Office of the Historian

79. Memorandum From the President’s Deputy Special Assistant for National Security Affairs (Bator) to President Johnson1

Washington, November 16, 1965, 2:40 p.m.

SUBJECT

  • Your meeting this afternoon with Joe Fowler2

Fowler will be asking for your preliminary approval of the broad outlines of the 1966 balance of payments program. We have worked out two alternative packages. One of these would leave us with a small but appreciable deficit of about $500–$700 million; the other would take us to zero or into surplus. Fowler will recommend, and I would agree, that you approve the more ambitious option. He will also tell you that to sell that option to Connor’s clients and the banks, it would be necessary for the government to dramatize the balance of payments program as part of the total effort connected with the Viet Nam war. What he would like to say—for the first time tomorrow at the press conference announcing the third quarter deficit—that the world is no longer the same as it was a year ago, that we are in a serious shooting war, and that our voluntary program to bring the balance of payments under control reflects the kind of national effort that is required from all parties.

I thought it might be useful for you to have a prior private indication of the kind of basic change of approach that Fowler will suggest. Connor wants to take a similar tack. However, Rusk, McNamara and Bundy have [Page 226] not been involved in this discussion and hence have not yet had their say. (My own prejudice, for what it is worth, is that your policy of the past year of being very careful not to over-dramatize the Viet Nam war is still right. It will be difficult enough over time to maintain room for Presidential maneuver and hold off pressure from those who still believe in the notion of a simple, clear-cut military victory.)

Francis M. Bator 3
  1. Source: Johnson Library, Bator Papers, Balance of Payments, 1965 [1 of 4], Box 14. Eyes Only.↩
  2. The President met with Fowler and Bator in the Oval Office beginning at 3:25 p.m. to discuss the balance of payments and other economic issues. (Ibid., President’s Daily Diary) No record of the meeting has been found. Presumably Fowler presented his memorandum, Document 78.↩
  3. Printed from a copy that bears this typed signature.↩