Memorandum of Conversation with Secretary of State Dean Acheson, H. Freeman Matthews, Charles Bohlen, and John Ohly

454 304 (RUMAN ARCHIVES **NATIONAL RECORDS any AND of TOP SECRET GOVER Oct.17 October 18, 1951 The Secretary on his return from NSC yesterday discussed the meeting with Messrs. Matthews, Bohlen and Ohly. He said that the Couneil had adopted the recommendations of the staff for referral back to the senior staff. He said that he had taken the memorandum which Mr. Nitze and Mr. Tufts prepared for him and made that the basis of his remarks, with the exception of a portion on page 2, which I believe was the last paragraph. Following this, Mr. Lovett spoke on the necessity for lead time in scheduling deliveries. He said this was a major difficulty. He then said that none of the European countries were complaining about the deliveries that were made and, in fact, the Danes were not able to take all that was being sent to them. Mr. Wilson said that it would be possible for us to meet the program which we had set out to meet, but the consequences as far as our domestic economy is concerned were very grave. Mr. Keyserling said he thought there would be no real danger in doing what we had originally set out to do. He said we had a strong industrial system and could adjust as required. The Secretary then said that he thought the problem fell into two parts. One was consideration of what we had done to date and the other was what we do from here on. He said.we had gotten together a series of delivery dates and had communicated this schedule to other countries concerned. These countries had in turn keyed what they were able to do to the delivery schedules which we had furnished them. He pointed out that we had understood all about lead time when we prepared these figures and had figured it in our computations. He said he realized that Korea and Indochina had both resulted in heavier demands on us than we had anticipated. However, deliveries are now going at a rate of about 100 million per month. In order to do what we planned, we would have to jump deliveries to a rate of 400 million per month. He said he thought it apparent that we could not do what we had planned to do when we had asked for the funds to be appropriated. DECLASSIFIED STATE DEPT MEMO 8-1-24 Project NLT 82-4 TOP SECRET By NLT- HU NARS, Date 9-5-Ly