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

93. Memorandum of Conversation⁰

Washington, February 25, 1961.

SUBJECT

• Meeting Between the Secretaries of State and Defense and the Director of the Bureau of the Budget on the Military Assistance Program

PARTICIPANTS

• See Page 4 below¹

1. Mr. McNamara indicated that the briefing which Defense personnel were to provide as a point of departure for the meeting had not received prior review or clearance within the Pentagon. Thus all principal participants would be hearing it for the first time. Mr. Bundy of Defense then presented a briefing in two parts which covered, first, the development of Five Year Military Assistance Plans and the derivation of the $2.4 in new MAP funds for FY 1962 originally requested of the previous administration and, second, certain possible alterations in concept stemming from preliminary conclusions of evolving strategic studies which suggested themselves for further consideration. He noted that while there were obvious dangers inherent in generalizing on the direction of these strategic studies four basic patterns appear to be emerging which could materially affect military assistance planning: (1) the ability of U.S. forces to conduct effective limited war operations and thereby deter limited war is receiving higher priority than heretofore; (2) increased attention is being given to a greater sharing of the security burden by our more developed allies and the consequent tapping of their military potential; (3) Free World ability to counter the guerrilla and other subversive tactics of the Communists’ sub-limited war threat is receiving greater emphasis; and (4) ultimate victory in the cold war is dependent on top priority being given to the achievement of self-sustaining growth by the underdeveloped countries.

The implications of the foregoing in terms of the future design of military assistance programs, according to Mr. Bundy, might include the following:

1) Basic national policy currently requires that “the United States and its allies in the aggregate will have to have, for an indefinite period, military forces with sufficient strength, flexibility, and mobility to enable them to deal swiftly and severely with Communist overt aggression in its various forms and to prevail in general war should one develop.” The mix of aggregate free world capability to deal with overt aggression must be changed by expanding the role of U.S. forces and the forces of economically-developed allies and by reducing the role of underdeveloped countries.

2) Top priority should be given by MAP to assist those economically-developed countries which possess the potential for significant contributions to free world military might to make the most effective possible contributions to free world limited and general war capabilities. An important by-product of this approach would be the establishment of the U.S. as the arsenal of the free world, its exports of military equipment and services substantially expanded through the use of cost-sharing assistance to our economically developed allies.

3) The top priority objective of U.S. policy in the underdeveloped countries is the achievement of a progressive internal environment secure from the ravages of Communist guerrilla activity and the various other covert activities which characterize the international Communist conspiracy. Where substantial fighting potential exists, particularly in ground forces (e.g. Greece, Turkey, Korea and GRC), a compact force structure should be sought which will permit effective indigenous support of free world military operations without sacrificing the priority objective.

2. Insofar as the foregoing bore upon the necessity for reaching judgment on the FY 1962 budget level for military assistance, the Defense studies suggested that the requirements, whether developed under previous guidelines or under the altered concepts would require no less than the $2.4 billion originally recommended by the Departments of State and Defense for inclusion in President Eisenhower’s FY 1962 budg-et. This compares to the $1.8 billion figure actually agreed upon by President Eisenhower.

3. General Lemnitzer noted JCS support for the basic long range planning concept as essential to the development of sound programs and stated that the JCS agreed that a FY 1962 level of $2.4 billion was required if U.S. security objectives were to be accomplished. He nevertheless reserved his position on the second part of Mr. Bundy’s presentation pending further JCS study.

4. Mr. David Bell pointed out that President Kennedy had indicated that decisions on the amount of economic and military aid to be requested of the Congress and the presentation of Presidential messages related thereto should be completed by the third week of March.

5. Secretaries Rusk and McNamara noted that there were a significant number of highly complex issues which would have to be considered on an urgent basis in any substantive review of the Military Assistance Programs, and agreed that this could not be completed prior to the March deadline for fixing the FY 1962 budget request. A judgment on the FY 1962 figure would therefore have to be reached on the basis of a more rapid and broad brush approach to the problem.

Action: Secretary McNamara agreed to provide recommendations for State consideration with regard to the FY 62 level to be proposed to the President, such recommendations to be available within 10 days. Mr. Nitze was assigned Defense responsibility for this effort. Mr. Rusk asked that Mr. Ball accept responsibility for coordinating the State-Defense effort.

6. It was recognized that there were a number of fundamental political and economic issues which might warrant an altered approach in our military aid posture toward NATO as well as toward the underdeveloped areas. Particularly in connection with certain of the alterations which were suggested for further consideration, e.g. such as the concept of the development of “compact forces”, General Lemnitzer indicated that the JCS would want to have the opportunity for a careful study of the underlying implications. Secretary McNamara indicated a similar view. Mr. Rusk stated, however, that an effective review obviously required an ample period of time for completion, and indicated a number of areas which he suggested required a fresh approach with our thinking not being unduly proscribed by our past posture. Mr. Rostow pointed out that even in the event that adjustments in policies or concepts were agreed upon, actual implementation would have to take into account the need for careful and time-consuming negotiations with our allies to secure agreement to any proposed adjustments which affected our implied or specific commitments. Mr. John Bell indicated that a careful interagency review of basic political and military concepts was deemed highly essential and suggested that the President’s submission of the FY 62 program should make clear to the Congress that such a review was going forward.

7. Mr. David Bell asked whether there was a consensus of views as to where, within the President’s budget, Military Assistance should be shown. Mr. McNamara and General Lemnitzer expressed the strong view that MAP should continue to be presented as an integral part of the Mutual Security Program budget. Mr. Rostow indicated that this was a matter which should be explicitly checked with the President, who, Mr. Rostow felt, may prefer a separation of MAP from the MSP legislation in order to de-emphasize the security aspect of foreign aid. It was generally agreed that under either arrangement no adjustment was contemplated in the administration and control of the program and that the place of MAP in the budget would be discussed with the President at the appropriate time.

8. Secretary Rusk referred to the current study on U.S. bases being conducted by the Dept. of Defense noting that it would be of great interest to the Dept. of State. Secretary McNamara stated that he would see that a copy would be made available to Mr. Rusk.

0. Source: Department of State, Central Files, 700.5-MSP/2-2561. Secret. Drafted by James M. Wilson, Jr. (B/FAC) and Seymour Weiss (B/FAC) on March 1.
1. The list is not printed. Secretary Rusk was accompanied by 12 officers, including Chester Bowles and George Ball. Secretary McNamara was accompanied by 10 officers, including Roswell Gilpatric and General Lemnitzer. Also attending were Walt Rostow from the White House, Robert Knight from the Department of the Treasury, and David Bell and Robert Macy from the Bureau of the Budget.