OFFICIAL DIARY (ACTING DD/I)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-01041A000100020062-5
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 2
• Document Creation Date: December 9, 2016
• Document Release Date: August 29, 2000
• Sequence Number: 62
• Publication Date: November 25, 1952
• Content Type: NOTES

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Security Information
Official Diary
(Acting DD/I)
Tuesday, 25 November 1952
1. First thing reported to DCI the results of yesterday's Steering Group
25X1 A9aMeeting and of my conferences with- Kent, Dulles, et al, on DCK's recom-
mendations and letter of transmittal. Presented him with a draft of NSC's actions
25X1A9a to implement all three paragraphs and secured his consent to these plus his di-
rections to have attend in the absence of Dulles and myself.
25X1 A9a Instructed accordingly. Told them not to yield on essential
issues. They did attend the meeting and se red approval to the first two recom-
mendations with minor changes. Admiral Wooidge was adamant against taking staff
action on third item - an examination of commander estimate machinery by DCI -
Frank Nash though in view of this he could not assent; so this matter was left
with no staff action, DCI being free to present the matter individually at the
Council Meeting.
2. Attended lecture by Asst. Secretary Wilfred McNeil at the National War
College at which he presented and discussed the essential elements of the defense
budget for 1954. Salient facts noted were:
a. Net cost of the Korean War per year over and above maintaining the
same forces in training and bases is less than one billion dollars.
b. Neither a monetary limit nor basic strategic concepts dictate the
size of the defense budget; rather the governing factor is the number of
physically fit males reading military age and the term of service 24
months, which is believed to be the maximum the American people will tol-
erate under present world conditions. This annual increment will support
a force of no more than 3,600,000 or possibly 3,700,000; therefore all
planning starts from this point and is designed to produce a balanced
force which will be completely re-equipped with modern weapons at vari-
ous dates running through 1954 for the Ground Forces and through 1956 for
the Air Force.
c. Basic figure of $11,000.00 per man per year is total maintenance
cost without purchase of new hardweire other than on a regular replace-
ment basis. Therefore, long-term defense budget outlook, assuming con-
ditions and prices remain roughly stable, is slightly under $1 ?,0001,000,000
a year. This will provide full equipment for forces in b eingand those to
be mobilized in the first twelve months and will maintain production of
such items as tanks at the bare replacement rate so that the assembly lines
are capable of being accelerated. This alternative is chosen over pro-
ducting a year's stockpile and closing down productive facilities.
c. Vast savings have been made through "incorporation" of all de-
fense units which can be treated as businesses, e.e., Naval Yards, MSTS,
Defense Printing Establishment, Pentagon, Coffee Roasting, etc. (This
possibility should be taken up with with respect to certain
parts of this Agency.)
25X1A9a
TrUr
file. If separated from the file it must bi
-RDP79-010-**A0,01@002000'&b review.
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Official Diary
Tuesday, 25 November 1952
d. Single agency procurement for the entire defense establishment is not
economical for standard items where the quantities required by all Services are
substantial, e. g., passenger sedans. On the other hand, it is obviously sensi-
ble where the items are specialized military equipment and one Service has the 25X1A9E
perponderance of requirements, e. g., tanks, Army and Marine. Hence,
has produced Directive 4008, which states as his policy that there will be indi-
vidual Service procurement in all cases except where single Service procurement
can be clearly demonstrated to afford a saving.
e. All accounts have been placed where practical on an inventory basis so
that true cost, i. e., consumption, can be measured (querie whether there is
adequate stock/turnover control to prevent excessive stockage.)
25X1A9a
3. With DCI and went to Bureau of Budget where presented a general
roundup of the world situation to Director Lawton, Assistants Staats, three others,
and Mr. Joseph Dodge, representing General :Eisenhower. World situation - present
and projected through two and ten years - was discussed by DCI and then individual
situations of danger were covered in more detail. Many questions were asked, in-
cluding policy matters which DCI handled with appropriate diffidence. At DCI's di-
rection, copy of National Intelligence Digest was given to Mr. Lawton. DCI took op-
portunity to impress upon those present, and particularly Mr. Dodge, a small propor-
tion of total budget of CIA which goes for actual intelligence and also the need for
integration of intelligence and planning data in producing really valuable estimates
of net capabilities. Altogether an inspiring two and one-half hours.
25X1A9a
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