The danger would be grave that these free governments would disappear. Instability and threats to peace would result. In our closely-knit world, such events would deeply concern and potentially endanger our own people.

The help toward economic development that we provide these countries is a means to forestall such crises. Our assistance is thus insurance against rising tensions and increased dangers of war, and against defense costs that would skyrocket here at home should tragedy befall these struggling peoples.

These revolutionary developments in distant parts of the world are borne on the crest of the wave sent out a century and a half ago by the example of our own successful struggle for freedom. The determination of the people of these nations to better their lot and to preserve their newly gained liberty awakens memories of our own noblest traditions. Our helping hand in their struggle is dictated by more than our own self-interest. It is also a mirror of the character and highest ideals of the people who have built and preserved this nation.

The third major element of the mutual security programs is the special often emergency--assistance we provide to help friendly nations through critical periods when violent political change, natural disaster or other circumstance threaten both their stability and our own national interests.

In 1953, strategically-located Iran, under an erratic leader, verged on Communism and chaos. The Iranians succeeded in establishing a government friendly to us and freedom. Our assistance gave them the additional strength needed to stabilize their nation and to consolidate their Victory over violence and subversion.

Similar aid to Guatemala enabled republican government to survive there after a pro-Communist regime was overthrown in 1954.

In the many unstable regions of the world, Communist power is today probing constantly. Every weakness of free nations is being exploited in every possible way. It is inevitable that we shall have to deal with such critical situations in the future. In America's own interest, we must stand ready to furnish special assistance when threatened disaster abroad foretells danger to our own vital concerns.

The major elements of our mutual security programs are therefore still as urgently needed for our own security as ever before. But, as others have recently urged, I believe that these elements should be more clearly defined in order to facilitate more efficient and more economical administration. I recommend four specific changes in existing programs:

First, defense assistance programs should be separated from programs for economic development.

Second, defense assistance should be recognized and treated as an integral part of our own world-wide defense efforts.

Third, economic development assistance should be provided primarily through loans, on a continuing basis, and related closely to technical assistance.

Fourth, needs for special economic assistance should be met by funds authorized and appropriated specifically for this purpose.

To accomplish these purposes I recommend the following legislative actions:

First, I recommend that defense assistance, both military assistance and related economic support, be separated from economic development assistance.

We spend the largest part of our mutual security funds to strengthen friendly military forces through the use of two types of defense assistance:

One is military assistance--that is, guns, ammunition, tanks, planes, ships and other weapons which we furnish to military allies, plus training in the use of such weapons.

The other is defense support. Although superficially economic in purpose, this assistance enables friendly nations to maintain military forces and provide military facilities substantially greater than they could otherwise support.

The present arrangement of our mutual security programs does not clearly differentiate defense support assistance from economic development assistance. Until now, both military and defense support assistance have been joined with development assistance in one appropriation measure. In the process, economic development assistance for countries with which we have military assistance agreements has tended to lose its identity.

To remove uncertainty as to the character and purpose of our aid, I recommend a clear separation of military and defense support assistance on the one hand, from economic development assistance on the other. The program being submitted to the Congress provides for this separation.

The second legislative action I propose is this: that defense assistance appropriations be included as a separate title in the regular Department of Defense budget.

Our expenditures for defense assistance differ neither in basic purpose nor character from those for our own armed forces. Once incorporated in our own Defense budget, they will become recognized here and abroad--as indeed they should be--as part of the military effort of the United States. To assure a continuing close coordination of all elements of the entire program, I also propose that these funds be appropriated to the President.

I recommend also that appropriations for both military assistance and defense support be pursuant to a continuing authorization enacted by the Congress. This would fittingly recognize that our own security requires continuance of these parts of our own military effort as long as Communist imperialism remains a menace to free peoples. This would also enable the Congress to consider simultaneously appropriations both for our own armed forces and for assistance to friendly forces. In this way, these two interrelated elements of our military budget can be better integrated and balanced, and the effectiveness of both increased. I recommend also that these defense assistance funds be authorized as our own military procurement funds are authorized, whether this be on the present basis--available until expended-or as it may be modified in the future. Policy guidance for both military assistance and defense support would, of course, be effected by the President through the Secretary of State.

For these two types of defense assistance programs in fiscal year 1958 I recommend appropriations totalling $2.8 billion in a separate title of the Department of Defense appropriation. Of this sum, $ 1.9 billion will be for military equipment and services. The remaining $900 million will be for defense support.

As a third major legislative action, I recommend that longterm development assistance be provided from a Development Loan Fund.

Our assistance to less developed countries can add only in limited degree to their own resources. Nevertheless, if so provided as to encourage these peoples to help themselves more than they can now, it can make a critical difference.

This objective requires a clear statement of our intention, in our own national interest, to help the people of less developed countries in their efforts to develop their economies. It requires also a greater assurance of continuity.

Development assistance programs are managed as effectively and economically as possible under the present system but suffer from major difficulties. One is that the present law makes funds available only from year to year with no assurance of continuity. Obviously, sound economic development is not a year to year undertaking but a continuing process. Another difficulty is closely related. Under present law funds are requested each year on the basis of estimated country programs. This leads to the establishing of levels of aid for each country that have to be prematurely formulated. Thereafter they become difficult to change without risking misunderstanding on the part of the countries we help.

In addition, even the personnel needed to administer these programs, most of whom must be highly skilled technically, cannot be assured of more than short terms of employment. This makes it exceedingly difficult to recruit and to hold good personnel.

Countries seeking and meriting our help should take increasing responsibility for carefully planning the projects which they need and can justify. It is no less important that our aid be geared to these projects and that our continued assistance be related to the progress being made in carrying out these projects.

That there may be greater continuity, efficiency and economy, and other nations encouraged to greater self-help, I recommend that the Congress establish a Development Loan Fund to finance specific projects and programs which give promise of contributing to sound development. This Fund would be used not for short-term emergency requirements but for economic development of long-term benefit to the borrowing country.

I visualize that assistance from this Fund would be provided essentially on a loan basis. Such loans should not compete with or replace such existing sources of credit as private investors, the International Bank, or the Export-Import Bank.

These loans should be made on a reasonable expectation of repayment in dollars or local currencies, even though we should recognize that this expectation would be based on confidence in the long-range development of the borrowing country and on hope for an improved international political climate rather than on presently demonstrable financial soundness.

The Fund would closely coordinate its operations with existing lending institutions. It could directly and independently provide financing or do so in conjunction with such institutions. A major purpose would be to promote--not impede--the flow of private investment, and to this end the Fund should have authority to engage in appropriate financing operations. Properly operated, it should increase sound activity by these other sources of credit and investment.

In order to avoid needless administrative duplication and to assure coordination with our foreign policy objectives, I believe the Fund should be established and administered in the International Cooperation Administration.

To achieve its objective, the Fund should initially command sufficient resources to finance its operations during the coming three fiscal years. Only thus can we break away from the advance country programming and other operating practices which now encumber and complicate the administration of development assistance. Lacking such assurance of continuity, the Fund would be little more than a new name for continuing, with minor improvement, the present practices.

I ask the Congress, therefore, for an initial appropriation for fiscal year 1958 and also for authority for the Fund to borrow from the Treasury in succeeding years, within stated limits. Such borrowing authority has been used to finance many other United States lending operations. I believe this financing mechanism is well suited to the character of the Fund.

In order to get the Fund under way in its first year, not less than $500 million should be appropriated--an amount which is included in the total request for new funds later presented in this message. I anticipate a substantial increase in sound requests for assistance in the following two years, as countries' development programs move forward. I therefore expect the Fund to require capital of $750 million in each of the fiscal years 1959 and 1960.

In order to accomplish the purposes of the Fund, sufficient capital must be provided now. To create a fund for long-term economic development while denying it the means to succeed would be to deceive ourselves, discourage our friends, and dissipate our money.

The technical cooperation program is one of the most valuable elements of our entire mutual security effort. It also should be continued on a long-term basis and must be closely related to the work of the Fund. I therefore propose that the Congress authorize technical cooperation on a continuing basis while continuing to appropriate funds on a yearly basis as is done now. For fiscal year 1958 I request an appropriation of $152 million for this program.

"Special assistance" I recommend be established as a separate category of aid to serve three major purposes:

First, to provide primarily by grant, economic assistance to meet needs of importance to our country which cannot be properly met by the basic types of assistance.

Second, to meet unforeseen additional military or other requirements above the funds programmed and requested. This I expect to be of particular importance during the initial year of the revised program.

Third, to be prepared to meet emergencies and contingencies that require waiver of certain restrictive legal provisions to protect the Nation's security interests. I request authority to waive these restrictions on the use of appropriated funds in the same amount as now provided. Part of the additional needs in the Middle East which I discussed before the Congress last January will be provided from such special assistance.

For these three purposes of special assistance--for which appropriations should be made annually--I request $300 million of new funds for fiscal year 1958. This sum includes $100 million to cover already anticipated requirements and $200 million for reserve and contingencies.

I should like to note especially one of these anticipated requirements. I refer to a program--malaria eradication--which will appear separately in the bill proposed to the Congress but will be financed from the special assistance fund.

Malaria is today the world's foremost health problem. Each year it attacks 200 million people, bringing death to two million and causing enormous suffering and economic loss in many areas. Today it is practicable to end this scourge in large areas of the world. I propose that the United States join with other nations and organizations which are already spending over $50 million a year on anti-malaria activities. In five years these activities are expected to eradicate this disease.

In addition to the programs already discussed, $113 million is required for multilateral programs, the program for peaceful use of the atom, and the administration of the nonmilitary programs.

It is especially important to continue our contributions to United Nations and other international programs in the fields of technical cooperation, assistance to refugees and migrants and children's welfare. These contributions, augmented by the contributions of other nations, will enable these organizations to continue their valuable work. I believe participation of the United States in these endeavors should be continued at substantially the present level. I also request continuance of our program to assist escapees from Communist despotism.

Before the United Nations General Assembly in December 1953, the United States first offered to assist other countries and to share with them its technology in the peaceful application of atomic energy. Our mutual security programs for fiscal year 1958 include additional funds to implement this offer by providing assistance in financing research reactors, other equipment and services to the growing number of countries engaged in peaceful nuclear activities.

The total request for new funds for fiscal year 1958 is $3.865 billion, a sum $535 million less than estimated in my budget message last January. Nearly all of that reduction is made possible by savings in the military assistance program in an amount of $500 million, which, if carried over, can be used to meet program needs of fiscal year 1958. This sum is not deferred spending but a real saving. These savings are largely attributable to a reduction in spare parts requirements based on experience in the actual use of our equipment by the forces we are assisting, reduced needs resulting from better planning with our allies, and a continuing improvement of the administration of the program. I ask that this $500 million be carried over to fiscal year 1958.

We are--all of us--seeking to cut the cost of government. All of us want taxes reduced when possible without injury to our country.

There is, however, only one sound way for us to achieve a substantial tax reduction. That way is to succeed in waging peace, thereby permitting a substantial cut in our heavy military expenditures. A substantial cut in these expenditures, in the face of present world conditions, would be foolhardy.

Similarly, and for the same reason, refusal to give adequate support now for our crucial mutual security programs could hardly be more ill-advised or ill-timed. It would risk not only the ultimate attainment of the tremendous military savings to which we all aspire; by encouraging aggression and discouraging our friends, it would also risk forcing our own defense spending to a level far higher than it is today. In this kind of a gamble, American lives are just as much in the balance as American dollars.

The Congress must also weigh these facts:

First, a substantial cut in defense assistance would force a reduction in the strength of allied forces. Thereby the risk of local Communist aggression would be increased. In order to forestall that, we would have to expand our own forces and station more of our youth abroad, or else supinely accept Communist expansion at the expense of the free world. I need hardly point out that such a procession of events would sooner or later force an increase in the number of young men inducted into our forces as well as a substantial increase in our own defense cost.

And second, we simply cannot afford to blight the hopes of the newly independent peoples who turn to the free world for help in their struggle for economic survival. Should we do so, these peoples will perforce be driven toward Communist or other totalitarian solutions to their problems.

I know of no precise relation between economic well-being and responsible political development. Yet continued poverty and despair are conditions that will foredoom moderate political life in these countries. If the best that these free governments can offer their peoples is endless hopelessness and grinding poverty, then these governments will surely fall. Certain it is that our peace, our political freedom, and our prosperity would not long survive the sweep of Communist despotism over these new nations.

Failure to provide adequate funds to help these struggling nations move forward could well become tragically expensive to every citizen in our country.

Our mutual security programs have become, during the past ten years, proven instruments of tremendous power for winning our struggle for peace. The proposals I have made for their improvement stem equally from the Legislative and the Executive Branches. I urge the Congress to join with me in giving these programs the strength which the present and future security of our Republic requires.

DWIGHT D. EISENHOWER