Documents / FOIA release
This Top Secret study by the Interdepartmental Coordinating Group on Germany and Berlin, dated July 12, 1961, and released by the Central Intelligence Agency, answers NSC Directive No. 58 of June 30, 1961. It sets out courses of action for the Berlin crisis but does not judge their merits. It covers imminent presidential decisions, a three-phase timetable running to January 1, military preparations and mobilization, covert action, economic sanctions, public information, negotiating positions and checkpoint procedures for East German personnel.
“Cooper”8 pages
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# SECRET acrambled for merchandise); (2) of anticipatory buying, inventory accumulation, and speculation by business firms financed by phenomenal profits and abundant bank credit; (3) of a price push-up designed to forestall getting stuck with a 'low' price ceiling in the event of a freeze; (4) of rapid acceleration of construction of plant and equipment in order to "beat the gun" on materials controls and allocations; (5) of increases in materials costs and franzied bidding for scarce resources and manpower; and, finally, (6) of investment shifts by individuals and institutional investors from liquid assets and fixed income securities into physical goods and aquities. These inflationary forces set in motion by warranted expectations and unwarranted fears of what the Government might do, will be given the impetus of substantial Government deficits unless we pay as we go, tax heavily, increase production per man-hour, increase savings, contract credit, control the money supply, and effectively enforce direct controls over prices, wages, materials, and manpower." ## B. Quantitative Projections for 1961-62 The existence of slack in the economy permits some additional defense spending without inflation. The danger of inflation can be appraised best through quantitative estimates of the consequences of a particular addition to the defense budget. In order to isolate the effects of defense expenditures themselves, the estimates assume away scare buying and hoarding by businesses and consumers. The further effects of a burst of spending by consumers are considered subsequently. ## 1. Impact of Expanded Military Spending Since the added military needs to implement the Berlin capability are so uncertain, it seems wisest to cover a wide range by making "low" and "high" estimates of possible added defense outlays. The low estimate adopted here assumes an additional $5 billion of defense spending in fiscal 1962 and $3 billion in the first half of fiscal 1963 ($6 billion annual rate). The high estimate calls for $11.5 billion of
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FOIA release, from the cia-readingroom collection. The PDF is mirrored here; the original link is above. The text was read from the page images by GLM-OCR; expect the odd misread word. 163 pages are in the text index: search them above, or from the library's search.