Papers, (Ann Whitman file) 2. 1¥53-0i U. S. SECURITY EFFORT OVERSEAS, FY 1958 AND FY 1959 (HS¢ Action No. 1812; N3c 5707/5; Memo for NSC from Executive Secretary, subject: "U. 5. Security Effort Overseas, FY 1957", deted November 29, 1957; Memo for NSC from Executive Secretary, subject: "Yy, S, Security Effort Overseas, FY 1958 and FY 1959", dated De- cember 9, 1957) Mr. Cutler delivered a report on the U. 5. Security Effort Overseas, FY 1958 and FY 1959, following an outline (copy of which is attached to this memorandum), When Hr. Cutler had reached his discussion of trends which could be perceived after analysis of the charts and data which he had presented, the President expressed surprise that we were apparently esking for less money for the mutual security progrems in FY 1959 than we had earlier agreed that we needed. With respect to Mr. Cutler's comments on the development loan fund, the Vice Fresident inquired whether we had not previously argued, in defense of this developnent loan fund, thet it involved an increesed trend toward loans for foreign assistence coupled with a decreese in grent assistance. (At this point the President temporarily left the meeting.) The Vice Fresident continued by pointing cut thet we must izke this point clear to the Congress because the totals for our military and econcmic assistance remained about the same, and this vould require explanation to the Consvess. Mr. James Saith, the Direct or of ICA, predicted that loans would protably be down in the next fi scal year, and that grants vould remain about the same, (At this point Secretary Dulles also left the meeting. ) if. Cutler then said thet Mr. Gnith wished to make a statement at this point. Mr. Snith explained that he wished to sp2ak to the economie rather than the military side of the mtuel security progrom. Fe pointed out Khrushchev's chalience to the United States some » } 4 three weeks aco, and Khrveshchev's svatenent thet the Soviet Union vould soon surpess the United States in competition in the field of peacenu production. There was clear evidence, continued tir. Smith, that Khrushchev has put this program to work. After citing verious instances of Soviet essistance and activities in the underdeveloped countries, Mr. Smith also pointed out the role of Communist China and the Satellites. He also listed briefly whet assistance wes be- ? REPRODUCED AT THE DWIGHT D. EISENHOWER LIBRARY adelight Oa Pe Bisenhower: ing given by the Soviet Union to non-Satellite nations in tems of eredits or other forms of assistance. He believed that this economic coap2tition from the Soviet Bloc posed a very serious challenge Matas si: garda f de ets atta, tn thet asetasamsEI