301. Memorandum From Secretary of Defense McNamara to the Chairman, Joint Chiefs of Staff (Wheeler)1
SUBJECT
- Deployments to Southeast Asia (U)
I have reviewed your recommendations in JCSM 702–66, November 4, 1966,2 and the related military and economic effects of your recommended deployments. The attached table3 summarizes your plan and the forces which I am approving for planning purposes.
As you know, a reasonably stable economy in South Vietnam is essential to unite the population behind the Government of Vietnam—indeed to avoid disintegration of the SVN society. Runaway inflation can undo what our military operations accomplish. For this reason, we have [Page 827] already taken actions to reduce military and contractor piaster spending towards the minimum level which can be accomplished without serious impact on military operations. Nevertheless, the price stability achieved last summer may be giving way to a new round of severe inflation. More must be done.
Ambassador Lodge has asked that U.S. military spending be held to P42 billion in CY 1967. The Ambassadorʼs proposed program of tightly constrained U.S. and GVN civilian and military spending will not bring complete stability to SVN; there would still be, at best, a 10 billion piaster inflationary gap. It would, however, probably hold price rises in CY 1967 to 10%-25% as opposed to 75%-90% in FY 1966. The burden of inflation falls most heavily on just those Vietnamese—the ARVN and GVN civil servants—upon whose efficient performance our success most heavily depends. Unless we rigidly control inflation, the Vietnamese Army desertion rate will increase further and effectiveness will decline, thus at least partially cancelling the effects of increased U.S. deployments. Further, government employees will leave their jobs and civil strife will occur, seriously hindering both the military and the pacification efforts and possibly even collapsing the GVN.
For these reasons we must fit our deployments to the capacity of the Vietnamese economy to bear them without undue inflation. As your memorandum indicates, the program you recommend would cost over P46 billion in CY 1967 at current prices. I believe implementation of a program of this size would be self-defeating. The plan I am approving at this time for budgetary planning appears to me to be the maximum consistent with any reasonable hope of economic stability. If contingencies arise during the year, we can re-examine the plan accordingly. I plan to provide sufficient combat-ready forces in the U.S. to meet reasonable contingencies.
A troop list containing each unit in Program # 4 is attached.4 You may wish to suggest changes in the unit mix, if there are units that have been deleted that have a higher priority than those I have approved. I would like to have these recommendations by December 1, 1966. I also would like your proposals as to ways in which approved units can be accelerated so as to provide maximum combat capability as early as possible in CY 1967.5
- Source: Johnson Library, Warnke Papers, McNaughton Files, Mc NTN VII. Top Secret. Printed in The Pentagon Papers: Gravel Edition, vol. IV, pp. 364–365.↩
- This memorandum concerned “Deployment of Forces to Meet CY 1967 Requirements.” (Department of Defense, Records of the Joint Chiefs of Staff, 9155.3 (18 Jun 66), Section 8A)↩
- Attached but not printed. The table lists the
following projected figures, in thousands, for total personnel in
South Vietnam under the Southeast Asia Deployment Program:
↩June 1967 December 1967 June 1968 JCS Plan: 455.9 504.0 522.2 OSD Plan: 439.5 463.3 469.33 - Attached but not printed.↩
- The Joint Chiefs of Staff responded in JCSM–739–66, December 2, proposing modifications in the plan for deployments to Southeast Asia. (Johnson Library, Warnke Papers, McNaughton Files, McNTN VII)↩