Office of the Historian

39. Memorandum From Francis M. Bator of the National Security Council Staff to the President’s Special Assistant for National Security Affairs (Bundy)1

Washington, February 8, 1965.

Mac,

We settled both outstanding issues—see the attached memorandum2—at a session this morning with Dillon, Gordon and Ackley.

On the Canadian business (see p. 2 of the memo) I am holding Dillon’s much too long memorandum,3 and will ask him to raise the matter [Page 104] with the President at the meeting. If the President agrees to call Pearson, we can do the necessary staff work. All the President will have to do is to read Pearson what he proposes to say about Canadian borrowings in the Message4 (p. 3, para. 4) and tell Pearson that if he is not agreeable, there will be enormous pressure on the W.H. unilaterally to impose a quantitative limit on Canadian flotations, which the President can do under the Act,5 or, as a second step, to lift the Canadian exemption.

A clean copy is being typed now for the President’s use this afternoon. If you agree, I will attach a note that there is agreement among the principals, both on the monetary policy language (see p. 13) and against raising the tax rate. (On the latter, Gardner is reluctant but will go along.)

I have asked Nick Katzenbach to the meeting in case the President has any questions about the antitrust provisions (see last para., p. 1, of my memorandum to the President,6 and point Six on p. 4, and p. 12 of the draft).

In your absence I am afraid I have had to move in hard during the past three days to make all this come off. I don’t think I brought dishonor to your office—and the Message is in pretty good shape, both in substance and in terms of interdepartmental politics. Incidentally, I have O.K.s on the Message from Dillon, Ackley, Connor (with one minor quibble which I settled with marginal assistance from Dillon), McNamara, Gordon and Bell. I am expecting calls momentarily from Ball—who will be happy—and, most important, Bill Martin, with their reactions. I told Martin that if he has any serious objections, we shall call off the meeting with the President and have it out with the principals.7 With Dillon in accord, I expect that Bill will fall in line.

Don’t forget that, for the record, the draft was written by Ackley and myself, with suggestions by Moyers.

FMB 8
  1. Source: Johnson Library, National Security File, Subject File, Balance of Payments, Vol. 2 [1 of 2], Box 2. No classification marking.↩
  2. Not attached and not found.↩
  3. Tab A to Document 41.↩
  4. Reference is to the balance-of-payments message.↩
  5. Reference is to the IET.↩
  6. Document 38.↩
  7. This meeting with the President was held on February 8 at 6:26 p.m. (Johnson Library, President’s Daily Diary) to discuss the final draft of his message on balance of payments which was delivered on February 10. No record of this meeting has been found. Francis Bator, in a separate note to Secretary of Commerce Connor and the other principals of the Cabinet Committee on Balance of Payments, requested that he receive comments either in writing or by telephone on the draft balance-of-payments message by 3:30 p.m. on February 8, since President Johnson was to meet with them later that afternoon “to review all outstanding issues, as well as the draft.” (Ibid., Bator Papers, Balance of Payments Message, February 10, 1965, Memos [2 of 2], Box 16) See also Document 40.↩
  8. Printed from a copy that bears these typed initials.↩