TOP SECRET FOP §SeORT the estimates thus fer given in this presentation. There would be further allusions to these recommendations in the subsequent reqports by the Service Secretaries and the Chiefs of Staff of the Services. Thirdly, Secretary Quarles discussed the impact of the re- ductions which weuld have to be made in the FY 1959 programs on our forces deployed overseas. The most serious effect would be felt in NATO. The proposed 1959 Budget would call for the with- drawal of 2/5 of one of our five divisions deployed in Western Europe. General Norstad felt that such a reduction would have a most unfortunate effect as regards the current climate in NATO. It was not clear what could be done to meet General Norstad's objections and anxiety but the Defense Department was trying to work out some plan which would not necessitate our going to the Paris NATO meeting next month with proposals for reducing the personnel of U.S. forces in the NATO area. airforce Secretary Quarles indicated that/reductions in the NATO area were likewise a matter of great concern to General Norstad. Secretary Quarles thought it was possible that some of the aircraft and personnel which we had thought it necessary to take out of the NATO area could be left there as the result of a new plan they were working out with General Norstad but if this was successful it would add another 39 million dollars to the FY 1959 Budget. In the case of Korea, the proposed withdrawal of one of the two U.S. Army divisions was completely unacceptable from the point of view of our political relations with the Republic of Korea and affected our hope of inducing the ROK to make a substantial reduction of its own force levels. Accordingly, we were also trying to work out 4 plan which would avoid a decrease in U.S. Army personnel in Korea. Secretary Quarles next turned to the problem of defense against ” R LIBRARY ~ REPRODUCED AT THE DWIGHT, D. BISENBOWE — Soviet Intercontinental Ballistic Missiles. The sum of approximately 200 million dollars had been budgeted for this purpose by the Services for FY 1959. On the other hand, the Gaither Committee recommended strongly an acceleration of the programsfor our defense against ICBM's. Accordingly, the Defense Department believed that it was an urgent necessity that we add some 100 million dollars more to this program for FY 1959 although this amount would still fall short of meeting the acceleration reconmended by the Gaither Panel. As for our satellite programs, the reconnaisance satellite and space research and development, approximately 100 million dollars would be required although here again this sum would not meet the expectations and demands of enthusiastic protagonists of space research. -5- TGP SECRET ce RTTII a ae tee ee