Document Type: 
Document Number (FOIA) /ESDN (CREST): 
Release Decision: 
Original Classification: 
Document Page Count: 
Document Creation Date: 
December 15, 2016
Document Release Date: 
April 13, 2004
Sequence Number: 
Case Number: 
Publication Date: 
July 21, 1967
Content Type: 
PDF icon CIA-RDP69B00369R000100240003-6.pdf355.52 KB
VA . -3"1 flt?,'S 'z.i 3'bc c,1 Approved For Release 2004/05/05 Ic' A-Rnp69Rnn3a9Rnnn10O40003-6 o~ cvvv Private Dealer Does a Brisk Business Rumania Curl .,L,Vx nLILam post out o Mr. t k n 37 h ri soo of Following the interna- A `Natural Outgrowth' articles the tional arms trade. ' 1t was such a natural out- By NEIL SHEEHAN growth o what the United States had been doing all Special to The New York Times -along," he said, referring to WASHINGTON, July 20 the vast grant aid program of "While Mr. Nasser's tanks werethe nineteen-fifties, when the still burning," said SamuelUnited States distributed $17- Cummings, the world's leadinibilliori in arms free of charge. private arms merchant, "we' "Congress complained for were already negotiating with arms," he said. "Why tthe com Israelis for the light weapons." plaining now that we're sell- 'Ili ht weapons" were in them?" he asked. -mi on a e Kuss on a $ wi,ai, relationship did t sales have to the maintenance sale to Italy in the spring of of internal security in Argen- 1965, Prime Minister Wilson tina?, Mr. McNamara was decided to intensify Britain's asked. "The answer is nothing," arms export business. he replied, "absolutely noth- France is exporting about 40: in Hg." I explained that the alter-' per cent of her aerospace pro-', 1 duction, much of it to the native would have been to see developing countries. Paris hasl urchase planes ns ti d N i o na p a Argent ignored the Unite from "another nation at a arms embargo against South much higher price, which Africa and since 1963 has sold would Involve a much greater that country about $300-mil, diversion from her economic lion in, jet fighters, tanks and resources." A Chain Reaction helicopters and is expected to sale to Argentina h about 70,000 Soviet-made. rifles One of the complaints was and several thousand pistols. by the Senate Foreign Rela- They were abandoned along tions committee. A staff study with large stocks of ammum?-; in January said: tion by the fleeing troops of "In Europe, American arms President Gamal Abdel Nasser salesmanship has often been of the United Arab Republic"zealous to the point of irrita- during the Arab-Israeli war last tion and overpowering to the month. point of encouraging the Euro- Mr. Cummings, president of peans to compete more aggres- markets the International Armaments sively for the arms in Corporation, intends to pur- the underdeveloped regions of --base the bulk of the captured the world." weapons and ammunition from The usual Defense De- the Israeli Government for sale partment reply to this criticism to sportsmen and collectors in is that only 11 per cent of the the United States and other arms have gone to the under- non-Communist countries. developed countries. All sales in this category, they maintain, War With Imported Weapons are carefully coordinated with The Arab-Israeli war, fought the State Department and the entirely with imported weapons other responsible Government was but one manifestation of a agencies. growing international problem I But 11 per cent of the $11.1- -the rapid build-up of conven- billion in sales as of June 30, tional arms in the developing 1966, means that arms *worth countries. In the five-year period ended June 30, 1966, the United States, through the Defense De- partment's arms salesman, Henry J: Kuss Jr. a much bigger arms merchant than Mr. Cum- Wings, $11.1-billion worth of weapons, 89 per cent of which went to the North Atlantic treaty Organization allies and to Australia and Japan. No percentage breakdown is available for the $1.5-billion worth sold. in the fiscal year mded June 30. Mr. Kuss in- :ends to maintain . sales of about $2-billion a year until 1975. Sales' combined with ;rants totaled about $3-billion a year in arms exports. The Administration defends he sales as necessary to strengthen allies, to promote case th objectives and to ase the United States balance A payments.Mr. Kuss professes puzzle Went at the increasing concern n Congress and elsewhere over its operations, a concern which ias been deepened by the \rab-Israeli war the, third since 1948. Appro e e .L prompted Chile, which has al-? ways considered Argentina at potential threat, to ask for. Skyhawks too. Since the planes, could not be supplied because) of the Vietnam war, Chile paid Britain, the "other nation" that had made the original sales of fer. to Argentina, about $20-' million for 21 Hawker-Hunter jets. The- Chilean purchase then led Peru to seek jets as well. The United States offered the Peruvians 15 old-model F-86 jet fighter-bombers. The Peru- vians turned down the offer. They wanted more modern, planes and they are reported' sell submarines there soon. Israel's .250 fighters and 50 bombers were all French-made -Mirage, MystBre, Ouragan and Vautour models. A study of the international arms traffic published in Octo- ber by the Institute of Strate- gic Studies in London esti- mated that as of 1965 about $1.2-billion worth of arms was flowing annually into the un- derdeveloped regions. This total included about. $450-million from the United States, both sales and grants, $400-million from the Soviet Union, $200-million from France and $150-million from Britain. The flow from the So- viet Union has grown since 1965. In sales alone, Defense De- partment statistics show that American arms purchased by and actually delivered to the developing countries have in- creased 13 times over five years from $34-million in the,, 1962 fiscal year to $444-million in the 1966 fiscal year. Italy, West Germany, Can- ada, Sweden, Switzerland and Belgium are providing addition- al weapons in smaller but still significant quantities. The problem of controlling the flow of arms to the under developed regions has been complicated by the burgeoning demand since World War II. The number of independent states has risen from 50 to 120. Each new nation seeks arms, for everything from an inde- pendence day parade to crush- ing an internal rebellion or pursuing a territorial dispute ,with a neighbor. . to be preparing to purchase supersonic Mirage fighter-' bombers from France.. The acquisition of Mirages by Peru could heighten the arms competition, since the Latin countries now possess only subsonic jets. Mr. Kuss inadvertently pro- vided some testimony last year h E r cans are u o t h sensitive underdeveloped re-' gions in the five-year period. About $998-million of this $1.22-billion has gone to the most explosive areas - the Middle East, India and Pakis- tan. p e y Secondary Sales Problem on w seeking to recover foreign ex- There is also growing evi. 'change spent on American dente that the sales to Euro? , weapons. pean allies are worsening the He told the Los Angeles serious surplus problem there World Affairs Council "that with the result that the Euro while military exports consti- peans sell their seeondhani tute less than 5 per cent of weapons to the developing the total defense business In ,countries in order to recge the United States, they consti- some of the foreign exchanange tute a much more significant they have handed to Mr. Kus: proportion of the balance of ' s defense busi- for new American arms. the free world The United States has al. ness, running 15 to 20 per cent ready been pushed into one average and sometimes 50 to arms sale in Latin America, 75 per cent of individual or 25 A-4 Sk hawk jet attack y country defense expenditures." bombers to Argentina in 1965 European nations are also to prevent. the Argentines from selling their own newly manu- diverting foreign exchange for selling factured and second hand arms British planes. to the developing regions be- Secretary of Defense Robert cause Mr. Kuss's aggressive c M Namara acknbwledged, tale Mr in and the aggressive pp e s ave the number of uuiillS 'swollen along with the aemana. in April, 1966, that the sale have hurt sales by the uro Until 1955, the United States had been made for economic 'peans to each other. - n_ and Britain exercised a virtual 1elease 2004/05/05.: CIA-RDP69B00369R00010G24 eS3-6Ver arms traffic to thhe so-called third world, and Supply and Demand Rise The supply of weapons and li su r h Approved an informal but reasonably ef- fective control was enforce Over the last decade this gntleman's agreement has col- lapsed as, the Soviet Union, France and the other European countries have become active suppliers. Australia and Japan can be expected to join the ranks and China will probably become a For Release 2004/05/05 : CIA4RDP69B00369R000100240003-6 Ironically, the Indonesian Army then used Russian weap- rns both to massacre the In- ionesian Communist party, Moscow's long-range hope there, and to depose President Sukarno after an abortive Com- munist coup d'etat in Sep- tember of 1965. Perhaps no instance illus- trates the manifold pitfalls of by the United States, the Soviet Union and the other industrial- ized nations to begin bringing the dangerous proliferation of conventional arms under con- trol. Latin American Effort , Only in Latin America has. the Administration made a se- rious effort to impose, control on conventional arms. At the Punta del Este meet- ing in mid-April, the Adminis- tration attempted to persuade the Latin-American states to pledge not to purchase or man- ufacture supersonic aircraft, na- val vessels heavier than de-I, stroyers, missiles or tanks over 30 tons. The Latin-Americans balked and the conference finally set primary motive for the Euro-l arms diplomacy'so well as the Soviet experience: last month pean nations' sales, Moscow and Washington export arms to in the Mild East. the underveloped world for pri- marily political purposes. Egypt and the $800-million to In the Middle East and North Syria, Iraq and Algeria since Africa, the United States 1955, much of it virtually given shipped tanks, antiaircraft mis- away, did with the Soviet Union siles, armored personnel car- influence wtPresident Nasser riers and other military equip- and the Syrian leaders. But went to Israel and to the con- control, he arms did not bring Mos- servative Arab states, Jordan cow and Soviet pros and Saudi Arabia. Washington tige with the . Arabs suffered has also been arming Morocco !when Moscow did not inter- and has supplied the great bulk vene militarily to save them of the equipment for Iran's from defeat. armed forces. With at least half of its int The Soviet Union has con- vestment destroyed or cap- centrated on arming what are tured by the Israelis, the So- called the radical Arab states viet Union now faces the pros- caEgypt, Syria, Iraq and Al- poet of having to invest anoth- geria. er billion to rearm Egypt and Egypt and Saudi Arabia are Syria to retain its influence supporting onnosin? factions in; with their leaders or perhaps Washington has agreed to' sell the Iranians $135-million worth of F-4 Phantom jets, the most advanced of operational American fighter-bombers, to MIG-21's Iraq has received from the Soviet Union. Algeria and Morocco last fought a border war in 1963 and they appear to be pre- paring for a second round. The United States has now prom- ised to sell Morocco F-5 jet] ighters while the Soviet Union steadily pumps more tanks and VIIG-21's into Algeria. Arms have sometimes gained he major powers considerable nfluence with the recipient na- :ion. This has been the case `or the Soviet Union in Egypt ind Syria and for the United States in Jordan, Saudi Arabia ind Ethiopia. But in other instances, the irms shipments have brought iegligible influence. At least $1.a-billion worth of kmerican arms, almost all of led _for a somewhat vague statement that the separate .states would "avoid military ex- penditures that are not indis- pensable in order to carry out the specific missions of the armed forces." from being overthrown from The United States has be within, hayed in the opposite fashion Produce Internal Problems in the Middle East and North Then there are internal prob- Africa, where its arms shier, lems that arise in the recipient ments have significantly in- countries. creased over the last three Social and economic prog- years. diversion of large amounts of -- "~du-israen war foreign exchange for weapons. .ton towapled peal thto the iSoviet' The' entrenchment of military Union to cooperate in imposing bureaucracies that resist social a limitation on arms traffic to change and acquire vested, po- the Middle East. President John' litical interests is also afro son has also proposed that the" quent result. United Nations ask all of its} Indonesia is an example of members to make public any' a country whose economy has future shipments to the area. been beggared by the impos- The Soviet Union has given sible task of supporting large no evidence of wishing to cot, armed forces that cannot even operate and has already begun', maintain and use their MIG-21 rearming Egypt and , Syria. jets, medium range bombers, Secretary of State Dean' tanks, submarines, destroy- Rusk has made clear that with- ers and a cruiser. out Soviet cooperation, the Ad- A study by the United States ministration intends to con-' Arms Control and Disarma- tinue its policy of arming both, ment Agency estimated that Israel and the conservative the developing countries paid Arab states. b f d xch ange e or t se vice in has evolved no long-range pol- an from drifting toward China e 1964, which was equal to about icy to deal with the growing n 1965. The $1.2-billion in So- "one half of all the new eco- problem of surplus arms. Thef iiet arms to Indonesia did not nhibit President Sukarno from nornic aids extended to them State Department simply grail+" adopting a pro-Chinese kagn that year. Much of this debt pies with each case as it arise g,- ido t nn 19pr and 1to forei thn! had been incurred for arma- The most recent prominent ex=- loll y of 964can ments. ample occurred last year when West Germany sold 90 surplus" F-86 jet fighter-bombers to' Iran, and Iran in turn shipped'` them to Pakistan. 1 Aitnougn Washington even,-` ,tually persuaded Pakistan to send the planes back to Iran, the ' incident indicated that, American control over the ul- timate use of weapons through agreements tends 'to weaken ` as the surpluses accumulate: Thisissue is becoming steadti ily more complicated because of the practice of granting'" manufacturing licenses to for- eign countries. Canada originaly produced the F-86's that West Germany sold to Iran. Canada is now, manufacturing Northrop F-5 fighters under license and the! Netherlands will begin produce' ing them soon. Japan, West Germany, Italy, The Netherlands and Belgium either, have produced or are` producing Lockheed F-104 Star- fighters, and Italy is manufac. !turing M-113 armored person-.. nel carriers and M-60 -tanks: At least 1,400 Starfighters have been manufactured abroad. About three months ago, Mr. Cummings, the private arms,A merchant, wrote a letter to the. State Department. He asked to what developing countries he.. would be allowed to arrange i sales 'of the 5,000 tanks and 1,000 jet fighter-bombers he, I-stimates will enter the Euro- jean surplus market by 1970o, A long-delayed reply finally a nformed him that the departno nent could give him no ad. range permission. He was told that he would have to ap proach it on a case-by-case, basis. It was also made clear .to?, him in conversations that the~r department would prefer him to make no transactions at all. - As an American dealer, Mr. Cummings makes no sales that are not approved by the Gov;., ernment. "In other words," he said, "the State Department doesn't have a policy. They have their heads stuck in the sand. They,, are hoping that all those planes r and tanks will just go away some night like a bad dream? Well, they won't. The Eura .. peans aren't going to dump , those arms in the sea. They're, going to get their money back.", "If I don't get permission,,, to a range the sales," he said,. "then my dastardly European,, competitors will sell them." Approved For Release 2004/05/05 : CIA-RDP69B00369R000100240003-6