LETTER TO MR. JOHN H. CRIDER FROM ALLEN W. DULLES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01676R003800030089-3
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 15
• Document Creation Date: December 12, 2016
• Document Release Date: March 13, 2002
• Sequence Number: 89
• Publication Date: January 13, 1958
• Content Type: LETTER

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Mr. John H. Crider{'
Deputy Director of Information
Committee for Economic Development
444 Madison Avenue
New York 22, New York
January i3, !958
Following a talk with Bill Foster, I again reviewed my notes
and decided that it was wise to maintain the original position that my
remarks should be off the record for the purposes of your report of
the meeting. I suggest that we retain the first six lines of page five,
and then make the following statement:
"Mr. Dulles then gave an off the record discussion of Soviet
developments in the industrial and military fields, with particular
reference to guided missiles and other mode; n military weapons,
and to Soviet economic and subversive penetration in the uncommitted
areas of the world. "
Meanwhile for your own records, but not for reproduction or
dissemination, I enclose a corrected copy of my remarks which you
may retain in the C. E. D. file a.
I regret the delay in answering your inquiry. This is due to
my absence from Washington during the opening days of the year.
Sincerely yours,
AWD:at
Distribution:
Encl.
Orig - Addressee
1 cc - DCI Speech file
1 cc - ER 1. ------
Allen W. Dulles
Director
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CONFIDENTIAL - NOT FOR RELEASE
N V. DULLES; Don, Ladies and Gentlemen: Possibly
you should have had the cocktails before and not after the first of the
two keynote speeches.
I am really very deeply honored at having been asked to be with
you today. I have long followed the work of the CR1), and I have always
admired it.
I propose, as suggested by those who invited me, to speak quite
informally from a few notes that I have here.
It is encouraging these days to bear a kind word for Intelligence.
From time to time I get a little irked at having to bear the brunt of the
charge of failing to report practically every development that occurs
in the world. I can't get up and say, "Gentlemen, we reported on that
faithfully and fully. t' Sometimes, and quite often, this would be true and
sometimes not. I have never computed what our batting average is,
but it is not bad, and it is not bad particularly in the field that is interesting
us today.
I can say, however, that in the years I have been in this work --
and I have now been in Washington at this job either as Deputy or Director
of Central Intelligence for about seven years, - I have found a growing
recognition of the essential importance of Intelligence to the policy-making
function, and I have found a growing willingness on the part of the
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policyaiakers to listen to Intelligence, to seek Intelligence, and to be
guided by it.
When they are not guided by Intelligence it is very largely due to
the fact that we didn't get the Intelligence before the policy-makers with
the right emphasis and at the right time.
Looking back over the recent soviet development of their guided
missile program, Intelligence has a pretty good record. But I don't think
we succeeded in getting over to the policy-makers the whole impact of
that program. I hope to be able to improve performance in the future
because it is not enough merely to report day by day particular events an
they occur in the world. Somebody must pull that intelligence together
and put it forcefully before the policy-makers so that they may reflect it in
their actions.
Turning to the subject that you have assigned, - and I think, looking
back, as Don said, it took a good deal of prescience to have chosen a subject
as pertinent as the one you have given to us, "The Competitive Struggle
Between American Enterprise and Soviet Communism, 11 - I shall start out
by saying that I think it is a fallacy for us to assume that free enterprise
necessarily and inevitably will out-produce in all sectors a state whose
economy is controlled by a Fascist or Communist type of state dictatorship.
We often tend to fall into that error, - the idea that inevitably our
system, the free enterprise system will come out on top. Naturally.
I believe in the free enterprise system, with all my heart and soul. but
we must look facts in the face.
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the days before World War II, there were sad mistakes made
in Britain and other countries in failing properly to appraise the German
advance in the field of aviation. It was partly because of the type of
government that Germany had under Hitler, a government that the West
fitly despised - that we felt there were more shortcomings in their
economic development and military accomplishment than there really were.
As we look back at our attitude toward Japan, when we entered the
war in 1941, a good many felt that we would not meet the type of resistance
that we did meet.
The issue, as I see it, is the objective and the goal of free enterprise
ere free enterprise puts its emphasis as contrasted with state-
controlled enterprise. It is natural and proper, under normal conditions, that
free enterprise should concentrate on the development of what the people
need to improve their livelihood and to raise the living standard.
State-controlled enterprise on the other hand concentrates on
those goals that are fixed by dictatorial leaders. These goals come
mass of the people want comes second. Maybe, as I
op later, it is hard to carry on that policy indefinitely because
some day the people will speak out. They haven't yet reached that point
case of dictatorially fixed goals, these usually are military,
clearly so as regards the USSR. Therefore, it is no wonder
that from time to time we will have the shock of finding that they have
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outstripped us in certain areas, particularly military areas, where they put
the major emphasis, as for example, the Soviet has done in the missile field.
I'd like to add here parenthetically that in my job I do not make
between the USA and the USSR in such fields, I am not an expert
ur own missile program. What I try to do is learn all I can about the
d of making Intelligence estimates, the need for some
impartial net evaluator is obvious. Intelligence should be responsible for
giving the status of the Soviet Union in a particular field and this should then
be contrasted with expert advice as to where we may be in that field. The
policynzakers are entitled to have such net evaluations and to ha:
to most competent authority and at regular Intervals.
TSSR is ahead in missiles, I don't think there is any reason
to seek some mysterious and esoteric answer. The fact in that since 194$ they
have spent here more mazihours than we and under highly competent scientific
and technological leadership with the necessary tools and equipment. Under
those circumstances it would be understandable if they were ahead of us today.
An I said a moment ago, history is full of examples where the well-fed.
well-clothi
d of living countries failed fully to comprehend the
e of external threats. You can find this in the Greek and Roman
days and right on down to England and France before World War II, and in
our own history.
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guid
e have the shocks that have come from sputniks and
.nds of others. I may say that Intelligence was not
surprised at the timing of putting the Sputniks into orbit. We estimated that
capabilities and the priorities of the Soviet they would do it sometime
this year. That was a fairly well accepted possibility. What was not
anticipated fully was the shock that this would be to the country and to our Allies.
Maybe in the long run it is fortunate that some year s ago we had the
Korean War to arouse us to our own problems and to serve as a clear alert
of Communist ambitious and potentials. Maybe in a few years we will look
back on the sputniks and bless our stars that they were sent up in 1957 and
not held back until 1959..
It is hard to gent over certain misconceptions about the strength and
capabilities of the people of the Soviet Union. Many of us still look on them,
as peasants and snusshiks. We have so low a regard for their form of government
and their oppressive police -type state that we rather assume that probably
are not very successful in other activities. It is hard for us to see how a
state organized as the Soviet state is can get the best in work and accomplish-
meats out of their people. Only those who have studied it deeply., as have
most of you, can realize and appreciate the strength of their development.
In the Intelligence community we assume, and for some years have
assumed, that what we in the Western World can do in science and technology
the Soviet Union can also do. As a corollary to this, as I said before, if they
put more time, effort and resources in a given field, they will do better than
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field. It is, of course, a great advantage, as I am told by all
a certain thing is doable
Union has profited
by this in many fields, particularly in the nuclear field. Their espionage
also played some role here. We can profit in the field of missiles by a
the Soviet technology and progress.
Now for a moment I wish to consider the basic Communist
ns, and I will keep watch of the time so that I don't cut you off,
MR.. RANDALL: Carry on.
MR. DULLES: What are the basic Communist assumptions? They
believe
y that capitalltsra and free enterprise and the Comm
of organization are incompatible and that some day
a showdown will come unless meantime they win by attrition and subversion.
comes, they propose to have the tools to win in that conflict.
I don't think they are looking for war at the present time or in the
immediate future. Until they feel much better prepared than they are today,
they win preach coexistence in order to have an adequate period to complete
their own preparations.
If during this period they gain a massive superiority over us in any
.cial field they will feel that they can press their advantage diplomatically
veer- creas .g boldness. And even if there is a nuclear delivery
which is one of the possibilities we foresee, they would h
rticular type of government, they would have a negotiating
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advantage because of their willingness to use tactics of blackmail.
In order to provide a basis for this policy they have concentrated
inea, (1) building up their industrial strength. particularly
heavy industry; (2) concentrating on gaining superiority on a selective basis
in the military field, and (3) economic penetration and subversion particularly
ary phases they apparently by-pass. They have no aircraft
re. And now we are somewhat puzzled but interested in the statement
made by Khrushchev that aircraft soon will be museum pieces. ire haven't
found them as yet putting their a in any muse
the aircr
They are carrying along
Id although at a rate that is slower than we had anticipated
two or three years ago; in particular they are not building as many heavy
they we
putt
they would be building and as they could build
mphasis there.
a can put major emphasis in every field, and the
Soviet are undoubtedly limited, just as we are, by having to make certain
choices.
It is forty years since the Communist take-over in Russia. Almost
half of this period was occupied by external and internal political strife after
World War I and by the years of World War iT and the postwar reorgan Cation.
Thus they have had only about twenty-five years to consolidate their industrial
strength. They took the United States as a model and they still are borrowing
all that they can from us particularly in the heavy production and industry field,
borrowing techniqUOS
derdeveloped areas of the world.
uying goods.
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By channeling a large share of their total effort into heavy industry
and into their investment base they have achieved a
rate of growth here
but at a cost, of course, to the Soviet consumer. Today the Soviet gross
national product, we estimate, is less than forty per cent of ours, but of that
total Soviet defense takes about fifteen per cent compared to only nine per cent
United Mates .
Further, owing to the relative efficiency of the Soviet military goods
ow pay for military conscripts, and the moderate cost base
for many commodities that go into their military machine, we estimate that
the total dollar value, if it were translated into dollars, of their defense
expenditure is roughly equal to ours. They are accomplishing this on a ba
as I said, that isba
forty per cent of curs today.
If we put in a comparable defense effort in
proportion
of G. N. P. -? we would b-e adding almost $20 billion to our, own defense budget.
One can ask, how long are the Soviet peoples going to tolerate this
at the expense of their standard of living? It is not easy to answer. We must
recognize that there has been some improvement in the Russian standard of
living over the past ten years, and further improvements are expected over
the next five years as a result of a shift in the planned investment, to some
small exte
:roan heavy industry to agriculture and housing.
utly they have been forced to divert a good bit of their manpower
and resources to improving their rather dilapidated agricultiuei position.
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That is one of the Achilles' heels of the Soviet Union.
Turning now to their military accomplishment; in 1946 the Free
World had a monopoly in long-range aircraft and in the nuclear field,
electronics and jet propulsion. Today, eleven years later, Soviet technology
is approaching ours in these fields, although our nuclear stockpile still exceeds
ire, we believe. It has probably outdistanced us in certain of these respects.
In the guided missile field they started in by taking over the German
assets. Beginning shortly after the war and they have followed a planned
program in the missiles field and have put a major emphasis on that. Starting
with the German V-2 of about 150 to ZOO mile capability, they have developed
clues until today we must recognise that in the short and intermediate
fields they have done extremely well. Now they have started testing the
longer
gibes.
In aviation they are at somewhat of a disadvantage because from
overseas bases we could reach their heartland with types of planes which
they would have to expend on oneway missions if they wanted to use them
against us.
it is probably for this reason that they are concentrating on the
guided missile as their weapon of the future although, as I said, they are
not yet neglecting their bomber position and have a very large and effective
diate bomber of the earns general type as our B-47 and a certain
number of heavier bombers.
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In addition to their industrial base and their military structure,
today a third main element in the competitive struggle of Soviet
Free World; namely, the economic, Political and
subversive penetration particularly in the Middle East, South a Southeast
d even parts of this hemisphere south of the Rio Grande. Long before
people in these areas were tremendously impressed at the
transformation which had taken plac* in the USSR in less than four decades
ging the USSR from a backward country into the position of the world' a
second greatest power and a leader in the scientific field. The Sputnik has
,at along. of course.
Unfortunately, the lessons of Hungary and of Soviet colonialism
to have seeped down in these areas of the world. The USSR has
been quick to realize and capitalise on the situation created by the admiration
of some of r
ckward countries. They have been able to capitalize on. it
ey have been willing to take the raw materials produced by
these countries which obviously we can't do. Take Iceland. They made a
netration in Iceland because they buy their fish. We have a plethora of
Their position in Egypt has been strengthened by many factor a
because they take Egyptian cotton. The Sudan has a serious problem in
The Communist bloc foreign aid dcs not approach ours in value
,ton and the Soviets stop in there with attractive offers.
on an overall basis. They have concentrated can certain countries where they
think they can make the most impact, - Afghanistan, Burma, Canbodiaa:,
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tnd, India, Indonesia, Nepal, Syria, Yemen, Yugoslavia.
over the last three fiscal years through 157, the USSR programmed
economic aid to these particular countries was slightly greater than our own
according to our computation. We estimate that the bloc's aid is about 1. 2
billion as against our nine hundred million dollars of aid to these countries.
Mao in these particular countries they have more technicians. Of course,
as I said before, our total program is very much greater than theirs. In fact,
was about ten times that of the bloc, but in many
countries the bloc doesn't compete with us. They are very careful in the
choice of the countries where they put their emphasis.
There is no reason to doubt that the Soviet can continue the three
ama I have n entioned; that is, the building up of their industrial base,
carrying on foreign economic and subversive program on at least the scale
continuing to make great progress in certain selected military fields, an
doing today. The Soviet will be able, to do this despite the system of
government under which these programs are carried on, and the other drains
on their economy.
begun
They have, however,
y/to modify their system, and that is a
encouraging feature. They have given more freedom to the scientists
scientists today than we are. They have also had to decentralize the control
eV have instituted a massive educational system. They are educating more
and technicians, and in order to build up their economic and industrial base
industrial machine.
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ve firmly that over the years the pressure of this
12.
education. the pressures of these scientific and other achievements, the
decentralisation will bring more changes in the Soviet Union.
The great problem is whether those changes will go far enough and deep enough
and fast enough sso that when the time of crisis comes there will be some real
check on the dictatorial power of the leaders in the Kremlin..
In conclusion I wish to add a word of warning. We must not le
:sputnik become a Trojan Horse. We should not go missile-mad to the
exclusion of adequate defense against other dangers. 'Vvhile looking at the
sky,
a Soviet through economic penetration and subversion
parts of the Free World.
ilitary
and subversive. Whether we can do it with "business as usual" is a matter
udge batter than I.
Thank you very much.
CHAIRMAN DAVID: I just asked Mr. Dulles if he would be will:
to answer questions which I know some of you may have. So if we may take
perhaps five minutes for that, I would like, Mr. Dulles, to ask you this.
about the near bases of Russia against us; that is the Russian submarines
coast? Will you comment on that?
MR. DULLEST Yes, I am glad you brought that up because I
probably should have mentioned that in my talk.
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The Russians have a large submarine fleet about 500 in all. A good
percentage of them are the modern snorkel-types submarinue, and wee believe
a could be equipped with the air-bre
guided r issile. We do not believe that as yet they are equipped for the true
Bile. That is a matter on which they are undoubtedly working.
The submarines do represent potential floating bases which joined with a
nuclear attack woul
very serious increment to their total nuclear power.
),,!AN DAVID: Stay right here because there may be some
other questions.
QUESTION; Mr. Dulles, how do you evaluate the effect of our
.gratian problems in this struggle for power?
MR. DULLES: What do you mean, the Southern problem?
UZSTION; The Little Rock problem.
. R. DULLES: The Little Rock problem,
had some effect
ad anticipated.
.sly that has
public opinion situation abroad, but not as much as I
yt4ing of that nature that tends to show division
nt to our friends and is an assert to our
MR. PETERSE : Will you co mine
e Communist Party
he relative power position
DULLES: Howard, we are satisfied that today the Party
on top.
I remain there forever is hard to tell. The Soviet
as you know, have not mixed in politics, but politics has naked
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the Soviet military establishment. And I am rather inclined to think that
they were a little apprehensive that the Soviet Army was getting too
independent of the Party, and that was one of the reasons for the departure
of Zhukov. But at the moment the Party is supreme but is keeping a weather
eye out for developments in their military forces that might threaten its
positio
QUESTION: Mr. Dulles. would you be willing to say how long
ago we know that the Russians would be able to put up a sputnik in 1951?
MR. DULLEST Well, Intelligence, does not claim to know
absolutely, but the estimate that we made was that they would have the
wring the present year. That was estimated about a year
e the event.
CHAIRMAN DAVID; Thank you very much indeed, Allen. We are
appreciative of your coming and giving us your comments.
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