PRIVATE DEALER DOES A BRISK BUSINESS RUMANIA CURL

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP69B00369R000100240003-6
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 15, 2016
• Document Release Date: April 13, 2004
• Sequence Number: 3
• Publication Date: July 21, 1967
• Content Type: NSPR

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Approved For Release 2004/05/05 Ic' A-Rnp69Rnn3a9Rnnn10O40003-6
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Private Dealer Does a Brisk Business Rumania Curl
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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