  The Battle Act and Economic Defense The Mutual Defense Assistance Control Act of 1951, usually known as the Battle Act after Representative Battle of Alabama, established a general framework of policy within which the executive branch takes actions that meet current conditions. This law reinforced the system of international strategic trade controls that was in existence prior to its enactment. It maintains a close link between United States foreign aid and strategic trade controls. It also recognizes the necessity of international cooperation in the control effort, and it aims toward strengthening the free world as well as impeding the military ability of nations threatening our security. Battle Act FunctionsAdministering the Battle Act is one of the responsibilities of the Director of the Foreign Operations Administration, with the help of a Deputy Director for Mutual Defense Assistance Control (MDAC). The Director’s responsibilities under the Act include the following:
The Money and the ManpowerThe budget of Mutual Defense Assistance Control (MDAC) for the present fiscal year is $1,078,000. As of December 31, 1953, the
This brought the total personnel on the MDAC payroll to 140, as compared with 115 on June 30, 1953. Besides these 140 people, the four agencies listed above had still others, paid from the agencies’ own funds, who were working at least part of their time on similar functions (and generally were engaged in such activities even before the Battle Act became law). EDAC Structure Meshing the GearsThe Battle Act is a part of the economic defense program of the Government. The economic defense program involves at least 10 agencies whose activities and interests have to be coordinated. The coordination is accomplished through the Economic Defense Advisory Committee (EDAC). The chairman of EDAC is the FOA Deputy Director for MDAC. The chart opposite this page shows what agencies are members and how the EDAC structure is set up. In addition the United States Information Agency has an observer on EDAC, and economic defense matters are closely coordinated with USIA for overseas information purposes. The chart also shows that EDAC has an Executive Committee; it handles the day-to-day operating and policy problems of the economic defense program. EDAC advises the Director of the Foreign Operations Administration and the Secretary of State who are charged with coordinating the implementation of the program of economic defense matters including the control of strategic shipments from the free world to the Soviet bloc. Each agency that has a part in the economic defense program brings its own particular point of view to the discussions which constantly go on in the EDAC structure. For example, the Department of State is the agency that coordinates the overall foreign policy of the Government and deals directly with other countries; hence, that Department is able to speak authoritatively about the vital problems involved in maintaining good relations and close cooperation among the free nations, and concerning the most feasible and effective means All these viewpoints and all these special areas of expert knowledge and experience are necessary to a well-rounded economic defense program. Each agency, while discharging its obligation to make its own special contribution to policy, is perfectly well aware that it is only one of the participants, and that the other agencies have legitimate points of view and valuable contributions to make. It is natural and inevitable that these agencies should not approach every problem of economic defense with identical views. But when the problem has been thoroughly considered, and all viewpoints taken into account, a decision is made on the basis of the overriding security interest of the country, and that decision then becomes the policy of the Government as a whole, respected by each agency regardless of the specialized views which it might have expressed in the discussions. Improving the MachineryOrganizational changes made in the United States economic defense program during the 6 months under review included the following: 1. Establishment of a Security Trade Controls unit within the United States Regional Organization at Paris. This unit represents the United States in the informal international committee known as the Consultative Group (CG) and its subordinate working bodies, the Coordinating Committee (COCOM) and the China Committee (CHINCOM). 2. Establishment of a Joint Operating Committee (JOC) in Washington. The Termination-of-Aid ProvisionThe Battle Act forbids United States military, economic, and financial assistance to any country that knowingly permits the shipment to the Soviet bloc of items listed for embargo under the Act, except that if the items are not munitions nor atomic energy materials the President may direct the continuance of aid “when unusual circumstances indicate that the cessation of aid would clearly be detrimental to the security of the United States.” On August 1, 1953, the President notified the Congress that he had directed the continuance of aid to France, the Federal Republic of Germany, Norway, and the United Kingdom, because the cessation of aid would have clearly been detrimental to United States security. Even though this presidential action took place in the second half of 1953 it was covered in the last Battle Act report, entitled World-Wide Enforcement of Strategic Trade Controls, and the texts of the letters that went to the Congress were reprinted as appendix B of that document, pages 73-77. There were no further Battle Act determinations to continue aid during the 6 months covered by the present report. (Another group of determinations went to the Congress on March 5, 1954, and the texts of those letters will be reprinted in the next Battle Act report.) During 1952 and 1953, the first 2 years in which the Battle Act was in force, the total amount of shipments of Battle Act embargo items knowingly permitted by countries receiving United States aid was in the neighborhood of $15 million. Of this amount, 74 percent consisted of “prior commitments”—that is, commitments made before the Miscellaneous ActivitiesAs usual, a wide range of activities relating to the Battle Act and economic defense was carried on during the last half of 1953. The intensive United States review of the control lists has been mentioned in chapter V. The United States Government continued to increase its emphasis on seeking improvements in the free-world systems for preventing illegal diversions of strategic goods. This problem involves goods of free-world origin which start out to friendly destinations but are illegally diverted en route to destinations behind the Iron Curtain. Our Government: (1) set up improved machinery in Washington for collection and coordination of information, in order to increase the effectiveness of our participation with other countries in the enforcement program, and (2) sought to work out better intergovernmental machinery to deal with diversions. Our Government also intensified its efforts to analyze current trade patterns between East and West, including the large number of trade agreements concluded between free-world nations and Soviet bloc nations. Summary of the ReportThis leads us back to the earlier chapters of this report, which may be summarized as follows: In chapter I, Stalin’s Lopsided Economy, we looked at the basic economic structure of the Soviet Union. Beginning in the 1920’s, the Bolsheviks deliberately concentrated on an industrial-military buildup, at great cost to their peoples. After the war, the same pattern was forced upon the European satellite countries. Trade was reoriented away from the West. That did not mean that the bloc could do without Western goods, but the goal was to obtain those imports that would help the bloc become more powerful and less dependent on the free world. The Kremlin also sought to use trade to divide the Western powers and to increase the reliance of free-world nations on the bloc. These Soviet policies—not Western strategic In chapter II, The New Regime and the Consumer, we described the new economic courses announced by the Soviet bloc governments after Stalin’s death. They made a great fanfare about providing more consumer goods to the people and improving the neglected agricultural sectors. But their steps did not go very far, and the purpose was to benefit the state and not the people. They apparently were trying to ease internal pressures—especially in the satellites—by opening the valves a little, as they had done before. But they did not alter the basic war orientation of their economies and they pressed on with the industrial-military buildup. In chapter III, The Kremlin’s Recent Trading Activities, we reviewed the so-called trade offensive—the various Soviet activities of 1953 and the early part of 1954 which seemed to show a livelier interest in East-West trade. The U.S.S.R. concluded more trade agreements, ordered consumer goods at a somewhat brisker rate, but also expanded its efforts to buy ships and showed plainly that its principal interest was still centered on the kind of materials that would foster industrial expansion. To help pay for imports, the Communist planners put manganese, oil and gold on the market in larger quantities than in recent years, though history showed that they had done the same thing in the past when it served their purposes. They also tried to increase their influence in Latin America and Asia. In chapter IV, What’s Behind It All, we examined the motives and the goals of the Soviet planners in all these recent trading activities. Oversimplified explanations should be avoided. Their actions are not motivated by a pursuit of peace—at least not peace as the West knows the term. Their motives are mixed. In changing circumstances they are seeking effective ways of accomplishing the same traditional objectives of feeding the economy—especially the heavy industrial base—and of weakening the free world. The free world is strong, and if free nations refuse to be divided or deceived—if they work shoulder to shoulder to prevent the Soviet bloc from getting the advantage—they can trade with the Soviet bloc on terms that bring benefits to the free world. In chapter V, U.S. Policy on Strategic Trade Controls, we outlined the factors involved in setting policy. Not merely because of Soviet activities but also because of the vast upsurge of free-world production and other considerations, 1953 brought a thorough review of United States policy. The basic policy was reaffirmed, but shifts in emphasis were made to meet current conditions and establish controls |
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