Foreign Relations of the United States, 1961–1963, Volume IX, Foreign Economic Policy

128. Memorandum From the Deputy Assistant Secretary of State for Politico-Military Affairs (Kitchen) to Secretary of State Rusk and Secretary of Defense McNamara⁰

Washington, December 12, 1961.

SUBJECT

• Report of the Military Assistance Steering Group

Pursuant to the directive issued by you jointly,¹ an inter-agency Military Assistance Steering Group has considered the principal military, political and economic issues bearing on the utilization of military aid for achieving U.S. objectives in six countries which are major recipients of U.S. Military Assistance. We have sought to determine whether there are feasible alternative methods which, if pursued over the long-run, might accomplish more satisfactorily U.S. objectives and which, in particular, would facilitate a more complementary programming of U.S. economic and military assistance. Our report, designed to establish policy guidelines for military assistance planning, is attached for your consideration. (Tab A)²

The essence of our conclusions is that, although sufficient military strength must be maintained in these countries to help deter local aggression and to assure internal security, the main thrust of U.S. aid in the next decade should be directed toward repelling the more likely Soviet threat of indirect aggression by furthering economic development and nation-building. Because U.S. and local resources are limited, a redirection of our assistance programs is required which will involve shifting gradually increasing proportions of aid from military to economic programs, a stretch-out of force modernization, and avoidance of the introduction of advanced and sophisticated materiel into countries whose financial, manpower and skills resources are inadequate. While it is clearly recognized that such a program will introduce difficult problems of turnaround, and, indeed, that implementation at an early date may not be possible in certain countries for political reasons, it is considered most important to establish now the governing policy for program development.

As chairman of the Steering Group, I subscribe to the recommendations of the report. It is also endorsed by Robert Komer, the White House staff participant, Kenneth Hansen, the Bureau of the Budget participant and Seymour Rubin, the AID participant. William Bundy, the Department of Defense participant, while subscribing to the general conclusions of the report has entered a reservation regarding implementation of the recommendations for Korea on the grounds that “the alternative totals have no basis in any current analysis” and also that he is “not prepared to conclude that we should alter our basic conception of the mission of ROK forces.” (Tab B) The report itself emphasizes that implementation in Korea can proceed only as our economic aid plans become firm and when we can determine whether increased U.S. conventional capability creates an additional basis for changing force posture in Korea. Mr. Bundy also notes that the Turkish situation is highly uncertain “on the economic front.” I concur with his observation regarding attention which must be paid to increasing problems in obtaining important facilities in Turkey, although I believe that certain proposals known to you will have a more important bearing on resolving these problems than will any given amount of military aid.

As noted in the body of the report, the JCS take the position that this is no time to make, nor to plan, reductions in military aid to the six countries. Admiral Smith, the Special Assistant for Military Assistance Affairs to the Joint Staff, who participated in the group’s work, has formally indicated his non-agreement “to reductions in military assistance to be imposed at present or in the foreseeable future.” (Tab C)

Our ambassadors in the six countries, supplemented by their MAAG chiefs, responded to your letter requesting a reappraisal of the stewardship of U.S. aid in their countries of assignment with briefs generally defending strongly the existing field plans.³ However, Ambassador Holmes was most forthcoming in dealing with a possible reduction in the force structure of the Iranian army provided selective modernization can be effected, increased economic aid can be substituted, and he can indicate to the Shah U.S. aid plans over a five-year period. Ambassador Berger, in a necessarily delayed response, left open the possibility of more far reaching changes in the Korean forces depending on accomplishments and developments measured over the next year.

At the request of Secretary McNamara and Budget Director Bell, a separate examination has been made of the implications of the steering group Report for the FY 1962 and 1963 military aid programs. This is presented in four charts at Tab D based on “high” figures representing DOD program requests and BOB “low” proposed alternatives. The steering group recognizes these are not firm figures but the best presently available for illustrative purposes, and the DOD figures, especially for 1963, reflect some reductions from previous plans. The charts set forth a six-country total difference of $94 million for 1962 and $151 million for 1963 which the Defense and Budget representatives respectively are prepared to support. Mr. Chenery,⁴ on behalf of AID, generally favors the larger reductions but believes such reductions should be offset by assuring, insofar as possible, early equivalent increases in economic assistance.

Mr. Komer and I, while advocating some cuts in FY 62 and particularly in FY 63 to emphasize firmly the new policy direction, recognize that too sharp a cut immediately would create strongly adverse local political repercussions. We suggest that (a) reductions greater than $50 million from DOD’s present FY 1962 program and $125 million from FY 63 would be excessive; (b) sharper cuts should be delayed until reallocation of a substantial portion of the “savings” into economic aid programs is feasible; (c) the country teams and unified commands should be given latitude to re-program within the lower ceilings; and, (d) a substantial proportion of the cut in both years should be allocated to Korea, by far the largest single MAP recipient.

Copies of this memorandum and attachments are being transmitted to all steering group participants for the attention of their principals.

I recommend that if you approve the conclusions as set forth in paragraphs 7 through 19, and the recommendations as set forth briefly in the country sections of the report, you confer with a view to achieving agreement that the report be accepted as establishing policy for Military Assistance program formulation. It is suggested that you may then wish to meet with the President and selected members of the NSC to obtain final approval.⁵

Jeffrey C. Kitchen

0. Source: Department of State, S/S-NSC Files: Lot 70 D 265, Guidelines for Military Aid Program. Secret. Attached to the source text were the conclusions of the Steering Group Report, paragraphs 7-19, which are in the Supplement, and the country alternatives and recommendations, paragraphs 54-85, not printed. Attached to an earlier, nearly identical draft of Kitchen’s memorandum, December 9, which was addressed only to Secretary Rusk, was the entire report of 40 typescript pages.
1. The directive has not been found but is elsewhere identified as a July 8 paper by Secretaries Rusk and McNamara, which approved the creation of an interagency steering group, composed of State, Defense, JCS, ICA (AID), and White House representatives, to prepare a basic review of military assistance policy and planning assumptions for seven major MAP recipient countries (China, Greece, Iran, Korea, Pakistan, Turkey, and Vietnam). (Memorandum from Avery F. Peterson (FE) to Walter P. McConaughy (FE) and John M. Steeves (FE), July 21; ibid., FE/EA Files: Lot 65 D 235, K2-C.1, Military Assistance (FY ’59-61)) Regarding the preparation of this review, see also the source note, Document 123.
2. Tabs A-D are not attached and have not been found.
3. The responses have not been found.
4. Hollis Chenery, Director for Program Review and Coordination Staff, AID.
5. The Steering Group report was discussed at meetings of the NSC Standing Group on January 5 and 12, 1962. (Record of Action, January 10 and January 12; Department of State, S/S-NSC Files: Lot 70 D 265, NSC Standing Group, 1/5/62 and 1/12/62) Kitchen’s memorandum was transmitted under cover of a memorandum from Battle (S/S) to McGeorge Bundy, January 16, 1962, to supplement the draft NSC Record of Action for consideration at the NSC meeting on January 18, 1962. A draft NSC Record of Action on the military aid program, January 13, 1962, which was prepared in response to decisions at the January 12 NSC Standing Group meeting, is ibid.,S/S-NSC (Miscellaneous) Files: Lot 66 D 95, Records of Action by the National Security Council.