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John F. Kennedy

John F. Kennedy

The PRESIDENTIAL RECORDINGS JOHN F. KENNEDY

THE GREAT CRISES, VOLUME ONE

JULY 30–AUGUST 1962

Timothy Naftali Editor, Volume One

George Eliades Francis Gavin Erin Mahan Jonathan Rosenberg David Shreve Associate Editors, Volume One

Patricia Dunn Assistant Editor

Philip Zelikow and Ernest May General Editors

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W. W. NORTON & COMPANY • NEW YORK • LONDON Copyright © 2001 by The Miller Center of Public Affairs

Portions of this three-volume set were previously published by Harvard University Press in The Kennedy Tapes: Inside the White House During the Cuban Missile Crisis by Philip D. Zelikow and Ernest R. May. Copyright © 1997 by the President and Fellows of Harvard College

All rights reserved Printed in the United States of America First Edition

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Library of Congress Cataloging-in-Publication Data

John F. Kennedy : the great crises. p. cm. (The presidential recordings) Includes bibliographical references and indexes. Contents: v. 1. July 30–August 1962 / Timothy Naftali, editor—v. 2. September 4–October 20, 1962 / Timothy Naftali and Philip Zelikow, editors—v. 3. October 22–28, 1962 / Philip Zelikow and Ernest May, editors. ISBN 0-393-04954-X 1. United States—Politics and government—1961–1963—Sources. 2. United States— Foreign relations—1961–1963—Sources. 3. Crisis management—United States—History— 20th century—Sources. 4. Kennedy, John F. (John Fitzgerald), 1917–1963—Archives. I. Naftali, Timothy J. II. Zelikow, Philip, 1954– III. May, Ernest R. IV. Series.

E841.J58 2001 973.922—dc21 2001030053

W. W. Norton & Company, Inc., 500 Fifth Avenue, New York, N.Y. 10110 www.wwnorton.com

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1234567890 MILLER CENTER OF PUBLIC AFFAIRS UNIVERSITY OF VIRGINIA The Presidential Recordings Project

Philip Zelikow Director of the Center

Timothy Naftali Director of the Project

Editorial Advisory Board Michael Beschloss Taylor Branch Robert Dallek Walter Isaacson Allen Matusow Richard Neustadt Arthur Schlesinger, Jr. Robert Schulzinger Contents

The Presidential Recordings Project Philip Zelikow and Ernest May xi

Preface to John F. Kennedy: The Great Crises, Volumes 1–3 Philip Zelikow and Ernest May xvii

Editors’ Acknowledgments xxv

Areas of Specialization for Research Scholars xxvii

A Note on Sources xxix

Meeting Participants and Other Frequently Mentioned Persons xxxi

Introduction: Five Hundred Days Timothy Naftali xli

WEEKEND OF JULY 28–29, 1962 3 Prologue: Taping System Installed 3

MONDAY, JULY 30, 1962 4 11:52 A.M.–12:20 P.M. Meeting on Brazil 5 12:25–12:57 P.M. Meeting on Peruvian Recognition 26 12:58–1:10 P.M. Meeting on Europe and General Diplomatic Matters 43 4:00–4:55 P.M. Meeting on the Economy and the Budget 52 5:00–6:48 P.M. Meeting on Nuclear Test Ban 80

WEDNESDAY, AUGUST 1, 1962 130 11:30 A.M.–12:43 P.M. Meeting on Nuclear Test Ban 132 4:45–5:32 P.M. Meeting on Nuclear Test Ban 167 5:35–6:25 P.M. Meeting with the President’s Foreign Intelligence Advisory Board (PFIAB) 186 viii CONTENTS

FRIDAY, AUGUST 3, 1962 202 10:33–11:12 A.M. Meeting on Berlin 203 11:14 –11:20 A.M. Meeting with Lyman Lemnitzer 227

MONDAY, AUGUST 6, 1962 233 6:00–6:42 P.M. Meeting with Wilbur Mills on the Tax Cut Proposal 234

WEDNESDAY, AUGUST 8, 1962 260 10:36–11:12 A.M. Meeting with Llewellyn Thompson on Khrushchev 261 5:30–6:12 P.M. Meeting on China and the Congo 272

THURSDAY, AUGUST 9, 1962 287 10:00–10:55 A.M. Meeting on Peru and Haiti 287 10:55 A.M.–12:15 P.M. Meeting on Berlin 311 4:30–5:47 P.M. Meeting with Business Leaders on the Tax Cut Proposal 335

FRIDAY, AUGUST 10, 1962 361 10:10–11:10 A.M. Meeting on the Tax Cut Proposal 362 11:20 A.M.–12:30 P.M. Meeting on the Gold and Dollar Crisis 385

WEDNESDAY, AUGUST 15, 1962 418 4:10–4:45 P.M. Meeting on Laos 419 6:35–6:53 P.M. Meeting with John McCone 439

THURSDAY, AUGUST 16, 1962 443 10:50–11:46 A.M. Meeting with Douglas MacArthur 445 5:50–6:32 P.M. Meeting on the Gold and Dollar Crisis 462

MONDAY, AUGUST 20, 1962 480 11:48 A.M.–12:06 P.M. Meeting on Intelligence Matters 482 4:00–5:30 P.M. Meeting on the Gold and Dollar Crisis 489

TUESDAY, AUGUST 21, 1962 526 9:30 A.M. Conversation with Orville Freeman 527 10:00 A.M. Conversation with Dean Rusk 534 CONTENTS ix

10:14 A.M. Conversation with Robert McNamara 536 10:20 A.M. Conversation with Eugene Zuckert 540 10:25 A.M. Conversation with Lyndon B. Johnson 541 10:30 A.M. Conversation with James Eastland 545 5:05–5:15 P.M. Meeting on U.N. Strategy 546 5:15–5:55 P.M. Meeting with Adlai Stevenson 552 6:00–7:05 P.M. Meeting on Trade and Textile Policy 566

WEDNESDAY, AUGUST 22, 1962 592 6:10–6:37 P.M. Meeting on Intelligence Matters 593

THURSDAY, AUGUST 23, 1962 603 9:36 A.M. Conversation with Philip Hart 604

MONDAY, AUGUST 27, 1962 608 TIME UNKNOWN. Dictated Memo to Eugene Zuckert 608 5:00–6:06 P.M. Meeting on Arab-Israeli Questions 610

WEDNESDAY, AUGUST 29, 1962 623 11:06 A.M. Conversation with David McDonald 624 5:46–6:35 P.M. Meeting on Berlin 627 6:35–6:46 P.M. Meeting on the Congo 641

THURSDAY, AUGUST 30, 1962 651 9:30 A.M. Conversation with Walter Reuther 651 11:26 A.M. Conversation with Willard Wirtz 654 11:30 A.M. Conversation with a White House Operator 655 11:33 A.M. Conversation with George Harrison 656 11:35 A.M. Conversation with Walter Reuther 657

Index 659

The Presidential Recordings Project

BY PHILIP ZELIKOW AND ERNEST MAY

etween 1940 and 1973, presidents of the United States secretly recorded hundreds of their meetings and conversations in the BWhite House. Though some recorded a lot and others just a little, they created a unique and irreplaceable source for understanding not only their presidencies and times but the presidency as an institution and, indeed, the essential process of high-level decision making. These recordings of course do not displace more traditional sources such as official documents, private diaries and letters, memoirs, and con- temporaneous journalism. They augment these sources much as photographs, films, and recordings augment printed records of presidents’ public appearances. But they do much more than that. Because the recordings capture an entire meeting or conversation, not just highlights caught by a minute-taker or recalled afterward in a memorandum or memoir, they have or can have two distinctive qualities. In the first place, they can catch the whole complex of considerations that weigh on a president’s action choice. Most of those present at a meeting with a president know chiefly the subject of that meeting. Even key staff advisers have compartmented responsibilities. Tapes or transcripts of successive meetings or conversations can reveal interlocked concerns of which only the president was aware. They can provide hard evidence, not just bases for inference, about presidential motivations. Desk diaries, public and private papers of presidents, and memoirs and oral histories by aides, family, and friends all show how varied and difficult were the presidents’ responsibilities and how little time they had for meeting those responsibilities. But only the tapes provide a clear picture of how these responsibilities constantly converged—how a president could be simultaneously, not consecutively, a commander in chief worrying about war, a policymaker conscious that his missteps in economic policy could bring on a market collapse, a chief mediator among interest groups, a chief administrator for a myriad of public programs, a spokesperson for the interests and aspirations of the nation, a head of a sprawling political party, and more. The tapes reveal not only what presidents said but what they heard. For everyone, there is some difference between learning by ear and by

xi xii THE PRESIDENTIAL RECORDINGS PROJECT eye. Action-focused individuals ordinarily take in more of what is said to them than of what they read, especially when they can directly question a speaker. A document read aloud to a president had a much better chance of registering than the same document simply placed in the in- box. Though hearing and reading can both be selective, tapes probably show, better than any other records, the information and advice guiding presidential choices. Perhaps most usefully, the secret tapes record, as do no other sources, the processes that produce decisions. Presidential advisers can be heard debating with one another. They adapt to the arguments of the others. They sometimes change their minds. The common positions at the end of a meeting are not necessarily those taken by any person at the outset. The president’s own views have often been reshaped. Sometimes there has been a basic shift in definition of an issue or of the stakes involved. Hardly anyone ever has a clear memory of such changes. Yet, with the tape, a listener now can hear those changes taking place—can follow, as nowhere else, the logic of high-stakes decision making. Casting about for analogies, we have thought often of Pompeii. As the ruins uncovered there have given students of Greco-Roman civilization knowledge not to be found anywhere else, in any form, so the presidential recordings give students of the presidency, of U.S. and world history, and of decision making knowledge simply without parallel or counterpart. They are a kind of time machine, allowing us to go back and be in the room as history was being made. And, unlike even the finest archaeologi- cal site, what we uncover are the words and deliberations of the people themselves in the moment of action, not just the accounts, summary notes, or after-the-fact reconstructions they left behind. Of the six presidents who used secret recording devices, three did so extensively. Franklin Roosevelt, Harry Truman, and Dwight Eisenhower recorded to a limited extent. John Kennedy, however, after installing an elaborate taping system in July 1962, used it frequently during the 16 months before his murder in November 1963. Using a different system, Lyndon Johnson made recordings throughout his presidency, especially in 1968, his last, tumultuous year in office. Richard Nixon, after two years without using any recording devices, installed a system which, because voice activated, captured every conversation in a room with a microphone. The existence of Nixon’s system came to light in July 1973 during congressional hearings on administration involvement in the 1972 Watergate burglary. Segments of tape obtained by Congress provided a major basis for the impeachment proceedings that led to Nixon’s later resignation. THE PRESIDENTIAL RECORDINGS PROJECT xiii

The Watergate hearings brought an end to secret taping. Afterward, it became unlawful to record conversations without knowledge and con- sent. As the ruins of Pompeii reveal details of Greco-Roman life only up to August of 79 A.D., when lava from Vesuvius buried the city, so secret recordings reveal the inner workings of the U.S. presidency only from 1940—and especially 1962—down to mid-1973. On the premise that these recordings will remain important historical sources for centuries to come, the University of Virginia’s Miller Center of Public Affairs plans to produce transcripts and aids for using all accessible recordings for all six presidencies. We started with the methods and style we used in 1996–97 to produce a then-unprecedented volume of its kind, The Kennedy Tapes: Inside the White House during the Cuban Missile Crisis (Cambridge, MA: Harvard University Press, 1997). Though that volume improved on the then-available transcripts of a few Kennedy administration meetings, we kept trying to find ways to make the transcripts still better. This was a process of trial and error. Our initial hope was that professional transcribers, like court reporters, could do much of the primary transcription. That did not work out well. For those untrained in the history of the period, transcribing presidential tapes can be a bit like assembling a jigsaw puzzle without being able to see the picture on the puzzle box, and this is especially true when the audio quality is bad. Tapes of telephone conversations tend to be much easier, both because the speakers are using a machine that was linked to the original recording system (usually a Dictaphone in this case) and because there are generally only two participants in the telephone conversation. Recordings of meetings are much harder to transcribe. Most Kennedy recordings are of meetings; most Johnson recordings (and all those publicly released so far) are of telephone conversations. Originally short of funds and audio expertise, we initially worked almost entirely with ordinary cassette copies of the tapes. We later began relying on more expensive Digital Audio Tape (DAT) technology. We tried out other technical fixes, starting in 1996 with a standard noise reduction technique (called NONOISE in the trade). The results were disappointing. We have since tried out other, much more sophisticated techniques suggested by some sound studios. Though we have learned these techniques can sometimes be vital for especially murky material suffering from unusual interference, there is an offsetting risk of additional distortion and loss of data, including the subtle changes in tone that can affect accurate speaker identification. Two of our scholars, Timothy Naftali and George Eliades, were especially critical experimenters in this learning process. xiv THE PRESIDENTIAL RECORDINGS PROJECT

The same two scholars helped the growing team stumble on a more useful bit of hardware. Looking for a way for two scholars to listen simultaneously to the same DAT copies, Eliades suggested use of a mul- tiple outlet headphone amplifier (Rane’s Mojo amplifier). Eliades and Naftali also discovered that this hardware dramatically improved our ability to boost the audio signal from the tapes. We are continuing to tin- ker with the hardware, including more use of CD-ROM technology. We welcome suggestions for further improvement. The most fundamental improvements in transcription so far, though, have not come from machines. They came from people. Introduction of a team method for reviewing transcripts, an innovation developed and managed mainly by Naftali, has helped reduce the most intractable source of error—the cognitive expectations and limitations of an individual listener. For instance, when you expect to hear a word in an ambiguous bit of sound, you often hear it. Even without particular expectations, different listeners hear different things. So we have utilized a special kind of “peer review” in this new realm of basic historical research. The talents required from our scholars are demanding. They must be excellent historians, knowledgeable about the events and people of the period. They must also have a particular temperament. Anthropologists and archaeologists used to taking infinite pains at a dig, teaspoon or toothbrush in hand, might call this a talent for “field work.” So we are especially grateful to the historians, listed on the title page of the volumes, who have displayed the knowledge, the patience, and the discipline this work requires, rewarded by a constant sense of discovery. In consultation with our editorial advisory board and our scholars, we developed a number of methodological principles for the Miller Center’s work. Among the most important are: First, the work is done by trained professional historians who have done deep research on the period covered by the tapes and on some of the central themes of the meetings and conversations. They are listed on the title page as associate and volume editors. The historians not only delve into documentary sources but sometimes interview living participants who can help us comprehend the taped discussions. Our voice identifications are based on sample clips we have compiled and on our research. On occasion our list of participants in a meeting differs from the log of President Kennedy’s secretary, Evelyn Lincoln. We list only the names of participants whose voices we can identify. Our research has also turned up a few minor cataloguing errors made at the time or later. Second, each volume uses the team method. Since few people always speak in complete grammatical sentences, the transcriber has to infer THE PRESIDENTIAL RECORDINGS PROJECT xv and create paragraphs, commas, semicolons, periods, and such. Usually one or two scholars painstakingly produce a primary draft, including the introductory scene setters and explanatory annotations. Two or more scholars then carefully go over that transcript, individually or sometimes two listening at the same time, with their suggestions usually going back to the primary transcriber. In the case of often-difficult meeting tapes, like the Kennedy recordings, every transcript has benefited from at least four listeners. The volume editors remain accountable for checking the quality and accuracy of all the work in their volume, knitting together the whole. All of this work is then reviewed by the general editors, with the regular advice of members of the project’s editorial advisory board. Third, we use the best technology that the project can afford. As of 2001, we work from DAT copies of the recordings (not the less expensive analog cassettes ordinarily sold to the public by presidential libraries). Our transcribers are now moving toward transferring this digital data onto CD-ROMs. Each transcriber at least uses a professional quality DAT machine and AKG K240 headphones with the signal boosted by a headphone amplifier. Each listens to a DAT copy of the library master, checking with a DAT from which sound engineers have attempted to remove extraneous background noise. Fourth, we aim at completeness. Over time, others using the transcripts and listening to the tapes may be able to fill in passages marked [unclear]. Although the Miller Center volumes are intended to be author- itative reference works, they will always be subject to minor amendments. Editors of these volumes will endeavor to issue periodic updates. We use ellipses in our transcripts in order to indicate that the speaker paused or trailed off, not to indicate that material has been omitted. Fifth, we strive to make the transcripts accessible to and readable by anyone interested in history, including students. As the U.S. government’s National Archives has pointed out, the actual records are the tapes themselves and all transcripts are subjective interpretations. For instance, our team omits verbal debris such as the “uh”s that dot almost anyone’s speech. Listeners unconsciously filter out such debris as they understand what someone is saying. Judgments must be made. Someone says, for example, “sixteen . . . uh, sixty. . . . ” The transcriber has to decide whether the slip was significant or not. But the judgment calls are usually no more difficult than those involved in deciding where to insert punctuation or paragraphing. In the effort to be exhaustive, sometimes there is a temptation to overtranscribe, catching every fragmentary utterance, however unclear or peripheral. But the result on the page can xvi THE PRESIDENTIAL RECORDINGS PROJECT add too much intrusive static, making the substance less understandable now than it was to listeners at the time. Obviously, what to include and omit, balancing coherence and comprehension against the completeness of the record, also requires subjective judgment. The object is to give the reader or user the truest possible sense of the actual dialogue as the participants themselves could have understood it (had they been paying attention). Sixth, we go one step further by including in each volume explana- tions and annotations intended to enable readers or users to understand the background and circumstances of a particular conversation or meeting. With rare exceptions, we do not add information that participants would not have known. Nor do we comment often on the significance of items of information, except as it might have been recognized by the participants. As with other great historical sources, interpretations will have to accumulate over future decades and centuries. Preface to John F. Kennedy: The Great Crises, Volumes 1–3

BY PHILIP ZELIKOW AND ERNEST MAY

hese three volumes in the Miller Center Presidential Recordings series cover the three months after Kennedy first began to tape- Trecord meetings. Before and after becoming president, Kennedy had made use of a recording device called a Dictaphone, mostly for dictating letters or notes. In the summer of 1962 he asked Secret Service Agent Robert Bouck to conceal recording devices in the Cabinet Room, the Oval Office, and a study/library in the Mansion. Without explaining why, Bouck obtained Tandberg reel-to-reel tape recorders, high-quality machines for the period, from the U.S. Army Signal Corps. He placed two of these machines in the basement of the West Wing of the White House in a room reserved for storing private presidential files. He placed another in the basement of the Executive Mansion. The West Wing machines were connected by wire to two microphones in the Cabinet Room and two in the Oval Office. Those in the Cabinet Room were on the outside wall, placed in two spots covered by drapes where once there had been wall fixtures. They were activated by a switch at the President’s place at the Cabinet table, easily mistaken for a buzzer press. Of the microphones in the Oval Office, one was in the kneehole of the President’s desk, the other concealed in a coffee table across the room. Each could be turned on or off with a single push on an inconspicuous button. We do not know where the microphone in the study of the Mansion was located. In any case, Bouck, who had chief responsibility for the system, said in 1976, in an oral history interview, that President Kennedy “did almost no recording in the Mansion.” Of the machine in the basement of the Mansion, he said: “Except for one or two short recordings, I don’t think it was ever used.” So far, except possibly for one short recording included in these volumes, no tape from the Mansion machine has turned up. President Kennedy also had a Dictaphone hooked up to a telephone in the Oval Office and possibly also to a telephone in his bedroom. He

xvii xviii PREFACE could activate it, and so could his private secretary, Evelyn Lincoln, who knew of the secret microphones, often made sure that they were turned off if the President had forgotten to do so, and took charge of finished reels of tape when they were brought to her by Bouck or Bouck’s assistant, Agent Chester Miller. Though Kennedy’s brother, Attorney General Robert Kennedy, and Robert Kennedy’s secretary, Angie Novello, certainly knew of the tapes and dictabelts by some point in 1963, it is not clear that they had this knowledge earlier. Anecdotes suggest that the President’s close aide and sched- uler, Kenneth O’Donnell, might have known about the system and might have told another aide, Dave Powers, but the anecdotes are unsupported. Most White House insiders, including counsel Theodore Sorensen, who had been Kennedy’s closest aide in the Senate, were astonished when they learned later that their words had been secretly captured on tape. After Kennedy’s assassination, Evelyn Lincoln was quickly displaced by President Johnson’s secretaries. She arranged, however, for the Secret Service agents to pull out all the microphones, wires, and recorders and took the tapes and dictabelts to her newly assigned offices in the Executive Office Building, adjacent to the White House. Though Robert Kennedy had charge of these and all other records from the Kennedy White House, Lincoln retained physical custody. During Kennedy’s presidency, only a small number of conversations were transcribed. Though Lincoln attempted to make some other transcripts, she never had much time for doing so. George Dalton, a former Navy Petty Officer and general chore man for the Kennedy family, took on the job. “Dalton transcripts” have not been released, but everyone who has seen them uses terms like fragmentary, terrible to unreliable, awful, or garbage. The tapes and dictabelts migrated with President Kennedy’s papers. First they moved to the main National Archives building in downtown Washington, D.C. Herman Kahn (an archivist, not the strategic analyst) was responsible for them within the National Archives system; Robert Kennedy was the custodian for materials belonging to the family, including all the tapes. Robert Kennedy disclosed the existence of the tapes in 1965 to Burke Marshall, a legal scholar and former Justice Department colleague. Lincoln and Dalton were looking after the materials, and Dalton was attempting some transcripts. The papers and the tapes then were moved to a federal records depository in Waltham, Massachusetts. In the summer and fall of 1967, when Robert Kennedy drafted his famous memoir of the Cuban missile crisis, Thirteen Days, he used what- PREFACE xix ever transcripts existed and almost certainly listened to tapes. Passages in the book which refer to “diaries” seem nearly all to be based on the secret recordings.1 After Robert Kennedy was assassinated in 1968, custody of President Kennedy’s private papers became the primary responsibility of Senator Edward Kennedy (Burke Marshall represented Jacqueline Kennedy’s interests). Dalton was employed by Senator Kennedy, and either some tapes or some of Dalton’s transcripts or both may have been moved into Senator Kennedy’s own files. Despite occasional rumors, none of the cus- todians publicly acknowledged that the tapes existed. When Nixon’s taping system was revealed in 1973 and Congress was seeking access to those tapes, Senator Kennedy was a member of the inquiring Judiciary Committee. With rumors by then rife, he and the family quickly confirmed that President Kennedy had, indeed, also secretly taped meetings and conversations in the White House. They publicly promised to turn the tapes over to the National Archives. During the next two years they negotiated a deed of gift that put in the hands of archivists at the John F. Kennedy Presidential Library in Boston, Massachusetts, all tapes except those dealing with private family affairs. According to Richard Burke, a longtime member of Senator Kennedy’s staff, Dalton was instructed by the late Steven Smith, Senator Ken- nedy’s brother-in-law, to remove sensitive documents from the Kennedy papers and to cull the tapes in order to protect the family’s reputation. Burke also claims that he read transcripts by Dalton from Oval Office dictabelts of conversations with Marilyn Monroe and Judith Exner and that Dalton had erased potentially embarrassing passages.2 But Burke is an undependable source. A book he wrote about his years with the senator is full not only of errors but of outright inventions. Yet there are others, including at least one Kennedy Library archivist who received the tapes, who suspected that between 1973 and 1975, Dalton—possibly assisted by Kennedy aide Dave Powers and retired archivist and Kennedy family employee Frank Harrington—looked at the tapes to see what should be removed without leaving any record or documentation

1. See Timothy Naftali, “The Origins of ‘Thirteen Days,’”Miller Center Report 15, no. 2 (Summer 1999): 23–24. 2. Philip Bennett, “Mystery Surrounds Role of JFK Tapes Transcriber,” Boston Globe, 31 March 1993, p. 1; Seymour M. Hersh, The Dark Side of Camelot (Boston: Little, Brown, 1997), pp. 454–55. xx PREFACE of their work. Dalton has refused to discuss what he did. Senator Kennedy’s then–chief of staff, when interviewed in 1993 by the Boston Globe reporter Philip Bennett, denied that Dalton had worked on the tapes at the direction of Senator Kennedy, but Burke Marshall told Philip Zelikow in February 2000 that he thought Dalton had been working on the tapes for the Senator, at least in general. In 1975, tapes recording about 248 hours of meetings and 12 hours of telephone conversations became part of the President’s Office Files at the library. While a treasure trove for history, this handover did not include all the recordings that President Kennedy had made, nor were all the recordings complete. Fortunately perhaps, the Secret Service agents had originally numbered and catalogued the reels of meeting tapes in a simple way, so removals and anomalies are easily noticed. There are a few. Three tapes were received by the library with reels containing “separate tape segments.” It is possible that they had been cut and spliced, for two of these tapes, including the one made on August 22, 1962, concerned intelligence issues and may have involved discussion of covert efforts to assas- sinate Castro. The Kennedy Library archivist Alan Goodrich says, however, that the “separate tape segments” may exist simply because the Secret Service agents were winding some partial reels of tape together to fill out the reels of blank tape being fed into the machine. Another tape from August 1962 is simply blank. Several more numbered tape boxes, for tapes made in June 1963, had no tapes inside, though the library has “Dalton transcripts” for at least four of these missing tapes. The fact that still other tapes received by the library had been miswound suggests at least that they had been clumsily handled. Since the library has not yet issued its own forensic reports about the “separate tape fragments” or blank tape or made the original tape reels available for outside examination or released the existing “Dalton transcripts” for missing tapes, we cannot draw conclusive judgments about just what happened. The dictabelt recordings never had any order. Lincoln seems to have filed them randomly. Some seem to have been partially overwritten. The Kennedy Library’s numbers merely distinguish one item from another. They provide no guidance to chronological sequence or content. As with the meeting tapes, the Kennedy Library has attempted to date and identify the tapes, and the editors of these volumes have confirmed and, in various cases, amended this information as a result of further research. A number of dictabelts were taken by Lincoln without authorization for a private collection of Kennedy memorabilia. Some of these went to the PREFACE xxi

Kennedy Library after her death in 1995; others turned up in the hands of a collector who had befriended her. In 1998 the Kennedy Library was able to recover these dictabelts too, but there is no way of knowing whether there were others and, if so, what their fate was. Once in the jurisdiction of the Archivist of the United States, the recordings were handled with thoroughgoing professionalism. The library remastered the tapes on a Magnecord 1022 for preservation. The dictabelts were copied onto new masters. All copies of the tapes, including those used for these books, derive from these new preservation masters. Some minor anomalies were introduced as a result of the remastering. Listeners will occasionally hear a tape stop and the recording start up, replaying a sentence or two. That is an artifact of the remastering process, not the original White House taping. The original tapes were also recorded 7 at relatively high density (18 inches per second). The remastered tapes necessarily have different running speeds that produce subtle audio distortion. The new masters, for example, seem to have people talking slightly faster than they did at the time. The library was initially at a loss as to how to make tapes available to the public. Many contain material still covered by security classification. Because of the poor sound quality of most of the tapes, it was not easy to identify sensitive passages. The library initially attempted to prepare its own transcripts and submit these for classification review. But the task was hard, the library staff was small, and funds were meager. Moreover, some archivists believed as a matter of principle that the library should not give official standing to transcripts that might contain transcribers’ errors. In the view of the National Archives and Records Administration, only the tapes themselves are archival records. All transcripts are works of subjective interpretation. The effort at transcription came to an end in 1983, and almost all the tapes remained under lock and key. In 1993 the library acquired new equipment and began putting the recordings onto Digital Audio Tape (DAT). These could be reviewed in Washington and digitally marked without transcripts. Changes in procedures, along with determined efforts by two archivists, Stephanie Fawcett and Mary Kennefick, accelerated the pace of declassification. Between 1996 and 2000 about half of the recordings in the Kennedy Library became available for public release; the rest await declassification review. While the Kennedy Library has been careful to make no deletions or erasures from tapes and dictabelts in its possession, the copies publicly released, and used for these volumes, do have carefully annotated exci- sions of passages still security classified. These passages were excised xxii PREFACE digitally, not literally, and remain intact on the library’s preservation masters. It is to be hoped that future, more tolerant declassification reviews may someday release some of the material that currently is excised. But even for the sanitized tapes, the library issues no transcripts. Our work on these tapes commenced in 1995. We obtained analog cassettes of tapes relating to the 1962 Cuban missile crisis as soon as they were released. Painstakingly, we listened to and transcribed those tapes. Each of us spent many hours listening to each hour of tape. Even so, our transcripts contained large numbers of notations for words or passages that were unclear or speakers that could not be identified. The resultant transcripts were published by Harvard University Press in 1997 as The Kennedy Tapes: Inside the White House during the Cuban Missile Crisis. Because of support from the Governing Council of the University of Virginia’s Miller Center of Public Affairs, and W. W. Norton, the transcripts of meetings on the missile crisis in volumes 2 and 3 of this series are more complete and accurate than were our original products. We were able to decipher in those tapes large numbers of words and passages previously incomprehensible and to identify speakers with greater certainty. We were also able to draw on the assistance of other historians employed in the Miller Center’s Presidential Recordings Project, employing and benefiting from the team method we describe in our general preface on the project. Some questions nevertheless linger because of uncertainties, already described, concerning the completeness and integrity of the tapes now available. Why were they made? Did Kennedy use the on/off switch with a view to controlling, even distorting the historical record? Did others, after his murder, tamper with the tapes in order artificially to shape the record of events? In view of the possibility that a small fraction of the meeting tapes were removed or mangled after the fact, can they really be regarded as better sources than self-serving memoirs or oral histories? To the extent that they are valid, undoctored records of conversations and meetings, do they tell us much that could not be learned from other sources? Our judgment is that any tampering with the tapes was so crude and ham handed that it extended only to removals. The extent of such removals may have been constrained by the original Secret Service cataloguing system. Since missing tapes would be noticed, too many missing tapes might cause an outcry and lead to unwelcome inquiries. So the removals of meeting tapes, if that is the explanation for the anomalies, were relatively limited. The situation of the dictabelts is different. Since they were not catalogued at the time they were made, we cannot know how many—if any—are missing. PREFACE xxiii

The most plausible explanation for Kennedy’s making secret tape recordings is that he wanted material to be used later in writing a memoir. Since he seems neither to have had transcripts made (with two minor exceptions in 1963) nor to have listened to any of the tapes, it is unlikely that he wanted them for current business. He had himself written histories and was by most accounts prone to asking historians’ questions: How did this situation develop? What had previous administrations done? He knew how hard it was to answer such questions from surviving documentary records. And he faced the apparent likelihood that, even if reelected in 1964, he would be an out-of-work ex-president when not quite 51 years old. Did Kennedy tape just to have material putting himself in a favorable light? On some occasions, he must have refrained from pushing an “on” button because he wanted no record of a meeting or conversation. Especially on early tapes, there are pauses at moments when the President was speaking of tactics for dealing with legislative leaders. Almost certainly, he made recordings only when he thought the occasions important. As a result, the tapes record relatively little humdrum White House business such as meetings with citizen delegations or conferences with congressmen and others about patronage. Those who have spent much time with the tapes and those who have compared the tapes to their own experience working with Kennedy find no evidence that he taped only self-flattering moments. He often made statements or discussed ideas that would have greatly damaged him had they become public. Early in the missile crisis, for example, he mused about his own possible responsibility for having brought it on. “Last month I said we weren’t going to [allow it],” he said. “Last month I should have said that we don’t care.” He never seemed to make speeches during a meeting for the benefit of future listeners. His occasional taped monologues were private dictation about something that had happened or what he was thinking, obviously for his own later reference. Two other points apply. First, he had no reason to suppose that the tapes would ever be heard by anyone other than himself unless he chose to make them available. They were completely secret. Second, he could hardly have known just what statements or positions would look good to posterity, for neither he nor his colleagues could know how the stories would turn out. The tapes of missile crisis debates establish far more clearly than any other records the reasons why Kennedy thought Soviet missiles in Cuba so dangerous and important. They make abundantly clear that his preoc- cupation was not with Cuba or the immediate threat to the United xxiv PREFACE

States. He feared that, if he did not insist on removal of the missiles, Soviet Premier Nikita Khrushchev would be emboldened to try to take over West Berlin, in which case he—Kennedy—would have only two choices. He would either have to abandon the two and a half million West Berliners theretofore protected by the United States, or he would have to use nuclear weapons against the Soviet Union, for there was no imaginable way of defending West Berlin with conventional military forces. The Soviet missiles in Cuba would then be a “knife in our guts” constraining the U.S. nuclear threats to save Berlin. The tapes also explain as do no other sources Kennedy’s approach to the Mississippi civil rights crisis. They show him worrying about international economics, specifically the drain on U.S. gold reserves, to such an extent that he questions whether the United States can or should continue to keep troops in Europe. The tapes in some instances disclose facts still hidden by walls of security classification, as, for example, that the Kennedy administration had plans to create an illegal CIA unit to investigate U.S. journalists and officials. But the greatest value of these recordings does not reside in specific revelations. It comes, as is said in the general preface to the project, from giving a listener or reader unique insight into the presidency and presidential decision making. We are proud to be able to put this extraordinary source into the hands of students of history and politics. Editors’ Acknowledgments

These initial volumes of the John F. Kennedy Presidential Recordings Series represent the work of a team of dedicated people. Besides the scholars listed on the title page, the editors are grateful to Lorraine Settimo, the executive assistant of the Miller Center’s Presidential Record- ings Project, and to Andrew P. N. Erdmann, the scholar who assisted with the Eisenhower conversations. At the John F. Kennedy Library, Jim Cedrone, Alan Goodrich, William Johnson, and Mary Kennefick were especially helpful. And at the National Archives, Nancy Keegan Smith was of special assistance. Lastly, we are deeply grateful to our editors at Norton, Drake McFeely and Sarah Stewart, who exhibit such a rare combination of qualities: attention to detail, patience, and vision.

Areas of Specialization for Research Scholars

RESEARCH SCHOLARS

David Coleman Cuba, Nuclear Test Ban

George Eliades Vietnam, Laos, Nuclear Test Ban

Francis Gavin Berlin Crisis, International Monetary Policy

Max Holland Domestic Politics

Jill Colley Kastner U. S.-German Relations

Erin Mahan Berlin Crisis, U.S.-European Relations, Congo, Middle East, United Nations, China

Timothy Naftali U.S.-Soviet Relations, Cuba, General Latin America, Intelligence Policy, Nuclear Test Ban

Paul Pitman U.S.-European Relations Jonathan Rosenberg Civil Rights

David Shreve Congressional Relations, Tax and Budgetary Policy, International Monetary Policy

CD-ROM DEVELOPER AND MULTIMEDIA COORDINATOR

Kristin Gavin

RESEARCH ASSISTANTS

Brett Avery Bush W. Taylor Fain Laura Moranchek A Note on Sources

In addition to the various memoirs and other writings cited as sources in our footnotes, we have relied upon the relevant archival holdings for the White House and the various agencies of the U.S. government, held mainly in the John F. Kennedy Library in Boston and the National Archives, Washington, D.C. We have also relied on the less formal holdings of that useful private institute, the National Security Archive, Washington, D.C. Each footnote appearing for the first time in a chapter is fully cited on first reference. The one exception made was for the many footnotes citing the U.S. Department of State, Foreign Relations of the United States 1961–63 (Washington, DC: Government Printing Office). Footnotes that include references to Foreign Relations of the United States are abbreviated as FRUS and include the volume number and page numbers. For FRUS references other than those from 1961 to 1963, the appropriate years are included.

Meeting Participants and Other Frequently Mentioned Persons

he following is a concise guide to individuals who participated in taped conversations. We have supplemented these brief descrip- Ttions, when possible, with the thumbnail sketches made by former presidential special consultant Richard E. Neustadt in his book Report to JFK: the Skybolt Crisis in Perspective (Ithaca, NY: Cornell University Press, 1999). Neustadt met the people he has written about. We feel that his vivid brush strokes add some additional color that we, at this distant remove, do not feel qualified to provide. We also include figures mentioned frequently in the conversations, such as foreign heads of government, who were not present at the meetings.

Abrams, Creighton W., Colonel, U.S. Army; Assistant Deputy Chief of Staff and Director of Operations, Office of the Deputy Chief of Staff for Operations, 1962–1963 Ackley, H. Gardner, Member, Council of Economic Advisers, 1962–1968 (Chairman, 1964–1968) Adenauer, Konrad, Chancellor of the Federal Republic of Germany, 1949–1963 Alexander, Henry, Chairman, Morgan Guaranty Trust in 1962 Allen, Ward P., Director, Office of Inter-American Regional Political Affairs, Department of State Anderson, George W., Admiral, U.S. Navy; U.S. Chief of Naval Operations, 1961–1963 Ausland, John C., State Department Representative to the Berlin Task Force, 1961–1964 Ball, George W., Under Secretary of State, 1961–1966 A Washington lawyer with an international practice, wartime associate of Jean Monnet (the advocate of European Union), adviser to Adlai Stevenson in 1952, ’56 and ’60, Ball had come into the Kennedy Administration as

xxxi xxxii MEETING PARTICIPANTS

Under Secretary for Economic Affairs; his focused energy, intelligence, and application already had won him a promotion. Barbour, Walworth, U.S. Ambassador to Israel, 1961–1973 Barnett, Ross R., Democratic Governor of Mississippi, 1960–1964 Bell, David E., Director of the Budget, 1961–1962; Director, U.S. Agency for International Development after December 1962 An economist, former Secretary of Harvard’s Graduate School of Public Administration, as it then was, and before that Administrative Assistant to President Truman, Bell was personable, thoughtful, analytic, and experienced. Billings, LeMoyne, Personal friend of President Kennedy; a roommate of the young JFK at Choate and, briefly, Princeton Blough, Roger, Chairman, U.S. Steel Corporation, 1955–1969 Boeschenstein, Harold, Senior Executive, Owens-Corning Fiberglass Corporation in 1962 Boggs, Thomas Hale, U.S. Representative, Democrat, from Louisiana, 1941–1943, 1947–1972; House Majority Whip, 1961–1971 Bohlen, Charles E., Special Adviser to the President, 1961–1962; U.S. Ambassador to France, October 1962–1968 One of the two top Russian specialists in the State Department, recently appointed Ambassador to France. More a thoroughly skilled operator than a deep analyst, Bohlen was bored in Paris, feeling out of things. Bundy, McGeorge, Special Assistant to the President for National Security Affairs, 1961–1966 Formerly Dean of Arts and Sciences at Harvard at a young age, co-author of Henry Stimson’s memoirs, “Mac” was bright, quick, confident, determined, striving to be the perfect staff man, juggling many balls at once. Bundy, William P., Deputy Assistant of Defense for International Security Affairs, 1961–1963 Carter, Marshall S., Lieutenant General, U.S. Army; Deputy Director of Central Intelligence, 1962–1965 Castro Ruz, Fidel, Premier of Cuba, 1959– Celebrezze, Anthony J., Secretary of Health, Education, and Welfare, 1962–1965 Charyk, Joseph V., Under Secretary of the Air Force, 1960–1963 Clark, Ramsey, Assistant Attorney General of the United States, 1961–1965 Clay, Lucius D., President’s Special Representative in Berlin, 1961–1962; Special Consultant to the Joint Chiefs of Staff, 1962–1963 Cleveland, J. Harlan, Assistant Secretary of State for International Organization Affairs, 1961–1965 Clifford, Clark, Personal Attorney to the President; Member, President’s MEETING PARTICIPANTS xxxiii

Foreign Intelligence Advisory Board from 1961 (Chairman from May 1963) Cline, Ray S., Deputy Director for Intelligence, Central Intelligence Agency, 1962–1966 Cox, Archibald, Solicitor General of the United States, 1961–1965 Day, J. Edward, Postmaster General of the United States, 1961–1963 Dean, Arthur H., Chairman, U.S. delegation, Conference on the Discon- tinuance of Nuclear Weapons Tests, Geneva, 1961–1962; Chairman, U.S. delegation, Eighteen-Nation Disarmament Committee, Geneva, 1962 de Gaulle, Charles, President of France, 1958–1969 Dennison, Robert S., Admiral, U.S. Navy; Commander-in-Chief, U.S. Atlantic Fleet and Supreme Allied Commander Atlantic, 1960–1963 Dillon, C. Douglas, Secretary of the Treasury, 1961–1965 Dillon was engagingly direct, practical, experienced, disinclined to reach beyond his own (broad) departmental boundaries, except on Kennedy’s invitation. Dirksen, Everett M., U.S. Senator, Republican, from Illinois, 1950–1969; Senate Minority Leader, 1959–1969 Dobrynin, Anatoly, Soviet Ambassador to the United States, 1962–1985 Dowling, Walter C., U.S. Ambassador to the Federal Republic of Germany, 1959–1963 Duncan, John P., Assistant Secretary of Agriculture, 1961–1963 Duvalier, François, President of Haiti, 1957–1971 Eastland, James O., U.S. Senator, Democrat, from Mississippi, 1943–1978 Eisenhower, Dwight D., 34th President of the United States, 1953–1961 Feldman, Myer, Deputy Special Counsel to the President, 1961–1964 Fisher, Adrian, Deputy Director, Arms Control and Disarmament Agency, 1961–1969 FitzGerald, Desmond, Chief, Far Eastern Division, Deputy Directorate for Plans, Central Intelligence Agency, 1958–1963 Forrestal, Michael V., Senior Staff Member, National Security Council, 1962–1965 Foster, William, Director, Arms Control and Disarmament Agency, 1961–1969 Fowler, Henry H., Under Secretary of the Treasury, 1961–1964 Fowler, James R., Deputy Administrator, Far East, U.S. Agency for International Development Freeman, Orville L., Secretary of Agriculture, 1961–1969 Fulbright, J. William, U.S. Senator, Democrat, from Arkansas, 1945–1974; Chairman, Senate Foreign Relations Committee, 1959–1974 Gilpatric, Roswell L., Deputy Secretary of Defense, 1961–1964 Wall Street lawyer, skilled, sophisticated, broad-gauged, loyal to McNamara. xxxiv MEETING PARTICIPANTS

Goldberg, Arthur J., Secretary of Labor, 1961–1962; Associate Justice, U.S. Supreme Court, 1962–1965 Goodwin, Richard N., Deputy Assistant Secretary of State for Inter- American Affairs, 1961–1963 Gordon, A. Lincoln, U.S. Ambassador to Brazil, 1961–1966 Gordon, Kermit, Member, Council of Economic Advisers, 1961–1962; Director, Bureau of the Budget after December 1962 Gore, Albert, Sr., U.S. Senator, Democrat, from Tennessee, 1959–1971 Goulart, João, President of Brazil,1961–1964 Graham, William Franklin (Billy), Baptist minister and evangelist Graybeal, Sydney N., Division Chief, Foreign Missile and Space Activities, Central Intelligence Agency, 1950–1964 Greenewalt, Crawford H., Chairman, E. I. DuPont de Nemours and Company, 1962–1967 Gromyko, Andrei A., Soviet Foreign Minister, 1957–1985 Halaby, Najeeb E., Administrator of the Federal Aviation Administration, 1961–1965 Halleck, Charles A., U.S. Representative, Republican, from Indiana, 1935–1969; House Minority Leader, 1959–1965 Harriman, W. Averell, Assistant Secretary of State for Far Eastern and Pacific Affairs, 1961–1963 Hart, Philip A., U.S. Senator, Democrat, from Michigan, 1959–1976 Haworth, Leland, Member, Atomic Energy Commission from 1961 Heller, Walter W., Chairman, Council of Economic Advisers, 1961–1964 Helms, Richard M., Deputy Director for Plans, Central Intelligence Agency, 1962–1965 Hickenlooper, Bourke B., U.S. Senator, Republican, from Iowa, 1945–1969; Chairman, Republican Policy Committee, 1961–1969 Hillenbrand, Martin J., Director, Berlin Task Force and the Office of German Affairs, Bureau of European Affairs, Department of State, 1961–1963 Hilsman, Roger, Assistant Secretary of State for Intelligence and Research, 1961–1963 Hodges, Luther H., Secretary of Commerce, 1961–1965 Hoover, Herbert H., 31st President of the United States, 1929–1933 Humphrey, Hubert H., U.S. Senator, Democrat, from Minnesota, 1948–1964; Senate Majority Whip, 1961–1964 Johnson, Lyndon B., Vice President of the United States, 1961–1963 Johnson, U. Alexis, Deputy Under Secretary of State for Political Affairs, 1961–1964 MEETING PARTICIPANTS xxxv

A senior career Foreign Service officer, most recently Ambassador to Thailand; successful in the Service in all senses of the phrase. Katzenbach, Nicholas deB., Deputy Attorney General of the United States, 1962–1966 Kaysen, Carl, Deputy Special Assistant to the President for National Security Affairs, 1961–1963 A professor of economics on leave from Harvard, Kaysen worked up expertise in defense policy and weaponry, among other things; brilliant, subtle, confident, analytic but also a looker-around-corners. Keeny, Spurgeon, Deputy Special Assistant to the President for Science and Technology A physicist with training in international relations, associated from the start with the President’s Science Adviser’s Office, Keeny was personable, sophisticated, discreet, and a great gatherer of bureaucratic intelligence. Kennedy, John F., 35th President of the United States, 1961–1963 Kennedy, Robert F., Attorney General of the United States, 1961–1964 Keogh, Eugene J., U.S. Representative, Democrat, from New York, 1937–1967 Khrushchev, Nikita S., First Secretary of the Central Committee of the Soviet Communist Party and Soviet Premier, 1953–1964 Killian, James R., Special Assistant to the President for Science and Technology, 1957–1959 King, J. C., Chief, Western Hemisphere Division, Directorate of Plans, Central Intelligence Agency Kirkpatrick, Lyman B., Jr., Executive Director, Central Intelligence Agency, 1962–1965 Kirwan, Michael, U.S. Representative, Democrat, from Ohio, 1937–1970; Chairman, Subcommittee on Interior and Related Agencies, House Appropriations Committee in 1962; Chairman, Democratic Congres- sional Campaign Committee Kohler, Foy, Assistant Secretary of State for European and Canadian Affairs, 1959–September 1962; U.S. Ambassador to the Soviet Union, September 1962–1966 Kreer, Robert G., Director of the Diplomatic Communication Services, Department of State Kuchel, Thomas H., U.S. Senator, Republican, from California, 1953–1969; Senate Minority Whip, 1959–1969 Land, Edwin, physicist and inventor; member, President’s Foreign Intelligence Advisory Board in 1962 Leddy, John M., Special Assistant to the Under Secretary of State until xxxvi MEETING PARTICIPANTS

April 1961; Assistant Secretary of the Treasury, April 1961–June 1962; U.S. Representative to the Organization for Economic Cooperation and Development after October 1962 LeMay, Curtis E., General, U.S. Air Force; U.S. Air Force Chief of Staff, 1961–1965 Lemnitzer, Lyman, General, U.S. Army; Chairman of the Joint Chiefs of Staff, 1960–1962; Commander in Chief, U.S. European Command, 1962–1969 Lincoln, Evelyn, Personal Secretary to President Kennedy, 1952–1963 Loeb, James, U.S. Ambassador to Peru, 1961–1962 Long, Franklin, Assistant Director for Science and Technology, U.S. Arms Control and Disarmament Agency, 1962–1963 Lovett, Robert A., Special Counselor to the President, 1961–1963; member, Executive Committee of the National Security Council, October 1962 Lundahl, Arthur C., Assistant Director of Photographic Interpretation, Central Intelligence Agency, from 1953 MacArthur, Douglas, General of the Army, 1944–1964 MacDonald, Torbert, U.S. Representative, Democrat, from Massachusetts, 1955–1976 Macmillan, M. Harold, Prime Minister of Great Britain, 1957–1963 A one-nation Tory in Parliament from the 1930s, close to Eisenhower since North Africa in the ’40s, complex, shrewd, detached and tough behind a bland, Edwardian exterior. Macmillan’s private humor and wry outlook on life endeared him to Kennedy, despite their age difference. Mansfield, Michael J., U.S. Senator, Democrat, from Montana; Senate Majority Leader, 1961–1977 Marshall, Burke, Assistant Attorney General for Civil Rights, 1961–1965 Martin, Edwin M., Assistant Secretary of State for Inter-American Affairs, 1962–1964 Martin, William McChesney, Chairman, Board of Governors of the Federal Reserve System, 1951–1970 McCloy, John J., Special Adviser to the President on Disarmament Matters, 1961–1963 McCone, John A., Director of Central Intelligence, 1961–1965 McCormack, John, U.S. Representative, Democrat, from Massachusetts, 1928–1971; Speaker of the House of Representatives, 1961–1971 McDonald, David, President, United Steel Workers of America, 1952–1965 McNamara, Robert S., Secretary of Defense, 1961–1968 MEETING PARTICIPANTS xxxvii

Recruited from the presidency of the Ford Motor Company, a driving, managing, no-nonsense—and also no-pomposity—rationalist; his adherence to reason and duty was so passionate as to hint at emotion hidden beneath. Meany, George, President of the AFL-CIO, 1955–1979 Meredith, James H., First African American student admitted to the University of Mississippi, 1962–1963 Mills, Wilbur D., U.S. Representative, Democrat, from Arkansas, 1939–1976; Chairman, House Ways and Means Committee, 1957–1976 Morgan, Thomas E., U.S. Representative, Democrat, from Pennsylvania, 1945–1977; Chairman, House Foreign Affairs Committee in 1962; member, Joint Committee on Atomic Energy in 1962 Moscoso, Teodoro, Assistant Administrator, U.S. Agency for International Development; U.S. Coordinator for the Alliance for Progress Murrow, Edward R., Director, U.S. Information Agency, 1961–1964 Nasser, Gamal Abdul, Prime Minister of Egypt, 1954–1956; President of Egypt, 1956–1958; President of the United Arab Republic, 1958–1970 Nitze, Paul H., Assistant Secretary of Defense for International Security Affairs, 1961–1963 Experienced in defense and diplomacy since 1940, sophisticated, competent, cool, public cold warrior and private philanthropist, Nitze had all the skills and some of the limitations of the driving young banker he had once been. Norstad, Lauris, General, U.S. Air Force; NATO Supreme Allied Commander, Europe, 1956–1963 O’Brien, Lawrence F., Special Assistant to the President for Congressional Affairs, 1961–1963 O’Donnell, Kenneth, Special Assistant to the President, 1961–1963 Okun, Arthur, Staff Economist, Council of Economic Advisers, 1961–1964 Ormsby-Gore, Sir David, British Ambassador to the United States, 1961–1965 Former Tory MP, intelligent, sensitive, quick on the uptake and well connected: related both to Macmillan’s wife and to Kennedy’s late lamented brother-in-law, the Marquis of Hartington, killed in World War II. Pérez Godoy, General Ricardo Pío, leader of Peruvian military coup of July 1962; leader of the military junta, 1962–1963 Pittman, Steuart, Assistant Secretary of Defense for Civil Defense, 1961–1964 Prado y Ugarteche, Manuel, President of Peru, 1956–1962 Reuther, Walter, President of the United Auto Workers,1946–1970 Roosa, Robert V., Under Secretary of the Treasury for Monetary Affairs, 1961–1964 xxxviii MEETING PARTICIPANTS

Rosenthal, Jacob, Executive Assistant to the U.S. Under Secretary of State, 1961–1966 Rostow, Walt W., Counselor of the Department of State and Chairman of the Policy Planning Council, 1961–1966 MIT economist, a driving enthusiast and conceptualizer with a tendency to listen to himself. Rusk, Dean, U.S. Secretary of State, 1961–1969 Experienced, thoughtful, conventional, perhaps essentially shy, temperamen- tally at odds with his presumed model and undoubted mentor, General Marshall, Rusk may never have felt at ease with JFK, to say nothing of articulate aides like Kaysen. Russell, Richard B., U.S. Senator, Democrat, from Georgia, 1933–1971; Chairman, Senate Armed Services Committee Salinger, Pierre E. G., White House Press Secretary 1961–1964 Saltonstall, Leverett, U.S. Senator, Republican, from Massachusetts, 1945–1967; ranking minority member, Senate Armed Services Committee, in 1962 Samuelson, Paul A., Economist; member, Council of Economic Advisers, 1960–1968 Schaetzel, J. Robert, Special Assistant to the Under Secretary of State for Economic Affairs, February 1961–March 1962; Special Assistant to the Under Secretary of State, March 1962–September 1962; Deputy Assistant Secretary of State for European Affairs after September 1962 Schlesinger, Arthur M., Jr., Special Assistant to the President, 1961–1964 Schroeder, Gerhard, Foreign Minister of the Federal Republic of Germany, 1961–1966 Schultze, Charles L., Assistant Director, Bureau of the Budget, 1961–1965 Seaborg, Glenn T., Chairman, U.S. Atomic Energy Commission, 1961–1971 Shoup, David M., General, U.S. Marine Corps; Commandant of the U.S. Marine Corps, 1960–1963 Sloan, Frank K., Deputy Assistant Secretary of Defense for International Security Affairs in 1962 Smathers, George A., U.S. Senator, Democrat, from Florida, 1951–1969 Solow, Robert M., Member, Council of Economic Advisers, 1962–1968 Sorensen, Theodore C., Special Assistant to the President, 1961–1964 Sproul, Alan, President of the New York Reserve Bank, 1941–1956; Chairman, Task Force on the International Balance of Payments, November 1960–January 1961 Staats, Elmer B., Deputy Director, U.S. Bureau of the Budget, 1958–1966 MEETING PARTICIPANTS xxxix

Stevenson, Adlai E., U.S. Permanent Representative to the United Nations, 1961–1964 Strong, Robert C., Director, Office of Near East Affairs, Department of State, 1961–1963 Sullivan, William H., U.N. Adviser, Bureau of Far Eastern Affairs, Department of State until April 1963 Sweeney, Walter C., General, U.S. Air Force; Commanding General, Tactical Air Command, 1961–1965 Taber, John, U.S. Representative, Republican, from New York, 1923–1963; ranking minority member, House Appropriations Committee in 1962 Talbot, Phillips, Assistant Secretary of State for Near Eastern and South Asian Affairs, 1961–1965 Taylor, Maxwell D., General, U.S. Army; Military Representative of the President, 1961–1962, Chairman of the U.S. Joint Chiefs of Staff, 1962–1964 [H]e had come out of retirement after a distinguished career to support JFK in 1960: one person at the Pentagon the President knew well enough to trust. Thant, U, Secretary-General of the United Nations, 1961–1971 Thompson, Llewellyn E., Jr., Ambassador-at-Large, U.S. Department of State, 1962–1966 Tobin, James, Member, Council of Economic Advisers, 1961–1962 Tretick, Stanley, Staff photographer for Look magazine in Washington, 1961–1971 Troutman, Robert, Member, President’s Committee on Equal Employ- ment Opportunity, 1961–1962 Tshombe, Moise Kapenda, Leader of the secessionist Katanga Province, the Congo, 1960–1963 Turner, Robert C., Assistant Director, U.S. Bureau of the Budget, 1961–1962 Tyler, William R., Assistant Secretary of State for European Affairs, September 1962–1965 Vance, Cyrus R., U.S. Secretary of the Army, 1962–1963 Vinson, Carl, U.S. Representative, Democrat, from Georgia, 1914–1966; Chairman, House Armed Services Committee, in 1962 Wagner, Aubrey, Chairman, Tennessee Valley Authority, 1962–1978 Webb, James E., Administrator, National Aeronautics and Space Administration, 1961–1968 Wehrley, Roy, Director, U.S. Agency for International Development mission in Vientiane, Laos Wheeler, Earle G., General, U.S. Army; Army Chief of Staff, 1962–1964 xl MEETING PARTICIPANTS

White, Lincoln, Spokesman, U. S. Department of State, 1961–1963 Wiesner, Jerome B., Special Assistant to the President for Science and Technology, 1961–1964 Williams, G. Mennen, Assistant Secretary of State for African Affairs, 1961–1966 Wilson, Donald M., Deputy Director, U.S. Information Agency, 1961–1965 Wirtz, W. Willard, Secretary of Labor, 1962–1969 Zorin, Valerian A., Soviet Representative to the Eighteen-Nation Disarmament Committee, Geneva, 1962–1964 Zuckert, Eugene M., Secretary of the Air Force, 1961–1965 Introduction: Five Hundred Days

BY TIMOTHY NAFTALI

t was July 1962, just past his five-hundredth day in office, and John F. Kennedy was becoming concerned about the fate of his presidency. He had set the bar high. A friend, the writer Gore Vidal, noted in an I 1 early portrait of the President that Kennedy “intends to be great.” At stake was not simply personal glory. Having been elected at 43, Kennedy symbolized the coming of age of a new generation of Americans. On a cold day in January 1961 the junior officers of World War II had trooped to Washington, D.C., to replace the aging generals of the Eisenhower administration. Kennedy challenged these young leaders, as he did himself, to seek a New Frontier, whether that frontier lay in the inner cities or in outer space. Like the men assembled by Frank Sinatra’s Danny Ocean in the 1960 Rat Pack film, Ocean’s Eleven, the New Frontiersmen were united by a code of honor earned through the hardship of the Depression and the experience of fighting in World War II. Kennedy himself had not experienced the Depression. His father had made his money during Prohibition, leaving the family well fortified during the difficulties of the 1930s. But he understood combat. In 1943, a PT boat he commanded was rammed and sunk by a Japanese destroyer. Kennedy had saved his crew. Too ironic by nature to cast himself in the role of political savior, Kennedy nevertheless took seriously that as president, he carried the hopes of his generation. And he worried that it might seem he was letting his peers down. In mid-1962 Kennedy could be excused if he doubted he would ever have a lasting effect on the American consciousness. That summer his presidency was not going terribly well. Kennedy had just suffered a telling legislative failure. In what the Los Angeles Times described as “Kennedy’s Blackest Week with Congress,” his plan for medical assistance for the elderly had been defeated on July 21, 1962, by a slim mar-

1. Gore Vidal, United States: Essays 1952–1992 (New York: Random House, 1993), p. 803. xlii INTRODUCTION

gin in the Senate, despite a overwhelming Democratic majority in that body.2 The outcome had stung Kennedy, who reacted by holding a press conference the night of the Senate vote to decry this “most serious defeat for every American family.”3 That legislative failure was the latest in a series of signs that the Kennedy magic was not having the effect that many had hoped and he had expected. The key areas of his presidency were marked by frustration and mistakes, high promise but middling result. The U.S. economy, for example, was in the doldrums. The hoped for expansion after the recessions of the late Eisenhower years had not happened. Despite Kennedy’s promise to “get the country moving again,” unemployment 1 hovered at 5 /2 percent, much lower than what the United States would experience in the 1970s and 1980s, but for this period unacceptably high. Business investment was also falling short of administration projections, though corporate earnings were strong and rising. And there were signs that the U.S. economy might even get weaker. New orders for durable goods—a bellwether for the industrial economy of the 1950s and 1960s—had been falling since January 1962. The stock market had taken a 25 percent tumble in the spring and had not recovered. Finally, due to outflows in foreign aid, overseas investment, and the cost of military operations and installations around the world, the U.S. balance of payments situation was difficult. The gold supply was down to its lowest level since the Depression.4 The state of the U.S. economy that summer seemed to confirm some of the early criticisms of the young President. Conservative businessmen had always been wary of Kennedy, who seemed too liberal despite the views of his businessman father, Joseph P. Kennedy. As president-elect Kennedy had averted a run on the U.S. dollar by assuring Wall Street that the liberal economist and Kennedy adviser John Kenneth Galbraith would not be designated secretary of the Treasury. Nominating instead Republican C. Douglas Dillon (who brought with him the talented finan- cier Robert Roosa to handle foreign economic policy), Kennedy purchased an uneasy truce with Big Business, but by the summer of 1962 that truce seemed increasingly untenable. In April Kennedy had used his

2. Los Angeles Times, 22 July 1962. 3. New York Times, 22 July 1962. 4. The United States covered 30 percent of the infrastructural cost of NATO; this meant an annual outflow to Europe of $1.5 billion. In the Kennedy era, exchange rates, the relationship between national currencies, were fixed and imbalances in the accounts of the major Western economies were redeemable in gold. INTRODUCTION xliii power to talk down the U.S. steel industry, which had announced a price hike. Steel prices returned to their pre-showdown level—a victory for the administration. But the defeat of Big Steel spread fears of more government intervention and the Dow Jones industrials plummeted. “Not since the days of FDR and the New Deal,” intoned the magazine Newsweek, “had the level of attack on a President, his family, and his policies seemed quite so heated.”5 Becoming popular with some businessmen were buttons emblazoned with “I Miss Ike.” The condition of the economy also inspired some criticism from the Left.6 Keynesian economists were pushing the President to ward off a recession by stimulating the economy. In a reversal of the politics of the 1980s and 1990s, the Left advocated a tax cut, while the Right argued that tax cuts were unacceptable because they were inflationary. Liberals were impatiently waiting for Kennedy to act on a tax plan. Criticism of the President was not simply directed at the economic performance of his administration. A little less than two hundred years earlier, the country had rid itself of George III and the Hanoverian dynasty. The Kennedys now seemed to some to be acting as if they were the country’s newest royal line. Just after the election, John Kennedy had appointed his brother Robert to his cabinet as Attorney General. The younger Kennedy had run the campaign for John F. Kennedy but lacked extensive judicial experience. More than a year later, Bobby Kennedy seemed to be working out in his job, though newspaper accounts of the horseplay around the Kennedy pool in Virginia were confirming an image of the Kennedys as spoiled and immature. But the most recent challenge to the President’s reputation was a storm of protest over the attempt to extend presidential coattails to an even younger member of the clan. That summer Edward M. “Ted” Kennedy announced that he would be running for the U.S. Senate from Massachusetts. “We could take Jack and Jackie and Bobby and Caroline,” said one wag, “but Teddy was too much.”7 In foreign affairs, the Kennedy record was also not flattering. Kennedy had criticized Eisenhower for his unimaginative foreign policy, accusing him both of having missed opportunities to reduce the chance of nuclear war with the Soviet Union and of having undermined U.S. interests in the Third World. In the initial months of his term, Kennedy had initiated more dialogue with the Soviets, at times involving his

5. “Kennedy and His Critics,” Newsweek, 16 July 1962. 6. New Republic, 16 July 1962. 7. “Kennedy and His Critics,” Newsweek, 16 July 1962. xliv INTRODUCTION brother as a secret back channel to Moscow. Yet relations with Moscow seemed to be worse now than they had been in January 1961. A summit conference with Soviet premier Nikita Khrushchev in June 1961 had turned out badly, with the two leaders’ disagreeing over the precondi- tions for peace and stability in the world. As a result, there was little movement on controlling the nuclear arms race or even on getting a superpower ban on testing nuclear weapons in the atmosphere or underground. The latter goal was of special interest to the President, who saw a nuclear test ban as essential to preventing the diffusion of nuclear technology to nonnuclear states. The results were no better in the Third World. Efforts to remove Cuban strongman Fidel Castro in early 1961 had led to the fiasco at the Bay of Pigs, where a 1,200-man Cuban emigré army was stopped at the beach and captured. A presidential promise to provide some air cover to the force was rescinded at the eleventh hour, and the United States, for all Kennedy’s efforts to limit his public exposure to the failure, received the brunt of criticism for the affair from Bogotá to Berlin. Meanwhile carrots seemed to be as unproductive as sticks in pushing the administration’s goals. Having announced the Alliance for Progress in March 1961 as a long-term crusade to combat Communism and shore up Latin America’s fledgling democracies through trade and economic assistance, Kennedy found these goals seemingly incompatible in the short run. By mid-1962, military leaders had removed friendly elected governments in Argentina and Peru and were threatening to do the same in Brazil, the largest country in Latin America. These coups posed a threat to the cherished concepts of constitutionalism and democracy in the region and a challenge to the spirit of the Alliance for Progress. Yet the dilemma for Kennedy was that the political generals in Latin America shared his assessment of the threat to regional stability from Fidel Castro and the Soviet Union to a greater extent than did the democrats they overthrew. Should the United States work with these generals or not? The only possible exception to this dismal picture of U.S. policy in the Third World was in Southeast Asia, where a cease-fire had been negotiated in landlocked Laos. But even there the policy had flaws: Kennedy knew that the North Vietnamese were not fully respecting their promise to let Laos be neutral in the Cold War. Moreover, further south in the region there was no cease-fire of any kind. Kennedy had made very little headway in helping the South Vietnamese defend themselves. By the standards of the presidents who succeeded him, John F. Kennedy was extremely popular as he neared the midterm elections of 1962. Yet Kennedy had reason not to be pleased with the polls that sum- INTRODUCTION xlv mer. The recent defeats in Congress, uncertainty over the future course of the U.S. economy, and the bashing by his critics had taken their toll. Kennedy’s public approval rating had dipped below 70 percent. For all the glamor of the Kennedy White House and all the freshness of spirit brought by this handsome young leader with the photogenic family, Kennedy was now less popular than Dwight Eisenhower had been. It was in this moment of disappointment that Kennedy decided to create an unprecedented record of his actions as president. He had long believed that few if any outsiders could understand the burdens of office.8 A few months earlier Kennedy had gotten into a spirited debate with Arthur M. Schlesinger, Jr., the Harvard historian who served as one of his special assistants in the White House, about how historians evaluated presidential performance. Schlesinger had provoked the exchange by asking Kennedy’s opinion of a system to rank U.S. presidents. “Only the President himself can know,” Kennedy replied, “what his real pressures and his real alternatives are.”9 A less self-conscious leader might well have shrugged off the inevitable chasm between the way he saw his leadership and how it was perceived by others. But Kennedy was an atypical politician in that he was also an historian at heart. In his senior year at Harvard he had written an analysis of British foreign policy before World War II. The thesis, published as Why England Slept, was the work of a young man who believed that democracies needed strong, vital leadership to fight dictatorships. That belief and the need to chronicle the struggles of the powerful never left Kennedy. In mid-July 1962, Kennedy directed his Secret Service staff to install a recording system to tape his conversations in the Oval Office, the Cabinet Room, and the residential portion of the White House. This was not unheard of for a U.S. president. To varying degrees, three of Kennedy’s predecessors had made secret tapes. But these had been small- scale operations, limited to the Oval Office and, at least in the case of Roosevelt and Truman, rarely used. Kennedy had in mind something bigger.10 By the time of Dallas, 16 months later, he had recorded over 270 hours of high-level deliberations in the White House.

8. Author’s Interview with Theodore Sorensen, April 2000. 9. Arthur M. Schlesinger, Jr., A Thousand Days: John F. Kennedy in the White House (Greenwich, CT: Fawcett Crest, 1965), p. 619. On 29 July 1962 the New York Times published the first presidential ranking since 1948, which was done by Schlesinger’s father, Arthur M. Schlesinger, Sr. 10. Franklin Roosevelt had a system installed in a closet of the Oval Office in the summer of 1940. Although it appears that Roosevelt lost interest in this system after he was elected to an unprecedented third term in 1940, he never ordered its removal. Harry Truman inherited the xlvi INTRODUCTION

Robert Kennedy once joked that among the things their father had taught the brothers was “never write it down.”11 John F. Kennedy, despite a love for language and history, had followed his father’s advice for over a year in the White House. But now he wanted a fuller record. The difficulties of his presidency had set the stage for this decision to install a taping system. Kennedy assumed that historians would not get his presidency right and secret recordings would give him fodder for a future memoir. But the precise timing of Kennedy’s decision to tape and the enthusiasm with which he used the machine once the decision was made were more likely the result of his desire to be sure to chronicle one particular challenge of the many swirling about him that summer. Amidst the many difficulties at home, Kennedy concluded that the United States faced its greatest foreign danger since the early 1940s. The President sensed that events were pushing the United States and the Soviet Union closer to war than they had been for some time. Earlier in the year, Kennedy had read Barbara Tuchman’s The Guns of August, a well-written history of the coming of World War I. Kennedy, who read widely, would on occasion come across something that profoundly influenced him. Tuchman’s work was important to him in that the narrative demonstrated how none of the major players in Europe at the time— German chancellor Theobald von Bethmann Hollweg, the Russian czar Nicholas II, or British foreign minister Edward Grey—had wanted war.12 Yet war was the sum total of all of their actions. Kennedy saw a disturbing parallel between 1914 and 1962. Instead of the Balkans, the tinderbox this time would be Adolf Hitler’s former capital, Berlin. As partners in the Grand Alliance against fascism, the United States, Great Britain, France, and the Soviet Union had in 1945 each earned the right to occupy the city. Since November 1958, however, the Soviets had intermittently threatened unilateral action to change the postwar status quo and end the Allied occupation of the western sectors of Berlin. In the late spring of 1962 Soviet premier Nikita Khrushchev had resumed pressure on the West to quit Berlin, insisting that otherwise

system and used it intermittently. He left just over ten hours of tapes from 1945 and 1948. Dwight Eisenhower used a different system and taped quite a few meetings from 1954 to 1956, though only about a dozen hours have been found by the Dwight D. Eisenhower Library. 11. Quoted in Evan Thomas, Robert Kennedy, His Life (New York: Simon & Schuster, 2000), p.172. Robert Kennedy made this comment in a note to the director of central intelligence John McCone on 2 May 1962. 12. Robert Kennedy recounted this in Thirteen Days: A Memoir of the Cuban Missile Crisis (New York: Norton, 1969), p. 62. INTRODUCTION xlvii peace would be impossible in Central Europe. Kennedy, for his part, was very clear that the United States would never abandon West Berlin. “It is a vital interest of the United States,” Kennedy told the Soviet ambassador, Anatoly Dobrynin, on July 17.13 Nevertheless, Khrushchev would not let up. In the third week of July, when negotiations between the United States and the Soviet Union ground to a halt over the future of a Western presence in the German city, Khrushchev warned U.S. ambassador Llewellyn Thompson that “he would have no choice but to proceed with a signature of [a peace] treaty [with East Germany] after which our rights there, including right of access, would end.”14 Khrushchev made no secret about expecting a major crisis in the fall. He even asked Thompson whether Kennedy wanted the Berlin question “brought to a head” before or after the midterm elections in the United States.15 What made the Berlin issue so difficult was that the North Atlantic Treaty Organization (NATO) could not defend West Berlin if Khrushchev lost patience and sought a forceful solution. West Berlin was about 100 miles inside the territory of East Germany and could easily be swallowed up by the Soviet force stationed in East Germany. Even if Khrushchev decided not to invade, this NATO enclave was in a per- ilous position. The Soviets could starve West Berlin into submission by closing down all access routes, including those by air, between West Germany and the city. Weighing down file cabinets in the White House were contingency plans listing responses to various Soviet actions against the city. What would the West do if the Kremlin announced that the East Germans were in charge of all access routes to West Berlin and then the East German government closed them? How would NATO respond if the Soviets prevented the use of Allied airfields? Conversely, would the Soviets react with force to a NATO move to defend West Berlin? Would this chain of events lead to nuclear war? In Kennedy’s eyes, the danger posed by the geography of Berlin was magnified by the personality of his adversary. A year earlier in Vienna, at their only meeting, Kennedy had tried to engage Khrushchev on the problem of misunderstanding and miscalculation in international politics. The effort was a painful failure. Every time the U.S. president raised

13. Memorandum of Conversation, 17 July 1962, FRUS, 15: 223–24. 14. Telegram from the U.S. Embassy in the Soviet Union to the Department of State, 26 July 1962, FRUS, 15: 253. 15. Telegram from the U.S. Embassy in the Soviet Union to the Department of State, 25 July 1962, FRUS, 15: 252–53. xlviii INTRODUCTION his concern over the disastrous consequences of a misunderstanding between the two superpowers, the Soviet leader responded as if it was only Moscow that was ever misunderstood. Kennedy did not want a war, and despite his suspicions of Khrushchev, he assumed that the Soviets were equally disinclined. Yet the superpower conflict was intensifying over Berlin, making a miscalculation more likely and potentially catastrophic in its result. The Soviet Union and the United States had nuclear weapons in Europe that might figure in any struggle there. In these circumstances, a detailed record of the steps the United States was taking to defend its position in Central Europe could be of great historical importance. Rather than starting a journal on July 30, 1962, however, John F. Kennedy opted to begin a program of taping key conversations with his advisers. Kennedy was no stranger to the tape recorder. The Dictaphone, a machine the size of a suitcase that sat on an credenza, was standard issue in U.S. offices in the mid-1950s. President Eisenhower used one. When he was a senator, Kennedy had used his Dictaphone as an administrative conven- ience. Kennedy dictated first drafts of his speeches into the machine, which a secretary would transcribe and his aide, Theodore Sorensen, would then polish. By the standards of the twenty-first century, this was an unusual system for a political leader. Ordinarily the speech writer produces the first draft, which the leader then edits and improves. But Senator Kennedy understood the issues he was writing about, and when the subject was foreign policy, he knew more than his staff. Moreover his staff was very small, and it was a polished literary style that he needed, not ideas.16 On occasion, Kennedy used the machine to dictate notes after an important meeting, but in those days he did not intentionally tape the meetings themselves.17 The most lasting use of taping in Kennedy’s Senate period came as a

16. The earliest surviving Kennedy senatorial tapes were made in mid-January 1954. One has Kennedy preparing a speech attacking President Eisenhower’s new foreign policy strategy for relying too heavily on the threat of nuclear war to deter Soviet aggression. While dictating this speech, Kennedy called Sorensen in and mused with him over some of the phrasing. Forgetting to turn off his dictating machine, the resulting conversation was recorded. Kennedy ultimately delivered this speech on 21 January 1954 to the Cathedral Club in Brooklyn, New York. See Dictabelt MR 77-18:2, John F. Kennedy Library. 17. In June 1954, during the Geneva conference over the future of Indochina, Vice President Richard Nixon dropped by to discuss with Kennedy the situation in Southeast Asia. Despite their political differences, the two men were friendly. Nixon’s office was actually across the hall from Kennedy’s and the Vice President often popped his head in. Kennedy did not record this conversation, but after the meeting he dictated his recollections (see Dictabelt MR 77 18:10, John F. Kennedy Library). INTRODUCTION xlix result of his decision to author a book on congressional leaders who had championed unpopular causes. Kennedy first conceived the idea for what would become Profiles in Courage in the fall of 1954.18 Originally the goal was to produce a long article for a national magazine, but a series of health setbacks in 1954–55—his back was operated on twice in six months—left Kennedy with time on his hands.19 So he began to think of writing a book. In February 1955, Kennedy had his Dictaphone machine brought south to Palm Beach, where he was convalescing. Over the next three months, the tape recorder served as the young Senator’s lifeline to the activity of his Senate office. Part of the time he used it to keep up with his official correspondence, but the rest of the time he used it to dictate at least 100 pages of notes for his amanuensis, Theodore Sorensen, who stayed in Washington. Kennedy’s notes consisted of quotations and observations—his own and those of the historians whom he had read— which Sorensen apparently wove into a narrative.20 In his first year as president, Kennedy continued this practice of using tape recorders primarily as management tools. On the one Dictaphone tape (or dictabelt) that survives from 1961, Kennedy is dictating some of the earliest National Security Action Memoranda (NSAM) of his administration.21 Earlier, during the campaign, Kennedy had used a tape recorder to dictate a piece on why he had entered politics.22 Otherwise Kennedy taped neither telephone calls nor meetings in his office until mid-1962. In July 1962 Kennedy let only a few people know of his decision to

18. Theodore C. Sorensen to Senator John Kennedy, 23 November 1954, Personal Papers, Box 31, John F. Kennedy Library; Senator John Kennedy to Cass Canfield, 28 January 1955, Personal Papers, Box 31, John F. Kennedy Library; author’s Interview with Theodore Sorensen, April 2000. 19. Kennedy hurt his back playing pickup football at Harvard and reinjured it when the PT boat he was commanding collided with a Japanese ship in the Pacific. His back started hurting again in 1954. 20. See Dictabelts MR77-18:25A, MR77-18:25B, MR77-18:26, and MR77-18:27A, John F. Kennedy Library. In these recordings, Kennedy is dictating notes for his chapter on Thomas Hart Benton. These notes were typed in Washington and then served as the basis for a chapter on Benton, a senator from Missouri in the mid–nineteenth century. The draft for that chapter, based in part on the notes from Senator Kennedy, was typed on Theodore Sorensen’s typewriter in Washington. There is no draft in Kennedy’s hand of the chapter. For a typescript of Kennedy’s dictated notes on Benton, see Personal Papers, Box 35; for the Sorensen redraft, see Personal Papers, Box 28, Item 4, John F. Kennedy Library. 21. Dictabelt 45, Cassette L, Presidential Recordings Collection, John F. Kennedy Library. The NSAMs were instructions to the Cabinet or the White House staff from the President. This dictabelt contains NSAM 9–12, all issued 6 February 1961. 22. Dictabelt 39, Cassette K, continued on Dictabelt 40, Cassette L, Presidential Recordings Collection, John F. Kennedy Library. l INTRODUCTION

initiate a program of secret taping in the White House. Besides the Secret Service team that installed the system and his secretary, Evelyn Lincoln, who would on occasion shut the system off for the President, Kennedy apparently told only his brother and, possibly, Kenneth O’Donnell.23 He also kept to himself what criteria, if any, he would apply to what he recorded.24 The taping system went in over the weekend of July 28–29, while the President was at Hyannis Port.25 Returning that Monday, Kennedy wasted no time in making full use of it. On that first day he would log four hours of taped conversation. The system had been set up so that Kennedy could initiate secret taping himself by inconspicuously pressing a button under his desk or by the coffee table in the Oval Office or by his leather chair at the long table in the Cabinet Room. Only once in the remaining 16 months of his life did Kennedy tire of taping his White House meetings. This lapse occurred in the heat of midterm campaigning in September 1962. Thereafter, especially when the focus of his concerns shifted from Berlin to Cuba, Kennedy recommitted himself to retaining an audio diary of his policymaking. With these tapes, Kennedy preserved a striking portrait of a government in motion. The Kennedy administration is best understood as a league of factions that owed their allegiance to one man. The first faction was the Adlai Stevenson men, some of whom had switched their loyalty to Kennedy as late as 1960, once it became clear that their man, the two-time unsuccessful Democratic standard-bearer of the 1950s, could not win. These men—the most important being John Kenneth Galbraith, Arthur M. Schlesinger, Jr., George Ball, and Stevenson himself—shared a belief

23. In conversations with the author, former Secretary of Defense Robert McNamara, former Presidential Assistant for National Security Affairs McGeorge Bundy, former Counsel to the President Theodore Sorensen, and Arthur Schlesinger have all denied knowing about the taping system when Kennedy was alive. 24. The opening segments of Richard Nixon’s taping in February 1971 involves a discussion between him and his aide-de-camp H. R. Haldeman about the nature and purposes of the taping system. Kennedy left no such explanation. The Secret Service agent who installed the system, Robert Bouck, later recalled Kennedy telling him that he wanted a taping system because of his concerns about an impending major clash with the Soviet Union (Robert Bouck Oral History, John F. Kennedy Library). The pattern of his taping, however, suggests that though the Berlin crisis was a likely catalyst, Kennedy wanted to preserve more than a record of his foreign policymaking. Midsummer concerns over Berlin pushed him to begin a practice he had probably been contemplating for a while. 25. Approximately a month later, Kennedy had a Dictaphone system attached to his and Evelyn Lincoln’s telephones, so that he could secretly record telephone calls. He taped telephone calls until early November 1963. INTRODUCTION li that the United States faced a mortal enemy in Moscow. Nevertheless, with the transition from Stalin to Khrushchev in the early 1950s opportunities had opened to improve relations.26 These men blamed the former secretary of state, John Foster Dulles, a Cold War hawk who doubted the possibility of a détente with the Soviet Union, for making U.S. foreign policy so rigid that Eisenhower could not exploit those opportunities. These men were also committed to domestic reform. They advocated to varying degrees an active role for government in achieving general economic growth and more widespread prosperity. A second circle around Kennedy came from among the ranks of Republican internationalists. C. Douglas Dillon had been under secretary of state for John Foster Dulles. In January 1961, he became secretary of the Treasury for John Fitzgerald Kennedy. As managing partner of a major investment banking firm, Dillon was well respected on Wall Street and his economic views were generally conservative. He sought to keep government intervention in the economy to a minimum. Kennedy also gave most of his key national security posts to Republicans. He asked J. Edgar Hoover and Allen Dulles to stay at the helms of the Federal Bureau of Investigation and the Central Intelligence Agency, respectively.27 He recruited McGeorge Bundy, the dean of the Faculty of Arts and Sciences at Harvard, to be his special assistant for national security affairs and Robert McNamara, the president of Ford Motor Company, to be his secretary of defense. Although young people figured prominently on Kennedy’s foreign policy team, the President always had time for those Washington veterans who had shaped the U.S. postwar policy of containing the Soviet Union. In his first year as president, Kennedy had called on the former Assistant Secretary of War John McCloy to formulate the administration’s arms control strategy and similarly enlisted former Secretary of State Dean Acheson to sort out the Berlin tangle. Others Kennedy tapped informally. Robert Lovett, a former secretary of defense in the Truman administration who had refused a position in Kennedy’s cabinet on

26. W. Averell Harriman expressed this view in Peace with Russia? (New York: Simon & Schuster, 1959). Harriman, Franklin Roosevelt’s ambassador in Moscow in World War II, served in the Kennedy administration first as ambassador at large, then assistant secretary of state for Far Eastern affairs, and finally under secretary of state for political affairs. Thanks to his friendship with Robert Kennedy, Harriman would eventually move much closer to the center of the administration. 27. He would ask another Republican, John A. McCone, to replace Allen Dulles at the CIA after the Bay of Pigs fiasco. lii INTRODUCTION account of health, was regularly asked for his foreign policy wisdom, and Clark Clifford, Truman’s special assistant, served “of counsel” on all matters, personal and public. After the failure at the Bay of Pigs in April 1961, Clifford received a formal appointment to the President’s Foreign Intelligence Advisory Board. Finally there were the Kennedy loyalists. These were energetic young men who owed their principal allegiance not to any set of ideas but to the President himself. Sometimes called the Irish mafia because of its overwhelming Irish-American makeup, the group included Kenneth P. O’Donnell, who as the President’s appointments secretary was Kennedy’s principal doorkeeper; David Powers, a Mr. Fix-it and court jester who had been a loyal aide since Kennedy’s first political campaign in 1946; and Lawrence O’Brien, an experienced Massachusetts political operative who kept track of congressional politics for the President. Even more important an adviser was Theodore Sorensen, Kennedy’s principal speech writer since 1954 and an unofficial domestic affairs coordinator in the White House. Another loyalist was Richard Goodwin at the State Department, who had worked with Robert Kennedy, when the younger Kennedy was with the Labor Rackets Subcommittee on the Hill. But the strongest and most powerful of the loyalists was Robert F. Kennedy himself, attorney general and still the most influential presidential brother in U.S. history. Looking back at the Kennedy administration, McGeorge Bundy, who was in many ways an insider, believed there was a place where even he could not go, a circle within the inner circle. The President and the Attorney General kept some things to themselves, which Bundy later described as the “unsharables.” As head of the Kennedy loyalists, Robert sometimes acted as a parliamentary whip for his brother, moving along these factions in the administration, making sure that when the time came, they voted with the President. His job was also to provoke the President’s advisers, to stir the policy pot, so as to ensure that the President got to hear all sides of an argument, especially his own.28 Robert Kennedy was strong willed and more impatient than his older brother. At the center was John F. Kennedy. Kennedy disliked elaborate organizational charts and instead moved among his advisers, seeking what he needed from each of them. Captured on tape are the essential elements of Kennedy’s management style. Self-confident and knowledgeable, Kennedy listened to briefings and then dominated meetings by questioning those around him. Whereas he expected clarity of thought and speech from

28. Author’s Interview with McGeorge Bundy, 16 November 1995. INTRODUCTION liii these advisers, Kennedy could himself be quite elliptical and often spoke in a rapid-fire shorthand. And whenever he forgot he was being taped, which happened a lot, Kennedy would slip into coarser phrases expressed in a distinctive Bostonian twang. Occasionally Kennedy left the recording machine on so long that he captured on tape the rhythm of a entire presidential day. Surprisingly, the young President seems not to have been in the habit of working long hours in the Oval Office. He came to the office late, took a long lunch, and usually left before 7:30 P.M. Perhaps much of the reason for the short day was Kennedy’s ever-present physical ailments. He needed long naps and frequent therapeutic swims to loosen his back. He also liked to take his work upstairs to the Executive Mansion, where he could read in bed. The tapes confirm that Kennedy was not the only power center in the Washington of 1962. Although Democrats controlled the House and Senate by wide margins, Kennedy lacked a working majority in the U.S. Congress.29 British commentators in the nineteenth century had criticized the U.S. Constitution for being “all sail and no anchor.” Kennedy was finding that in 1962 it was the other way around.30 Southern Democrats formed a powerful bloc in Congress—controlling half of all committees in the House and 9 out of 16 in the Senate—and they generally opposed the administration’s legislative agenda. In the past year they had joined with Republicans to defeat or delay Kennedy initiatives on Medicare, the farm bill, and floating a bond to fund the United Nations. Besides northern and midwestern Democrats, Kennedy could count only on the liberal wing of the Republican Party, senators like Jacob Javits of New York and Leverett Saltonstall of Massachusetts, to support him and then really only on foreign policy questions. The prospects for legislative action were so grim that by July 1962, there was some talk of Congress’s just shutting down for the remainder of the session. Finally, not all of the voices captured on tape were those of federal officials or legislators. To govern effectively, the President needed to create consensus outside Washington. As he considered tax reform, for example, Kennedy reached out to business leaders and economists to gauge where Washington could help Wall Street and Main Street. Local voices were even more significant in shaping John F. Kennedy’s approach to civil rights. Kennedy’s decision to tape coincided with a dramatic and violent turn in

29. House: Democrats 262, GOP 174 (1 vacancy); Senate: Democrats 64, GOP 35 (1 vacancy). 30. James Reston, “Kennedy and Capitol Hill: An Institutional Crisis,” New York Times, 25 July 1962. Reston quoted the British historian Lord Macaulay. liv INTRODUCTION the struggle for civil rights for African Americans. In the deep south, African Americans were pushing to do those things that most Americans had long taken for granted: to enroll in public universities, to eat at public lunch counters, to pray in houses of worship without fear of violence. Their appeals reached the Oval Office and Kennedy responded. Meanwhile, the opponents of change were not mute. Southern state leaders cautioned the young northern President not to push too fast to implement federal court decisions or to try to erase certain southern ways. As the tapes document dramatically, nearly every action by the Kennedy administration in support of the exercise by African Americans of their civil rights was to meet with a stubborn southern reaction. The civil rights struggle was not like those foreign crises for which Kennedy had calmly prepared himself, but it would mark his presidency just as profoundly. This was John F. Kennedy’s world when he started recording his official meetings. Although he would never know it, his presidency had hit a bottom of sorts in July 1962. The months ahead would bring his administration’s greatest achievements and some of its greatest controversies. But all Kennedy could know as he left Cape Cod early on the morning of July 30, 1962, was that he faced enormous challenges. He sensed the very real possibility of a war with Russia. And there was always the chance of something unexpected and bad happening at home. Kennedy’s taping system was ready, and it was about to record the transformation of his presidency. The PRESIDENTIAL RECORDINGS

JOHN F. KENNEDY

Prologue

Weekend of July 28–29, 1962

Sometime That Weekend

I am now at the President’s desk and I’m waiting . . .

Taping System Installed1 Robert I. Bouck of the Secret Service installed the taping system over the weekend of July 28–29, 1962, while President John F. Kennedy and his family were in Hyannis Port, Massachusetts. Although Bouck later explained that he installed the system himself, the first sounds are probably of Bouck and someone else testing the system before the Kennedys’ return.

Unidentified: Is this a Coast Guard boat? Or do you want it up there? Unidentified: No, this— The machine is turned off abruptly. After a short silence, a lone voice is heard. Unidentified: I am now at the President’s desk and I’m waiting . . .

1. Tape 1, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection.

3 4 MONDAY, JULY 30, 1962

Monday, July 30, 1962

The President awoke this morning at the Kennedy home in Hyannis Port, Massachusetts. Boarding Air Force One at a little after 9:00 A.M., he flew to Andrews Air Force Base in Maryland, where Marine One, the presidential helicopter, was waiting to ferry him to the White House. President Kennedy entered the White House from the South Lawn at 10:25 A.M. He went straight to work. Turning left in the hall that bisects the ground floor, President Kennedy walked through a short lobby to the Colonnade connecting, along the fabled Rose Garden, the Executive Mansion to the President’s working office, the West Wing. On the right of the Colonnade, he passed the swimming pool, the french doors of the Cabinet Room, and then those belonging to the office of Evelyn Lincoln, his secretary. Walking through Lincoln’s office, or perhaps opening his own Rose Garden door, he entered the Oval Office. The taping system had been installed over the weekend. The President had had a switch placed under his desk in the Oval Office and another under the portion of the long conference table nearest his chair in the Cabinet Room. Kenneth O’Donnell, the President’s appointments secretary, had not scheduled any meetings for the first 90 minutes of this otherwise busy day. The President had time to acquaint himself with the new taping system before catching up on his mail and telephone calls. Meeting on Brazil 5

11:52 A.M.–12:20 P.M.

[W]e may very well want them [the Brazilian military] to take over at the end of the year, if they can.

Meeting on Brazil1 President Kennedy used his taping system for the first time to capture his conversation with the U.S. ambassador to Brazil, Lincoln Gordon.2 Gordon was in Washington to discuss the most recent political crisis in Brazil.3 The largest country in South America, Brazil was considered by U.S. officials as a major test of the Alliance for Progress, the centerpiece of the Kennedy’s administration’s efforts to encourage economic development and political stability in Latin America. In Brazil the Alliance for Progress took the form of a $274 million joint U.S.-Brazilian development project, for which the United States pledged $131 million in grants and loans to develop the drought- stricken and impoverished northeast region.4 Kennedy had taken a personal interest in Brazil, especially the activities of João “Jango” Goulart, Brazil’s charismatic president. Goulart was a puzzle to Washington. Since coming to power in August 1961, Goulart had adopted a self- described “independent foreign policy” that involved maintaining good relations with Fidel Castro. At the January OAS foreign ministers’ meeting at Punta del Este, the Brazilian foreign minister Francisco San Taigo

1. With President Kennedy, McGeorge Bundy, Richard Goodwin, and Lincoln Gordon. Tape 1, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 2. Lincoln Gordon was ambassador to Brazil, August 1961 to January 1966. An economist at Harvard and Oxford before and after World War II, Gordon helped develop the Marshall Plan, advised NATO in the 1950s, and soon after the 1960 election was appointed a member of a Latin American Task Force organized by president-elect Kennedy. After playing a prominent role in the organization of the administration’s Alliance for Progress, announced to the world in a White House speech by President Kennedy to the Latin American diplomatic corps on 13 March 1961, Gordon was appointed ambassador to Brazil. From January 1966 to January 1967, Gordon served as assistant secretary of state for inter-American affairs, resigning that post to become president of John Hopkins University. 3. Gordon was in Washington from 26 July through 1 August. William H. Brubeck, Memorandum for Mr. McGeorge Bundy, 25 July 1962, “Brazil” folder, National Security Files, Box 13, John F. Kennedy Library. 4. “Northeast Agreement,” Cable to Brazilian Government, 9 April 1962, “Brazil” folder, National Security Files, Box 12A, John F. Kennedy Library. 6 MONDAY, JULY 30, 1962

Dantas had led the opposition to sanctions against Cuba. Besides the confrontation over foreign policy, relations with Goulart were strained because of a series of high-profile expropriations of U.S.-owned Brazilian subsidiaries. Yet when Goulart visited the United States in April 1962 he had made a good impression on President Kennedy. The Brazilian president had two private sessions with Kennedy, gave a speech to a joint session of Congress, and visited New York, Chicago, and the North American Air Defense Command in Colorado. A high point of the tour was Goulart’s offer to buy out foreign-owned public utility companies on negotiated terms, a reference to the dispute with U.S. giant IT&T, whose telephone company had been taken over by the state of Rio Grande do Sul. Both leaders appeared pleased with the visit and President Kennedy promised to go to Brazil in July or August. Kennedy never made that visit. By the summer of 1962, Brazil was in the grip of a constitutional crisis born of the strange circumstances surrounding Goulart’s rise to the presidency. In 1960, Goulart, a Labor Party leader, had been elected to the vice presidency. Under the Brazilian constitution of 1946, separate elections were held for presidents and vice presidents. The elected president, Jânio Quadros, stunned the nation a year later by resigning in what appears in retrospect to have been a monumentally unsuccessful play for more power. Assum- ing that the military would never support Goulart, who would succeed to the presidency if Quadros’s resignation were accepted, the president expected the Brazilian Congress to agree to a broad delegation of powers as a way of persuading him to revoke his resignation. Instead the resignation was accepted at face value with Goulart the beneficiary. As Quadros had predicted, the leadership of the Brazilian military was not happy, and a civil war was averted only by a congressional compromise that limited presidential powers even further. The Brazilian constitution was amended to transform the government into more of a parliamentary regime, modeled after the West German constitution. A disciple of the legendary Brazilian leader Getúlio Vargas, Goulart dreamed of revoking this parliamentary democracy to return to the strong presidential state of the 1930s and 1940s. Vowing to recapture those powers, Goulart once quipped to Gordon, “I do not intend to be the Queen of England.”5 By the terms of the new constitution, a plebiscite on restoring presidential powers was to

5. Timothy Naftali Interview with Ambassador Lincoln Gordon, 3 August 2000. Meeting on Brazil 7 be held in 1965 just before the next presidential election. Goulart did not wish to wait that long. The U.S. government watched warily in June 1962 as Goulart launched what the U.S. diplomats thought was an attack on the Brazilian parliamentary system in June 1962. Congressional elections were scheduled for October, and the constitution provided that anyone in public executive office who wanted to run for congress had to resign his office four months before election day. Goulart used the fact that the Brazilian cabinet had to resign to maneuver the congress into advancing the date of the referendum on presidential powers. He also forced out a center- right prime minister in favor of a little-known left-leaning candidate, Francisco Brochado da Rocha. Brochado da Rocha was no stranger to the U.S. Embassy. As secretary of justice in the state of Rio Grande do Sul, he had played a very active role in the IT&T telephone expropria- tion, which despite Goulart’s promises in April had not come any closer to resolution. Goulart’s political gambit worried Washington and President Kennedy’s visit was postponed.6 Brazilians friendly to the United States warned that the political crisis of July was a “Garincha” play, named after a celebrated Brazilian soccer player “whose style is to take great risks in the hopes of great gains.”7 This manufactured crisis would allow Goulart to make a successful bid for dictatorial powers. Brochado was a close associate of Leonel de Moura Brizola, the governor of Rio Grande do Sul, who was considered to be a man of the far Left. Brizola was also Goulart’s brother-in-law. Brizola and the federal foreign minister Dantas were considered by some Americans as dangerous influences on the Brazilian president. The rise of Brochado was just the latest in a series of developments that portended an anti-U.S. turn by Goulart. That summer the Congress had passed a remission of profits bill which taxed foreign subsidiaries heavily and seemed to discourage any further direct investment by the

6. “Background on Current Situation in Brazil,” attached to State Department memorandum for McGeorge Bundy, 28 July 1962, John F. Kennedy Library. Written on the top of the document is the note, “Send to O’Donnell Mon. A.M.” For the CIA’s views see two reports that predated the Goulart visit to Washington: “Brazilian President João Goulart,” Office of Current Intelligence, CIA, 30 March 1962, and “The Situation in Brazil,” Office of Current Intelligence, CIA, 2 April 1962, “Brazil” folder, National Security Files, Box 13, John F. Kennedy Library. 7. Philip Raine, counselor of embassy for political affairs, U.S. Embassy, Brasília to State, “Goulart Plan to Change Parliamentary System in Brazil,” 20 July 1962, “Brazil” folder, National Security Files, Box 13, John F. Kennedy Library. 8 MONDAY, JULY 30, 1962

United States. In July Gordon spoke by telephone with President Kennedy to outline his concerns and the White House asked for more detailed information about the political situation in Brazil.8 Even before Gordon’s return to the United States, the Kennedy administration decided to act. The CIA station in Brazil, with the support of Ambassador Gordon, drew up a plan to influence the congressional elections, scheduled for October 7.9 It was feared that the Left, which controlled between 80 and 100 seats in the 326-seat legislature, would make significant gains. The policymaking body for covert action in the Kennedy years, the Special Group (Augmented) of the National Security Council,10 apparently approved the plan by late July, though the details, including the amount of covert funding to be funneled into the election, had still to be worked out.11 This would occur while Gordon was in Washington. Among the factors in this political crisis, the Brazilian military was known to be friendly to the United States. Any effort by the Brazilian army, the strongest and most politically significant of the services, to oust Goulart would require a response from Washington. The Kennedy administration had an inconsistent policy toward military coups in Latin America. In April the United States had recognized the government of José María Guido of Argentina, a civilian who had been installed by the Argentine military. Yet three months later, Kennedy had made a public stand against the new military junta in Peru, breaking diplomatic relations with Lima when its constitutionally elected president was over- thrown. The inconsistency of the Kennedy administration’s approach reflected a deep ambivalence about the nature of the threat to U.S. interests in the hemisphere. Washington’s dilemma was how to navigate between a desire to neutralize Castroist or Communist influence in Latin America while remaining true to its preference for constitutional liberal- ism in the Americas. Already dissident members of the Brazilian military were sending feelers out to the United States to determine whether a Brazilian coup would be accepted like the coup in Argentina or denounced like the junta in Peru.12

8. Naftali Interview with Gordon, 3 August 2000. 9. Ibid. 10. The Special Group (Augmented) comprised the under secretary of state, U. Alexis Johnson; the attorney general, Robert Kennedy; the deputy secretary of defense, Roswell Gilpatric; the director of central intelligence, John McCone; and the special assistant to the President for national security affairs, McGeorge Bundy. 11. As it appears from the transcript of this July 30 conversation. 12. Sometime in the late spring, Gordon had a meeting with Admiral Sylvio Heck, a former Meeting on Brazil 9

Kennedy started taping as Ambassador Gordon described his meeting on July 23 with President Goulart.

Lincoln Gordon: . . . [unclear] we’re still on very good terms personally, which is a good thing and I think he’s very candid. We had a long talk on Monday about his political organization.13 I said I would have to explain to various people, including you, how it is that his new foreign minister14 says that the Alliance for Progress is a wonderful thing, but his political party’s strategy is being planned now by his brother-in-law, [Leonel] Brizola,15 a young, very far left-wing Labor Party fellow; and [Francisco] San Tiago Dantas, who’s moved far to the left since you saw him, with anti-Americanism and anti–Alliance for Progress as a major plank in their platform— President Kennedy: Did they announce it as anti? Or is this just by indirection? Gordon: [Unclear] Brizola’s speeches essentially are very bad. One after another on television . . . lots of money. It started as being just anti–American business. Now it’s become anti–American government on the theory that you are in the pocket of American business. I haven’t yet been attacked personally, but I expect that one of these days. But it’s sure. [They said things like:] The United States is draining the country; American business is draining the country. We are responsible for all the delays in Brazilian development. They’re an economic colony of the United States. We are responsible for infant mortality, every damn thing under the sun.” Such . . . completely irrational and highly emotional [unclear]. Now Goulart’s answer to this was that that left-wing group in the Labor Party is 30 percent of the party:16 “I really sympathize with the 70

minister of the navy who had opposed the Goulart succession in 1961. Heck had requested the meeting to ask whether the United States would support the military overthrow of Goulart. Gordon recalled that he was not authorized to give a response. Washington only expected an assessment of the seriousness of Heck and his group. The embassy’s political experts doubted Heck could organize a successful coup (Naftali Interview with Gordon, 3 August 2000). 13. Monday, 23 July 1962. Highlights of that talk were cabled to the State Department, which passed the report along to McGeorge Bundy at the White House. See Gordon to SecState, 24 July 1962, in “Brazil” folder, National Security Files, Box 13, John F. Kennedy Library. There is a check by “Bundy-P” indicating perhaps this was shown to the President. 14. The new foreign minister Afonso Arinos, whom Gordon met on 21 July, promised that he would abandon the term independent foreign policy (Gordon to SecState, 24 July 1962, “Brazil” folder, National Security Files, Box 13, John F. Kennedy Library). 15. Leonel Brizola, Goulart’s brother-in-law and governor of Rio Grande do Sul. 16. The left-wing group was known as the Compact Group in the Brazilian Labor Party (PTB). 10 MONDAY, JULY 30, 1962

percent, which is very much more moderate, that is my personal position; but I stand at the moment between these two because the conservatives in the country are all against me and I need this left wing as my shock forces against the parliament[ary] majority.”17 That is Goulart’s position up to election time. I don’t know what the hell he’d do if he got more power. He wants more power desperately . In this hour and a half, he was like a Victrola record: he came back twenty times to say that the [parliamentary] regime is no good. It’s fallen [unclear]. I don’t have any equal power to get at the [unclear]. President Kennedy: I suppose that’s true, isn’t it? He doesn’t have anything to do with [a] party. Gordon: He has a helluva lot of influence. President Kennedy: Yes. Gordon: If he wanted to work with a cabinet, it would work. But he doesn’t want to work that way, I don’t think. This is clear, this is distinctive. [Unclear.] President Kennedy: Do you think he knows what he wants himself ? Or is it just, sort of, he floats with the waves? Or has he really got an objective, a long-range objective? Gordon: I don’t think he has any long-range objectives. No, I think, he wants more power. President Kennedy: Is Salasman—is he the finance minister?18 Gordon: He accepted. He accepted— President Kennedy: Well, [will] he come up here to see us at all? Gordon: I don’t know. President Kennedy: Have we got any new financial deals that we’re supposed to . . . Gordon: We have been discussing this in the last couple of days. I saw Salles on Sunday, while he was still trying to make up his mind—19 President Kennedy: Did you tell him all these things that you have said to me?

17. Gordon is repeating here the gist of his memorandum on his meeting with Goulart that he cabled on 24 July 1962. “On own political orientation Goulart placed himself in middle between left-wing compact group and moderate right-wing, whose present strength he appraised as 30 to 70 [percent]. Said large moderate parties irreconcilable [sic] opposed to him, supported by conservative press and business interests, and he intended to fight them. PTB compact group were his shock forces in this fight. Sees need for non-Communist but radical new political force for drastic social changes. . . .” 18. Kennedy means Walter Moreira Salles, the former Brazilian ambassador to the United States who was known to be pro–United States. 19. Sunday, 22 July 1962. Meeting on Brazil 11

Gordon: Oh, indeed, oh yes. There is no problem about where he stands. He stands— President Kennedy: Yes, but I mean the fact that we can’t—you know, they send up these fellows to see us who are very reasonable and of course we go ahead with them and then it just goes down the— Gordon: Well, he asked— President Kennedy: —drain. Gordon: Well, he said he was making a condition of his acceptance, a very vigorous anti-inflationary program. And he said that, “if I really do that and get the condition accepted, do you think that there would be any chance of American support?” And I said, “In light of what happened in the last two months, I think he [President Kennedy] would appreciate it; but this time there really must be some performance.” And he said, “A promise is just—isn’t going to convince anybody.” My own feeling is that what we should do is probably go easy on stabilization assistance and probably do nothing to stall it off. But to push on certain types of projects, which could be advertised, which could be made into concrete manifestations of the Alliance for Progress. The only trouble with stabilization assistance, you know, [is] we get no credit for it— President Kennedy: That’s right. Gordon: —except with a handful of bankers and economists— President Kennedy: That’s right. I agree I think we ought to forget that. Gordon: —and— President Kennedy: Have we got any stabilization assistance still to go? Gordon: We’ve got left over about 90 million dollars from the package negotiated here. President Kennedy: And how much have we given them in the last 12 months? Gordon: Well, we’ve released—the whole thing was 328. So, we’ve released—what’s the difference of that? President Kennedy: Two hundred million. Just vanished isn’t it? Gordon: That’s right. Absolutely. And at the moment either balance of payments support or budgetary support is like just pouring water into a sieve. I mean they’ve got more or less— President Kennedy: [Unclear] have we just frozen it? I mean are we not going to give it now? Should we take any steps to prevent any more from running— Gordon: Oh yes, oh sure. Just before the president came in April, we 12 MONDAY, JULY 30, 1962

released 30 million roughly and we said that the rest, the remaining 90, would depend on performance or the performances of factories, and so on.20 It’s been highly negative. One of the projects, [in] the northeast, for example, I think we should push ahead. There are certain governors: Governor Rio Grande del Norte . . . I don’t think he saw you, Aluisío Alves, but he saw everybody else in town. He was up here about three weeks ago. This is a hell of a good fellow. . . . President Kennedy: This is Vicento—this not Rio, is it? Gordon: Rio Grande del Norte. President Kennedy: This is Rio. Gordon: It is a little state in the northeast. President Kennedy: Oh, I see. No, I didn’t see him. Gordon: This is a little state in the northeast. This is a 40-year-old fellow, energetic as can be, not a demagogue, honest. He’s— President Kennedy: How strong are the Communists there? Gordon: As such, the party is weak. President Kennedy: But it is just they’ve got them out— Gordon: [Unclear] we like. President Kennedy: But now they’ve just taken over a lot of the Left? Gordon: They have taken over a lot of the Left. And they are in some key spots and they have been organizing . . . President Kennedy: Goulart gives them shelter? Gordon: He gives them shelter both in the government and in the trade unions. Richard Goodwin: And they haven’t— Gordon: [Unclear] on the trade unions guise at the moment, but perhaps even more. Goodwin: And they’re allied with the nationalists in a lot of key areas, who are not Communists themselves but who have mutual objectives at this point in time. President Kennedy: I just read some of the stuff in the Washington Post this morning with these visiting students up there— Goodwin: Yeah. President Kennedy: —about . . . the reason was . . . in other words . . . Gordon: Well, there’s [mumbles]. President Kennedy: What? Gordon: There is a visiting student group here.

20. President João Goulart visited the United States 3 to 7 April 1962. Meeting on Brazil 13

Goodwin: That’s the one. Gordon: Is that the one? [Mumbled agreement.] I didn’t see the Post story. They’re making a tour of the White House tomorrow morning between 9:15 and 9:50. And I would hope very much that you would be willing to give them five minutes just to shake [hands]— President Kennedy: Who are they? Gordon: They are seventy students from four different states.21 They were recruited by an extremely energetic American lady, Mildred Sage, a Bostonian, a girl who’d been married to an American businessman or some fellow. She raised 90 percent of the money from mostly the American business community down there, the other 10 percent came from the State Department. They have been up at Harvard for two weeks. They run all the way from strongly democratic, pro-American to almost Communist, highly nationalist but anti-American. Sage got them all together. I was with them at lunchtime on Saturday talking about [unclear] for an hour or so, asked them how things went at Harvard. They said, “Very well. We learned a lot, and we were not being propagandized.” I think it’s good. I think we made some headway with them. They’re going to meet with Ted [Moscoso] this afternoon for an hour and a half and with regional aid people. They are meeting with HEW this morning and meeting with the State Department tomorrow afternoon. And then decided we’d [unclear] at two [P.M.]. But I think if you could step out into the Rose Garden . . . President Kennedy: OK. If you can arrange that. Tell me, what is their complaint about American business. Is there any legitimate complaints? Gordon: No. Not significant. The myth has developed that the remissions of profits are draining the Brazilian economy. This is almost pure myth.22 There is Brazilian documentation as well as our own. President Kennedy: How much do we take out a year? Gordon: We take out officially something like 40 million dollars and

21. This group of 76 Brazilian university student leaders was sponsored by the Inter- American University Association of São Paulo. 22. The Joint Committee of the Brazilian Congress on the profits remittance bill reported that between 1954 and 1961 the net inflow of private direct investment was $721 million as compared with an outflow of profits and dividends of $269 million (Memorandum for the National Security Council Executive Committee, Meeting of 11 December 1962, 10:00 A.M., “Proposed Speaking Paper,” Robert F. Kennedy Confidential File, Box 7, Cuban Crisis 1962, Executive Committee, NSC-62, John F. Kennedy Library). 14 MONDAY, JULY 30, 1962

there may be disguised profits, with a maximum of another 20. The total of 60 is not just American, but all foreign investors. We have perhaps 60 percent of it. President Kennedy: So, in other words, we are taking out about 30 million dollars a year? Gordon: [Unclear.] No, it’s actually— President Kennedy: And actually we have been putting in? Gordon: It’s actually peanuts, you see. President Kennedy: And we have been putting in? Goodwin: Even private investment is putting in that much. Gordon: Now, they have—somebody handed me this morning, these figures. President Kennedy: Well, what happens when those figures are pointed out? Nobody points them out? Gordon: Yes, people point them out— President Kennedy: You mean, private investors are putting in almost that much; in addition we are putting it in aid and all these other things, and in addition we are buying their coffee. Gordon: Many of these people either don’t believe the figures or they haven’t been pointed out sufficiently or effectively. This is something we’re going to try to take care of in briefings during this week, with—to tackle this one head on [unclear]. President Kennedy: With who—briefing with who? Gordon: Well, this would be with AID and State. President Kennedy: But I mean, can’t we get everybody—? Gordon: With these students, I mean, these students— President Kennedy: Oh, yeah, but hell they’re just— Gordon: I know. President Kennedy: —they’re just a fraction. But I mean is there anybody down there that can bother to point out these figures? Gordon: Well— President Kennedy: [What] the United States has given in aid in the last two years; the profits that have been taken out are so much; the amount of purchases from the United States . . . Gordon: This was done extremely effectively by the reporter for the Joint Senate and House Brazilian Committee on this remissions of profits bill and they [unclear]. But these fellows will say, “Oh well, you know, he’s a tool of the trusts. He’s a reactionary. He’s . . .” There is a senator from Rio Grande do Sul . . . Brizola and . . . President Kennedy: What’s Brizola’s job now? Meeting on Brazil 15

Gordon: He is still governor.23 He will be governor until January. He is running for the Congress from Guanabara.24 President Kennedy: Now, we’ve, of course, indicated that if they want to buy up [the American utility companies] . . . What percentage of American investment [located] there is [in] the [unclear interjection by Gordon] utilities? Gordon: Not that [unclear]. President Kennedy: They haven’t done anything about buying those up, have they? Gordon: No, I talked with them about this last week when the new government got started on meetings [unclear] with the American Foreign Power group, [unclear] the biggest, who have a new proposition [unclear] discussing. Goulart feels a strong personal commitment to you about this. And he says he is going to push it. And I think there is a chance that he can get this thing. All they did was to establish this commission, which is supposed to negotiate an effective treaty but they never really got it going. There’s been little action on it, at least from [unclear] since the April talks. This is— President Kennedy: Is there big discouragement in Brazil [among] all the moderates? Gordon: Ah, they’re not discouraged to the point of giving up. They’re very unhappy. The way this political crisis was handled was extremely bad. No, a fellow like Aluisío Alves wants to organize a strong center, a strong slightly left-of-center. And, I think, we ought to support this absolutely to the hilt. Six seconds excised as classified information. Gordon: We reviewed this at length just before I left. I think he’s become more rather than less important. There was a little period when we were getting a bit complacent. We have passed through that. We can’t afford to be complacent. I think we have to do more and I think we probably have to do more with a little bit less concern about possible wastage and control. The boys have a little bit of a GAO [General Accounting Office] philosophy. You know they want to be awful careful about making

23. Governor of Rio Grande do Sul, which is the southernmost state of Brazil, on the Brazilian- Uruguayan border. 24. Guanabara was a state in the southeast. In 1974 it was fused with the state of Rio de Janeiro. 16 MONDAY, JULY 30, 1962 sure that their money is rightly spent. Well, that’s a good prejudice to have, but we’ve only got two months left.25 We have this organization called IPES, for example, which is a progressive [unclear] organization which needs some financial help; it’s got [unclear] support and I think we should help them.26 We won’t be able to get a detailed account of withdrawals and how every withdrawal in particular will be spent. I just don’t think we can afford to take risks. Unidentified: I agree with the substance . . . Gordon: We’ve got— Goodwin: I think the elections really could be a turning point. Linc is analogizing to the Italian elections of ’48.27 President Kennedy: I know. Well, how much are we going to put in?28 Gordon: Oh, this is a matter of a few million dollars, say. Seven seconds excised as classified information. President Kennedy: That’s a lot of money. Because, you know, after all, for a presidential campaign here you spend about 12. And our costs—so that I don’t think—that’s 8 million dollars, would be an awful lot of money in an election.29 Gordon: That’s right. President Kennedy: [Unclear.] Gordon: It’s an incredibly complicated political scene— President Kennedy: Well, now, is it really being spent now? Are you going ahead with it?30

25. Until the October election. 26. The IPES was the Instituto de Pesquisas e Estudos Sociais. Established in late 1961 by a group of business and civic leaders to lobby on behalf of liberal democracy and private enterprise in Brazil. It became the principal channel through which U.S. money flowed into the Brazilian elections of 1962. Naftali Interview with Gordon, 3 August 2000; and Ruth Leacock, Requiem for Revolution: The United States and Brazil (Kent, OH: Kent State University Press, 1990), pp. 111–13. 27. Fear of a Communist victory in the 1948 Italian elections led to the first massive political covert action by the U.S. government. The brainchild of George Kennan at the State Department and Frank Wisner of the fledgling Central Intelligence Agency, this operation involved providing financial and strategic assistance to pro-Western personalities, primarily A. de Gasperi and other representatives of the Christian Democratic Party [see Evan Thomas, The Very Best Men: Four Who Dared: The Early Years of the CIA (New York: Simon & Schuster, 1995), pp. 28–29]. Deemed a success, it apparently became the model for similar political action in other countries. 28. What is interesting here is that President Kennedy’s question implies that this covert action has already been approved without his direct involvement. 29. In a published interview in March 1977, Lincoln Gordon estimated that the U.S. government spent $5 million to influence the Brazilian elections of 1962 (see Leacock, Requiem for Revolution, p. 120 and p. 277, note 54). 30. Again, it seems that though the Special Group has apparently approved an operation without his knowledge, the President is not perturbed. Meeting on Brazil 17

Thirty-nine seconds excised as classified information. President Kennedy: Well, now there’s nothing I can do about, with Goulart is there? There’s nothing— Gordon: Well, I think there is. This is the point of strategy in general, I think, is this. One thing I wanted to alert you to is the, is the possibility of military action. This is, this is quite possibly in the cards. President Kennedy: Well, now let me ask—we have of course been very critical of Peru’s military action—31 Gordon: [Unclear.] President Kennedy: —which is entirely different. We might not be quite as—The military did a pretty good job a year ago.32 It all depends on the circumstances of the military action. Gordon: I think, I think— President Kennedy: In other words, we were against military action in the Dominican Republic. We have been reserved about the military after they arrested Prado, and so on.33 But we are going to go back and recognize them next week, or this week; but the question really is, how we . . . what our attitude towards it would be.34 Gordon: Well, I think that what we should do . . . This is a very delicate business and we have to protect ourselves very carefully about this. I don’t think we want to try to encourage a coup. What we really want to do with Goulart, I think, is two things: we want to make use of the fact that he does have a tremendous regard for you. And he is really very proud that this relationship with the U.S. [unclear] has been established. And there are certain things . . . I think we’ll get this IT&T case settled and soon and finally [unclear interjection by President Kennedy]. We got your letter to Goulart. I talked with him again Monday. I think you’ll get that fixed. I hope we can avoid other expropriations this time. I think we can make some headway on the utility thing. It’s mostly negative, but I think we’ve got to use as much as we can. The main thing is at the same time, to organize forces which are both political and military to, either to reduce his power . . . in an extreme case perhaps to push him out, if it comes to that. And this would depend on some overt action on his part. He’s playing, he’s quite prepared to [unclear].

31. The United States has not yet recognized the military junta in Lima, Peru, which took power 18 July 1962. 32. Kennedy is referring to the Brazilian military’s role in easing the transition to Goulart after Jânio Quadros’s surprise resignation in August 1961. 33. Manuel Prado y Ugarteche was the president of Peru until the 18 July coup. 34. Toward a military coup in Brazil. 18 MONDAY, JULY 30, 1962

Goodwin: Has he changed a lot of commanders, military commanders in the garrisons? Gordon: He’s changed a number and he’s threatening to change others. How far he goes on those changes depends a little bit on the resistance of the military. I think one of our important jobs is to strengthen the spine of the military. To make it clear, discreetly, that we are not necessarily hostile to any kind of military action whatsoever if it’s clear that the reason for the military action is— President Kennedy: Against the Left. Gordon: —he’s giving the damn country away to the— President Kennedy: Communists. Gordon: Exactly. And there is a lot of evidence that Goulart, will- ingly or unwillingly, has been [unclear] that. A few weeks ago just after Dantas was defeated in Congress,35 he [Goulart] had a specific plan, which he told Kubitschek.36 Kubitschek told me this firsthand. A plan to nominate a cabinet of his own without a prime minister. He told the Congress that he wouldn’t expect this Congress to ratify [it], but he hoped the next Congress would, which is going to be elected in October. And to call for a plebiscite now for a return to a presidential regime in October. Kubitschek took this to thirty high military officers and they told him unanimously that this was obviously unconstitutional and if Goulart tries it, they would oppose him. He asked whether he could tell Goulart that. They all said yes, and some said, “Well, it would be better to sign our names to a statement.” And he went back to Goulart and Goulart withdrew. You see the kind of thing that’s in his mind. This is . . . he’s thinking actively about a kind of white coup, as they call it. And if the military are too frightened . . . if they feel that there is no support anywhere, inside or outside, especially outside—which means us—if they take action, then they . . . They were, I am told . . . I was unfortunately sick in bed the week before last, just gradually getting on my feet— President Kennedy: Yeah. Gordon: —this last week before I came up on Wednesday. I did man-

35. In June, the Brazilian Congress had refused to accept Francisco San Tiago Dantas as prime minister. 36. Former president Juscelino Kubitschek de Oliveira, arguably Brazil’s most popular politician, could not succeed himself in 1960 but remained a strong future contender for the presidency. Meeting on Brazil 19 age to see Goulart, and the new foreign minister and the prime minister Tuesday night, and Walter Moreira Salles on Sunday. Eleven seconds excised as classified information. Gordon: The military, I can see that they are very friendly to us: very anti-Communist, very suspicious of Goulart. And they expressed great dismay at our position on Peru. Well, I can explain to them what the political circumstances are. I think it’s important that we should make it clear, to these friendly people, the ones we really know are friendly— President Kennedy: But by the— Gordon: That the Peruvian case is not necessarily— President Kennedy: Yeah. But by this week we’ll be right back recognizing the Peruvian government. Goodwin: Well, I think it—as long as they understand that a military action to save constitutionality— President Kennedy: [Grunts.] Goodwin: —is fine. Then I think that that’s why we can’t have the OAS meeting because this would really discourage the military.37 If you start getting all these countries together and— President Kennedy: Yeah. Goodwin: —passing resolutions against— President Kennedy: That’s what I want to say today at this [unclear]. Goodwin: Because we may very well want them [the Brazilian military] to take over at the end of the year, if they can. Gordon: We have that military front. And as I see it their function is first to keep Goulart on the rails— President Kennedy: What kind of liaison do we have with the military? Gordon: Well, it’s pretty good. The military’s not united. This is one of the things that make it complicated. There are a few officers who are strong left-wingers themselves, including a couple in quite high positions: commander of the first army, which is in the city Rio de Janeiro . . . a very dangerous fellow. Goulart toyed with the notion of making him minister of war and then withdrew because there was a hell of a lot of [unclear]. President Kennedy: Do you think if Goulart had power— You know you get into these fights with Congress and just about use anything to get your way.

37. The abbreviation OAS stands for Organization of American States. 20 MONDAY, JULY 30, 1962

Do you think if he had the power, would he relent? Or is this just a tactic? Gordon: I’m afraid that—I doubt whether he’s, I don’t believe the man is a Communist. I think what he would probably do is something like . . . more like [former Argentine dictator Juan] Perón. A kind of, a kind of— President Kennedy: Personal dictator. Gordon: —a kind of populist personal dictator. President Kennedy: Yeah. Goodwin: Well, I don’t . . . I think that you gotta remember that he may not have a purpose but Dantas has a purpose. And Brizola has a purpose and that purpose is not Peronist, it may be Nasserist or Titoist, eventually. And I think that their presence, that they [have], and the intellectual domi- nation that they might have would move him. Because there’s no . . . if you’re going to play a part on the world scene, you know, today you can’t be a Perón. You have to go further and that’s what they want. President Kennedy: Yeah. Goodwin: No doubt about— Gordon: They want it. Goulart doesn’t give a damn about foreign policy, actually, he’s— Goodwin: Well— Gordon: —he’s interested in [unclear]— President Kennedy: Vanity. Goodwin: —well, you know, he is a man of great vanity and of desire for power. President Kennedy: [Unclear.] Goodwin: No, I think the chances are 80 percent that he would push pretty far to the left with these two fellows. Gordon: Well, I don’t believe that [unclear]— Goodwin: He would not be a local dictator, not be satisfied with [unclear]. Gordon: There’s a good chance that they would push him out— President Kennedy: Dantas? Gordon: No, that they would try to push Goulart out in certain circumstances. President Kennedy: Yeah, but Dantas is . . . Now, what is it we ought to do? I think that we’ve got this problem of how much we do against Goulart and how much we try to do with him. Gordon: I think we have to try— President Kennedy: How about what we ought to do about getting the word to the military that— Meeting on Brazil 21

Goodwin: I think, strengthen our relations with the military; we’re making our position fairly clear to them. Maybe McNamara ought to review the people he has there and see if he can [unclear].38 Gordon: Well, we need, we need a new Army attaché badly. Goodwin: You see, is there anything else— Gordon: The Army is much . . . that’s the . . . most important [of the three Brazilian services]. This is the key fellow in the relationship. President Kennedy: Our fellow, is he good? Gordon: Our present fellow is . . . he’s nice but fairly stupid.39 I talked with General [unclear] about it. President Kennedy: But, of course, we don’t have many fellows who can speak Portuguese, do we? Gordon: Well, there are a few around, not many, not many. But I think that McNamara— President Kennedy: All right. Now let’s have a—When are you going back there? Ten seconds excised as classified material. Gordon: Yes. President Kennedy: When do we get a look at it now before we—so we know where we are going? Goodwin: Well, you have the last— President Kennedy: Like this Army—Who are you talking to about changing the Army attaché? Gordon: I talked to General [unclear].40 President Kennedy: Well now, is there any use in changing a fellow, when within three months you may be able—to have to—can he establish his links within three months? Gordon: Uh, yes. President Kennedy: Is there anybody that’s ever been there before, that’s had good relations we could send back? Goodwin: What about this Eisenhower [unclear]? Gordon: Dick Walters?41

38. Robert S. McNamara was U.S. secretary of defense. 39. Colonel Stanley N. Lonning was U.S. Army attaché in Brazil. 40. In an interview with Timothy Naftali on 3 August 2000, Ambassador Gordon recalled that before returning to Washington in July 1962, he had spoken with General Andrew P. O’Meara, the commander in chief, Caribbean, about changing the U.S. Army attaché in Brazil. 41. Colonel Vernon Walters. A linguist, fluent in seven languages, Walters had served in Italy during World War II as the U.S. Army’s combat liaison officer to the Brazilian Expeditionary Force. He went to Brazil for three years after the war as assistant military attaché in Rio de 22 MONDAY, JULY 30, 1962

Goodwin: Dick Walters. Gordon: He is in Rome. President Kennedy: Does he know anything about Portugal? Goodwin: He knows Portuguese fluently. Gordon: Oh, he speaks Portuguese fluently. He’s a hell of a good fellow; he’s got a good political sense, too. Goodwin: He was Eisenhower’s interpreter down there, wasn’t he? Gordon: Oh yeah, oh yeah. He would be marvelous. He was— President Kennedy: Now, what are you going to do about that? I mean, who are we going to get? We gotta get somebody down there who can establish liaison quickly . . . you got to speak Portuguese. Goodwin: Why don’t we talk to Ros Gilpatric or somebody.42 President Kennedy: OK, well that ought to be done today. Fifteen seconds excised as classified information. President Kennedy: You say there’s no need my writing Goulart again, to ask him to do anything? Gordon: No. No. Goodwin: You know, your brother sat in on the initial meeting that set up this political program. It was basically from his push that it got going anyways. President Kennedy: Yeah. Gordon: Now. President Kennedy: Is he going to be at the meeting tomorrow?43 Goodwin: Might be a good idea. President Kennedy: Would you, would you tell him? Yeah. Gordon: There’s one—there are two other little problems I have here on my plate. Kubitschek has written you a letter, which I have here.44 President Kennedy: Well, is he supporting Goulart? Gordon: No, no. President Kennedy: Is he disturbed?

Janiero. A stint with the Marshall Plan in Paris followed, where Walters met Lincoln Gordon for the first time. Joining General Dwight Eisenhower’s staff at NATO headquarters in 1951, Walters later served as interpreter to President Eisenhower and Vice President Richard Nixon. In July 1962, Walters was Army attaché in Italy. 42. Roswell L. Gilpatric was deputy secretary of defense. 43. Special Group (Counterinsurgency) meeting. 44. Gordon brought the original with him. Meanwhile the U.S. Embassy cabled to the State Department an informal translation of Kubitschek’s letter to President Kennedy. “Informal Translation of Letter from Ex-President Kubitschek to President Kennedy,” 25 July 1962, “Brazil” folder, National Security Files, Box 13, John F. Kennedy Library. Meeting on Brazil 23

Gordon: He is supporting—he is disturbed as hell. He is supporting Goulart only on the idea of returning to the presidential [unclear]. He wants it in ’65.45 He would like to do something about loosening the Alliance for Progress politically all over Latin America. I think we should encourage him. This letter says very little. [A piece of paper is flipped.] That’s the translation. What we have worked out with Ed Martin is,46 he’s going to see Lleras Camargo in Bogotá,47 and then we’ll come and see Kubitschek in Rio . . . an idea for trying to pick up this initiative. It was written by Schmidt, of course, who always writes these letters.48 Goodwin: Yeah. Gordon: It practically says nothing, except that this can’t just be a technical program, it needs to have some political emphasis and he’s right. But he doesn’t say how to do it. I think we must take advantage of the Kubitschek— Goodwin: You know . . . with the Monnet Action Committee idea.49 Gordon: Yeah. Goodwin: I think he might accept that. Gordon: Right. I tried this out on Schmidt last week and he was down on it. Schmidt has a great prejudice against Ted Moscoso because he thinks—he’s prejudiced against all Puerto Ricans, by definition.50 Quite unjustified, actually, but . . . President Kennedy: What does he want us to do, I wonder? Gordon: Well, what he would really like is for us to set up under the OAS some sort of general political coordinator for the Alliance for Progress and put Kubitschek in that job. That can’t be done this year, I think. I think it might be good idea, but I don’t know whether Kubitschek would be the man or not. But I think we have to work up to this by stages and some sort of action committee maybe with some blessing— President Kennedy: What way are we going to change it again? Tell me. What is it they want us to do?

45. The 1946 Constitution forbade immediate reelection but permitted a second, nonconsecu- tive term. 46. Edwin M. Martin was assistant secretary of state for inter-American affairs since May 1962. 47. Alberto Lleras Camargo, president of Colombia 1945–46 and 1958–62, had recently left office. 48. A. F. Schmidt was aide to former Brazilian president Kubitschek. 49. Jean Monnet. Kubitschek’s idea was inspired by the Marshall Plan for Europe. 50. Teodoro Moscoso was U.S. coordinator of the Alliance for Progress. 24 MONDAY, JULY 30, 1962

Gordon: What they would—at the moment, the formal structure of the Alliance for Progress is the OAS council— President Kennedy: Yeah. Gordon: —and the Inter-American Economic and Social Council, meeting at the ministerial level once a year, on a lot of technical issues. What they would like is, something like what was done with the Marshall Plan at a given point. We’ve got [Dirk] Stikker, the former Dutch foreign minister, to be a sort of political coordinator for the Marshall Plan and he got a formal job; he was the permanent chairman of the Council, and what they would like is something like that—51 President Kennedy: Well, would Kubitschek be good for that? Gordon: I think he would be good but he wouldn’t have complete receptivity in the Spanish-speaking countries. President Kennedy: Yeah. Gordon: And there’s always a certain— President Kennedy: So what is it you suggest I do about this letter? Gordon: Well, let’s work on an answer for it. I think you ought to do nothing until Ed is out of these preliminary talks with about 25— Goodwin: We thought that something like the Monnet Action Committee. Gordon: What it would actually do— Goodwin: Lleras Camargo, heading it might be good. Or something that is not official or not sponsored by us or— President Kennedy: By private citizens. Goodwin: Yeah . . . by private citizens, industrial groups, political people. . . . Gordon: What might get some kind of . . . I think, to tie it in somehow informally to— Goodwin: To the OAS. Gordon: —the OAS. . . . I think this would be good, [unclear] we can get it. President Kennedy: I think that’s a good idea about getting a private group talking about the— Goodwin: There is no equivalent of a Monnet subgroup at all. This would be—the only people with real stature—only about a half a dozen that you can name would be Galo Plaza, Lleras Camargo, Kubitschek.52

51. Dirk Stikker was NATO secretary-general. 52. Galo Plaza Lasso was the former president of Ecuador, 1948 to 1952. He lost the election of 1960 to José María Velasco Ibarra. Meeting on Brazil 25

And they’re about the only—You don’t have any nonpolitical person of the Monnet type; but one of these fellows . . . I’d like to tie Kubitschek in with Lleras Camargo because Kubitschek’s running for president of Brazil and Lleras Camargo is running for nothing. President Kennedy: That’s right. Well, can somebody come back to me with this? Goodwin: Yes. McGeorge Bundy: [referring to the letter] That’s the original. Gordon: One other thing, Mr. President. My northeast program needs a new director. President Kennedy: Yeah. Gordon: The one we tried was a failure. The best-qualified man for this job is a man called Warren Wiggins, who works for [Peace Corps director] Sarge Shriver. President Kennedy: Why not get him? You want to tell him? Goodwin: OK. President Kennedy: Does he speak Portuguese? Gordon: No, but he speaks Spanish and [unclear exchange]. President Kennedy: What’s he do for Sarge? Goodwin: He’s one of the associate directors; job’s pretty important. President Kennedy: OK. Well, let’s get him. Yeah. Just tell Sarge we need him and we’ll figure out . . . If there’s any question, let me know. Goodwin: All right. President Kennedy: Will I see you? I won’t see you before you go? Would you let me know, if I should . . . Call me on the phone before you go. Gordon: Yeah. President Kennedy: [Unclear].

The meeting ends. Gordon and Goodwin are heard talking in the hall. Then Kennedy shuts off the machine. Gordon arranged for the visit of the Brazilian students. The next morning, the President would spent 22 minutes with them. Lincoln Gordon and Richard Goodwin did not leave the White House. Kennedy had a brief meeting scheduled with representatives of the Jewish War Veterans of the U.S.A.; then Gordon’s and Goodwin’s Latin American expertise would be needed again. 26 MONDAY, JULY 30, 1962

12:25–12:57 P.M.

It looks like we’re being more Peruvian than the Peruvians, more democratic than they are, and we’ve now got to think about how we are going to protect our own prestige.

Meeting on Peruvian Recognition53 Brazil was not the only Latin American country in crisis in late July 1962. On July 18 the Peruvian military drove a Sherman tank into the presidential palace in Lima and arrested President Manuel Prado y Ugarteche. Ambassador James Loeb of the United States had tried to forestall this military coup, which had been rumored for months. In March, following a meeting with President Kennedy, Loeb warned the Peruvian military that were it to stage a coup to erase the results of a presidential election scheduled for June, it could not count on U.S. recognition. The Peruvian military openly stated that it would not accept the election of Víctor Raúl Haya de la Torre, the leader of the liberal American Revolutionary Popular Alliance (APRA), who was the favorite to win. Haya’s anti-Communist credentials were well established, but the army hated APRA for a bloody attack on a military barracks in 1932. Peru’s troubles worsened in the summer. The results of the June election were inconclusive. None of the candidates won the required 33 percent of the share of the popular vote to be elected. As the military began making noises that it would nullify these results and restore order, Loeb asked again for permission to warn the Peruvian army that the United States would view dimly any intervention in Peruvian politics. This time Washington said no. Dean Rusk cabled back, “Flexibility is necessary to U.S. policy interests.”54 In this case flexibility was a code word for indecision. Once the coup happened and Washington observed the arrest of Prado and the establishment of a 12-person junta under General Ricardo Pío Pérez Godoy, Kennedy returned to his earlier policy of defending democracy in Peru

53. Including President Kennedy, Ward Allen, George Ball, McGeorge Bundy, Richard Goodwin, Lincoln Gordon, James Loeb, Edwin Martin, and Dean Rusk. Tape 1, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 54. Department of State (Rusk) to American Embassy Lima, 16 July 1962, “Peru” folder, National Security Files, John F. Kennedy Library. Meeting on Peruvian Recognition 27 by containing the army. The United States suspended diplomatic relations with Peru on July 18, keeping its embassy open in Lima. And the next day, Kennedy publicly condemned the Peruvian coup, describing it as a “setback” for the entire region and denouncing the junta for violat- ing “the purposes inherent in the inter-American system.”55 The State Department then suspended all U.S. aid. The President apparently was not comfortable for long with this policy. While receiving support from the liberal constitutionalists of the region, Rómulo Betancourt of Venezuela and José María Figueres Ferrer of Costa Rica, Kennedy’s nonrecognition policy proved unpopular with the United States’s European allies and some Latin American states, which viewed it as a form of intervention in domestic affairs. Even in Peru, there appeared to be little opposition to the junta. An attempt at a general strike fizzled. Soon some officials at State and the President himself began to worry about the long-term consequences of alienating the Peruvian military, which appeared to be in control of the country. Caught between seemingly conflicting goals in Peru, the administration employed two channels to try to communicate to the Peruvian junta its willingness to restore diplomatic relations in return for the establishment of some sort of constitutional regime with free elections and civil rights for the Peruvians. Ambassador Loeb was empowered to present this case in Lima (and in his absence, Chargé Douglas Henderson); while in Washington, the President turned to his old friend, Charles Bartlett, the Washington correspondent for the New York Times–affiliated Chattanooga Times, to make the pitch to the Peruvian ambassador, Fernando Berckemeyer.56 Over the weekend this policy seemed to bring its first results. The junta restored some civil rights, indicated it would soon release former president Prado, and promised elections by June 1963. It was now time for President Kennedy to reconsider his diplomatic boycott of Peru.

55. Press Conference, 19 July 1962, “Peru” folder, National Security Files, John F. Kennedy Library. 56. On Loeb’s efforts in Lima see Department of State (Ball) to American Embassy Lima, 23 July 1962, “Peru” folder, National Security Files, John F. Kennedy Library, as cited in “Idealism in Crisis: John F. Kennedy’s Alliance for Progress and Military Coups in Latin America, 1961–1962,” Laura Moranchek, unpublished paper, 1999. For information on the Bartlett channel, see Handwritten Notes [early August 1962], “Peru” folder, National Security Files, Box 151; Interview with James Loeb, 12 November 1967, John F. Kennedy Library; Timothy Naftali Interview with Charles Bartlett, October 1999. 28 MONDAY, JULY 30, 1962

The President began taping as he asked the assistant secretary of state for inter-American affairs, Edwin M. Martin, to brief the group on the status of U.S. policy toward Peru.

President Kennedy: [Unclear.] Unidentified: [Unclear.] President Kennedy: [Shifts in his chair.] How are we now? Edwin Martin: Mr. Secretary— Dean Rusk: Well, Mr. President, I think that there are three different things that we might remind ourselves about. One is the effect of whatever we have done so far in Peru and I think we have nothing to be ashamed of or nothing to worry about as far as the situation up to this point is concerned because this junta has taken over; there are civil liberties. They have worked out some working relationships with heads of the parties. They arrested the President, but didn’t try him and execute him, and there’s a little restraint there which I think has been a dividend from the attitude of the hemisphere up to this point. The most immediate thing is the meeting of the OAS this afternoon, primarily insisted upon by the Venezuelans.57 We had thought on Saturday that we had the Venezuelans in a position to let the OAS [unclear] committee to consider the Venezuelan motion, and they’d pull it back. But apparently the Venezuelan [representative] over the weekend, [unclear], had a talk with Betancourt, [and] is going to propose that a committee be established simply to set a date for a foreign ministers’ meeting.58 And the plan is that the OAS chairman, the Colombian, would ask them to— President Kennedy: What? Rusk: The OAS chairman, who is a Colombian— President Kennedy: Yeah. Rusk: Simply would ask that now it be put over for a week to ten days in order to give delegates a chance to get instructions. And get that—

57. The Venezuelans wanted to convene a meeting of foreign ministers to condemn the junta. The OAS in 1962 had 21 members and 11 votes were needed to call this meeting. This initiative was a problem for the United States. If Venezuela failed to get the 11 votes, then the junta might have interpreted this as a weakening in hemispheric opposition and reneged on its promises. On the other hand, if the meeting occurred and a resolution passed, the United States would not be able to recognize the regime without severe criticism in Latin America. 58. Rómulo Betancourt had been the president of Venezuela since 1959. Meeting on Peruvian Recognition 29

President Kennedy: What is it they’re going to ask, the Venezuelans, to do? Rusk: They are going to ask for a meeting of the foreign ministers, primarily. But, procedurally ask for a committee to meet to actually set a date, or recommend a date. Now, this is not something we can support. If we have a vote on that, we have to vote against it. President Kennedy: On what grounds? Rusk: On the grounds that we don’t think this is an appropriate action. President Kennedy: Who will represent us at the OAS— Martin: Chep Morrison is on three weeks’ military leave.59 President Kennedy: I see. Ward Allen (?):60 On the grounds, sir, that the point of setting such a date, prior to a decision favorable to convening the foreign ministers— which has not yet been made—we think therefore such action would be premature. President Kennedy: So that will be defeated, will it? Allen (?): I think, yes sir, and I think that in any event we can talk the Venezuelans out of it, beforehand. President Kennedy: OK, so what will be the next hurdle that . . . ? Rusk: That would be all for the day. Allen (?): Right. They would table their proposal to call a meeting of foreign ministers. They would speak to it. Then—our hope is, I would speak, and simply say here: It is the objective of the [unclear] that this is an important matter which requires consultation of government. We propose therefore that this meeting be suspended and another meeting be called in a week to ten days to consider the matter further. And we would hope then that that would end it. We are trying to get some of the others who are opposed to a meeting not to get so involved with the wrong group. President Kennedy: Now, what about the Wednesday meeting? Martin: This is in place of the Wednesday meeting. [Someone else says, “This is it.”]

59. DeLesseps “Chep” S. Morrison was U.S. permanent representative to the OAS. 60. Ward Allen’s voice could not be identified. He is listed in the President’s Daily Appointments Diary as having attended this meeting. Allen headed the Office of Inter- American Regional Political Affairs, Bureau of Inter-American Affairs in the State Department. Not only is this the only voice at this meeting that could not be identified, but the substance of his comments is consistent with what could be expected from a person in Ward’s position. Therefore the editor has made a tentative identification. 30 MONDAY, JULY 30, 1962

President Kennedy: I see. Martin: The Venezuelans jumped the gun on us [unclear] go ahead. President Kennedy: Well, that will take care of that. Now, then, what is our general attitude about resuming relations with this junta? Will we expect some Latins as well as others to resume relations this week? Rusk: [to Martin] Would you run over the situation and . . . [unclear]. Martin: As of today, Haiti has resumed. Paraguay has indicated that she would have in a day or so, but we think this was probably because she expected Argentina to do [it], which at one time was also interested in going on Saturday. We have conveyed your request that you gave to me after you saw Alsogaray.61 The Argentines have responded and said, “Please tell the President that we will not resume immediately, but will hold off for a considerable period of time, if necessary.” We think at least—the Chileans have said, and I talked to Bill Cole this morning who is back, that they would probably be third or fourth or fifth, but they would wait on some others.62 On this basis, unless something now unforeseen should happen, we do not anticipate that anybody except Paraguay is possible or probable this week. And Paraguay will not set much of the ten pins in motion, I think. Rusk: Mexico said they would be one of the last. President Kennedy: [under his breath] Good. And what does it look [like] . . . How would you sum up after this week, on the restoration of relations? Martin: I think the British will restore, probably today, and it may well be that the French, Germans, and Italians will follow suit before the end of the week. [Unclear.] President Kennedy: Any other Latins this week? Martin: No Latins this week, as far as we can know. President Kennedy: What is the advantage of waiting? Martin: Except Paraguay. President Kennedy: What is the advantage of waiting this week? What is it we are trying to get from them, that we have a chance of getting but we haven’t gotten? Martin: This leads into the other major question. Do you want us to go ahead, Mr. Secretary?

61. The President met with Argentina’s minister of economy, Alvaro Alsogaray, on Wednesday, 27 July 1962. 62. Charles W. “Bill” Cole was the U.S. ambassador to Chile. Meeting on Peruvian Recognition 31

Rusk: Go ahead. Martin: Well, I think that, as far as we’re concerned, we ought to wait until a number of other countries are ready to go with us. And that we ought to use this period to see whether or not we can get anything additional. I think from the reactions we have had from our chargé, one can’t be overly optimistic.63 There are some private channels that are somewhat more optimistic. But it’s clear the current junta still feels some pressure on them. I think what we want as a minimum is a real guarantee that they will hold elections and abide by the results. President Kennedy: Even if the date is as originally set? Martin: Even if the date as originally set. I think we should continue to see if we can move up the date. But I don’t think that is as important as being sure that they are held and the results accepted. President Kennedy: Have they indicated they would hold—they have indicated of course they would hold the elections? Martin: On June 9th, and that they would accept the result. They’ve said this. President Kennedy: Now what kind of . . . more guarantee would you get? Martin: Well, I would like to have them say that again to us after discussions in some fashion; but more importantly we feel that it would be desirable to try hard to see if they would be willing to have an OAS election observer team or some multilateral hemisphere operation in connection with this, as an assurance of their good faith in the matter and that this is something we should see. I think these are the important things. I think we ought to privately— George Ball: Plus [unclear] absolute assurance of the maintenance of civil liberties. Martin: Well, the maintenance of civil liberties—They have, as you may know, restored civil liberties fully over the weekend. First they had a 30-day suspension, which they have now pulled back. President Kennedy: You might get me a memorandum, Ed, before my press conference Wednesday on the things which the junta has done in the civil liberty areas to which we can partly claim some responsibility—64 Martin: Yes. I can do that. Rusk: These three points, the maintenance of civil liberties is much better now—

63. Douglas Henderson was chargé d’affaires, Lima, since 26 July 1962. 64. Wednesday was 1 August 1962. 32 MONDAY, JULY 30, 1962

President Kennedy: They’ve got the maintenance of civil liberties, they have set the [election] date for June, we don’t expect they’ll change the date for June, they have said they will abide [unclear]; now if they say it again, [unclear] more power to it. Martin: If they could say [that] to some kind of an OAS body and then welcome some kind of OAS team watching the situation, et cetera. I think this would give us more assurance. We would also like to talk to them about the Communist fact—particularly the Communist trade union leaders and the effect on APRA and make sure that they don’t get fooled by this one.65 This is certainly where the Communists [unclear]— President Kennedy: Well . . . what do you see as our schedule for resuming relations? Martin: My own thinking is that probably sometime early next week, we would probably, we would need to make a decision and the decision should probably be affirmative. We have done what we can do. President Kennedy: But you expect probably that—you don’t expect this week other Latin American countries to go ahead. Martin: No. No. President Kennedy: Then what will you do—send out a notice to our . . . saying that we’d like to notify [unclear] everybody [in the hemisphere] that we are planning on going ahead and recognize? Martin: [Unclear] in the Argentine, which worked rather well, was that he suggested a couple of days’ notice. And we’ll probably want to do it on Wednesday. We’d be quite agreeable if a few other Latin Americans did [it] between now and then, and we have suggested to one or two of them [unclear] with the same goal, to do it themselves. McGeorge Bundy: Did we formally suspend relations with the Argentinians?66 Martin: Yes. Bundy: In the same fashion?

65. The American Revolutionary Popular Alliance (Alianza Popular Revolucionaria Americana, APRA) was led by Víctor Raúl Haya de la Torre. 66. On 29 March 1962, the Argentine military removed democratically elected President Arturo Frondizi. The president of the Senate, José María Guido, took the presidential oath of office that day. The coup caused a sharp debate in the Kennedy administration. Secretary Rusk, the Argentine team at State, and the U.S. ambassador in Buenos Aires, Robert McClintock, all favored recognizing the Guido government. Assistant Secretary Martin and Special Assistant to the President Arthur M. Schlesinger, Jr., were against recognition. President Kennedy waited until some large Latin American countries had recognized the new regime and then did so in mid-April 1962. Meeting on Peruvian Recognition 33

Martin: In exactly the same fashion. President Kennedy: Will you give me also in this memorandum, Ed, what we did with the Argentine; because I understand the difference, the only difference so far, is my statement.67 Or is there any other difference? Martin: Your statement and the suspension of aid. President Kennedy: That wasn’t done in—? Martin: That was not done in the Argentine case. We proposed that and you and the secretary decided against it.68 President Kennedy: OK, I see. Is that the reason we’ve gone ahead in this case because we said we were going to? Is that correct? Is that why we’re doing this? Martin: Partly, we said we were going to; and partly because there was no observance of the constitutional norms or protection of civilian government as there was in the Argentine case. President Kennedy: I see. Well, this is what we want to get down now for this press conference . . . this point here. Unidentified: There was a Supreme Court decision in Argentina. [Unclear.]69 Rusk: Also when we acted we did not know what the conduct of the junta was going to be. Martin: No, that’s true. Bundy: All we had to go on was the tanks banging through the presidential gate. President Kennedy: Yeah, but they also had seized and imprisoned the— Martin: And they had imprisoned the president and— President Kennedy: They are going to say, “Well, you mentioned the imprisonment of Prado and everything.” [Unclear] Prado and Frondizi are in prison. I’m going to have to say what they’ve done. Now, as I say, the only thing that’s [unclear] about— Martin: Frondizi would be allowed to get out of prison in Argentina the minute he agrees not to live in Argentina. The problem is that he doesn’t want to leave the country. . . . Bundy: [aside] Pretty thin difference.

67. The fact that on 19 July President Kennedy took a public stance against the Peruvian coup. 68. Martin and Rusk were on different sides in the recognition of Argentina debate. 69. The Argentine Supreme Court cloaked the March coup in constitutional legality by ruling that Guido’s succession was constitutional because Frondizi had been out of the capital. In fact, Frondizi had been under arrest. 34 MONDAY, JULY 30, 1962

Richard Goodwin (?): In effect, to me, this is a double coup: the coup against [unclear] in order to prevent the result of free elections and [unclear] it really [unclear]. Unidentified: That’s right. Rusk: Mr. President, another thing in the picture here, as to how we do that—this business of [unclear]. We don’t want to lose, if we can avoid it, the very definite “plus” opinion we’ve had around the hemisphere on our attitude toward the junta. And secondly, we’ve got to find some way to give [Rómulo] Betancourt a chance to pull back out [unclear], to give him some of these points that he can— President Kennedy: Yeah, but on the other hand, we have got to be concerned about our own—we can’t look like we’ve embarked on a road [unclear]. Better not [unclear] in the hemisphere either. Rusk: Right. That’s right. President Kennedy: And that’s what I am most concerned about right now: Is to get out of this in a—we are going to have to resume relations and it’s going to look like the United States has encountered a stronger man and they weren’t able to implement it and then had to back down. Now these things that Prado agrees [with]: to the gradual points of a civilian restoration that we are sort of [unclear], I am not even aware of much of them and no one else is.70 So we are going to have, we are going to have quite a time trying to make it look as if we haven’t gotten the air kicked out of us. Ball: Well, Mr. President, [this is] consistent with the junta’s claim that what they were doing was moving into a situation where there had been dishonest elections in order to preserve the kind of caretaker so they can hold new elections. And if they were to do these three things you’ve said: the maintenance of civil liberties, the bringing in of somebody to observe, some third party to observe the elections— President Kennedy: When they take place? When they take place? Ball: When they take place. Plus the assurance that they will support any government that comes out of those elections. This is consistent with their thesis. Now if we can get them to make this very clear in a way which makes it also appear that this is the result of the kind of pressure we’ve been doing. I think this gives us . . . President Kennedy: That’s right. Now how do we get . . . Two of

70. The President meant the head of the military junta, General Ricardo Pío Pérez Godoy, not Prado. Prado was the ousted president. Meeting on Peruvian Recognition 35 those they have already said and we have to get them to say again the third—about bringing the OAS group in. Rusk: Well, I think the fact that the Venezuelan motion will be before the OAS gives us the chance to say to the junta, “Now look, you’ve got to have some way to manage this problem in the OAS; now here’s a way to do it.” President Kennedy: But is [there] any new word in from Lima? Martin: [Unclear.] President Kennedy: Now how are we going to be in touch with the junta? Is this the most effective way, [via] our chargé? Or should we be in touch with one of the Peruvian embassies of another state? Allen (?): I think, Mr. President, that if they can do it in Lima, I think there might be circumstances in which, for example, if the British recognize today that the British [unclear] very effectively. Martin: If we had difficulty. Allen (?): If we had difficulty. But I think there’s a broader spectrum of contacts in Lima than there would be here, which is just through Ambassador [Fernando] Berckemeyer. President Kennedy: Now will we send another message through our chargé, sort of restating how we felt about [unclear] these things? You know, in other words, what we want to do is sort of restate them, two of these three things— Allen (?): Right. President Kennedy: —which you’ve already got again. And we put it in one package and the third thing we would [unclear] on their own— not as the result of compulsion—is the OAS to observe the election. Is there any information for us to believe that they will do that? Martin: Well, we also had an indication through the Sears channel—71 Unidentified: Sears? No, I haven’t heard from him [unclear]. Unidentified: This was in the press. President Kennedy: As I say, I think we’ve got to be putting our minds now that this Peruvian thing has taken place, there is no evidence of public disorder. . . . It looks like we’re being more Peruvian than the Peruvians, more democratic than they are, and we’ve now got to think about how we are going to protect our own prestige. [Martin agrees.] That’s what I’m most concerned about. Martin: That’s right. Well, I think the message that went out on

71. Unidentified. 36 MONDAY, JULY 30, 1962

Saturday is pretty clear on this, what we were anxious to do. And I think Jim [Loeb] and my press conference . . . we got this across and the press stories over the weekend both here and in Lima, on the U.S. side, were good on this score. But I agree, this is the key— President Kennedy: That’s the problem now. Martin: —problem in the lineup. James Loeb: I’d like to, on this score, I haven’t said anything, but we did gain a major victory both in Peru and in the continent. I think the problem is, without being evicted . . . President Kennedy: How did we gain a victory in Peru, though, Jim? There doesn’t seem to be—at least the stories I read coming out of there indicates a rather [unclear] attitude toward our action. Loeb: I think they’re wrong, Mr. President. I think that we . . . when we took the stand, we never had any slight idea that we were going to overturn the junta—the junta was the entire armed forces and the navy. President Kennedy: What did we think we were going to do, then? Loeb: We—Prado has been released, civil liberties have been restored, I think the secretary . . . they have made more concessions than they ever would have made if we hadn’t taken that stand. President Kennedy: Why—how do we get that over? Loeb: Well, we’re trying to get it over. I think Ed and I partially did. I think we ought to— Martin: Sir, we also put out a Voice piece on Saturday on this whole . . . of our Latin American [unclear].72 [Unclear interjection.] [Unclear] he canceled this morning because he’s tied up with [unclear]. Unidentified: We should see if can get somebody up on the Hill to make a speech about some of these things. President Kennedy: We have [unclear]? Unidentified: No. No. Rusk: Manny might [unclear],73 or Mansfield.74 President Kennedy: I think either one of them would be fine, Wayne is chairman of the committee, if he would—Doc [Martin], why don’t you get ahold of him—75 Martin: The committee’s scheduled tomorrow after [unclear].

72. Likely the Voice of America. 73. Congressman Emmanuel Cellar. 74. Mike Mansfield was the Senate majority leader from Montana. 75. Wayne Morse was the chairman of the Subcommittee on Latin America of the Senate Foreign Relations Committee. Meeting on Peruvian Recognition 37

President Kennedy: He shouldn’t attack the junta; he should just say that the result of our policy has been the following and so we begin to lay this groundwork. And I can do something about it on Wednesday. Now the other thing is that I talked to Linc Gordon this morning, and he is very alarmed about events, as you know, in Brazil.76 And he thinks the army may be an important factor there to prevent a real Com- munist takeover there. He says the army is very discouraged now because of our stand against the army takeover in Peru. How would we prevent the army from becoming completely demoralized if they become the only [unclear]? He made the point to some of them that we opposed the army takeover in Peru because it was against constitutional government, against a free election. Bundy: And in fact it is at least [unclear]. President Kennedy: Yeah. Of course. It has that clear difference. That is a factor in Peru; but in Brazil the army may be all that we’re going to have left three months from now, the way it’s going. Martin: We got a question Saturday, “Does this mean we would never want the army to intervene in a [unclear] situation?” And I said there are no rules and regulation in the future as our policy is flexible. [Unclear] are really two or three democratic, constitutional governments. President Kennedy: Well, now, you might speak again to Linc about this— Martin: Yeah. President Kennedy: —to figure out what the line’s going to be. And then probably what we ought to do . . . another thing, Ed, he wants to change the Army attaché down there, which he is going to check on; but I think, he may . . . you ought to tell him to let his army people and the military attachés sort of have this line because, you know— Martin: Yeah. President Kennedy: You don’t want to have them . . . That is one country where the army may be important. Twenty-seven seconds excised as classified information. Loeb: Well, I think, one difference, Mr. President, is that the Communists in Peru had one objective which they have never been able to accomplish, which is to break this anti-Communist force. The military, in effect, is trying to accomplish what the Communists had not succeeded in accomplishing. This is an entirely different situation in Peru. It

76. Lincoln Gordon was the U.S. ambassador to Brazil. See “Meeting on Brazil,” 11:52 A.M. 38 MONDAY, JULY 30, 1962

was fuzzy a little bit in Argentina; but in Peru it was clear on one side. It might be clear on the other side in Brazil. Martin: My sense [unclear] I think we’ve got to have an even better probable basis in distinguishing because first of all, [unclear] yesterday. Goulart will not be able to accomplish what he may be trying to do, [unclear] he thinks is satisfactory, without some constitutional break— President Kennedy: Yeah. Martin: —which he has been rather [unclear]; but he will have to take a [unclear] which is really unconstitutional, [unclear] to get back powers which the Congress won’t give him or to dispense with the Congress, which is still essentially conservative. And this would give us a— President Kennedy: Well, I— Martin: —a different framework in which to act. President Kennedy: That’s right. Well, I think Linc has a major job doing this. Especially [unclear] I talked to him again about giving the army a little bit without getting caught. And so, I think we’ve got to— Martin: Well, I’m—I rather expect to be down there next week for this conference on world tensions also, and I’ll talk to some [unclear]. Rusk: Can we have a meeting this afternoon or tomorrow morning before . . . on Brazil about—? Martin: We’ll be seeing [him] at two tomorrow afternoon, now I— President Kennedy: Let me just say now as I understand it, then, we are going to try to get the Venezuelans to withdraw this or else to get it tabled— Rusk: Get them to withdraw their proposal. President Kennedy: All right, then our chargé, we’ll have to send him another clear— Martin: We will. President Kennedy: —instruction saying what we would like now is, number one, a restatement of the package; number two, [unclear] these things that are done, you see, done in a way that hasn’t been dramatic. It seems to me [unclear], perhaps we ought to say, one, that civil liberties [have] been restored [unclear] maintained. Number two, whatever it is they’ve done that is useful, let them say they have done it in one [unclear]. And then . . . Not looking like they’ve done, with the impression [unclear] civil liberties restored, number two, they’ve set this date, which they will abide by for a free election. Then, if possible [unclear] to try to get this in [unclear] and inviting the committee in. So, they may not be willing to do that because they may be doing [unclear]. [Unclear] because the British go Meeting on Peruvian Recognition 39 ahead. Our friends the British, are they worried about that dam up there or something?77 Martin: That’s been a factor. President Kennedy: [cynically] The British . . . ask us to do something good. [General laughter, followed by an unclear comment by the President.] Martin: [Unclear.] They have a recognition policy as evidenced by Communist China, which is fairly inflexible. President Kennedy: I think we’re all going to recognize them [unclear] them. Martin: That’s right. President Kennedy: All we ask is that they [unclear]. Unidentified: It took us three weeks in Argentina, sir. Martin: We’ll get that thing done. [Unclear.] President Kennedy: [Unclear.] As I say now, even if we get [unclear] I think our central problem is to protect our prestige, which is involved in this struggle, because if we don’t, whatever goodwill we’ve gotten in Latin America . . . we don’t [want it to] look like we have gotten a licking from [unclear]. Bundy: [Unclear] say we get out of Latin America [unclear]. We can do that right away at [unclear] time. I am not myself aware of it; but an awful lot of other people are [convinced] that our diplomatic action... it would seem to me, the aid suspension is precisely the same as in Argentina and the Argentine suspension lasted three weeks [unclear]. President Kennedy: Well now, my brother Teddy who was down there, said to me last night, “How do you explain the contrast between the ambiguity about your policy in Argentina and in Peru?”78 Well, I started to try to explain it to him. The point is, he watches it carefully and as a candidate therefore wants to go over his answers, and he doesn’t know. And, now, if he doesn’t know, and I must say that I only know when I think about it for a while. [Laughter.] We’re going to have a chance to get it at the press conference Wednesday. But that indicates that we are in some trouble, I think, on this one. Martin: I think, Max Frankel had some of this in his story yesterday, which we gave him on Saturday.79

77. Unidentified. 78. Teddy is Edward M. Kennedy, Democratic nominee for the U.S. Senate from Massachusetts. 79. New York Times, 29 July 1962. 40 MONDAY, JULY 30, 1962

Loeb: One of the problems is the interaction here. The last time, when I came up, Mr. President, to talk to you in early March, before I could get back to talk to the generals to give them the answer, Argentina’s taken place, and [unclear] looked awful thin on it. So, I think, the Argentine thing did affect them, they didn’t believe it. As a matter of fact our Army attaché went to see General [Rijos],80 the head of the military school, one of the plotters. And he looked at the paper and said, “Don’t tell me you’re not going to help us; look what you’re doing for Argentina. Of course you will.” Rusk: We did make a pretty strong effort here to prevent this from happening [murmur of agreement] and in that circumstance when it happens despite your efforts to prevent it, then you expect a response, for prestige. [Unclear.] Loeb: That’s right. I mean, you can’t [unclear]. President Kennedy: What happened, of course, what really adversely affected them was the closeness of the election, the junta. If it had been a clean victory, we would have had a somewhat— Loeb: Are you sure? President Kennedy: What? [Unclear exchange.] Well, they would have seized it; but the point is, then, our protest would have been [on] much sounder ground. Unidentified: The resistance would have— President Kennedy: Would have been sounder. Unidentified: There wasn’t any resistance, of the real kind. There wasn’t any real resistance. . . . Loeb: The military really prevented a solution to the problem. Belaunde81 would have been president with APRA’s support had the military not told him, “Don’t take it.” Bundy: You don’t mean Belaunde, do you? Unidentified: [Unclear.] Loeb: Yes, they would [unclear] actually completed negotiations, [unclear] the military— President Kennedy: I think the problem is here that the stories out of there looked like the Peruvians and the . . . hypothetically [unclear]. Three seconds excised as classified information. Martin: One hundred forty-four Peruvian— President Kennedy: Well now, I didn’t even see that.

80. Unidentified Peruvian general. 81. Fernando Belaunde Terry was the presidential candidate and leader of Acción Popular. Meeting on Peruvian Recognition 41

Martin: I’m rather optimistic. President Kennedy: I didn’t even see that—as I say, I think we got, let me . . . I’m very concerned about our problem now because I think that it affects us not just the United States but [unclear] all through the hemisphere. People say it’s good, America is noble but not very effective anymore. That’s what I think. In fact there was an article to that effect by Warren Ulmers or something that the United States no longer can . . . and this has proven it and that’s not very good. Loeb: I would say just a word in defense of the Peruvians and their resistance. The army— President Kennedy: [Unclear] to resist it. Loeb: The army has created a circumstance where these Peruvian workers were asked to go out and fight and die for the former dictator because they had eliminated Haya. So, this was the issue. You [unclear] past Thursday, then you have to— President Kennedy: Where is Haya now? Who’s there? The Scotty Reston article.82 Loeb (?): No. President Kennedy: But the point is, Jim, as I say, the story in the New York Times as well as in other papers. Was it Saturday or was it yesterday? Loeb: There was a Friday one. President Kennedy: That’s what I’m concerned about, that it’s going to be interpreted as a licking. I think, as I say—where I think we went wrong was my statement. I should have kept out of it unless we were sure of a success. That was a mistake; but that’s in the past now. Now the problem is how to see about getting these fellows to do this in a way that we want them [to]. And I think that we can just say to them, we’ve got to go ahead on recognition. Because [unclear] about everybody’s going to recognize them and we’re going to have to. On economic aid and so on, then we’re not going to be cooperative. But even that, we don’t play too many cards with because they can give us a screwing that way—American profits and so on. Unidentified: Yes, sir. President Kennedy: We’re holding up American aid, aren’t we? Martin: Yes, sir. President Kennedy: Let’s not go ahead on that for awhile. Well, now

82. James Reston, “JFK’s Sudden Diplomacy in Latin America,” New York Times, 27 July 1962. Having ascribed to Kennedy “the habit of talking and acting in a hurry when things go wrong in Latin America,” Reston predicted that the President would soon regret his policy of nonrecognition in Peru. 42 MONDAY, JULY 30, 1962

two of the three things we wanted, they have already done. It shouldn’t be very difficult to ask them to redo their package. The other thing they may or may not do. Martin: Do we have to restore all the aid when we renew [unclear]? President Kennedy: No, I think we just . . . we’ll have to talk about that. Unidentified: What is the— President Kennedy: We’ll have to take a look at it and see how we sort of dragged it. It shouldn’t look like we just sort of dragged it out. Meeting breaks up. The President huddles with a smaller group. Martin: [Unclear] press conference. [Unclear.] President Kennedy: Yeah, I saw that. Unidentified: [Unclear.] Unidentified: The red one? Unidentified: Yeah. Red one? President Kennedy: I just want to keep that chargé. I saw his answer back and it kind of gives them the flavor of what we’re thinking about, to a certain extent. Martin: We’ll send a memo just to make sure he’s seen it. President Kennedy: Right. I think the only thing that he may not realize is this problem [unclear] explaining to [unclear]. Bundy: [engaged in a separate conversation with George Ball about the British and European trade negotiations] You can’t do anything about it. President Kennedy: [Unclear] that’s critical of the United States [unclear] understand [unclear] want a restatement of the [unclear] elections and these other things which have sort of slipped out, which have not been particularly dramatic. And they [unclear] try to get that which they already [unclear] dress it up as a pretty good package and give us the key, then we’re moving in. Bundy and Ball continue their side conversation as the others file out. Bundy: [Unclear] on trade [unclear] I’m not sure that the [unclear] Agriculture Department [unclear]. Ball: I think this [unclear] other there. Then they ask the President if he could turn his attention to European matters for a moment.

The Peruvian policy group left. Following the President’s instruction, Edwin Martin and Ambassador Loeb headed off to draft a cable to the chargé d’affaires in Lima, Douglas Henderson. The cable laid out the administration’s desire for three concessions by the junta as the price for Meeting on Europe and General Diplomatic Matters 43 recognition: a guarantee of continued civil liberties; a guarantee of free and fair elections before June 9, if possible, but not later; and an invitation to the OAS to send an observer team to monitor the election. The first two points had already been agreed to by the junta, but President Kennedy needed them restated more forcefully to influence world opinion. The third might pose a problem. Fearful of the loss of prestige in the region, however, Martin and Loeb stressed that Washington “wished to expedite solution in such [a] way as not to leave the United States isolated or to give the appearance of U.S. capitulation.”83 As the Latin American specialists were filing out of the meeting, Bundy pulled Rusk and Ball to one side to discuss some foreign economic matters with the President.

12:58–1:10 P.M.

I just see an awful lot of fellows . . . who don’t seem to have cojones.

Meeting on Europe and General Diplomatic Matters84 From time to time, President Kennedy dropped his cool demeanor and slid into more colorful language. What started out as a quick strategy session to determine the U.S. line on the then-current Common Market negotiations in Europe deteriorated into something else entirely. Kennedy had a lot on his mind. The struggle over Berlin worried him. But in this brief conversation, Kennedy spent most of his time giving an unvarnished critique of the U.S. foreign service. As a young man, Kennedy experienced embassy life firsthand when his father, Joseph P. Kennedy, was ambassador to the Court of St. James. Evidently the ambassador was not the only Kennedy to have left that London experience with some sour memories. Behind the withering characterizations of U.S. diplomats there was also, no doubt, some presidential frustration over then-current dealings with dictators in the Soviet Union, Cuba, and the determined junta in Peru.

83. Rusk to Henderson, 30 July 1962, 9:17 P.M., FRUS, 12: 869–70. 84. Including President Kennedy, George Ball, McGeorge Bundy, and Dean Rusk. Tape 1, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 44 MONDAY, JULY 30, 1962

Before the end of this conversation, the Harvard faculty, especially one economist, would also be the target of some presidential ire.

McGeorge Bundy: Well, do you want to take a minute? Door closes. Dean Rusk and George Ball have remained behind with Bundy and Kennedy in the Oval Office. Bundy: This is this question. George Ball: This question— Bundy: Whether you go in in writing on our view of the Common Market negotiations.85 [to the President] I don’t know whether you have had a chance to— President Kennedy: I haven’t read that paper. I’ll do it by lunchtime and I’ll call you this afternoon. Ball: All right, it’s . . . My own recommendation would be that we don’t give them an aide-mémoire, but that we instruct the ambassador simply to go call on the governments tomorrow morning. Tomorrow is a crucial day because they go back for the— Bundy: —final round. President Kennedy: What do you want to say in it? Ball: Well, it simply defines what, with more precision in the light of the developments of the agreement, exactly [Bundy tries to interject] what the American trade position is, particularly with regard to common agriculture products. Now this is really—the only reason for doing this—we are not going to change the result at all; but we want to be able to assure the American agricultural interests that there was no ambiguity about our position with the Europeans— President Kennedy: I’ll read this now. Bundy: I think it best to do it this way, Mr. President. If George could get a draft ongoing in a final form, that’s the easiest way to get the President’s mind on it. Ball: Well, actually this is— Bundy: It can be just the same as the one you had over the weekend. Ball: No. I’ll get it over to him— Bundy: Might do that. Dean Rusk: There ought to be some strong introduction there so that no one on the inside can use this move as a—

85. The six original members of the European Economic Community were negotiating with Great Britain to admit it into the Common Market. Meeting on Europe and General Diplomatic Matters 45

Bundy: Excuse. Rusk: —for responsibility or failure. Bundy: What we really want is a copy of the outgoing cable to show people back here. Nobody in the chancelleries has any doubt what our view is. Ball: That’s right. Yeah. President Kennedy: We’ll get that out before we— Bundy: Yeah. Ball: Right. I’ll get it over to you. Nine seconds excised as classified information. President Kennedy: There’s nothing else we have to do in Berlin. Looks to me, like all that stuff that—my weekend—that Sunday intelligence thing about what they’re doing to the Wall, doing to the autobahn and the shipment of fighters and all the rest sounds to me like they’re ready to do something [unclear].86 Bundy: [to Rusk] We have, as I told the President this morning, an understanding that the Berlin task force is working hard on the whole business of “after an announcement of a peace treaty.” On the other hand, I am inclined to think that Thompson’s—when does Tommy get back?87 Rusk: On the sixth of August. Bundy: That his assessment from Copenhagen—did you see that in the brief ?—that on the whole Khrushchev doesn’t want a grand caesura.88 President Kennedy: I saw that. Yeah. Now, Ed89 said something to me on Sunday about sending Jim Loeb back there [to Peru].90 And I said, “Well, he’s persona non grata,” and he said, “It’s much better to have them declare him persona non grata.” I don’t think that’s so, then we would have to withdraw him. I don’t think we ought to send Loeb back there. We ought to get his family out of there. Put the chargé [d’affaires] there, then send an ambassador down— Bundy: [to Rusk] Why don’t we live with a chargé for a while? There’s a lot of advantage in that.

86. Every weekend, McGeorge Bundy prepared a collection of classified materials for the President to read. This intelligence report was not found. 87. Llewellyn E. “Tommy” Thompson, Jr., retired as U.S. ambassador to the Soviet Union on 27 July 1962. See “Meeting with Llewellyn Thompson on Khrushchev,” 8 August 1962. Thompson had served in Moscow since 1957. 88. On the way home from Russia, Thompson sent a cable to Dean Rusk arguing that Khrushchev “did not intend [to] push Berlin question to point of real risk of war” (Thompson to Rusk, 28 July 1962, FRUS, 15: 255). 89. Edwin Martin was assistant secretary of state for inter-American affairs. 90. James I. Loeb was U.S. ambassador to Peru, 31 May 1961 to 26 July 1962. 46 MONDAY, JULY 30, 1962

Rusk: Well, I think we ought to— President Kennedy: The question really ought to be whether we . . . I can send Jim anyplace else or whether he retires from the foreign service. I think probably we ought to offer him something: maybe Honduras or something [unclear]. Rusk: Let me take a look at that business. I don’t know enough about it. . . . Bundy: Did Bill Art get a chance to speak to you about Canada this morning?91 Rusk: No, I asked Robin.92 President Kennedy: It follows [unclear] we are going to have one more request before the . . . to see whether, what’s his name? Bundy: Irwin [Prescott]. President Kennedy: . . . of Harvard Law School wants to go. If he doesn’t want to go, then— Bundy: [Unclear.] You might want him checked out. I’m going to ask Bill to check that. President Kennedy: He’d wanted to go to Australia, which we didn’t do. Otherwise you might as well send a career man. Rusk: He probably wanted to go. But I would think that since he had a special interest in Australia and was lukewarm about that— Bundy: Was he? Rusk: Yes, and regrets he was faced with that. President Kennedy: Well, Mac can check [that] today; otherwise it can actually go to a career [unclear]. Rusk: [Unclear.] President Kennedy: That Iranian did not overly impress me, that fellow we had from Iran. He came in to see me . . . right out of that school. Rusk: Iranian? President Kennedy: Mustache . . . No, our ambassador to Iran. Ball: Did Calvin go home? [Mixed voices.] President Kennedy: I mean Iraq. Bundy: Jernegan?93 Rusk: Oh, Jernegan? Well, it depends on how you look at it, Mr. President. He’s a pretty crack officer.

91. Unidentified. 92. Unidentified. 93. John D. Jernegan was U.S. ambassador to Iraq, 12 January 1959 to 11 June 1962. He visited Kennedy in July 1962 after having been declared persona non grata by the Iraqi government. Meeting on Europe and General Diplomatic Matters 47

President Kennedy: Is he? Bundy: He did one thing, Mr. President. He never got into a lather over the fact that these relations were going sour and he never became their man in a rather difficult period. President Kennedy: I agree. I mean, I understand that I can’t judge these things. Rusk: I have known Jernegan, Mr. President, quite a long time and in the situation where there is real trouble I would rather have him there than many. Bundy: If the Foreign Service knew how much you plead their case over here, Mr. Secretary, you’d be in like Flynn. President Kennedy: I’d just like to have—who is on the selection board now, this year, that is our man? Rusk: Well you mean, for selecting our chiefs of mission? President Kennedy: No, the new ones. Bundy: The promotions. Rusk: Oh, the promotions. President Kennedy: And the new recruits to the missions. Rusk: Oh, they have got a whole series of boards, for different grades, and each one of them have a couple of people on them. President Kennedy: Yeah, but [unclear] take a look as long as [unclear] new people coming in—I just see an awful lot of fellows who, I think— Bundy: You mean the cream of the crop? Rusk: The class A people? President Kennedy: [dropping his voice] No, I don’t think so . . . people . . . who don’t seem to have cojones. Bundy: Yeah. President Kennedy: Really what I think [unclear] as a group. If I had to generalize—you never want to generalize—I think surely the Defense Department looks as if that’s all they’ve got. They haven’t any brains. [Laughter.] But I mean, can’t we get a spine to [unclear]? Huh? That’s where your problem is. They all come in here . . . even though we’ve replaced the fellow we sent to the Sudan.94 Bundy: That’s not [unclear], the other fellow. President Kennedy: [Unclear.] Rusk: Rountree. Bundy: That’s Rountree. President Kennedy: Now Rountree just doesn’t present a very virile

94. William M. Rountree was the newly nominated U.S. ambassador to the Sudan. 48 MONDAY, JULY 30, 1962

figure, that’s all. Maybe that service doesn’t—maybe that work doesn’t require it. Bundy: It doesn’t attract. President Kennedy: Albrecht, Rountree.95 I mean what . . . even that very nice fellow, Woodward, they all look sort of—and he’s one of the best.96 They don’t have very many, sort of—what is it? Bundy: Charming . . . President Kennedy: You don’t agree with that? Rusk: I don’t agree with the— President Kennedy: McClintock in the Argentine.97 Rusk: —with the assessment of the overall makeup of qualifications and I think that the— President Kennedy: Why is it that that particular—I think, my judgment is because these are all fellows who went in, in the 1930s and ’20s, when this was a very very specialized, rather precious career. And that isn’t what you are getting in now. I don’t [unclear] joining the Peace Corps. They all look kind of . . . the same type of fellow who you’d want to have later in the Foreign Service. They all look very rugged, an American type, who seem to be both bright and physically with some vitality and force. But when you’re talking to, these days . . . when you’re talking to so many people who are dictators, who sort of come off in a hard and tough way, I don’t think it makes much of an impression on them if some rather languid figure—Again that’s my generalization and I’m sure it’s grossly . . . [unclear]. Rusk: Well, I think it is true, Mr. President, that— President Kennedy: Well, I mean you couldn’t get a better man, in my opinion, than Freeman, for example.98 He isn’t that way at all. [Unclear] Colombia [unclear]. He’s first class. Hell, I’d send him anywhere. Bundy: Tom Mann or [Llewellyn E.] Thompson.99 President Kennedy: Or what’s his name—the fellow we had in Canada?100 Bundy: [Unclear.]

95. Albrecht is unidentified. 96. Robert F. Woodward was U.S. ambassador to Spain, since 10 May 1962. 97. Robert M. McClintock was U.S. ambassador to Argentina, since 14 February 1962. 98. Fulton Freeman was U.S. ambassador to Colombia, since 16 June 1961. 99. Thomas C. Mann was U.S. ambassador to Mexico, since 5 August 1961. 100. Livingston T. Merchant was U.S. ambassador to Canada, 15 March 1961 to 26 May 1962. He had been U.S. ambassador to Canada for the first time in the Eisenhower administration. Meeting on Europe and General Diplomatic Matters 49

Rusk: Livingston Merchant. President Kennedy: I mean . . . Rusk: Well, it is true, Mr. President, that you, if you said two years ago— President Kennedy: Or the fellow in Italy is very [unclear].101 Rusk: Two years ago if you started at the top of the foreign service list and looked at the people that take on the top jobs, you’d have to eliminate about 60 percent of those in career ministerial ranks: you just couldn’t do it. Now this has been pared down enormously, now I think we are far— President Kennedy: Now the fact of the matter is that when we [unclear] however [unclear] more people, career people, in Europe, in my opinion, than [ever] in this century. I thought there was [unclear] . . . Rusk: At no time in history would an important post be filled by so many nonpolitical people. President Kennedy: That’s right. And now we ought to [unclear] there. Therefore having done that it seems to me we’ve got a right to be rather tough about where they all . . . You know, I think it, [unclear]—like Dobrynin makes an impression, because you think there is a very—102 Bundy: [He laughs.] Aircraft engineer. President Kennedy: —self-assured and very competent, bright fellow and that makes an impression the Russians are some sort of . . . A fellow walked in like McClintock, you’d think, “Guys, is this the United States?” Bundy: McClintock was a good soldier in the Lebanon, you know.103 The appearance is somewhat deceptive there. President Kennedy: Remember, all their appearances are deceptive. Let’s get some guy [laughter]. Rusk: Despite [unclear. There appears to be a short break in the tape.] I would guess the appearances don’t produce necessarily the results. President Kennedy: That’s correct. But I don’t think you can generalize, I agree, I know that. I understand that a lot of fellows who look very deceptive out there and [unclear] long experience helps. And I know that you get all this sort of virility over at the Pentagon and you get a lot of Arleigh Burkes: admirable, nice figure, without any brains.104 We all know

101. G. Frederick Reinhardt was U.S. ambassador to Italy, since 17 May 1961. 102. Anatoly Dobrynin was the Soviet ambassador to the United States, since March 1962. 103. Robert M. McClintock was U.S. ambassador to Lebanon during the crisis of 1958, when Eisenhower sent U.S. Marines into Beirut. 104. Admiral Arleigh Burke served as Chief of Naval Operations, 1955 to 1961. 50 MONDAY, JULY 30, 1962

that. But that, we don’t want that. But the problem is, there must be somebody . . . you can’t separate it, so much. I just think there is too much of that thread running through. Bundy: Well, Mr. President, I really think the problem is— President Kennedy: [Unclear.] I don’t think they have to be that way. But there’s an awful lot of them. [Unclear.] Rusk: Yeah. Well, I must say that in saying goodbye to the lot that are retiring [unclear]. Bundy: You ought to see the ones that got away! [Laughter.] Rusk: We’ve retired an awful lot of good prospects for retirement all right. [More laughter.] President Kennedy: I remember Herschel Johnson.105 You remember Herschel Johnson? Rusk: Yes. President Kennedy: He was with my father. He used to call my father Jeeves, which drove my father mad. Herschel was an Old Lady if you ever saw one. Rusk: Sir, I [unclear]. President Kennedy: But he was celebrated a lot. Bundy: I think we have got a real problem with our DCMs in West- ern Europe, because they’re trained by our chiefs of mission.106 President Kennedy: The second people? Bundy: Yeah. Rusk: Well, I think that— President Kennedy: Cecil, you’re getting Cecil home, aren’t you? Rusk: We’re going to get him somewhere else. Bundy: You can’t fire him without a letter from Joe Grew in the papers.107 Rusk: Well, we got Leoville Patterson. [Unclear.] He does not have the strength of Joe in [unclear]. Bundy: Thank God. Ball: By the way, who is the very distinguished Harvard economics professor who just made a speech to the German bankers, saying that the dollar is 10 percent overvalued?

105. Herschel Johnson was counselor at the U.S. Embassy in London, from 8 July 1937 to 11 February 1941, then minister counselor until becoming U.S. ambassador to Sweden in October 1941. 106. The abbreviation DCM stands for Deputy Chief of Mission. 107. Cecil is unidentified. Joseph Grew was the former U.S. ambassador to Japan. Meeting on Europe and General Diplomatic Matters 51

President Kennedy: Who said this? Ball: It is in the Journal of Commerce this morning. President Kennedy: A distinguished economics professor? Bundy: Hockelick?108 Ball: It may be Hoteler; he just two days . . . Bundy: Was there a name in this? Ball: No, it was Wallich’s piece.109 Bundy: I am no longer able to account for a lot of the professors in the economics [department.] President Kennedy: He made this, he made this in Germany? Ball: In Germany, to the group of— President Kennedy: Well, that’s just Harvard. I’d take his passport. I mean, imagine the son of a bitch doing that. Bundy: [sarcastically] You get his name, [unclear]. Ball: Well, it continues some serious— President Kennedy: That’s the nearest thing to treason. Bundy: That’s right. Ball: Of course, bankers today [unclear] money because they thought he would be brought here to spend [unclear]. President Kennedy: He’s talking like in a classroom: it is 10 percent overvalued. [Bundy agrees.] That would be great to devalue by 10 percent, that would do us a lot of good. What would that do? Based on other currencies, it may be 10 percent overvalued. . . . Bundy: In the end, it doesn’t work that way. President Kennedy: George, you’re working hard on this thing in spite of the Treasury opposition.110 Ball: We’re not . . . Bundy: The Treasury’s not going to— Ball: The other day we had a meeting; it was the most constructive meeting we’ve ever had on this thing. And Bob Roosa was there and he was full of ideas.111 He seemed to me enthusiastic toward going right down this program. Unidentified: We all are. President Kennedy: Right. Good. I’m very interested.

108. Hendrik Houthakker, later on Richard Nixon’s Council of Economic Advisers. 109. Henry Wallich, chairman of Eisenhower’s Council of Economic Advisers and former Yale professor, was then writing for Newsweek. 110. The President is referring to the Treasury’s opposition to a State Department plan to stabilize the U.S. dollar by negotiating an end to European purchases of gold. 111. Robert Roosa was assistant secretary of the Treasury. 52 MONDAY, JULY 30, 1962

Ball: We’re working very closely together, very hard on this thing. Discussion ends. All leave through the door. The President is on his way to the swimming pool.

President Kennedy’s official day was usually less than eight hours. At lunchtime the President would often go to the pool for a half hour of swimming. Then he would retire to the family quarters for two hours, including lunch. Today he returned to the Oval Office just before 4:00 P.M. for a meeting on the federal budget.

4:00 –4:55 P.M.

. . . you got anything to do about the Small Business Administration getting more money in there?

Meeting on the Economy and the Budget112 The President’s frustrations this day were not solely in the area of foreign policy. Current news magazines were full of criticisms of the administration’s handling of the economy. Growth rates were flat and unemployment was rising. President Kennedy needed to meet with his budget director, David Bell, and others to discuss the administration’s budget proposals for fiscal year 1964. Working from a joint Treasury–Council of Economic Advisors (CEA)–Bureau of the Budget monthly review document, Kennedy aimed to produce a budget proposal that served three major purposes. It had to appear, on the surface, to be a product of surpassing frugality. It had to include new outlays for programs that genuinely interested the President and his chief economic advisers. And, in what was fast becoming President Kennedy’s theoretical outlook, the budget had to also possess a critical mass large enough to propel the economy in at least a modest upward trajectory, despite its relatively trim appearance.113 Banking on

112. Including President Kennedy, David Bell, Henry Fowler, Walter Heller, Arthur Okun, Theodore Sorensen, and Robert Turner. Tape 2.1, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 113. Memorandum for the President from C. Douglas Dillon, Walter W. Heller, and David E. Bell, 27 July 1962, Departments and Agencies: Bureau of the Budget, July 1962–November 1963, President’s Office Files, Box 71, John F. Kennedy Library. Meeting on the Economy and the Budget 53 a general tax cut at some undetermined point in the near future and on relaxed political and economic budgetary limits beyond that point, President Kennedy hoped that these budgetary changes would take place amid economic growth rather than decline. The most recent economic indicators were not encouraging. Having missed their forecast for the first two quarters of the year by predicting more growth than actually occurred, Kennedy’s Council of Economic Advisers, represented here by Chairman Walter Heller and staff economist Arthur Okun, had just issued a much gloomier report, forecasting an increase in the unemployment rate and the distinct possibility of a recession before the end of the year.114 The Republican opposition girded to attack on two grounds: that the economy was faltering somewhat after an all too brief period of renewed growth and that, at the very least, the Kennedy performance had fallen considerably short of the lofty goals set by the President himself in the campaign and throughout 1961. And while the Treasury, represented here by Under Secretary Henry Fowler, offered a much more sanguine view of the near term, they forecast little more than modest growth and a stable unemployment rate. At approximately 5.5 percent, the unemployment rate stood well above the 4 percent goal Kennedy and his advisers hoped to reach sometime in 1963.115 With plans for a tax cut—either immediate and temporary, or delayed but permanent—as the backdrop to these discussions, caution and deliberate formulation prevailed. Much of the President’s reluctance, explained Walter Heller, “was simply a political sensitivity to the sting of Republican charges of fiscal irresponsibility and a consciousness that tax cuts did not fit his call for sacrifice.”116 “The Republicans would kick us in the balls on that one,” Kennedy reminded Paul Samuelson.117 Political opposition notwithstanding, Kennedy had by this time settled on the economics of the Keynesian tax cut proposed by nearly all of his economic advisers. Only uncertainty in the prevailing economic fore-

114. Though officially recognized as a staff economist, Okun, along with fellow staff economist (and future Nobel laureate) Robert Solow, became, according to CEA member James Tobin, additional members of the council in all but name [see James Tobin and Murray Weidenbaum, eds., Two Revolutions in Economic Policy: The First Economic Reports of Presidents Kennedy and Reagan (Cambridge, MA: MIT Press, 1988), p. 4]. 115. A goal reached by Kennedy’s successor, Lyndon B. Johnson, in December 1965. 116. Walter W. Heller, New Dimensions of Political Economy (Cambridge, MA: Harvard University Press, 1966), p. 30. 117. Quoted in Richard Reeves, President Kennedy: Profile of Power (New York: Simon & Schuster, 1993), p. 319. 54 MONDAY, JULY 30, 1962

casts forced the President to consider a temporary “quickie” tax cut designed to stave off an immediate recession. Plans for tax cuts, in general, otherwise focused on permanent tax code revision, the eradication of the “fiscal drag” blamed for the economy’s underperformance, increasing demand as a catalyst for new investment, and a full-employment goal of no more than 4 percent unemployment.118 Despite conspicuous hesitation regarding the timing of a tax cut and the associated political difficulties related to deliberate deficit financing, the President and his advisers were unwavering in their preference for these goals, even if the more pessimistic forecasts were to be proved wrong and a recession deemed unlikely or impossible. As a result of these concerns, the President and his advisers devoted much of this meeting to a survey of the budget numbers and their economic impact. What should be counted and when it should be counted became questions of paramount significance. Kennedy understood that the answers would tell him much about the economic impact of the budget and the outlook for the economy at large. And perceptions also mattered. How the budget was perceived—by the public, by the political opposition, and by the press—was just as important to the President and his economic advisers.

Recording begins with a broadcast of the major league baseball All- Star game heard in the background and on the left channel.119 The conversation between President Kennedy and his advisers begins soon after this broadcast is cut off and is recorded on the right channel. [Broadcaster] Vin Scully: . . . Bill Mazeroski of Pittsburgh at second, Dick Groat of Pittsburgh at short, and Ken Boyer of the St. Louis Cardinals at third. Tommy Davis of the Los Angeles Dodgers—

David Bell: [Unclear] differently or you’re going to get caught that

118. Fiscal drag is a phenomenon produced when government (mostly federal, but also state and local) fiscal policies take in, either in the form of excessive tax withdrawals or insufficient spending (or a combination of both), more than they send out. 119. This All-Star game, played at Chicago’s Wrigley Field, was actually the second of two played in 1962. Two All-Star games were played annually from 1959 to 1962, with proceeds from the second contest earmarked for the recently established major league pension fund. The American League defeated the National League 9 to 4 in this game on the strength of Rocky Colavito’s three-run home run in the seventh inning, and $216,908 was raised for the league’s pension fund. Meeting on the Economy and the Budget 55 same way. These are very small percentages of the total, and that you . . . I don’t know whether we can count on doing much better . . . Henry Fowler: We’ve been basing it all on contract letting, from Defense and other large contract-letting departments in— Bell: [Unclear.] Fowler: —May and June. Unidentified: But you can still count on—[Recording goes off and comes on again.] Unidentified: We’ve done that and while we have a little— Unidentified: This pattern of— Bell: The accuracy of the [unclear]. Walter Heller: There are some fairly good ones . . . [Unclear background conversation.] Fowler: These figures on goals, that is, are generally . . . are not in favor of, say . . . The things that are associated with large defense contracts and all the good goals show a drop-off in June, whereas normally you expect a rise such as [unclear]. [Unclear exchange.] Unidentified: You do the same thing— Bell: Prices go up. Unidentified: Unless you— Bell: [Unclear.] Contract letting or [unclear]. President Kennedy: But they should proceed here? Unidentified: Yes, sir. Bell: That there it is, related to the three-party monthly reviews, and . . . We sent you a copy on Friday. I don’t know whether you had a chance to look at it or not. This one, has the key element in it that, looking forward into fiscal ’63 we get a split verdict from Treasury and from the council.120 And that they make . . . they have different assumptions about the . . . what the economy is going to do in the early part of calendar 1963. Thirty-two-second pause. President Kennedy: It’s a big difference. The CEA projection for the second quarter of ’63 is 559 billion.121 Bell: Right. President Kennedy: While the Treasury projection for the same is 581? Bell: Yes, sir.

120. Council of Economic Advisers. 121. Figures drawn from Memorandum for the President from C. Douglas Dillon, Walter W. Heller, and David E. Bell, 27 July 1962, Departments and Agencies: Bureau of the Budget, July 1962–November 1963, President’s Office Files, Box 71, John F. Kennedy Library. 56 MONDAY, JULY 30, 1962

President Kennedy: It’s a major— Bell: It is. Actually, the difference of view as to what’s going to happen to the economy after the first of the year— Fowler: The detail of that is indicated on page 2 in the economic outlook under “Housing,” “Plant and Equipment,” and “Inventories.”122 We will summarize— Bell: All the Council is saying [is] that the economy is going to start sliding downward after January, and the Treasury’s saying it’s going to continue slightly upward after January. Twenty-nine-second pause. President Kennedy: How many copies of this have you made, Dave? Bell: Well, they’re all here in the room, sir, except, for about three more that are in our . . . in Bob Turner’s office.123 This was handled the way— President Kennedy: Yes. Bell: —each of these things has been handled over the last number of years. President Kennedy: The estimated budget deficit . . . under the Treasury is 7.4, and 8.3 under the CEA model. Bell: Yeah. You see there isn’t much difference. Those two figures are not really far apart. President Kennedy: Increased expenditures 1.2. That would be what? Agriculture? And it’s Postal? Is that where we’re seeing it? Bell: It’s an increase since the last . . . yes, since the January budget. President Kennedy: That would be the . . . primarily on page 4, these increased expenditures? Bell: Those are about 600 million, resulting from the modifications that we have made since the public works bill and the breaks entered under unemployment compensation . . . recommendations from some of the [unclear].124 Now, that’s only a net 450, but it shows here 600 million, the difference between the payment and the receipts side. The other 600 million dollars . . . we anticipate a farm bill that will not cut expenditures

122. On housing starts, for example, the joint memorandum reads: “The Treasury foresees some decline in housing starts from the high levels reached in the second quarter of calendar 1962, but feels that a ready availability of mortgage funds, some upward trend in family formation and increases in additions and alterations will help sustain total housing expenditures. CEA expects that the slackening of income gains will lead to a decline in housing activity during the first half of 1963.” 123. Bob Turner was assistant director, Bureau of the Budget. 124. The public works bill was the Public Works Acceleration Bill, signed by President Kennedy six weeks later on 14 September 1962. Meeting on the Economy and the Budget 57 the way yours would have. A delay in postal rates going into effect, probably next January rather than July 1st so that we get some in the budget.125 And the U.N. bond legislation hitting ’63 instead of ’62.126 Possible larger pay raises.127 And this public welfare bill you signed a couple of days ago has a hundred million dollars plus in it that was over and above what you recommended.128 That’s where the billion-two comes from. I don’t think any of it, we can do much about it at this stage, with the exception of what Congress is doing with your various recommendations. Theodore Sorensen: At least, Mr. President, in our [unclear] to you, we found an outstanding— President Kennedy: Does this go . . . We assume that you are going to take a billion dollars off foreign aid. They’ve taken 500 million off of the shelters, that’s a billion and a half. That’s not—129 Sorensen: Let’s put it in there— Bell: We have assumed that there will be about a 500 million dollar net cut in expenditures in, stemming from the Congress’s actions on appropriations. If they cut foreign aid, the effect of the cut will be felt only partly in fiscal ’63 and partly in fiscal ’64 because they enacted obligational authority to make loans. Much of the expenditures in ’63 will stem from loans that are already being made or have been made, so that, the Congress’s action on foreign aid will have a minimal . . . a smaller effect in ’63 than the gross amount that they cut. And along with the rest of the budget, as you know, they move up a lot of things, as well as moving some down.

125. Postal rate increases were attached to the Pay Bill (H.R. 7927) signed by President Kennedy on 11 October 1962. This legislation increased the first-class postage rate from 4¢ to 5¢. 126. Legislation to authorize the U.S. purchase of $200 million worth of 2 percent interest U.N. bonds, designed to help the United Nations out of its precarious financial situation. This legislation was delayed because of strident opposition in Congress and was eventually altered to authorize only $100 million in bond purchases. 127. Potential federal pay raises attached to the Pay Bill, note 126. It increased salaries of non- postal employees by approximately 10 percent and those of postal employees by approximately 11 percent. The administration proposal was replaced by a substitute bill, introduced by James Morrison (D-Louisiana), that substantially increased the costs of the Pay Bill relative to the administration’s first projections. 128. The amount authorized in the new Welfare Bill was $2.8 billion, a $300 million increase from the previous year and $100 million more than requested by President Kennedy. Attracted to its self-help provisions and to the imposition of new penalties for parental misuse of Aid to Families with Dependent Children funds, conservatives supported the bill openly and contributed substantially to the drive for additional funds. 129. This was federal aid for the construction of radioactive fallout shelters. President Kennedy had proposed a $568 million fallout shelter program; Congress scrapped the proposal, appropriating only $10 million to undertake a study of the potential need for such a program. 58 MONDAY, JULY 30, 1962

President Kennedy: Let’s see, [reading] “On a consolidated cash basis, the estimated excess of payments over receipts is $8.2 billion.”130 It’s 6.9.131 That doesn’t seem to me very much different from the . . . Bell: Not very much different. That’s right . . . this particular year. President Kennedy: I wonder why that is? Heller: Well, because the most of the impact of . . . on revenues is delayed for some time, and our divergence in the GNP developments is really only after the close of this calendar year. Unidentified: Most of the revenues— Heller: Most of the revenue impact will come in fiscal ’64. That’ll be a much bigger divergence if [unclear] those plans with those figures. Our set of figures is essentially a sort of a high-level plateau in GNP, but with unemployment rising, with the gap between what we could do and what we are doing widening. I think yours is more of a plateau of unem- 1 ployment. Your . . . you keep, what, 5 /2 percent unemployment right straight through, and your gap between the actual and the potential [output] would be about steady.132 We see— Fowler: We feel it will begin to come out and move up in the fourth quarter of this calendar year and the first quarter of statistical . . . but at a slightly higher rate in the movement from the first to the second quarter of the second year. President Kennedy: Well Dave, are we going to do anything about our budget? Changing the budget form? Are we going to put it in different forms, like the consolidated cash?133 Bell: Well, we’ve got, as you know, we have a study underway on this.

130. A consolidated cash basis is a method of computing the budget by which Social Security and other trust fund receipts and disbursements are included in the total. Total trust fund activity in 1962, which included Social Security, highway grants-in-aid, unemployment compensation, and a few others, amounted to approximately $25 billion. 131. The $8.2 billion was the CEA deficit estimate and the $6.9 billion was the Treasury estimate, both on a consolidated cash basis. See note 134 on the consolidated cash basis and other methods of government budgeting. 132. You refers to the Department of the Treasury. 133. Four different methods of computing the federal budget were in use at this time and were given active consideration as the official method. The conventionally accepted method, known as the administrative or bookkeeping budget, excluded trust fund receipts and disbursements and classified all investments as expenditures. The consolidated cash budget differed from the administrative method by including trust fund receipts and disbursements. The national income budget also included trust fund transactions but did not classify some investments as expenditures. It also recorded transactions when liabilities were incurred (accrual basis) but not when cash changed hands (cash basis), and it omitted transactions in financial assets and already existing assets (government loans, for example). The capital budget, like the adminis- Meeting on the Economy and the Budget 59

Just . . . I guess, I’m going to have to put it to these fellows within the next week or two because I think we have a different suggestion. I think they would like us to go to a capital budget, and we’re going to come down against it. We’ll be bringing this to you, fairly soon. President Kennedy: What would be, in short, your reasons against it? Bell: Well, there are two or three points involved. Now, the first is that the . . . it seems to me it tends to create a bias in favor of physical public works and against actions which are maybe more important and necessary, like increases in expenditures for education and research. It looks as though you are saying, “Don’t worry about how much you spend on public works, worry only about how much you are spending on your current outlays.” Some of the current outlays are more important than the public works in terms of their contribution to the growth of the country. The second principal problem is that it looks as though you’re saying . . . the . . . we should plan typically to budget for borrowing to cover capital expenditures, whereas the decision whether or not we should have a budget deficit and therefore a net borrowing, in an economic sense, really has nothing to do with that whatever. That’s strictly an irrelevant fact. The economics of the situation depend on the entire drift of the . . . The criteria for decision in economic terms are the impact of the federal fiscal actions on the economy. In some years you want to budget for a deficit and for borrowing that is much larger than the amount of capital you happen to have in that year’s budget. Other years you don’t want to borrow, you want to budget for no borrowing whatever, even though you do have some capital outlays. Heller: May I interrupt to say I agree a hundred percent with that point, and that, that doesn’t need to be dictated by the size of the capital budget . . . but that’s getting into— Bell: Yeah. Heller: On this we’d have a 100 percent agreement . . . this second point. Bell: Well, it doesn’t really affect the question here, but we will indicate why— President Kennedy: But how can we get a budget that will not put in more, extract more without really having any effect upon the . . . Now, as

trative budget, excluded trust fund transactions but placed capital outlays into a separate account. All but the capital budget were produced in the 1962 Annual Report of the Council of Economic Advisers (Washington, DC: U.S. Government Printing Office, 1962). 60 MONDAY, JULY 30, 1962

I understand it, for the last, what, four or five months we’ve been taking more out than putting into the economy by how much? How does it run for a year, the 12 months, from July to July, isn’t it? [Unclear exchange.] Bell: My economists . . . Fowler: Mike can tell us about [unclear] . . . he said that’s gone up. Robert Turner: That’s on the national income account basis, though. Fowler: That’s on an income and product account basis, we have not been—[Unclear exchange.] Bell: On the income and product account basis, we have not been drawing out more than we’ve been putting in. We’ve been drawing a small deficit each quarter.134 Arthur Okun: It’s not seasonally adjusted. Turner: [Unclear] and on a cash basis it’s extremely hard to put together . . . roughly it is close to 2 billion dollars in the second quarter in surplus, but— Bell: Yeah. Turner: —we’ve been trying to put a precise figure together . . . hoped to have it here today, and it probably— President Kennedy: This is on the [consolidated] cash [basis], is it? Turner: This— Fowler: This is income and product account that you have there. Okun: Those probably aren’t seasonally adjusted. They are— Bell: The cash— Okun: Those are— Bell: The cash figure, Mr. President, would show a surplus in the spring and a deficit in the fall . . . seasonal. Okun: Right. Bell: The question is whether that has any economic meaning. President Kennedy: Yeah, well . . . Fowler: We usually attribute the economic meaning to the incoming tax year. Bell: To these figures here. The reason being that the swing, the tem-

134. It was the contention of Kennedy’s economic advisers that this method (national income) of budgeting produced figures that most accurately reflected the economic impact of federal government operations. Use of the accrual method and the inclusion of the trust fund transactions, for example, reflected transactions with clear impact on private spending decisions. Since corporate income taxes were normally paid more than six months after the liabilities were incurred, actual payments could run well below accruals in times of rising economic activity, yet the sum of the accrued liabilities tended to determine corporate cash flow and spending practices. This difference for fiscal year 1962 was estimated at approximately $3 billion. Meeting on the Economy and the Budget 61 porary . . . the seasonal surplus in the spring, the deficit in the fall, I think— Unidentified: Sure. Bell: —has to do with when you collect your corporation tax receipts. In the fall, even though you’re not collecting them, the corporations know that they are accruing them, and they are setting aside cash funds. They could be buying Treasury bills, or some other handy device to keep the money liquid, you see. Therefore, since they are putting the money aside, taking it out of the normal stream of their private business activities, it has roughly the same effect on the economy as if we were getting it in taxes. So that even though there is a seasonal swing, it’s questionable whether it has any very large economic significance. These figures, which most of the economists look to as the real indicators of the government’s effect on the economy, do not show the same kind of a swing. They are normally— Fowler: On a cash basis, for example, this fall we’ll have a very substantial— Bell: Deficit. Fowler: —deficit. Turner: Ten billion dollars. Fowler: Ten billion dollars. President Kennedy: You don’t think that’s any help to the economy? Turner: A little. Bell: Yes, a little. But not that much. Fowler: But not as much significance as what these figures would show. Bell: Our private income and product [unclear] figures will show 1 deficits in the fall of probably, oh . . . 2 /2 percent. Heller: The quarter’s changing so that’s right. 1 Bell: Now, 2 /2, during the fall actually . . . roughly. Though it should be— President Kennedy: Well, this says here, it might be 5.1, isn’t it? Turner: That’s an annual rate. Fowler: These are annual rates, Mr. President, they’re projected on an annual rate basis. Fifty-three point . . . Bell: Now, the main . . . the third question on the capital budget, sir, and again, I’m not going to argue the case now, but, this is what we will be talking about, is that if you would propose a capital budget, it seems to me you’re very likely to be in a logical position of having to defend the point of view that the federal debt can rise indefinitely. This is purely a political point. The economics of that doesn’t bother me in the slightest. I think that’s correct, as an economist. The federal debt should rise indefinitely. 62 MONDAY, JULY 30, 1962

But politically it’s a rather difficult position. And yet that’s the implication of a capital budget against which you would . . . you would regularly cover your capital expenditures by borrowing. Now as, as Walter says, that isn’t the only kind of a capital budget [unclear.] Heller: No, well, you could run a surplus on the current account.135 Then fiscal policies, hopefully, offset whatever excess you have in the deficit on the capital account. Bell: But these are the considerations being— Fowler: Mr. Stans has devoted his last two weekly articles to this capital budget question.136 Bell: Oh, has he? Unidentified: Yesterday, in your— Bell: I stopped reading them months ago. [Quiet laughter.] Fowler: The last time I think it came up for any brief consideration on the Hill, that was when Ruml proposed it.137 I think, there was the usual blast from Senator Byrd, and then it kind of evaporated.138 But that was a very brief encounter, though. It wasn’t a well-developed, well- designed push through. Bell: We had some small approach to the capital budget in the income and product account figures, because they do leave out federal lending activity, and, I think, there’s questions we’ll have to consider when we come to these bills, and we may have to bring judgments on them as to whether or not it’s a sufficient basis of change, to enable you to present the budget figures from that . . .

135. Expenditures category in a capital budget for operations and not investments. 136. Maurice Stans was budget director in the Eisenhower administration and later secretary of commerce and finance chairman of the Committee to Re-elect the President in the Nixon administration. Stans had been hired by the Los Angeles Times-Mirror syndicate to write a weekly column on economics and economic policy. Syndicated in 46 newspapers by this time in 1962, Stans’s column had surveyed issues such as the rising tide of personal bankruptcies, the ongoing corporate profit squeeze, the loss of U.S. gold reserves, and other similarly gloomy topics. 137. Beardsley Ruml was a Carnegie Corporation executive, director of the Laura Spelman Rockefeller Memorial (which he transformed from a modest social work program into a major research agency), dean of social sciences at the University of Chicago, Macy’s Corporation treasurer, Federal Reserve Bank of New York director, and unofficial adviser to Franklin Roosevelt (particularly during the late 1930s period, often termed the Second New Deal). In concert with Harry Hopkins, Leon Henderson, and Aubrey Williams, it was Ruml, along with Marriner Eccles, who convinced Franklin Roosevelt in the midst of the 1937–1938 “Roosevelt recession” to ignore Treasury Secretary Morgenthau’s urging of a balanced budget and to create additional purchasing power through government deficit spending instead. 138. Harry F. Byrd, Sr., was a Democratic senator from Virginia, 1933 to 1965, and chairman of the Senate Finance Committee, 1955 to 1965. Meeting on the Economy and the Budget 63

Fowler: We haven’t considered this at any length, Mr. President, over in the Treasury. I have discussed it informally with Secretary Dillon, and I have the feeling that some consideration ought to be given to, if you are going to move forward on that, on having some kind of outside economist . . . organizational analysis before you jump.139 Bell: You mean as, as window dressing or for a real purpose? Fowler: Well, a little bit of both. Bell: But, the . . . we’re already moving . . . the President has asked the chamber of commerce to give us some advice, or to consider these questions which are— Fowler: That’s right. I think we might— Bell: That’s under way. Fowler: We . . . we probably have to anticipate— Bell: If we think the prospect of getting— Fowler: —yours would be one way or the chamber’s would be another in some kind of amalgam in between. Bell: We also have to consider the related question: whether the whole budget should be put on an accrual basis rather than a cash basis. President Kennedy: That’s what I . . . I had a bill to that effect. It passed the Congress, and the appropriations committees objected. Bell: We didn’t realize that. President Kennedy: That was . . . that was the one the Hoover Commission made public—140 Unidentified: [Unclear.] Bell: No, that’s the accrual accounting— President Kennedy: Yeah. Bell: —accrual accounting. The accrual accounting part of it was all right, but what the Hoover Commission recommended was what they call accrued expenditure limitations. President Kennedy: Yeah. Bell: Which would mean that the Congress would vote limits on the expenditures that any agency could make in a given year. The trouble with that is that the expenditures simply flow on out from the commitments that have already been made and made earlier. And, therefore, you can say—to the defense of the department—that we’ve got an accrued expenditure limitation of so much in this fiscal year. If that is less than

139. C. Douglas Dillon was secretary of the Treasury. 140. See Budgeting and Accounting, Letter from the Chairman, Commission on Organization of the Executive Branch of the Government (Washington, DC: U.S. Government Printing Office, 1949). 64 MONDAY, JULY 30, 1962

the bills that will be coming due, under the contracts that they have . . . that they have been authorized to make, then you have got to consider how to make some private contractors wait for their money. It doesn’t have any real effect on their making the volume of commitment, which is the point of effective control. So, that in particular, that’s a lesser . . . a separate . . . a separate point. But we have been . . . the government in the budget, with that bill, which you introduced, the government has been going out on an accrual accounting basis. And nearly all the departments now can provide accrued cost figures for our use. In fact we understand that their [unclear] will remain. The main impact of it, though, would be on the receipts side. Unidentified: Yeah. President Kennedy: What do we have to decide today? No, this is just really— Bell: This is the best . . . this is the information. . . . Having noted that there’s a difference between the council and the Treasury at this point, I— President Kennedy: It’s rather large, isn’t it? Now, tell me again, what is the reason for a difference of almost 30 billion dollars for . . .141 Fowler: Well, in each of the three sectors that are discussed on page 2 and 3—housing, plant and equipment, and inventory planning—there is some substantial difference of view. I think the differences are somewhat marginal on housing, but on plant and equipment we stick, more or less, to the premise of the budget last January that given the depreciation changes, given the investment credit, there will be a push forward in the plant and equipment field.142 We see no reason to back away from that judgment, which was made then collectively, insofar as the first six months of 1963 are concerned. I think it’s too early to anticipate very much in 1962, and I wouldn’t on that score, but we do think given the enactment of the investment credit, that the combination of the two things will be of some significance in the first six months—

141. Gross national product (GNP) projections. 142. Earlier that year, by executive order, President Kennedy had enacted accelerated depreciation schedules for plant and equipment, which allowed businesses to write off the cost of these investments at a faster pace than before. The Kennedy administration had also submitted legislation introducing a 7 percent investment tax credit for the purchase of new plant and equipment. The investment tax credit would be signed into law on 16 October 1962 and, together with the new Treasury Bulletin F depreciation schedules, would increase corporate cash flow over the first year by approximately $3 billion. Meeting on the Economy and the Budget 65

President Kennedy: Well, we’ll have three budget deficits . . . aren’t we? But there’s nothing we can do about that [unclear] as far as I can tell [unclear]. Fowler: Well, I think it’s worth noting, however, that the amount of the deficit already cranked into the situation ought to provide some, at least, retarding effect on any, on any fall back, you see, so . . . Heller: Yeah, there’s some cushioning. Well, we went back to check what we said on that and that’s exactly what we said. Fowler: There is a cushion there, but— Heller: Cushioning, but not, not that it’ll [unclear] push it back up. Fowler: You get about the same amount of cushioning for . . . on our projections now as the Eisenhower deficit provided in 1958 or ’59. President Kennedy: Six point three this year . . . an estimated, what, seven billion next year? Nothing . . . Unidentified: Yes. Heller: That’s seven billion. Unidentified: Seven to eight. Unidentified: Right. Heller: Seven to eight. President Kennedy: Well, all right, say eight. . . . Let’s just [unclear]. Fowler: The last element, Mr. President, is on inventories, and, there, we take the view that, inventory accumulations which have dipped some, and will dip a little bit more for the remainder of the year, will probably increase moderately in 1963. We think inventory levels are quite low now compared to sales. We don’t have any picture of excessive inventories having built up. They’ve been really held back, whether it’s due to judgment or due to new techniques of measuring inventories and using better calculating methods for procurement. . . . But, anyway, there is a lot of room there for continued inventory accumulation in early ’63. On the other hand, the council’s judgment is that very conservative inventory policies are likely to be maintained even though there is an advance. And I think— President Kennedy: Can I . . . can I just ask, what was our deficit for last year? Bell: Three point nine, sir. You mean fiscal ’62? President Kennedy: Yeah. Bell: —’62? President Kennedy: Yeah. Bell: I mean ’61. Unidentified: Fiscal ’61. President Kennedy: Oh, yeah. 66 MONDAY, JULY 30, 1962

Bell: That, of course, you count that as an Eisenhower year. President Kennedy: Yeah. Well, it’s . . . I was going to say, in the year, how much did we . . . added to . . . How much did his . . . based on the amount of increases in the program, how much did we add to that deficit? [Unclear exchange.] Unidentified: It depends on how much [unclear] in the [unclear]. Unidentified: Sounds incredible. Unidentified: Right. President Kennedy: OK, that’s a drop in . . . his estimates were wrong on income and his programs were wrong. But we added something to it in agriculture, didn’t we, and something in defense? Unidentified: [Unclear.] President Kennedy: What? Unidentified: I’ll tell you [unclear]. Bell: We would have added, you know. . . . They can . . . it’s right up to a billion dollars, to 3.9. Could have been— President Kennedy: Ours? Bell: —logically argued at the time . . . President Kennedy: Well, all right. I want to thank you for these figures. Bell: Mr. President, there is in this difference, in the anticipation of what happens in . . . in January. Beyond January it appears, in some [unclear] they’re probably waiting on, deciding on the tax cut. Sorensen: The best I can say, Mr. President, our arguments may be able to show the difference in the Treasury and the CEA aggregate unemployment numbers. It’s the largest— Unidentified: The CEA— Sorensen: The CEA predicts unemployment’s going to go up to 7 percent. Bell: Look up to C-1.143 Sorensen: The statement . . . table and statement at C-1 . . . 7 percent compared to 5.5 percent. And the difference is— President Kennedy: By what date do they think it’s 7 percent? Unidentified: That’s 7 percent in August. Unidentified: Seven percent in [unclear]. Unidentified: So that’s the middle of May [unclear]. Unidentified: —in the second quarter. Heller: [to himself, quietly] [Unclear] 1963, again [unclear].

143. Attached statement in which the Treasury projected the GNP for the second quarter of calendar year 1963. Meeting on the Economy and the Budget 67

President Kennedy: These figures are [unclear]? OK. Heller: Also, possibly, we should go over, but aren’t prepared to today, is the relationship of the deficits of fiscal ’63 and fiscal ’64 on our tax cuts and no tax cuts. That we’re ready to say whether the deficits for the two years are now going to be getting larger or smaller with the stimulus of the tax cut. And I think that’s an open question. Bell: The memo I just handed to you, sir, has been pending since July 12.144 It was prepared originally for . . . that one. President Kennedy: This one? Bell: Yeah. For the meeting with Wilbur— President Kennedy: OK. Bell: —but, [unclear] with Mills.145 Now, that recommends some action on expenditures, for the second half. You already know about and have approved the Veterans Administration’s dividends.146 President Kennedy: Right. Bell: It’s being looked into. President Kennedy: Right. Bell: Now, on page 3 . . . two other . . . recommendations that we propose to you, make to you, one is to accelerate Defense Department procurement of general and medical supplies which they would be buying any way, but which they could buy a little earlier. President Kennedy: For this fall? Bell: Right . . . well, it’d be, yeah, for this coming fiscal year. Place the orders as soon as they can. President Kennedy: And that’s, what, 50 million dollars? Bell: Well, it may add as much as 50 million, I don’t know. President Kennedy: Are you checking into that, then? Bell: Yes, sir. We will if—

144. The memo was Bell to President Kennedy, “Possibilities for Increasing Government Outlays in the Short Run,” 12 July 1962, Departments and Agencies: Bureau of the Budget, President’s Office Files, John F. Kennedy Library. 145. Wilbur Mills was the chairman of the House Ways and Means Committee, with whom President Kennedy would meet one week later, on 6 August 1962. See “Meeting on the Tax Cut Proposal with Wilbur Mills,” 6 August 1962. 146. This was an acceleration of life insurance dividend payments. Officially announced on 22 November 1962, it advanced payments of $222 million on National Service Life Insurance policies (to be paid in January 1963, rather than throughout the 1963 calendar year) and $15.6 million—disbursed also in January—to holders of U.S. Government Life Insurance policies. As Budget Director Bell noted in his memorandum, this infusion, being a trust fund item, would not affect the administrative budget but would nonetheless provide a small stimulus, a suitable initiative, then, for the political environment in which the President and his advisers operated. 68 MONDAY, JULY 30, 1962

President Kennedy: Yes. Bell: —you agree. Then point three, there are certain speedups in contracting and procurement in other agencies. There isn’t much money involved, but this again can help a little bit . . . if you’d like us to pursue that. We could also speed up the food stamp plan. I don’t, personally, think that’s a good idea. I think Ted may . . . may be for that. I’m not sure. Sorensen: Well, we’re about to announce an expansion of the food stamp plan into more communities, but that was decided upon earlier.147 Bell: But that’s part of the normal program. This would be an additional expansion. They, in effect, can, you know, can enlarge this quite rapidly.148 President Kennedy: Where are we putting it now? We have it in how many communities now? Sorensen: Well, we have 8 until— Bell: That’s right. Sorensen: —last year and we’re about to announce at your next press conference, Mr. President that they’re— Bell: Going up to— Unidentified: To 20? Bell: —[unclear] 20. Sorensen: Well, no [unclear] what an addition of 20 . . . At any rate— Bell: Yeah. Sorensen: —it’s a very popular program, both on the Hill and in the communities where it’s taken— President Kennedy: What are you . . . you got anything to do about the Small Business Administration getting more money in there? Bell: Well, that’s the other thing we have in here for current decision. It’s on page . . . page 6.

147. Instituted in 1939 and discontinued in 1943, the federal Food Stamp Program was rein- stituted in 1961 as a pilot program in selected counties and municipalities. Changed fundamentally at this point from a program that was designed to distribute farm surpluses to one that focused more on improved nutrition, it grew markedly as it expanded to cover more people and a greater variety of foodstuffs. On 2 August 1962, only three days after this meeting, President Kennedy issued a statement calling on the Department of Agriculture to expand the Food Stamp Program to an additional 25 areas in 18 states [see “Statement by the President on the Food Stamp Program,” Public Papers of the Presidents, John F. Kennedy, 1962 (Washington, DC: U.S. Government Printing Office, 1963), p. 599]. 148. Many counties and municipalities had requested new pilot programs. The Food Stamp Program would continue to function as a pilot program and would continue to operate as a subsidy, rather than a grant, program until late in the Johnson administration. Meeting on the Economy and the Budget 69

President Kennedy: Well, now let’s see, there’s some more here. Well, let’s let the Food Stamp go, then . . . not accelerate; increase this, or . . . Ted, this is number four: “Expand Food Stamp.” Sorensen: [Unclear.] President Kennedy: [reading] “Using Section 32 funds . . . of doubtful desirability once expanded, it would be difficult to retract. Would have no . . . virtually no stimulating impact on private investment,” but they would on private . . . on production.149 Bell: Well, it’s essentially simply a matter of using up some of the agricultural surpluses. There’s no net stimulating effect, and you don’t want to have any stimulating effect on agriculture output. [Quiet laughter.] OK, fine. President Kennedy: OK, well, now, the other one . . . the next one I think we ought to . . . ‘‘Accelerate placing contracts.” Bell: But to this point it is, that Bob . . . in that case would go into a new set of circumstances, when the appropriation bills are enacted— President Kennedy: [reading] “Accelerate in the first quarter . . . repay VA [Veterans Administration] insurance dividend normally payable in the full year.” Bell: That’s one that would be coming up, as of January 1st, isn’t it? Sorensen: Yes. Bell: That’s right. Unidentified: OK. President Kennedy: [Unclear] new authority to request it— Bell: Now, then you get to some things if you want to ask Congress for more money. But I’m assuming that you do not want to make that decision today. President Kennedy: There’s one like this already. Bell: Right. President Kennedy: Right. Now, this is the . . . “that will increase rate of extension of credit, considerable authorities, in the case of variable rates, have been granted which can be used . . . which [unclear] have very little economic effect. . . . Small business loans . . . from all of . . .” They’re financed by appropriations, aren’t they? Bell: Yes, sir, and revolving funds. And here, they have, in effect, a limitation, on the size of the loan. Their statutory maximum has been 350,000 dollars per loan. They have been operating administratively at 200,000 dollars as part of the cutback exercise which we put in last fall.

149. The reference here is to the proposed expansion of the Food Stamp Program. 70 MONDAY, JULY 30, 1962

They recommend, and we concur, that it’s time to lift that back to 350,000 dollars, if you agree. You should be aware, however, that if you do that you’re committing yourself to— Sorensen: If you’re— Bell: —sending up a $60 million supplemental along about in January. Now it may not turn out to be exactly 60, but we’ve got to look at it, at that time. It may well be 60.5.150 President Kennedy: Now, first off, who can get something from the Small Business Administration that they can’t get from their local bank? What . . . what . . . how much of a difference is there? Bell: The theory is that nobody gets anything from the Small Business Administration unless they can’t get it from their local bank. It’s supposed to be a lender of last resort. Now, in practice there’s some skepticism, and what entitles some skepticism is that whether the bank in every case is, you know, just doesn’t get interested in this particular fellow and his project, and therefore, says, “Well, you can go ahead to the Small Business [Administration], and I’ll say that I wouldn’t make the loan.” The . . . nevertheless, I suppose a reasonable assumption is that 50 percent of them— President Kennedy: How have we been doing this? The credit rating’s been good? Bell: Well, it’s been fine in recent years, you see, but that’s because the economy’s been, by and large, been moving pretty well. 1 Sorensen: [Unclear] Wall Street, to about 4 /2 percent. Bell: But, if we were in a time of real difficulties, their loss ratio would jump sky high. President Kennedy: What’s the loss ratio of a regular bank? Sorensen: [Unclear.] 1 Unidentified: And this is 4 /2 percent. Bell: In pretty good time. But that’s, you see . . . that’s the theory, I think. You’re supposed to make loans that are— President Kennedy: Anybody got any thought about this? Sorensen: I think it’s . . . it will add some . . . enough stimulus to the rest of the economy and it’s worth going ahead on, Mr. President. You know that the 60 million sent up in January is not going to improve [unclear]. Unidentified: Let’s go on.

150. President Kennedy approved raising the cap for small business loans and sent up a $40 million supplemental appropriation to pay for the prospectively increased outlays. Meeting on the Economy and the Budget 71

President Kennedy: OK. Let’s go with that. Bell: [Unclear] and I think the prospect [unclear] how its going to end. President Kennedy: All right, then, the other is financed biannually . . . that you borrow from the Treasury, from the Farmers Home Administra- tion.151 Bell: Yeah. President Kennedy: Only 275 million dollars.152 Bell: Now— President Kennedy: Leaves us with 600 million left. Bell: Well, this is— Unidentified: You could easily opt— President Kennedy: They think big over there.153 Bell: [Unclear] yeah, at this stage . . . yeah. President Kennedy: That would be . . . We would . . . I’d have . . . there’s a supplemental request for 325 million dollars. Bell: Well, we back them up on that, at the present time. There are two different programs. The one you’re looking at is the operating loans program, the other is housing. We’re going to come back to that. We recommend no action to you on either one at the present time. Now— President Kennedy: VA. I see . . . yeah. Bell: VA housing also we recommend no action at the present time. But you should be aware that they are . . . they are there to be used at any stage you want to. President Kennedy: Yeah, but your point is that in both of these, it looks like you’re substituting public loans for private loans. Bell: Yeah . . . right. President Kennedy: What would be the other one? Fowler: You’ve got aid— Sorensen: I hope the Treasury’s right.154 [Unclear exchange.] Fowler: So do we. [Laughter.] Heller: I must say, we do, too. Bell: But, let’s get to the last page, then, Mr. President. This is on the public works . . . the standby public works. President Kennedy: [Unclear] now, you designate it as—the . . .

151. Post–World War II successor to the New Deal Era Farm Security Administration which administered farm ownership and production and subsistence loans. 152. Farmer’s Home Administration operating loans were limited at this point to $275 million; the Department of Agriculture proposed raising the limit to $600 million. 153. They refers to the Department of Agriculture. 154. In their projection for GNP. 72 MONDAY, JULY 30, 1962

Bell: The Secretary of Commerce . . . But the question here is how you would want the standby public works bill operated, if it’s enacted. We’re all . . . everybody’s in agreement, now, that this isn’t the way to do it. The House bill has a public works coordinator who would be established— President Kennedy: Yeah, that’s what we were talking about this morning with Lee White.155 Bell: Some of us are anxious to see that, I guess. President Kennedy: You can probably take that out, I think . . . if Bobby wants it in, but . . .156 Bell: Yes, he does. President Kennedy: Is that the public works coordinator in the Department of Commerce, isn’t it? Bell: Not the way they write it. They want it in your office. Turner: But they . . . you know, the bill doesn’t put it anyplace. Unidentified: It then creates— President Kennedy: And, well, I suppose you got a half billion— Turner: Because they are assuming that it would be in the Executive Office of the President. President Kennedy: You might want to get this sort of instruction, in any case, to Hodges.157 Bell: Yeah . . . right. The assumption that— President Kennedy: The main response, so you can get a coordinator, now, to work with whoever— Bell: Somebody’s going to have to be ready to go right up there with them on appropriating more— President Kennedy: Yeah . . . well, now, Dave, what do you want to do about this? Bell: If you’ll agree with this— President Kennedy: Yeah. Bell: We’ll . . . we’ll tell him that—

155. Lee White was deputy special counsel in the Kennedy administration who advised the President on civil rights and urban affairs. White later served as chairman of the Federal Power Commission from 1966 to 1969. 156. Attorney General Robert F. Kennedy. 157. Luther Hodges, former governor of North Carolina (1954–1961), was appointed secretary of commerce by President Kennedy in large measure to assuage business fears of the incoming administration. An active promoter of increased exports and increased trade with the Soviet Union, Hodges remained secretary of commerce under Lyndon Johnson until retiring to the directorship of the Financial Consultants Mutual Fund in December 1964. Meeting on the Economy and the Budget 73

President Kennedy: OK. Bell: —you know, we’ll go around and . . . a letter will be prepared. Of course, it’s a hell of a— President Kennedy: Now, what about the dunes?158 Does it have anything to do with what we’ve been talking about? Unidentified: Yeah. Bell: Well, I think . . . I don’t know what . . . Did Lee report to you on that session that he and I both attended in Senator Douglas’s office?159 President Kennedy: Yeah. Bell: I think there’s no question but what— President Kennedy: I must say, I come down on the side of jobs, now, rather than recreation at this point. Bell: Well, the question is whether any jobs are in it, Mr. President. The Indiana folks think so, but, there are jobs there only if the steel companies are going to expand their facilities. And, it’s really . . . there’s room for plenty of skepticism that the steel companies will do that. President Kennedy: Well, if they don’t, then what happens? Bell: Then we’re building a harbor, and— President Kennedy: Well, don’t we have any commitments? Isn’t there any way to get a commitment out of steel before we build the harbor? Bell: Oh, yes. That’s in there. The . . . yes, the arrangements that the engineers propose is that they wouldn’t start work on the harbor until the steel companies had formally and firmly committed themselves to build their part of the harbor, which is the piers, along both sides.160 We would build the breakwater and do the main dredging, and they would build the dock facilities. They on the sides, and the state of Indiana on the . . . on the south end of the harbor. Everybody would have to have his money ready to put into the kitty, before any work were undertaken. And, therefore, if the steel companies backed off what it would mean is you’d have a harbor authorized for quite some time, but it wouldn’t be constructed. The likelihood, I sup-

158. There was a legislative battle involving Senator Paul Douglas, who championed the preservation of Lake Michigan’s Indiana sand dunes; Bethlehem and National Steel companies, who hoped to build steel mills at that point on the lakeshore; and Indiana state officials, who favored, at the same site, a new lake port and expanded industrial development in general. After years of struggling for it, Douglas secured, in November 1966, the passage of legislation creating the Indiana Dunes National Lakeshore. 159. Lee is Lee White. 160. The engineers are the Army Corps of Engineers. 74 MONDAY, JULY 30, 1962

pose, is, you know, anybody’s guess. . . . It doesn’t seem, to me, likely that there would be substantial expansion in new steel works over the next two or three years, but—161 President Kennedy: Of course, if we . . . if we knock it down, it will look like we’re the ones that— Bell: I agree entirely. I agree entirely. President Kennedy: If they don’t build it, then you’ve still got your recreation, haven’t you? Bell: You’ve got the status quo. I don’t think there’d be any actions undertaken. I don’t know what would happen. There might be some of that land that could begin to . . . to be put into other kinds of industrial facilities, but not very much, I should think, because there’s many involved— President Kennedy: When are you going to come forward with your . . . As I say, I’m great on recreation and all the rest, but I do think if we’re talking about the number of jobs which they’re talking about that I won’t be sympathetic to . . . that number of jobs in that place, that’s all. Bell: Well . . . President Kennedy: These days. Bell: I think the problem is essentially political. I don’t think there’s any doubt that, what the— President Kennedy: Well, politically, if we could get that back, you’d say, you would go ahead, because it’s Indiana versus Senator Douglas. Bell: No, I think that the merits of the case strongly argue that if you’re putting the whole thing into recreation, in 25 years there isn’t any question that the value to the nation will be far superior on that side. Heller: There’s no doubt about it. Bell: In the short run, this case about jobs is not too clear. If the steel companies were ready to go ahead and invest, then there would be jobs. President Kennedy: Now, don’t we get . . . what kinds of assurances can we get out of the steel companies before we set it aside for productive use? Bell: The steel companies are so badly caught between the two opposing political sides of this thing, I don’t think we can get anything out of them that tells us anything we don’t now know—as to the likelihood that they will, in fact, be ready to invest at any given date. They

161. This meeting followed the widely publicized administration showdown with the steel companies in April 1962 regarding steel company pricing. In that event it became clear that most steel companies were operating well below their productive capacities. Meeting on the Economy and the Budget 75 have said, to the state of Indiana, “Yes, we do plan to use these sites for steel works.” They have not said, “We are prepared to commit ourselves to take action as of 1 January 1963,” or something like that. And I don’t think we could get any such commitment. Nor, I think, we’re . . . are we likely to get the opposite, because then the state of Indiana would be all [unclear], saying, but they’ve said, “No, we don’t plan to do anything with that land for the next four years.” So I just think they’re gonna stand right where they are in saying, “We bought the land to build steel plants. If you want the harbor, go ahead. One of these days, we’ll build the steel plants.” President Kennedy: Now, can’t we say that we’ll go ahead with the harbor if we could only get some indication that you’ll build the steel plant? Otherwise, why are we going to build the . . . How much are they sticking in the harbor? The steel companies? Bell: About 5 million dollars. President Kennedy: And we’re putting in how much? Bell: Twenty-three, I think. President Kennedy: Fine, and how much is the state putting in? Bell: Well, the state puts in about 35, eventually. I’m not quite sure how much— President Kennedy: Well, they’re not putting much in, so—162 Bell: No, they’re not. President Kennedy: —the companies, but . . . I mean, they can probably afford to put in 5 million to get this. It adds to the value of their land, anyway, doesn’t it? Do they use some land there? Bell: Yes, they do, and I suppose it does, in the sense that it would be valuable industrial land. President Kennedy: So it— Bell: I don’t . . . I’m not sure they would put up that $5 million. They’re pretty . . . you know, steel companies are pretty funny folk. President Kennedy: Well, I’m all for that. But anyway, so we [go] in for that figure. The United States government and the state of Indiana go in for a combination of 55, 60 million . . . Bell: There is another . . . another big question mark here. Douglas is saying . . . his engineers say the state of Indiana will never be able to float the 30 million dollars of revenue bonds. The state of Indiana has a constitutional prohibition against general purpose bonds, or whatever you call them. Is that right?

162. They are the Bethlehem and National Steel companies. 76 MONDAY, JULY 30, 1962

Unidentified: Yeah. Heller: General obligation . . . Okun: General obligation bonds.163 President Kennedy: How do we get into . . . as I say, I haven’t followed it closely. Can’t we get an understanding from everybody—the steel companies, the state of Indiana, et cetera—and then say, “If you . . . if these understandings are any good, we can go ahead. If they’re not, then . . .” At least, then, we’re not going to have everybody saying that it’s because the administration failed to provide dollars for— Bell: Now, that’s the position of Indiana. The state of Indiana says, “We do want to go ahead.” And we say, “We can float the revenue bonds. The steel companies say, “Yes, we do plan to use this.” President Kennedy: Were we given that in writing and so on? Bell: It’s in writing. They plan to use it for— President Kennedy: Do they say when? Bell: No, they do not. President Kennedy: Well, couldn’t we find that out and ask them when they plan to go ahead? Bell: We can try. I don’t know. President Kennedy: I mean, I think we ought to put the . . . If we’re not going to . . . we ought to put it on the . . . If there’s a legitimate question here, we ought to put it on their backs. Bell: This is precisely what I meant by saying that the problem is essentially political. President Kennedy: Well, we ought to say, “We’re prepared to go ahead with the land . . . with the thing, and if this is what sounds reasonable, and the thing, but we’re not going to go ahead unless we have the assurances from the companies, now.” If the companies are not going to give us any assurances, then it’s back on them. Bell: Well, let me talk to Lee about this.164 Fowler: [Unclear] the article [unclear] after that or the next day. I don’t know whether it’s good or bad, or whether you saw it or not . . . in the New York Times.165

163. General obligation debt is secured by the full faith and credit of the state’s taxing authority, whereas revenue bonds, the other major type of state debt instruments, are secured by revenues from the projects financed by their proceeds. 164. Lee White. 165. Probably James Reston, “Kennedy Takes His Battle to the Nation,” New York Times, 29 July 1962, p. 8E; or Joseph A. Loftus, “Economic Indicators Hold Key to Tax Decision,” New Meeting on the Economy and the Budget 77

Bell: Can’t we do that? We can’t send them that one budget item. Twenty-eight-second pause. Unidentified: Yeah, I think that [unclear].

At this point, the meeting ended and the President began speaking with Robert Roosa, Henry Fowler, and an unidentified adviser about recent newspaper stories. His brief conversation with Roosa appears to be a discussion of reported developments in the steel industry. “Beth Steel Profits Off, Spending Up,” read one headline; “Lag in Profits,” read another.166 After their attempts at an industrywide, across-the-board price increase in April 1962, eliciting the famous showdown with the Kennedy administration and the eventual rollback of the increases, U.S. steel companies appeared to be initiating a new public relations blitz designed to tell a tale of woe and to garner support for prospective price relief. And it was a portrayal that seemed to be garnering sympathy despite the reality that poor U.S. performance actually reflected vigorous foreign competition and relatively high U.S. producer prices. Reflecting on several issues and several articles at once, Kennedy also referred, briefly, to a separate article on the U.S. balance of payments problem and the potential weakness of the U.S. dollar.

Roosa: [Unclear.] You asked me to contact Clark Clifford [unclear].167 I have an appointment with him for Friday. I’ve got the whole dossier here, if you have a—

York Times, 29 July 1962, p. 5E. Reston noted that much of Kennedy’s legislative difficulties stemmed from the complicated and abstruse character of many of the issues and proposals he championed. Loftus summarized by writing, “The information here is that the report Mr. Kennedy is waiting for to decide on the tax cut is the report that only Chairman Wilbur Mills of the Ways and Means Committee can give.” Curiously, one relatively trivial point raised here by Loftus, that July’s economic indicators tell you little about current trends—due to vacation absences—is one repeated by Wilbur Mills in a meeting with President Kennedy on 6 August 1962 (see “Meeting with Wilbur Mills on the Tax Cut Proposal,” 6 August 1962). 166. Christina Kirk, “Beth Steel Prices Off, Spending Up: The Homer Plan to Ease Squeeze,” New York Herald Tribune, 27 July 1962, p. 20; Christina Kirk, “Lag in Profits,” New York Herald Tribune, 29 July 1962, 5:7. 167. Clark Clifford was former special counsel to President Truman, who, since 1950, had become a partner in a Washington, D.C.–based law firm that specialized in corporate tax and legal problems. A member of Kennedy’s Foreign Intelligence Advisory Board (and its chairman after April 1963), Clifford was, at the time of this meeting, employed as an adviser to several large U.S. steel companies. 78 MONDAY, JULY 30, 1962

President Kennedy: There’s another one in there this morning, you know. Roosa: I saw it. That one’s not quite so bad. President Kennedy: No? Roosa: But, I think, maybe they’re . . . they’re starting to relent. The only way you’re going to see any or all of this is broken down into groups and . . . I’ll leave it with you. I had intended to, do a little— President Kennedy: Obviously, the dollar, in Sunday’s paper, is hopeless. Roosa: Yeah. President Kennedy: [reading] “The dollar under fire in Britain.” Roosa: That’s . . . that was the essence of it. President Kennedy: Did we ever find out whether he’s got any conflict of interest in this, the price we’re paying at this time is what? [Unclear.] Roosa: They really do that. President Kennedy: Beautiful job. Hopeless is the word here. Because they are— Roosa: Yeah, he is. President Kennedy: Is there any . . . did you tell me there was someone— Unidentified: Douglass Cater’s looking into it.168 President Kennedy: Who is? Unidentified: [Unclear], Cater. Douglass Cater’s looking into it with The Reporter. Fowler: [Unclear] report in the Journal calm you down today?169 President Kennedy: Paul Boyd’s article today— Unidentified: Yes. President Kennedy: —in the Tribune, was quite an article about their troubles.170 Fowler: Yes. The economics [unclear]. President Kennedy: Their market has gone down 40 percent in two years, isn’t it?

168. Douglass Cater was Washington editor and then national affairs editor of The Reporter. Dean Rusk hoped to name Cater as assistant secretary of state for public affairs but lost out to Press Secretary Pierre Salinger who selected Roger Tubby for the post. In May 1964, Cater became a special assistant to President Johnson. Hired chiefly as a speech writer, he was soon drafted to help frame education policy in particular and health and education proposals in general. 169. Perhaps a reference to “U.S. Chamber Urges Higher Interest Rates to Restrict Flow of Gold to Other Nations,” Wall Street Journal, 30 July 1962, p. 5, especially if Fowler was being facetious. 170. The steel companies. Meeting on the Economy and the Budget 79

Roosa: Yes, sir. President Kennedy: Forty percent, isn’t it? Bell: It’s forty? Sorensen: That’s fantastic. President Kennedy: Why are they so bad off [unclear]? Roosa: Well, they’ve tried to play it both ways, and now they’re planning a lot of the expansion.171 And to get prices to increase, they’re trying to clamp down on it, and the events being as crude in its effect as the original increase.172 President Kennedy: As what? Roosa: It’s as crude in its effect as the original increase. They’re trying to tighten up without having the instruments for doing it gradually and effectively. President Kennedy: Add some [unclear], boy, are they getting cocky. Sixty-two outward . . . an upturn in business. [Unclear.] Roosa: Well, we’ve got a separate section on some of them. They’re indicating that, in general, we’ve been— President Kennedy: Ninety-eight point four. Roosa: —primarily, we’ve handled them one at a time. President Kennedy: [Unclear], you say Dave Cater’s looking at it in the . . . ? Unidentified: Yeah. Yeah. He’s looking at the one in the national [unclear]. Unidentified: I’ll be back in [unclear]. President Kennedy: [Unclear.] It’s what? Unidentified: It’s really—

The President’s careful discussion of federal budgetary accounting practices was excellent preparation for his next meeting. As the economists left the Oval Office, Kennedy walked over to the Cabinet Room to set the negotiating strategy for the next round of talks in Geneva on a nuclear test ban.

171. As the Bethlehem story, above, explained, most U.S. steel companies professed a need for increased capital spending as a way to break out of their sales and profit slumps. Accompanying this profession was a parallel call for greater corporate cash flow, ostensibly the only way to finance the modernization the industry required. 172. The original increase was most likely the rescinded mid-April round of price increases led by U.S. Steel. 80 MONDAY, JULY 30, 1962

5:00 –6:48 P.M.

If we put in a number n, the Congress will say it should be 2n 1 and the neutrals will say it should be /2n, and we will have a hell of a war over something that doesn’t do us any good at all if the Soviets stick with zero.

Meeting on Nuclear Test Ban173 In 1962, nuclear testing was the issue on which people focused their fears and concerns about the global nuclear arms race. Advocates of a test ban made various arguments: a test ban might hinder the development of yet more nuclear weapons and relax superpower tension; a ban at least on above-ground tests might do away with their hazardous radioactive fallout; and a test ban might keep even more countries from joining the nuclear club which already included the United States, the Soviet Union, Britain, and France. John F. Kennedy wanted a comprehensive test ban treaty. He emphasized the last argument—the risks of nuclear proliferation. A test ban was, however, very difficult to negotiate. Although nuclear tests in the atmosphere, underwater, and in space could be detected by devices under U.S. control, it was not possible to monitor effectively underground tests without an intrusive verification system. Since March 1962, the Kremlin had opposed any verification that involved inspections on Soviet territory. Within his administration, Kennedy faced strong opposition to a comprehensive test ban. Some opponents believed that a test ban treaty was unenforceable. Others believed that the outlawing of testing would cause harm by discouraging scientists from staying in government laboratories and foreclosing the development of possible new weapons perhaps producing little or no fallout or producing intense radiation without the accompanying blast and firestorm effects of existing weapons. Confusingly, some of these projected new weapons were sometimes labeled fusion bombs even though existing thermonuclear weapons were fusion weapons, and some

173. Including President Kennedy, Vice President Johnson, McGeorge Bundy, Arthur Dean, Adrian Fisher, William Foster, Leland Haworth, Carl Kaysen, Lyman Lemnitzer, Franklin Long, John McCone, Robert McNamara, Paul Nitze, Dean Rusk, Glenn Seaborg, and Jerome Wiesner. Tapes 2 and 3, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. For a copy of a memorandum on this meeting, see Memorandum of Meeting with President Kennedy, 30 July 1962, FRUS, 7: 520. Meeting on Nuclear Test Ban 81 were called neutron bombs even though considerably different from the neutron bombs or enhanced radiation weapons developed later in the 1960s. Since the spring of 1961, when John Kennedy first employed the Attorney General to explore with Soviet representatives the possibility for a test ban agreement, the President was active in seeking ways to break the diplomatic stalemate in Geneva and the political logjam at home. He resorted to both orthodox diplomatic contacts and special back channels to find common ground with Moscow. For these efforts the President had but 15 months of failure, not in the least because he faced a reluctant partner in the Kremlin. But President Kennedy’s foreign frustration was not simply because of Khrushchev. He found it hard to maintain a united front with his allies, especially the British, who were, if anything, more willing to take risks to achieve a comprehensive test ban than he. World opinion was also shifting against the President. Despite the fact that John Kennedy himself was a strong advocate for a test ban and the Soviets had shown no flexibility in their unwillingness to allow foreign inspections, the United States was viewed by many neutral nations as the greatest obstacle to achieving a test ban. Scientific innovation in the summer of 1962 complicated the politics of the test ban even further. Over the weekend of June 28–30, two Air Force experts determined through a reassessment of data from the Soviet blast of February and the French tests in the Sahara in May that the United States could detect underground blasts with a system that was less than 20 percent the size of the huge verification system proposed at Geneva and would require far fewer on-site inspections.174 Not only could underground tremors be detected more easily, but scientists could more reliably distinguish between the seismic and the nuclear test–related explosions.175 These new criteria, which were referred to as the VELA test results, called into question the U.S. negotiating position and put downward pressure on both

174. Dr. Doyle Northrup and Dr. Carl Romney worked at the Air Force Technical Applications Center. Their assessment of seismic capabilities was part of the VELA Program, overseen by the Pentagon’s Advanced Research Projects Agency and designed for the “evaluation and development of methods of monitoring a treaty of test cessation.” “Nuclear Test Program,” (undated 1961), FRUS, 7: 178. The Geneva system, first elaborated in 1958, comprised 180 land-based control posts, of which at least 110 were to be on continents. 175. This was the result of two new assessments. The first was the new confidence in the achievement of a long-range seismic detection capability which would make it possible to detect events in the Soviet Union from stations outside the country. The second was the determination that the number of earthquakes that might produce unidentified events comparable to an underground nuclear test of a given magnitude had been substantially reduced since the previous estimate—by a factor between 4 and 5. 82 MONDAY, JULY 30, 1962 the number of monitoring stations and number of on-site inspections that would be required to maintain a watch on all underground explosions above a certain magnitude. Not all underground tests could be detected, given available technology; but most of them could. The Kennedy administration initially mishandled this new scientific data. The Pentagon released it on July 3 without any diplomatic or political preparation, placing the White House in the worst possible position with critics at home and abroad. On the one hand, the Pentagon was now saying that it did not need as much help to verify an agreement. On the other, the State Department was still pushing the pre-VELA diplomatic package at the talks in Geneva. The State Department then succeeded in making the situation worse. The U.S. negotiator in Geneva, Ambassador Arthur Dean, misspoke on July 14, telling a group of reporters that the new data probably implied that the United States might not require any monitoring stations on Soviet soil anymore. Although the secretary of state would quickly correct the ambassador, the impression was out that the U.S. position at Geneva was soft. At home press criticisms rose among opponents of a comprehensive test ban; while congressional opinion—especially among the members of the Joint House-Senate Committee on Atomic Energy—reflected the lack of any political preparation by the executive branch and moved decidedly against changing the U.S. negotiating position. On July 25, Senators Chet Holifield and Henry Jackson of the Joint Committee on Atomic Energy made clear their opposition to any new concessions to the Soviets based on the Pentagon’s new analysis: “There could be nothing more dangerous than to make a hasty change in the fundamental principle of arms control because of a preliminary scientific finding.”176 Now three weeks after the release of the new data, the administration was finally getting around to a full-fledged test ban policy review. Kennedy’s decision to start secret White House taping coincided with the final stages of the process. The first two phases of the review, a meeting of the U.S. government’s top nuclear test ban experts—the Committee of Principals—on July 26 and this committee’s meeting with the President on July 27, were not taped. But when President Kennedy reconvened this group on July 30 to discuss the rough consensus reached the week before, recording machines were whirling in the basement. The test ban issue would challenge the President’s grasp of technical detail. Not only would he need to understand the bases of his advisers’ disagreements over the detectable versus the nondetectable; but the

176. Chet Holifield, joint committee chairman, and Henry M. Jackson, chairman of the Subcommittee on Military Applications to President Kennedy, 25 July 1962, FRUS, 7: Supplement. Meeting on Nuclear Test Ban 83

President was called on to assess the possible future effects of a test ban on U.S. weapons development. In this vein, there was more bad news for President Kennedy. Problems were cropping up with the DOMINIC atmospheric test series, which the United States had launched in April 1962. On July 25, a nuclear test of a Thor missile from Johnston Island, known as the BLUEGILL shot, experienced a catastrophic failure. The missile exploded shortly after ignition and caused major damage to the launch pad and radioactive contamination of the surrounding area.177 President Kennedy brought his nuclear test ban experts to the White House, including Arthur Dean who was flown in from Geneva on the weekend, to formulate a coordinated response to these missteps and challenges. The President wanted modifications in the U.S. negotiating position, and this meeting was designed to formalize the preliminary conclusions reached at the two earlier meetings. The basis for conversation was a summary drafted by William C. Foster, director of the Arms Control and Disarmament Agency (ACDA). Foster’s recommendations contained new proposals. The administration would accept the principle of control stations that were manned by nationals of the country in which they were located so long as they could be supervised and their data analyzed by some kind of international commission. Knowing how politically delicate verification was, the State Department and ACDA recommended putting forward a test ban agreement that did not require verification—a partial or atmospheric test ban. Finally, Foster’s paper suggested that the number of these internationally supervised nationally manned control sites could be reduced from the Geneva number of 180 (with 19 on Soviet soil) to about 25 (with 5 in the Soviet Union). For the time being, this was to be an internal U.S. number to be brought out only when the Soviets would accept the concept of some foreign inspection.178 The President’s special assistant for national security affairs McGeorge Bundy tried to orchestrate this meeting so that Arthur Dean would emerge with his instructions for Geneva. Before the meeting the President received William Foster’s paper and was told by Bundy what to expect from the rest of the group.179 At first the

177. FRUS, 7: 520, note 1. 178. Memorandum from the Director of Arms Control and Disarmament Agency (Foster) to President Kennedy, “U.S. Program Regarding a Treaty to Ban Nuclear Weapons Tests and Other Disarmament Proposals” (as Revised), 30 July 1962, FRUS, 7: 517–19. 179. Bundy to the President, “Agenda for 5 P.M. Meeting Today,” 30 July 1962, “Nuclear Weapons” folder, National Security Files: Box 100a, John F. Kennedy Library. This document and the transcript that follows provide a wonderful case study of how high-level meetings can go awry. 84 MONDAY, JULY 30, 1962

Department of Defense would make the argument for a comprehensive test ban. A scientific representative from the Atomic Energy Com- mission would then explain the effect of a test ban on U.S. technical development. Then Foster would run through his recommendations, which Bundy assumed the President would accept. Next week the United States would offer a partial test ban to the Soviets while sending signals that a comprehensive test ban might be possible, with a lower number of required inspections and even nationally manned monitoring stations, so long as Khrushchev returned to his pre-1962 position of supporting the concept of foreign inspectors in the Soviet Union. However, the meeting would not go as planned. President Kennedy started taping before formally calling the meeting to order. He is overheard asking Glenn Seaborg, the chairman of the Atomic Energy Commission, for information about how long it would take the United States to complete the DOMINIC test series in view of the loss of the launch pad on Johnston Island. President Kennedy was evidently concerned that the U.S. series should be completed as quickly as possible and certainly before the current Soviet tests ended. He did not want to be negotiating a test ban while the United States was the only superpower exploding atomic weapons into the atmosphere. The tape quality is poor.

President Kennedy: [Unclear] I think [unclear] to repair that pad out there?180 Glenn Seaborg: Yes. President Kennedy: Let me say again, the only problem that we’re going to have is if their tests are over; so they can tell people that their tests are over . . . ready to go in a few months, is that correct? Seaborg: That’s right, the 27th. President Kennedy: Seven to eight weeks, yeah? Seaborg: Yes. President Kennedy: Yes, and then we get [unclear] and then as we, we’re also saying, [unclear] won’t be finished until October 25th, the following day. Unidentified: [Mumbles.] Unidentified: What’s that? Franklin Long: There’s only one.

180. The pad on Johnston Island destroyed by test failure on 25 July. Meeting on Nuclear Test Ban 85

William Foster: There is only one pad. [Unclear.] President Kennedy: Can I fire it from any other pad you’ve got? Unidentified: The only way [unclear] there’s no other way of doing it. President Kennedy: Well, the only problem that I see is when we start firing that thing after they get finished [unclear]. The conversation gets choppy. Kennedy and Wiesner may have been dis- tracted as the rest of the group settles into their seats. President Kennedy: . . . probably, because [unclear] that went over. Jerome Wiesner: I want to get rid of— Paul Nitze: They’ve said— Unidentified: They’re waiting . . . They want to launch September 1st or November 4th might be as long— President Kennedy: August 5th, September 5th, October 5th. The earliest, the closest thing, isn’t it. [Unclear] only three tests we’re talking about?181 Unidentified: Three tests, yes. McGeorge Bundy: Mr. President, we thought that we might actually sit down and wrestle with that problem for a few minutes after this meeting today because it is a tough one. President Kennedy: OK. Wiesner: Have you seen the amendment?182 They’re trying to get us in a box and keep us from getting the information. President Kennedy: Yeah, but we’re not right . . . The fact that . . . OK. A short indistinct conversation follows on this point. The Secretary of State interjects, “Suppose they take our absolute advantage? Maybe that means we’d offer . . .” Foster: [in response to an unclear comment] October 20th, we might agree, is still in that area.183 Dean Rusk: As I think about it, it’s a fairly remote— Unidentified: Yes, I think. [An unclear exchange follows.] McGeorge Bundy, the President’s special assistant for national security affairs, signals the formal start of the meeting. Bundy: Mr. President, we thought we’d begin this afternoon by reviewing some of the studies that you asked to have done over the

181. The President has walked into a minefield. There is a dispute among his national security advisers as to how many U.S. nuclear tests remain in this series. The Defense Department, for example, would like to add new airdrop tests. 182. Unidentified amendment. 183. On 20 October the Soviets were expected to complete their then-current atmospheric test series. 86 MONDAY, JULY 30, 1962

weekend. Two were done by the Defense Department and two were done between the Defense Department and the AEC.184 Then, Secretary McNamara, if you would speak right at the beginning, if you would, and then Commissioner Haworth might certainly follow him.185 Unidentified: Which statement are you on? Robert McNamara: Mr. Nitze will comment on the work we did for the President. Nitze: Mr. President, you asked us to look at what the world would look like if there was a longer [unclear], if there were no test ban.186 We looked . . . One of the problems we looked at was the problem of diffusion, what would happen with diffusion of nuclear weapons, and first of all as to what the technical capabilities of various countries were, and we found there were 16 countries that had the technical capability to produce at least a few nuclear weapons within the next ten years. These are 16 in addition to the 4 present nuclear countries.187 And the cost of getting into the nuclear business for them might be on the order of [unclear] typically 175 million dollars each. The cost of a delivery system would be much more, but they might have just a rudimen- tary delivery system that could deliver these small number of weapons over a [unclear]. And the time from initiation of an advanced program to completion might be three to seven years, something on that order. We also looked at the motivation that these [unclear] have to get into the business, and the restraints on their getting in. The restraints against their going into the business, if, in general, if they haven’t got a clear military need—for instance, Canada doesn’t need nuclear weapons—but there are pressures today in the international community against their going in.

184. “The U.S.-U.S.S.R. Military Balance with and without a Test Ban Agreement,” “The Diffusion of Nuclear Weapons with and without a Test Ban Agreement,” “Maintaining Readiness to Test During a Test Ban,” “Relative Technical and Military Advantages of Testing or Non- Testing Under Various Testing Constraints,” Departments and Agencies: ACDA, Disarmament, General 7/29–31/62, National Security Files, Box 256, John F. Kennedy Library. 185. Leland Haworth was commissioner, Atomic Energy Commission. 186. “The U.S.-U.S.S.R. Military Balance with and without a Test Ban Agreement,” and “The Diffusion of Nuclear Weapons with and without a Test Ban Agreement.” As of August 2000 both reports remain classified. As of August 2000 the only two reports that had been declassified were the memorandum on maintaining readiness and the memorandum on relative technical and military advantages of testing or not testing under various testing constraints. 187. The United States (1945), the Soviet Union (1948), Great Britain (1952), and most recently France (1960). Meeting on Nuclear Test Ban 87

The pressures for their going in are: the prestige of [the] military—a seeming military requirement, in the face of [unclear] their own people. But after looking at the capabilities and the restraints, we came to the conclusion that the ones that would most likely develop a nuclear capability in this sphere were China,188 and perhaps Sweden and India,189 and that might lead also the Australians and the Japanese to try to get into the business, and one couldn’t exclude the Union of South Africa,190 from perhaps wanting to get into this business in a ten-year time frame. I’m not sure that Egypt [unclear] get in in this ten-year time frame. The pressures on both Germany and Italy to either get a capability of their own or to acquire weapons or to share the control of nuclear weapons would be very great. But if they go forward with some kind of a multilateral form or if the Europeans do, this might take that pressure off. But if you look at the period beyond 10 years, up to an additional 15 years, then the possibility becomes much higher, and obviously less pre- dictable. The important point is that if both we and the U.S.S.R. continue testing, then it is possible that the cost of producing weapons will go down substantially. It might go down by a factor as large as ten or a hundred, so that it will cost really very little to produce nuclear weapons, if both tested to perfection a nonfission trigger, which you can do with cheap materials therefore. And furthermore, the diffusion of nuclear technology is to be anticipated if both of us test this knowledge, the technological knowledge exists in our and the Russian technological communities. This does seep out. Also, the proliferation of peaceful reactors will cause people to have more knowledge about nuclear matters. They will probably have nuclear power plants to convert plutonium from those power plants. So the ease of getting into the business in the period beyond 10 years, up to 25 years, would be far greater. Furthermore, if some of the smaller countries begin to get them, then this induces other countries to get them, so that looking forward to a 25-year period, we would consider, in the absence of a test ban, the risk of diffusion to be very great indeed. Of course, the question arises as just the degree to which a comprehensive test ban would, in fact, limit that diffusion. If it’s our idea that a comprehensive test ban is a necessary, but not a sufficient, condition

188. China tested its first atomic device in 1964. 189. India tested its first atomic device in 1974. 190. The Union of South Africa developed atomic weapons in the 1980s. 88 MONDAY, JULY 30, 1962

to inhibiting, and slowing, the dispersal of nuclear knowledge and the problem of nuclear testing, I think it would probably require a degree of collaboration between the U.S. and the U.S.S.R. to really inhibit the further spread of nuclear weapons, even if you had a comprehensive test ban. If this were merely an atmospheric test ban, it was our conclusion that there wouldn’t be much inhibition to the further spread of weapons because testing underground would be legal and most countries could probably develop underground tests if they were strongly motivated to getting into this business. President Kennedy: Does that increase the—By what factor does that increase the difficulty, if the fellow could go underground? Nitze: I think Glenn [Seaborg] could speak to that . . . Long: Against the total development costs, Mr. President, very little. President Kennedy: So, in other words, even if the country had not done any atmospheric testing they could test underground. . . . Seaborg: Oh yes, it would slow them down a few years, I suppose. Bundy: Not that long. Seaborg: Not that long. Bundy: If you make your preparations ahead of time—the French, for example, [unclear interjection] were in their primitive stage of doing underground testing recently, and . . . Seaborg: Well, it depends on how long a program and [unclear] about how sophisticated, and how far they’re going, and so forth. McNamara: For most of these cases, we are estimating five or six years of development and [the need to test] underground might add a year to it. Unidentified: [Unclear.] Wiesner: They knew they had to do it from the start because while they were doing all their other things, they’d be learning how to do underground certainly, too. A fragmentary side conversation arises over how to determine when a country goes nuclear. Leland Haworth: Well, we had some limitations and we totaled the results, et cetera. Unidentified: This total is true. Bundy: Yes, but if all you want to know is: Did it go? Is what you want to know . . . in 1945? Haworth: Yeah, but you don’t need to go back so very far. That’s not what we’re talking about here. Bundy: You’re talking about the first nuclear weapons. Meeting on Nuclear Test Ban 89

President Kennedy: [The President restores order so that Secretary Nitze can finish his presentation.] Right. OK. Fine. Nitze: We also did a study on what the effect of continuing testing would be upon the relationship between the U.S. and the U.S.S.R., and there, I think, in the summary, we said that continued testing should lead to growing equality between the U.S. and the U.S.S.R. Today, they’re probably as far, if not further, along in high-yield, efficient weight-to- yield ratios. Below the high yield, we have a decided advantage today, and what our advantage today rests . . . not only upon a more efficient, smaller set of warheads but also upon the more sophisticated general technology: hardened, accurate, sophisticated weapons. If they continued testing, there would be a trend toward their knowing whatever it is we know. There would also be greater knowledge of effects of weapons, and there would be a risk of the unforeseeable, things that you can’t today foresee. President Kennedy: What about the fusion . . . If you had a test ban, where you would . . . your chance of getting a fusion bomb would be?191 [Unclear] not the [unclear] [bomb].192 In any case . . . Unidentified: Oh, if there was a complete test ban, including a ban on underground, yes, that could be. Bundy: You could do it by cheating. Unidentified: Well, I think this is an important point, if you want them to take one [unclear] against cheating. McNamara: At the threshold proposed, it would allow development of the fusion bomb if one was to cheat under that threshold.193 President Kennedy: Under the threshold of what [unclear]? Bundy: It depends, Mr. President, with any [system], it depends what you test in.194 We’ve talked about approximately up to 10 kilotons in alluvium—the estimates are that, especially as systems of testing become more sophisticated, you could learn all you need to know for an all-fusion weapon, assuming that you didn’t get caught [testing devices having an explosive force of less than 10 kilotons]. Now, statistically, if

191. The President is possibly referring to the development of a fusion bomb with a fusion trigger, which might create very little fallout. 192. The President probably is making clear he is interested in discussing the development of new kinds of fusion bombs and not the existing hydrogen bomb, which is also a fusion bomb. 193. The Secretary of Defense is warning the President that even under a comprehensive test ban, states could develop more-advanced kinds of fusion bombs. The manufacture of a fusion bomb requires very low yield nuclear tests, which would not be detected by the various monitoring systems proposed by the United States and Great Britain to verify a comprehensive test ban. 194. It refers to the ability of control stations to detect the blast. 90 MONDAY, JULY 30, 1962

you run a big series through time, there are lots of reasons that might . . . that will open a bigger field of debate as to whether you could or could- n’t get away with it. Different people will take different views.195 President Kennedy: Would the [unclear] consider the development of the fusion bomb . . . Would that [unclear]?196 Unidentified: Yes, sir. Nitze: Yes, it might reduce the cost of weapons by a very large factor, and would reduce the cost in terms of plutonium or other fissionable material . . . Unidentified: Not according to— President Kennedy: Once you have the weapons, does it really, is it . . . and all these things that have to go into that equation, but once you have the weapons, and you’ve paid the costs, and you have the material, is it . . . Starting over again would be a big saving. But if you’ve got to . . . given our position, the stockpile of the Soviet Union, the stockpile of the nuclear club, [is it] worthwhile enough for us not to have a test ban?197 McNamara: Mr. President, it’s very difficult for me to put down on paper the military advantage associated with one side having a fusion bomb and the other side not. I know that [unclear] but I haven’t been able to put down on paper, a clear analysis of why the fusion bomb, possession of it exclusively, provides one with a substantial military advantage, assuming that the other side has a large stock of nuclear weapons. [Unclear exchange.] Wiesner: One of the great dangers here is that this is a specific example of general [unclear] a continued research and development [unclear] on our part makes the diffusion easier. If we learn how to make these weapons, [initially] by fission triggers, presumably it will be easier to make and cheaper to make, and both easier and cheaper for other people, too. So that if you won’t accept Bob McNamara’s statement that it is essentially hard to see the real advantage of a fusion weapon once you have the enormous stockpiles that the world has, it seems to me a kind of a disadvantage to development.198 [Unclear] technical and other [unclear] to development. I think that [unclear] there’s probably a

195. Apparently even if a single blast were undetectable by a control station, a long series of these small tests might be detectable. 196. According to Seaborg’s notes, “The President inquired as to the value of the fusion (neutron) bomb, which might be developed in underground testing” [Glenn T. Seaborg, with Benjamin S. Loeb, Kennedy, Khrushchev and the Test Ban (Berkeley: University of California Press, 1981), p. 166]. 197. Kennedy wants to know whether the advantages of the neutron bomb, whose development would be illegal under a comprehensive test ban, outweigh the strategic advantages of a comprehensive test ban. 198. It refers to a comprehensive test ban. Meeting on Nuclear Test Ban 91 tremendous incentive on the other side to cheat on this particular proto- type.199 And even if they did, it’s hard to see that it could imbalance the military situation. President Kennedy: General, do you want to say something about this? Lyman Lemnitzer: Based on the characteristics of fusion weapons, there’s some difference of opinion on the characteristics. We believe there’s [an] advantage to having it. Wiesner: Can I add something, for just a moment? There was a couple of years ago a general belief that the fusion weapon was a special kind of battlefield weapon [unclear], because the nuclear fusion weapon would be used to kill troops without doing blast damage and without leaving radioactivity behind. There was a smaller, detailed study of it made last year that turned around this, to give you more light, showed that this was a mixed blessing. Because while it killed a few people close in rapidly, it was really a time bomb in the sense that most of the people who got the neutron blast that were not killed instantaneously, were, in the fact of the matter, in bad health, but were going to die in a period from 12 hours to 2 weeks. So that what you would be creating on the battlefield was essentially a kamikaze situation with troops, and it would have to be . . . So we’re not going to do that. I think the [unclear] many of these people who were saying that this is a very unique close battlefield weapon withdraw from that position. And I think the designers are likely to feel very strongly [unclear] that this is an important role for the . . . President Kennedy: Well, let’s proceed on [unclear]. Before Commissioner Haworth starts, there is an indistinct exchange over something that the AEC might summarize for the President. Kennedy also asks McNamara whether he has any papers that would summarize this matter. McNamara says that he does. Just as Haworth begins to speak, someone asks for a brief adjournment. Perhaps in response to the previous unclear exchange, Haworth is heard discussing estimates of the amount of time it would take the United States to resume nuclear testing in the event that the Soviets or anyone else suddenly broke a test ban. The issue of keeping some U.S. testing capability, even under a test ban, leads Haworth to raise the question of using Britain’s Christmas Island testing facility. Haworth: [Unclear—almost inaudible.] There are four facets. Before we . . . the most important of these is Christmas Island. Because we are not sure they would release their [island] for any weapons tests. We believe

199. A fusion (neutron) bomb. 92 MONDAY, JULY 30, 1962

that if at all possible, we should try to procure it with very few limitations of the [unclear] should be restrictive. But other than that, we ought to try to be part of a long-term agreement in which we are both free to do the things we want to do, and not be committed to [unclear] British. We believe that with this maintained state of readiness, that as far as the field is concerned we can then have about a two- to three-month response time in any case of an abrogation of a treaty. If we spent several million dollars to improve it, we might reduce that down to 60 to 90 days. In the— President Kennedy: Sixty to 90 days? Haworth: Yes. I’m sorry, just 30 to 60 days. We believe, though, at the same time in working on developing an airborne, all airborne [unclear] for [unclear] tests we’ve done some of that in the current series, and believe therefore the whole purpose might well [unclear] to get it, and even though we [unclear] on this issue, he was working on the instrumentation and so on.200 [Unclear.] If we should have another atmospheric series [unclear]. President Kennedy: We’ll talk about that this afternoon. Haworth: Then we should fix up and maintain Johnston Island for the special effects tests that it’s being used for now. We should [make ready] the pad, and still another for the same technique [unclear], that sort of test [unclear] the other, but probably [unclear] do [unclear], and find this sort of the analogs of the airborne capability for weapons development. The Navy is studying our shipborne capability for the launch pads’ effects. And this kind of limiting factor [unclear] Johnston Island. One of the things that impresses about the airborne and shipborne capabilities is that you can make yourself more independent of weather and other considerations [unclear]. Well, so much for the [unclear] as I say, we— President Kennedy: But we are in touch now with the . . . We are [unclear] to [unclear] an alternate land site where we could duplicate the Christmas tests. In other words, [unclear].201 Haworth: Yes. Just maintain that we have any jurisdiction over or [unclear] jurisdiction over the island. Bundy: It’s an island which is no good for anything else, Mr. President. That’s all I’m saying. Haworth: Except for scientific tests.

200. Nuclear tests that do not require a launch pad, such as airdrop tests, would not need as much startup time in the event that a test ban were suddenly broken. 201. In case the British decided not to allow the United States to maintain a workable launch site on Christmas Island as insurance against a future Soviet treaty violation. Meeting on Nuclear Test Ban 93

President Kennedy: Well, we’ll see what they say. If they refuse to give us this long-term agreement, then we’ll [unclear]. Haworth: Now turning to the other paper, it had to do with—where is that?—possible technical developments in these areas, so long as there is a [test ban] treaty or [there is] not to be all-out testing, or testing development and so forth. A lot of it has been said already around the table, so I’ll try to be very brief. We considered the case of a total test ban, by that I mean a really effective total test ban, and I think that our conclusions are the same as Mr. Nitze’s with respect to different [unclear]. So we then looked, Mr. President, at a comprehensive test ban with cheating. We considered two levels of cheating, one below 10 kt. and one below 3 kt. I think that one can summarize it very quickly by saying that, at either of these levels, one can study most of the phenomena of the basic underlying physical things. He can, of course, develop devices depending on the level at which he [unclear] tests.202 He can develop devices, small weapons, a combination of larger weapons. He can make tests that he can later extrapolate to still larger weapons. And it depends then on just how far he dare go. It’s an important thing, I think, though, that at 10 kilotons—for example, one can probably, by the scheme known as the [Choctaw] test, you could get the trigger of the secondary of a thermonuclear weapon—he can probably be pretty sure of having designs that he could trust up to several hundred kilotons, even though he’d only [have] done a 10-kiloton test. That’s typical [unclear]. Then there’s the all-fusion thing that’s been already mentioned. I believe that the most important aspect of that is the fact that it might unbalance the unbalance that now exists between the Soviets and ourselves on quantities of that material [unclear] values that we can measure. President Kennedy: What we need— Haworth: Well, we have much more fissionable material than anybody. It seems to me that these improvements in efficiency, all the way down to the all-fusion weapons, are, from this point on, probably more important, from that standpoint, than even from the standpoint of light- weight and the other military-type device. President Kennedy: I don’t see the . . . I see the advantage for them to cheat, but I don’t see that that makes for much of an advantage for us, does it?

202. Referring to a cheater country. 94 MONDAY, JULY 30, 1962

Haworth: No. Well, but we have been considering how the Russians see this. President Kennedy: But in other words, though, whether you have an agreement or not have an agreement—[Unclear exchange.] Haworth: Yes, I see. Right. I think it’s an additional reason to be very careful with the recommendations [unclear]. Then we considered the case of no restrictions on underground testing, and there, of course, you can do more of the same, plus the fact that you can then begin to do what are called reduced-yield tests for very large weapons, and in all probability in a year or two one can do tests up to a few hundred kilotons, and those could incorporate, then, these reduced-yield tests which would enable you to design weapons up to several megatons, or a few megatons, entirely underground. Now, with respect to the underground, the total comprehensive ban, and the possibility of cheating, I actually believe the most important thing is the point that Dr. Seaborg made in our last meeting, namely, that the fact that the cheater would keep his laboratories going, doing tests and experiments.203 There’d be a core of ideas that would keep the whole subject alive, would make the field more attractive to good, aggressive people. I think that is the most important thing. And of course it has a big impact on the thing I personally am most worried about, and that is the effect of a later abrogation, that it seems to me that our greatest danger—and I’m not saying the most likely danger, but the one that would have the biggest effect—would be if we would go downhill in our capability, the Russians would then after three or four or whatever years, bring a surprise abrogation. They would have two advantages: one, if they had wanted to cheat in the meantime and keep going, they could have some technical advance, plus this liveliness that I spoke of a moment ago, plus, of course, the fact that they would have planned it for a particular time and so forth. So I think that the one that— President Kennedy: What might they find out, though? Let’s . . . Given the kind of possibilities of cheating under this agreement [unclear] more reasonable. Obviously, they’re not going to take unreasonable risks, [unclear] people will test, but they’re [unclear] and abrogate in five years. What does it take to find out [unclear]? Haworth: Well, from the point that I spoke about earlier [unclear] . . . President Kennedy: Yeah, but they might . . . But I don’t see that any of the ones that you talked about, are really decisive.

203. The President last met with this group on Friday, 27 July 1962. Meeting on Nuclear Test Ban 95

Haworth: They’re probably not decisive. I don’t believe that underground cheating would be decisive. That’s one of the reasons why I say that I think these indirect effects, this effectiveness and morale of the laboratories and so forth, is more important than any technical advances that they would find out. And then I think that was, in turn, most important if it is leading up to an abrogation. Wiesner: Technically, people know that even if this situation developed and there was an abrogation, and we lost a year or two, that this doesn’t mean we’ve lost a military advantage. Now, [there are] so many other dimensions that this nation has an option on, if you want to, to move in.204 For example, we can increase the number of missiles. There are so many responses we have which you could do quickly. The problem is to make it obvious to them that increasing their arsenal would [unclear] respond [unclear] if they do abrogate the treaty. I think you have to have [unclear]. Rusk: [to Wiesner] Are you and Dr. Haworth [saying] the same thing . . . that it would be difficult to maintain a central core of men who give this their full intellectual attention [unclear] . . . ?205 Haworth: For a long period of time, actually. I think irrespective of magnitude . . . I think a formal treaty [unclear]. If it were a real treaty I think people would be rather willing to take [unclear]. President Kennedy: I think. . . . Let’s see now . . . [Unclear.] Sounds of papers being shuffled. Participants look at Foster’s memorandum. Foster: We have read them and [unclear] generally agree with these [Defense and joint Atomic Energy Commission–Defense] reports. I think the first [unclear] basic report which was expressed [unclear] in general terms last week, and following these studies, we would recommend in effect that you do a [unclear] we’re going to [unclear] in order to get the advantage in timing, we recommend that we table an atmospheric, outer space, underwater test ban treaty.206

204. Wiesner was talking about ways the United States could blunt the strategic consequences of a Soviet test ban violation. 205. Rusk is referring to the problem of maintaining nuclear weapons research under conditions of a total test ban. 206. In his formal paper, William Foster laid out seven recommendations: a. Atmospheric test ban. The United States should table an atmospheric–outer space–underwater test ban treaty. b. Comprehensive test ban. At the time of tabling an atmospheric–outer space–underwater test ban treaty, the United States should declare its willingness to accept a comprehensive test 96 MONDAY, JULY 30, 1962

President Kennedy: Have we ever tabled the one before [unclear]. Foster: Well, our ambassador [unclear] said the other day . . . Bundy: We have never tabled a treaty, we have made proposals . . .207 Foster: Right. [Unclear interjection by Wiesner.] [Unclear] was turned down and see which way this one is turned down. It would at least put us in a good position. And an atmospheric treaty does not have the domestic political difficulties which you would expect with the comprehensive [unclear]. At the time— Rusk: And, as well, it has very large international appeal. Foster: Oh, it has a great deal of appeal, really emotionally, and whether it is proper or not, it has a great emotional appeal, in terms of fallout. We would at the same time, express our willingness to discuss a comprehensive test ban treaty, without numbers, but involving a possible reduction in the number of on-site inspections, and involving a slightly different type of control post than had been in the Geneva treaty. We would not discuss numbers, of either control posts or the on-site inspections, unless the Soviets expressed a willingness to get away from their zero on-site inspections. President Kennedy: Have they ever indicated a willingness to go

ban treaty involving internationally monitored national control posts on Soviet soil and involving a possible reduction in the number of on-site inspections. We should be prepared to provide the conference with as much recent data as we can relating to detection, location, and identification capabilities of internationally monitored and coordinated national systems while making the point that this data did not eliminate the need for on-site inspections. We should avoid proposing specific numbers either of stations or of on-site inspections on the ground that we saw no point in suggesting or debating details or numbers until the Soviet Union accepted the principle of on-site inspections. c. Soviet testing. In the event the Soviets commence an atmospheric series, we should continue to indicate willingness to negotiate in both areas a and b but should indicate that we might wish to conduct further tests ourselves if the Soviet series produced extraordinary results. d. Domestic political preparation. The decision to table a revised comprehensive treaty should await the developments both at Geneva and in this country. A major campaign of domestic information and political preparation should be begun as to the new data and its significance. e. No-transfer agreement. The United States should press for a worldwide agreement banning the transfer or acquisition of nuclear weapons or nuclear technology. This course of action would be related practically but not organically to the other courses of action. f. Underground testing. We should continue our underground testing program until a comprehensive treaty had been achieved. g. Readiness to test in the atmosphere. We should, to the extent feasible, maintain readiness to test in the atmosphere. This would involve discussions with the United Kingdom as to the continuing readiness of Christmas Island as a test site.

207. The United States proposed a partial test ban in September 1961. The Soviets rejected this proposal. Meeting on Nuclear Test Ban 97 ahead with control posts? And now, of course, it’s got to be a question of what “internationally coordinated nationally controlled” control posts, what those words mean. [Unclear.] How do we interpret that phrase, in other words? Foster: Well, I thought, again, that we should go in, with the internationally monitored and coordinated control posts, so that the data from control posts on the Soviet soil would feed into the international system and that there would be the opportunity of having some representatives, other than all Soviet citizens, who will take a look at this situation. Now, the scientists, I believe it is fair to state, think that the value of that data is, from a scientific viewpoint, not particularly great. From a political viewpoint at home, however, it has a political significance, which without some such request for an outside look at the Soviet data, I think their political friends have made it quite clear to us that they would feel that this is a tremendous concession for the Soviet Union [unclear]. It would take a lot of education before we can accept such a— President Kennedy: But our whole scientific opinion is that we can do without that information from the Soviet Union as far as these control posts are concerned? Rusk: As far as detection is concerned. President Kennedy: [Someone coughs.] Gesundheit. This is really in a sense a political decision that there are increasingly [unclear] treaty. Unidentified: I think we ought to accept it myself. [Unclear.] President Kennedy: That could be the start. [Unclear] could be [unclear]. Arthur Dean: Well, I think that we could approach the Soviets and, under general [unclear] and comprehensive treaty, not mentioning the number of control posts and number of on-site inspections. Of course, they’re pretty smart. They would immediately start playing a numbers game with us, and say, “Well, you had 180 [control posts] before, and you’re talking about 19. . . .”208 President Kennedy: We were talking 180 around the world, were we?209 Dean: We were talking 180 around the world, and 19 on Soviet territory.

208. Arthur Dean was the chairman of the U.S. Delegation to the Eighteen-Nation Disarmament Committee at Geneva until 27 December 1962. 209. The President is referring to the verification system proposed at the Geneva conference in 1958. 98 MONDAY, JULY 30, 1962

President Kennedy: And now we’re talking about [unclear]? Dean: We’re talking about 20 on an international [basis] outside the Soviet Union and 5 on Soviet territory.210 Long: That is not a fair comparison, though, because although it’s 180 that one had before, where you covered all testing and all media, and with the 20 that you mentioned, you’re only [verifying] with respect to seismic [areas], so that, if you would . . . the numbers wouldn’t be quite that different. Foster: It might be 170, wouldn’t it? Wiesner: But we did want 17 seismic control posts in the Soviet Union and we’re now talking about 5. I think that’s a relatively— Bundy: We’re not talking about 5, I think that’s really the point. [Bundy chuckles.] President Kennedy: We’re now talking about 5 in the international system. [Unclear] understand [unclear]. Before this, we were talking about 180, is that correct? Long: Yes, that’s right. And those 180 had . . . All of them, or essentially all of them, had seismic equipment on site, but they also, all of them had various types of equipment to monitor tests at high altitude in outer space. President Kennedy: But will we still need that, won’t we? Long: There’s quite a good case to be made for letting the monitoring of high altitude and outer space be done by unilateral systems, so that simply [unclear]. President Kennedy: Why is that? What is that case? Long: Well, the case is threefold. One of them is that outer space is ideally the sort of situation where we can do fully as well by ourselves as we can with the [unclear]. [Unclear] as to the numbers of pieces of equipment, things that we go into that if we have to do— President Kennedy: In other words the United States alone can monitor that around the world? Wiesner: If we want to. President Kennedy: If we want to. So there’s 180, now we reduce that to 20? We could reduce it to 20, these . . . The conversation becomes confused. Evidently Dr. Long of ACDA envi- sions deploying new types of monitoring stations that were not prescribed in the old Geneva system of 180 stations. Meanwhile Jerome Wiesner has

210. The Arms Control and Disarmament Agency had suggested that the new technical information permitted a scaling back of the verification system to 25 national control posts that would be internationally monitored. Meeting on Nuclear Test Ban 99

just assured the President that some of the monitoring can be done by systems controlled by the United States within its own territory. Long: If one did the very tentative kind of technical proposal which we have been working on, one would include seismic and atmospheric in this international [system], and then the number of separate stations might be nearer to 50, of which [unclear]. President Kennedy: We’re at 50. . . . What about 20? Wiesner: Twenty at seismic only, you see. And these things are not supposed to be co-located [unclear]. President Kennedy: All right. [Unclear.] So 20 is the seismic . . . ? Long: Twenty of these would be seismic, some of which would have other facilities like electromagnetic pulse. And as I say, the total number would cover atmospheric and . . . President Kennedy: Some of these, 30, and the 20 seismics, and 30 makes 50. Would they all be located in the United States? [Several people simultaneously answer “No,” and someone adds “All around the world.”] So where do we get the 80–20? [Unclear] seismic. Where did we get . . . ? Long: Twenty is the number of seismic stations which by themselves, if no stations inside Russia, do quite a good job of monitoring seismic events. President Kennedy: [Unclear] do quite a good job. [General laughter, perhaps in reaction to this confusion over the number of control posts.] Wiesner: At the last meeting, Mr. President, last Friday— Unidentified: Mr. President, this is why we decided not to have precise numbers! Unidentified: Let’s not. Wiesner: Last Friday, you were given a chart which compared the performance of the system that Dr. Long is talking about with basic [unclear] with the performance of the system that we attributed to a [unclear] . . . President Kennedy: I know that they’re comparing in some way [unclear] with 180 [unclear] I know . . . testing the equipment in outer space, the atmosphere, seismic, and electromagnetic. Now we’re only talking about 20 that would be just seismic? Or 50 that would be just seismic? Long: No, they . . . If the . . . The 20 figure comes up over and over again, because if one focuses only on the underground problem, 20 stations outside Russia, 20 seismic stations, is a system that has been assessed in detail and whose characteristics are known rather well, and we are reasonably confident— President Kennedy: Is this 20 based on the new information, last month’s data, or is this based on the [unclear]? 100 MONDAY, JULY 30, 1962

Long: Well, it’s based on a consideration of last month’s data. Particularly the capability of those [unclear]. President Kennedy: All right. So now we’ve got 20 that are seismic. Now we’re talking about 50. So where did we get the other 30? Long: One would have—this is going to be cumbersome but I think [unclear] a lot, one would have about 15, around the world. Fifteen pieces of equipment which were acoustic, [unclear] then we’d have about 25 pieces of equipment around the world for electromagnetic pulse, but some of these various things would be co-located, so that the total number would be 45 or 50. President Kennedy: Now, tell me your judgment on the 20. As I understand it, the other 30 would be for above ground, is that correct? Then either [unclear]. With 20 seismic, if the Russians were cheating, so far as testing, we’re in [unclear] of this great data from the control posts within the Soviet Union. We didn’t have any [unclear]. What kind of . . . What are the chances of picking up [unclear] . . . ? Long: The detection threshold for, on a sort of comparable test basis would be . . . The detection threshold for the Geneva system for this particular standard [unclear] tuff would have been about 1 kiloton.211 The threshold for these 20 will be just about twice that, about 2 kilotons. The identification capability is reasonably close to the same. President Kennedy: Now that’s for tuff; and for the other material? [Several people answer simultaneously: “Alluvium.”] Long: The same factor of two would hold. President Kennedy: Was that five before? Now it’s up to ten? Unidentified: It’s actually up to 22. Unidentified: Twenty-two. Six and 12. [Unclear exchange.] President Kennedy: In other words, you couldn’t really do without any inspection in this time period, could you? Unidentified: You could not. President Kennedy: You could do without controls [unclear]. Unidentified: That’s correct. President Kennedy: What is your judgment, let’s say you have two conditions of . . . You don’t have reliance upon their national control stations, how many inspections, scientifically . . . How many incidences could you pick up on one of these [unclear] machines, whether it would

211. Tuff is hard rock in which a nuclear explosion can be tested. It is a mixture of volcanic ashes and igneous rock. A low-yield test (1 kiloton) would be easier to detect in this hard material than in the softer alluvium. Meeting on Nuclear Test Ban 101 be seismic, that you think it would require inspection in the Soviet Union [unclear] based on that latent data? Long: One would end up seeing something like very roughly 50 to 75 small earthquakes, small events, small seismic events, which were on land, which were sort of not obviously in the shallow coastal waters—so that there’s some reasonable chance to think they were on land [unclear] reasonable chance. But it should be said that that’s a number that does fluctuate from year to year, so that one year it might be 50 or another year it might be a hundred. President Kennedy: And in a previous year, this new information . . . how many do we think it would add? If [unclear] tell about . . . ? Long: Oh, the number would have been . . . well, with what previously, [before the] very new, it would have been very high, something like a thousand. President Kennedy: So now you figure that you can tell, by pointing these machines, you could pick up, distinguish, between an earthquake and an atomic explosion except in 50 to 75 cases, is that about it? Long: Yes. That’s in some ways an unfair, but actually a correct, statement. It doesn’t quite put the thing in the picture in the sense that a better station would detect more of those smaller events and of course leave somewhat more undetected, so that in a sense we would have a better station and it would see more events, at least maybe a hundred [unclear]. Wiesner: If we improved the system, so that the threshold goes down, we’ll see more and more events, so that [unclear] a very poor system wouldn’t see anything, needing inspection. But this is the dilemma [unclear]. President Kennedy: For example, if you move the threshold up . . . [unclear] talk about cheating Wiesner: Yup. You could. [Unclear.] Bundy: We’d be consistent then. Wiesner: But we’d be very happy if under all conditions we could see a clear implosion; but if we could, then these number of events might be four times as many. President Kennedy: Now, let’s say the 50 to 75, if you test . . . Does that include the 5 or 6 or 7 or 8 kilotons in alluvial? Unidentified: Yes. Yes. President Kennedy: Would that include, say, 2 kilotons in alluvial? Long: No, it would go to 5 to 10 kilotons. President Kennedy: Five to 10. And anything below 5 to 10 kilotons in alluvial would not show in that, would not go into the 50 to 75? Unclear exchange between Long and the President. 102 MONDAY, JULY 30, 1962

Long: Two kilotons associated with 10 to 20 in alluvial. I said 5 to 10. [Unclear exchange.] In tuff. President Kennedy: Two kilotons in tuff is equivalent to [unclear]? Several say, “10 to 20.” President Kennedy: Now, if you drop the . . . that’s the threshold is it? Long: Yes. President Kennedy: [Unclear.] On the alluvial, then, say, you had 5 to 10 in alluvium, could you pick that up at all? Wiesner: No. Long: Well, on this system, a single 5- to 10-kiloton test, a single 5- kiloton test in alluvium probably would not be seen. Bundy: What’s not clear to me is whether that’s true of all tests, or whether this depends on circumstances and conditions— Long: It does depend on circumstances. There’s a very significant amount of fluctuation in the behavior of these stations depending on precisely where the station is and where the test is, so that . . . Bundy: There’s a risk factor involved . . . Long: It shouldn’t be taken quite that. . . . There is a risk factor involved. Wiesner: As a matter of fact, if we all calculated that the threshold is 5 kilotons, I doubt whether anyone would have the courage to test [unclear] kilotons just because of the uncertainty in someone being able to [unclear]. President Kennedy: It occurred to me, there are certainties in regard to testing as well as . . . Bundy: Detection. Detection. Long: The fluctuation [unclear] in signals that are generated from various sites . . . Bundy: The same earthquake doesn’t give the same signal to different places. Rusk: Well, you couldn’t be comfortable testing up to these . . . President Kennedy: It . . . wouldn’t it help you very much to have additional detection? [Unclear] reduce the number from 180 to just 20 of the seismic—I don’t know all these figures. Wouldn’t it help you to improve, to increase the number, not reduce the seismic so much? Another 20 machines around the Soviet perimeter? Wiesner: If it’s right within the Soviet Union, you probably can’t help yourself a great deal . . .212

212. Referring to an explosion. Meeting on Nuclear Test Ban 103

Unidentified: [Unclear.] Wiesner: That’s right. Those few might help some, but I doubt we can find a marked improvement. Foster: It would help. It would help on this fluctuations—especially since we defined it as having to have four stations. Long: We had to have made provision, for example, [unclear] wanting to improve a quite substantial number of rather ordinary [stations], one would almost say, relative to these inferior, university-type seismic stations around the world: Japan, Russia, Iran, Iraq. . . . Those stations . . . each one is not very good, relative to these rather good ones proposed here, but every now and then one of them does pick up an event, and the fact that they are occasionally false in their [unclear]. President Kennedy: Well, it doesn’t seem to me that there’s so much objection to the number of control posts as there is objection [unclear] . . . Rusk: Unless they have . . . Unless they man them internationally. I think the Russians have objected to international— Tape cuts out for 13 seconds. Wiesner: Incidentally, I think that we’re talking about the core of the two proposed systems when we talk about the level of 22 kilotons in alluvium. It’s either accepting the set of figures that say 6 to 12, and this just involves being willing to spend more money and have better equipment, and have a more complicated system. So, an alternative to your proposal that would have more stations which also could be looked at in detail is that, including the best possible stations [unclear] limitations. President Kennedy: Yes. And as I say, I don’t . . . now, even if they . . . I gather from what you said, Doctor, that there isn’t very much that we would anticipate the Soviet Union, given its sophistication, that they would be able to develop with these tests. Haworth: There’s certainly a lot they would be able to develop, [unclear]; in my personal opinion, it would be unlikely to be decisive. President Kennedy: They could— Tape cuts out again for 45 seconds. During this period the conversation shifted to the status of negotiations in Geneva. The U.S. special envoy to the General Disarmament and Nuclear Test Ban talks, Arthur Dean, is speaking as the recording resumes. Dean: [ fades in] . . . then today are being turned down on the grounds that we now spend some 43-odd underground and know how to do it. I think they have also learned how to do underground better, and I think they’ve assumed that we were, in effect, offering them something which didn’t need any inspection, or any control system, [unclear] we 104 MONDAY, JULY 30, 1962

would be perfectly free to continue to do it underground.213 Now my general judgment is that they wouldn’t accept it. I also feel that, all of the Eight feel,214 that when we put out our Department of Defense memorandum of the 7th of July, that that was sort of a diplomatic signal that we planned to make some fairly important concessions on the comprehensive treaty.215 That’s the way they all interpreted it. The Swedes, Madame [Alva] Myrdal, their ambassador, has told me that if we don’t table a comprehensive treaty in about two to three weeks, she is under instructions from Bernd Lundgren, their foreign minister, to come in with a fairly important proposal for a comprehensive treaty. And the Swedish scientists are very suspicious of our data. They can’t understand how we picked up the Soviet tests, underground signals and, second, in the French test by distant instrumentation. And yet we say that we can’t always detect and identify by distant instrumentation. They are very . . . She tells me that she hopes we will come in with a comprehensive treaty, but that if we don’t within that period, she is under instructions to do something fairly comprehensive— President Kennedy: Now what is our answer to those two points about picking that up? Haworth: Well, the French test, for example, was above 40 or 50 kilotons and it was in rock, hard rock, which is ten times as good a signal as alluvium.216 Dean: But you see, that’s top secret, I can’t mention it. President Kennedy: Why can’t you mention it now? Long: The yield in magnitude, the magnitude is top secret.217 . . . [fade in] magnitude, which, by the standard thing, is . . . would be equivalent to 90 to 100 kilotons in tuff, or 15 kilotons in granite. [Unclear interjection.] That could [unclear]— President Kennedy: What was it in granite? [Unclear exchange.] Bundy: Well, that we don’t have to say.

213. The Soviets began to test underground in October 1961. The United States had started in September 1957. 214. The eight neutral members of the Eighteen-Nation Disarmament Committee. 215. The memorandum of 7 July alerted the world to the Department of Defense’s upward revision of current detection capabilities. 216. In other words, an explosion in hard rock is ten times easier to detect than one in alluvium soil, which is much softer and can muffle sound waves. 217. At this point in the conversation the White House recording machine switched from Tape 2 to Tape 3. Meeting on Nuclear Test Ban 105

President Kennedy: In other words, we’re now relying on the figure received in our machines and not on the special intelligence, so that’s a rather easy line. So, I think let’s go ahead. And we have some . . . Wiesner: But this is interesting because the rest of them probably will say it’s 20 or 30, but there’s still a disagreement between them by a factor of two, so— Unidentified: Anyway, they’re saying— Bundy: Well, that’s a whole lot more than nothing. Wiesner: Yup. President Kennedy: Anyway, could we detect it on our machine close by or would they go all the way around? Long: All the way around. A very long distance. President Kennedy: OK. Well, that’s one point. Now, the other one would be . . . What’s the other thing we talked about? The . . . Bundy: Semipalatinsk underground shot, which we also detected a little while ago. Long: Also big, very much the same size, detected by many many stations, both ordinary university types and— President Kennedy: How much did we figure that was in stone? Unidentified: Size 10? Long: A little bit smaller. President Kennedy: Is that in stone? Long: Yes sir. The rock in that area is, again, hard rock. Wiesner: These are both aseismic areas to which . . . [Unclear] happened in the seismic areas you might not have paid notice. Bundy: Well, not only aseismic areas, but testing areas. Wiesner: Testing area and very large explosions. Unidentified: Well, I think that that seems to me [unclear] answers. Dean: So far, that’s been regarded as top secret. Foster: Mr. Dean— Bundy: Every newspaper’s— Foster: The point for consideration here is we have declassified the use of several Nevada shots and told in what medium they are, what the yields were, and people around the world, of course, had their seismic counters at our facility. Bundy: [aside, under his breath] This is just nuts. Foster: So if that information has . . . should be dispensed if it hadn’t been—it’s been given out— Unidentified: Ahead of time. Foster: Well, it should because that would straighten a lot of this out. [Unclear interjection.] 106 MONDAY, JULY 30, 1962

Long: Wait a minute. Which hasn’t been . . . You were referring to the French shot? Foster: Yup. French and Russian. [Unclear] our information— Unidentified: From which then people can infer these things and straighten all this out. Wiesner: Yeah, but they’re always carrying the extrapolation too far, because these are under ideal conditions for detection with no attempt made to disguise or hide the thing. We’re worrying about poor conditions with people trying to hide, and we’ve got to keep saying this to them. Dean: I know— President Kennedy: I think Arthur Dean ought to maybe go ahead and say what he, these two points anyway. It doesn’t seem to me that this is very secret. Dean: Yeah. That’s fine; can I just finish my [unclear]? President Kennedy: Yes. Dean: I believe, and I’m in no position to judge the law; maybe our secretary and Mr. Foster would know, but the political situation is precarious—but I think the Indians have now come to the conclusion that, since we will not accept the 100 percent destruction of nuclear weapons and delivery vehicles and the abolition of all foreign bases in the first stages, that there’s no possibility of bringing the Russians and ourselves together and disarming. I think they’re very discouraged and very disillusioned. I think, therefore, they’re determined in the fact that they must get something before the UNGA [U.N. General Assembly] on nuclear testing. I think they are determined that they are going to introduce something, and most of them are much more interested in the arms race, at least at Geneva, than they are in the fallout. I think if, because of the political situation, we cannot table sometime before the committee adjourns on the first of September, if we can’t table something even with blanks in it—even if we put blanks in it, I think we would get a very good position in the UNGA—but if we can’t table something along the comprehensive line after we tried the atmospheric . . . I may be wrong, they might expect the atmospheric, but I think the Soviets will not, and I think most of the Eight there will be somewhat disappointed if we don’t come along with an atmospheric.218 I’m very much afraid that we might go into the UNGA, and that the Swedes, joined, I believe, by the Arabs, can themselves propose [unclear]

218. Dean was referring to a draft comprehensive treaty that would leave unspecified the number of monitoring stations and annual on-site inspections. Meeting on Nuclear Test Ban 107 something which might be far more difficult for us to combat in the UNGA if we ourselves don’t come forward with our own treaty before the first of September, and [unclear] largely without. Now as I said, I quite agree with the theory here that we ought not to just go in and table a comprehensive treaty with, let’s say for the sake of argument, five control posts inside the Soviet Union and say, 12 on- site inspections per annum, because I think immediately the Soviets would start driving on numbers, and I think India would start driving on numbers. And I think you’d end up with a number that you wouldn’t be able to sell domestically. And maybe the thing that they’ll do is to still continue to build these [unclear]. The Soviets, of course, are pretty shrewd and— President Kennedy: I’m not going to . . . I don’t see . . . That’s what I don’t understand, how we can do it in blanks. Dean: Well, I think they’re pretty shrewd. What [unclear] to say, whether you’re talking about a greater number of control posts or a lesser number. You’re talking, between 10 to 15 or 5 and 10. I think that they’re playing the game. President Kennedy: And you keep saying, “Well, will you accept any?” and they’ll say what? Dean: Well that’s . . . I’ll have to try. I think I’ll have to try it at least for two days with [Valerian] Zorin to see whether, as a matter of principle, that they would accept any control posts on the Soviet Union, on a . . .219 President Kennedy: What is our argument for not having a definite number proposed? Rusk: So long as the Soviets stand with zero, whatever number we put in, whether it’s 12, 8, or 2, would be subject to erosion. We both do our best to put in a reasonable number adequate to our needs. In the process of mutual opinion and discussion, this number will come down under pressure for no purpose. So what we can say is that, whatever number it is, you can be very sure that it’s more than zero. Bundy: To put it another way, Mr. President, sure we’re parlous with two groups of people, whatever number. If we put in a number n, the Congress will say it should be 2n and the neutrals will say it should be 1 /2n, and we will have a hell of a war over something that doesn’t do us any good at all if the Soviets stick with zero. Rusk: The main prerequisite is to get some agreement with the

219. Valerian A. Zorin was the Soviet representative to the Eighteen-Nation Disarmament Committee, 1962. 108 MONDAY, JULY 30, 1962

Russians. And if we put in numbers without getting a breakthrough on the principle from the Russian side, then we’re negotiating with the neutrals about something that doesn’t have any relevance to them at all. President Kennedy: If we’re talking, though, about 50 to 75 events, it seems to me that actually you don’t need 12 inspections. The President’s comment sparks an unclear exchange. His eagerness to bring down the number of required annual on-site inspections is controversial around the table. McGeorge Bundy is one of the President’s challengers. President Kennedy: You can prove this though, Mac. We were talking about 12 to 20 based on the number of events, and now we’ve cut the number of events into . . . what? A fifth or a tenth? Bundy: You’re saying exactly what the Swedes will say, Mr. President. President Kennedy: Well, that’s it. That’s, you see, the logic of it takes us there. By what do we cut our events? Unidentified: Well, then we’d have to add [unclear]. [Unclear interjection by the President.] Bundy: Probably about 10 [unclear]. [Wiesner is speaking in the background.] Depending, but you’re using different detection systems. But what you have to bear in mind as you improve the detection system, the number of events goes up again.220 [Unclear exchange.] Unidentified: The problem with that, I think it would probably go up by four Mac not by ten. Bundy: It depends where you look at it, to inspect it. Rusk: [Unclear.] When we first went in, we had one inspection for every five events, so we had a threshold. But when we revised the threshold, the ratio of inspections to suspicious events jumped from 1 to 40, so we thought that from 12 to 20 inspections, there was an overhang of the possibility of inspections which would give us some security. Now, you get below a certain number, and that overhang of inspections is not viewed as a threat. When you got down to three, for example, it doesn’t provide enough of a threat of inspection to apply real brakes on a place as large as the Soviet Union. Unidentified: What’s that, a lot of control posts? [Unclear.] Rusk: A lot of international control posts on Soviet territory.

220. Bundy is deflecting the President’s argument by making the point that as verification technology improves, more rather than fewer suspicious underground events will be detected. These, in turn, will necessitate more on-site inspections. Meeting on Nuclear Test Ban 109

The President appears impatient with this opposition to reducing the number of on-site inspections. He turns to other areas where the U.S. position can change in Geneva: on the number of required control posts, how they are manned, and the number of on-site inspections. President Kennedy: I think according to Arthur Dean, we’ll just have to go through with the changes we’ve made. This first place is international, we’re now talking about it as specifically manned [control posts]. We’re talking . . . well now, we’re not talking about internationally manned, we’re talking about internationally controlled. We haven’t defined what the difference is, have we, between internationally manned and internationally controlled? Dean: As I understand it, [as opposed] to having this [as] one-third are Western, one-third Soviet, one-third neutral on the control posts, we now are prepared to have these control posts manned 100 percent by Soviet nationals, except that we would like to have some right of supervision of the equipment and the calibration and the training of the personnel by [unclear] on the committee. It’s not [unclear] right of on-site inspection. President Kennedy: Well, it seems to me . . . Can’t we drop . . . What did we originally say was our number for control posts along the Soviet [unclear]? [Some unclear responses.] Dean: Ninety-two. President Kennedy: Now we’re talking about . . . It seems to me in this area, we could drop it. I mean, they were counting on this very much. There’s got to be some change in our position, otherwise we’re going to look [unclear] last month and that would look pretty bad. Wiesner: Well, the President’s proposal is that in addition to the [unclear] outside the Soviet Union— President Kennedy: [Unclear] 5 to 19 in. Wiesner: Will be 5 here— Rusk: That drops from 19 to 5 . . . Wiesner: Manned by the Soviets, which is a critical Soviet [unclear]. President Kennedy: That’s if we count the category before that. Foster: No sir. We’ve never mentioned it. President Kennedy: How long will that last when we don’t have any confidence in it anyway? The fact that we don’t regard it as essential. Why? Why can’t we say we’re dropping it from 19 to 5 because of our new information [unclear]? Bundy: Well one reason, Mr. President, one reason for the question is that the 5 is associated with a total net worldwide system of 25, of which 5 of these would be [unclear], 20 would be outside. 110 MONDAY, JULY 30, 1962

As you said yourself 20 minutes ago, there’s a real question of whether that’s the thing to do or whether we want 50 stations which would detect a lot more closely.221 I don’t think what we . . . This happens to be one system which we’ve looked through, but it’s not the only possible system, and I don’t think we’re in a position now to say that it’s the one to which we would sign on. We could put it forward as a sample, but I don’t think you ought to get pinned to it. President Kennedy: Say [unclear]. When did it . . . Did we ever put forward the drop of 180 to 20? Dean: No, sir. [Unclear]— President Kennedy: With no bombing data? That’s an American proposal? Bundy: It’s not a proposal; it’s only a study program. President Kennedy: I understand, but that’s an American— Unidentified: It could be co-opted. Haworth: This is a suggestion within the executive branch. President Kennedy: Well, why is it we can’t drop this 180 down to . . . drop it to 50? It really depends on what kind of controls, inspection, I mean, quotas we’re talking about. Whether they’re major or [unclear] circumstances, less sophisticated. Unidentified: Yes. President Kennedy: And that’s if we dropped the 20 to the 5. I mean, if we . . . What was the figure again? Unidentified: Nineteen. President Kennedy: Nineteen down to 5, then say on the question of inspections, we’ve got to first find out whether we’re going to get any action. If that’s the weakest part we’re going to be in. The fact of the matter is, if we said from 12 to 20, if we said 9 now, at least it would look like we could change, and 9, I would think, would be . . . the Soviets probably could take it [unclear] anyway.222 The question we have to decide is, if we said from 12 to 20 [unclear], are we better off to have a slightly different figure—as a result of new material—9, than we are with Arthur Dean over there saying, “Well, I can’t give you what our figure would be,” because [unclear] to be safe. I

221. The President did not say this. He never quite understood how the number of control posts rose from 20 to 50 in the course of Dr. Franklin Long’s speech. 222. The President is referring to on-site inspections in the Soviet Union. The U.S. position was that it required between 12 and 20 annual inspections of suspicious underground events to verify a comprehensive test ban. Meeting on Nuclear Test Ban 111 would think they would say, “Well, let’s get your figure and then we’ll make the Soviets come up.” I would think that one way [the onus] is going to be on him all the time for the next three months, and in the United States; the other way is going to be for the Soviet Union to break the [unclear]. Bundy: You could have the best of both worlds, maybe, by saying we could go at least to 12, and we hope lower, but the data aren’t yet completely examined. Then you’d know you’d get pulled further, but— Wiesner: I think it better if you don’t specify numbers, because if you have 12, people start saying well, you know, 12. Bundy: That’s true, but we know— Wiesner: We’ll say we’re willing to talk about a new number once we understand that there’s going to be some inspection. [Then] we’re in much better shape. Bundy: And that the number will be lower. Wiesner: The number will be—[Unclear exchange.] Foster: [Unclear] lead us to believe that it will be a lower number than we previously thought. President Kennedy: What will be Arthur Dean’s answer to why we can’t come forward with a new number? Bundy: It’s actually damned complicated, as we found out this afternoon. Dean: [Unclear.] I think I could explore with Zorin for a couple of days alone, but he and I alone, whether or not they in principle would accept a comprehensive treaty, if they would be willing to accept a lower number of control posts and a lower number of on-site inspections than we’ve been talking about before. And I think I can explore that with him. . . . If he’s too vague, I don’t believe I can spar with him much beyond two days, but supposing he said to me at the end of the two days, “No, we absolutely, flatly refuse to accept any control posts, and we flatly refuse to accept the on-site inspections [unclear].” Bundy is heard whispering in the background. President Kennedy: [to Bundy] I don’t agree with [unclear]. I think, well, I think we ought to, well why don’t we . . . Foster: I ought to mention one other technical factor that has not been mentioned, that relates to the inspections, and that is the defined area over which you can look, and that originally the Geneva system was supposed to be so that you had a 50 percent chance that it was actually inside the area where you were allowed to look. This is one thing that has been clearly done on a professional basis, whether by having fewer stations farther away, and so forth. And our position would be better if we could get that area enlarged, and that 112 MONDAY, JULY 30, 1962

would give us more breathing room on inspections, so that should, I think, be factored into the plan as well as the other two. Dean: Somewhere, around 200 to 500? Foster: Well, maybe [unclear]. [Foster continues to whisper in the background.] Wiesner: Actually, as it’s set up now, I think you will get the pattern that we have a 200 and a 500, and the 500 occurs if you don’t have a signal surround. And I think this would be the case in almost all the signals we’re talking about, so we’re talking automatically with the 500, would- n’t you agree? Unidentified: I would think so, and [unclear]. Foster: I just can’t see why this . . . increasing that would be nearly so objectionable to the Russians as more inspections. President Kennedy: [Unclear.] Maybe we ought to change that restriction. Dean: I don’t [unclear]. Wiesner: On a related point . . . in the list of things that’s been proposed here, as you know, issuing from the State Department is also a pretty [unclear], and after the Secretary of State proposed this the other day, it appeared to me that this might be the mechanism that would give Premier Khrushchev some flexibility if he needs it. After all, he’s in a very funny spot vis-à-vis inspections. He’s made the statement so many times that he isn’t going to have any inspection in the Soviet Union, that he has to have some way to get out of it. If they’re seriously interested in these kinds of thing, then they would [unclear] to, but he was in a position to say, “Well, I am really not interested.” President Kennedy: Well now, you know, Arthur, what about now, given the mood of the place? Are we suggesting that Arthur Dean can go back to them and say, “We’ll drop the number of control posts on the Soviet Union’s [unclear]”? Do we have agreement that that’s our position? Foster: Not right away, Mr. President. I think you can take a sam- pling tomorrow morning with the congressional leaders, and I can assure you all our mail and our discussions with the two committees that [unclear]. President Kennedy: Well, I agree the stories this weekend are unfortunate—they keep using the word soft and so on, which is very absurd. But the only thing is we do have, as I understand it, new information, and we don’t want to just dissipate . . . for political reasons, we don’t want to miss a chance, particularly if we are, which seems to be the general consensus, with a general agreement that we’re better off . . . and we Meeting on Nuclear Test Ban 113 don’t want to let the uninformed, in a sense, to use that term, hold us back and bring us into a worse situation. Haworth: Well, I’m appalled that they don’t believe it, sir.223 Bundy: Well, this isn’t partly because the job isn’t finished. It’s just— President Kennedy: That’s right. Haworth: Make up our own mind. Bundy: They’ve always been told that this data is very tentative. The data is really rather less tentative than [unclear]. Rusk: But Mr. Dean will only say that we dropped 180 posts to the range of 50. Well, that automatically, proportionally drops the 19 to the range of 5. That’s 5 being the total number of posts you’re talking about. I think we could go ahead on that, on a discussion basis. We’re not [going to] put it in the form of a formal treaty text. But I wouldn’t say [unclear] about that. President Kennedy: What is the . . . now I know that the . . . Has this been sort of explored in detail with the joint committee yet? Foster: Yes, sir. There was a technical presentation by Defense [unclear] for three or four hours, and then I was up for three or four hours, and was not . . . President Kennedy: Because they don’t . . . that joint committee doesn’t want a test ban, I mean, isn’t that their— Foster: Well, they want . . . They were expecting an atmospheric test ban. At this point in time, they’re against concessions, as they call them. The Foreign Relations Committee, before which I went after those two appearances, is almost . . . Well, [Senator] Clint[on] Anderson moved strongly for an atmospheric test ban. [Unclear], [Senator Stuart] Symington, [Senator Wayne] Morse . . . it looks like [Senator] George Aiken will be [unclear], as I say—but I talked to him a little bit—are all against this at this point in time.224 They say it’s too tentative . . . President Kennedy: Atmospheric? Foster: No, atmospheric is all right, that’s if it’s by itself. President Kennedy: I see. Nitze: [Unclear.] Has it occurred to them that we were not talking about a situation in which there was no inspection, because Stuart Symington

223. Some congressional leaders had questioned the implications of the technical reassessment announced by the Defense Department on 7 July. 224. Clinton P. Anderson, a Democratic senator from New Mexico, and George D. Aiken of Vermont were on the Joint Committee on Atomic Energy. Stuart Symington of Missouri and Wayne Morse of Oregon were on the Foreign Relations Committee with Aiken. Symington was also on the Armed Services Committee. 114 MONDAY, JULY 30, 1962

called me very upset and said, “I hope to hell that you’re not going to go through with this.” [Unclear interjection.] He seemed vaguely lost [unclear]. Foster: [Unclear] insisted on on-site inspections, both committees. President Kennedy: He did not [unclear]. Bundy: Is it not clear to them? I think the ones I talked to— The tape cuts off for 1 minute and 24 seconds. Evidently some of the missing conversation involves discussion of how to persuade the members of the Joint Committee about the significance of the new data. Long: [fades in] But you would take one large underground test as a calibration to explosions. President Kennedy: What about our own test? Has that told us much? Our own underground test? Doesn’t that tell us? Long: Yes, our own underground tests confirm all this, but you see, this is so [unclear] to see Russia, you have a neutral fellow seeing some of ours, for example, it did respectively but not nearly so well seeing these French Sahara tests. But all these confirm for us that it’s just that the very best numbers, the ones that are particularly interesting . . . I think this is just—[Unclear exchange between Long and Bundy.] Adrian Fisher: Mr. President, with [Senator] Hubert Humphrey as probably the strongest supporter that we’ve got.225 He takes—who wants this treaty really badly—he takes the position that he wishes that you do a two-stage operation. He said if you put any major, “the things we’ll call concessions,” now or table a comprehensive treaty based on “national systems,” the animals will go loose and people will take positions on this, so it will make it very hard to get a treaty ratified if we ever get one in debate. We originally, as you know, felt rather the other way. If you sound all excited about it [unclear] and he said, “If you really want a treaty, don’t do anything too fast, because if you do, you’ll have people like Jackson . . . “ Tape cuts off again for 51 seconds. According to Seaborg’s account of the meeting, several others reiterated Fisher’s view. They reported that “the proponents of a test ban in the Senate such as Humphrey feel that it should be taken in two steps: first, exploration without actual numbers and then a treaty.” President Kennedy: The Senate and the [unclear] consider the job [unclear]. On the other hand, maybe by the fall, the Soviets finish their tests, we make the determination that their tests are not a danger to us, that we might be able to really do something on a treaty. We will have two or three months, and they won’t be [unclear] to feel that they’re

225. Hubert H. Humphrey, senator from Minnesota, was on the Foreign Relations Committee. Meeting on Nuclear Test Ban 115 being rushed.226 Now, how can we . . . on the other hand, those people over in the [unclear] Senate. Rusk: Mr. President, the effect of what we’re saying here to Arthur Dean would be to go over there and talk about a comprehensive treaty. There would be two blank spots in it, and that’s the numbers, so long as the Soviets are sitting on zero. But in any event, we would like to go ahead with that in spirit, since we can go ahead on that now— Bundy: [whispering an aside to a separate conversation] I agree with that. This is so stupid as to— Rusk: —without reference to all this inspection issue. President Kennedy: Well, now can’t we—? Rusk: [Unclear] is enough activity for Arthur Dean for some time to come. President Kennedy is not persuaded that the administration should be so cautious. President Kennedy: [Unclear] trying to go from 180? So that there’s no point— Bundy: Well, he can certainly indicate that he’s ready to move, Mr. President— Rusk: Yes. Bundy: —and maybe we can give numbers in the control posts area if we avoid the numbers, but if you’re going to feel Zorin out as to whether there’s any give, if you get give, then we’ve got a clear course. Unidentified: That’s right. Bundy: If you don’t get any give, then we have to look again. Isn’t this going to be true all summer long? Rusk: Sure. Bundy: If you go back and talk two days— Dean: Yeah [unclear]. [Dean tries to interject.] Bundy: —then you have to ask again. Meanwhile, we’re at war on the Hill, and maybe we’ve got resources we haven’t mobilized for talking to these fellows. Rusk: See, we don’t really have a case to argue on Capitol Hill or for the public so long as the Soviets are saying zero inspections. President Kennedy: Yeah, but the only problem is how Arthur Dean . . . this thing could build into sort of a struggle and all the rest, and he’s got no data. And then he goes back there and, says . . . Well, he’s got to look like he’s got something more.

226. They refers to the senators. 116 MONDAY, JULY 30, 1962

Bundy: He can tell a lot, Mr. President. Now, there’s this very simple thing. If people don’t even know the difference between a 50-kiloton shot in granite and a 5-kiloton shot in alluvium, there’s quite a lot to be said at Geneva [laughs], it seems to me. Unidentified: Yeah. And we’ve got [unclear]— Bundy: We’ve got to look around and do a lot of declassifying. Dean: I don’t want to overexaggerate what might happen if the Swedes come into this thing, but I think the Swedes feel that we’ve had this information a lot longer than three weeks ago. Bundy: Well, that’s another thing we could say—with straight honesty. Dean: And . . . I think the Swedes may come in, and I think the Russians would also come back on this thing. Our data now in effect goes back to the occurrence of their [unclear] back in 1959. Foster: By good luck not by good knowledge of their [unclear]. President Kennedy makes an unclear response to Foster. Dean: I’m really sorry, but I think, and I don’t want to exaggerate this thing, but I think that if we don’t use, if we don’t do . . . I don’t want to get you in trouble on the political situation here, but you may find that if we don’t come up with something very good within two to three weeks, that the Swedes and the Indians and the Arabs may come in and table their treaty and bring their scientists in to prove that we can do a lot more than we’re prepared to say that we can do as of the present time. Then you’ve ruined—according to the UNGA—[unclear], and you’ve got their plan plus their data which I think puts us in a very difficult position for the UNGA this fall. I don’t want to overexaggerate that speculation, but Madame Myrdal has told me that she’s under instruction [unclear] to move within two weeks in a major way if we don’t do something within two weeks. Wiesner: That could be. That could be. Bundy: From what I heard, Art, with all the dope that we’ve got in front of us that we’re pretty sure they don’t know, you could make three 6-hour speeches. And if she doesn’t have to go back and tell them [unclear]—[Unclear exchange.] Dean: No, she doesn’t. But I think the Swedes are onto something, because this fellow [unclear] keeps coming around everyday, asking, probing, probing, probing, asking for more information. And I think that they think that we’ve had this data that we are now saying [since] the seventh of July, for over a year. President Kennedy: For over a year? Dean: Yes. President Kennedy: What do they base that on? Meeting on Nuclear Test Ban 117

Dean: Well, I think we have. President Kennedy: We have had this data? Long: Couldn’t have got it from the Russian test or the French test until the last year . . . Dean: Well, I think this data’s been available to AFTAC for well over a year.227 Dean’s comment provokes a loud outburst from a few participants who speak over each other. Bundy: It’s nuts to even say that! [Laughter.] Unidentified: Oh, I agree. President Kennedy: I’ll tell you . . . I sent a memorandum to the Secretaries of State and Defense about this, because, as I say, I don’t know anything that we’ve done that is more confused and spread havoc that this thing . . . as far as the government’s going [unclear]. So we’ve looked into this question—I sent a memorandum with exactly that question, how long have we had this, and why, if we had it for any length of time, wasn’t it made available to the disarmament agency? So I sent that over to the Secretary, so perhaps you could tell us . . . Bundy: He’s answered. McNamara: Well, I would be happy to. The information is based on analysis, further analysis of the Russian and French tests. The French tests occurred on approximately May 5, if I remember the date correctly. It normally takes 60 days to transmit the information from the collection stations to the analytical groups in Washington, which would mean that they received it on July 5. In this particular instance, however, they became so interested in the possibilities that this information allowed them to, in effect, recalibrate their scales, they expedited the transmission and received it, I believe, on June 15. Now I’m quoting these dates from memory, but I can check my memo here. They began to analyze it on June 15, and on the weekend of June 29, which I believe was a Saturday, Dr. [Doyle] Northrup, [who was] at home, had a new idea of the way in which this could be interpreted, and either went to the office or took the material home with him on Sunday, reanalyzed it, and concluded that the estimate should be changed. Now that would have made the date approximately June 30 or July 1. The Disarmament Commission had called a meeting for July 3. The question was, then, since he had this new information that had

227. The acronym AFTAC stands for Air Force Technical Application Center. 118 MONDAY, JULY 30, 1962

developed between June 29 and July 3, should he present it to this meeting. He discussed the matter with his superiors in the Air Force. They said, “Expose them.” He went to the meeting. [Someone begins to tap on the table.] There were 25 people in the room; he exposed the information to them. Now I am told—although I wasn’t present at the time—that later, it was considered that since 25 people knew it, particularly because of the character of the people, this was likely to leak to the press, and it was subsequently proposed that it be distributed to the press. I think that’s a fair approximation of the timetable. Bundy: That’s right. McNamara: Since Mac was involved in the process— Bundy: I was deeply involved in this last part and would still . . . if they’re suspicious of us for having put it out, what they would think of us if it had leaked out beggars description. McNamara: But I think, Mac, it’s fair to say that this was a weekend analysis. Bundy: Look, now, this is what happened and now it’s also fair to say, in a wider sense, that if we’d all looked harder at the data and had a different system for spying it out, we might have known a lot a lot sooner. But it is not true that anybody sat on the knowledge of this stuff, and anyone who says that ought to have . . . really [ought] to be hit over the head. [Unclear exchange.] Rusk: There’s a major reinterpretation here, because somebody had some ideas they discovered [unclear] under credence, and not under national interest. Kaysen: But I think the important point is when the questions were asked, I think, because the fact that certain numbers existed doesn’t in itself make you change your ideas. [There is a whispered side conversation.] You have to ask the question, “Do these numbers mean something different than what we thought they meant?” Bundy: That’s right. Maybe we were dumb, but we weren’t corrupt. President Kennedy: Now we’re going to get Arthur . . . Unidentified: [Unclear.] President Kennedy: Given the problem at home, given the fact that we’re really rather indecisive about the significance of these matters because it’s all new, where do we go and deal with Zorin . . . ? Zorin will say to you that he won’t allow anybody to be on the national control sites except Soviets. He will also say that there’s no inspections, and we will, after you and Zorin meet, go before the neutrals and you say, “Zorin says this,” and they’ll say, “Well, all right with Zorin, but what about you?” That’s where it seems to me his problem is going to come [unclear]. Meeting on Nuclear Test Ban 119

Dean: Well, I bet I . . . President Kennedy: For instance, if we could say a change that will not be particularly controversial, but I say, well I say, we could change the number, though we daren’t put it into distribution, the number of . . . [Bundy whispers] control sites. That’s where all the difficulty is. It all depends what kind you have and where you locate it. At least he can say he’s gone from 180 down to 50, can’t they? That certainly isn’t . . . What? Unidentified: Does Arthur have to respond to the neutral nation proposal which is on the table? Wiesner: Because there is already a specific proposal. President Kennedy: What about? Wiesner: Which says that essentially the national type of detection system and inspection which is rather ambiguous as we read it here, you can’t tell whether it’s invitational inspection or permissive, unless— Rusk: Mr. President, the Eight only, with the possible exception of India, appear to walk the fence that some control, some international inspection, is necessary. It seems to me that so long as the Russians are saying zero, we can get the neutral nations over there to put their heat on the Russians, rather than on ourselves. But we don’t have to come out, we can intimate that these figures are lower than we thought they had to be at the beginning. But just so long as the Russian figure is zero, the neutral problem is with the Russians, not with us. . . . The tape cuts off again, this time for 51 seconds. President Kennedy: . . . if we went to the previous data, this kind of inspection system, with the progress that they can make underground, is still a terrific gamble for the Russians.228 [The President continues to speak softly.] Haworth: Well, I agree. And I . . . well, I think, Mr. President— President Kennedy: In the first place, we tried to put in a separate category what they could get by cheating underground. And that . . . they know that they could get some things, but when we talk together what we could ask them . . . what they’ve got. As I understand it, the scientists tell us they don’t think they could make decisive breakthroughs. So they have to have a reason for cheating, and if you’ve got the chance to inspect them, even ten times, you’ve got a pretty good—even with the previous data—you’ve got a chance that I wouldn’t think they’d, that anybody’d want to take.

228. The President was returning to his earlier argument that even scaled down, the proposed verification system would deter Soviet cheating. 120 MONDAY, JULY 30, 1962

They’re not gonna let us do it anyway. They’re not going to let us go tracking around the Soviet Union ten times in a year anyway, are they? Dean: Now, as I understand it [unclear]. Unidentified: [Unclear.] President Kennedy: You don’t think they’ll let us go any time? Dean: As I understand this data—I’d like to have the scientists correct me—I’ve been troubled for 18 months about the fact that this system we’ve set up is really a Frankenstein. The one that we originally had set up, with 180 control posts and that type of thing, I . . . the cost and the whole thing, I’d always thought that it would never work, and that if we could do these things on a national basis, and where we could build our own equipment and have our own personnel in to supervise it, plus this tied in to some kind of an international commission with an obligatory right in the commission to determine when you make the on-site and to make it obligatory and not invitational [that then it might work]. And all the Eight have told me that when I say it must be obligatory, “We agree with you.” Now, I’d always thought that instead of making a concession to the Soviets, or making this a softer system, I think you really have got a harder system, a better system. Wiesner: You’d get it quicker. Dean: Now if we could . . . and you don’t have to wait this three years while you install these 180 control posts when you really have an uninspected, uncontrolled moratorium. If we really could satisfy the congressional committees that the scientists are correct on this data, and that we’ve even got a better system, perhaps we could get in on the public and all of the newspaper accounts who used the word soft on Monday [morning], or concession, or it looks as though you’re giving something away to the Soviets. I actually [unclear]. President Kennedy: I’d prefer that word soft. . . . Dean: —you’re improving it; you’re improving the situation. Foster: Mr. President, it seems to me that this is a good system, it can be put in sooner, it is salable to the Congress. It just needs a little more time, and a little more . . . than just me selling it to them over the [unclear]. It seems to me also, however, perfectly negotiable to go to the neutrals and the nonaligned and say, “We have come back, and our data allows us to accept a good many of the philosophies within your proposal—national control posts, augmented by an international commission and international monitoring and coordinating.” It also allows us to claim in advance that we will be able to substantially reduce the number of control posts— Bundy: And on-site inspections. Meeting on Nuclear Test Ban 121

Foster: —on Soviet territory and of inspections, over our previous plans. Now, if you don’t have to give numbers at that point. I think you’d say, “But before any of this can take place, we have got to get acceptance of the principle of on-site inspections in the Soviet Union.” The President realized that no one in the room supported his view that it was in the interests of the United States at that time to authorize Arthur Dean to present precise changes in the U.S. position. President Kennedy: I generally agree [unclear], so that’s all right with me. Now the question is, what about the scientific briefing? Get all of this clear, the real essence of all this, [unclear] limitations as well as the possibilities, can be presented to all of them, so that some Swede isn’t up there . . . Wiesner: You mean in Geneva? President Kennedy: Yeah. How exactly . . . Who’s going to do that? Foster: Oh, we’re gonna send Dr. Long, hopefully Dr. Wiesner, a distinguished seismologist, either Dr. [Frank] Press or Dr. Oliver or Dr. [unclear], from AFTAC. Wiesner: Up to [unclear]. Foster: —from AEC. And invite the other nations to do this, giving them a time, a week’s notice. The Soviets, I understand, are . . . have said that they would be willing to discuss this thing— Dean: [Unclear.] That’s right. Foster: —with competent people. Now this gives us, again, a week or so in which we can do some verbal arrangement on the Hill . . .

The tape cuts out for eight minutes and four seconds. According to Seaborg’s diary account, “Foster reiterated that he would like to table the atmospheric test ban treaty, and Bundy reiterated that Congress would be troubled if a comprehensive treaty were tabled at this stage depending solely on national detection posts. . . . Vice President Johnson said that many senators have talked to him about their concern about opposition to such a treaty.” According to an unsigned memorandum on this discussion, the participants made the following recommendations and suggestions:

Mr. Foster summarized his view. We should table a treaty banning only atmospheric tests now. We should tell the neutrals that our new data means we can accept a national detection system, fewer detection stations, and fewer on-site inspections, but we must first get acceptance from the Russians of the principle of on-site inspection. 122 MONDAY, JULY 30, 1962

Ambassador Dean repeated his view that we should table a comprehensive test ban treaty even though all its details could only be spelled out later. Mr. Bundy pointed out that tabling a comprehensive treaty would upset the senators. The Vice President acknowledged that many senators were upset. They are concerned about what we are now doing and they need additional information. Possibly the President will have to talk to certain key senators. Ambassador Dean restated his view that we should introduce a revised comprehensive treaty now. Mr. McCone said that the congressmen are worrying [about ?] the test sites in the Soviet Union.229

Foster: What we propose in the comprehensive treaty. The commission should take appropriate measures, including arrangements for permanent observers at, or periodic visits to, elements of the system, in order to ensure that established procedures for the rapid, coordinated, and reliable collection of data are being followed. President Kennedy: Well, now isn’t it a fact that we don’t . . . that our new scientific data, if we believe it, will tell us that national control of these systems on the Soviet Union are not necessary [unidentified speaker agrees with President Kennedy] [unclear] make some progress? Haworth: They would jump on this localization. President Kennedy: Tell exactly where it is? Haworth: Yes. Wiesner: Well, as a matter of fact, if the Soviet Union did [unclear interjection], it would help on detection, too. But— Bundy: All right. Well, now we can’t count on it. The President had a new strategy. He would adjourn this meeting and try again later to achieve consensus on a new negotiating posture in Geneva. President Kennedy: That’s our proposal, there. Well, now, we’re still back . . . We’d better . . . We’ve been at this problem for over an hour, and I don’t think that . . . it seems what we’ve got to do is come back tomorrow. When are you going, Arthur? Dean: I have no plans [unintelligible because Dean and the President are speaking at the same time].

229. Memorandum of Meeting with President Kennedy, 30 July 1962, FRUS, 7: 520–24. Meeting on Nuclear Test Ban 123

President Kennedy: You probably ought to go up and talk on the Hill a little before you go, just to . . . I mean, Wednesday morning, we could arrange to have you go up on the Hill, and then we’ve got to have a meeting again tomorrow in which we go at this matter of exactly how he should word the three matters: How we should describe the control posts, and how we should, how many of these control posts he could save. Because it’s got to look like there’s some difference, otherwise we’re sending him back there to lose the case. Then we can’t have put out all this publicity and then make it look like we just didn’t do anything in effect. I think what we’ve got is political, Arthur, because I don’t think the Soviet Union is going to probably accept, certainly before their tests are over, and we’ve looked at them, and they’ve looked at them, and neither one of us is going to accept any inspection, a [unclear] observer, accept an inspection. The problem is to have it on their back and not on our back for the next five or six months. And . . . Dean: On this question of— President Kennedy: I’d just like the Secretary to go over there and have something to protect himself with, and us with, and not have it look like he’s just kind of shooting off. But Arthur Dean has all his information based on the Soviet interpretations, given to you [unclear] arrival. They’ll say, “Arthur Dean knows it’s better than this, but he’s been forced by the Pentagon and the warmongers to just come up with nothing.” Now they tend to . . . I know that the Congress is [unclear], also the broader constituen- cies of the Congress in this matter, particularly when none of us think they’re going to get a test [ban] anyway at this time. But now the question is, what is our posture, arguing this matter, our position over the next five or six months? We don’t want to have the Soviets and the main neutrals all together, and two-thirds of the General Assembly all beating our brains out.230 I don’t think anybody’s going to be very . . . particularly if we know an awful lot of people up there, on political grounds would be charging us with selling out no matter what we do anyway. So I think we’ve got to think of what his case is going to be when he gets over there. Dean: I might— President Kennedy: Why don’t you think about that overnight.

230. The President was anticipating a difficult time over Berlin at the U.N. General Assembly in the fall. Nikita Khrushchev was expected to come over in November, and Kennedy did not want to hand him another issue in the form of apparent U.S. intransigence on a nuclear test ban. 124 MONDAY, JULY 30, 1962

Dean: Yes. President Kennedy: Let’s get back tomorrow and talk about it. Dean: I mean, just [this] last discussion I had with Zorin, he was very relaxed the other afternoon and we were together for three or four hours, but he said to me, “Are you going to try to stop us from doing this next series of tests?” And I said “Well, what do you mean?” And he said, “Well, are you going to make some kind of a proposition that’s going to make us look badly because we go through with the next series of tests.” And [unclear], “Well, we could do it of course.” And I said, “What do you have in mind?” [Laughter.] He said, “Well, what do you think of this Padilla Nervo’s thing?”231 And I said, “Well . . .” President Kennedy: This what? Rusk: . . . Padilla Nervo’s proposal, [unclear]. Dean: Padilla Nervo’s proposal. Rusk: [Unclear] stops January 1st . . . , sir. Dean: That you stop your testing in some stated period of time. Kennedy asks about the details of Padilla Nervo’s proposal and Rusk responds indistinctly. Dean: And I said, “Well, of course you’re also [going to] have to [Rusk continues to mumble in the background ] . . . you’re always going to have to be sure that the period of time is long enough, and you’re always going to have to be sure that you or ourselves don’t test last, and maybe we could work it out so we have some stated period of time. I don’t know what it should be. I think June 30th, ’63, is probably too early; but I said, “Even if we signed the treaty, and we both agreed to it, there’d be some period of time before it’d be ratified by our Senate, in which it wouldn’t be a binding agreement, but probably we could, if we did get together, we probably could agree on some period of time in which each of us could test.” And he completely tried to raise this three or four times as to whether we were going to try to stop them from testing, and I said, “Well, we certainly are open minded on that; we certainly would be prepared to work out some kind of a formula with it.” But he is very much interested in this Padilla Nervo formula. President Kennedy: That’s all just . . . it’s just in the atmosphere, is it?

231. Luis Padilla Nervo, the Mexican representative to the Eighteen-Nation Disarmament Committee, suggested on 14 June that the nuclear powers agree to stop atmospheric testing by 1 January 1963. Meeting on Nuclear Test Ban 125

Dean: They’re going to start—no sir—they’re . . . President Kennedy: Well, I meant [unclear]— Dean: Padilla Nervo is against all testing. [Unclear exchange.] President Kennedy: But he’s got inspection in there, ideally. Unidentified: January 1st was his date, wasn’t it? Dean: It is, but Padilla Nervo is— President Kennedy: It’s the date . . . It’s just the date the agreements begin, I think. Well, I think we’ve got to come back tomorrow. Let me just say again that in view of the publicity we’ve had [unclear] to date, in view of Mr. Dean’s own position over there, then I think there is the impression on our part that this new data should bring new hopes within the limits of our own concern for safety here, and also the Congress, and we’ve just got to figure out what we can give him to go back and sustain him for two or three months.232 And we’re going to be debating this, and we’re clearly not going to get any place with the Russians on this matter until they get through their tests and we’ve analyzed them. We’ve got to get something for Arthur. We’ve got to think about the little things. Now what are we going to do about the French? [Unclear.] Bundy: After this meeting, I think that we’re going to have further discussions. We’ve already said that this was your initial meeting with Mr. Dean. We simply say that again. If we could all do as well as we did over the weekend, we’d get a medal for good behavior. . . . It seems to me, if we could just—[Laughs.] President Kennedy: Anyways I might say coercion was [unclear] idea. Bundy: I tried to bat that down. Softness and concession has nothing to do with it. It’s what the facts indicate that we need to have that we’re talking about. We might all go after that one understandably. Wiesner: The trouble is the data is soft. Foster: Perhaps due to the frustration of the leadership [unclear] on this, with the Vice President might be helpful. Rusk: I think this [unclear] today. The meeting begins to break up. Wiesner mentions the timing of raising this matter with the congressional leadership. While the men stand and move their chairs, there are some unintelligible exchanges. After a door closes an argument begins between Arthur Dean and Robert McNamara

232. On 14 July, Arthur Dean had said to reporters that the new data might make it possible for the United States to withdraw its insistence on having any monitoring posts in the Soviet Union. He was quickly corrected by Dean Rusk. 126 MONDAY, JULY 30, 1962

over when the new data on detection capabilities was available. The President is overheard saying, “Why don’t we do this tomorrow?” Bundy: But really, nobody’s hiding anything. They may not. . . . Dean: A year ago, I had the chance, and I cross-examined this fellow [unclear]. But the [unclear] was disciplined for giving me information about [unclear] at all. I know perfectly well this son of a bitch is furious. President Kennedy: But some of this suggests [unclear]. Bundy: . . . dislike this information? McNamara: Mr. President, I’ll absolutely guarantee you that Romney . . . I said [Dr. Doyle] Northrup but it was [Dr. Carl] Romney that was the [unclear], that did this over the weekend of the 29th. . . .233 Dean: Well, I can show you charts dated a year ago where— Bundy: Oh, well three years ago [unclear]. Unidentified: Is that going to go outside of this room? President Kennedy: Well, you’ve got to do that, but I’ve got to say, I . . . You know, Romney’s . . . of course . . . couldn’t . . . Do you feel that this [is] information they had? Dean: I don’t think they realized it. But I, when I kept cross-examining them about it, cross-examining them about it, cross-examining them about it, they finally disciplined Doyle for giving me too much information!234 McNamara: Well, that may be. I don’t dispute that at all, although that isn’t going to happen. It isn’t happening now. And, of course, definitely . . . But Romney didn’t have these ideas, he didn’t have the data [unclear]. Dean: Well, I got suspicious myself over this thing, not that anyone was hiding anything, but I just kind of put all of the little stuff together, and I kept cross-examining all of these fellows, and finally they . . . I got silence. And I went after them all again and that’s . . . Bundy: That’s what’s been changed. [Unclear exchange.] President Kennedy: What I’m talking about is talking about bringing down tomorrow John McCloy and Bob Lovett as a . . . sort of independent outside people who might be able to help out with the joint committee . . . that wanted [unclear].235

233. Northrup and Romney worked at the Air Force Technical Applications Center (AFTAC). 234. Dean is referring to the Air Force. 235. Robert A. Lovett and John J. McCloy were two of the most experienced national security specialists in the United States in 1962. Secretary of defense during the Korean War, Lovett had been offered his pick of senior positions in a Kennedy administration, only to turn them all down on account of his health. McCloy, assistant secretary of war during World War II and later the U.S. high commissioner in Germany, served under Kennedy as the President’s adviser on disarmament until October 1961. Meeting on Nuclear Test Ban 127

Unclear exchange involving Dean. President Kennedy: Particularly, Scoop [Senator Henry Jackson] is very responsive to Bob Lovett, and [unclear]. Dean: I think Lovett will be fine. Bundy: Are you going to be OK on this, on the data, at the meeting? Dean: Yeah. President Kennedy: Well, now first— Dean: You sure about it? Was he fine with this? President Kennedy: Well, yes, he hasn’t [unclear] very close to— Unidentified: No, he is not. Dean: Let me tell you what happened. He got very sore, because he said that we didn’t bring this thing up in either [unclear], but we did bring it up before [unclear], and he got up and walked out to another meeting, and the whole thing was [unclear]. [Bundy makes an amusing aside.] President Kennedy: [Unclear] has this information? Foster: Oh, Mr. McCloy has it, the chairman of it has it, and he’s talked a lot of [unclear] over the telephone [unclear]. President Kennedy: All right. Now what about this? What I’d like to see, is it possible to get Mr. McCloy and Mr. Lovett down in the morning to get it together . . . get all the data. . . . Bundy: Get a briefing— President Kennedy: . . . all the data, and have a meeting in the afternoon like we had today and discuss these three points? Unidentified: Sure. President Kennedy: Then Arthur Dean ought to think overnight [someone mumbling in the background] [about] what he thinks he needs to go back there, given the limitations in our position. And I just . . . Really, because you know, the Hill, we don’t want to find ourselves historically . . . and then we miss the chance [unclear]. Obviously, what will happen, as well, [unclear] series. But I think we’ve got to give him something to do. Otherwise it’s going to look like we got him back and didn’t really pursue [unclear]. . . . Bundy: I think you [unclear] if we do a hard job with the Committee and we get the thing calibrated so that we can— President Kennedy: If we can get McCloy and Lovett going, it is much easier for him to do this. Dean: I’m sure. President Kennedy: We’ll try to get them. Mac, you want to talk with—? Dean: I’ll call. [Unclear exchange.] President Kennedy: Mac, [unclear] if you can get them to come 128 MONDAY, JULY 30, 1962

down in the morning for the data and in the afternoon for our meeting. Have you got all the . . . ? [Unclear exchange.] Bundy: The only way to get [unclear]. President Kennedy: I think if we can get . . . I’ll tell you what, Mac . . . Could we make sure that . . . ? Bundy: Yes, sir. President Kennedy: I’d like to have Mr. McCone get all this, because they’re going to be talking to him, a lot of these people. Bundy: All of the technical data? President Kennedy: Well, have him listen to it, because a lot of the Joint Committee know him and then he would be in a position to do us a [unclear]. So let’s get that tomorrow morning, too. If we can get Lovett, McCloy, and Mr. McCone there at the same time; otherwise it just [unclear]. Bundy: Well, if we could get as many as we can get. That’s the easiest [unclear]. McNamara: Mac, who do you want to have do this? Bundy: Well, I would think that there are several people that ought to do it, and the question is who really can pull it together and harden it up. And my . . . in some ways I wish you would do it. You’ve heard all the data; you’ve got an analytical mind. You can present it to a layman better [unclear]. McNamara: I haven’t heard this. This is just what I was going to do tomorrow morning assuming that there’d been no [unclear]? Bundy: That’s just what has to be done. McNamara: You have to pour this through a layman’s mind, and [unclear] some [unclear] fashion, but I can— Bundy: Well, I myself haven’t listened to it enough. McNamara: Well I have; but I would [never] do it. . . . If they can’t come down, I will definitely [unclear]. Bundy: Bob, we can probably hold the whole thing 24 hours. [Unclear] to have a meeting without getting this done, so let me find out what their availability is and . . . President Kennedy: Will you let me know, too? Bundy: Yeah, sure. When I know— McNamara: [Unclear] which requires you to process it through somebody. Might talk the same language as the uninitiated, which [unclear]. Bundy: This is plain. But also, you see . . . what did happen, and this is why people worry about, had worried about the earlier organization, is that when these fellows go up, they’re under instructions from General Meeting on Nuclear Test Ban 129

LeMay to make it very plain that all this data is tentative and implies no breakthrough.236 So these two create [unclear] . . . McNamara: Well, it’s a little more than that, Mac. Harold Brown feels that this is tentative.237 President Kennedy: Does he? McNamara: I wouldn’t say tentative. He feels there are many uncertainties, and of course there are. There is a tremendous amount of interpretation that’s— When the President is out of earshot, Bundy outlines his concerns about the President’s eagerness for new numbers. Bundy: The basic reason for not putting in figures is that there are . . . it isn’t just [unclear] events. I mean that the President keeps going back to that, but the moment you get a sophisticated understanding of the interlock between detection and inspection and threshold, and risk, you know that the number is a political number; it’s never a technical number. Unidentified: Yeah. Kaysen: This, I think, is an important point. I think the big thing about the new data that hasn’t been clearly said, Bob, is that all the uncertainties we have [unclear] a different direction. People are uncertain, and they are mostly uncertain about how much better this is. Dean: No, no, no. I don’t know about that, [unclear]. [Unclear exchange.] McNamara: I definitely don’t agree. Kaysen: I can’t believe we spent two and a half days on this— McNamara: Some people may be that, but Harold is not just as uncertain that they aren’t much better. . . . Harold is uncertain as to the range, and the point within that range which might turn out to be the most probable point, and the range is wide. Bundy: Yes, but it’s all in one direction. McNamara: No, no. I think the, except the— Bundy: Except that problem with alluvial testing; I thought it was a [unclear]. McNamara: That was a [unclear] problem. Kaysen: . . . But the alluvial testing [unclear interjection] is at least half a red herring. [Unclear exchange.] Unidentified: [Unclear] made a pressing case the other way.

236. General Curtis LeMay was Air Force Chief of Staff. 237. Brown, later secretary of defense in the Carter administration (1977–1981), was director, Defense Research and Engineering of the Department of Defense in 1962. 130 WEDNESDAY, AUGUST 1, 1962

Dean: What do you fear? That’s what I want to know. [Unclear exchange.] Kaysen: Mac, Taz wanted you to know that he’s collecting [unclear] for you or for somebody’s customer. [Unclear.]238 Bundy: Yeah, I have a customer. [Unclear exchange.] Door closes. The President forgot to turn off the machine and the tape spooled out. There is some indistinct corridor discussion and then someone, probably Evelyn Lincoln, turned off the machine.

As Bundy had suggested, the matter could wait 24 hours. Lovett and McCloy could not come down together on July 31, so the next meeting on the test ban would be held over to August 1. In the meantime, the White House Press Office announced that the President would be giving a press conference Wednesday afternoon. The President already intended to discuss Peru at that time; but he would also be expected to have something to say on Arthur Dean’s instructions by then. The President had one more meeting before going for his second swim of the day. An old friend from Kennedy’s time on the Senate Labor Rackets Committee, Clark Mollenhoff, was in for an unrecorded 20- minute chat. Finally, at 7:25 P.M., the President could call this well-taped day over.

Wednesday, August 1, 1962

After taping nearly four hours of conversation on Monday, the President left no tapes from the next day.1 Tuesday, July 31 was largely taken up with ceremonial duties. In the morning, President Kennedy met with the Brazilian student leaders as suggested by Lincoln Gordon. Later he attended the swearing in of the new secretary of health, education and welfare, Anthony Celebrezze. However that evening, Kennedy held a very interesting meeting with Georgi Bolshakov that would have provided

238. Tazewell Shepherd was the President’s naval aide.

1. The Secret Service numbering system suggests that no meeting tapes were made on 31 July 1962. WEDNESDAY, AUGUST 1, 1962 131 some insight into his back-channel relations with the Soviet Union had he taped it. Ostensibly a journalist, Bolshakov was actually a Soviet military intelligence officer. Since May 1961, he had had regular meetings with Attorney General Robert Kennedy. Although used by the Kennedy brothers to send feelers to Moscow, Bolshakov was not the Kremlin’s special envoy, though his reports on the Kennedys were sent directly to Nikita Khrushchev. At the end of July, however, Khrushchev had decided to use Bolshakov to request that the United States stop overhead reconnaissance of Soviet ships plying to Havana. The Oval Office meeting was arranged for July 31 so that President Kennedy could respond directly. The Soviet record of this conversation (no U.S. record has been found) indicates that Kennedy agreed to suspend overhead reconnaissance of Soviet merchant ships but wanted a promise that Khrushchev would put the Berlin question “on ice” until after the fall congressional elections.2 Nothing came of President Kennedy’s Berlin condition and so the President’s own promise to suspend overhead reconnaissance was not kept. Unfortunately, it would not be until mid-October that President Kennedy understood the reason for Khrushchev’s acute sensitivity to the security of Soviet cargoes heading for Cuba. The President resumed taping the next day, August 1. He had breakfast with the Vice President and his domestic policy advisers and then went into a meeting with the U.S. Ambassador to Cambodia and Averell Harriman, the assistant secretary of state for Far Eastern affairs. A large ceremony followed, at which the President signed the Foreign Aid Bill. The Secretary of State took a few minutes of the President’s time as did the daughter of the state committee chairman for New York, Catherine Pendergast. None of this was taped. Then the President turned to the stubborn problem of the U.S. position at the nuclear test ban talks in Geneva. The White House had already scheduled a press conference for 4:00 P.M. that afternoon, where the President intended to announce this new position. The President would tape their meeting.

2. The meeting with Georgi Bolshakov is listed in the Presidential Appointments Diary. See Aleksandr Fursenko and Timothy Naftali, “One Hell of a Gamble”: Khrushchev, Castro, and Kennedy, 1958–1964 (New York: Norton, 1997), pp. 193–95, for details of the meeting. 132 WEDNESDAY, AUGUST 1, 1962

11:30 A.M.–12:43 P.M.

Now, the question will really be whether for the next six months the United States ought to look like there is new information, and we haven’t changed our position at all, and the cat really therefore will be on our backs. Or whether we say, “Well, based on the new information, here’s where we’ll go, and go no further” and the cat then is on the Russians’ backs.

Meeting on Nuclear Test Ban3 After the test ban meeting on Monday, July 30, had adjourned, Kennedy asked John McCloy, who had served as the President’s adviser on disarmament until the formation of ACDA in 1962, and Robert Lovett, a former under secretary of state and secretary of defense, to travel from New York to Washington in order to study the VELA seismic results. Kennedy also asked the director of central intelligence, John McCone, to review the seismic results and to join with McCloy and Lovett to serve as an advisory group. On Tuesday, July 31, Secretary McNamara and Director of Central Intelligence McCone spent roughly three hours reviewing the results of the VELA seismic improvement program with a group including Dr. Doyle Northrup, technical director of the Air Force Technical Application Center (AFTAC); Dr. Carl Romney, also of AFTAC; and Department of Defense general counsel Norton.4 The group developed a table showing the changes in basic detection capability and the analysis of natural events by the number which would remain unidentified under three detection systems: (1) the system as it currently existed or was known in March

3. Including President Kennedy, McGeorge Bundy, Arthur Dean, Adrian Fisher, William Foster, Roswell Gilpatric, Vice President Johnson, Robert Lovett, John McCloy, John McCone, Edward R. Murrow, and Dean Rusk. Note that the official presidential log for August 1 does not list McCloy, Lovett, or Murrow as participants of this meeting, but both McCone’s August 2 memorandum and Glenn Seaborg’s account indicate that they were indeed present. Seaborg’s account also implies that Seaborg himself was present, as well as Dr. Franklin Long of the Arms Control and Disarmament Agency. [Glenn T. Seaborg, with Benjamin S. Loeb, Kennedy, Khrushchev and the Test Ban (Berkeley: University of California Press, 1981) pp. 167–68]. Tape 4, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 4. Northrup was harshly criticized by his superiors in the Air Force for his handling of AFTAC’s new information on seismic detection (see Memorandum of July 27 discussion, drafted by McCone, Central Intelligence Agency, DCI Memos for Record, 4/7/62–8/21/62; see Supplement). Meeting on Nuclear Test Ban 133

1962, (2) the March 1962 system with the most recent technology and knowledge, and (3) the so-called national system. Probabilities of success and deficiencies were also noted in the table.5 On Tuesday evening, Lovett visited McCone at his home. The two talked, and Lovett remained at McCone’s home for dinner (although McCone himself was out for the evening), reading the transcripts of the joint committee hearings of July 19 and 23, as well as additional material from the White House and McCone. Lovett gave McCloy and a select group of scientists a briefing on these documents the next morning at 10:00 A.M. Kennedy convened the meeting at 11:30 to continue the discussion of negotiating strategies at Geneva, as well as his statement for that afternoon’s press conference.6 The President turned on the machine as Dean Rusk suggested the President hear from William Foster, the director of the Arms Control and Disarmament Agency, who that morning took some soundings on Capitol Hill.

Dean Rusk: . . . including our security interests in trying to bring some end to this arms race, and then secondly, having decided what would be right for us to do, to consider what Arthur Dean’s negotiating problems are, to see how we can best give effect to that position. I think though that, since you [unclear] material already that it might be well for Mr. Foster to bring you up to date on his discussions with the [congressional] leadership, and you might want to get comments from Mr. Lovett and Mr. McCloy as to how this appears to them, after their rather extensive briefing, [unclear] first [unclear], summarized. William Foster: Well, we had a very interesting breakfast this morning, Mr. President. Senator [Richard] Russell, Senator [Henry “Scoop”] Jackson, Senator [John] Pastore, and Senator [Stuart] Symington were there, and we put before them what we considered to be the improvements in [detection] capabilities, and then I think I can simplify the discussion, which was quite extensive, by saying that, at the end, Senator Russell said

5. Table not attached to McCone’s Memorandum for the File, 2 August 1962, FRUS, 7: 531–33. 6. For the text of the statement which Kennedy read at the press conference, see Public Papers of the Presidents of the United States, John F. Kennedy, 1962 (Washington, DC: U.S. Government Printing Office, 1963), p. 591. 134 WEDNESDAY, AUGUST 1, 1962

that he recognized that these scientific achievements probably were sufficient to lead to some modification in the number of our on-site inspections. The point at which he felt he would have to differ very strongly with any change, was in changing the control posts from internationally manned to nationally manned. We informed him we felt that we had sufficient ability from outside to detect, without any Soviet contributions from their control posts, to detect better than we could before, and we still insisted on on-site inspection. We felt therefore, if we had international supervision of the control posts on Soviet territory, that this would give us enough of a handle so those stations would at least make some contribution. Well, he said, “Maybe so.” He said, “I shall have to tell you that I would have to vigorously fight any proposal of a treaty which gave up this international supervision.” Now . . . McGeorge Bundy: Gave up the supervision? Foster: The international supervision of these control posts. Arthur Dean: Well, do you mean the international supervision or international manning?7 Foster: Well, [unclear]. John McCone: Well I [unclear] the proposal he makes, and he was talking about international supervision with national manning, but they’d be interested in the supervision being on the job all the time. He’s not in favor of a roving team that would spot-check them occasionally. Bundy: [Unclear] internationally when some things get crossed— McCone: That’s right, that’s right—[Unclear exchange.] Unidentified: He will not raise those issues. McCone: He will [not] what? Unidentified: He will not raise those issues. McCone: On the basis . . . on an international operation, . . . national . . . Rusk: Mr. President, you will recall it is our proposal we have an outside scientist stationed at these stations to ensure against tinkering. Foster: Now, he further said on the way up to the Hill—Adrian

7. This was an important distinction. The existing U.S. position, as it was presented in the April 1961 U.S.-U.K. draft treaty, was that these control posts—19 on Soviet territory according to the Geneva system of 180 stations worldwide—would have international staff. The Soviets rejected this proposal. During the White House meeting on 30 July a consensus had formed that in light of the new scientific guidance it would be acceptable to allow the Soviets to staff their own control stations so long as they agreed to international supervision. This new position was proposed informally to the Soviets a few days later, on 6 August, in a private note to the Soviet delegation in Geneva. Meeting on Nuclear Test Ban 135

Fisher rode up with him, pursued this conversation—he said that if we simply, in the discussion, said that we were willing to discuss a change in the relationship of these control posts to the international system, without identifying what “supervision” meant, that he would not give us too much trouble.8 I think this is being appraised. So that I think this, I think some education— Bundy: Well, obviously it’s been modified [unclear] as John McCone [unclear] in his more recent . . . Foster: Well, I think that, while you’d have difficulties, this is not impossible on the basis of putting forward a willingness to modify our existing treaty, which is on the table, in the direction of lesser on-site inspections, on the basis of fewer control posts, and on the basis of a willingness to discuss the relationship of these control posts to an international commission.9 Is that a fair statement? Adrian Fisher: I would think so, [unclear]. His own feeling, right now, is simply, they have not crossed the bridge in on-site inspections, and we’re still just . . . As he said, [unclear] we’re still . . . President Kennedy: Yeah. Fisher: They haven’t given us the signal that they’re willing to talk, and then they’re, under these circumstances I think, you know, you’re maybe just going to a lot of effort . . .10 Foster: He said I don’t trust them at all, [and] I don’t think they’re going to do anything, but if you did it this way, this probably is a risk we could assume.11 It’d be a— President Kennedy: And have the Soviets ever . . . do they ever make a very sharp distinction between their willingness to accept a degree of international manning of the control posts and manned inspections? Actually, the control posts [unclear] doesn’t seem to me to present any espionage hazards comparable to free inspection. Have they made that distinction or do they—? Dean: Well, they say as of the present time that they will not permit any stationing of anybody, neutrals or anyone else, at control posts on their territory, nor will they permit any on-site inspections by anybody outside the [unclear].

8. Fisher was deputy director of the Arms Control and Disarmament Agency from 1961. 9. This would be in order to accommodate the proposal made by the eight neutral delegations to the Geneva talks on 16 April that an international commission of scientists be established to supervise the detection process. 10. The Soviets had not accepted the principle of on-site inspections. 11. Referring to the Soviets. 136 WEDNESDAY, AUGUST 1, 1962

President Kennedy: They don’t make any distinction between one being [unclear]. Dean: No. President Kennedy: Fine, good, well, perhaps, Mr. McCloy? The congressional reaction to the concept of “international supervision” for the control posts introduced a new twist into the policy review. The President, however, decided to move the meeting along. He was keen to focus on the advice of McCloy and Lovett regarding Arthur Dean’s negotiating instructions. John McCloy: Well, I’ve listened to this briefing this morning and have given it some thought. I learned that by . . . coming to the conclusion that we’ve got to make a very clear statement, and I think we ought to make it beforehand rather than in [unclear] composite treaty, of our insistence upon the on-site inspections. [Soviet foreign minister Andrei] Gromyko, as you confirmed, has said that this is an undebatable point. I think we ought to be just as undebatable on the other side, and I believe that the offer can’t be divorced entirely from the test ban, can’t be isolated from the test ban. I believe it has a big implication on other aspects of our disarmament. I think, unless we get this embedded in the whole disarmament process, that we’re not going to get anywhere, and I feel that if we gave way on this, if we accepted, ignored the statements which they have so explicitly made at this point, this would be an encouragement to further obstruction. I think the sooner we meet that head-on, the better off we are. Bundy: Can I ask you one question on that? McCloy: Yeah. Bundy: Would you . . . Supposing, which is not currently the case, but supposing we had a really major advance and could tell without inspection, no matter what they may say—12 McCloy: What I’m putting my accent on is verification rather than various independent controls. Bundy: It isn’t that you want to go there in order to go there; it’s that you’ve got to know. McCloy: That’s it. I’ve got to know whether they are cheating, I’ve

12. Bundy questioned the need to make Soviet acceptance of on-site inspection the sine qua non for all arms control or arms reduction deals. An atmospheric or partial test ban, for example, could be verified by the United States without a presence on Soviet territory. Meeting on Nuclear Test Ban 137 got to know. I’ve got to come down and test this event, if it’s a suspicious event. And I’ve got to do it, and I don’t mean in regard to a test ban, but I’ve got to do it all the way along the line, in disarmament, or else we’re not going . . . it isn’t in the interest of the United States to disarm. Rusk: The answer to Mac is that the object of inspections is to provide assurance. Unidentified: —Feedback. Rusk: If you can clearly provide assurance— Unidentified: That’s right. Rusk: [Unclear] day you look at it. Bundy: There are people who say the object of inspections is to establish the principle. I didn’t think that . . . McCloy: Well, that’s not what I mean, no. I mean, for the principle is what— Unidentified: We need to know. McCloy: —we need to know. We can’t equivocate on what we need to know. And, therefore, I would say to them that, you’ve made the statement that you are prepared [to accept on-site inspections] . . . We are not going to concede in any sense that we can’t have on-site inspections. It’s demanded . . . it’s an element that’s going to run through all the disarmament discussions. If you’re ready to give way on that, then we’re ready to sit down with you and discuss these modifications that we feel the advance of the art has enabled us to do. Rusk: Mr. President, I think Mr. Dean would agree that Lord Home and I both laid a very strong basis for this point at the last meeting, where we had—13 Dean: That’s right. Even the Pole.14 Rusk: —several people who came up after it and said that we had made a very fine statement. Emphasizing the very point that you made that inspection has to come about. This secrecy is incompatible with— McCloy: It’s incompatible with constructive disarmament. President Kennedy: Well, we . . . I understood that the Secretary of Defense, after examining this new scientific information, came to the conclusion that based on this new information, instead of insisting on 12 to 20, we could protect our national interests by having only six on-site

13. Alec Douglas Home, Lord Home, was the British foreign secretary. 14. Presumably Professor Manfield Lachs, Polish deputy representative to the Eighteen- Nation Disarmament Committee. 138 WEDNESDAY, AUGUST 1, 1962

[inspections]. That is not our governmental position, but that may or may not be Secretary McNamara’s position.15 But there isn’t any doubt that if they would accept the principle that we would be able to change our required number of— McCloy: On-site. President Kennedy: . . . on-site inspections. Now . . . Unidentified: That’s correct. President Kennedy: This may be just academic unless they change it. The question would be whether we would indicate, with what words we would indicate our willingness to change, providing the principle is accepted. Or do we, when Mr. Dean goes over there, and they say . . . He says that he doesn’t have the principle accepted, and they say to him, “well, assuming the principle were accepted, what would this new scientific information permit you, require you to insist upon?” Does he then say, “Well we can’t even discuss that until we first get the principle accepted?” Or does he say, “Well, we could reduce it, and then perhaps negotiate a reduction.” How does he handle that? McCloy: We would . . . Is the chief accent, and if I could just . . . is the chief accent on the number of control stations, the reduction of control stations, rather than the reduction of the on-site inspections? I do believe as a concomitant of this better detection system, we probably won’t have as great a necessity for on-site inspections, as you would have had, but I— President Kennedy: I understood that this new information could really . . . that the nationally manned, internationally monitored control stations would permit you to check information outside and inside in such a way that it really wouldn’t be very worthwhile for them to try to cheat on the . . . There would be quite a risk in their cheating with the kind of information they send out from the nationally manned control station. Bundy: It’s true, Mr. President, but remember they can always lower the threshold way down, and enlarge their level of safety.16 I mean, change— President Kennedy: Yeah, but that’s why I think that’s why we have to insist on the international inspection. Now, if you have six international inspections combined with any kind of effective international monitoring

15. John McCone had stepped out of the meeting by this point. He would become very concerned later when it was reported to him that Robert McNamara’s position was that the United States could live with as few as six on-site inspections. 16. Bundy is referring to the fact that the Soviets could resort to testing very low yield devices, which would be very difficult to detect. Meeting on Nuclear Test Ban 139 system of the nationally manned control posts, combined with an adequate number of stations outside the Soviet Union, the rewards for the Soviets scientifically of cheating is really, based on what we heard the other day, is rather limited. They’re not going to gain anything, given the way the art is now developing. They’re not going to be able to make much progress, with these rather limited tests underground, and the gamble, to have six or eight international inspections . . . I don’t see that it’s worth it to the Soviet Union to take that chance to cheat, because they’re not going to gain much. If they were testing in the atmosphere, they can make great progress, but they’re not going to be able to make that kind of progress underground. What is the return to that? Why should they cheat under those conditions? McCloy: Well, anybody that’s experimenting, underground or in the air or where[ever], as against the fellow that isn’t experimenting, is gaining. You’ve got to operate— President Kennedy: Yeah, but even . . . but our scientists tell us that the amount of gain they can make is very low with these tests, if they cheated. Compared to what they now have as a result of their last atmospheric test, and will have as a result of their [Soviet code-named TYCHI] one, is quite limited. McCloy: Well, I think that’s probably so, although this morning, Dr. [Leland] Haworth was a little bit hesitant— Bundy: I’ll tell you what is real clear, and I think this is the more logical one if history is on our side. What they would do is stuff that would not be cheating, up to the point when they abrogated. Then they would abrogate massively. This would keep their laboratories alive; they could plan against a date. That’s the more serious [unclear]. President Kennedy: But that’s an argument against any test ban. Bundy: That’s correct. Yeah. Unidentified: That’s right. That’s right. President Kennedy: Now, against that we have to put the studies of the Department of Defense about the problem of diffusion—17 Foster: The risk— President Kennedy: And other countries testing and making these things so cheap that everybody will have them in great quantities. So that it’s not a single scale. McCloy: Mr. President, although it may be true, that you don’t get in

17. Kennedy was reminding the group that he believed a strong argument in favor of a test ban was that it would curb nuclear proliferation. 140 WEDNESDAY, AUGUST 1, 1962

bulk, once, a great advantage, if you have a steady accumulation from year to year of underground testing, and we not being able to test—and by assumption we can’t test because we’re an open society; they can— maybe that accumulation in the end is pretty substantial. I’m not saying that this isn’t a risk that we ought to take. I’m very much in favor of a test ban, as you know. I think it’s symbolic. It has great significance for our security. To achieve it, I’m ready to make some sacrifices for it. I don’t think that you can treat this [as] entirely de minima, however: a constant series of underground, undetected testing on their part, as against no testing on ours. President Kennedy: No, that’s right. That’s why we’re insisting on inspection, as I say the Secretary said that . . . 18 I wonder . . . We’ve got two problems: One is what I might say this afternoon, because I think these stories that have come out have caused an unnecessary concern and alarm, because they’re always using the words soft and concessions and all the rest, and the scientific information is not regarded as hard enough to make concessions or to soften. So I’d like . . . It seems to me I ought to really get it as clearly as we can today what our position is going to be, and also what we ought to, what Arthur Dean ought to say. What’s your thought, Mr. Lovett, on what we ought to do on this? Robert Lovett: Well, I agree, Mr. President, with the comments of McCloy. I’m a member of the once-burnt, twice-shy club down here. I’ve been through this Hans Bethe affair, and the Committee of Experts, and I’m aware of the fact that in this particular instance you have no scientific breakthrough.19 The scientists themselves confirmed that this morning, as they have in the recent past. We have some improvement. There’s no reason to believe preliminary figures can’t be materially changed, changed in the important elements at least, and there’s no reason to think that additional improvement won’t occur over a period of time, but at the moment, there is no scientific breakthrough. There is some slight improvement in detection means outside the country.

18. The President may have been referring to McNamara’s apparent belief that the number of required on-site inspections could be reduced without any additional risks to national security. 19. Lovett appears to have been expressing frustration at the contradictory recommendations made over previous years by the Foreign Weapons Evaluation Group chaired by Cornell University physics professor Hans A. Bethe. Meeting on Nuclear Test Ban 141

Secondly, I have a feeling that we are making this decision unneces- sarily complicated for ourselves by regarding this as a negotiation. I don’t think this is a negotiation, Mr. President. I think this is a phase of the Cold War, and I think it ties in with a lot of other things, as, for example, the GNC form of the draft of the treaty.20 We are told by Gromyko and [Soviet negotiator Valerian] Zorin within the last few weeks that they will “not permit verification of amounts of weapons and forces at any stage of a disarmament plan, not even in the [unclear] zone.”21 In those circumstances, it seems to me that we have to pay far less attention to the posture of this country, than we do to our own security. The posture internationally is nice, but the security is the thing that keeps us alive in the future. My own feeling about it is that, in the present circumstances, we ought to go for a comprehensive treaty, say nothing at this time about atmospheric, not say in our discussions with them that we might accept a reduced number of things, because I don’t see why we should. What we need to do is to talk about discuss instead of accept. The language in one of these reports, in the book that Mac [Bundy] was good enough to give us a chance to study last night, uses that language. Edward R. Murrow: What language? Lovett: Accept. Murrow: Oh. There’s been a change. Lovett: Well, it changed overnight because it was given it to me last night. Bundy: I’m not sure I have the latest figures. I can’t tell [unclear]. [Unclear exchange. McCloy is heard saying “On Monday” perhaps in reference to the date of the figures he consulted. ] Lovett: [Unclear] . . . would probably help the position of the United States. [Laughter.] President Kennedy: We’re trying to . . . Lovett: I think it’s perfectly clear, to be realistic about this, that we are not going to get agreement from the Soviets for on-site inspection for verification purposes. An interesting sideline to that, which probably Dean [Rusk] knows, is that Mr. Khrushchev has been very outspoken recently. He says that

20. The abbreviation GNC stands for Group of Nonaligned Countries. 21. The United States’s spring 1962 proposal for general and complete disarmament made to the Eighteen-Nation Disarmament Committee in Geneva included a provision for zonal inspection. 142 WEDNESDAY, AUGUST 1, 1962

there’s no self-respecting country [that] can accept such control. He’s speaking now of retained arms. He will let us inspect the arms which are going to be destroyed, but not the arms that are being retained. In other words, we can go into the morgue and count the bodies, but we can’t go into the maternity ward and count what’s coming.22 And, he says this in spite of the fact, and he’d be far more persuasive if he remembered this, that he proposed just precisely this form of verification by inspection under the Rapacki Plan . . . Germany, Poland, and Czechoslovakia.23 So the net of my feeling is that we ought to approach this entirely realistically. We ought to put it forward in such a way that we make it clear that unless they are prepared to abandon their complete refusal to agree to any form of obligatorily accepted verification by inspection . . . if they will do that, then you are prepared to discuss the application of any modernization program of these techniques to the problem of internationally . . . of formal control systems. The number, I should think, we would want to avoid, Mr. President, discussing. We don’t know, and I think it’s far too early in any negotiation, to get into it. President Kennedy: Mr. Dean, do you want to make any comment? Dean: Well, I agree a hundred percent that we ought to discuss first, primarily whether it’s in the security interests of this country. And I don’t think that we ought to get into this question of numbers first. I can go back and discuss with Zorin with respect to whether or not, as a matter of principle, they would take any on-site inspections. [Unclear] it may mean that we can get them to accept some, although Gromyko told the Secretary [Rusk] very clearly they would not. Mr. Zorin has said the same thing to me. You then get down to the question of what do we want to accomplish. We probably are now going to have another month’s [worth] of discussion at Geneva before we adjourn for the UNGA.24 Madame [Alva] Myrdal, who is in London. . . . Her last act as foreign minister of Sweden . . . [she is]

22. Kennedy liked this turn of phrase. He would use it in a response to a reporter’s question at his afternoon press conference. 23. In October 1957, Polish foreign minister Adam Rapacki proposed a denuclearized zone in Central Europe to extend through Poland, Czechoslovakia, and both Germanies. His proposal also included limitations on conventional arms in the region and a nonaggression pact between the Warsaw Pact and NATO. In December 1957, chairman of the Soviet Council of Ministers, Nikolai Bulganin, publicly endorsed the plan, but the Eisenhower administration rejected it on the basis that the limitations it would place on NATO’s deployments would be detrimental to Western security interests, particularly in the Federal Republic of Germany. 24. U.N. General Assembly. Meeting on Nuclear Test Ban 143 terribly interested personally in this question of a test ban treaty, and that they want to wait to see if we’re not going to come forward and make some proposals on the basis of this supposed new technical knowledge.25 And if we don’t, that they’re going to come through and probably put some kind of a proposal of a treaty based, I guess, almost entirely on the eight-nation memorandum, which they initiated.26 And, what concerns me then is we might lose control of the negotiations at about the time that we went into the UNGA. Now as Senator [Stuart] Symington said this morning, “Well what of it? What do we care? If the UNGA is against us, that’s so much the better, and we don’t care who has the majority in the UNGA.” Well, I would hate, and I’d hesitate to see us lose control of [the] negotiations, [unclear] the fact that we now have 106 against us, Burundi and Algeria numbered in there, with . . . We started with 52, two-thirds of 70. You’ll have the Africans in there, playing a pretty important position. I think we’re going to be negotiating on this for a long time. I would like, if we can, and I don’t want to give away anything on security, and I don’t want to be making any promises that on the basis of science that we can’t perform, but it does seem to all of us, even Jack [McCloy] knows, from the time I got into this thing27 that this 180 [stations] proposal, 3 billion dollar investment figure, taking four years to install, is just not working.28 We’ve always wanted to get a more workable system. Not any concession to the Russians, but just a workable, efficient, and effective system. I would like to be in the position, and even though Zorin says flatly they won’t take any on-site [inspections], to be able to outline that we believe—without going into too much of actual detail—but we do believe that this Geneva system could be replaced by a system which would not only, except in certain respects, would be more efficient than the Geneva system, [but] would go into effect immediately. I think it would be workable, and I think we at least have to come out of these Geneva negotiations with some forward movement on the part of the United States, so that we don’t go into the UNGA with, in effect, saying, “Yes, we know there’s some technical improvement, but we won’t discuss it.” I think that would put us in a very bad light at Geneva and in [unclear] world opinion.

25. Alva Myrdal was the head of Swedish delegation to the Eighteen-Nation Disarmament Committee in Geneva. 26. Proposed at Geneva, April 1962. 27. Dean had been the U.S. disarmament negotiator since February 1961. 28. Dean said nations here but clearly meant stations. 144 WEDNESDAY, AUGUST 1, 1962

Rusk: Well I think with Geneva— Fisher: We could reduce, materially reduce our control stations, don’t you think? Dean: Now when you say “materially reduce,” I would [unclear interjection] I want to be clear that what we’re really talking about is going to about 80 instead of 180. Unidentified: Going to what? Dean: We’re going to [talk] about 80 instead of 180. The 25 is seismic stations. You’re still going to have your acoustic—29 Unidentified: Acoustic and electronic. Dean: Your acoustic over in the air, your electromagnetic pulse. You won’t have all three—acoustic, electromagnetic, and seismic—at every one, but you’d be working these technical— Bundy: At 80 locations. Dean: At 80 locations, and you’d be working in collaboration with these universities around the world. They’ll all tie in together. So you’ll probably have about a total of about 25 of what they call these [unclear]— Unidentified: Seismic active relays. Dean: Huh? President Kennedy: If we get [unclear], can we not say that this is, that these 80 would be . . . in addition to the advantage of speed or immediacy, they ought to be more effective? Dean: Be more effective. Yes. Bundy: It wouldn’t be more effective than the old system would be, but they’re more effective than the initial designed effectiveness of the old system. Dean: Well, you can put it into effect almost immediately. You don’t have to wait— Bundy: That’s right. Dean: —for four years. It’s on operating— McCloy: Oh, I’m greatly relieved that we’re off the hook. Dean: What?

29. Here the conversation picked up on the difference between the number of control stations of any type and those designed simply to detect seismic (earthquake) waves. At the 30 July meeting Kennedy became confused as some of his advisers argued for reducing the number to 25 and others to 50, without making clear that the smaller number included only seismic control stations and the larger included all detection formats. No one mentioned the number 80 at the earlier meeting. Meeting on Nuclear Test Ban 145

McCloy: I’m greatly relieved that we’re off the hook on that 180. That was a cumbersome number of . . . unworkable . . .30 Fisher: We’re not off the hook, yet. It still sits there at the moment. McCloy: Well, if we can get off, [unclear] if we can get off. Fisher: Well, this is what we’re recommending. President Kennedy: Can we describe this phase of it as making, rather than the word concessions and softening and so on, that it will make this part of the system more effective? And why is it we’re going to be able to do this immediately and have to wait four years for the other? How would you describe this? Dean: Well, we’ve got the, we’ve got the working stations, sir. We’ve got this equipment under the Geneva program which was already given to them, if we can get these . . . Bundy: But we need at least six months to a year. [Unclear exchange.] Dean: Well, maybe six months to a year as against roughly four years, I believe. President Kennedy: And they’re clearly expensive [unclear]. Dean: Oh, nowhere near as expensive as— President Kennedy: What will it cost [unclear]? Dean: ACDA costs on the 180 stations was estimated at 3 billion and operating costs half a billion and 35,000 men. It always seemed to me fantastic. President Kennedy: And now what is . . . Your cost is what? Bundy: Well, those figures have never been very hard.31 Dean: No, no. Unidentified: I’d be careful about . . . Unidentified: I’d be careful . . . Unidentified: We don’t have many, we don’t have many soft figures. [Unclear.] President Kennedy: Well, now, that’s . . . What else have we . . . As the President tried to refocus the discussion, there was a side conversation about the cost of the Geneva system. Bundy can be heard saying “more economical than” and someone else added, perhaps as a way of explaining the savings, “men, money, and durables.” President Kennedy: Now I think that . . . I’d quite agree with Senator

30. McCloy was referring to the number of control stations. 31. Perhaps evidence of how little confidence there was that the Geneva system would ever be accepted and implemented. 146 WEDNESDAY, AUGUST 1, 1962

Symington, if we finally get down to where we are about to sign something, we’re not that interested in giving them something to go away, as far as we’re concerned. It’s just a question of [unclear] at this point and which one is going to be the future of the Soviet position. There’s no reason for us to make it more difficult if we can make it easier for ourselves. Dean: That’s right. President Kennedy: It’s just a question of what our posture is compared to theirs. If we sign, and then it becomes a . . . if there’s any doubt about our positional piece,32 then we ought to try to figure out why we will look like we are the opponent when it clearly is the Soviet Union.33 Bundy: Let me give you one more fact which is in active consideration both on the policy and on how to handle it today. We have signals that the Soviet low-yield tests in the atmosphere [unclear] first indications of higher altitude [unclear]. Lovett: Right on schedule. [Unclear exchange.] Bundy: We have announced that we will release— Eleven seconds excised as classified information. McCloy: Mr. President, you wouldn’t use the word eighty this afternoon in the press conference, would you?34 President Kennedy: No. Fisher: Did I understand, Mr. McCloy, that the word material reduction . . .35 McCloy: Well, that’s what I would say, yes. It seems to me that it’s bound to be [unclear] . . . President Kennedy: Unusually significant reduction? Or [unclear]? Dean: I think you could use the word or term significant reduction in your . . . Bundy: “In the structure of the detection system.” Dean: Yes. But at the same time . . . President Kennedy: . . . you make a more effective [unclear]—36 Bundy: Cheaper, more quicker . . .

32. President Kennedy meant “negotiating position.” 33. Sensitive to the role of public diplomacy on this issue, the President made a point of inviting veteran broadcaster, the chief of the U.S. Information Agency, Edward R. Murrow, to these test ban meetings. 34. Lovett was referring to the number that Dean mentioned earlier in the meeting for all control stations in a proposed new verification system. 35. In the number of control stations. 36. Concerned that even this language might be viewed as a concession, Kennedy is eager to remind the public that the new, slimmer version of the Geneva system would be equally as, or more effective than, the originally proposed version. Meeting on Nuclear Test Ban 147

Dean: Doing it more quickly, and I think, in most instances, equally as effective. [Unclear exchange.] Bundy: That’s a way of producing the same effectiveness, [as] the initial assigned effectiveness? Lovett: That’s all right, no it’s all right. Dean: It gives us the same effectiveness as the initially designed means available. Bundy: The same effectiveness we first hoped to get of our new system. You see the point. [Unclear exchange.] Dean: There is a slight . . . there is one detraction from that. There is a slight degradation of this new system in identification. Lovett: That’s right. Dean: If you don’t . . . slight degradation in your ability to identify nuclear explosions in the Soviet Union if you don’t have the number of control posts inside the Soviet Union as was originally contemplated by the ’58 system. Foster: You can’t fix the locations effectively, either. [Several people speak up at once.] Bundy: —locations very close together. [Unclear] probably need a larger area for inspection. McCone has apparently reentered the room at some point. Lovett: Yeah. McCone: I’d be careful about references to the capabilities of the original system, for this reason, that the original system, we knew had a threshold. We laid out the VELA program with the purpose of finding out whether we could improve technology and thereby reduce or eliminate that threshold. Now, we’ve eliminated the threshold first. Now we’re using the technology to reduce the system. This might cause some questions and problems.37 [Unclear exchange.] President Kennedy: [to Arthur Dean] OK, well, now the second . . . what is the . . . what do you think . . . do you have an opinion of what you see as your problem in presenting this, and what you think would be the alternative ways of doing it? Dean: I guess that I would hope that we would not start out with

37. The test proved that the same level of detection could be accomplished with fewer total control stations, of which fewer needed to be on Soviet soil. This information, however, did nothing to alter criticisms of the original Geneva system. There was a threshold for the 1958 Geneva system below which no tests could be detected. McCone was making the point that the VELA tests did nothing to alter that threshold. 148 WEDNESDAY, AUGUST 1, 1962

this atmospheric [unclear] treaty—underground and outer space— because on November 28 [1961] the Soviets proposed a ban in the atmosphere, plus a moratorium on underground. I would be very worried that they would maneuver us somehow, through India or [international] pressure, to take this atmospheric and then, instead of our being free to continue to test underground, I would be afraid that terrific opinion would be building up to make us agree to an uninspected, uncontrolled moratorium on underground [testing]. Now I know you’re saying we won’t,38 but I simply say I think you’ve then given away your biggest asset. And that is, our ability to agree on bans in the atmosphere. That’s basically [unclear]. I would be inclined to try this out on Zorin and make sure he’ll say no on the on-site, then I could go before the plenary and say that we’ve tried to work this thing out, but we are prepared to lay out—without going into too much detail—we are prepared to discuss an internationally supervised system. So that gets away from the eight-nation memorandum, which relies entirely on nationally manned plus some additional systems by agreement. I’d lay out that we do believe that we are prepared to sit down with the Soviets and try to make this a more effective system. And try to outline, without going into too much detail, just some of the things that we have discovered, but which I think we’ve got to be awfully careful about, as Mr. Lovett says, not to announce this as a scientific breakthrough. In that way, I think we could keep this discussion going and I think that we could prevent the Eight there from agreeing on some Swedish program that they might bring in.39 President Kennedy: What are you going to do about the British? Because they’re going to be a bit more . . .40 Dean: Well, they’re going to be quite a problem, because they’re . . . Lord Home has been making some statements that in effect have called this a scientific breakthrough, and in answers . . . not in answers to questions, in statements in England. And the British told me before I just came over here, Godber, their minister, was there, that they are really in

38. Stop underground testing. 39. The Eight are the eight nonaligned members of the Eighteen-Nation Disarmament Committee—Brazil, Burma, Ethiopia, India, Mexico, Nigeria, Sweden, and the United Arab Republic. 40. The British, who were eager for a test ban agreement, would want to hear sweeter music from U.S. negotiators. Meeting on Nuclear Test Ban 149 a very tough way, as far as the conservative party is concerned, and they’re really looking for us to come back there with some sort of major thing that’s going to help them out with their difficulties.41 I think they’re in so much difficulty that this isn’t going to help them, but Godber, who’s a very good fellow, told me that they really expected us to come back with some really major changes. [Unclear background whispering.] I think that these are . . . I think in all probability that you will have to, as soon as we agree on this, that you will have to explain this to Mr. [Harold] Macmillan personally, if—42 President Kennedy: Well, I’d like to ask Mr. Lovett if he believes, which I think we all would accept as solid, that the Soviets will not agree to on-site inspection, and if there is new information which reduces the number of events to a fourth, and when you have the British who have always wanted to go much further even before we understood the information, plus the neutrals . . . What is wrong with us attempting, saying, putting forward these reduced figures at this time of the number of on-site inspections? By doing this, we would have demonstrated that we were bringing our position up to our technology. I don’t think anybody . . . most people would think, whether we say six or seven or eight [on-site inspections], that it would be certainly sufficient restraint on the Soviet Union. They would- n’t really want to take this chance.43 Why would we be in a better position to do that? Then the Soviet Union would then be sticking with its original position, and we at least would be in a much more protected negotiating position with the British who’ll be out trying to gut us . . . as well as everyone else . . . without really losing anything. What is the reason not to do that [unclear]? Lovett: I think there’s one basic reason, and that is that the Soviets have consistently said they will permit no inspection, no verification of any sort. I read the quotation from Khrushchev which was two weeks ago. And [Andrei] Gromyko and Zorin have consistently taken his position. Now, if they say, “none at all” and then we go over there and then say, “Well, will you consider 10, 13, 20, 6?” . . . whatever it may be, it seems to me that they will continue to say no while we have given rather

41. Joseph Godber was the British minister of state for foreign affairs (June 1961 to June 1963) and representative to the Geneva Conference. 42. British prime minister Harold Macmillan. 43. Probably take the chance that their cheating would be detected. 150 WEDNESDAY, AUGUST 1, 1962

important evidence, in fact, that we are prepared even to abandon the verification and inspection, which at once runs into the problems of our phased general disarmament program, runs into the entire structure of our— President Kennedy: If I may, no, excuse me, we would reduce the number, but we wouldn’t give up the— Lovett: Well, we would reduce the number. Then we’ve opened up a whole new area of problems, which is: What is the minimum number of verifications which would be appropriate? President Kennedy: Well, up to now, we’ve said based on previous information which, as I understand the report, is four times as many events. We have said that we would go between 12 and 20. Now, let’s say that the secretary, after looking at it, says that, based on the development of the art and so on, that we could detect our, that it would be too much of a risk to the Russians if we had six or seven or eight, let’s say, whatever the figure might be, but at least then we have come forward with a new position based on new information, which isn’t a breakthrough, but it’s more sophisticated [unclear]. Lovett: Well, basically Mr. President, I think that’s one man’s position, one man’s opinion, in an area in which there can be no exactitude at all. I don’t think 12 or 20 carries any magic; but fundamentally, every time we withdraw from a position of an unquestioned principle, I think we weaken the principle itself. President Kennedy: That’s our own principle! After all, we did change from 20, to— Bundy: Twelve. Lovett: Twelve at this point, as I understand. Dean: That’s right sir. Yes, that’s right. President Kennedy: But at any rate, there’s nothing sacred about 20 or 12, it really depends on how many events and what you consider con- stitutes a reasonable hazard to cheating. Lovett: Well, I— President Kennedy: Now let’s say this new information tells us, without regard to negotiation, within this room, that six [inspections] presents the Russians with a [unclear] hazard and we are convinced they won’t take any. Now, the question will really be whether for the next six months the United States ought to look like there is new information, and we haven’t changed our position at all, and the cat really therefore will be on our backs. Or whether we say, “Well, based on the new information, here’s where we’ll go, and go no further” and the cat then is on the Russians’ backs. Meeting on Nuclear Test Ban 151

Lovett: Well, sir, I don’t think we can shift the cat as easily as that. It seems to me that if we say to the Russians—this is an element of negotiations, Mr. President, that I’m talking about, not the generic problem. If they say we will consider no inspections, none at all, and we say, “Well, has the number got anything to do with it?” President Kennedy: That’s right. Lovett: And they’d say, “Yes, the number’s got something to do with it,” then you’d have a reasonable opportunity to talk about it. But if they say, “No inspections at all,” and they have consistently taken that, they say no self-respecting country would permit this, this seems to me it’s an exercise in futility, and it becomes something of a gimmick in the public mind. And in the world. President Kennedy: Well, let me put it a different way. Do you see any objection . . . We’ve talked about the question of reducing from 180 to this sort of—now, do you see any objection to Mr. Dean saying that, if the Russians were willing to negotiate this question seriously based on this new information we now have for the number of inspections, we’d be prepared to discuss it with them, and if there is a [unclear], to reduce the number of tests.44 But until we know whether they’re going to persist on . . . our getting into detailed discussions about the number if we are running [unclear]. Do you see anything wrong, in short, with him indicating that we would, once the Soviets had accepted the principle of international inspection, we would be prepared perhaps to change our [unclear]? Lovett: I would think there would be nothing wrong with saying that we would discuss it, once they had agreed to the principle of inspection, because I don’t know what the magic figure is, Mr. President. Unidentified: [Unclear.] Dean: Can I make a suggestion on our . . . ? President Kennedy: Yeah. Dean: They’ve always said that there are never more than 50 unidentified events in Soviet territory. Our formula—12 to 25—when we said there was a hundred. So we said, here’s how [unclear] correct, then, on the basis of one to five, are . . . that we’ll have.45 If your signs are incor- rect, then it’s a maximum of 100, and we go up to 20. Now we might be able to say, “We’re quite prepared, on the basis of these new calculations,

44. On-site inspections. 45. The U.S. position was that it wished to investigate by on-site inspection one out of every five unexplained underground events in the Soviet Union. 152 WEDNESDAY, AUGUST 1, 1962

to relate the number of on-site inspections in the Soviet Union to what we agree upon is the number of unidentified events on Soviet territory.” Now, as I understand, under this new data, it’s roughly 75, and so on the basis of one in five, that would be 15. Now this is really a political judgment. 12 is one a month. So I think—as all of the Eight keep saying to us all of the time, “you want to always have some give in your position”—I would think that we might put it into a formula relating it to the number of unidentified events, and then, perhaps, if we need to, depending upon your instruction, we might get down to somewhere around 10. But in the first instance, I should think it would make a very good impression if we were prepared to say that we would relate these on-site inspections to whatever the new data showed with respect to your number of unidentified events.46 Rusk: Mr. President, the— Bundy: [aside] Do you agree with that? [Unclear response.] Rusk: This problem runs into what Chip Bohlen is always talking about, of [unclear]. So long as the Soviets sit at zero, any figure that we could put in will be clipped sharply by the others [someone agrees] in an effort to get us to move nearer the Soviet position. Our move has got to be, and I think we can succeed in this, to get other people talking at the Russians about zero, rather than talking about a figure of whatever— President Kennedy: But can we get them to do that though, Mr. Secretary, unless we have indicated some change in our . . . Rusk: Well I think that that’s probably incumbent upon us [unclear]. Unclear exchange. Rusk is apparently asked a question to which he responded, “The last time we used this is . . .” President Kennedy: But I must say that if we say there are only 70—I’m not saying that that’s all there are—but if there’s only 70 and you’re going to inspect one out of every five, I don’t see that . . . The fact of the matter is that if you’re inspecting one out of every ten, it isn’t worth it to cheat.47

46. What the group did not understand was that Kennedy had always understood this to be a political number, and there is evidence that the President was not concerned about the ratio between inspections and unexplained events. In May 1961, the President had Robert Kennedy offer Khrushchev a secret deal through Soviet intelligence officer Georgi Bolshakov for ten on-site inspections. This was long before the VELA tests reduced estimates of the number of unexplainable underground events each year in the Soviet Union (see Fursenko and Naftali, “One Hell of a Gamble,” p.113). 47. Number of unexplained underground events. Meeting on Nuclear Test Ban 153

Bundy: Given the fact that 70 is [unclear] . . . President Kennedy: I would hate to be doing something illegitimate and figure every tenth time there’s going to be an inspection, because you wouldn’t do it, it’s too much of a risk, just by mathematical— Dean: We could divide [unclear]. We could divide it one step further, if you wanted to, and that is to divide the number of inspections between your seismic areas and your off-seismic areas in the Soviet Union. Or your seismic areas entirely in Kamchatka, Kurile Islands, and this Kashmir region northeast of Afghanistan, the very heartland of Russia. As I understand it, that’s a fairly hot seismic area.48 President Kennedy: There aren’t that many . . . [Unclear exchange.] Bundy: You could say that [unclear]. Dean: It might be nice to have a further degree of flexibility in divid- ing up your 12, or whatever your number is [unclear] between your seismic and your— President Kennedy: We’re not in disagreement here that if the Soviets actually said they’d come forward and start discussions, then we would take another look and figure what is the . . . gives us protection. All right, now we’re only talking therefore, if they do change, how is it that we can keep the, as the Secretary suggests, the major heat on them, and not on our refusal—and with . . . the British, I know, are going to be at us—our refusal to equate our new information with a new position? What phrases can Arthur Dean use that would indicate that we’re prepared to take a new position without getting us into a lot of trouble before the time comes? I wouldn’t mind having a fight with the Congress if it looked like you could really get an agreement, and get a treaty . . . Make that the initiative that would be worth a fight. But if we’re not going to ever get that, there’s no sense in having six months of being attacked by [Senator Henry “Scoop”] Jackson and others for giving away our position rather late in the game. Now how can . . . it seems to me, therefore, it’s just a question of how Arthur Dean can put this, so that the next six months it’s more on the Russians than it is on us, and that we don’t look like our position remains unchanged with the information which is changed. I just don’t know what the phrase is that he’s going to use. He’s the one who has to carry the case. What can we say to him that he can say? Yeah.

48. In earthquake zones the odds that an underground nuclear test might be mistaken for a seismic event are high. 154 WEDNESDAY, AUGUST 1, 1962

Vice President Johnson: Could I read a couple of paragraphs here and make a limited comment? [Unclear.] [The Vice President begins to read from draft language for the President’s 4:00 P.M. press conference statement.49]

Our new assessments give real promise that we can now work towards a system of detection and verification which would be substantially less large and cumbersome than the system which was contained in the treaty which we tabled in Geneva in April. Meanwhile, on the defense side, our new assessments do not affect the requirement that any system include adequate provision for on-site inspection of unidentified underground events. It is probable that if we can agree on an improved system, in the light of our very best assessment of the technical capabilities, there is no justification whatever for accepting the comprehensive treaty on the basis of present Soviet insistence that any inspection whatever [unclear].

Bundy: No inspection. Vice President Johnson: [continuing reading]

We have been conducting a most careful and intensive review of our position with the object of bringing it squarely in line with technical realities. I must express the hope that the Soviet government, too, will reexamine its position on this matter of inspections. In the past it accepted the principle, and if it would return to its earlier position, we, for our part, will be able to engage in a more serious attempt to reach agreement on the relatively small number of on-site inspections which is essential.

Isn’t that what you’re saying? Dean: Yes, sir. Vice President Johnson: Now isn’t that what you’re saying? That keeps the [unclear] on-site inspections . . . Lovett: . . . keeps the initiative with us. Vice President Johnson: And, that’s just a bare modification of the last page of your statement [unclear]. Rusk: See, the two essential points here for the President today:

49. For the transcript of the President’s news conference later that afternoon, including his statement regarding the test ban treaty, see Public Papers of the Presidents, pp. 560–98. Meeting on Nuclear Test Ban 155

Recent tests have resulted in an improved capability to provide assurance through a simpler and less expensive arrangement. Secondly, we see no way to provide assurance without an adequate number of on-site inspections. So long as the Soviets say “No on-site inspections,” we cannot be encouraged about the prospects of a test ban treaty. That’s exactly what they’re going to say. [Voices of agreement.] President Kennedy: What is Arthur Dean going to do? Bundy: [Unclear] on numbers until we get them on the [unclear]. President Kennedy: On what grounds? Bundy: On the grounds— President Kennedy: When they say to him, “Well is this . . . what do you believe this new data will permit you to agree upon?” What does he say in answer to that? Lovett: That these are preliminary figures, Mr. President. President Kennedy: Right. Lovett: We’ve got to explore this and find out what is the proper number. Vice President Johnson: And we’re going to sit down and discuss it. Once again the discussion of firm numbers for a new Geneva verification system sets off an unclear exchange. Bundy: [Unclear] answer is if we [unclear] lower number, we could- n’t agree around this table, whether it’s three or— Rusk: Mr. President, [unclear] accept, [unclear] India . . . Arthur Lall50 [unclear]. I think we get Mr. Dean to go to them directly, in private and say, “Well now, on that question, there’s no point in my negotiating that number with you, Mr. Ambassador. This is a problem between the United States and the Soviet Union. And so far, as the Soviets are saying zero, we’re not in business. Now, if you can help us get the Soviets to talk about this, then all of us are in business here. But there’s no point in my talking to you about a specific number—it’ll be lower, I can tell you it’ll be lower—but let’s don’t get into specific numbers, until the Russians—”51 [Rusk is cut off.] President Kennedy: If he can decide . . . Now, as long as . . . I just wanted to get the . . . He can say that it’s going to be lower. It’s going to . . . My judgment is, that’s what he has to say. It’s going to be lower. Dean: I say lower. The 12 is related to the number of unidentified events. [Unclear exchange.] I’d like to be able to relate it so that [unclear].

50. Arthur Lall was the Indian ambassador to the Geneva talks. 51. A strategy to use the Indians to help move the Soviets to accept some, any on-site inspections. 156 WEDNESDAY, AUGUST 1, 1962

[Unclear exchange.] I don’t want it to pass lower than 12 [on-site inspections], that’s my problem. Rusk: “Lower, in the light of improved capabilities.” President Kennedy: Well, it may be lower than 12.52 Dean: Lower than 12, I’m sure its going to be, but in the first instance I would like to have the negotiating [room] because I don’t— [unclear exchange]. President Kennedy: I want to make sure that we’re not sending you out without even a shirt on. [Laughter.] Do you feel that you’ve got enough to? I don’t think that we ought to . . . I think the heat ought to be on them. Dean: I think [unclear]. President Kennedy: We ought to give you as much as we can [unclear]. Dean: If you’d allow me to relate it to the scientific data on it, I think I’ve got the negotiating ability to [unclear], but I need— McCloy: One thing that I don’t like about the Vice President’s and yours, Mr. Dean, is the fact that we don’t see how we can give up the . . . I think we ought to be more aggressive, be more crystallized in [unclear] on-site inspections, because I think, as I say, it’s not only related to the test ban and the probability of getting a test ban, but it relates to the whole probability of getting off this [unclear] . . . Bundy: Well, you can make that argument if you want . . . President Kennedy: I think we ought to restate at the beginning what this information is. I mean everybody’s got a . . . at least generally what it has indicated, based on the early July, or whatever it is . . . but indicate the somewhat tentative nature, but it does encourage us.53 Bundy: [Unclear.] President Kennedy: Whatever the phrase, at least restate what the data is, because everybody’s got entirely different ideas of what it is, the data. The fact of the matter is even with the most optimistic view of the new data, there is still a great . . . this threshold is different than . . . the number of events is still substantial. Bundy: The basic point is— President Kennedy: And then go on to say along the lines of what Mr. Vice President read there, and let’s give him [Dean] the general American position this afternoon rather than continuing to have his [unclear] [unclear interjections] about international inspection, about

52. Kennedy once again showed he is not stuck on any particular set of numbers. He wanted a treaty. 53. “Early July” was the 7 July 1962 Pentagon statement about the results of the VELA tests. Meeting on Nuclear Test Ban 157 nationally manned [control stations], about using the phrase we used before about internationally— Bundy: . . . internationally supervised . . . President Kennedy: —and whatever, supervised, and that would just have to be a negotiating matter as to what . . . Senator Russell would be satisfied as long as we use that phrase. [Unclear.] Lovett: Don’t we want to deal, Mr. President, also, to try to strike down this big scientific breakthrough— President Kennedy: Yeah. [Unclear background discussion.] Lovett: Saying that there is no scientific breakthrough. We had [unclear], Romney, Norton, the whole thing.54 Bundy: [Unclear] very important point. President Kennedy: How do they describe it, then? [Unclear exchange.] Lovett: Well, this . . . the sort of language that . . . in answer to a question on the Hill, was that Dr. [Jerome] Wiesner says, “There is no clear way of identifying a nuclear explosion without looking at the spot itself.” Then Senator [John O.] Pastore says, “Then there has to be on-the-spot inspections.” Then Arthur Dean said, “Yes, that is right.” This morning under questioning he confirmed, as did the others . . . to my question, “Do you regard this as a scientific breakthrough,” they all said no, they did not. Bundy: It’s only a word. I don’t myself think we ought to get into this word, what is and isn’t a breakthrough. Anything that reduces by a factor of three the requirements of the system is a very substantial change. [Chuckles.] President Kennedy: [to Lovett] Did they say that to you? Lovett: [Unclear.] Yes, sir. President Kennedy: They [unclear] . . . Lovett: [Unclear.] We were all there. They said that there is no scientific breakthrough. President Kennedy: But that there is a factor of . . . did they . . . Lovett: No sir, they didn’t say anything about that. President Kennedy: What did they say to you as far as the improvement of this system, of their detecting? Lovett: They said that they would substantially reduce the number of— Unidentified: Suspicious events.

54. Dr. Carl Romney was a member of the Air Force Technical Application Center (AFTAC); Norton was general counsel of the Department of Defense. 158 WEDNESDAY, AUGUST 1, 1962

Lovett: Suspicious events. Rusk: [Unclear.] You said at the beginning, Mr. President, that the results of the VELA tests have in essence done two things: One, they make it possible to reduce the number of so-called suspicious events. And secondly, to increase advantageously the range of estimates taken. [Unclear exchange between Rusk and Lovett.] McCloy: The point is then, they have not changed the bottom-line identification. . . . Unidentified: That’s right, that’s right. McCone: Well, the point here is that they’ve discovered an error in 1 the transposition in the Richter scale. [Unclear] factor of 3 or 2 /2, in reduction of the number of [unexplained] events, of course, is not due to the improvement of— Lovett: This is no scientific breakthrough. McCone: —technology, it’s just that they found that a conversion factor was [unclear]— Bundy: Well, I don’t think you really ought to say, [unclear interjection by Lovett] “no scientific breakthrough.” That’s a word game. To understand your figures better by this amount is very, very important. Lovett: Well, the figures on the thermometer are no longer the same. Bundy: Yeah, that’s right. Lovett: We agreed this morning that the patient hasn’t got a fever of 106. It’s the same patient. He’s just as sick as he was before, but it’s only reading 102. And that’s all that’s happened. Unclear exchange. Bundy can be heard saying, “The reason it’s very different.” President Kennedy: Tell me that value again. Lovett: The Richter system, as it was worked out in 1935 based on a list of earthquakes, has now been proved by advanced techniques, improved science, and that sort of thing, as I understand it, to be incor- rect. So they’ve got to revise the yardstick by which things are measured. That is one of the problems that produces this [unclear]. Bundy: That’s the primary reason. I agree. Lovett: This is not a scientific breakthrough, in my opinion. It is a correction of a scientific mistake. Rusk: I wouldn’t attach the word breakthrough, because most breakthroughs are— Bundy: Are like that. [Unclear exchange and laughter.] McCloy: [Unclear] saying it’s a breakthrough abroad. Unidentified: There you are. Meeting on Nuclear Test Ban 159

Foster: They extrapolated from large events to indicate that there would be a lot more events. When they actually checked the events, there weren’t so many. Now, this is a difference, Bob, because you’re measuring against fewer events. Now, this is literally a true change because if the thermometer says 106 [unclear comment by Bundy], you feel badly. Actually it isn’t the thermometer being up there. . . . The thermometer was down where it says “you’re at 94 and you feel pretty good.” Lovett: But you still feel badly. Fisher: We just [unclear] a number of earthquakes. Foster: Because you’ve counted these earthquakes, and this is the basis of the present number. President Kennedy: May I ask you, what are the British drawing from the same information as we’ve got? Why do they draw a different conclusion? Foster: They draw the conclusion that we can detect a lot better than we could. And this is true to some extent. And they also draw the same conclusion that detecting against a less fuzzy background, you can identify better. Now, this is not true, you can’t identify better—[Unclear background discussion.] Bundy: Mr. President, they wanted you to go with a nationally controlled system beforehand. Their desire for this is obviously reinforced by this new assessment. President Kennedy: But they still claim that national inspection is necessary? Bundy: They still agree that on-site inspection is necessary. President Kennedy: Well, I think we’ve got to get this statement going. What is our schedule now, as far as, are we going to meet this afternoon?55 Bundy: We had a meeting scheduled for quarter to five, Mr. President. President Kennedy: I’m not sure at this point— Bundy: It’s on the record, and it’ll be a little difficult to cancel it now. President Kennedy: Well, it’s just a question of when do you go back to New York? McCloy: Nine. President Kennedy: Do you want to come? Can you come at a quarter to five? And number two, I wonder if there’s some way we could read you this statement when we get it done.

55. The President had planned to meet later with his full test-ban team to formalize the instructions for Dean. 160 WEDNESDAY, AUGUST 1, 1962

Bundy: We can . . . [to Lovett] Unless you’re all tied up this afternoon, we’ll hunt you up or you can come and join us when we have a draft. Lovett: I have an appointment [unclear]. President Kennedy: [Unclear.] Dean: Could I make just one comment on your draft. I hope in relation to this scientific data, [unclear] when we reported this decoupling event in ’59, the Soviets said we were wrong.56 Because they said that the number of earthquakes in the Soviet Union was somewhere around 50 to 60. I hope we don’t . . . I know that I’m going to be faced with the matter of debating with the Soviets that they’re now going to say, “Well, you’ve held up this nuclear test ban since ’59, [unclear].” You want to be a little bit careful about the way we word this. Bundy: Got any advice? Dean: Huh? Huh? Bundy: How do we . . . What do we say? Arthur Dean was crazy? Or is there some better way out? Dean: Oh, I was crazy, but I wasn’t there in ’59. [Laughter.] President Kennedy: Well, if they were right, [unclear] right for the wrong reason, why is that? Foster: Well, they didn’t mention their own earthquakes [unclear] because they were mere [unclear]. We were doing it by calculating the curve, and we estimated that we had this many. The reason for this is we now have a better detection procedure. This is the real reason. Lovett: Bill, isn’t that a beautiful argument, to say they could measure it because they were on the spot for the test [unclear]? Bundy: Yeah. Foster: I believe this is, again, the problem of secrecy. If they open up their society, these misapprehensions will not develop. Lovett: Mr. President, you expressed some concern as to why the Russians might be stupid enough—I don’t think you used that word—to take a chance on it being caught, with their foot off base. President Kennedy: Yeah. Lovett: I don’t know the reason, but I think the element that makes it less abhorrent to them is a complete absence of conscience, and of embarrassment. They’re not embarrassed by being caught off base. In

56. Decoupling is a technique employed to drastically reduce the strength of the shockwaves emitted by a nuclear explosion, and thereby the chances of detection, by conducting the test in a large underground chamber. Meeting on Nuclear Test Ban 161 fact, they regard that as an accomplishment. I think the feeling which you have on that score shouldn’t weigh too much into trying to measure “why would they do a stupid thing like this and get caught?” They don’t mind getting caught at all, sir. President Kennedy: Well, let me say that I, what I, you have to put so many things into the equation, or into the machine, the computer. You have to put what they could hope to accomplish scientifically by cheating, how much embarrassment they would suffer from being caught, what the chances are of your catching them, what the risk would be to us if both of us continue with the present system of testing, those dangers they would bring, help keep their . . . make these weapons and so on. So I think you’d have to put all that into the machine, and then you’d get an answer which everybody would interpret differently, but which I would interpret as a . . . Depending on how much significant progress they could make by cheating. Let’s just assume they would cheat—I’m ready to accept that—let’s assume they would cheat and take the chance of getting caught. In the first place, I think one in five, they’re going to give you a factor mathematically.57 Bundy: Well, Mr. President, bear in mind that their cheating would go on underneath the threshold, and you wouldn’t have an inspection, so you won’t see a suspicious event . . . Lovett: Yes sir, that’s the point. That’s the point. President Kennedy: That’s right. So that you’d have no suspicious event, and you’d have to make a judgment as to how much ground, compared to what we’ve been through in our laboratories, how much ground they could gain by cheating, assuming they had [tested ille- gally], below the threshold, over a period of years, compared to the danger to us of a constant testing and an increase in weapon technology of other countries who do not now possess it. I think that would be the formula. I think one trouble is that we and the joint committee look too much at the Soviet gains and less at the danger to us of other national [nuclear] deterrents arising.58 Now what do you . . . what is your view of that?59 That doesn’t bother you?

57. One on-site inspection for every five suspicious underground events. 58. Joint Committee on Atomic Energy. 59. The President rephrased his basic argument for a test-ban treaty. 162 WEDNESDAY, AUGUST 1, 1962

Lovett: I don’t have that feeling, Mr. President. I think we . . . it may be a fact that we look too much at the Soviet gains, but we’ve consistently underestimated their competence over a period of years.60 And the ones which led the underestimates were the scientists, who said it would take them ten years to catch us. I think that the only measure we have of our own position here is our potential enemy. And this would not really bother me, sir. President Kennedy: If other countries have possession of this . . . Lovett: Oh yes, I wouldn’t want to see [nuclear] proliferation. But I think that’s a separate problem which would not be controlled by this test ban. President Kennedy: Test ban. Rusk: Well, we should work on that simultaneously as a separate matter. Lovett: I think it’s a separate matter, sir. By fundamentally rejecting the President’s motivations for a test ban, Robert Lovett put the President on the defensive. President Kennedy: Well I think that, well I would . . . it would seem to me that the test ban might lessen the chance of proliferation. If that weren’t so, then I agree. I don’t know what good the test ban really is, except [an] atmospheric test ban might be in some day useful to [unclear] radioactive.61 [Unclear interjection.] Roswell Gilpatric: I think a ban, an agreement between the U.S.S.R. and the U.S.A., would have a very strong deterrent effect on them. Lovett: I think it would have a certain deterrent effect, Ros. I don’t think it’s in the order of magnitude that the Army paper, the military paper shows, which rather offers it as an inducement for the ban.62 I don’t think it is. I think it’s a potential benefit to get a ban [unclear] perhaps, but I don’t think you can say that if you get this test ban, you’re not going

60. The United States underestimated the speed with which the Soviets would develop a nuclear bomb. In the mid- to late 1950s, however, the United States exaggerated the growth of the Soviet nuclear arsenal. 61. The President was referring to public concerns that nuclear testing releases strontium 90 and other harmful radioactive elements into the atmosphere. 62. This is probably a reference to “The U.S.-U.S.S.R. Military Balance with and without a Test Ban Agreement,” a document introduced by Paul Nitze at the 30 July test-ban meeting. Given to the President by McGeorge Bundy on 30 July 1962 to prepare for the earlier meeting, it has not been declassified as of August 2000. See Bundy, “Agenda for 5 P.M. Meeting Today,” 30 July 1962, “ACDA, Disarmament, General, 7/29/62–7/31/62” folder, Departments and Agencies Files, National Security Files, John F. Kennedy Library. Meeting on Nuclear Test Ban 163 to have proliferation. I don’t think the Chicoms [Chinese Communists] or any [unclear]. I’m not sure it follows. Theodore Sorensen: . . . work simultaneously toward the . . . Unidentified: [Unclear.] Lovett: You have to deal with it as a separate problem but simultaneously handle it. President Kennedy: I think the one question which we’re now in [unclear] is the question of whether we want the atmospheric test ban itself. [Unclear exchange.] Bundy: I don’t think you need it.63 It’s not relevant to your press conference. President Kennedy: No, I meant, it seems to me at 4:45 we ought to come back to that. Sorensen: [Unclear.] Unidentified: You need a fallback, I think, Mr. President. President Kennedy: Good. Well now, where could we establish to have this paper reviewed?64 Bundy: Well, Ted will be working on the paper. I’ll give him all the data, and then, when he has a draft, we can have a discussion of it. President Kennedy: Except they’ll want . . . Unidentified: [Unclear.] Bundy: Well, I think we should all come back . . . 2:30? President Kennedy: How about 2:30? Bundy: Three o’ clock? Or 2:30, what do you think? Unidentified: Three o’clock. Sorensen: What time is the press conference? Four? Several Voices: Four. Sorensen: Well, in that case then, we’d better make it 2:30. President Kennedy: 2:30. Bundy: Sounds good. Meeting adjourned. Small unintelligible side conversations began. Dean said, “I’ve been trying to get him, but he’s traveling up in the country somewhere, but . . .” After five minutes of indistinct banter, the President is overheard preparing for his press conference. He asked for information about the status of the Satellite Bill that was being fili- bustered in Congress.

63. Need to have that answered now. 64. The President’s 4:00 P.M. statement. 164 WEDNESDAY, AUGUST 1, 1962

President Kennedy: Pierre, what about that satellite thing? Do you want to give me a brief, and I’ll read it before? [Unclear] . . . Unidentified: Yeah. Unidentified: I’ll tell you why. The President said, “Dean would be good,” and then was pulled to one side for a small chat. Dean: Have you got just a second? President Kennedy: Yeah, sure. Their conversation is unintelligible. McCone: [Unclear.] Bundy: Well, I think we’re getting there. McCone: [Unclear.] Bundy: That’s going to be quite different when we get to it. I know the Vice President has been working on it and [unclear]. Murrow: This is the key issue. Are you going to use the word internationally operated, or are you just going to use— Bundy: No, we are not. I think we say internationally supervised. Unidentified: Internationally is not the word I want for operated. Bundy: So it’s [unclear]. Murrow: All right. That’s fine. Bundy: I don’t think. Murrow: Well— Bundy: We were going to decide that at 2:30 . . . make it clear that internationally— Murrow: Right, well I shouldn’t . . . well I can say it may be clear it’s going to be internationally supervised [unclear]. Bundy: [Unclear] to discuss. Murrow: Right. Bundy: And all under [unclear]. Unidentified: Pardon? Bundy: All under the [unclear]. They move for zero inspections. Unidentified: Yes. Unidentified: [Unclear] I was . . . Senator [unclear] how come the thing blew up so badly in the island?65 That seemed to be in his mind. McCone: Oh yeah, he asked all about it. And I don’t know what the hell happened to this last one, do you? Unidentified: No.

65. On 25 July 1962 a Thor missile carrying a nuclear device as part of the DOMINIC test series exploded on Johnston Island, destroying one of the launch pads. Meeting on Nuclear Test Ban 165

McCone: Huh? Unidentified: Looks like— McCone: [Unclear.] The first two . . . the scientists [unclear] to get their [unclear] gadgets on them. Unidentified: This is through them all. McCone: Through them all. What happened with this last one, I don’t know. President Kennedy: Let’s get that clear. Now . . . Rusk: [Unclear.] Dean: Well, the first one was scrubbed because the Navy ship didn’t get a fix on it. I think it was successful, but then the Navy ship worried that they hadn’t got a fix on it. So they scrubbed it. Unidentified: [Unclear.] [Rusk can be heard in the background mentioning Russia.] Dean: [Unclear] the first one. The second one was lopsided. The first one was a success. Unidentified: [Unclear] had nothing to do with it. Unidentified: First [one] was a success. Dean: I think we need more elevation of morale among the scientists. Of course, they had to [unclear] because one ship hadn’t got a fix. Unidentified: Yeah. McCone wanted to make a telephone call. Unidentified: Well I think if the Secretary goes . . . McCone: Have you got a line for me? Unidentified: Yes, I [will] go out. . . . I think I’m going to try to make a date with the Attorney General. This was 2:30 wasn’t it? Unidentified: Yeah. Unidentified: [Unclear.] Unidentified: I’ll keep my eye on it. Unidentified: I’ll know just exactly who took them. [Unclear exchange.] As McCone waited for his line, Rusk was organizing the preparation of the President’s statement for the press conference at the State Department. Unidentified: Mr. Secretary, can I get you a ride? Rusk: Yeah. Let’s work on the statement now, we’re coming back at 2:30; Thompson’s got it [unclear].66 Unidentified: We’re coming back. The Secretary of State is ready to leave. Unclear exchange.

66. Llewellyn Thompson was U.S. ambassador to the Soviet Union. 166 WEDNESDAY, AUGUST 1, 1962

Unidentified: Can I give you a lift? Dean: Yeah, thank you. Some salutations are heard. Two speakers were talking about Douglas Dillon and Robert McNamara: “Secretary of the Treasury, that’s understandable; Yeah, that’s interesting. This is the Secretary of Defense’s view.” McCone: [on the telephone] Yeah. All right, get him there. Hello? Hello? Hello? [Pause.] Walter, I’m going out to the house for lunch with Mr. Lovett and Mr. McCloy.67 I asked Sherman Kent68 to round up some people that could to talk to Mr. McCloy on this Russian oil problem.69 Have you found out what he’s got prepared and give me a call up at the house? I’ll be there in a few minutes. OK, anything new? Yeah, yeah, yeah. And, we’ll be in contact [unclear]. OK. [Unclear.] McCone hung up. There was some closing banter with McCloy and Lovett before their car arrived. Someone mentioned work the previous night that took three and a half hours. “It gave it a little advance.” To which either Lovett or McCloy responded, “Gave it the whole works.” After they left, an unidentified speaker decided he needed a little food, “Maybe I’ll get myself a little piece of candy,” and chuckled. Unidentified: Did somebody say about the, got to keep the [unclear] business up? McCloy: Well, like I said, it’s in Mac Bundy’s [office]. Unidentified: No it isn’t. He took it with him. I think I told you [unclear]. Come on let’s go. The remaining people left the room. After a little over a minute of silence, the recorder picked up the sounds of someone, probably Evelyn Lincoln, switching off the machine.

President Kennedy went for his prelunch swim, then returned to his private quarters. At 2:30 P.M. his advisers gathered to rework the Vice President’s draft of the test ban statement for the 4:00 P.M. press conference. The phrase “internationally supervised,” which Kennedy believed Senator Richard Russell and the other arms control skeptics on the Hill might be willing to swallow, was added to describe an acceptable verification system to police a test ban. There was nothing added to reflect

67. Probably Walter Elder, John McCone’s assistant. 68. Sherman Kent was head of the Office of National Estimates, 1951 to 1968. 69. McCloy had long been an intermediary between large oil companies and the government. Meeting on Nuclear Test Ban 167 the President’s readiness to reduce the number of control posts from 180 to something less than a hundred or to reveal his flexibility on the number of mandatory on-site inspections. At 3:47 P.M. President Kennedy left for the State Department audito- rium, the venue for the press conference. Minutes later he delivered the written statement but in response to a question about what “internationally supervised” meant in the context of the proposed Geneva verification system, he went further than his advisers expected. He spoke of “national control posts . . . internationally monitored or supervised.”70 The United States had never accepted national control posts. The official position was that these monitoring stations should be manned by an international scientific team. Whether he intended to or not at that particular moment, President Kennedy had suggested some new flexibility. When his test ban policy group reconvened at the White House after the press conference, the President would be somewhat on the defensive. Former defense secretary Robert Lovett had cautioned him in the morning that the test ban talks were not a negotiation but “a phase of the cold war.” There would be others around the table who expressed a concern that the United States not appear too willing to get an agreement. President Kennedy’s challenge was to mollify the unpersuaded while still providing his negotiator, Ambassador Arthur Dean, with something useful to say in Geneva.

4:45–5:32 P.M.

What is the statement we made in the statement itself ?

Meeting on Nuclear Test Ban71

At 4:45 P.M., the test ban meeting begun in the morning was reconvened, this time with a larger group in attendance. This would be the last meeting to establish Ambassador Arthur Dean’s negotiating instructions before he returned to Geneva.

70. The Kennedy Presidential Press Conferences (New York: Coleman, 1978), pp. 356–57. 71. Including President Kennedy, Arthur Dean, William Foster, Leland Haworth, Carl Kaysen, Lyman Lemnitzer, Franklin Long, Robert Lovett, John McCloy, John McCone, Robert McNamara, Edward Murrow, Paul Nitze, Dean Rusk, Glenn Seaborg, and Jerome Wiesner. Tape 5, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 168 WEDNESDAY, AUGUST 1, 1962

The first part of the meeting was not recorded. President Kennedy began taping as he read aloud British prime minister Harold Macmillan’s reply to his cable on U.S. strategy in the test ban negotiations. He had stressed to the British leader that, though he wanted a comprehensive test ban, he would accept an atmospheric test ban as a first step. The President also requested the right to use Christmas Island for U.S. nuclear tests. This request was very much a part of Kennedy’s efforts to prepare seriously for the possibility of a test ban agreement. Administration experts on nuclear testing had cautioned the President that one of the dangers of an atmospheric test ban would be that the United States would make itself vulnerable to a sudden Soviet abrogation of the agreement by allowing U.S. nuclear facilities and laboratories to erode during the period the treaty was observed. The British facility on Christmas Island, in their view, was insurance against a Soviet violation of the ban.72 Macmillan wrote to say the British would allow the United States to use Christmas Island now and, in the event a test ban treaty were signed, would keep the facility in good working order, just in case it were later needed. Macmillan also cautioned that the British preferred to push for a comprehensive ban, though President Kennedy’s proposed first step would be acceptable.73 The sound quality in the first ten minutes of this tape is especially poor.

President Kennedy: [reading from Macmillan’s letter, received by the White House]

. . . tests if they tried to cheat. However, I quite realize that you do not entirely share this view. And anyway, Congress would not accept it, at least at the moment. So I agree that there would now be advantage in offering both the atmospheric ban, as you suggest and also a comprehensive treaty which at this stage would not need to specify the exact number of inspections. I am looking into the question of Christmas Island, but I should

72. Gerald W. Johnson, Assistant to the Secretary of Defense (Atomic Energy) and Leland J. Haworth, Commissioner, Atomic Energy Commission, “Memorandum on Maintaining Readiness To Test During a Test Ban,” 29 July 1962, National Security Files, Departments and Agencies: ACDA, Disarmament, General, 7/29/62–7/31/62, Box 256, John F. Kennedy Library. 73. Department of State, Presidential Correspondence: Lot 66 D 204, M–K, 1961–1962, National Archives II. Meeting on Nuclear Test Ban 169

think that we would not find it too difficult to keep the installations on a care and maintenance basis, as indeed we have been doing in recent years. I am looking into this further and if the treaties were tabled, we would certainly consider doing as you suggest. Of course, the question of reactivating Christmas Island in the event of the Russians cheating, would have to be discussed between the United States and British Governments of the day. I have not discussed your letter with anyone (except David Gore who is here on leave and with Alec Home.) So these are just my personal thoughts.

Well, I think the main point is . . . if we just could get Christmas Island for just the time being, I think he thinks we are going to table it. He’s talking about our tabling the comprehensive, so, if we’re not going ahead with the [unclear exchange]. McGeorge Bundy: [Unclear] would be, Mr. President [unclear]. President Kennedy: Now, in the first place, let’s say, what we would . . . what is going to be our response on this [unclear] concept of an atmospheric test ban as of a certain date? Bundy: Could I interrupt for one second, Mr. President. President Kennedy: Yeah. Bundy: Pierre [Salinger] is getting pressure from the press already as to whether we are now, whether your statement at the press conference means that we are . . . a sign that your position is that we would accept “internationally supervised, national control posts.” Unidentified: [Unclear.] President Kennedy: [Unclear.] What did I say? Bundy: That’s what we agreed on in the text [of the statement]. President Kennedy: [Unclear.] Dean Rusk: I believe we did say “internationally supervised, national control posts.” Unidentified: “Internationally supervised, national control posts.” President Kennedy: Well, does that mean the international corps of supervisors [unclear]? These are the things that Mr. [Arthur] Dean is going to discuss. Bundy: The details are not . . . you don’t need to give them to Pierre in the next hour. You have to work out the full background on that to get the [unclear]. President Kennedy: What is the statement we made in the statement itself ? Bundy: In the written statement, there was nothing on this except 170 WEDNESDAY, AUGUST 1, 1962

that [unclear] said that an internationally monitored system of control would be [unclear]. President Kennedy: Well, I’ve always thought [unclear] was mean- ingless. Unidentified: [Unclear] very closely. Robert McNamara: Well, exactly. [Laughter.] President Kennedy: And therefore in a paradoxical . . . So that I . . . It seems to me the important point is that [unclear] internationally monitored. So, in effect, that’s what Mr. Dean has had to set out. But I think that. . . . Now, what we have to go into is how does this differ from our previous . . . what is the phrase we used before in the treaty in the [unclear] about the monitoring stations? Arthur Dean: “Under effective international controls.” President Kennedy: This is “under effective international control.” Is that the phrase, was it? Now, do you want somebody else with a [unclear]? Did somebody ask you about [unclear]? Bundy: If we can wait till six. We can stick on this point. President Kennedy: I believe the important point for Pierre is just to say in the present language—Repeat that language, would you? Dean: “Under effective international controls.” President Kennedy: We’re talking about restraint, not controls. Bundy: That’s exactly that because in the end we may want to negotiate a separate statement on controls. President Kennedy: I think that . . . can’t he say that what we want are control posts, which are effectively— Bundy: Under effective international supervision. President Kennedy: Now, if he starts to ask you about how this com- pares with our treaty, just say, “This is a matter Mr. Dean is discussing”; [background whispering] but the important point is, we have not accepted the concept of national control posts, solely. We’re talking about internationally supervised for the national control posts. [Laughter.] All right? Rusk: The paragraph A on page 3 gives a summary of terms under a comprehensive test ban and [unclear] give Mr. Dean a chance to find out whether there’s any possibility of us moving on a comprehensive treaty. It would mean that we would not get into detailed numbers, [unclear] a real response from the Soviet Union, although we would have to indicate informally and privately to a number of delegations that the numbers would be smaller than those we talked about in the [draft] treaties that have been tabled. We had an understanding among ourselves of the approximate num- Meeting on Nuclear Test Ban 171 bers we would be willing to discuss, at such time as the Soviet position made it possible to discuss it. There would be five national stations on the Soviet Union with a neutral observer present, in the range in which we talk about on-site inspections. But I think the key question we think . . . we really ought to think about this afternoon is what we do if there is a sentiment in Geneva to move on the atmospheric [test ban]. And my own personal belief, subject to Mr. Dean’s negotiating needs, would be that we’re prepared to move on that rapidly, subject to the point at the bottom of the page, that if the Soviets continue an extended series, and we find it necessary for security reasons to conduct an additional series, we would not then enter into an arrangement with [unclear]. President Kennedy: Couldn’t we put it in a . . . Either we would accept it immediately— Rusk: Yeah. President Kennedy: —the atmospheric test ban, and therefore we wouldn’t do any more of our tests and they would call off theirs, which obviously they won’t do. But otherwise, that we should agree on a date, to give us time to test again, if we decided that we needed to after this series of tests. So it would either be September 1, for example, or June 1. By then we would be able to test again if we wanted to, but we would still have agreed to a cutoff date. Rusk: I think this. . . . From a political point of view, that would be . . . [unclear] dramatic about it on the part of . . . from the point of view of our test people, and at Defense they would [unclear]. Glenn Seaborg: It would . . . should be quite acceptable from the [unclear] AEC standpoint and I think Mr. McNamara should speak to the [unclear]. McNamara: It would be quite acceptable from our position also. William Foster: This has been suggested by Padilla Nervo, in fact.74 President Kennedy: He accepted a different . . . He has different dates, doesn’t he? Foster: Yeah, he was flexible on the dates. He wanted a date that would be acceptable [unclear].

74. Luis Padilla Nervo, Mexican representative to the Eighteen-Nation Disarmament Committee, proposed in June 1962 that there be a time-lapse between the signing and the coming into force of a treaty. He suggested an end date for atmospheric testing of January 1963. London supported the proposal. 172 WEDNESDAY, AUGUST 1, 1962

Bundy: Is he fixing a date now? Or do we know? Foster: No, we’re working on that because we discussed [unclear]. Rusk: The earlier the date, the better from a political point of view, in terms of negotiation. June 1 sounds a little distant. I gather that they expect to finish their series by the end of October. We hesitate to accept a much earlier date than June 1 . . . Bundy: Well, we prefer not to decide that now, Mr. Secretary. What we really ought to do is to see what they’re doing. President Kennedy: Well, but you don’t need to have . . . If we get a chance to get an atmospheric test ban, don’t we . . . providing we have sufficient time to . . . We don’t want to have it [unclear] a chance lost . . . Unidentified: [Unclear.] Bundy: But we don’t today have to say what [unclear] would be. Robert Lovett: My guess would be that if their series calls for a specific response on our part, it would be in the length of the test period rather than the length of the— Jerome Wiesner: Yes, the high-altitude area. McNamara: I think that’s right. Foster: [Unclear.] McNamara: Certainly today we wouldn’t want to decide on a date earlier than June. Bundy: Yeah, that’s right. Foster: Today we wouldn’t want to set— McNamara: We would not. President Kennedy: Now does Mr. Dean . . . should he . . . should his response be when he arrives there be favorable to this? Dean: I personally think we’re getting into a Soviet trap on this atmospheric test ban, and I don’t like to differ with the Secretary, but last November they said that they wanted an atmospheric test ban plus a moratorium on all further underground testing. I think they’re going to try to wangle the Eight to make this proposal on atmospheric testing, and I think they’ll play around with that in an effort to try to put the heat on us, after we’ve made the atmospheric proposal; then I think we’ve lost our most important weapon. I don’t believe you’re going to be able to get a continuation of underground testing even though you make your atmospheric test ban. I think you’ve given up your most important negotiating position. And then I think world opinion would put terrific pressure upon us to agree not to do any further underground tests. You’ve got a moratorium pending the working out of your controls. Then, I think you’ve given away all your negotiating position if you offered an atmospheric test ban, I think. Meeting on Nuclear Test Ban 173

President Kennedy: Let me just say that I don’t find any [unclear] to a reasonably [unclear] responsibility [unclear]. I don’t find the slightest pressure to desist from underground testing, as a moratorium or on a unilateral basis without inspection. I think that everybody in the world says we should. We should either . . . in fact, I think there isn’t the slightest inclination, and I don’t even feel that they could ever put any real pressure on us. That’s number one. Number two, for us to put a hold on an atmospheric test ban, providing we have sufficient time to test again if we need it, I think does put up in the air our whole capacity on this issue. Then we really look like we’re just wild about this. And I think that militarily, though we may wait, providing we have a chance at another go, until you make it necessary, everybody is better off together, if that’s all we’re going to get. Rusk: Mr. President, I think that the thing Mr. Dean will need to get a little comfort on this is for him to know that we see that trap lying there, and we just are determined not to step in it. But if he is told that we are not going to be pressured into a moratorium on underground testing— Lovett: Why can’t we say no? Rusk: Then let’s cancel the trap so we won’t put our foot in it. John McCloy: As a precondition, why don’t you say that “you know that we’re ready to accept an atmospheric test ban, but we want you to be aware that we’re not going to go into this moratorium dance”? [Unclear exchange.] Dean: I think we ought to make it very clear, if we do decide to accept the atmospheric test ban, that they’re not under any circumstances going to get in any further unpoliced moratorium underground. [Unclear exchange.] President Kennedy: So, in other words, then, Mr. Dean will see that the response to this thing, for the reasons they . . . I think that it’s possible then, if . . . they may try to pull away by opposing what they [unclear] before. Anyway [unclear]. Then there’s the question to come on the date. Do we have to say, “Oh, if it’s done immediately,” because they want nuclear tests, otherwise we have to make sure we’ve got enough room at the other end? Dean: Padilla Nervo suggested January 1, ’63. And his proposal, at least that’s what we have [unclear] right straight through to December 31, ’62. I told him at the time I thought that was entirely too early, that we would have to go at least to the middle of ’63 and then I didn’t know how much further than that you would want. President Kennedy: Actually, you know what tests, what tests you’d 174 WEDNESDAY, AUGUST 1, 1962

want to run now anyway, right, even if you get . . . [unclear]. Say you had nine months in which you could test, you know what tests . . . ? Seaborg: In the weapons area. I’m not sure that we would know so well on the effects of— Wiesner: But then this doesn’t depend as much on the Russian tests as getting our own out of the way so that we know what our uncertainties are, so that . . . McNamara: It doesn’t depend exclusively on the Russian tests, but the Russian tests may influence our nuclear testing— Wiesner: [Unclear.] McNamara: —so that we do wish to have Russian test information available before we state finally and unequivocally that we would accept, could accept that, a certain test ban, without further testing. And I think, therefore, that the date suggested by the President is just about the right date, September 1 or June 1. Now, we might be able to shave the June 1 later, but we certainly won’t know for some time. Foster (?): We still control the comprehensive, if we retreat to this. If we can’t get the other, then we want to move on the other. Wiesner: Now, within this discussion on the comprehensive on page 3, and I’d like to comment, as I did last time, that I think there are some inconsistencies with the proposal. I don’t believe we can go to Geneva without talking about the means, the way . . . about capabilities of the system without talking about the specific system. I just don’t understand how we’re going to do this. Foster: I agree with you. Dean: [Unclear] within one day, I . . . sure, that I can easily walk this tightrope, but I know within one day I’ll have to begin the— Wiesner: [aside to someone] Page 3 in the . . . Dean: —with the various specifics. I don’t believe you can carry on any meaningful conversations beyond a certain point, without getting into ranges or if you’re going to have numbers, you will say 10 percent or 25 percent, I mean that if taken down . . . a very very effective impact. I don’t, myself, think it’s quite realistic to say that you’re going to say “substantial reduction” and then say, “but I won’t tell you how much.” McCloy: Can’t you ask the Soviets to commit themselves to an on- site inspection before you go in and talk specifics? Dean: I can do that with them, but I mean . . . and our allies will immediately come to me and start saying, “What are you talking about here? I mean, how many control posts are you going to—” Bundy: I think that’s different with control posts than what it is with inspections. You can avoid talking about a specific number of inspections. Meeting on Nuclear Test Ban 175

President Kennedy: Yeah. Dean: I can relate the on-site— Bundy: I believe we can be insistent on the control posts—[Unclear background exchanges.] Wiesner: I think you’d have to be prepared to discuss some configuration. You can get around this by talking about several—very elaborate ones and very simple ones—but otherwise you can’t do what we suggest. Bundy: We’re not in any trouble on numbers of control [posts]— Wiesner: Why? Bundy: We talked this morning about a system of control posts that might be as much as 80, taking in all of the different kinds of [unclear] which is technically how [unclear]. This is embarrassing. The number of inspections that they want us to be having, to be honest [unclear]. President Kennedy: That question should be . . . Wiesner: I understand that now, but I just want to make sure we understood . . . that this document says what we mean. Rusk: Well, we’re talking about proposing specific numbers. That doesn’t mean that we can’t, in the case of control posts, talk about orders of magnitude and approximations, and . . . Bundy: What’s really happened . . . [Unclear exchange.] Wiesner: We’ve got to be able to say, “Here is a system configuration and we think this will have defined detective capability.” Paul Nitze: But you can use that as an illustration. Wiesner: Well, that can be an illustration. Nitze: It doesn’t have to be a proposal. Wiesner: That’s right. I understand that. Foster: And you don’t have to specify details of how this is [unclear]. You don’t have to go into all the details precisely, [unclear]. The number and the location are variable. For the next three minutes of recording, the sound quality deteriorates. Rusk: Of course, I realize this would be a little difficult for Mr. Dean, but I do think it’s important that we find ourselves negotiating with the Soviets, and not with the neutrals on these questions. Dean: I’m not going to negotiate with the neutrals for that matter. [Unclear.] The President’s going to have to telephone Mr. Macmillan, because the day that I land, all four of your allies are going to want to know pretty specifically what I’m going to discuss with the Russians. Always before we have had a Four Western meeting before the meeting began, and we’ve kept them very closely posted. Now, some of them are more discreet than others. Canada today is a very slippery ally on this point. 176 WEDNESDAY, AUGUST 1, 1962

Foster: Is there any objection to saying that the control posts . . . if it’s possible that after consideration we might be able to do reduce it somewhere in a range of up to 50 percent? Wiesner: Bill, if you want to do what this says, which says we should be prepared to provide the conference with as much recent data as we can relating to detection, location, and identification capabilities of internationally supervised systems, national systems, you have to be specific about locations. I mean, just giving numbers like that permits a discussion that doesn’t really agree with what this paper is saying [unclear]. This is the point I am trying to make. Foster: You can’t do it all at once, and the point is you move into this gradually— Unidentified: All right. Foster: And it seems to me if you have a range, it’s perfectly possible to carry on negotiations. Unidentified: That’s right. Wiesner: You may take this system that’s more elaborate than the one you [unclear] get. Foster: That’s right. Wiesner: My point is, if you’re going to have any serious technical discussion, you have to specify what you’re talking about. Nitze: Well, let’s not have the serious technical discussion in the first few days. Wiesner: All right, [unclear]. Dean: Actually the [unclear] scientists don’t like it. Wiesner: Uh-huh. McCloy: Can’t you protect your on-site inspections by hinting much more elaborately what you’re going to do with the control system? Isn’t that enough for you to start off with at least, and then . . . See the other thing we’re not going to talk about until we get some missive from the Soviet Union that they’re . . . Dean: The on-site inspections doesn’t bother me as much as the number of the controls. I think you’re going to have to be . . . we just might discuss this with the Four or [the] Russians. Fifty-six seconds excised as classified information. Dean: Well, I’d like to get some here. Wiesner: [Unclear.] President Kennedy: Well, I think the British are more the problem now because with this letter from the prime minister in which he says, “I believe there is a technique for [unclear] determining testing” [unclear] Ambassador. What he’s saying is [unclear]. Meeting on Nuclear Test Ban 177

And I rather expect that that’s going to be their position. Foster: I think you can talk about ranges without drawing the full range [unclear]— President Kennedy: What would we say scientifically on this question about the number of controls? What do we say . . . I know it would depend on the kind of station we talked about, but what is our range, depending on the kind of station? Just the 80? Franklin Long: If I could talk just about the seismics. The couple of things that we have done in our recent [unclear] is, we have in the first place, focused on the Northern Hemisphere—Cuba, Russia, China, United States, Canada, and so on. And for those with a quite well controlled organization of 25 seismic stations, including, now, stations in the U.S.S.R., one gets really a system, with the U.S.S.R. stations, one gets a system whose capability is, I would say, indistinguishable from [unclear]. It’s really a very satisfactory system. Even the point that we made at the previous meeting was even if you didn’t include the U.S.S.R. stations, it’s a pretty respectable system. Now, one could push that number to 30, but 25, I think, would be a pretty satisfactory number. Rusk: [Unclear.] Dean: That’s [unclear] seismic [unclear]? Long: [repeating Dean’s phrase] This is [unclear] seismic [unclear]. Leland Haworth: Mr. President, I think it’s important that if we do mention any numbers of this sort, that we make the point that this is the Northern Hemisphere, so that it won’t be in their minds that this is spread all over the world, because they might grant control with respect to almost a smaller fraction under the, coming under— Dean: Now, we are talking about Asia, as I understand it? Unidentified: Yeah, but [unclear] controls . . . Dean: [Unclear.] Unidentified: [Unclear.] Wiesner: In the atmosphere of the United States. . . . President Kennedy: Now, if they ask you, in regard to on-site inspections, you will not give even the Four [allies], before we’ve talked [unclear] . . . Dean: I plan, at present, Mr. President, the Soviets, with respect to on- site inspections, that we were quite prepared to relate the number of on- site inspections to the number of unidentified events in the Soviet Union. Foster: Are you prepared to talk about that? Dean: Talk about the number of unidentified events? Foster: [Unclear.] 178 WEDNESDAY, AUGUST 1, 1962

Dean: Then I think I can handle myself on that. President Kennedy: You won’t give them any . . . Dean: I won’t give them any specific numbers. President Kennedy: Can you make it very clear, which we would . . . the fact that the information that we have does not permit . . . Dean: We’ve got to have on-site inspections. Bundy: Your government has not authorized you to discuss any concrete numbers until the principle of on-site inspections— Dean: That’s right. Bundy: —is agreed upon. Dean: That’s right. President Kennedy: Now, when you first get there, the first question really will be this atmospheric test ban. What do you think of Arthur Dean saying that he’d be prepared to sign that tomorrow, if it would go into effect tomorrow? With that . . . then they would say, the Russians would suggest, “Well, we can’t do it tomorrow.” And we say, “Unless you’re prepared to move right now.” And then we’d have to pick another date, move back to our June date. Then there’s no hesitancy about our embracing it. Rusk: If it isn’t signed immediately then there is a problem of finding the right date. [Mumbling in the background.] So we have to be pretty careful not to accept in any way the Soviet alleged right to test now. Carl Kaysen: Mr. President, if we get into the position of saying, after we’ve said we’re prepared to sign it tomorrow, and we get a no to that, then we get into a discussion of the atmospheric test ban, don’t we somewhat undercut our own position of trying to get discussion on the comprehensive [test ban]? Wouldn’t it be tactically better if, as you suggest, that if Arthur says, “Sure, we’re prepared to sign one tomorrow” and we get the no answer on that, then let’s say, “Let’s talk about the comprehensive.” I feel if we indicate a willingness to talk about the time at which in the future we’re prepared to sign the atmospheric, we undercut our position for arguing that the comprehensive is quite important today. Dean: Yeah. President Kennedy: Well, I just . . . Well now, let’s see, there’s some certain adjustments [unclear] in our position on the general disarmament treaties. Unidentified: [Unclear] their statements. Foster: Let’s start on page 4, Mr. President. [reading] “Stage I Meeting on Nuclear Test Ban 179

Production.” It has been agreed to by the interested agencies and the Committee of Principals, and briefly: “The production of armaments during Stage I should be limited to replacement and repair of existing armaments. Replacement would be ‘in kind.’ The amount of production will be reduced at least as much as the reduction of armaments. Produc- tion of new types of weapons, of prototypes, and of new armament production facilities would be prohibited.” This developed from the fact that any limitations by percentage, we talked about before, developed a variation in the percentages, developed a complication in definition to such an extent that, in view of the fact that we are [unclear] on the scope with this restriction, the announcement is late and in phase two [unclear] appear to be the simplest [unclear] between the agencies, and it doesn’t matter [unclear] frustration with this language [unclear]. President Kennedy: Yes, I see how this makes [unclear] position harder. Bundy: Is there trouble in the Joint Chiefs concerning weapons? Lyman Lemnitzer: We see problems, and we’re not sure what in kind means. We have questions about this particular area, and we feel it’s indefinite and not precise. But that’s our problem. We don’t know what in kind means. Foster: By types, essentially. Lemnitzer: Well, by types, categories . . . Wiesner: It could be 2a or f. Bundy: No, we’ll have to tie it down [unclear]. Unidentified: A B-52? [Unclear.] Lemnitzer: That is a question of a strategic delivery type, whether it’s a missile . . . Are missiles and aircraft interchangeable? Foster: No, it’s by types. For the next few minutes, the sound quality of the recording deteriorates. Rusk: [Unclear] this would be about the same. Lemnitzer: Whether it’s a B-52, or a Minuteman, or an Atlas . . . Unidentified: We’ll have to replace it. Bundy: A B-52 [unclear]. Unidentified: Right. That’s a possibility. [Unclear.] Unidentified: You can’t so redefine a B-52 that it turns into a Minuteman. Lemnitzer: All right, take an Atlas and a Minuteman. Isn’t an Atlas replaceable by a Minuteman, because of obsolescence? Foster: No. Unidentified: No. 180 WEDNESDAY, AUGUST 1, 1962

Wiesner: That’s what was possible when it was categories Lemnitzer: That’s what got us into— Unidentified: Correct. Lemnitzer: —troubles. Unidentified: Right. Lemnitzer: [Unclear.] Unidentified: In other words, your narrowing of the definition is in the interest of preserving— Bundy: It’s quite apparent that that definition would be exactly how much energy to exert [unclear] State Department. Minutemen [unclear]. Unidentified: [Unclear.] Wiesner: That will have to be pinned down in the negotiations. The principle is to narrow— Lemnitzer: That’s the point we want to be so sure of: that this will be defined precisely in the ongoing negotiations. Wiesner: It will have to be, yeah. . . . Foster: We’ll have an annex that would so define it. Unidentified: You’ll spend ten years negotiating this thing. Rusk: [Unclear.] We may in fact wind up with one if we make any headway in this direction. Foster: Yeah. President Kennedy: Can we do number two now? Foster: Well two has to do, Mr. President, with the reduction of military bases in Stage I, at least the willingness to discuss the reduction of military bases in Stage I without in any way giving way to the Soviet emphasis on foreign bases. It will only be discussed if substantial progress had been made in the reduction of armaments in the early parts of Stage I. It is felt that if we actually make progress in Stage I on those reductions then it would be logical to assume, that certain bases would be eliminated too, and therefore we’d be willing to discuss it with the Soviet Union. This, again, is recommended as a method of, really, negotiating to disarm the attack of the Soviets in this regard, since they have made a lot of progress with all of the other members of the conference, on the basis that they know we’re going to give up some bases, therefore why are we unwilling to discuss it. We’re willing to discuss it after we’ve seen some signs of actual progress. Rusk: As long as we’re sure . . . but then how are you going to avoid discussing the available systems, [unclear] then? Lemnitzer: We do see a problem in this area of bases vis-à-vis installations or facilities, the right interpretation of what bases happen to Meeting on Nuclear Test Ban 181 mean. And it’s just going to have to be very carefully looked at. It affects our whole NATO deployment, particularly, in which I have a particular interest right at the moment, but I speculate [unclear].75 We do believe this is an unfair contest on bases, insofar as giving up a base on our part, on [the] one hand, and the Soviets moving out. They can move into Europe very quickly, across the ground. If we pull out of Europe or our positions in the Far East, our reentry is an entirely different type of problem. We are at a distinct disadvantage, a military disadvantage in this field. Wiesner: But there are limitations on this, though. . . . Lemnitzer: Well, obviously, the way it’s worded I’m just calling attention to some of the problems. Be prepared to discuss, if there is substantial progress. That’s the way I understand it, Mr. President. Rusk: The third point is that [unclear] this decision will be taken immediately from phase one to phase two. It seems a little hypothetical at this point given the general state of discussions. But the proposal here would be that we move it away from the Security Council, we make it by a two-thirds vote of the Control Council of the disarmament organization, and that the United States and the Soviet Union would have a veto. This would require nationalist China to be there, in the Security Council. Bundy: [Unclear] NATO [unclear]. Rusk: Well, it says . . . we’re clearly inferring those of at least the United States and the Soviet Union. Maybe one or two others who would insist on a veto. President Kennedy: [Unclear] is this the general [unclear] for the public record. Dean: Yes, sir, we would put this on the table. President Kennedy: At least the United States and the Soviet Union . . . Dean: Yes. Unidentified: I would predict that the British and the French will object. Lovett: No, as a matter of fact, they’ve recommended it. Dean: The British . . . not the French, but the British have recommended it. President Kennedy: Do you have any suggestions? Unidentified: If it ever gets to that.

75. Lemnitzer’s appointment as supreme commander of NATO forces had been announced in July. He took up the post on 1 November. 182 WEDNESDAY, AUGUST 1, 1962

Foster: Well, there are just a few more items. President Kennedy: As for the ambassador’s general plan of action, how are you going to . . . what are you doing about the technical briefing? Dean: I thought I could handle immediate negotiations with [Valerian] Zorin and to the extent necessary with the Western Four, and then I thought I would gradually expand this number about . . . expand it [unclear] by the weekend of the . . . President Kennedy: Does anybody really need . . . for your preliminary discussions with the Four as regards . . . Foster: They’ve pretty well got all the facts. Dean: Oh, they’re all pretty well versed on this. I would prefer that we keep this on a political basis until about a week . . . whatever they say . . . they’re apt to pick up a chance remark of anybody that’s most favorable to them and then quote it in the summary saying “I’m quoting an American scientist who says this,” and that’s . . . they’re generally very [unclear]. I think it would be better if we could get [unclear] discussions for about a week. President Kennedy: OK, well now, on the guidelines to the background [unclear]. Dean: Can I add just one fact in? President Kennedy: Yes. Dean: The Soviets have already agreed to go from 1.7 to 1.9, are we still not . . . does [unclear]. Foster: Further study is being undertaken on this, Mr. President, by the Joint Chiefs. Rusk: This is a general [unclear] I assume. [Unclear] 3.1, the Soviets’ 1.7. [unclear] 1.9. The Defense Department announced [unclear]. President Kennedy: How long would it be before we get an answer to it? Lemnitzer: Recently there have been some real problems in this area of determining our forces, and one of the principal difficulties of identifying a military . . . civilian and military employee vis-à-vis a man in uniform. There’s all sorts of possibilities. The Soviet Union has many of the things that we do in our services performed by civilians. President Kennedy: What are our force levels now? Lemnitzer: About 2.8 million. 1 McNamara: It’s 3 /2 million, including civilians. Lemnitzer: It is. McNamara: This is one of our problems, Mr. President. To answer your question directly, I believe we have scheduled the completion of the Meeting on Nuclear Test Ban 183 study for about the 20th of August. We can work on the disarmament dates to that date. Unidentified: We have a meeting on August 20 [unclear]. President Kennedy: That meeting on August 20th [unclear]. Now, on the guidelines and background [unclear] of this meeting in August. [Unclear.] Rusk: Mr. President, I do think that it’s important, it’s also important for the four Western powers and as at least a preliminary point for Zorin, that we ought to give very little more than you gave in your press conference today. President Kennedy: Any use having Mr. Dean go up to the joint committee [on Atomic Energy]. Dean: I’d be very happy to go to the joint committee tomorrow. President Kennedy: Bill, what’s your judgment of their state of mind [unclear]? Foster: Well we spent about two and a half hours with Senator [Chet] Holifield yesterday.76 I think he’s all right. We talked to Senator [Henry] Scoop Jackson and Senator [John] Pastore at breakfast this morning,77 so they’re pretty well up to this. President Kennedy: It seems to me, unless there’s some disadvantage or some use to have them . . . Rusk: Well I think it would be important for the committee to know what Ambassador Dean is not going to do in Geneva. [Unclear]— Bundy: That’s right. President Kennedy: All right. Why don’t we see if we can get an appointment for tomorrow morning with the committee and let them [unclear]. Bundy: I suggest we have two committees hear it, not just one. [Unclear.] Foster: I think Senator [unclear]? Unidentified: [Unclear.] President Kennedy: Well, when do you wish to go back? Didn’t you say tomorrow? [Unclear background discussion.] Dean: No sir. I’ve been trying to check on planes, but I think the earliest one I could get out is 9:15, 10:00 or 8:15, 10:00 on Friday morning.

76. Senator Chet Holifield was the chairman of the Joint Committee on Atomic Energy. 77. Henry “Scoop” Jackson was the chairman of the Subcommittee on Military Applications, and Senator John Pastore was the vice chairman of the Joint Committee on Atomic Energy. 184 WEDNESDAY, AUGUST 1, 1962

President Kennedy: Well, why don’t we see if the committees could meet . . . the joint committee, with the Senate Foreign Relations, and they could invite . . . Unidentified: How about Armed Services? President Kennedy: Armed Services. Why don’t they . . . Why don’t we get the Senate Foreign Relations Committee to invite Senator [Richard] Russell and Senator [Leverett] Saltonstall to the Foreign Relations [unclear].78 Foster: Senator Russell, of course, is on the Joint Committee. President Kennedy: I know that. Unidentified: He never shows up. Rusk: But you had breakfast with him. Foster: [Unclear.] We had breakfast, and I called on him individually. President Kennedy: Perhaps if somebody could call [Adrian] Fisher [unclear] and say that Mr. Dean could go around and see Senator Russell first about this. McCone: I think that might be a good idea. [Unclear.] Unidentified: We can say that. [Unclear exchange.] President Kennedy: OK, I think that ought to be . . . if we need background, we’re going to say that Mr. Dean is going up to Hill [unclear]. Now, do you want to make any suggestions about [unclear]? Rusk: Mr. President, there’s been a good deal of [unclear]. [Pauses.] I think we ought to safeguard against such a thing. One is that there’s a great row going on within the administration. This is a matter on which we have had consultation with any administration. We are all in agreement on the nine we’ve picked. We’ve consulted with the congressional leadership in sending Ambassador Dean to Geneva to find out what the possibilities are for a comprehensive test ban. I think on the technical side that we need to indicate that we . . . what might be called the simple plan, is the minimum results of these technical developments with respect to the reduction in the number of suspicious events, some improvement in the range of detection, but nothing which indicates that we can eliminate on-site inspections. I think that we should background that so far as we know, the Soviets have not changed their position.79 They oppose all on-site inspections,

78. Russell was chairman of the Armed Services Committee; Saltonstall was a member of that committee. 79. “Background that” means brief the press on a background basis. Meeting on Nuclear Test Ban 185 which would preclude any optimism on that point. They have reaffirmed it very recently. And very much leave it at that. I wouldn’t get into the question of exactly what these so-called internationally supervised national control posts are, because that’ll take some negotiation in Geneva. Bundy: It has to be [unclear]. That’s where the heat will be. It’s really imperative for us to try to spell that out. Edward Murrow: Mr. President, do I understand that Ambassador Dean is going to accept the atmospheric test ban forthwith when he gets back to Geneva? Dean: Well, not quite that way because their proposal on November the 28th is that we accept the atmospheric test ban and the [unclear]. [Unclear exchange.] Bundy: [Unclear] see it [unclear] papers. Dean: I want to look at . . . I want to examine Madame Myrdal’s proposal, and see what she says before I say I’m going to accept an atmospheric test ban right off the bat. Rusk: Can’t you possibly get a commitment from that there won’t be any pressures on a moratorium? Dean: Right. I want to interview Madame Myrdal before I make any statement. Rusk: And study the record. Dean: What? Rusk: And study the record. Dean: Oh, and study the record. President Kennedy: [Unclear] this says “name of observer from Moscow”? Where they said [unclear] . . . we make the point that our information makes it . . . we now conclude incontrovertibly that any nuclear test may be detected by national means. So that the scientific testing is going to be important to demonstrate and not [unclear] choice . . . and that, therefore, the scientific estimate ought not to be of extreme importance. For the next two minutes of the recording, the sound quality deteriorates. Dean: We also [unclear] their actual records [unclear] series. It’s possible we could eliminate all on-site inspections. President Kennedy: Where did you get that? Nitze: Did Macmillan say that last night?80 Dean: Well, Macmillan, in an answer to the question in the House, said possibly all on-site inspections might be eliminated.

80. British prime minister Harold Macmillan. 186 WEDNESDAY, AUGUST 1, 1962

Unidentified: This is just the opposite of what he said about nine weeks ago. Dean: Well, he’s under terrific pressure. Unidentified: We ought to keep our relations with [unclear].

The meeting dissolved into muffled discussion. Rusk can be heard referring to “political hope” with Bundy’s adding that Dean might say, “Your scientists don’t agree with ours.” The President then said that it was time “to break this up,” and the men are heard leaving. For the next ten minutes there is chatter in and around the room. Only the occasional word is intelligible.

5:35–6:25 P.M.

Times have changed. You can’t do this anymore on a hit-and- miss basis like we’ve done in the past because now incidents of this kind are infinitely more important and more damaging than they’ve ever been before. . . . And the FBI . . . has never been effective.

Meeting with the President’s Foreign Intelligence Advisory Board (PFIAB)81 There would be no let up in President Kennedy’s schedule this day. From the test ban meeting he immediately went into a meeting with his Foreign Intelligence Advisory Board. President Kennedy gathered the board to discuss a serious press leak. A front-page story in the New York Times by Hanson Baldwin, which appeared on July 26, revealed detailed U.S. intelligence information on the size and strength of the Soviet intercontinental ballistic missile force.82 The source of the article was apparently a National Intelligence Estimate on Soviet military forces that was distributed in the government in early July. For Kennedy this leak was the latest in a series of unauthorized disclosures of sensitive

81. Including President Kennedy, Clark Clifford, Robert Kennedy, Dr. James R. Killian, Jr., Dr. Edwin H. Land, and Maxwell Taylor. Tape 5A, Presidential Office Files, Presidential Recordings Collection, John F. Kennedy Library. 82. Hanson Baldwin, “Soviet Missiles Protected in ‘Hardened’ Position,” New York Times, 26 July 1962. Meeting with the PFIAB 187 information.83 He wanted to make an example out of Baldwin, the Times’s longtime military affairs correspondent, and whoever leaked this information to him as a way of deterring similar leaks in the future. Baldwin’s piece not only described in detail the probable size of the U.S. superiority over the Soviet Union in numbers of intercontinental ballistic missiles and nuclear submarines—a fact that had been common knowledge since late in 1961—but also gave evidence of Soviet efforts to strengthen, or “harden,” the installations holding their ICBMs, which could only have come from the supersecret CORONA satellite program. Baldwin reported the assessment of U.S. military experts that these defenses would be of little help against a U.S. nuclear first strike. It was an important leak. There had been some talk in the Pentagon that summer of 1962 of the importance of coming up with a plan to wipe out all Soviet missiles before Russia could use them against the United States. Apparently someone at the highest level decided to affect the debate by leaking to the New York Times. And President Kennedy was furious. The very day he read the article the President had the Attorney General initiate an FBI investigation.84 The Bureau worked quickly. At 9:30 A.M., July 30, 1962, the FBI held a very high level briefing at the Pentagon for Robert McNamara, the secretaries of the armed forces, the members of the Joint Chiefs of Staff, and other high officials of the Department of Defense.85 The FBI representative advised the group that the Bureau was investigating the source of the leak and needed help in determining Baldwin’s contacts during his visit to Washington in mid-July. McNamara pledged his assistance and that of the Defense Intelligence Agency (DIA). The director of the Defense Intelligence Agency informed the Bureau that McNamara himself had met with Baldwin on July 19; but McNamara denied being the leaker. None of the other officials in attendance volunteered that they had seen Baldwin, though the Bureau suspected that Baldwin had met with several high-level Pentagon officials. That evening, two FBI agents

83. In July 1961, the FBI investigated a Newsweek article by Lloyd Norman on contingency planning in the Berlin crisis (see director, FBI, to the Attorney General, “Article by Hanson W. Baldwin in the New York Times, July 26, 1962,” 31 July 1962, Hanson Baldwin Collection, Sterling Memorial Library, Yale University). 84. The attorney general, Robert Kennedy, instructed the FBI to begin an investigation of the Baldwin leak on 26 July (FBI report, “Article by Hanson Baldwin in the New York Times, 26 July 1962, Espionage-X,” Hanson Baldwin Collection, Sterling Memorial Library, Yale University). 85. D. E. Moore to W. C. Sullivan, 30 July 1962, Hanson Baldwin Collection, Sterling Memorial Library, Yale University. Moore was the FBI officer who led the briefing at the Pentagon. 188 WEDNESDAY, AUGUST 1, 1962

approached Baldwin at his home in Chappaqua, New York. Just back from work and rattled by this unexpected intrusion, Baldwin asked the G-men to leave and make an appointment to see him the next day at the Times.86 The FBI demurred and instead put a tap on his home telephone. That night the FBI heard Baldwin tell a colleague: “I think the real answer to this is Bobby Kennedy and the President himself, but Bobby Kennedy particularly putting pressure on [J. Edgar] Hoover.”87 As of late afternoon August 1, FBI agents were preparing to visit Baldwin’s appointments secretary to ask for a list of everyone the journalist had seen during his four-day Washington visit in July.88 President Kennedy was not satisfied with leaving the investigation to the FBI. He asked his Foreign Intelligence Advisory Board to evaluate the seriousness of the leak and in light of their assessment to suggest additional steps to deter leaks like this one. When he was first elected, John Kennedy thought he would have little use for these intelligence consultants. The President’s father, Joseph P. Kennedy, had served on the President’s Board of Consultants on Foreign Intelligence Activities, as PFIAB was called in the Eisenhower period, and apparently thought little of the organization. President Kennedy abolished the board of consultants and might have done without it but for the Bay of Pigs fiasco. Stunned by the role of the CIA in the failure of the paramilitary operation in Cuba, Kennedy reconstituted the board under a new chairman, Dr. James Killian of the Massachusetts Institute of Technology. He named an old family friend, Washington lawyer Clark Clifford, to the board, which numbered eight members including Harvard international historian William Langer and the President’s military adviser, General Maxwell Taylor. The President turned on the tape at the start of the discussion of Baldwin.

President Kennedy: I’d just like to say before I . . . I want to get it so it’s independent . . . nonagency evaluation of the significance of this Baldwin article because, you know, there is so much braying down here

86. Director, FBI, to the Attorney General, 31 July 1962, Hanson Baldwin Collection, Sterling Memorial Library, Yale University. 87. Ibid. 88. Mossien to Hanson Baldwin, Memorandum for the Record, 4 September 1962, Hanson Baldwin Collection, Sterling Memorial Library. Mossien worked for the New York Times. Meeting with the PFIAB 189 about a lot of these things that appear in the press and it’s hard to separate what is really a bad leak from other kinds of leaks, which we see every day. Secondly, whether, if this leak is serious, whether we . . . there is any action that we could take with . . . I had a talk a year ago with some of the publishers about this matter without much success and maybe there is nothing that can be done.89 But if this is a serious leak then, it seems to me, that we ought to do something about bringing it to the attention of the responsible people, who are, presently, you know, the publishers’ associations and see whether they feel stimulated to take some action of their own. Unidentified: Yes, sir. James Killian: [Unclear.] It is the judgment of your board today that this is one of the most damaging unauthorized disclosures and leaks that we have any knowledge of in our experience. There is no doubt. And we made a detailed analysis here that we have tried to make available to you as to what this means in terms of the coordinated intelligence operations we’ve been carrying on. And, in our judgment, this is going ultimately to result in the diminution of the intelligence that we have available to us because the Soviets will now be prompted to engage in concealment and deception. There are many technical ways that they can do this. We think it inevitable, this is going to reduce the intelligence take on very vital kinds of intelligence now which has to do with the whole balance of power, and our military planning, the problem of [unclear] and the SIOP and our own missile program.90 We would say to you unequivocally that this has been a tragically serious breach of security. President Kennedy: What I find is incomprehensible . . . that someone of [Hanson] Baldwin’s experience and stature and the status of the [New York] Times would do it in a story which was not of particular interest to anyone but the Soviet Union. Killian: We certainly share this feeling, in fact. And given his presumed military knowledge and background, we just think it incomprehensible that he should do this. President Kennedy: Can I get a memorandum or a letter from you which is a statement of what you’ve just told me?

89. Presidential Statement to the American Publishers’ Association, 1961. 90. The Single-Integrated Operational Plan (SIOP) was the U.S. nuclear strike plan. 190 WEDNESDAY, AUGUST 1, 1962

Killian: Yes. We have a brief statement here.91 Perhaps I might just read this quickly. [Begins to read paper.] Three minutes and 28 seconds excised as classified information. Killian: Does this answer your question? Unidentified: Yeah, it does. It definitely does. It does. Yes. President Kennedy: What is your judgment as to how many people might have had—well, of course it is hard for you to make that judgment. How many people might have had the capacity to have given this kind of information to this [unclear]? Killian: Such information as we have available and we’re . . . After you had reduced the list of the distribution of the estimates, about 33 people, who got the list.92 In addition to that, there were some hundred people at least who were engaged in the preparation of the estimate. And it was this group, perhaps enlarged by some factor—we think the secretaries who get this and transmit it to the people that work for them and various other people—probably the number is substantially greater than a hundred, engaged in the preparation process. We have some comments to make on this because we think in dealing with this highly sensitive material that if we change procedures to reduce the number of people involved in handling this kind of material in the estimating process— Robert Kennedy: I might say, Mr. President, that’s the same conclusion as we reached from our investigation that there must have been several hundred people who had this information.93 Killian: It’s a lot of people. Edwin Land: There are a lot of loyal people. There are about seven thousand people now who have access to this general information and our impression is that the operating people, the people who work at it and gather the information, are responsible because they’re involved in it. Our general concern is what happens to the information when it gets to high levels. President Kennedy: [to Killian] Jimmy, what is your guess as to the effect on the Soviet Union if it became known that we regarded this as a

91. Document not found. 92. The estimates are National Intelligence Estimates (NIEs), which were produced by the Office of National Estimates in a process supervised by the U.S. Intelligence Board. The NIEs drew on the full range of intelligence resources available to the several intelligence organizations serving the government. The sensitivity of the information contained in the estimates necessitated that distribution be as limited as practicable. 93. The Attorney General oversees the FBI. Meeting with the PFIAB 191 very dangerous—we feel—as a dangerous leak? In other words, this was enough of a red light to them that . . . Would this have been enough of a red light that any publicity about our feeling that this was a very damaging leak would not add to our security loss at the moment? Killian: It’s highly doubtful. [I would] answer that this way: that they may well consider that this kind of article written in this newspaper by this man [is] probably with authority. This is one of the things that makes [unclear] leaks a particular kind of problem; but we would also have to add to that, that public discussion of this particular situation will undoubtedly tend to authenticate still further, the article. [Unclear.] And I think it would be necessary to weigh the possible authentication effects for the Soviets against remedial measures that may be essential to— President Kennedy: There wasn’t enough authentication in the article for them, given the information they have and therefore judging how much information we had, that they probably are able to authenticate it sufficiently that way? Killian: That’s the kind of thing that Dr. Land has just mentioned— President Kennedy: Yes. Killian: They can relate this directly to specific events that this reveals of our observing. This is an authenticating kind of aspect to the article that makes it even worse than you might think. Land: That’s right Mr. President, [we spent] a great deal of the day discussing this point and I suppose that what we feel is so much is revealed that it’s unlikely that much damage would be done. But we’re a little [unclear] directing the plan; yet we are a little reluctant to take the chance of having to discipline someone directly for doing it . . . that would authenticate it. I suppose by not [unclear] the discipline that Dr. Killian will discuss [unclear] vital . . . and disciplinary steps should be taken but with some effort to separate the disciplinary action from that particular article. Killian: Public [unclear] action. Well, we have ventured to put down some suggestions here. Whether they are practical from your point of view or not, you will have to judge. Realizing how difficult and impractical this area is, we nevertheless feel that we ought to try to grapple with it. We would make this kind of comment, first of all: Given the damaging nature of this, it justifies you in taking very drastic and unprecedented procedures to prevent it in the future. I might make the observation that having observed our responses to security breaks over a period of years, having observed a certain ultimate timidity in trying to do something about them that we have seen a situation evolve wherein those who engage in security leaks probably have no real fear that any punitive 192 WEDNESDAY, AUGUST 1, 1962 action will be taken. And this is a part of the problem that we face at the present time. This is one of the reasons why we feel so strongly that if you could find the ways and the means appropriately to take drastic action, even though this drastic action might result in adverse criticism temporarily, after a period, that the national interest would be well served by your doing it, and taking the adverse reactions as they might come. It’s been, I think, the fear of adverse reaction that prevented any kind of, this remedial action being taken in the past. It is easy for us to say these things to you and you will have to evaluate the risk of approving this. But it is our considered judgment that you will be justified even against the possibility of reactions by the press or reactions within your own official family to do some things that obviously are of an unprecedented and drastic nature. We would suggest that the first and most basic response which obviously ought to be taken here is to be a very clear indication on your part of the seriousness with which you consider this particular security break, and the [unclear] that you were asking at the beginning. And to the extent that we can be helpful in providing you with a backup statement as to how serious we deem this to be, we will give you such documentation as you might find useful. President Kennedy: I wonder if I, in other words, if I can get a letter from you— Killian: Yes. We thought that if this would be useful to you we’d fight [unclear]. Now, we suggest, for example, that you might call a special meeting of the National Security Council and make a very strong statement at such a meeting to make clear to all of the cabinet officers involved that you have a cumbersome staff problem, in deadly [unclear], how serious you feel this to be and how important it is that we prevent it in the future. It may be the force of your concern will strengthen the hands of each of the people who are involved, as for example the Secretary of Defense and all the members of his staff, in dealing with the problem, the petty things, which have been very difficult. We know, of course, that you have initiated an FBI investigation of this particular situation. We recommend that should the offenders be identified that you authorize drastic discipline, individual discipline. That such discipline be taken in a way that leaves no doubts in the minds of the offenders’ associates about how disastrous their actions have been and the punishment that has been meted out. And I think all of us feel very strongly that provided the man can be identified, that the men can be identified, that really drastic action is indicated. And that this will be the best way to prevent future occur- Meeting with the PFIAB 193 rences of this sort. And that in very few instances, the facts that we know anything about, where punitive action hasn’t worked— President Kennedy: Well, you remember the . . . the one case back that I talked to Secretary McNamara and the other generals . . . they got a call that they thought they probably had the— Killian: This was the letter from Secretary Rusk. President Kennedy: Yeah. Indeed, they’re sort of [unclear]. They’re rather pessimistic about their chances but they need to make [mumbles]. . . . Killian: We make a further suggestion that in the event that the investigation reveals—and this comes about as a result of a discussion that we had with General Taylor, in particular—offices or groups that might have been involved in this thing, that the situation would justify taking some kind of disciplinary action against the whole of that particular office group, even though he personally might have not been directly involved in this [security]. But, this would, again, do much to alert people and indicate the seriousness and the determination to stamp out this kind of thing. We recommend another kind of thing, that consideration be given to the establishment and distribution of new policies in the Department of Defense and the other agencies involved in handling classified intelligence material, about procedures to be followed by personnel when talking to the press. We suggest consideration be given to a requirement in such a policy that officers, both civilian and military, be required to prepare memoranda reporting each conversation they have had with representatives of the press and that such memoranda be filed with the head of the department or agency in which they are involved. President Kennedy: Do you think that anybody who talks to a newspaperman at the Pentagon should first clear it with the press officer or that he should have a third person present to . . . ? Killian: Well, we have some skepticism about the third person for a variety of reasons. We think, first of all, that the press will not accept this. There will be a quite powerful reaction to this as an overall policy. We think that this suggestion of having them understand that they are expected to prepare a memorandum of their discussions, and that this memorandum must be filed with the head of their particular branch or agency, would help to make them more careful, more reticent and would, in the event that they don’t prepare the memorandum, leave the man in a much more vulnerable position to that punitive action in the event that it is necessary. This is one of the problems [unclear]. Land: I can’t; I tend to— 194 WEDNESDAY, AUGUST 1, 1962

Killian: We have not discussed the question of whether a man should check in with the central office before he has a meeting with the press. This might be a very— Unidentified: Well, this gives an immediate record of everyone the press representative might see. President Kennedy: All right, so the burden would be on the government rather than on the newspaperman— Killian: Yes. President Kennedy: So it might be more polite to accept it. Right. The press might not want to go to clear it. [Unclear.] Killian: We don’t see that the press could have any adverse reaction to this, at all. Because this is none of their business. Maxwell Taylor: I might say others have— Killian: You are not interfering with their access to personnel. Taylor: We’re not talking about a lot of people either in the Pentagon. Killian: No. Taylor: I would say that the people who should be allowed to talk regularly to the press are very few and in the past have been very few. Killian: Still another suggestion is that there ought to be a sharper identification, a listing of those particular areas that have a high degree of sensitivity, more than we have done so far. And then the procedures should be adopted, even more stringent than those we now have. [Unclear] access [unclear] of the kind that we’re talking about involving this, too. This board has undertaken to prepare its list of such areas and we think that the Director of Central Intelligence and the Director of the Intelligence Agency of the DOD ought to make an analysis of this [unclear], too.94 Then it can be made clear, clearer than it is now that there are these certain areas that must be handled in very special ways and that people must take extreme precautions. We next suggest as I mentioned earlier that we ought to try to reduce the number of people involved in the estimating process, when the estimates involve this kind of high[ly] sensitive materials. [Someone says “That’s right.”] Having a list of these areas of high sensitivity, the National Estimates Board ought to limit the accessibility to this information when they deal with these particular kinds of topics, cutback on

94. The abbreviation DOD stands for Department of Defense. Meeting with the PFIAB 195 this 200 as we were talking about, keep it very very small. It may well be that there are certain kinds of information that is [sic] so sensitive and obviously so valuable as ought not to be handled in any way except by hand-carrying [unclear] locked, like a courier, certainly. We make another observation here with some hesitancy, but nevertheless I think it was the clear opinion of the board that the FBI may not be the best agency to conduct investigations of leaks of this kind. The history has shown that they have never been either enthusiastic or successful in dealing with serious security breaches. As I am sure you are fully aware, Mr. Hoover apparently doesn’t like to get into this field.95 He feels it is an administrative responsibility rather than an FBI type of responsibility. We’re unsure how enthusiastic the FBI is when it under- takes to make an investigation. We say this not wanting to be unfair to the agency. But for, I think, a more fundamental reason: that is, we believe that there ought to be within the defense, within the intelligence community itself, the means to conduct this kind of search and investigation. The act gives the Director of Central Intelligence the responsibility for protecting the sources of our intelligence information.96 He really has no mechanism to do this at the present time. The only committee of USIB that has at least the designation of being a committee to deal with security problems . . . We would suggest, therefore, that the Director of Central Intelligence be encouraged to develop an expert group that would be available at all times to follow up on security leaks. When the FBI gets into this problem, they are not cleared in the first place as we discovered in this particular situation.97 They start from behind the starting line. It takes them a long time to get the necessary background to begin to be effective. We ought to have a trained, experienced and knowledgeable team available to deal with this problem whenever and wherever it arises. And perhaps, maybe, this could be approached in two ways: One, we say ask the Director of Central Intelligence to make sure that he has such a team available to him operating under his direction. And next that the director of the intelligence agency of the DOD

95. J. Edgar Hoover had been the director of the Bureau of Investigation and its successor, the Federal Bureau of Investigation, since 1924. 96. The act is the National Security Act of 1947. Clark Clifford, a member of PFIAB, participated in the drafting of that act. 97. They did not have security clearance for matters of national security. 196 WEDNESDAY, AUGUST 1, 1962 have a similar group that can work in the Department of Defense. Because under the new directive establishing the intelligence agency in Defense, the director of that clearly has the responsibility for security, but he is just getting started and so far doubtless does not have any real reasons to discharge this responsibility. Here are two ways that we think it would be better and would have an important effect, a deterrent effect, on leaks in the future, if we had such groups available to respond to it. Clark Clifford: I think, Mr. President— Killian: This would be better than the FBI. Clifford: I think this is the most effective recommendation that the group makes: that there be a full-time, small group, devoting themselves to this all the time. I believe that that group could become knowledgeable about the pieces that these various men write, like Baldwin and Alsop and so forth.98 They can after awhile become pretty knowledgeable about who these men are seeing, these columnists, where these leaks occur. It can be done quietly, unobtrusively [so] that they have a wealth of background from which to select the information. They’re at it on a full-time basis. Times have changed. You can’t do this anymore on a hit-and-miss basis like we’ve done in the past because now incidents of this kind are infinitely more important and more damaging than they’ve ever been before. Killian: That’s right. Clifford: And the FBI, as Jim says, has never been effective. I remember in 1946, they had a bad leak in the State Department that 16 years ago they gave the same kind of report and I bet I’ve seen plenty of them. They never found out who it was. They were really valueless. But a full- time group that is working on it all the time and has some background so that when one of these leaks occurs, they don’t start from scratch. They’re already very well oriented in the field. Taylor: I think if this can be combined with a thorough system of keeping memo for record . . . if this kind of group— Unidentified: Yes. Taylor: —went around and looked at the memo of record all through the Pentagon, they’d see the pattern of behavior simply. Unidentified: Sure. They would. Killian: There are many things that such a sensitized group could do that . . . They could follow the press and see evidence of . . .

98. Clifford could be referring to Joseph Alsop or to Stewart Alsop. Meeting with the PFIAB 197

Taylor: We’d know the trends, where their contacts . . . President Kennedy: That’s a very good idea. We’ll do that. What about this particular case in regard to the Times itself ? We’ve had two or three bad leaks from the Times: one was the Finney story of several years ago which caused the Russians to change their own method of sending communications on the telephone.99 Killian: We were briefed at our last meeting on the fact that you had protected firing of a Polaris-type of missile on a Russian submarine out of fear that the New York Times, in a Finney story a couple of days later, [would] essentially [say] the information that the Russians have on the Polaris type is bogus. This supports what you say. . . . President Kennedy: You think there is any . . . You would describe this as, what, one of the worst that you have seen? Unidentified: [Unclear.] President Kennedy: Which one is worse? Killian: I don’t know of any one that is worse. Thirteen seconds excised as classified information. Killian: But that wasn’t the first kind of a leak to the press. It was another . . . President Kennedy: Do you suggest that . . . this is, of course, a . . . the New York Times would be . . . I am not sure how effective a question [unclear] here. Clark Clifford might suggest some recommendations at the moment. The nature of the press, as I say, I had a very . . . I found their conversation very . . . I made a speech up there in which I suggested that they examine the matter after Cuba.100 And they were very unreceptive to it and they came down, five or six of them when they were here to [unclear]. And I was just wondering whether there was anything to do with them. They are the most privileged group. Killian: And they’re all sitting on their asses. Unidentified: That’s right. President Kennedy: And they regard any action in this area as a limi-

99. John Finney was the New York Times science correspondent. 100. Kennedy was referring to the role of the press in the Bay of Pigs affair. Days before the start of the operation, Kennedy had asked Orvil Dryfoos, the president and publisher of the New York Times, to withhold information about the Bay of Pigs operation. The New York Times com- plied. On 27 April 1961, in a speech delivered in New York City to the American Newspaper Publishers Association, Kennedy called on the press to “heed the duty of self-restraint which that danger [the present danger] imposes upon us all.” Public Papers of the Presidents, John F. Kennedy, 1961 (Washington, DC: U.S. Government Printing Office, 1962), p. 337. 198 WEDNESDAY, AUGUST 1, 1962

tation on their civil rights. And they are not very used to it. On the other hand, I wouldn’t think that [Orvil] Dryfoos would be very happy using his paper for a very unimportant story about our estimating function [unclear] the effect that you describe. What is your opinion, Clark, whether we ought to try going to the publishers or not . . . or the publishers? Clifford: My feeling in this particular instance is that the transgression is such a tragic one that it would be a mistake on the part of the President or this committee to let it go without bringing it to the attention of Dryfoos. I’m sure he doesn’t recognize all the implications. I’m assuming he’s a loyal American. If he knew what this did to our national security, then I believe there might be less likelihood of this happening in the future. If, however, nothing is done with reference to Dryfoos, then I think they proceed on the assumption that “I guess this isn’t doing any damage, let’s encourage our boys to get more of the same.” It is my opinion that some contact should be made with Dryfoos, and it should be brought to his attention that this is perhaps the most serious transgression of its kind that’s occurred since you’ve been President and that the damage is so severe it’s probably incalculable and that the purpose of bringing it to his attention is on the basis that if he knew the amount of damage done then there is much less likelihood of it occurring again. Killian: We’ve had quite a lot of discussion about this. Clifford: And there may be some different feeling on the part of other members of the board. President Kennedy: What about the publishers’ group that came to meet me last year?101 Six or seven of them, who were more or less . . . [unclear]. I guess they were the board of publishers. I had trouble with a speech in which I had suggested at that time the necessary procedures to prevent this thing. I’m wondering whether we should—Time [magazine] is actually one of the worst offenders of this kind over the years. Its contacts are the best. What do you think? Of course, as this thing becomes rumored around, which it will, then I wonder whether we ought to attempt . . . what’s your judgment of our bringing to other publishers’ attention that this atmosphere is disastrous? Clifford: I doubt that there is much usefulness in that. You get a

101. On 9 May 1961, President Kennedy met with officials from the American Newspaper Publishers Association, the American Society of Newspaper Editors, the Associated Press, and the United Press International (David R. Davies, “Kennedy and the Press, 1960–1963,” in the Presidential Recordings Project Archive, Miller Center of Public Affairs). Meeting with the PFIAB 199 group of publishers together and each seems to sustain the other in his position that the government should not interfere with their business. Also, it’s much more likely to be spread around when there is a group of them called in to discuss it. My present notion is that probably the best approach is to make individual contacts with publishers as this type of incident occurs. And there probably are not more than 6 or 8 or 10 or 12 in the country who have papers of such substantial influence that it would be necessary. I hope that no more of them occur. I think we all know that they will occur. These occur every so often, and if there were some procedure by which that publisher when such an incident occurs, and it can be pin- pointed and he can be shown the damage that has occurred, then I would hope ultimately there’d be a greater feeling of responsibility on their part in the future. It may not work, but I think it ought to be tried because I think that in some way there is an avoiding of responsibility unless it’s brought to the attention of a publisher when such an amount of damage has been done. Killian: There’ll never be a better case than that to justify certain [unclear]. President Kennedy: Do you have a . . . can you then draft for me a letter which I can use as the source? I also have a statement from Mr. McCone and Secretary McNamara as to the seriousness— Killian: Yes. President Kennedy: —and I would use that as the basis of my letter to Dryfoos. Killian: Very [unclear]. President Kennedy: But I think . . . And I agree with you about the establishment of a group over there because there isn’t any doubt that they can follow this very closely, a lot of this stuff goes out. You only just described about the submarine. We had that coming in and in addition, the press were aware and the Pentagon, and the State Department, and the CIA were aware that there was this group. That would . . . might have a very very useful effect. Killian: Yes. Clifford: We saw a report after you saw it today, too, that— Two seconds excised as classified information. Clifford: —told about Hanson Baldwin coming to Washington on the day before this report was disseminated. And they say he was there that day, he was there the next day. It is known that on the day that the report was disseminated, he spent that day at the Pentagon. Well, now that’s apparently all they know. 200 WEDNESDAY, AUGUST 1, 1962

I say that this group can know who it is who he’s seeing at the Pentagon. They can find that out, I think, within a period of a few short months. They can find out who are Hanson Baldwin’s contacts. When he goes over to the Pentagon, who does he see? Nobody knows now. The FBI doesn’t know. But I think it would be mighty interesting to know when he drops [in] over there whom he sees. And I think it would be mighty interesting to know who Alsop sees and who Chalmers Roberts sees and the rest of these fellows.102 Let’s then begin to get up a file on these different men because if they begin to know where to go. . . . To my knowledge it’s never been done before and it is long overdue. Killian: All right, sir, we will prepare and give to you that statement. President Kennedy: I think everyone who has clearance for this particular type of a sensitive . . . We ought to establish the procedure whether they see them at their home or any place that we get the memorandum on their conversation and it should be from anybody from the White House or anyplace else. And that we get that established and failure to do so would be regarded as a breach. [Unclear.] Killian: The knowledge among all the people who are seeking this material that you are deeply concerned about this and prepared to take action on the matter [unclear]. Clifford: Mr. President, you made one comment, I think maybe we might want to refer to. I would wonder about the advisability of writing Dryfoos a letter [Killian is heard muttering in the background] and sending copies of a letter that Dr. Killian might get out for McNamara— President Kennedy: I thought if it was delivered by hand and then brought back by hand but— Clifford: That would concern me a good deal. In the first place you have gone on record in such a manner that it would indicate that perhaps that the article is based upon fact which would concern me some. Who would see it besides Dryfoos, I don’t know. We can’t be absolutely certain— Killian: He suggests that we would send it— Clifford: Well, I know that, but—[Killian speaks indistinctly.] President Kennedy: How else would we get it to Dryfoos’s attention? Clifford: If you intended to get it to Dryfoos’s attention directly, it would seem to me that the most effective way would be for you to talk to Dryfoos. I doubt that a letter from the President would have much effect

102. Chalmers M. Roberts wrote for the Washington Post. Meeting with the PFIAB 201 upon him. I believe if I were a newspaper publisher and the President of the United States told me what damage this had done to my country, I think it would make a hell of an impression on me. Now, you can’t do that with all of them, but there’s only one New York Times. It’s considered generally to be the most influential. Every newspaper in the country takes the New York Times. And this would be an interesting test to see if this could be effective insofar as the New York Times is concerned. Killian: Again, appealing to them because of their great prestige and influence to exercise [their] responsibility. President Kennedy: Good. Well, as I say . . . let’s work on the best way to establish the contact. What I need, of course is [unclear]— Killian: Well, I understand how you feel about putting anything in writing. President Kennedy: Is the judgment from you as to its seriousness because they will tend to dismiss anything we in government say as just an attempt to . . . Killian: All right. Taylor: Would you see any disadvantage in the President showing the kind of letter you’re going to write? Killian: No, I see no disadvantage. President Kennedy: I think that . . . it would be necessary to have just two. One would be a report to me; and the other would be a letter which I could show to Dryfoos to demonstrate that this is not a— Killian: Yes. President Kennedy: —overly sensitive administration. [Everyone laughs.] Unidentified: Thank you very much. Killian: I bet you’ve had a heavy day. President Kennedy: Yes, I did. You will put in writing all the things that—? Killian: Yes, we will. [Meeting ends.] Evelyn Lincoln: Is Dr. Killian with you? The President, or possibly Evelyn Lincoln, turned off the machine.

The last meeting of the day was with Representative Wright Patman, Walter Heller of the Council of Economic Advisers, and Larry O’Brien, the President’s congressional liaison. The President did not tape it. Then it was on to the pool and dinner. 202 FRIDAY, AUGUST 3, 1962

Friday, August 3, 1962

The President arrived in the office a little earlier than usual. Ordinarily he had a working breakfast until about 10:00 A.M. But this Friday he came in just after 9:00 A.M. This had been a busy week for the President as he faced decisions on Latin American policy, the U.S. position at the Geneva disarmament talks, and the very public debate on a tax cut. But throughout the week, another issue had never strayed far from the President’s mind. Berlin was arguably the reason Kennedy decided to install an elaborate taping system in the White House. It was certainly the area where he most expected a major crisis with the Soviets. As he said Monday to Dean Rusk, “Looks to me . . . like they’re ready to do something there.” The Soviets did not misbehave particularly this week. But the President believed the United States had to be prepared to act if they did and the unwieldy North Atlantic Treaty Organization (NATO) had to be ready to act fast, if need be. In the New York Times that morning were two stories related to Berlin that caught the President’s attention. The Soviets were protesting the flight of a U.S. helicopter over East Germany the previous day. Meanwhile the U.S. reservists who had been called up to meet the Berlin emergency in 1961 were now complaining about the length of their service. Just as the Soviets began making threatening noises again, it appeared that there would be obstacles at home to maintaining a united front in response. After quarter-hour discussions with a representative from Indiana1 and the U.S. ambassador to Chile,2 President Kennedy welcomed his Berlin task force in for their first discussion with him since Nikita Khrushchev told the departing U.S. ambassador Llewellyn Thompson in late July that he was prepared to sign a peace treaty with East Germany sooner rather than later, and thereby bring the crisis to a head.

1. Vance Hartke. 2. Charles W. Cole. Meeting on Berlin 203

10:33–11:12 A.M.

You know, the damndest details come into this business.

Meeting on Berlin3 Berlin seemed a dangerous place to be in the summer of 1962. The building of the Berlin Wall the previous August, followed by a tense standoff between Soviet and U.S. tanks in October, had exacerbated the sense of imminent violence in the city. Since November 1958, the Soviets had used the threat of signing a separate peace treaty with the German Democratic Republic (G.D.R.) to force the Western powers out of West Berlin. Initially, Nikita Khrushchev had set a six-month ultimatum to reach an agreement with the West, and then let it pass in 1959 when the Eisenhower administration refused to give up the U.S. position in Hitler’s former capital. In the wake of John F. Kennedy’s failure at the Bay of Pigs, Khrushchev revived the threats of 1958 at the Vienna summit in June 1961. But the mobilization of U.S. Reserves convinced Khrushchev that this U.S. President was as committed as his predecessor to a West Berlin linked to the Western alliance. Although the Berlin crisis of 1961 had sub- sided by October, once again Khrushchev was threatening to sign a peace treaty that would force U.S., British, and French troops out of West Berlin. The U.S.-Soviet negotiations to settle the issue peacefully had reached a public stalemate in April 1962. In discussions with U.S. ambassador Llewellyn Thompson at the end of July, Khrushchev had not set a time limit; but his actions portended some kind of declaration that fall, when he was expected to visit the U.N. General Assembly. The signing of a peace treaty with the G.D.R. would not by itself mean world war. The U.S. feared that once the Soviets renounced their World War II occupation rights, the East Germans would demand the removal of the Western powers from Berlin. The Kremlin would denounce the hard- won understandings that permitted the West to reach West Berlin, an enclave 110 miles inside of East Germany, by air, rail, or road. It was East German interference with allied access to Berlin, backed by Soviet power, which could possibly spark a war. Even without a separate peace treaty, the

3. Including President Kennedy, McGeorge Bundy, Martin Hillenbrand, Foy Kohler, Paul Nitze, Dean Rusk, and William Tyler. Tape 6, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 204 FRIDAY, AUGUST 3, 1962

Soviets had started a campaign of harassing both civilian and military aircraft in the air corridors established between West Germany and West Berlin. Most recently, on July 30, a Soviet controller at the Berlin Air Safety Center protested a U.S. helicopter flight over Karlshorst, which was in the East sector but within the 20-mile Berlin control zone, and warned that it would be shot down if it returned. Major General Watson, U.S. commandant for Berlin, fired off a note protesting the threat. Meanwhile, U.S. officials began reviewing flight procedures, and the Joint Chiefs of Staff temporarily suspended flights over Soviet installations in East Berlin. Western officials in Berlin and Bonn agreed that the Soviet threat consti- tuted a new form of intimidation in the conflict over Berlin. Kennedy had called for the creation of a task force to deal with the Berlin situation after the stormy meeting with Khrushchev in June 1961. When the Wall went up in August 1961, the Berlin Task Force began meeting daily, coordinating opinions and information from the White House, the Department of State, and the Pentagon. An ambassadorial group from the United States, Great Britain, France, and West Germany also met regularly to deal with the Berlin issue. President Kennedy had been deeply dissatisfied with allied contingency planning to deal with a Soviet or East German move against Western access to Berlin. The various NATO military contingency plans, known as BERCON and MAR- CON, would take days to implement, and there seemed no good way to deal firmly with aggression from the East without resorting to nuclear weapons, which could unleash a general nuclear war.4 The President was most familiar with National Security Action Memorandum 109, incongruously code-named Poodle Blanket, which he approved in October 1961.5 Poodle Blanket seemed unworkable to the President in a crisis. The plan envisaged a 60-day negotiation and mobilization period before the allies could act. McGeorge Bundy attempted to dispel the President’s impression, stressing that the pause would coincide with an intensive period of diplomatic activity to avoid military action. Yet it seemed that the more Kennedy learned of planning for problems in Berlin, the less he had to be pleased about. In June, the President was informed that months would still be required before any of the plans under consideration could be made operational. On August 2, Dean Rusk

4. The BERCON plans dealt with Berlin itself while the MARCON plans were NATO plans for Marine countermeasures. 5. National Security Action Memorandum 109, 23 October 1961, National Security Files, Meetings and Memoranda, Box 332, John F. Kennedy Library. Meeting on Berlin 205 sent him a memorandum on contingency planning for a Soviet-G.D.R. peace treaty.6 Kennedy also learned that despite the current tensions, some of the West European allies were dragging their feet in fulfilling their obligations to NATO. The West Germans and French, for instance, thought Berlin should be protected with firm, nuclear threats. Rumors were reaching Washington that the West Germans, who had made a commitment to NATO of 700,000 soldiers, were considering holding their number to 500,000, a move which would constitute a blow to Secretary of Defense Robert McNamara’s latest ideas for a forward defense based on increased conventional forces. Kennedy, who had campaigned on a platform of personal sacrifice, had extended his call for “burden sharing” beyond the nation’s borders to ask not what the United States could do for Western Europe but what the Western European nations could do for the defense of their own continent. Finally, equally fresh in Kennedy’s mind were the extensive talks between Secretary of State Dean Rusk and Soviet foreign minister Andrei Gromyko in Geneva in mid-July, where both had been present for the signing of the Laos accords. Whereas the talks brought relief to the tensions in Southeast Asia, they had the opposite effect on the situation in Central Europe. Like Khrushchev in the Kremlin, Gromyko had sounded the toc- sin of an impending German peace treaty. There was some discussion of a nuclear nonproliferation agreement. But even this was overshadowed by Berlin. Gromyko had stressed Soviet concerns that West Germany might acquire nuclear weapons. As part of President Kennedy’s efforts to share the burden of NATO defense more equitably, he had approved discussion of a multilateral nuclear force (MLF)—possibly a jointly manned nuclear submarine—that would both discourage European countries from acquiring nuclear weapons of their own and provide tangible proof that in the event of a Soviet attack, the Europeans would have nuclear weapons nearby. Gromyko and Rusk had discussed their shared interest in nonproliferation but had parted company on the significance of the MLF idea. The Soviets stressed its incompatibility with nonproliferation. The State Department had prepared a draft statement for Gromyko that awaited the President’s approval.7

6. Rusk to President Kennedy, “Contingency Planning for Soviet-G.D.R. Peace Treaty,” 2 August 1962, FRUS, 15: 257–62. 7. This draft has not been found. For the final version of the statement, see Memcon, 8 August 1962, FRUS, 7: 541–47. 206 FRIDAY, AUGUST 3, 1962

The President began to record this meeting with his Berlin advisers as Dean Rusk described his recent discussions with Gromyko.

Dean Rusk: [voice fades in] He volunteered that their deputy foreign minister would be either [Vladimir] Semenov, or—8 William Tyler: [Vasili] Kuznetsov or—9 Rusk: Kuznetsov or— Tyler: Or somebody else. Rusk: And asked if Tyler would be out there. My thought— McGeorge Bundy: Lucky Tyler! [Laughter.] Rusk: Actually, we used [U.S. ambassador-at-large] Tommy Thompson’s idea. President Kennedy: Yeah. Rusk: This could be a career. It could go on for months and months. And he would be very much up to that kind of job. So, the second point on which [Andrei] Gromyko went through on this [was the] nondiffusion of nuclear weapons point, and I have here. I haven’t had a chance to talk to Bob McNamara about it, but I have here, something I drafted as a letter to Gromyko.10 I think it would put us in a position of saying to our allies that we haven’t passed over the pieces of paper to the press. I would give this carefully to [Soviet ambassador to the United States, Anatoly] Dobrynin orally, letting his men then stay behind and take accurate notes so they have an exact copy, but not actually pass a piece of paper. You might just take a moment . . . President Kennedy: When would you send this? Rusk: I would do this as soon as possible today, or you talk to McNamara or Bundy, or tomorrow . . . as soon as possible. Tyler: Is that the only copy we have with us? Rusk: What? Martin Hillenbrand: [mumbles] I’ll promise that . . . The group proceeds to read the draft. Rusk: Stick to this one; it’s really important [unclear] thing on Berlin. President Kennedy: Hmm, hmm. More time passes. There are sounds of papers turning and of writing.

8. Vladimir S. Semenov was Soviet deputy foreign minister and an expert on Germany. 9. Vasili V. Kuznetsov was Soviet first deputy foreign minister. 10. The draft of the letter that the Secretary of State read to Ambassador Dobrynin on 8 August. Meeting on Berlin 207

President Kennedy: Now, what would be the advantage, what would be the purpose of taking this out as a separate matter? Rusk: Well, we would like to get going on something in which they have a real interest. I’m sure they have a tremendous interest in this nuclear weapons for Germany problem, and if we [can] get it worked on so that we can throw this into the Geneva framework, that is, the general worldwide arrangement, then you avoid the specific discrimination against Germany, which of course is an enormous problem in Germany.11 Now, this could cause us trouble in, both in France and in Germany.12 Bundy: Yes, but this could cause us some, but it’s— Rusk: Yes, but if we push this problem out of the strictly European framework, and really tee off on our European allies that China is our problem, 650 million people out there, and we’ve got allies right around the rim of China, and that we are intensely interested in getting Peiping [Beijing] on the line with this kind of thing, as well as the Soviet Union. President Kennedy: But Peiping, though, wouldn’t agree. Rusk: Well, if Peiping didn’t agree, then we’d have to take a look and see whether we would go ahead without them. President Kennedy: So at least it . . . Now how does this tie into the Berlin treaty, I mean the Berlin . . . ? Rusk: Well, I think that if we got going on something that is as serious to them as this problem, this would—this could—take some of the heat off the Berlin question, because I think this is something where they could see some pretty great gains in, as would we. . . . Foy Kohler: Are you sure this shouldn’t be geared to a test ban of some kind? Rusk: Well, we’re working on the test ban simultaneously . . . Kohler: I’m just thinking— Bundy: This ought to be a sentence here relating it to the test ban so that it doesn’t look wholly as—

11. The Soviets wanted the problem of nuclear diffusion to the Germanys to be mentioned in any nonproliferation treaty. The U.S. position was that if Germany were mentioned, why not China or Israel, as other states that should not become nuclear powers. This would be discussed by Rusk and Dobrynin on 8 August. Memcon, 8 August 1962, FRUS, 7: 541–47. 12. The Kennedy administration anticipated West German and French opposition to any nuclear nondiffusion agreement because it would restrain the development of national nuclear capabilities. The West German government further believed that any agreement that pre- cluded the transfer of nuclear weapons to NATO represented a reduction of U.S. commitment to Europe. The French government had consistently opposed test ban talks, nondiffusion agreements, and a NATO multilateral nuclear force as attempts to stymie the development of a French nuclear arsenal. 208 FRIDAY, AUGUST 3, 1962

Rusk: There was a reference in here to disarmament, we could build that up a little if you like, but I don’t think we need to hook it to the test ban, and if the present atomic powers continue to be atomic powers, continue testing, there’s still no reason why we can’t say that we won’t give these to anybody else, and ask everybody else not to have them. President Kennedy: Didn’t we always attempt to keep this out of the Geneva talks because we thought this was something the Soviets wanted? Unidentified: We didn’t— President Kennedy: Now we’re relating it to Germany aren’t we . . . Rusk: In our principles paper, we included a paragraph on nuclear nondiffusion, and we talked about it either in the deputy foreign minister’s or some other appropriate forum, so that we indicated to the Soviets that Geneva might be the right place for it. But I think we’ve got almost as much mileage out of this with respect to Berlin as we can get. [Sounds of agreement from others around the room.] President Kennedy: I agree that’s true . . . Rusk: Without tying it organically to Berlin, which is the principle the Germans would never accept. President Kennedy: Well, okay, let’s go ahead with this, then. Rusk: All right. President Kennedy: Well, what about the . . . ? Rusk: Now, the other point that I would like to mention pertains to this . . . dealing with these various contingencies. At the present time, if they propose a peace conference for an East German, for a German peace treaty, our plan is to play that down, to minimize the effect of that, and get other countries outside the bloc not to attend, and to nevertheless play on the wicket that if they simply substitute East Germans for Russians, our [unclear] would otherwise continue. At least we would go right ahead, don’t worry too much. We think what is missing there is an immediate counterinitiative on our part, and the point that is not in the paper is that we would suggest that we get racked up with our allies now, that we would make within hours a counterproposal of a deputy foreign ministers’ discussion to consider whether there’s any prospect of reaching an agreement. In other words, if they propose a phony conference, we go back to the deputy foreign ministers, straight away. This would also tie in to the possibility of U.N. action, because if this gets into the U.N., what we would not want from the U.N. is a U.N.-proposed settlement with all sorts of U.N. forces and that sort of thing in the first stage. We wouldn’t want the U.N. to try to get into the settle- Meeting on Berlin 209 ment, but we don’t shoot, but talk, a resolution out of the U.N., and talking would be the deputy foreign ministers, as we see [it]. So that, for us to go right back and propose a deputy foreign ministers [meeting], if they come up with a peace conference call, it would put us in a good position to deal with the U.N. conference. So I think that if we could get that laid on in advance, so that we would—literally within hours, hopefully within an hour—have something going right back to the Soviet Union, we not only would be prepared for that move on their part but we would look prepared, which is almost as important. Kohler: You haven’t mentioned the French angle. Tyler: Uh-um. Rusk: Yes, the French on both these points. The nondiffusion point and on the deputy foreign ministers we could have trouble with the French. I think that if the Russians made these proposals without any sense of threat, without any ultimatum, the French might come along. [Foreign minister] Couve [de Murville] seems a little more open to rejoining the party when I talked to him yesterday. And I think that the French idea, that these are matters which ought to be settled by the Big Four—Russia and the three Western powers—would fit this, but even so, [President Charles] de Gaulle might stick a bit on the question of there being no basis for discussion. But I think that the deputy foreign ministers level has to transfer to either the foreign ministers or chiefs of government. This is not as much of a problem because the purpose of the deputies would be to find out whether there is any [unclear] debate at this point in time [unclear]. [Laughter.] President Kennedy: Do you think that that’s much of a counter. . . . There’s no sense . . . We talked one time about whether, if they announced they were going to sign this peace treaty, whether we would have a meeting with [British prime minister Harold] Macmillan and de Gaulle and so on; but you decided the timing or whatever that that would not be appropriate. Bundy: Too big a signal. Kohler: That goes contrary to the philosophy we’re following— [Unclear exchange.] Rusk: And I also, I think under those circumstances, it might create a sense of panic. It might be better for you to work in such a meeting [unclear] trip because [unclear] get into this, but to have them propose a conference, and have the Western heads of government suddenly meet, I think would look like a crisis and uncertainty [unclear]. 210 FRIDAY, AUGUST 3, 1962

President Kennedy: What about this coming into the U.N., and Congressman Hale Boggs’s cable saying they thought they were going to take it to the U.N.?13 Rusk: Yes, Bill [Tyler], did we have one or two other hints about that? Tyler: [German ambassador Hans] Kroll, came up with . . . The German ambassador came up with that estimate on speculation some weeks ago. . . .14 Rusk: Gromyko, as well as Dobrynin I think . . . Didn’t Dobrynin mention this at lunch yesterday? Tyler: He didn’t mention the U.N. specifically, but he said . . . I asked him whether Khrushchev would be coming in, and recommending . . . Rusk: Yes, Gromyko is very careful [to] leave this open, so we just don’t know . . . Tyler: Dobrynin said . . . nothing official has been decided. It was too early to tell yet, but he left the implication that it was in the wind. Rusk: Well, now, we’ve got masses of papers here, Mr. President. I don’t know which particular points are . . . President Kennedy: Well, let’s see. [reading] “If at any time it seems that withdrawal by the Soviets from their functions with respect to the allied access is imminent, the three governments would presumably act in accordance with agreed contingency plans. The assumption underlying these plans is that the Western Powers are prepared to accept execution of existing procedures on ground access. . . .”15 Is that the question about the passports, or what the procedure is? Bundy: That’s a slightly separate problem. Kohler: That’s a compromise. Bundy: That’s after they’ve begun to . . . If they put in new requirements, the passports and visas question would arise. The question which is reviewed here, on which we will get some heat, I think, in this next month, [the] Department thinks, I think, from the French and

13. Thomas Hale Boggs, Sr. (D-Louisiana), served as majority whip in the House of Representatives. In 1962, he was serving on the House Ways and Means Committee and the Joint Economic Committee. A copy of that cable has not been found. Apparently, Boggs reinforced administration fears that Khrushchev intended to attend the opening session of the 17th U.N. General Assembly and possibly call for a U.N. resolution to the Berlin question. 14. Hans Kroll was West German ambassador to the Soviet Union. 15. President Kennedy was reading from the memorandum on peace treaty contingencies prepared for him by Rusk. The rest of the sentence reads, “. . . to Berlin by East German personnel substituting for Soviet personnel” (see Rusk to Kennedy, 2 August 1962, FRUS, 15: 257–62). Meeting on Berlin 211

Germans, [unclear] with Germany is whether we accept without protest the no-trouble change from Soviet to East German controls on existing access procedures. Tyler: On the ground? Bundy: On the ground. Rusk: But I think that we continue to insist that the Soviets would be responsible to us. If they choose to use these people to carry out their responsibilities, that’s their business, but we expect from these people exactly the same rights [unclear]. Bundy: This decision was made just about a year ago, and we’ve stuck to it since. President Kennedy: Now, what is the French . . . Anything new? Anything we’re aware of ? Bundy: No, everybody’s agreed. President Kennedy: What kind of paper might the East Germans insist on looking at—in terms of kinds of paper? What is it they stamp today? Kohler: Movement orders. It’s just— President Kennedy: On the West Germans going into West Berlin? Kohler: No, on the West Germans, there’s a regular procedure. They have to have an identity card and it’s stamped, and they check that they have a customs . . . President Kennedy: That they have a passport, and so on. . . . Kohler: The West have no passports . . . Rusk: The West Germans have no objections for West Germans going east, on these. Kohler: No, they’ve accepted that. Hillenbrand: This is all addressed to allied access. The German access question is . . . Kohler: That’s a separate question. . . . However, this does not permit the East Germans—the agreed planning does not permit the East Germans to do anything different than is done by the Soviets today. That would be a sticking point if they changed the procedures. President Kennedy: They asked for different kinds of documentation? Kohler: Yeah. Tyler: Or inspection of vehicles. Kohler: That’s right. President Kennedy: Inspection? What is this document? Bundy: What we would do, Mr. President, is to go on with them in the same way that we’ve responded to Soviet harassments and Soviet 212 FRIDAY, AUGUST 3, 1962

attempted encroachments, of which there have probably been 100 in the last two years. Rusk: You know, the damndest details come into this business. Apparently, the British military trucks, Mr. President, don’t have tailgates. Ours do. So that these fellows can look into the British military trucks without any trouble, so that no inspection point arises. With ours, you have to get up on a box and then you have a look at the . . . I don’t know why we can’t leave our tailgates down in order to . . . President Kennedy: Let me just ask you about that [unclear] topic. [Unclear] given any thought to lowering . . . I saw that . . . Bundy: But not over the . . . Rusk: They’re flying simply symbolic flights. The one that flew again was at 1,000 feet. I don’t think we want to give up helicopter flights throughout the 20-mile zone, but we want to stop this business of low-flying, picture-taking flights, and flights around the Russian headquarters. President Kennedy: Well now have we set a . . . what we’ve told them that they can’t go below a thousand feet? Have there been any instructions? Hillenbrand: There’s the instructions. Probably points to a document near the President. That’s the . . . President Kennedy: [reads some of it aloud] “increases pressures to expand over, encroachments over Soviets [unclear] . . .” Now, did that flight yesterday meet this—? Unidentified: Suggestion. Hillenbrand: It did not go over Karlshorst. Bundy: That was a straight local reaction, Mr. President, on which we have intercepted a telephone from the fellow who was being flown over to the Soviet man with the BASC saying, “Tell your man opposite the table that he is in some danger if he flies right over us this way.”16 In other words, it was an immediate local response to a direct, very low overflight of a specific building, is what it amounts to. Hillenbrand: Yes. Bundy: The language was in fact quite guarded not telling him he would be shot down, telling him that someone would be shot down . . . [Laughter.] President Kennedy: [reading] “Average daily U.S. [unclear].”

16. The Berlin Air Safety Center (BASC) was the U.S., British, French, and Soviet organization for exchanging information regarding aircraft in air corridors to Berlin. Meeting on Berlin 213

Rusk: I must say on that one, I don’t know the Soviets will object. President Kennedy: “Average daily helicopter flights over the Soviets’ sector” . . . We’ve been doing that, is that it? Hillenbrand: Oh yes, it’s been going on for— President Kennedy: What are we giving as the reasons why? Hillenbrand: Well, mainly intelligence flights. Bundy: Well, there’s also a kind of flying the flag. This is within an area in which it is legitimate to fly. Rusk: I think we want to do just enough of them to keep the right alive and not stir up the West Berlin–Soviet conflict—I think just as a demonstration. President Kennedy: We asked for these reports . . . Hillenbrand: We’re instituting a general review of the situation. Meanwhile, the kind of flight that caused this particular incident has been suspended, but there will continue to be normal operational flights until the review comes to some conclusion. President Kennedy: They’ll be above 1,000 feet. It that right? Hillenbrand: Well, there’s no height limitation. What they’re to avoid: flying over or in the vicinity of Soviet military installations in East Berlin. That’s the territory that’s now being reserved because that’s the kind of thing the Soviets— President Kennedy: Are you going to tell them to do it at reasonable heights? Or do you think you ought to be adopting this? Hillenbrand: Well, I think they’re hypersensitized now in Berlin to this. Our mission knows that . . . Bundy: Do they know more generally, Marty [Hillenbrand], that we’re obviously playing into their hands if we have fencing incidents in the next couple of months? Hillenbrand: I think they’re aware of this. We’ve been in touch with them by KY-9 phone as well as by this message. And they know that this is a subject on which we are sensitized. President Kennedy: I agree, but the only thing is I saw in this morning’s papers it sounded to me that . . .17 Hillenbrand: Now, actually, you see, our people have issued a press release on this indicating that the flight did not penetrate the sector at all.

17. On 3 August, the New York Times carried an article entitled, “U.S. ’Copter Flies Over East Berlin,” which reported that “a United States Army helicopter flew over East Berlin yesterday without incident although there had been a Soviet threat earlier that the craft might be shot down.” 214 FRIDAY, AUGUST 3, 1962

Paul Nitze: This is the actual press release that was issued.18 Rusk: About the flight that was talked about this morning? Nitze: That’s right. Hillenbrand: The papers then claimed there were eyewitnesses who said that the flights actually had penetrated East Berlin. President Kennedy: Oh, I see. OK. Hillenbrand: So, they’re very much on top of this story, and I think they will avoid any flights that are likely to expose— Bundy: Things like this—three Soviets arresting [unclear] one guy? President Kennedy: Let’s just read this now, where it says a bunch of things: “However, as the result of Macmillan’s visit to Washington . . . [Kennedy jumps ahead in the document.] . . . the French and Germans . . . [He jumps ahead again.] . . . somewhat unenthusiastically agreed . . .”19 [He returns to the part of the paragraph he jumped over.] “Persistent physical interference with access to Berlin was chosen as the point at which the West would have to demonstrate its determination.” [Then he rereads the key allied response.] “The French and Germans subsequently— and somewhat unenthusiastically—agreed.” Why were they unenthusiastic about this? Hillenbrand: Well, because it does in fact represent a larger measure of acceptance of the G.D.R . . . President Kennedy: . . . than they wanted. [He continues reading.]

The essential argument in favor of this position was that the earlier plans did not draw the line at a point which would receive public understanding and support in that they would involve a procedural

18. The press release reads, “We noted press reports that there were U.S. army helicopter flights over the Soviet sector today. As a matter of fact, there were no such flights today. Some helicopters did fly over West Berlin today. As we have previously stated, there has been absolutely no change in regard to normal routine flights of U.S. planes within the Berlin Control Zone.” See Telegram, Bonn to Rusk, 2 August 1962, Germany, “Berlin Cables” folder, National Security Files, Box 97, John F. Kennedy Library. 19. Referring to Rusk’s memorandum, Kennedy read a passage under the section “Assumption Underlying Plans for Withdrawal of Soviets from Check Points.” The passage reads: “However, as the result of Macmillan’s visit to Washington in the spring of 1961, and after informal U.S. discussion during the following months, the United States and United Kingdom revised their positions to permit implementation of existing procedures by East German personnel. Persistent physical interference with access to Berlin was chosen as the point at which the West would have to demonstrate its determination. The French and Germans subsequently—and somewhat unenthusiastically—agreed.” Meeting on Berlin 215

innovation likely to give rise to criticism that the West was making an issue over who stamped a document. It was argued that a Western position of leaving well enough alone and not being the one to demand a change in its favor would appear reasonable and unprovocative, and that U.S. allies would move to this position in any event. There would possibly be some questioning in the U.S. press, public, and Congress as to whether the most suitable breaking point had been chosen. There would also be grave difficulties in making the U.S. position plausible. . . . [Kennedy jumps ahead.] All this would be apparent to the Soviets. . . . [He jumps ahead again.] In the face of Bloc pressures . . . it seems likely that the U.S., U.K., and France would eventually accept the same paper-stamping from the East Germans that . . . [He jumps to new paragraph.] Since the decision to accept East German stamping was made, both the U.S. Embassy in Bonn and the U.S. Mission in Berlin have questioned it. Their essential argument is that although who stamps a document is not a good issue over which to use force if necessary, the issue is actually much more than that and really boils down to whether or not the U.S., the U.K., and France are determined to maintain their right of free and unrestricted ground- access to Berlin. They argue: (1) that the question of “persistent physical interference with access to Berlin” will never arise; (2) that substitution of East German personnel will be the most visible and objectionable single act; . . . [He jumps to point 3.] thereafter the East Germans will take one infinitesimal step after another . . . [each much less] salable a breaking point than substitution—until, over . . . time, by gradual erosion Western . . . [ground access] is completely at the mercy [of the Ulbricht regime]. . . . [He jumps ahead.] [T]his is more or less what he had in mind, i.e., that action in the period after the peace treaty will be so slow and circumspect that the West will never be provided with a point . . . Those who object to East German stamping argue that it will lead at best to self-blockade on the ground and at the worst to de jure acceptance. . . .

Self-blockade, of course, is what they can do. . . . The easiest answer . . . Rusk: It makes our retaliation and certain of our moves— President Kennedy: How do we . . . What do we do about this if they change the personnel authority, at least the [East] Germans do, the Russians announce it, then what if they change the documents so that 216 FRIDAY, AUGUST 3, 1962

the kind of document which we have to do acknowledges the sovereignty of the G.D.R.? What do we do then? Kohler: We go into regular contingency planning, then. Start a probe through that refuses to follow their many . . . President Kennedy: Okay, an economic cut-off before we do the first probe? There isn’t a Western cutting off of trade? Kohler: No, sir. Rusk: Well, one of the troubles there, that’s where the self-blockade comes in. If they stop only our military convoys, and then we break trade with the Soviet bloc, this blockades the civilian population of West Berlin. So it’s this kind of a pinch that we get into. Kohler: I might mention in this connection, Mr. President, Mr. Secretary, that we are planning just a briefing session for you next week sometime that goes into the whole range of these contingencies— Rusk: The sequence of events, that’s how we’re looking at it this time. Kohler: —and that knits together not only the military but the economic and political and other contingency planning. I think it would be helpful to get the general picture. President Kennedy: Yeah, good. What about this debate now going on in Germany now. This announcement of the increase in the force levels has caused the Germans to decide we’re not going to use . . . Is that the reason for the nuclear . . . for this debate . . . the stories coming out of Europe that we’ve changed our strategy? What is sort of the reason they’ve started up now? Is it the German parliamentary debate?20 Nitze: I think there are two things involved. One of them is, when [West German defense minister Franz Joseph] Strauss was over here, he talked about the fact that he couldn’t meet a budget above 16.6 billion marks [unclear]. And McNamara went through with him what would really be required for them to meet their MC/26 goals, which would be closer to 680,000 men than 500,000.21

20. At his 1 August press conference, President Kennedy was asked to comment on European press speculation that U.S. command changes indicated “a complete change in American strategy going as far as to a nuclear disengagement.” He responded that the speculation was “wholly unfounded, wholly untrue, and the slightest check by those who transmit them through Europe would demonstrate that they are unfounded.” In late July, SACEUR General Lauris Norstad announced his resignation, effective 1 November 1962. His intended replacement was the present Chairman of the Joint Chiefs of Staff, General Lyman Lemnitzer. The Europeans favored Norstad’s conception of NATO as a fourth nuclear power. The European press speculated that his departure signaled a shift in U.S. defense strategy. 21. Strauss visited Washington from June 7 to 8, 1962. During discussions with Kennedy and McNamara, Strauss explained that it would require an armed force of 750,000 in West Meeting on Berlin 217

And Strauss said that he would have to take it back and talk it over with [West German chancellor Konrad] Adenauer, and Adenauer would have to decide whether the level would be the 500,000-man level or higher. It seems clear, from what is coming out of the German press now that Adenauer has decided for the 500,000-man level and not a higher level. I think the Germans are trying to justify that and that is why Strauss isn’t making speeches why he’s starting [unclear] annoying. They are laying a defense against the arguments that McNamara made to them. President Kennedy: What will this do to their divisions? I mean, are they pretty much the 30— Nitze: Well, I hope it would mean that rather than having the 12 divisions which they were supposed to have, they’ll probably end up with about 11 divisions and not up to the full standard that they hoped it would get to. So that it will be somewhat short of the goals. President Kennedy: And they’re saying that this is because the United States is changing its strategy? Nitze: No, they say this is just because of budgetary limitations on themselves and that they can’t afford to do any more. Rusk: You see, from their point of view, this is not so closely linked into the nuclear strike as it is to the forward strategy. What we’re trying to do is to get the buildup to get the kind of forward strategy that the Germans themselves want. President Kennedy: Well, now that they— Nitze: This is linked to the strategy point, because if they don’t go beyond the 11 divisions in the [unclear], then it becomes doubtful as to whether we really can do the forward strategy and then hope for a nonnuclear [unclear] at length. And then we’ve got to rely more on a quick introduction of nuclear weapons than usually related to the strategic. President Kennedy: And they’re suggesting that the [General Maxwell] Taylor appointment indicates that we are not going to introduce nuclear [unclear]?22

Germany to meet the commitment of 12 divisions under 1962 NATO policy proposal MC 26/4. He declared that West Germany might need to reduce the size of its divisions. 22. West German uneasiness about a shift in U.S. nuclear strategy toward greater reliance on conventional weapons was increased by Kennedy’s nomination of General Maxwell Taylor to succeed General Lyman Lemnitzer as Chairman of the JCS. Taylor’s 1959 book, The Uncertain Trumpet (New York: Harper, 1960), criticized Eisenhower’s “overemphasis” on nuclear “massive retaliation” for leaving the United States unprepared to fight limited wars. Many of his views had been adopted by the Kennedy administration. 218 FRIDAY, AUGUST 3, 1962

Nitze: That’s right. President Kennedy: Now when do we take . . . Do we say anything about this? Or do we . . . ? Bundy: We’re doing something about it already, Mr. President. Taylor is doing some backgrounding, and you struck a firm blow. He may have been anti-French, but he hit the Germans [unclear].23 [Laughter.] President Kennedy: I know he said that while I was talking to him. [Inaudible exchange amidst the laughter.] President Kennedy: But the thing is that this sort of, their refusal to go ahead, and their acquiescence really in the French refusal to go ahead, I think . . . and then, sort of, blaming it on us . . . is curious. So, what are we going to do about it?24 Bundy: The internal German political situation is conducive to the worst possible discussions on this at the moment. The old man [Adenauer] is old. Strauss is under a cloud; they’re all looking around for someone to hit [unclear]. President Kennedy: What about that fellow who was quoted as having been over here talking to some of our people, some fellow from the Christian Democratic camp? Hillenbrand: [Georg] Kliesing.25 President Kennedy: Yeah, who did he see over here? Did he see anybody in Washington? Hillenbrand: We didn’t have much to do with it . . . [in response to a question] . . . [unclear]. He is a member of this— Unidentified: He came over . . . he was part of that group with George Brown.26 Bundy: The WEU defense committee.27

23. As commander of the 101st Airborne in World War II, General Taylor had hit the Germans hard in Normandy. 24. President Kennedy was frustrated that the West Germans would not pressure de Gaulle to meet the French commitment of four divisions under the MC 26/4 goals. 25. Bundestag deputy Georg Kliesing was a leading West German defense expert. On his return from a recent trip to the United States, he declared that General Taylor intended to use nuclear weapons only in the event of a direct attack on the United States or a major nuclear offensive against Europe. 26. George Brown was a deputy leader of the British Labour party and shadow foreign secretary. 27. The Western European Union (WEU) was signed by Belgium, France, Luxembourg, the Netherlands, and the United Kingdom at Brussels in March 1947, and modified and completed at Paris in October 1954. Its main feature was the commitment to mutual defense should any of the signatories be the victim of attack in Europe. In September 1954, the WEU was amended to permit the Federal Republic of Germany and Italy to join. Meeting on Berlin 219

President Kennedy: Oh, I see. Nitze: George Brown came in to see you. President Kennedy: Oh, I see. Nitze: Kliesing was the chairman of that group. President Kennedy: He’s quoting Washington as what? Saying about the . . . Oh, he quoted us as having atomic withdrawal, didn’t he? Hillenbrand: Well, no, he actually said was we would not . . . What he really said was that the general view that was now accepted here was that which General Taylor had put forth in his book, and that is that there would be no use of our nuclear deterrent, except in defense of the American homeland.28 Bundy: But Taylor didn’t even say that. Hillenbrand: But he’s quoted as having said this, that’s the way . . . President Kennedy: Of course, that’s wholly . . . Bundy: Taylor was talking to [General Adolf] Heusinger and it’s not . . .29 Rusk: He couldn’t have heard any American say that during his trip. Nitze: To the contrary. President Kennedy: What are we going to . . . When will this debate be over and when will they reach their decision on the funds? [Mixed voices with Nitze’s adding, “Already in the budget.”] President Kennedy: That’s their budget figure so the budget . . . Nitze: And after that [unclear] equivalent of the decisions before [unclear]. President Kennedy: Well now, what is it we . . . Are we planning to do anything about that? Bundy: We’re having difficulty. Their argument with us, Mr. President, is that they shouldn’t be required to do more until the French do more. It’s a very hard proposition to beat. Kohler: I think we shouldn’t get engaged in a public debate with them. A backgrounder will straighten it out, as some of this is fairly good. But we will continue to pursue this in the NATO Council and through SHAPE itself,30 and I’m not sure that this debate isn’t going to come out well—isn’t going to do some good—because Strauss was already, when he was here, coming to the realization as to what a grave

28. Reference was to General Taylor’s The Uncertain Trumpet. 29. Heusinger was general inspector of the German armed forces. 30. The acronym SHAPE stands for Supreme Headquarters, Allied Powers, Europe. 220 FRIDAY, AUGUST 3, 1962

deficiency it is that the French not only have just two divisions there and are only committed to four, but that this, in itself, is an imbalance and that they should [unclear] be committed to six if we’re going to have a forward strategy. And if this is debated long enough, I think the Germans will turn toward pressing the French for more conventional strength on the central front, don’t you Paul? I think this would . . . Nitze: Well, Strauss would like to do that— Kohler: Yeah. Nitze: But what I highly doubt is whether Adenauer feels that his relations with de Gaulle are such that— Bundy: Adenauer won’t. Kohler: In due course, though, it might, because this was a visceral [unclear] problem to them . . . President Kennedy: [Unclear.] In due course, around September— we don’t want to get this in on account of the election—but I would think in the fall we would make some proposals to them about goals and so on, then we’ll also make some proposals about their increasing their acceptance of the burden of defense. And then about increasing the manpower, we’ll suggest that if they don’t want to do any of these things, then we’re going to take some of ours out. We’re not going to be up for six divisions while the Germans don’t do what they should do in their own country, and the French do nothing, and I think at that time, we don’t want to do it now because we want to use that argument perhaps for our monetary problem, but I would think we would pull out. . . . We would indicate either that . . . thin out . . . We can’t be the ones, while no one else . . . Kohler: Well. President Kennedy: It’s [unclear]. Every time that an American speaks to Adenauer about it, he doesn’t want to put any pressure on de Gaulle. What’s he saving de Gaulle for? He’s only saving him because he doesn’t want to put pressure on de Gaulle because he wants to use de Gaulle against us, on the political field. He doesn’t want to have a fight with de Gaulle in this area because he figures de Gaulle will sustain him against us in case we’re going to compromise in Berlin. I’m sure that’s the extent of it. We carried him. . . . Rusk: I’d like to send over a long memorandum that [permanent representative to the North Atlantic Council Thomas K.] Finletter wrote.31 His conversation with—

31. Finletter’s memorandum remains classified. Meeting on Berlin 221

Bundy: We have it, Mr. Secretary. I put it in the President’s weekend reading.32 Rusk: Oh you have that? That’s good, because that will throw some light on it. We’ve got a real tussle with de Gaulle on the whole European NATO structure and everything else. We’ve got to work to get the rest of it solid and leave de Gaulle in a minority of one, if possible. President Kennedy: Hell, we don’t even need the French on this monetary matter. Bundy: We’ll keep Bill Tyler in charge of de Gaulle.33 Tyler: I don’t think that’s it. De Gaulle rather likes being in a minority of one. [Laughter.] Rusk: Well, let’s accommodate him, then. [Laughter.] Well, we will go ahead on getting this deputy foreign ministers proposal cleared away for immediate response if they call a conference. Bundy: We’ll take that up with the other three now. Rusk: That’s right, we would. Nitze: I take it, for us, that we would play everything on a low key during this whole thing. [Sounds of dishes being cleared.] Unidentified: I think it very important that— Bundy: That’s signed down on the [unclear] unsigned [unclear] would be [unclear] a little bit . . . That’s one of the open questions in the memo. President Kennedy: You mean whether we move any troops, and so on . . . Bundy: Whether [unclear] on the peace treaty basis. Nitze: Mr. Thompson has suggested that it would quiet things that [unclear], but that there’s no publicity for, which is hard for us to do. All the thinking . . . President Kennedy: That’s right. Nitze: It would really help us to prepare for that . . . Bundy: You could move a quartermaster company without getting any publicity.

32. President Kennedy was leaving that afternoon for Hyannis Port. In a cover memorandum for the President’s weekend reading, Bundy wrote, “Ambassador Finletter’s memorandum on the state of minds in the North Atlantic Council. This is the one the Secretary mentioned Friday morning in the Berlin meeting. The most interesting views are those at the beginning of Boon of the Netherlands and von Walther of Germany, and at the end those of Stikker. Nobody loves de Gaulle” (see Bundy to Kennedy, 3 August 1962, “Index to President’s Weekend Reading” folder, National Security Files, Box 318, John F. Kennedy Library). 33. Tyler was one of the few Kennedy administration officials who had a good rapport with de Gaulle. Tyler frequently served as Kennedy’s translator during phone calls with de Gaulle. 222 FRIDAY, AUGUST 3, 1962

Rusk: But I think we ought to keep a daily eye on what our intelligence picks up on Soviet military moves. If they begin to make military moves then we’ve got to make some. Bundy: I agree. President Kennedy: I spoke to the Secretary [of Defense] the other day about whether we ought to get a renewal of this power to call up reserves without having a national emergency. He said that he felt we should and he was going to look into it. We haven’t got too much more time. Nitze: We looked into it yesterday, and I haven’t yet reported to Bob [McNamara]. The outcome of Norman Paul and my investigation is negative on this.34 If we go to the Congress now for a renewal of this reserves authority, it would meet with serious opposition on the Hill. You’d have to really give forceful arguments as to why you wanted it. This would be played up in the press.35 It would be contrary to what we understood, at least to be the State Department’s— President Kennedy: The only thing is, even if we put a great . . . What is it they want to do then? That would mean that from the end of the first part of September until January we couldn’t call up air— Bundy: Not without a national emergency. Nitze: We’d have to call up the National Guard to [unclear]. President Kennedy: Even if we wanted to call up 30,000? I mean most likely— Bundy: If you’re going to do that, I suggest you ask the Vice President. Has anybody talked to Dick Russell about it?36 Nitze: Norman Paul has taken extensive soundings on this. Bundy: If the President said to Russell that he simply, we weren’t through with Berlin, that it’s just in a quiet phase, and we’d like this same . . .

34. Norman Paul was assistant to the Secretary of Defense for Legislative Affairs. He was participating in a Department of Defense legislative proposal to reorganize the Army National Guard and Army Reserve. The plan would provide greater civilian authority over functions formerly reserved for the armed services. 35. Congress had provided more funds than requested for the National Guard and Army Reserve from 1958 through 1961, but a 1962 Department of Defense plan to reorganize them generated a major controversy. The Kennedy administration expected congressional opposition to increased Reserves authority. President Kennedy was also disturbed by a story on the cover of the morning’s New York Times, which reported that Army reservists were bitter about their ten months of duty in Europe where they had been sent after the Berlin crisis flared. A spokesman for the Army unit had accused Kennedy of contriving the crisis for political reasons and had considered their stint in Europe a waste of time. 36. Senator Richard Russell (D-Georgia) was the chairman of the Senate Armed Forces Committee. Meeting on Berlin 223

President Kennedy: How much . . . What was the number we were allowed to call up? Kohler and Bundy: 250,000. Rusk: If we got about a dozen—and you’re talking about the briefing of the President on this sequence of events—if we got about a dozen of the key leaders down here, like Russell, and [unclear] given that same briefing, about the way this thing could develop . . . Bundy: Mr. President you need some middle-ground authority short of a national emergency. Rusk: We could then explain to them why it is necessary that the President have this authority without kicking up a big fuss about it. Try to handle it as a routine, low-key . . . Bundy: Extension— Rusk: Extension of something that wouldn’t last long . . . Nitze: Our congressional people have a very sketchy [unclear]. Rusk: Yeah. Bundy: It’s a question really of how high a level they’re asked to do it at, at least in part, it seems to me Nitze: What they say is we’re just releasing the Reserve divisions now. The publicity that comes out of this isn’t too good, which is a problem. Before a congressional election, people focus on just this point. Rusk: Maybe it’s easy for these fellows coming back from these reserves, saying well, it turned out not to be necessary, what the hell. But in fact, it would seem— Bundy: They’re going . . . President Kennedy: They’re not mad at the Congress. They’re mad at us. And me, and so on, so why should any congressman . . . I’m sure we can do it if we get these fellows in to do the preparatory work, and I’m sure that if . . . Why don’t we plan to have, after this briefing that I get, then get the Hill people down, with you and the secretary, Secretary McNamara, and have them say, at times say, have McNamara say we need some authority because we may have to call up our air units? They’re the ones who’ll probably [unclear]. We’ve got to stop calling ground units if we’d say there’s a national emergency . . . but I can see how calling back these air people for two or three months . . . So I think we ought to have that power, because otherwise we’ll have to call 20,000 people, and in order to do that we’d have to have a national emergency, and that would really be crazy. Even if they only give us the power to call up 100,000 this time, and have that thing run out in March—not for a year, like they did before—but have it run out in March. . . . We asked for a year before, didn’t we, Paul? 224 FRIDAY, AUGUST 3, 1962

Nitze: I don’t remember. President Kennedy: Well, now this time we could change the amount to 100,000 or whatever, if necessary, and we could change the time to six months. Then, at least it would be on our back, not theirs, and I’m sure we can get that. But it’s gotta be done by us, not— Rusk: It may even be that the leadership would think that the . . . the quietest and quickest way to do it would be just a one-line bill extending the earlier package. You don’t have to get into the changes, particulars. Just extend it. President Kennedy: For five, for six months [unclear]. Bundy: We’d better get it for a year at a time. President Kennedy: Well, in any case, we could . . . Bundy: Could I see [you] for one minute, Mr. Secretary? There’s a very important dispatch from Geneva showing that we’re in danger of having a rift with our British friends [unclear]. It’s likely . . . You’re not terribly worried about [unclear]. All of the Berlin group left the Oval Office, except for Bundy and Rusk who remained behind with the President. President Kennedy: There should be a memo [unclear]. [Unclear]? Who’s Godber?37 Bundy: Godber is— President Kennedy: I know. But, I mean, who told the . . . said his understanding from [the] U.S. was the Soviet post could now be excluded from systems? Bundy: Mr. Secretary, Mr. President, there was a technical discussion of the possibilities of national control stations. There’s been no agreement on this. He knows it perfectly well, but the British are very tight and tied on to desiring [unclear] on this point. . . .38

37. Joseph Godber was British minister of state for foreign affairs and chair of the British delegation to the Eighteen-Nation Disarmament Committee. A telegram from the U.S. delegation explained that Godber’s “particular concern is with what they understand is provision that there should be a minimum of one foreigner per eight-hour shift at control posts in U.S.S.R. Godber said such a provision would vitiate whole political value of acceptance ‘national stations’ concept. Also said his understanding from U.S.-U.K. technical talks was that Soviet posts could be excluded from system and system could still have satisfactory detection capabilities” (see FRUS, 7: 533). 38. See nuclear test ban meetings on July 30 and August 1 for British impatience with the U.S. negotiating strategy at the Geneva disarmament talks. Harold Macmillan’s government believed the United States sought an impossible level of verification, including extensive international inspections which were plainly unacceptable to the Soviets, as a precondition for a comprehensive nuclear test ban. Here the question is what the United States meant by “inter- Meeting on Berlin 225

Rusk: This came out of the [President’s special assistant for science and technology Jerome] Wiesner [unclear]. . . . Bundy: But Wiesner had no authority, and I’m sure did not try to say that this was now technically possible. They were talking about the man- ageabilities. I think what’s indicated here is a very strong message from you to the prime minister that we’re just not in business with the Congress, unless we stick to this line.39 President Kennedy: In the first place, we ought to find out whether the Russians . . . Before we have a split between the United States and the U.K. . . .40 Bundy: Exactly. It’s like the international access authority.41 Why fight over it? . . . President Kennedy: . . . until we find out we’re gonna get anyplace, then if we’re really gonna get someplace, if this happens to be the issue which prevents the signing of the [comprehensive nuclear test ban] treaty then we can either come together or have a fight, but not to have a fight before we even hear from the Russians. So, Godber better . . . All right, how will we get this [unclear]? Bundy: My theory . . . We owe the prime minister an answer anyway— President Kennedy: Yeah. Bundy: —we would say to him that it was perfectly obvious to us that we would have a first-class political row in this country which would . . . There’s no point in having either a split with the Congress or a split with the British on a hypothetical issue, just what you’ve just been saying. President Kennedy: Okay. Bundy: And would he please tell his people to stick to technical discussions on this point until . . . President Kennedy: . . . until we find out about this question of international . . .

nationally supervised national control posts” on Soviet territory to monitor compliance. As a result of an intensive policy review, the United States had shifted from requiring international control posts to showing a willingness to accept these hybrid posts that would be run by Soviet nationals but somehow supervised by non-Soviets. 39. President Kennedy faced congressional opposition, centered in the Joint Committee on Atomic Energy, to any perceived concessions that weakened verification. He knew that whatever agreement he reached in Geneva would ultimately have to be ratified by the U.S. Senate. Members of the joint committee opposed national control posts. 40. Probably a reference to a critical question in test ban negotiations: Would the Soviets agree to international inspection of any kind? 41. A November 1961 U.S. proposal to end uncertainty regarding Western access to West Berlin, rejected by the Soviets. 226 FRIDAY, AUGUST 3, 1962

Bundy: . . . and we see whether there’s any give. President Kennedy: But, I mean, there isn’t any doubt we’re gonna have a fight with the British if we ever . . . because they, he thinks . . . Bundy: Sure. President Kennedy: We know what he thinks. So that . . . Bundy: I’ll draft something now. [Bundy leaves.] Rusk: [Unclear.] President Kennedy: [Unclear.] You’re not going yet are you? Rusk: No. President Kennedy: [Unclear] with you [unclear]. Rusk: I’m leaving now. On the separation [unclear] arms embargo [unclear].42 President Kennedy: Yeah. We hope to get the Saudis out, as you know, unless we put it off till [unclear] people to talk to . . . Rusk: Aside from that [unclear]. President Kennedy: [Laughs.] What about the . . . But I think that if you talked to [special assistant to the secretary of state Charles] Chip [Bohlen] that he’d probably want [unclear]. [Voices fade. Rusk leaves.] Kennedy went to see his secretary, Evelyn Lincoln. The two of them came back into the Oval Office and shut the door. The President was concerned that the recording device was not working properly. Evelyn Lincoln: [Unclear.] President Kennedy: Yeah, but then I can’t still tell whether it’s on or off. I don’t know, I turned . . . I just pushed, pulled that thing across. Lincoln: Yes. President Kennedy: But I can’t tell you now whether it’s on or off though; can you? Lincoln: Oh. President Kennedy: I think what they’ve got to do is work out some thing . . . I don’t know, there . . . I don’t [know] whether it’s on now or not, you’d better turn yours off. [Garbled exchange. The tape machine stayed on.]

The President’s next visitor entered the Oval Office a few minutes later. The President had more questions about the military aspects of preparing for any Soviet move on West Berlin.

42. The Kennedy administration was seeking an arms limitation arrangement for the Middle East. Meeting with Lyman Lemnitzer 227

11:14–11:20 A.M.

I think they [the West Germans] can do a great deal more.

Meeting with Lyman Lemnitzer43 On August 1, President Kennedy announced that General Lyman Lemnitzer, the outgoing chairman of the Joint Chiefs of Staff, would be replacing General Lauris Norstad as supreme allied commander in Europe. Lemnitzer’s appointment was controversial because the allied leaders favored Norstad’s conception of Europe as a nuclear third force. The President’s selection of Maxwell Taylor to replace Lemnitzer had caused even greater concern in Europe because Taylor advocated measures short of nuclear attack that NATO could adopt to defend its interests in Europe. Some European leaders saw Taylor’s appointment as a shift away from the U.S. nuclear commitment to Europe. Lemnitzer would have as one of his responsibilities as SACEUR making sure that the Europeans did not believe this. He would also need to explain the Kennedy administration’s concerns about defense burden sharing. Before leaving for Europe, Lemnitzer wished to clear up a few miscon- ceptions he felt the President had about Berlin contingency planning. A meeting in mid-July of a high-level group of Berlin experts from the Pentagon, State, and the National Security Council with the President had not gone well.44 Kennedy dominated the meeting, asking so many questions that Lemnitzer felt the President had not received an adequate military briefing. Worse, Lemnitzer feared the President left the meeting convinced that the Pentagon had insufficiently prepared for a Berlin crisis. Lemnitzer asked for this meeting with the President to assure him that the necessary operational plans existed and the only problem that remained was getting allied support for joint military action. Unfortunately for Lemnitzer, the President had no time for a long military briefing.

President Kennedy: Good morning. How are you? Glad to see you. Lyman Lemnitzer: Now that we’ve had our briefing on Berlin contin-

43. President Kennedy and General Lyman Lemnitzer. Tape 6, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 44. See Lemnitzer, Memorandum for the Record, 19 July 1962, FRUS, 15: 230–32. 228 FRIDAY, AUGUST 3, 1962

gency plans,45 I rather got the impression that we had not put things quite in the right perspective,46 and there could be some concern about the plans and the sequence of events, and so on, on the military side. There are similar ones on the political and economic side. So I am back [unclear] and I thought I would try to put our sequences together in a paper of this type. And this is illustrated, but I’ll make this clear. In accordance with the way the plans are now drawn, I have started with the very first indication of Soviet intentions to call a peace conference, that’s on the inactive side going right to almost to general war here on the far side. Now what we were talking about that day was way over here just before we get to general war. President Kennedy: Right, right. Lemnitzer: And before that there are a great many sections of planning . . . President Kennedy: [reading47] Let’s see now, “Intensified planning, initiate quiet procedures . . .” What could those be? Lemnitzer: Well, they would be to put troops on the alert along the front. A surveillance type, it could be graduated from efforts to collect additional information to moving troops up into their assigned areas. Any one of these things. President Kennedy: What I think we ought to do is to . . . the first troops that we would call out, if we got into this thing of course is the air. We would have to call those poor bastards back in again.48 Lemnitzer: Yes, sir. President Kennedy: But we ought to agree to get that planned. Lemnitzer: Well. President Kennedy: If we have to, about who we’d call back, and so on, and where we’d put them, these reserves. Lemnitzer: I’m sure that both departments, the Army and the Air Force, are now looking at that particular one as to, if we do get into one . . . because this is in accordance with the requisites that the Secretary has given us to take a look now and see . . . if we do get into another hassle this summer or fall, we’ll know who to call.

45. General Lemnitzer was probably referring to the joint State-DOD-JCS and White House Staff meeting on July 19 with President Kennedy about Berlin planning. 46. See Lemnitzer, Memorandum for the Record, 19 July 1962, FRUS, 15: 230–32. At that meeting Lemnitzer concluded that the President did not understand the relationship between BERCON/MARCON and Poodle Blanket. 47. Memorandum from Lemnitzer, not found. 48. There was a lot of grumbling by Air Force Reserve pilots called up in 1961. Meeting with Lyman Lemnitzer 229

President Kennedy: You notice how all those reservists bellyaching this morning in New York and when asked, they answered they were all in dance orchestras and these . . .49 [Laughter.] Lemnitzer: My goodness. Well, I thought that this might be helpful for you. I have abbreviated it quite a bit; but one of the other things that I just wanted to just say that, if we started from the time he calls a peace conference or indicates his intention to, we have things graduated all the way up. This is really a catalogue of the plans as they exist to date, and they’re pretty complete. Unfortunate comments that were made in that particular briefing was the time to get plans approved for the military action that we refer [to] over here all the way on page 3.50 President Kennedy: So let me take this to the Cape.51 Lemnitzer: Well, that’s why I wanted to get it over to you today. I thought if we could just sit down, that this would reassure you that there are parts, there are other aspects, however were I to see President de Gaulle, I’d talk this over with Norstad. And right down at the end, you’ll find that NATO emergency defense plans are thoroughly SHAPE emergency defense plans. If something happened right today, he would put his emergency plans in, and they’ve been developed under President [Dwight] Eisenhower, and then later [General Alfred] Gruenther and right on down through.52 And it would only take a long time to get these plans approved through the international chain of command. This is where the pileup will take [unclear]. To pinch off that Kassel salient, if we wanted to take drastic action over here this far, which I think is quite unlikely, a corps group commander could put that plan together from an outlying map overnight, and it wouldn’t have to be checked through in detail all the way on up to the national authorities. President Kennedy: What about this decision of the Germans of not increasing their forces as we had hoped? Are they? Say one division . . . Lemnitzer: Well, no, I haven’t heard that they’ve made any change. . . .

49. Still fresh on the President’s mind is the article from the cover of that day’s New York Times about the bitterness of Army reservists recently returned from a ten-month duty in Germany because of the Berlin crisis. 50. At the 19 July meeting the President was given the vague answer that it would take months for any serious operational plans to be approved. See Lemnitzer, Memorandum for the Record, 19 July 1962, FRUS, 15: 230–32. 51. His weekend retreat at Hyannis Port, Massachusetts. 52. General Alfred M. Gruenther was supreme allied commander in Europe from 11 July 1953 until 11 November 1956. 230 FRIDAY, AUGUST 3, 1962

President Kennedy: But are they only going to keep it at 500,000 instead of the 700,000? Lemnitzer: That’s the rumor. I personally think that they have to change, after they reach their 12 divisions, they’ve got then to move into the area of support forces. They haven’t got the kind of support forces . . . President Kennedy: They won’t have 12 now, though will they with this figure? Won’t they only have 11? Lemnitzer: Well, I don’t think that they have officially changed their commitment to NATO yet, and I think it ought to be resisted. I think they [the West Germans] can do a great deal more. When they get their 12 divisions, which I think that they should get, I think then they should build up the logistical backup, the way our forces are backed up, so that they can carry on sustained action. This, in my opinion, is one of the jobs that I have to do over there, to press, as we are pressuring them now, as a national government, to press our allies to look to their . . . First build up their units to the required strength. They’re below strength, most of them. They did come up in the last year a lot as a result of the Berlin emergency, but they still have some things to do in the logistical field, so that they don’t have to live off of our lines of communications, and out of our depots, and that they get into this area themselves. I personally think also this is de Gaulle’s whole problem, because if they do this, they’re going to have to get a lot of equipment and material from us. Kennedy: Well, the Germans have been [unclear] with the French. Lemnitzer: Well, I think this may be reassuring to you. I rather was unhappy, that day when I left, that maybe we left you with the belief that maybe the planning had not proceeded as far as it should have in the last year. I agree that it could have proceeded farther . . . President Kennedy: What does [Major General David] Gray do?53 Lemnitzer: What’s that? President Kennedy: What’s Gray’s— Lemnitzer: Well, he’s working with Nitze, Paul Nitze, in the ambassador’s group, and there’s where they run into the problems of every little thing, that the German doesn’t like it, or the British doesn’t like it. You’ve got to go back to the national capitals. To get something approved through the whole chain of command really takes a terribly long period of time. This is where the tie-up occurs. It don’t take long to develop a military plan to do some of these things on the American side.

53. Gray was the Joint Chiefs of Staff representative on the Berlin Task Force. Meeting with Lyman Lemnitzer 231

We have plans to do these things. It’s just a question of going through the long harangue of discussions as to whether we ought to do this or couldn’t it be done a different way. And whenever you get more than two people involved, then it goes up, the time required goes up in geometric progression. When you get three, it’s 9 times as much, when you get four, it’s 16 times as long. And that’s the way it goes. Whether, it’s in the Defense Department or the Joint Chiefs of Staff. President Kennedy: Well, I’ll get this; I’ll take this one. Lemnitzer: This is just one copy. Now, there’s no copy of this. I was supposed to give one to Secretary McNamara; I’ve made only seven copies. I’m using them for my own edification. I just want to explain one thing, though, before I leave. We have started off, as this has illustrated, that the first activity of bloc denying access to us is on the ground. This is an assumption. We put in phase II, under the National Security Action Memorandum, the air blockage.54 Now these could be interchanged. They might do it in the air first. But nevertheless, these are the sequence of events in the military field, and where the political side and economic side is pretty well defined, now I’ve indicated them. I understand that State is using this as a model to try to list the political actions and economic actions that might parallel some of these . . . President Kennedy: Yeah we’ve gotta get something from them, but I [unclear] a good way to put it. We better get something on the political and economic. Lemnitzer: Yes. President Kennedy: Have you shown this to . . . ? Lemnitzer: They know that I’ve prepared this, on the military side . . . President Kennedy: I’ll send it to Bundy and ask Bundy to get something like this from the State Department. Lemnitzer: I think it would be helpful . . . President Kennedy: All right. Lemnitzer left; President Kennedy escorted him to the door. President Kennedy: Pierre [Salinger] come here would you?55 [Door closes.]

54. This is a reference to NSAM 109, commonly called Poodle Blanket, approved on 23 October 1961 (see NSAM 109, 23 October 1961, Meetings and Memoranda, National Security Files, Box 332, John F. Kennedy Library). 55. Pierre Salinger was Kennedy’s press secretary. 232 FRIDAY, AUGUST 3, 1962

President Kennedy: Now you’re going to talk to them about working out a device for getting it off ?56 Evelyn Lincoln: Yes. President Kennedy: What? Now there’s— Lincoln: There, see it’s on. President Kennedy: [Unclear.] Lincoln: Now. Push that. President Kennedy finally shut off the machine.

Pierre Salinger ushered in Sandra Clardy, a representative of Girls Nation, for a ten-minute photo opportunity with the President. Kennedy would have a somewhat tight schedule before leaving for the Cape. General Maxwell Taylor visited just before noon for a brief unrecorded talk. The President then had only 12 minutes for his daily swim before a luncheon with a group of California publishers and editors. This was another in a series of publishers’ luncheons with Kennedy, intended to drum up wider understanding of the administration’s goals and achievements in advance of the November midterm elections. After the luncheon and some free time in the Executive Mansion, the President ended his official day by meeting with Michael V. DiSalle, the governor of Ohio.57 At 4:45 P.M. President Kennedy left the South Grounds aboard Marine One. Ahead of him were two days of sailing and motorboating with Mrs. Kennedy and Caroline and John, Jr. As usual, he brought some weekend reading. Berlin was not to be left far away. Included in the packet prepared by McGeorge Bundy were some cables showing West German nervousness about NATO defense policies and possible U.S. responses to Soviet aggression in Central Europe.

56. The President continued to experience problems with the recording system. 57. Kennedy did not tape his meeting with DiSalle. However, after the President had left the Oval Office, the tape recorder was accidentally turned on, with DiSalle and a few aides still in the room. Captured on tape are about ten minutes on Ohio politics. It is likely that Evelyn Lincoln, who knew of her boss’s difficulties with the tape machine, had inadvertently turned the machine on, when she was trying to turn it off. The transcript of these ten minutes has not been included because the President did not participate in this brief discussion of Ohio politics. Monday, August 6, 1962 233

Monday, August 6, 1962

“Marilyn Monroe Dead, Pills Near:” The President’s copy of this morning’s New York Times highlighted the event. Below the news of the movie star’s death was another front-page story, “Kennedy Presses For Safer Drugs.” In light of the Thalidomide scare, where an antinausea drug tested on pregnant women had left some babies with deformed limbs, the President was championing rigorous drug approval procedures by the Food and Drug Administration. The juxtaposition of the two stories seemed bizarre. There was more bad news for the President. As expected, the Soviets had resumed atmospheric nuclear testing. They set off a huge 45-megaton blast over Novaya Zemlya on Sunday. The news from Geneva was no better. The Soviets were not even waiting for the formal presentation of the new U.S. and British nuclear test ban proposals to knock them down. The President arrived in the office in time to greet a group of young musicians from Interlochen, Michigan, before their concert on the South Lawn. The morning was then taken up with meetings with McGeorge Bundy; the President’s military aide, Brigadier General Chester V. Clifton; August Heckscher; Arthur M. Schlesinger, Jr.; and the departing Yugoslav ambassador, Marko Nikesic. After the President’s customary midday break, he met with Najeeb Halaby, the administrator of the Federal Aviation Administration. The only meeting taped that day was the last, with the chairman of the House Ways and Means Committee, Wilbur Mills of Arkansas. The President needed to sound him out on a tax cut. As the newspapers were making clear, the White House was on the verge of making a choice between a “quickie” tax cut in 1962 to stave off a recession that some were beginning to forecast and a permanent tax cut in 1963 designed less to prevent a recession than to achieve full employment, stimulate increased productivity and investment, and produce lasting economic growth. Without Mills on his side, the President knew that either option would be impossible, whatever the merits of the tax cut stimulus his advisers had proposed. As he once said to Theodore Sorensen, “Wilbur Mills knows that he was chairman of Ways and Means before I got here and that he’ll still be chairman after I’ve gone—and he knows I know it. I don’t have any hold on him.”1

1. Theodore Sorensen, Kennedy (New York: Harper & Row, 1965), p. 426. 234 MONDAY, AUGUST 6, 1962

6:00 –6:42 P.M.

Even if you hold defense down, space is going up, and there are enough other programs that are bound to be increased by law . . . but I don’t see any problem with having a deficit because it at least keeps the . . . It’s much better to have the employment and the economy going, even if you have some deficits, provided it’s not excessive and inflationary.

Meeting with Wilbur Mills on the Tax Cut Proposal 2 Not yet sold on the economic or political propriety of his recent tax cut and tax reform proposals, President Kennedy was anxious to gauge the sentiments of Wilbur Mills, chairman of the most important tax-writing committee in the U.S. Congress, the House Ways and Means Committee, since 1957. Mills had already earned a reputation as a tax expert and as the imperious chairman of the one House committee that lacked a subcommittee to dilute its responsibility or influence. Known by many colleagues as “Ol’ Never Miss Wilbur,” Mills had also developed a reputation for sinking legislation he deemed difficult to pass. Time magazine once described his predilection for this behavior by suggesting that he “is not just a mule who blocks innovations but a leader who hates to lose.”3 Because legislation emanating from the Mills Ways and Means Com- mittee always emerged under a “closed rule” permitting one or no floor amendments, Mills was especially wary of legislative proposals or provisions that might engender contentious floor debate or worse, an embarrassing defeat of the recommended legislation in the House. Though it would have been natural for the President to consult any chairman of the House Ways and Means Committee at this point in his deliberations, it is likely that he had Mills’s reputation for caution in mind as he invited him to the White House in the summer of 1962.4

2. President Kennedy and Wilbur Mills. Tape 7.1, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 3. Time, 9 February 1968, p. 18. 4. Ultimately, Mills would back a tax cut proposal and even helped Ted Sorensen prepare President Kennedy’s speech on behalf of the tax cut delivered later that year to the Economic Club of New York on 14 December 1962, the response to which seems to have convinced the President that the proposal might well succeed. “Oh, I was very strong for it,” Mills remarked in a 1971 interview, “ . . . had been long before it was even born. This resulted from several meetings with President Kennedy in 1962” (Transcript, Wilbur Mills Oral History Interview Meeting with Wilbur Mills on the Tax Cut Proposal 235

President Kennedy spoke privately to Wilbur Mills with apparently two goals in mind: He hoped to uncover the nature of Mills’s economic thinking on the subject of the current economy and the tax cut proposal; and he hoped to draw Mills toward his own way of thinking on these matters, in both economic and political terms. Preparing an intelligence report for, and securing Mills a place at, the White House meeting to be held four days later with the President’s chief economic advisers may well have been, indeed, the overriding rationale for this meeting.

Unrelated and undated fragment precedes main conversation; Evelyn Lincoln and unidentified male. Evelyn Lincoln: And it’s very different [unclear] . . . yeah. Unidentified: Well, I think anyone, not knowing the difference . . . Lincoln: Um-huh. Unidentified: Walking up, would— Lincoln: Think that was . . . Unidentified: Would not really know of it once you . . . Meeting with Mills begins in midconversation. Wilbur Mills: . . . seems to be sluggish. We haven’t gone as high or as far up as any of us would like to have had, perhaps as much as we should have; certainly we’re not using full resources, either physical or manpower. All of that . . . but still, the committee is not convinced that we can make a case yet, that we are not making if we do this, susceptible to the charge of being fiscally irresponsible in the process. President Kennedy: What about Arthur Burns . . . I thought . . . how was his testimony?5 Does he think we ought to have a tax cut now, or . . . ? Mills: No . . . no. As I recall— President Kennedy: He says prosperity bubbles but recovery may be over.

I, 11/2/71, interviewed by Joe Frantz, Lyndon Baines Johnson Library, p. 9). While the tax cut bill cleared Mills’s Ways and Means Committee and the House of Representatives just before President Kennedy’s assassination, it would not be signed into law until February 1964, under President Lyndon Johnson. 5. Arthur F. Burns was director of the National Bureau of Economic Research at Columbia from 1945 to 1953, a member of “Democrats for Eisenhower” and Eisenhower CEA chairman from 1953 to 1956, professor of economics at Rutgers University (where he taught Milton Friedman and Geoffrey Moore), counselor to the President in the Nixon administration for a brief period in 1969 and early 1970, and then Federal Reserve chairman from 1970 to 1978. Though he switched parties just before being appointed to the Eisenhower CEA, Burns remained sympathetic to some of the ideas and practices of Kennedy’s economic advisers. He abhorred the wage- 236 MONDAY, AUGUST 6, 1962

Mills: Well, he takes a position, more or less, that, we’re sluggish . . . I guess. That’d be the better description than that. But he didn’t think . . . now here, if you’ll notice . . . [sound of pages turning] he didn’t think in terms of . . . of . . . I guess . . . tax cut, prorate, you see. [Unclear] there’s no reason why we couldn’t go to that first year. Now we have Saulnier.6 And Saulnier is somewhat of a disappointment to me. He was Eisenhower’s man, right after Burns. He came after Burns. It’s [sound of pages turning] over here on this page. President Kennedy: For a minute I thought maybe . . . Mills: Now, there he is . . . President Kennedy: [reading] “Full recovery. . . . Not really . . .” Mills: That’s right. And he wasn’t really for a tax cut . . . wants to reduce the burden of profits, cut expenditures . . . They— President Kennedy: Like to cut, they all want to cut expenditures. Mills: Well, that’s what I’m saying. . . . They . . . President Kennedy: Yeah, but they don’t ever say what they want to cut do they? Anybody ever ask them what they want to cut? Mills: Yes. Now with Burns, he was very specific. He was. I was amazed at that. I believe it was Burns, he gave us some high . . . He gave us some priorities. President Kennedy: Okay. Mills: He was very much in favor of what was already taking place in this area of cutting the military spending overseas. Buy here rather than over there.7 President Kennedy: That’s right. That makes more spending, or it’s more expensive. Mills: Now . . . Yes, I know it does. But, one, I was thinking it was

price guideposts (though he would later urge guidepostlike activities in the Nixon administration) and believed that the administration Keynesians had adopted a simplistic worldview; yet he considered their modeling and forecasting to be excellent and generally believed that their confidence in their ability to tame the business cycle was not misplaced. 6. Raymond J. Saulnier succeeded Arthur Burns as chairman of the Eisenhower Council of Economic Advisers (1956 to 1961). Though he viewed the construction of the interstate highway system, launched under the Eisenhower administration, as a way to stimulate the economy during recession, Saulnier favored balanced budgets and did not support the call for a tax cut in the early 1960s. Most of his reluctance to support a tax cut rose out of his fear that the Democratically controlled Congress would enact tax cuts that would forgo too much revenue [see Raymond Saulnier, The Constructive Years: The U.S. Economy Under Eisenhower (Lanham, MD: University Press of America, 1991), pp. 74, 126]. 7. Part of the overall program to limit the number of dollars paid to entities in foreign countries and to ameliorate the potential balance of payments problem. Meeting with Wilbur Mills on the Tax Cut Proposal 237

Burns that had this idea, but one of them, of this more conservative group—with respect to the balance of payments—gave us an idea I hadn’t really thought of.8 Our aid ought to be somewhat limited to the difference between our imports and exports. Let them know if we’ve got five billion dollars of surplus, if we’ve got four billion dollars, that’s the extent to which we can go at the moment because of our problem of balance of payments. President Kennedy: Well, you know, we have been tying aid more and more.9 We now . . . we had it at a billion-three last year. Mills: Right. President Kennedy: I think it’s 800 million this year. The difficulty is . . . I have the ambassador from Brazil up here, and . . . Linc Gordon, and he says, of course, the few ties which we now try to do—50 percent— that means you have to cut out all schools, hospitals, and so on because they are mostly local cost.10 And he said Brazil could go Communist within the next year, without any trouble.11 Mills: Maybe in spite of it. President Kennedy: So that [unclear] is pretty tough. And then you try to . . . President Kennedy: But, in any case, your judgment is— Mills: [Unclear.] President Kennedy: Yeah, they all want to get that tax down in front of . . .

8. The balance of payments is an ongoing record of the credit and debit transactions of a country with all other countries and foreign institutions. These transactions are divided into two groups, the current account—made up of visible trade (merchandise imports and exports) and invisible trade (services and foreign profits and interest earnings)—and the capital account—made up of net foreign investment. The balance of payments “problem” had come to President Kennedy’s attention largely because of fears that a liberal Democrat like himself would abandon sound monetary practices and that the U.S. pledge to redeem foreign dollar holdings for gold at $35 per ounce might lead to a run on the U.S. gold supply (if too many dollars accumulated abroad). A transition economic policy task force, led by New York Federal Reserve Bank director Alan Sproul, also recommended that Kennedy pay specific attention to balance of payments effects as he framed his domestic economic policy. 9. This refers to the practice of tying U.S. foreign aid, often on a specified percentage basis, to the recipient country’s promise to use a portion of that aid to purchase exported U.S. products. 10. Lincoln Gordon was ambassador to Brazil. 11. See “Meeting on Brazil,” 30 July 1962. Ambassador Gordon did not say to the President that Brazil was on the verge of Communism. Richard N. Goodwin, deputy assistant secretary of state for inter-American affairs, the other participant in that conversation with the President, held the more pessimistic view of Brazil’s political future, though even he did not make this prediction. 238 MONDAY, AUGUST 6, 1962

Mills: Sure. Because they’re saying this . . . actually what they’re saying, and they didn’t put it this way . . . I asked some questions about it. But what they’re saying is this. To give the economy this temporary injection, it may have some effect, but the minute that injection wears off, it’s just like medicine.12 President Kennedy: Uh-huh. Mills: Then the basic problem you’ve got is still this business of the tax law itself taking more out of the economy than it ought to at levels of full employment, therefore defeating our purposes of ever getting to the level.13 President Kennedy: What I think, what I see is . . . is I think that, you know the Treasury thinks . . . The Council is more gloomy. Now, the reason I think they’re more gloomy if I wanted to psychoanalyze the council would be that they participated in a judgment that was high—five-seventy, and therefore, now they’re going the lower, and they feel that the only way to prevent this premature recession is to have a tax cut.14 Now they’re . . . Let’s say we got the . . . Leon Keyserling had that article—15 Mills: Yes . . . I read that . . .

12. Though there was an ongoing debate between those who favored a temporary versus a permanent reduction of tax rates, many political opponents of a tax cut in particular professed the belief that even a permanent tax cut would not have much of a stimulative effect after the first season. 13. The Kennedy Council of Economic Advisers suggested that should this kind of surplus prevail (via rapidly increasing revenues), it would prove to be a boon to credit markets in the short run and should open up medium- or long-term opportunities for additional tax cuts or new public expenditures. 14. President Kennedy is referring here to the Council of Economic Advisers and their most recent prediction for the nation’s gross national product, promulgated in the 1962 Annual Report of the Council of Economic Advisers and transmitted to the President on 12 January 1962. The CEA had predicted a GNP of $570 billion at the end of the second quarter, 1962; the actual GNP at that point stood somewhere between $552 billion and $557 billion. Having witnessed a rise in GNP from $501 billion to $542 billion in 1961, as the nation moved out of the 1960:2 to 1960:4 recession, the Kennedy CEA based their optimistic forecast for early 1962 on the continuation of this trend, renewed strength in private markets, and “current and proposed government actions” that would reduce unemployment to 4 percent by mid-1963. Though personal consumption increases generally conformed to their forecasts, the CEA was surprised somewhat by the slower than expected increase in government expenditures and by the reluctance of businesses to continue the buildup of their inventories at the fairly rapid rates that had begun to prevail in 1961. 15. Keyserling was a graduate of Harvard Law School and was appointed by President Harry Truman as a member of the first Council of Economic Advisers in 1946. He became chair of the CEA in 1950 and served in that capacity until Truman left office in 1953. As an adviser to Senator Robert Wagner (D-New York), Keyserling was instrumental in writing the Full- Employment Act of 1946 (signed into law as the Employment Act) which created the Council of Economic Advisers. Keyserling also advised Senators Allen Ellender of Louisiana and Robert Taft of Indiana. He became a prominent liberal critic of the Kennedy administration and characterized its economic proposals, throughout 1961 and 1962, as too timid and conservative Meeting with Wilbur Mills on the Tax Cut Proposal 239

President Kennedy: —in the Sunday Times . . . about what he thinks ought to be done.16 Now, what do we do to . . . let’s say we’re going to get through this year. We’ll have an upturn in the fall of automobiles and so on, so let’s say we’re going to be all right this fall, or reasonably all right, but that the recession will come on . . . everybody even says it’ll either be late this fall—this recession—or it’ll be in the winter or the spring of ’63. Doesn’t everybody admit . . . pretty much? Isn’t that all your dope? Mills: Some of them are as optimistic as the Treasury people were in here the other day. President Kennedy: Yeah. Mills: That it could come, up in ’63 . . . President Kennedy: Yeah. Mills: Now, they’re . . . Most of the economists think that we ought not wait until there’s a recession. President Kennedy: That’s correct.17 Mills: We ought not look to see the signs of a recession. President Kennedy: That’s correct. Mills: What they’re concerned about is that the economy’s not moving upward [unclear]. That we do this to get the economy to move a little bit more. Now the difficulty in the House and Senate, I think you would know better, you know the Senate better than I would, but certainly I think it’s true, in view of the committee. You might be able to get the Congress to do this if we were in a depression, if we’re starting downhill, and everybody could see we’re starting downhill. And you could say that you thought that it was better to do this through tax reduction than to get busy with a whole lot of billions of dollars in additional public works, or something, or anything else of that sort you’d want to say. Now, at that particular time, the Congress would go with you, I think. But, I . . . I don’t believe that they will support, because I don’t think they’re sufficiently aware . . .

with undue emphasis on balanced budgets and the balance of payments. “Tax reduction never cleared a slum, and tax reduction never increased a teacher’s salary,” he declared in 1969. 16. Leon Keyserling, “One Prescription for Unemployment,” New York Times, 5 August 1962, Magazine section, pp. 10G, 56G–57G. Suggesting that the real unemployment rate was approximately 7 percent—after accounting for the full-time equivalent of the existing and widespread part-time employment—Keyserling pleaded with the administration to enact an immediate personal income tax cut and to make it retroactive to 1 July 1962. 17. Kennedy’s firm response here came most likely from an earlier discussion of Senator Paul Douglas’s opposition to the tax cut proposal. Paraphrasing William Prescott at Bunker Hill, Douglas beseeched the administration “not to fire until we see the whites of the eyes of the recession.” 240 MONDAY, AUGUST 6, 1962

President Kennedy: Did this . . . did they, did the members of the Ways and Means Committee get shaken at all about the prospect for the economy? Mills: No, because, most of these people say, we’re not qualified to say when a depression is coming, or a recession. We’re calling your attention to the fact that there is this much unused capacity within the United States, both physical and manpower. In the place of having a gross national product of 552 billion, it ought to be 30 billion more, in order to have unemployment down to 4 percent, or to have full plant capacity . . . and things like that.18 Now that’s the way they’re talking to us. But they would not tell us, and that was one of the points that one of the staff members made, that maybe this— President Kennedy: [aside] Could you get that Economist magazine? [Door closes.] Mills: Maybe this is a little bit, too brief in the economic outlook where they say downturn soon, or— President Kennedy: Well, I’ve got them all summarized. Mills: I know you have. I sent that record down here, hoping that— President Kennedy: I’ve got— Mills: There are several parts of it that you might take time to read . . . President Kennedy: Well, I’ve got them to summarize it all. Lincoln: [delivering The Economist magazine requested by the President] Here are the pages to read. Mills: To get at . . . Well, I don’t believe you get [unclear]. I know you haven’t got time to read all that. President Kennedy: No, but they did about a five- or six-page summary of each of them. Mills: Oh, well. It was . . . The main thing I was thinking about was that you get a feel, through the questions of the members of the committee. President Kennedy: Yeah. Mills: And— President Kennedy: I looked at those— Mills: [Unclear] what bothers them, you see. President Kennedy: Yeah.

18. CEA models suggested that were the unemployment rate at 4 percent, as opposed to the current 5.7 percent (August 1962), national output would have been approximately $30 billion higher. The CEA estimate of the gap between actual gross national product and the output obtainable at full employment had narrowed from $51 billion in the first quarter of 1961 to $28 billion by the end of that year. The unemployment rate would not drop to 4 percent until December 1965. Meeting with Wilbur Mills on the Tax Cut Proposal 241

Mills: And I’ve got on . . . I went into this with . . . And let me make this point with you, which I think is most important. Let us assume that half the people in the United States were sophisticated and fully informed and they took the economists’ point of view. They wanted tax reduction, but the other half says, no that isn’t the thing to do. And that’s about the way I think it was, at the moment, frankly, [unclear] things get moving—instead . . . in spite of the Gallup Poll.19 You have 50 percent that say, “Yes this is a good thing.” But then you’ve got a marked division in that 50 percent as to how it’s to be done. President Kennedy: Yeah. Mills: And I asked, Ruttenberg today,20 after we’d had George Meany and had him today,21 I said, “Now, Mr. Ruttenberg, just . . . most of the people appearing before the committee who’ve talked in terms of tax reduction have suggested tax reduction, as you’re suggesting it. I think that probably we ought to take 3 percentage points off of each bracket as we go up and maybe 3 percentage points off of the corporate tax. Now, that is Walter’s thinking.22 And I knew that, you know, from the hearing. “Maybe four even would be better, depending upon the circumstances. Seven and a half billion in one instance, ten in the other.” I said, “Would the . . . would your organization support that?” He said, “No, we would be emphatically opposed to that. The only way to spur this economy is to put your tax loss, your reduction, in the first bracket.”23 Well, you see now, what you’ve got is . . . You’ve got business on the one hand, if they want a tax cut, wanting one type of a tax cut. You’ve got the labor groups on the other hand wanting a tax cut, but a different type of a tax cut. So you got a division within the people that want a tax cut. And we were talk-

19. A Gallup poll released only a few days before this meeting revealed that 72 percent of those queried said they would oppose a tax cut “if a cut meant that the federal government would go further in debt” (see “Gallup Poll,” New York Times, 5 August 1962, p. 2E). President Kennedy downplayed the results at the press conference following its release and suggested that the results would have been far different if the poll had asked the respondents, instead, to consider a tax cut as a way to prevent a recession. 20. Stanley Ruttenberg was an AFL-CIO economist. See Nelson Lichtenstein, The Most Dangerous Man in Detroit: Walter Reuther and the Fate of American Labor (New York: Basic Books, 1995), p. 366, for a brief summary of how the George Meany–Walter Reuther rivalry affected Ruttenberg’s ability to consult with the Kennedy administration on plans for a tax cut. 21. First president of the AFL-CIO, formed in 1955 out of the American Federation of Labor (dominated by craft unions) and the Congress of Industrial Organizations (dominated by unions organized principally on an industrywide basis). 22. Walter W. Heller was a former University of Minnesota economist and chairman of the Kennedy Council of Economic Advisers (CEA). 23. The first bracket is lowest income bracket. 242 MONDAY, AUGUST 6, 1962

ing today, Ullman24 and Cecil King25 and I were, as we broke up. They said, “Now you see where we are?” That’s after I’d asked Ruttenberg these questions. “See where we are? Even if we made up our minds that we wanted a tax cut, we can’t win, because we can’t write one that either one of these groups are going to say, or both of these groups are going to say they want.” So three-fourths of the people, finally, are going to say this tax bill is not what we want, and that is a danger. And you turn around and ask a businessman, and I’ve done that, if we want to increase consumption, we do it in the first bracket There’s no doubt about that. That’s where the people spend their money. President Kennedy: Um . . . Mills: If that’s what we want, to create additional market, purchasing power, it’s there. And Walter would tell you and you know it yourself.26 But, the businessman would say that’s not the kind of tax cut we need. What we need is a tax cut that engenders greater incentive.27 President Kennedy: Of course, they are— Mills: Inducement for— President Kennedy: As I say, you know where they are [unclear]. Mills: Certainly. President Kennedy: You know what this— Mills: Give them an inch and they want a mile. President Kennedy: This fellow now, [reading] “Dr. Otmar Emminger,” this is from The Economist magazine, “director of the Deutsche Bundesbank, wrote a hard-hitting article in the Frankfurter Allgemeine Zeitung pointing out that the marked shift in cost, and the failure of the United States to notably reduce the overvaluation of the dollar . . . ” This is The Economist.

24. Al Ullman was a Democratic congressman from Oregon and member of the Ways and Means Committee. He was first elected to Congress in 1956. 25. A Democratic congressman from California who became the second-ranking Democrat on the Ways and Means Committee in 1961. King was first elected to Congress in 1942 from a predominantly working-class Los Angeles district. 26. Walter Heller. 27. See President Kennedy’s speech to the Economic Club of New York on 14 December 1962 in which he attempted to bridge the political gap between those who sought a tax cut to increase purchasing power and those who sought it as a spur to new investment [“Address and Question and Answer Period at the Economic Club of New York,” 14 December 1962, Public Papers of the Presidents, John F. Kennedy, 1962 (Washington, DC: U.S. Government Printing Office, 1963), pp. 875–81]. To the President and to his economic advisers, the ultimate goal was increased risk taking and increased investment in the private sector; increased purchasing power, rather than a supply-side tax cut, was, however, the proposed means to this end. Meeting with Wilbur Mills on the Tax Cut Proposal 243

“Above all, Dr. Emminger speaks out against the widespread belief that present stresses on the dollar force the United States to take risks with its domestic economy.” In other words, we’re too restrained. “Nothing would harm the world economy and confidence in the dollar more than a premature slide of the American economy into a recession. As for the danger that official countermeasures may be inflationary, some experts indeed maintain the present circumstances of the United States are very difficult to bring any inflation about. A [misreads, momentarily] reactionary policy . . . a refla- tionary policy of the right kind, he points out could actually help the balance of payments, through its crucial effect in attracting private capital.”28 Well, now, the problem that I see . . . here’s what I see. I think we’ve got . . . let’s just halve these in Committee, but let’s just say we’re going to be through. . . . Paul Samuelson says the downturn will take place in the fourth quarter, but let’s assume that he’s wrong, and that we’re all right this year on the plateau when the unemployment figures stay below 6 percent.29 Then we get the winter of 1963, and the thing runs out of gas. Meanwhile we’ve sent up a tax bill, which has some reform in it.30 You know that reform’s going to have tough sledding, because . . . especially [unclear] the depletion or one of those things and it’s never going to . . . it’ll never happen.31 So, but in any case we do have a reduc-

28. See “The Business World: Reappraisal for the Dollar,” The Economist, 4 August 1962, pp. 457–58. The Emminger quotation is on p. 458. 29. Samuelson was an economics professor at the Massachusetts Institute of Technology and unofficial economic adviser to the Kennedy administration. Before declining President-elect Kennedy’s offer to join the administration as chairman of the Council of Economic Advisers, Samuelson chaired its transition-based economic policy task force. 30. As it was then considered, any plan for a tax rate decrease was to be accompanied by tax code reform. Though CEA chairman Heller was urging the President to consider one change at a time (tax cut first) and though general reform was eventually dropped in favor of a few specific changes (travel and entertainment expense deduction changes), reform proposals were, at this time, at the forefront of most tax policy discussions. 31. The reference was to the Oil Depletion Allowance. Created in the mid-1920s under the Coolidge administration, it allowed oil producers to exempt 27.5 percent of their income from taxation. The 27.5 percent figure had been adopted, according to Texas senator Tom Connally, simply because it sounded “scientifically determined,” and was a provision designed to help oil producers offset exploration costs. Though Vice President Johnson believed that the Oil Depletion Allowance was an appropriate target for tax reform, he was also one of the first to remind President Kennedy that its removal might well jeopardize both other tax reforms and the tax cut since quite a few members of the tax-writing committees hailed from oil producing states. Afterward, Kennedy told Johnson and others to remind their “oil friends” that 10 percent of his trust fund was in oil, and that he would never preside over the destruction of his own wealth (see Bobby Baker, “Wheeling and Dealing,” Playboy, June 1978). 244 MONDAY, AUGUST 6, 1962

tion. Our budget is going to be unbalanced, because our costs are just going up, and then you know every . . . You can see the way they add to everything and re-add. It’s just built into the structure. Even if you hold defense down, space is going up, and, there are enough other programs that are bound to be increased by law so that we . . . but I don’t see any problem with having a deficit, because it’s . . . at least keeps the . . . It’s much better to have the employment and the economy going, even if you have some deficits, provided it’s not excessive and inflationary. But . . . so we send the bill up, and you start hearings on it. You get through with the hearings at the end of March or April. We get it through the House in May, and Harry Byrd starts it in June and gets the bill from the floor in late August,32 like he does for, after all this tax bill, look how long he’s taken with it.33 We put this thing through in what, March or at the end of February? This thing . . . Mills: He had it by the 15th of March, I thought. President Kennedy: Started on the 15th of March . . . We put the trade bill through to what? April?34 Mills: No, that didn’t go until June, because— President Kennedy: Yeah. Mills: —we held it up. President Kennedy: Now he’s still at it. He won’t even finish the hearings until the beginning of September and then we take it to the floor. So we won’t get a tax bill through, even if we send it up, until September, and by then we’ll be in the midst of a major recession. Then how do we look? What do you and I look like then? Mills: Let me make this suggestion now. And this is a difficult, it’s a political evaluation. I know that. We’re faced with this very fact, that if you should request a tax reduction now, you might well not get it, and it would engender a terrific amount of criticism within the House at the idea of a tax cut. That, I think, we walk into with our eyes open. Now, you’ve got to evaluate, on the other hand, whether or not you as the

32. Harry F. Byrd, Sr., conservative Democratic senator from Virginia and chairman of the Senate Finance Committee from 1955 until his retirement in 1965. 33. It is the investment tax credit legislation. This credit, eventually signed into law later in 1962, was equal to 8 percent of investment in eligible machinery and equipment and was estimated to have improved overall corporate cash flow at the outset by approximately $1.5 billion per year. It was proposed originally alongside a reform by which the federal government would begin to withhold taxes on interest and dividends, and, as a result, was designed to be revenue neutral. 34. The trade bill is the Trade Expansion Act of 1962. Meeting with Wilbur Mills on the Tax Cut Proposal 245

President of the United States can be stopped even—when you know that—from doing what you think you ought to do, when you make up your mind what you ought to do. Now, you’ve got to be able, I think, to evaluate the situation: Are we going to be in such a thing as a recession by the first of the year? Frankly, I don’t know and I don’t think our evidence before the committee would lead us one way or the other in that conclusion. Some of them, you could take one position and say to one fellow and say no, another yes. President Kennedy: Yeah, and I don’t have any confidence in these fellows either. Mills: I don’t either. President Kennedy: Because, you know, we thought we were going to have a 570 . . .35 Mills: I know. President Kennedy: They can’t tell. They can’t tell. Mills: They can’t tell. President Kennedy: But at least they can tell, I suppose, when it’s starting to run out of gas, but they can’t tell when the real downturn will— Mills: Well, they’re looking at . . . I think, frankly, that it’s a mistake and I’ve had them admit it in the committee to take June or July statistics. I wouldn’t believe either one of them as indicative of which way the economy was going, if they showed up or if they showed down. I’m not too encouraged by what I see from the July figures, frankly. President Kennedy: Uh-huh. Mills: I don’t think you can tell too much by just one month or two months. I don’t think you can tell particularly by the summer months. I’ve tried to keep up with these indicators myself. President Kennedy: What is your guess as to what, you would, if you had to make a guess based on what you’ve heard and your knowledge [unclear]? Mills: If I had to make a guess, based upon what I’ve heard, I would say that the situation at the moment is such: That some time within the next six months there will be a downturn.36 I think that downturn may

35. A reference, once again, to the January 1962 CEA forecast for GNP. 36. A recession would not again plague the U.S. economy until the fourth quarter of 1969, 106 months into the Kennedy-Johnson expansion. 246 MONDAY, AUGUST 6, 1962

well be unless we have another stock market thing or something like that. It may well be the mildest we’ve had yet of any of these downturns. It may not come back too fast on the basis of what they’re saying, but I do believe that there’s no real reason for it to be serious, that is, to the extent of the ’57 one even. I think it would be more like, this one that we were in in ’60, and not get very low, be a plaguing thing, knock some unemployment up perhaps, but this whole thing could shift.37 This whole thing could shift, and they all admit it. Every one of them. Businesses haven’t got any real inventories. Well, now, if they had heavy inventories coming into this thing I’d be scared to death. They haven’t— President Kennedy: Well, now what is your bet— Mills: Actually, this Keezer . . . this fellow Keezer . . .38 He’s a conservative, but he’s . . . he works for Elliot Bell.39 He and Elliot Bell take different views on these things a lot, but he’s about the best-informed man I’ve ever known, too, on the intentions and plans of business with respect to plant and equipment. And he says . . . if I can find the page reference in here [thumbs through record of Ways and Means Committee testimony] . . . but I’d have them brief this, if I were you, pretty carefully, because . . . see, only with a reform . . . He thinks that it makes no difference whether we do it now or a little later. President Kennedy: I’ve got it here. Mills: That he doesn’t see anything with respect to a shift in plant and equipment expansion of business to indicate it. Now that’s his field. He hadn’t gone into consumer indices and things like that, but I see they didn’t pay much attention to what he said. [Laughter.] President Kennedy: Now this is a boy who is pretty— Mills: He’s a little bit more conservative than some of the others, frankly. President Kennedy: What about . . . what’s your, well, now what will happen to, let’s say I don’t make . . . send up any recommendation now, and then, come next winter we begin to slide into this recession? Meanwhile you’re beginning your hearings on this tax bill. We don’t get a tax bill in September . . . we go into a recession—

37. Even though the official 1957 recession (1957:4 to 1958:1) was of shorter duration than the official 1960 recession (1960:2 to 1960:4), it was followed by six months of unemployment in 1958 (April to September) that exceeded the peak unemployment rate of the 1960 recession. 38. Dexter Merriam Keezer was an economist and the author of New Forces in American Business; An Analysis of the Economic Outlook for the ’60s (New York: McGraw-Hill, 1959). 39. Elliot V. Bell was economics editor and editor of Business Week magazine. Meeting with Wilbur Mills on the Tax Cut Proposal 247

Mills: No, you’ll get it much quicker than that. You’ll get one quicker than that. If you would go with us on the . . . on some simple idea . . . and it’s got to be simple now. We could enact, I think, in the House, without too much trouble, if we’re going in or if we are, and everybody sees now that we’re in a downturn. President Kennedy: Let me say something to you, now, just between us. This is . . . supposing we call them back, and if the Congress doesn’t change much, and we call them back in November. Mills: If you’re in a depression, you’ll get it. President Kennedy: Well, let’s just say that the signs are . . . I’m just thinking that for . . . if we, you and I, guess that the . . . Let’s just say we assume that we guess that we’re about to have a recession in the winter of 1963, and, as I say, most of our economist friends may . . . would probably say it’s going to be sooner than that, but let’s say that. Wouldn’t we be better off, and . . . But on the other hand, if I go up and ask for a tax cut now, and Congress isn’t going to give it to us, it’s going to compli- cate the running for office of a lot of fellows who have to defend that the president’s asked for a tax cut. It shows the economy’s desperate; and, it shows the Democrats have failed to bring the economy back; and it shows that they’re fiscally irresponsible. And a lot of bastards then come out and say they’re not for a tax cut, and that . . . well, some will break with me. And in other words, it will make our problem almost impossible come November. That’s . . . so that’s, I think— Mills: Your judgment is right about that. President Kennedy: Ah, but let’s say that we also know that come next winter we wouldn’t get the bill and Harry Byrd would screw us even if you put it through the House. And by the time you get a rule out of Judge Smith snow would be on the ground.40 But, let’s say we come back, that the Congress doesn’t change much, so that they couldn’t say, “Well, this is a lame duck Congress.” Let’s say we can hold our strength reasonably well, then we could, if necessary, and if we saw this thing coming in a more immediate fashion, we could always go back, I suppose, in November, couldn’t we?41 And then at least if the Congress didn’t act, it would be . . . the responsibility would be . . . wouldn’t be ours. Mills: I had thought that probably that this might be a way out of it,

40. Howard W. Smith was a conservative Democratic congressman from Virginia who served as chairman of the House Rules Committee from 1955 to 1967. 41. Kennedy is talking about Democratic strength in Congress after the midterm election. Presidents have come to expect that their party will lose seats in a midterm election. 248 MONDAY, AUGUST 6, 1962 and, I know, there’s been too much talk about your position, really. . . . And that might be indicated, as I see it, your position, there certainly has been too much talk, generally, about what we ought to do. I had thought this— President Kennedy: I think it’s unfortunate that Patman’s having his open hearing.42 Mills: I do too. But I think it’s . . . I’ve been trying to figure out just what we would say, in the committee, that could be helpful and what you could say that would be helpful. Now, people want to have confidence. You know that, first of all. They want to have confidence in this whole system that we’ve got. They want to look on the bright side always. We can say that our concerns primarily stem from the fact, that there were some indications that our economy was not moving forward, uphill, at as fast a pace as we thought we were capable of moving. And we’ve looked into it. There are those who think that we’ve got some troubles ahead, at some time. We don’t know when. Everybody is convinced that we are capable of greater economic activity than we’re presently enjoying. But when it comes to reducing taxes, creating additional deficits, that is also a very serious matter. And it has to be . . . it has to be considered in the light of many factors. We’re all for full employment. We want full employment. We want to do something about our balance of payments. We want to retain the confidence of the American people in our desires to run the government on a fiscally responsible basis. There are many factors that have to be considered. And I can’t breeze to the conclusion, at the moment, that the situation is such that we need to further enlarge our deficit at the moment. Now, I’m watching the situation and I’m going to keep abreast of this thing, because I know that the American people would rather have some additional deficit in federal financing to a downturn in economic activities or a full-blown recession or depression that can cost us so much more.

42. Wright Patman was a populist Democratic congressman from northeast Texas who served in the U.S. House from 1929 to 1976. Patman, who once shared a desk with Sam Ealy Johnson (father of Vice President Lyndon Johnson) in the Texas legislature, was a frequent opponent of large banks and Federal Reserve policy (and their adherence, in his view, to a regime of high interest rates and tight money). Beginning in 1961, as chair of the Small Business Committee, Patman held hearings which over a period of several years detailed the tax avoidance techniques of large philanthropic foundations. Patman also served as chair of the Joint Economic Committee, then undertaking a series of hearings on the Kennedy tax proposals. Meeting with Wilbur Mills on the Tax Cut Proposal 249

President Kennedy: Um . . . Mills: And I shall keep abreast of this thing, and when I become convinced that I’ve got a choice to make between tax reduction and an increased deficit, and a recession, I’m going to take the tax reduction route. And I shall advise the Congress.43 Now, there are many good things that we can look to in this situation. We’ve . . . we’ve got a very high level of consumer purchasing. There’s been some shift with our employment. It’s not as good as we want . . . the fall months sometimes are better than the summer months. Businessmen will admit that readily. Business still seems to have the . . . the desire to go forward with its plant and equipment changes . . . plans. And we’ve given them incentives to do that. We’ve given them incentives to do that.44 Now, we’ll watch this thing, and if . . . if it’s necessary, I wouldn’t hesitate to ask the Congress to come back. If it can . . . If it isn’t necessary, we’ll submit a plan of tax reform the first of the year, and then because of the time taken in connection with tax reform to enact it, if the situation requires it, I’ll ask the Congress to do something about the rate of taxation while there’s time to complete a program of tax reform. Now, there are a lot of people that would support the idea, I think, that you’re watching this thing; you’re not going to let it go down. And of course, politically, we can’t let it go down. We all know that. And I’m going to make that choice. If I have to do something, if I have to recommend to the Congress tax reduction to keep us from going downhill, you can count on me doing it. But I’m not going to ask the Congress to create additional deficits and tax reduction until I know that I’m faced with that choice. Now, maybe, your people would say, “No, don’t do that now because you might want to reduce taxes to boost an economy that’s already going up the hill, just . . . at a little faster pace. That is the problem in the Congress, of getting the Congress to do that very thing. President Kennedy: Yeah . . . Mills: It’s not with respect to tax reduction to prevent us from going downhill when we know we’re going downhill.

43. A scenario nearly tantamount to passage in the House, for as Ways and Means member Phil Landrum of Georgia, noted in 1970, Mills’s alert mind, experience, and ability to communicate with other members caused committee members “not to study so hard” [quoted in Mark Silbergard, Phil M. Landrum, Ralph Nader Congressional Project (Washington, DC: Grossman, 1972), p. 8]. 44. Principally the accelerated depreciation allowance introduced earlier that year. 250 MONDAY, AUGUST 6, 1962

President Kennedy: Now, the problem . . . well the other problem is the question . . . the time that you— Mills: You may have . . . and I was going to say that now, Mr. President . . . you may have to pay a little bit more price, and, that is, it may have to be more of a cut. We may have to lose more revenue, at a given time, because of the reluctance of Congress to act until it’s maybe too late. President Kennedy: Yeah— Mills: It’s a little later than it should be in your opinion or mine. President Kennedy: Umm . . . Mills: In the place of seven billion, it may have to be ten billion because the Congress has waited a little too long to accept the idea. President Kennedy: How long . . . What is your view, Wilbur, of the problem of . . . let’s say that we see signs that we’re going to have the downturn in March, or April, or May or something of 1963. Or . . . how do we . . . ? What way is it that we . . . we get into the problem if that’s going to tell you that it’ll take seven or eight months for the Congress to act? By then you’d be in the middle of a recession. Mills: Here’s what I was thinking. We do something simple like this. We could say to the Congress . . . ask the Congress to pass legislation which will permit us to withhold from everybody this much less, you see. President Kennedy: For a period of what? Mills: Well, whatever time we think. The rest of the year, while the Congress is . . . And to write this change into whatever changes that the Congress makes on a permanent basis. President Kennedy: We could actually do that if we had to. If we really were serious, as I say . . . if the Congress were not changed in com- plexion, we could always come back if we needed to in December to do that much, certainly. Mills: Certainly. But that can easily be done. The Internal Revenue Service people . . . I know Mortimer Caplin can make changes within their withholding tables very quickly to accommodate that.45

45. Caplin was the Internal Revenue Service commissioner from January 1961 to July 1964. He had taught Bobby and Ted Kennedy at the University of Virginia School of Law and now spearheaded the Kennedy administration’s effort to pinpoint needed tax reforms, particularly proposals to eliminate business travel and entertainment expense abuses. When the so-called Kennedy tax cut was finally signed into law in February 1964 under President Johnson, reduced withholding rates were utilized, in the same fashion described here by Mills, to jump- start the economy. In March 1964 the withholding rate declined from 18 to 14 percent, reducing overall withholding by approximately $8 billion while the tax cut itself reduced personal income tax liability for 1964 by $6.7 billion. Meeting with Wilbur Mills on the Tax Cut Proposal 251

President Kennedy: So, it would just be a question of having the advice of Harry Byrd? Mills: That’s right. You’d say . . . say you think it ought to be, that we ought to withhold just 10 percent less, or maybe a hundred dollars a month, or [unclear] ten dollars a month. Whatever the figure is, they tell me they can work that out pretty quick. Now that doesn’t affect your permanent rates at all, but for a temporary period you just disregard your permanent rate and take this much less. Now, that, I think is simple enough that we could do that pretty quick. And I don’t know that we’d have to do much of a hearing on it. But if you get into what Walter’s talking about, this adjustment of rates, you know and I know that they can’t be temporary.46 If once that’s done . . . President Kennedy: Yeah. Mills: The Congress and you and I can get by letting it go back up. But now you can forgo this little old 10 percent or 15 percent, whatever, 40 percent, whatever you want to make it. We’re just reducing this withholding for that period of time. And if you— President Kennedy: Well, I think that makes sense. Well, why don’t we . . . If we can just give . . . keep this to ourselves, because, we . . . I’ve got the problem of taking a look at this thing, as I kept saying, August 10th, and then, getting some statement. It may be that you and . . . if you could come down on that Friday, that August 10th, then we’ll . . .47 In the meanwhile, I’ll be working on some satisfactory way of putting our case, and if we can just keep this to ourselves so we don’t get the press, and have them— At this point Mills began to offer brief summaries of a number of individuals who testified (on the economy and on the merits of various tax reform and tax cut proposals under consideration) at a recent House Ways and Means Committee meeting. Mills: This . . . Here’s another . . . there’s another excellent statement that I wish you would ask them to let you just check. This man right here is a very, a very qualified person that . . . a public statement like that is well worth reading. Now this man, practically said that we were already in one [a recession]. He wants a permanent cut, not a temporary cut, you see, and he wants it into effect now. It’s an across the board type

46. Walter is Walter W. Heller. 47. Mills joins President Kennedy and his chief economic advisers at the White House on this date for an additional discussion of the administration’s plans for a tax cut (see “Meeting on the Tax Cut Proposal,” 10 August 1962). 252 MONDAY, AUGUST 6, 1962

of a cut. Sporn is 20 . . . he’s been in government and out of government, but he’s not a president of this group that’s . . . He’s recognized as a very able fellow.48 But there’s, oh . . . this one’s a disappointment for me. President Kennedy: Really? Mills: I expected great things out of him. He’s born and raised in Bonham, Texas, . . . graduate of the University with me and he’s in New York. I was a little bit . . . This man is from Boston. You know this one. President Kennedy: Yeah. Mills: I’ve known of him for years. He used to be down here in the government service. He was one of Fred Vinson’s economic advisers back in—49 President Kennedy: They, of course, all want these corporate tax cuts. Mills: Oh, yes, yes. He says it’ll be— President Kennedy: Greenewalt any good?50 Mills: Greenewalt was outstandingly good, very good, and he sticks to the idea of a tax cut for the individual, not for the corporation. But . . . President Kennedy: [Unclear.] Oh, he got the wire? Telephone call for the President. Lincoln: Yes. He’s on. President Kennedy: Oh that’s fine. Begins speaking with someone on the telephone and begins writing in middle of conversation. Hello? Hello, Colonel? Oh, well, listen, I’m awfully sorry to hear that. I hadn’t realized that the situation was that way. [Eight-second pause.] I’ve . . . well . . . [Fifteen-second pause.] I know, well, my goodness, I didn’t realize that she was as sick as that. I’m terribly sorry about that. [Seven-second pause.] Yeah . . . Yeah . . . [Nine-second pause.] Well, listen, she’s—[Eleven-second pause.] Well, listen, you’ve both have been terrific to us. [Ten-second pause.] Well, you’re very nice, Colonel, and I’m just awfully sorry. As I say, and until I heard today I had no idea that the sit-

48. Possibly a reference to Philip Sporn. 49. Fred Vinson was a member of the U.S. House of Representatives from 1924 to 1929 and 1931 to 1938 and a member of the House Ways and Means Committee from 1931 to 1938. Vinson was widely acknowledged as one of the leading authorities on matters of taxation in the U.S. House. Following Henry Morgenthau’s resignation at the end of World War II, Vinson served as Harry S. Truman’s secretary of the Treasury. He left that post in March 1946 to become the first chairman of the boards of directors of the International Monetary Fund and the World Bank. 50. Crawford Greenewalt was retired president and current chairman of the board of E. I. DuPont de Nemours and Co. President Kennedy would meet with him on 9 August 1962 (see “Meeting with Business Leaders on the Tax Cut Proposal,” 9 August 1962). Meeting with Wilbur Mills on the Tax Cut Proposal 253 uation was like you—[Thirteen-second pause.] Yeah . . . Yeah . . . Yeah [Twenty-six-second pause.] Well, you’re . . . well, you’re terrific, Colonel, and I’ll . . . I hope to get a chance to see you this fall, anyway. Well, okay, Colonel. I’m awfully sorry. Good-bye. [Sound of phone being hung up.] Mills: [Unclear.] President Kennedy: Yeah. Mills: He’s a very fine economist. He’s with this, Allied . . . machine tools . . . President Kennedy: Yeah. Mills: Machine tool [unclear]. President Kennedy: But the committee did not come out with an impression of what . . . any single impression? Mills: Not that we need to do anything at the moment— President Kennedy: Right. Mills: —at least because of an impending recession. President Kennedy: When do you figure . . . when are you going to finish your hearings? Mills: Thursday. President Kennedy: And when do you think that . . . What will you do or state as far as the committee goes? Mills: Well, I’m not intending to release this right now. And I don’t know what to say. I’ve got to say something, I guess. President Kennedy: Why don’t we do this? Why don’t . . . let’s see, Friday is the 10th, isn’t it? That we were supposed to meet— Mills: Yes. President Kennedy: We’re going to have . . . Why don’t you come down to that meeting?51 Mills: [Unclear.] All right. President Kennedy: [President Kennedy’s voice fades a bit as if he were walking away from Mills as he speaks.] Then I will . . . let’s say that I would put out some statement, appropriate, about . . . along the lines perhaps you suggest. I’ll work on it this week. Then, you might put out a statement saying that you agree with that judgment, that based on your hearings . . . and then we’ll be moving in concert. Mills: If I release this thing, though, the Republicans are where they can pick this up right quick on the idea that we needed to do something. That’s the trouble. [Nervous laughter.] It’s—

51. Additional reference to the meeting proposed for 10 August 1962 with the President’s chief economic advisers. Though Mills spoke very little at this meeting, he did attend. 254 MONDAY, AUGUST 6, 1962

President Kennedy: Well, I . . . yeah [unclear] what I would . . . you wouldn’t have enough time to release yours, though . . . Mills: Oh, yeah. President Kennedy: It seems to me . . . I mean there’s enough in there to say we ought to do it right now. Mills: Well, if we rely on some of these people, there are conditions they effect. I mean Greenewalt and fellows like that. Now, this is a little bit of a misstatement, I think, about what he said on the expenditures. . . . I mean, he didn’t say— President Kennedy: Well, you know those guys, they . . . but they love to say reduce taxes in each proposal, [but] they aren’t going to tell you that. Mills: But he didn’t— President Kennedy: What they do, they get the government out of the agriculture business or some other foolish thing. Mills: —tax cut should be accompanied by significant expenditure cuts, but he didn’t say that. President Kennedy: He said the ones we think were easier . . . Mills: He told me that it would be helpful— President Kennedy: Yeah. Mills: —if you would make a statement [unclear] that you intended to sort of freeze spending at this level, if it could be done. President Kennedy: Yeah. Mills: And that you didn’t have to cut out— President Kennedy: You know how difficult it is, though. Because so many of this stuff is built in.52 Do you have a pen? I don’t know if I’ve got one here . . . Mills: Here’s one. President Kennedy: This is all right. Mills: And it won’t . . . and this one I had mentioned to you, and I’d read Joe Pechman because Joe . . . I think he’s a very able—53 President Kennedy: Let’s see this one. Mills: Pechman’s not only—

52. Referring to budget increases. 53. Joseph A. Pechman was an economist and tax policy specialist with the Brookings Institution. Though, at this point, Kennedy seems unaware, Pechman had already been called on frequently to advise members and staff economists of his Council of Economic Advisers [see James Tobin and Murray Weidenbaum, eds., Two Revolutions in Economic Policy: The First Economic Reports of Presidents Kennedy and Reagan (Cambridge, MA: MIT Press, 1988), p. 4]. Meeting with Wilbur Mills on the Tax Cut Proposal 255

President Kennedy: He’s a— Mills: I wanted you to read that one because it’s . . . it’s very conservative. President Kennedy: [writing as he speaks] Joe Pechman? Mills: Joe Pechman, now, that came today. And I [unclear]— President Kennedy: Well, and then I’m going to find out what Doug’s going to say. I haven’t seen his testimony.54 He’s been away. Mills: I would read . . . well, now, he called me just a few minutes ago. I would read George Meany. George Meany I’m just fond of. President Kennedy: Yeah. Mills: This, this was a good statement. President Kennedy: Right . . . Right. Mills: I’d read that. You know who he is. President Kennedy: Yeah. Mills: But George Meany, I’m very fond of him. President Kennedy: Yeah. Mills: Get his idea. He wanted to— President Kennedy: He sent me over that . . . a lot of that stuff. He’s ready for a tax cut right now. Mills: Oh, well, he is [unclear]. President Kennedy: [Laughter.] And Keyserling is always there . . .55 Mills: Oh, yes. President Kennedy: I keep wondering why Keyserling ever got in that ’49 recession if he knows all these answers. Mills: You know, I was in law school with Leon Keyserling. This is interesting— President Kennedy: He can talk like a bastard, can’t he? He’s the most articulate fellow. Mills: —really a very outstanding record in law school. He never studied economics in his life, I don’t suppose—in school—any more than you and I did. President Kennedy: Yeah. Mills: May have had to take a course in college. President Kennedy: Yeah. Mills: And then when I found him, when I came to government

54. C. Douglas Dillon was secretary of the Treasury, January 1961 to March 1965. 55. Leon Keyserling was chairman of the Truman Council of Economic Advisers during the 1949:1 to 1949:4 recession. 256 MONDAY, AUGUST 6, 1962

down here . . . It was the old Senator Wagner in New York State had had him as his administrative assistant,56 and he’d given him to Roosevelt, President Roosevelt, to put over in the slum clearance.57 You remember Straus that was out here running it.58 He was his general counsel. I was on the Banking and Currency Committee. So we was thrown together that way, and we renewed our friendship. We were friends in school. A very smart guy who we’d like to talk to and get the answers to prospective questions, you know. [Chuckles.] President Kennedy: Oh, yeah. Mills: Well, when Straus left, I came down here and talked to President Roosevelt, and suggested that he give him that job as the head of the slum clearance and he did for a while. Then he got to be an economic adviser to Truman. Well, now, his wife is a brilliant economist. President Kennedy: Umm . . . Mills: I’ve been in their home and had dinner with them. I think maybe she’s got her doctor’s degree in economics. President Kennedy: Oh, yes. She taught at Sarah Lawrence. Mills: Yes. She’s a brilliant economist. Now I . . . I assume he’s learned what he knows from her . . . because he was a lawyer. President Kennedy: Yeah . . . yeah. Mills: A graduate of Harvard Law School. President Kennedy: So, I read that article yester[day] . . . Now what, Wilbur, I think that . . . that as I see it, your judgment would be that we . . . that we go ahead now, that we take a look . . . If it looks . . . begins to look really ominous in November or so, we can always come back. Mills: Certainly. President Kennedy: If you think it looks really lousy and, as I say in January, if the Congress is all chewed up and the Republicans win a lot and we go up in January and recommend it, that we state that . . . some of the plus and minuses signs now, and then . . . And I will issue a statement, and then you will say, based on your hearings . . . Probably, but I think, probably, our statement ought to come out ahead of you because if you issue a statement on Thursday— Mills: No, I— President Kennedy: —saying we shouldn’t have one, then on Friday.

56. Senator Robert F. Wagner. 57. President Franklin D. Roosevelt. 58. Robert Straus, son of Jesse Straus, head of Macy’s department store, was an NRA official under President Franklin Roosevelt. Meeting with Wilbur Mills on the Tax Cut Proposal 257

Mills: No. President Kennedy: Makes it look like— Mills: No. I’d want you to have it first. President Kennedy: Then if you— Mills: But I would minimize, to the extent you can, the minuses. President Kennedy: Yeah. Mills: Because I think we’re— President Kennedy: We don’t want to talk ourselves into it. If we’re not going to do anything we’d better not— Mills: That’s the point. I think, I think if we hew to the line, that— President Kennedy: —with unemployment down to 5.3 and so on. Mills: That’s right. That’s it precisely. President Kennedy: Now, the only thing is, to make sure that Leon . . . that Patman’s hearings I’ve told . . . I went over Heller’s testimony today, and, you know, he’s saying a little of this and that, this and that, and so on. He isn’t saying very much. I think it’s unfortunate that they’re having a public hearing. Because you see, when this talk about a tax cut started, which was way back in early July when we had this meeting with Samuelson. Except at that point this was the market that was in much more desperate trouble.59 Mills: Right. President Kennedy: You know the thing was looking like it might go through, the . . . through the floor this summer. Well, then that picked up some. Then I think we, of course, with the depreciation,60 and then if we can finally get some sort of tax credit by,61 that would do quite a lot to help improve things. Mills: The one thing that Keezer says, in addition to this other evaluation I was talking about, that was significant. I don’t think I’d ever

59. Beginning with the fallout from President Kennedy’s confrontation with the steel companies in April 1962, all stock market indices began to register significant declines, declines which persisted until midsummer and which were blamed on the President’s antibusiness attitude. On 30 May 1962, for example, former Vice President Richard Nixon blamed the decline on the administration’s “hostile climate toward business.” 60. Accelerated Treasury Bulletin F depreciation guidelines, introduced by executive order in 1962. Viewing depreciation as a function of both “wear and tear” and technological obsolescence, the Kennedy CEA justified the new depreciation guidelines on the basis of updated replacement practices peculiar to the new era of technological progress and on data that revealed a small reversal of this trend in the late 1950s. These new guidelines allowed for a much more rapid writing off of capital investment costs than the previous existing guidelines [see the 1962 Annual Report of the Council of Economic Advisers (Washington, DC: U.S. Government Printing Office, 1962), pp. 132–33]. 61. The investment tax credit. 258 MONDAY, AUGUST 6, 1962

heard it before. In 1929, when the stock markets went down, the total loss in values of stocks at that time was equal to 120 percent of our then gross national product. President Kennedy: Yeah? Mills: And that’s why it makes such a major contribution to our well- being economically. President Kennedy: Yeah . . . Mills: But, this last reduction was less than 20 percent. President Kennedy: Yeah . . . Yeah. Mills: The total loss in that was less than 20 percent of our then gross national product, showing what has happened over the years. It’s protection, of course . . . Securities and Exchange.62 These marginal operations and all that, that I don’t know much about. But something has happened to where we can take [it] in stride. And he pointed out that the remarkable thing about it all was that it didn’t have any more effect. You didn’t find any dropping in real estate values to amount to anything. Not much change— President Kennedy: [Unclear] paper loss in purchasing power . . . Mills: When we take something there that was as damaging, perhaps . . . if it had happened in 1929, we’d have had a major recession. President Kennedy: But I think the problem is . . . just looking at it tactically now, this week, is to keep the members of your committee—at least the ones who are our friends—in doubt so that . . . What we don’t want to do is have Loftus and these others who are saying that we’re not now going to definitely have it, that the President and the chairman thinks he can save it.63 What . . . what we want to do is put out whatever decision we announce with sufficient, with impact, so we get all the benefit, so we don’t have the Republicans saying, “Oh, well, the administration is . . . the economy’s in trouble and they won’t do anything about it.” So, I think, if we can keep it vague this week, and if you say, “Well, I think, the President’s waiting until he sees these August figures until we meet,” and then you just say you’re not going to make up in your mind until you’ve looked at the August figures and finished the hearings. Then we sort of put it to bed until we’re ready to come out and do it, and then maybe I’d say— Mills: I haven’t said a word. I’ve told everybody that the only thing you can say about my position is that I’m always—

62. Securities and Exchange Commission, created in 1934. 63. Joseph A. Loftus was a business reporter for the New York Times. Meeting with Wilbur Mills on the Tax Cut Proposal 259

President Kennedy: [Unclear.] Mills: —a little amused at a suggestion of this sort. But, I’m certainly open minded, to having this borne of necessity. President Kennedy: And I’ll send you up . . . This is a pretty good article that was in The Economist this week. I’ll send it over to you. Voices begin to fade; President Kennedy and Congressman Mills sound as if they are standing and walking away. Mills: All right. President Kennedy: About the problem of the dollar. I’m more encouraged about that. Mills: Well, everything before our committee was . . . you ought to read the record of it, plus the criticism by the Republican members, of course. But these witnesses, here’s Burns, Saulnier and all of them practically praising— President Kennedy: Yeah. Mills: —how these things have turned out . . . President Kennedy: Yeah, I think, we’re doing . . . much better shape on that. Mills: They all say that. President Kennedy: Well, [unclear] think which way we can— Mills: Well, [unclear] you decide to go. [Unclear] go to lunch with [unclear] Friday. Whatever it is, you’re going to have to talk with Al Ullman. I don’t much about [unclear]. President Kennedy: [Laughter.] Voices trail off as President Kennedy and Congressman Mills departed; tape runs for an additional 1 minute, 37 seconds.

The President and the Chairman of the House Ways and Means Committee seemed to have reached an understanding. There would be no tax cut proposed this summer. Mills was reluctant to use Congress to take preventive economic measures. However if the economy started to sink in the fall, Mills agreed that there could be a special session in November or December to rush a cut through. Meanwhile, the President seemed to like Mills’s suggestion of an invisible tax cut achieved by having the IRS issue a temporary reduction in payroll withholding rates. Following this meeting with Mills, Kennedy had his domestic policy adviser, Ted Sorensen, begin work on a White House statement explaining why it was a no-go on a quickie tax cut. The President finished his official day with a relaxing swim. 260 WEDNESDAY, AUGUST 8, 1962

Wednesday, August 8, 1962

On August 8, President Kennedy devoted the bulk of the morning to the problems of organized labor. George Meany, the president of the AFL- CIO, came to the White House for half the day. In the morning, the President spoke in the Rose Garden to a group of labor leaders from the Caribbean, Central America, and Surinam, assembled by the AFL-CIO. Later the President was to meet with his labor secretary, Arthur Goldberg; the new HEW secretary Anthony Celebrezze, who had replaced Abraham Ribicoff the week before; and Lee White to discuss, in part, the possible creation of a presidential emergency board to avert a nationwide rail strike. Finally, there was a luncheon planned with the AFL-CIO’s Executive Council. Sandwiched in the morning’s program was a 36-minute conversation with Llewelyn Thompson who had just returned to Washington after leaving his post as U.S. ambassador to the Soviet Union. A holdover from the last administration, Thompson had gained the respect of the President through his measured cables. Thompson seemed to understand the mercurial Nikita Khrushchev better than any of the administration’s Kremlin hands. Thompson and another veteran diplomat, Charles “Chip” Bohlen, were the men President Kennedy would rely on for appraisals of the Soviet leadership. Thompson’s cables in late July alerted the President to the fact that Khrushchev was once again gearing up for a showdown over allied rights in West Berlin. Meeting with Llewellyn Thompson on Khrushchev 261

10:36–11:12 A.M.

Do you think that the Cuba thing and the fact that we hadn’t gone into Laos might have given him the impression that we were going to give way in Berlin?

Meeting with Llewellyn Thompson on Khrushchev1 Llewellyn “Tommy” Thompson had served two presidents as U.S. ambassador to Moscow. In that time, he had become a recognized student of Nikita Khrushchev, having witnessed Khrushchev’s emergence as the undisputed head of the Soviet government in 1957. Thompson spoke Russian and traveled around the United States with Khrushchev when the Soviet leader made his unprecedented 23-day visit in the late summer of 1959. He resigned his post in late July to return to the State Department. At his last meeting with Khrushchev, on July 25, Thompson detected the start of a new Berlin crisis. In the course of cabling Washington three times over the next few days, Thompson stressed that he did not think Khrushchev was prepared to go to war over Berlin, but he cautioned that the wily Soviet leader was about to launch a new campaign for world opinion before signing a peace treaty.2 President Kennedy did not know Thompson personally. He kept him on as ambassador because of his reputation. Recently returned from Moscow, Thompson was in a position to give Kennedy the briefings he would need to make sense out of his adversary in the Kremlin and the latest Soviet bid for Berlin. It is likely that Thompson knew little if anything about the President’s use of a back channel to assess Khrushchev’s intentions regarding Berlin. He certainly did not know of the President’s meeting a week earlier with Soviet intelligence officer Georgi Bolshakov. At that meeting Kennedy had asked for a Soviet commitment to put the Berlin issue on ice for a while in return for a U.S. promise to suspend overhead reconnaissance of Soviet shipping to Cuba by U.S. pilots.3

1. President Kennedy and Llewellyn Thompson. Tape 8, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 2. See Thompson cables of 25, 26, and 28 July 1962, FRUS, 15: 252–55. 3. See Aleksandr Fursenko and Timothy Naftali, “One Hell of a Gamble”: Khrushchev, Castro, and Kennedy, 1958 –1964 (New York: Norton, 1997), pp. 193–94, for an account of this Oval Office meeting (which included Attorney General Robert Kennedy) based on Russian sources. 262 WEDNESDAY, AUGUST 8, 1962

The meeting opened with Thompson’s reviewing briefly Khrushchev’s meeting with Eisenhower at Camp David in 1959 and the abortive 1960 summit in Paris, which broke up when Khrushchev demanded that the United States apologize for the violations of Soviet airspace by U.S. U-2 spy planes.

Llewellyn Thompson: . . . [unclear] to see whether or not, if he could have, withdraw it and [unclear]? President Kennedy: The Germans? Thompson: Yeah. And [President Dwight D.] Eisenhower had said no. He said, “This shows that he was, that he had some knightly qualities,” he said— President Kennedy: Khrushchev said that? Thompson: Yeah. President Kennedy: Yeah. Thompson: I told this to Eisenhower, and he said, “Well,” he said, “when you write him, which you will have to do to thank him for his farewell gifts and so on, why,” he said, “couldn’t you?—You might put in something about, that I had spoken of him, and the great impression he’d made on me or something like that.” I don’t know if that’s useful to do or not. But he . . . you can think about it. President Kennedy: No, I think that— Thompson: I think he . . . See, he was so let down by this build up. He kept saying this business: “Eisenhower called me friend,” and he kept saying that publicly. Here was this Russian peasant who—[He chuckles.] President Kennedy: Yeah. Thompson: —in a country that had always been a pariah and then, you see this, this idea, well, I think this might be useful to encourage this idea that this is— President Kennedy: Yes. Thompson: —still a genuine feeling that we, both parties, have for the Russians: we are prepared to be friends with them in order to solve the problems. President Kennedy: What is your judgment about the U-2? Did he want Eisenhower to just . . . did he want to get out of it, or was he really attempting to sort of bait a trap?4

4. On 1 May 1960, a U.S. U-2 reconnaissance plane flown by Francis Gary Powers was shot down over the Soviet Union. Denials by the United States that the plane was on a spy mission Meeting with Llewellyn Thompson on Khrushchev 263

Thompson: I’ve always been convinced that he didn’t want an excuse. I think they had a meeting of the Presidium,5 just before he went there and said “Look, this German thing is too dangerous. If you don’t get an agreement on it, you bring it to a head, you’ve got to move. This we can’t do now and you’ve got to break it up.6 Because before he saw Eisenhower, he saw de Gaulle, and gave him in writing this rather offensive demand for an apology and if Eisenhower had gone ahead and apologized—a Frenchman had this thing leaked out—he must have known this. I mean, the way he handled it, I’m sure he wanted to break it up. I felt so sure of this that—you know, [you] remember he left there and went to Berlin, East Berlin— President Kennedy: Yeah. Thompson: And everybody thought he was going to announce the signature of the treaty.7 And I was so afraid we’d make some statement that would make it necessary for him to do that, that I sent a telegram to Paris saying I was convinced he would not do this in which . . . simply on the basis that I was sure that the whole play was to prevent the issue coming to a head.8 President Kennedy: Well, what would they have done if there hadn’t been a U-2, do you think? They just would have had the meeting and wouldn’t have gotten an agreement? Thompson: Yeah. But in those circumstances, I think that he might have worked out a modus vivendi of some sort. The thing that I never could understand was why he surfaced the U-2.9 They knew about it before, and maybe they were afraid now that Russia’s

collapsed when Khrushchev revealed that the pilot had survived and could tell his story. Khrushchev, who had been invited to a meeting in Paris with Western heads of state— Eisenhower, Harold Macmillan of Great Britain, and Charles de Gaulle of France—used the U-2 affair to break up the summit on 16 May 1960. Thompson, the longtime U.S. ambassador to the Soviet Union, was in Paris at the time and Kennedy, the historian, was asking for his insights into why Khrushchev sacrificed the summit. 5. The Presidium of the Central Committee of the Communist Party was the main decision- making body of the Soviet Union. Under Stalin and again after Khrushchev’s dismissal, it was known as the Politburo. 6. Thompson is referring to the Berlin Crisis started by Khrushchev in November 1958 when he threatened to sign a peace treaty with East Germany in six months if the Western powers did not accede to his demand for a demilitarized West Berlin. Although Khrushchev allowed the first deadline to lapse by early 1960, he was agitating again for a resolution, something which, according to Thompson, his colleagues in the Kremlin thought highly unlikely. 7. A peace treaty with East Germany that would terminate the Allied occupation rights in all territory claimed by East Germany, that is, all of Berlin. 8. Thompson remained in Moscow during the Paris summit. 9. To surface in this case means to “reveal something that is secret.” 264 WEDNESDAY, AUGUST 8, 1962

become so open that it would become known. There were too many military [officers] who knew it, [and] there were too many civilians, but he could have sat on that just as the way he sat on [the President murmurs agreement] this business of these fireguards who never, ever appeared. President Kennedy: We got any explanation of that? You think it was just that they were shot? Thompson: Hmm. President Kennedy: Or they were imprisoned, or what, shot or . . . ? Thompson: I think they were probably shot. But . . . maybe the local boys covered [unclear]. That’s very possible. President Kennedy: Yeah. Thompson: It seemed that they were very excited [unclear] times. President Kennedy: Right. Thompson: It’s quite possible.10 President Kennedy: But, why would he have become so—Do you think that the whole Camp David business was a propaganda from his point of view, the “spirit of Camp David,” or do you think he really felt this? Thompson: Well, I—I think he felt a lot of this. Of course, I think the Chinese angle was very prominent in his mind. I remember when he came back, the Swedish ambassador, who was the oldest fellow there—he’s been there about 13 years. He said to me this, “There’s something strange about the way Khrushchev is playing this Camp David business, putting up posters around on the streets, advertis- ing in a film about it.” He said, “They are playing this up for some reason.” And he said, “I think it must be the Chinese.” Well, I think it was a large part of that. This was showing that there was some mileage in his— President Kennedy: Yes. Thompson: —in his policy of trying to build relations with America. President Kennedy: Why? Thompson: Because at this time in their own councils the Chinese were saying this was for the birds—[unclear]. [Chuckles.] President Kennedy: Yeah. Thompson: [Unclear.] President Kennedy: That’s right. Thompson: That made the U-2 all the more difficult for him. But . . . He kept, it was always on his mind, he brought it up about three times [unclear] . . . talking about the secrecy of this thing. He kept saying, “Well, here [unclear] the U-2 and your people just insist on knowing

10. It is not clear what “fireguards” Thompson and Kennedy were discussing. Meeting with Llewellyn Thompson on Khrushchev 265 everything; you’d never be satisfied.” But I also think that, for this reason, that they won’t agree to any on-site inspection.11 President Kennedy: Right. True. Thompson: It’s slightly possible that they think now, we’ve got more of a chance of a breakthrough than they do. Because we can make a much bigger effort than they can afford to make now and for that reason they might want to do it for that. They are just simply against . . . they figure our military is spotting these missile sites. President Kennedy: I think that we might get the atmospheric, don’t you think?12 If they don’t make any significant breakthrough on this thing, then we can put that forward.13 Thompson: Yeah, I think that could go, and I think very possibly this nondiffusion might go, because that doesn’t involve inspection.14 President Kennedy: Has that . . . the conversation which the Secretary is going to have with Ambassador [Anatoly] Dobrynin on that,15 is that to be gone through with the British and the Germans and the French on that?16

11. Thompson was referring to the negotiations on a nuclear test ban. Due to the number of hard-to-explain seismic events in the Soviet Union, the United States had insisted on a certain number of inspections per year to ensure Soviet compliance with a test ban. 12. Get the atmospheric test ban. It would not require on-site inspection because atmospheric testing creates air particles that can be detected from outside the Soviet Union. 13. Here breakthrough likely refers to a change in the Soviet position on on-site inspections. 14. An agreement on the nondiffusion, or nonproliferation, of nuclear weapons. Gromyko and Rusk had discussed this at a private dinner in Geneva on July 22. Both foreign ministers expressed their country’s interest in a nonproliferation agreement. They disagreed, however, over the most likely causes of nuclear proliferation. Apparently Gromyko stressed his concern that the U.S. plan for a European multilateral force (MLF) was a ploy to give a national arsenal to West Germany. The Soviet Union wanted any nonproliferation agreement to outlaw multilateral nuclear sharing. A record of this conversation has not been found. However, its substance was discussed at a subsequent meeting of Rusk and Soviet ambassador Dobrynin (see Memcon, 8 August 1962, FRUS, 7: 541–47). 15. Rusk met Dobrynin that day at the State Department. He had invited Dobrynin to call in order to discuss the possibility of an agreement on the nondiffusion of nuclear weapons (see Memcon, 8 August 1962, FRUS, 7: 541–47). This discussion hit a snag. Whereas Rusk spoke in favor of a general nonproliferation agreement, Dobrynin made clear that his government was most concerned about the acquisition of nuclear weapons by either of the Germanies. Moscow either wanted a specific agreement prohibiting nuclear sharing with Germany or, at least, Germany was to be named in a general nondiffusion agreement. Dobrynin emphasized that the acquisition of nuclear weapons by West Germany was his government’s “problem number one.” Rusk assured Dobrynin that Germany had forsworn acquiring nuclear weapons in 1955 and this was a binding agreement. The United States, on the other hand, was concerned that China and Israel would get the bomb. 16. The President wanted to know whether Rusk would be clearing his statement on the nondiffusion of nuclear weapons with the Europeans before meeting Dobrynin. 266 WEDNESDAY, AUGUST 8, 1962

Thompson: I don’t know, the secretary—I think it’s not because the Secretary showed me yesterday the draft of his statement, and it’s basically saying “I will have to consult with the allies on this one.”17 President Kennedy: Yeah. When you got to do that? Thompson: Well, I didn’t ask him any. . . . President Kennedy: What is your judgment as to the purpose of the Vienna meeting that we had and also why he took such a tough tone there and then why they called it [the threatened move against West Berlin] off ?18 Thompson: I think again this Chinese thing was at a touchy, crucial stage with them that . . . very difficult. I think there must have been a lot of people in the Presidium who said, “This is getting . . . This split is too dangerous for us, and we’ve got to heal it.”19 And the way the thing came out, it was on the very issue that they are fighting the Chinese about: this is whether or not they should go ahead vigorously to try to exploit every opportunity regardless of the risks, almost regardless of the risks and . . . Or whether it’s better to have a more or less status quo and try to deal with their domestic problems and mark time. And so, the situation with China, his relationship with China being what it was, to have done that could have caused very great internal pressure that [unclear], I think. But personally I’m still glad you had the meeting. I think you— President Kennedy: Oh, it was educational for me; but I don’t know whether—it seemed . . . the fact of his, he was so sort of tough about Berlin . . . Thompson: Ah, but he also was very impressed— President Kennedy: Hmm. Thompson: —with your determination—

17. Rusk read the statement on the nondiffusion of nuclear weapons at the August 8 meeting with Dobrynin. He suggested that the United States and the Soviet Union move with Britain and France to propose a two-point agreement: (1) A commitment by existing nuclear powers not to transfer nuclear weapons to other nations and (2) A commitment by nonnuclear powers not to develop nuclear weapons. On the issue of the proposed MLF, the statement stressed that it was intended as “a means for preventing the further spread of nuclear weapons on a national basis.” Rusk reminded the Soviets that under existing U.S. law and allied military arrangements, “United States nuclear warheads remain under all circumstances under United States custody and control” (see Memcon, 8 August 1962, FRUS, 7: 541–47). 18. The Vienna meeting was the Kennedy-Khrushchev summit of 3–4 June 1961. Kennedy is alluding to the fact that Khrushchev threatened at Vienna to force an immediate Berlin crisis, then did not do so. 19. The Sino-Soviet split. Meeting with Llewellyn Thompson on Khrushchev 267

President Kennedy: Yeah. Thompson: —and this was important. President Kennedy: Because otherwise after the Cuba thing—20 Do you think that the Cuba thing and the fact that we hadn’t gone into Laos might have given him the impression that we were going to give way in Berlin? Thompson: I don’t think so very much. President Kennedy: Hmm. Thompson: I really don’t. I really don’t. It could have had some bearing on that; but I don’t . . . I think Khrushchev has always been . . . he’s always felt he had us over a barrel in Berlin. President Kennedy: Yeah. I think he does. Thompson: [Unclear.] [Laughs.] President Kennedy: [Chuckles.] He’s always been right. Do you think it was useful calling up our troops?21 Thompson: I do. And he said, very—I didn’t understand quite what he was driving at. I’m not sure what he’s driving at, he said, “I understand the President on this.” President Kennedy: Yeah. Thompson: I don’t know what he . . . quite [unclear] he meant by that, I wasn’t sure. But this has led to their [resumption of nuclear] testing and so on, these efforts at . . .22 But at the same time, he said, “I understand the President on this and [unclear].” These conversations with him bob back and forth, and I didn’t get to follow up on that. I had wanted to say, well the important thing for us was they not misunderstand our intentions, but I didn’t get a chance to get it in, particularly with all these ambassadors and . . . President Kennedy: Hmm. Thompson: Particularly when I am talking to him in Russian, the thing goes pretty fast, and I don’t have too much time to think. But I think he still, he’s got a lot of really serious internal problems. The agri-

20. The Bay of Pigs fiasco in April 1961. 21. On 25 July 1961 President Kennedy announced his intention to request congressional standby authority to call up 150,000 reservists to meet the Soviet challenge over Berlin. The President had considered declaring a national emergency, which would have permitted him to call up one million reservists; but he worried that his European allies would consider this an overreaction. Thompson from Moscow had been one of those advising the President that the Soviets were likely to be persuaded by “substantial but quiet moves that did not panic our allies” [see Theodore Sorensen, Kennedy (New York: Harper & Row, 1965), pp. 588–89]. 22. In the fall of 1961, the Soviets broke the three-year moratorium during which neither superpower had detonated any nuclear test devices. The United States then resumed its own testing in the spring of 1962. 268 WEDNESDAY, AUGUST 8, 1962

culture thing is lasting; it’s going to be a long time before [unclear]. And I think their crop this year is going to be far worse than he lets on and our Agriculture boys think that. President Kennedy: Hmm. Thompson: And this makes a real problem for him. President Kennedy: We ought to be thinking about what, if he goes to the U.N., what his proposal would be.23 He obviously could propose that the U.N. assume the responsibility, and I wouldn’t be surprised if it has a rather . . . it could have a good ring to it—24 Thompson: Yeah. President Kennedy: —as far as the committee of the . . . the Indians and so on. Whether we ought to have a counterproposal such as the willingness to submit this to a plebiscite of the people, whether they want the U.N. or the continuation of the Communists, whether that should be our counter.25 But obviously we have got to have some counter. Thompson: This could, of course, be a way for him trying to get off the hook. President Kennedy: Yeah. Thompson: Because he mentioned something about having a commission of jurists, or something of this kind, look at this thing. Well, on that we’d be on very strong ground. President Kennedy: Yeah. Thompson: But I think it would be wise for us, if we just, if we get to the point where it looks like it’s going to happen to get at [Jawaharlal] Nehru, and [Gamal Abdul] Nasser and maybe [Josip Broz] Tito and just lay it on the line that he has brought up, he has made this a problem by the attempts to focus on [unclear].26 To us, this is whether or not you’re thrown out of Europe or not and

23. As Thompson was making his way home from Moscow, he cabled from Copenhagen, “I believe Khrushchev is likely to bring Berlin problem before the United Nations and probably will present Soviet case. Suggest we should be thinking about how to prevent neutrals from proposing compromise solutions unacceptable to us and from giving him impression he can proceed with his plans with strong support from world opinion” (see Telegram to Secretary of State, 28 July 1962, FRUS, 15: 255). 24. Kennedy is referring to a possible Soviet proposal that U.N. troops assume allied responsibility for the security of West Berlin. 25. Presumably Kennedy is discussing here the possibility of a referendum in East Germany. The United States had previously discussed the possibility of a referendum in West Berlin on the future of that enclave. 26. The prime minister of India, the president of the United Arab Republic, and the president of Yugoslavia, respectively—then the three most powerful figures in the nonaligned movement. Meeting with Llewellyn Thompson on Khrushchev 269 we can’t have this. We’ve got to keep our troops there now in these circumstances and that any compromise which threatened this could mean that these people would be responsible for bringing on a conflict. And [we tell them] that they had better not put up any compromise proposals without thorough consultation with us to make sure that we’re not put in this position. Because this, they don’t want a conflict and. . . . But it has to be driven home to them because of the temptation to be the— President Kennedy: [Unclear.] Thompson: —guy who pulled off the thing— President Kennedy: Yeah. Thompson: —is very great. President Kennedy: But I think the part where they could regard us as being unreasonable would not be on our staying in Berlin, and so on, particularly if we say we’ll put it to a judgment of the people there; but the fact that we refuse to recognize East Germany. I think the Yugoslavs . . . I am sure the Indians . . . everyone . . . I think there would be a general agreement in a lot a part of the world that that is an unrealistic position, in general. Thompson: Certainly on the frontier thing; I think there’s one [where] I think they’re right. It probably is a bit. If that were the issue [unclear] . . . President Kennedy: You mean the Oder— Thompson: Oder-Neisse. President Kennedy: Yeah. Thompson: Precisely. [Unclear.] President Kennedy: But the recognition of East Germany: I can see where they would think that . . . they would consider that our failure to acknowledge that after 17 years, at least as a de facto situation . . . we do really, as a de facto, but even—that is where, I think, you will have the most difficulty. Thompson: I think there, I thought that the Secretary did a good job at Geneva in laying out the case this last time.27 President Kennedy: Yeah. Thompson: He spelled it out in that . . . On that he said that, he made quite clear we weren’t going to take any action which would show that they weren’t a sovereign state in effect. We weren’t demanding any [unclear], just that they not interfere with us, with our communications with our troops [in West Berlin]. And . . .

27. Ambassador Thompson is referring to Secretary of State Rusk’s handling of the July meetings with Soviet foreign minister Gromyko in Geneva. 270 WEDNESDAY, AUGUST 8, 1962

President Kennedy: Was . . . he was very formal with you, was he? Thompson: Yes, he always is. And I told him, I had tried to prepare a way for [Thompson’s replacement] Foy [Kohler] and he said, he was very cagey on that [unclear] at one of these conferences. I can make no judgment [unclear]. President Kennedy: Yeah. Thompson: But he said, “We’ll welcome him. We will try to work with him.” And . . . President Kennedy: Did he say anything about Dobrynin? Thompson: No, he didn’t bring that up. [Unclear.] First of all, it was just purely social. President Kennedy: Hmm. Thompson: His wife was there.28 And she was . . . she and Jane got on very well.29 President Kennedy: Right. Thompson: Jane had found in London one of these little drinking cups that has a false bottom— President Kennedy: Yeah. Thompson: —and she gave it to him. And Mrs. Khrushchev came over and kissed her. [He laughs.] She tries to hold his drinking down.30 President Kennedy: Yeah. [Mumbles something.] Thompson: He cursed at me, [unclear] an old handicap because he . . . drinking out of this little glass—[Thompson laughs again]—like drinking with his fingers. And . . . President Kennedy: He was very nice to [Pierre] Salinger, wasn’t he [when Salinger visited Moscow in May 1962]? Thompson: Yes. [Unclear.] Of course all this is . . . it’s like dealing with a bunch of bootleggers or gangsters. There’s a kind of hypocrisy that— President Kennedy: [Unclear.] Thompson: That’s a little hard to take. But . . . oh, we talked a lot about agriculture and his crops and that stuff, that sort of thing. But he is a fascinating character.

28. Nina Petrovna Khrushchev (?–1984). 29. Jane Thompson, wife of the ambassador, understood Russian and Mrs. Khrushchev knew some English. See Jane Thompson’s colorful memorandum on their time together during the Soviet leader’s visit to the United States in September 1959, Record Group 59, Bureau of European Affairs, Office of Soviet Affairs, Box 4, National Archives. 30. Ibid. Nikita’s drinking had been a subject of light conversation between Jane Thompson and Nina Petrovna for some time. Apparently Khrushchev liked to tease his wife that she refused to drink anything at all, even cognac for formal toasts. Meeting with Llewellyn Thompson on Khrushchev 271

President Kennedy: Yeah. Well, listen, Tommy, I will—[President Kennedy rises from his chair.]—perhaps we could, perhaps you could just get . . . before you [unclear]. Thompson: I’ll do that tomorrow. President Kennedy: Somebody, before you go, can just get on that buzzer [Thompson agrees] and [unclear] want to be like because we did have the [Paul] Nitze meeting [unclear] know more about it than anybody. But he asked me whether we ought to see if we can change our procedures and then perhaps you could work out a memorandum for me [unclear] . . .31 Thompson: Fine. Then, this would be my following request. The first one, [unclear] here, I thought if you had no objections, I might say something about how much I appreciated the close cooperation [unclear] close contact [unclear] had with Cuba in the time before Khrushchev [unclear]. President Kennedy: All right. That would very nice [unclear]. Thompson: [Unclear] give him a specific [unclear]. President Kennedy: Yeah. All right. We’ll see [unclear]. They left the Oval Office together—talked in the hall for awhile, with the occasional word intelligible. Kennedy is heard discussing his concerns about the allies and his hope for a basis for resolving the Berlin crisis satisfactorily. Once Thompson had left the West Wing, Kennedy returned to the Oval Office. Just before shutting off the tape machine, Kennedy said, “[unclear] with Thompson.”

The President did not tape any of the labor-related conversations of the day. He also did not record a conversation with his budget director, David Bell. He did, however, choose to make a recording of his next foreign policy discussion, a focused discussion of initiatives in two problem areas, China and the Congo.

31. The President may be referring to the 19 July 1962 meeting of State-DOD-JCS and White House staff representatives with him to consider the approval of Berlin contingency plans and those maritime contingency plans concerning Berlin (see Memcon, 19 July 1962, FRUS, 15: 230–32). 272 WEDNESDAY, AUGUST 8, 1962

5:30 –6:12 P.M.

Your next exasperation now, Mr. President . . .

Meeting on China and the Congo32 The Soviet Union was not the only major Communist power threatening United States interests. After spending part of the morning of August 8, 1962, discussing Kremlin-generated problems, Kennedy turned that afternoon to the general threat posed by the Mao Zedong regime in the People’s Republic of China (P.R.C.). Despite initial hopes of improving U.S. relations with the People’s Republic of China, President Kennedy remained trapped in the rigid nonrecognition policy of his predecessors. Mao’s policies themselves had much to do with the administration’s unyielding position. Chinese Communist denunciations of “peaceful coexistence” between the East and West, China’s pursuit of a nuclear weapons program, and Beijing’s support of the North Vietnamese and Laotian Communists—all reinforced the Kennedy administration’s nonrecognition policy. Generalissimo Chiang Kai-shek’s Chinese Nationalist government in Taiwan, backed by a supposedly powerful U.S. China lobby, also inhibited the Kennedy administration’s flexibility regarding China. For over a year, the Nationalists had pressed the administration for military support of a mainland invasion, which Chiang believed would inspire an uprising against Mao’s regime. In mid-1961, Kennedy approved the preparation for six intelligence drops of 20-man teams over South China. Claiming the groups were too small, Chiang never carried out the drops. During the spring of 1962, the Nationalists stepped up demands and requested 16 B- 57 bombers, additional C-123 aircraft for intelligence-gathering drops, and approximately 35 ships capable of carrying a platoon of tanks or an infantry company. Those demands were the subject of discussion when the President, McGeorge Bundy, Desmond FitzGerald, Michael Forrestal, Averell Harriman, and John McCone met in the Cabinet Room. The Kennedy administration’s initial response to Nationalist pressure had been to temporize. Worried about provoking a Communist Chinese or Soviet military reaction, President Kennedy absolutely refused

32. Including President Kennedy, McGeorge Bundy, Desmond FitzGerald, Michael Forrestal, Averell Harriman, and John McCone. Tape 8, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. Meeting on China and the Congo 273 to send Chiang either ships or bombers without sure knowledge that the PRC would not respond with military action. His concern seemed to be justified when, during mid-June 1962, the People’s Republic of China began to amass forces in the Fujian area across from Taiwan. Mao declared that they were for defensive purposes. To defuse the situation, the Kennedy administration assured Beijing that the United States was not backing a Nationalist invasion of the mainland. The administration continued delay tactics with Chiang, partly out of fear that the generalissimo might proceed with invasion plans without U.S. support. President Kennedy did not want another Bay of Pigs, yet he was personally intrigued by guerrilla warfare tactics and searched for temporizing measures. He was therefore willing to consider amphibious landings and intelligence drops of 200-man teams. On June 5, McCone visited Taiwan as part of a two-week trip to Southeast Asia. He informed Chiang that the United States was willing to prepare but not yet implement intelligence-gathering airdrops. Two C-123 aircraft were being equipped, and the President had approved the training of Nationalist aircrews. The administration promised to consider Chiang’s requests for three additional C-123s. McCone was uncertain whether any intelligence-gathering team could survive on the mainland. He also worried that a 200-man drop as opposed to a 20-man drop approximated the first phase of active military operations. The Director of Central Intelligence’s doubts were reinforced by the newly appointed ambassador to Taiwan, Admiral Alan G. Kirk, who assumed his post at the beginning of July. Not coincidentally, Ambassador Kirk was a specialist in amphibious operations, an action also under consideration by the administration. Kirk similarly swayed Mike Forrestal, the National Security Council officer for Asia, who was in Taipei on July 23, 1962. For several months Forrestal harbored doubts about the advisability of intelligence airdrops, especially 200-man teams. Now, in early August, he expressed firm opposition to Bundy: “I have thought a good deal about whether anything should be done, but I have not come up with any course of action to suggest. Unless you have other ideas, I would propose to let the matter drop without letting it go any further.”33 Averell Harriman, the assistant secretary of state for Far Eastern affairs, had also consistently advised the President to resist Nationalist demands. He shared the concern that Chiang was using intelligence-

33. Michael Forrestal to McGeorge Bundy, 7 August 1962, National Security Files, Meetings and Memoranda series, Staff Memoranda, Michael Forrestal, John F. Kennedy Library. 274 WEDNESDAY, AUGUST 8, 1962

gathering schemes as a way of drawing the United States into support of a mainland invasion. President Kennedy began taping as he opened discussion of a draft telegram to Ambassador Kirk about the timing, size, and overall merits of intelligence drops over mainland China.34

President Kennedy: Now that we’ve got those ships, it’ll take at least three months to get those shipments in. Don’t you think? John McCone: October is the [C-]123s. Michael Forrestal: Landing craft, sir, or the airplane? President Kennedy: Landing craft. Forrestal: Landing craft. Now that’s a big operation. Desmond FitzGerald: Operation. McCone: They’d have to be moved forward by then. Forrestal: Yeah. McCone: Because— Forrestal: It’ll take six months, I was told out there by Admiral Kirk.35 McCone: When were you there, Mike? Forrestal: Two weeks ago, sir.36 McCone: You came back [unclear]? [Long pause.] President Kennedy: [marking up text] Dare we modify [the] present policy of the movement of C-123s to Taiwan, updating use as is necessary? That’s how many C-123s? McCone: Those are two of the five C-123s that we’re going to keep in this country. President Kennedy: They’re the ones that we— McGeorge Bundy: Well, the dropped aircraft— McCone: Two hundred–man drop— President Kennedy: [reading while writing and scribbling out text] “And therefore it suggests . . . [reading very fast and mumbling] the Presi- dent . . . on the same basis . . . aircraft with all . . . the [unclear]. [Unclear] agree to modify policy in 1962 . . . brought out already in a different frame [unclear] . . . as long as it takes . . . be made . . . planes will be made available.” [Unclear] get Kirk out there.

34. For a copy of the completed telegram that is being drafted and sent to Ambassador Kirk, see Message from Harriman to Kirk, 8 August 1962, FRUS, Northeast Asia, 22: 301. 35. Admiral Alan G. Kirk was U.S. ambassador to the Republic of China since July 1962. 36. Forrestal was in Taipei on 23 July 1962. Meeting on China and the Congo 275

McCone: I agree.[Scribbling out text.] [Long pause.] Averell Harriman: Now this says the telegram—I think it will be . . . [Let’s] send it around. We could save time from running around on this memorandum.37 [Unclear] memorandum, if you want to underline something. [Unclear.] [Possible break in the tape recording.] President Kennedy: [scribbling text as he speaks] Well, do you think you ought to give him a . . . Is it best to give Ambassador Kirk an explanation of why to take [unclear] 100,000 tons of shipping [unclear] to be in service immediately be it for two-, three-, or four-months’ period . . . from the time it began for service to take place, from the time of their arrival? This is not the kind of situation we want at all because [to] anyone it would seem illogical unless it was real. [scribbling out text] “Is it necessary for us to explain why we can’t go with this 100,000 tons?” That . . . McCone: I thought our reason for not giving it to them was so as to not give them the capability of doing something without our approval. President Kennedy: Right. McCone: And— President Kennedy: Well, only because if we did give it to them without these three months’ periods, obviously I would think [it] would encourage the Chinese Communists to launch an attack on Quemoy and Matsu and force them to build up their defenses. And world opinion would consider this an insane action.38 McCone: Sure, it would become known [unclear]. President Kennedy: In three months, for us to ship a hundred thousand tons . . . Bundy: The trouble with that is that it gives them some incentive to try and figure out a quieter [unclear] way of doing it, and we just don’t want to do it. FitzGerald: And, also, to avoid any three months’ delay that keeps us here. Bundy: We’d have to emphasize the length of time that it takes but at this point [unclear]—

37. According to a note in Harriman’s personal papers, he took the following four documents with him to this meeting: FE No. 884 and attachment (message from Kirk); FCT-7903; memorandum for President from Harriman (original and copy) dated 8 August 1962; and the draft telegram for Kirk from Harriman (see “JFK 1961” folder, W. Averell Harriman papers, Box 479, Library of Congress). None of these items appear in his papers or in the holdings at the John F. Kennedy Library. 38. Since 1954 the People’s Republic of China had intermittently threatened to seize these off- shore island groups. A buildup of six divisions in Fujian Province that began in June 1962 renewed President Kennedy’s concern that Beijing was planning to launch an invasion of the Quemoys and Matsus. 276 WEDNESDAY, AUGUST 8, 1962

President Kennedy: How long is it now? McCone: Really, [unclear] basically we did not think [unclear]. President Kennedy: Only two? [Unclear.] This . . . he always wanted two didn’t he? McCone: He wanted five. Forrestal: Five total—[Unclear exchange.] President Kennedy: Who says that? Harriman: Admiral Kirk only wanted two. President Kennedy: Oh, yeah. [Unclear.] Forrestal: Why do we say, “One or two?” [Several voices at once.] President Kennedy: Well, let’s check that first. McCone: But with two we cannot put it in 200-man drops. We need at least five, so— Unidentified: We need five for a 200-man drop. FitzGerald: We can take about 50 men apiece. [Discussion about the text they are reading.] McCone: We’d like to remove the last sentence from that first page [unclear] message [unclear] and move it into here. [Garbled voices—elliptical comments about rewording of the text.] Forrestal: Mr. President, in paragraph 4, I think Mr. McCone has made the point that he would just as soon we stopped the pressing about these drops. He suggested that we change the sentence in B in paragraph 4 at the very bottom: “Although we do not object to 20-man team drops, we do not want to press this—we do not wish to press any drop into the PRC” in view of that other telegram that you’ve got in front of you. The theory here being that [unclear] actually printed. Twenty-six seconds excised as classified information. McCone: For two months, they’ve had no drops although they had the troops there all the time—a secret deploy[ment] of over a thousand men. And I think they’ve had two amphibious landings, as well, in two months’ time. I think that there’s a hell of a lot of talk going on about this, presently. I think it’s very relaxed. I think if they were dynamic in the movement of those, if we feel they are completely on top of it, then we could send in commando raids of all kinds [unclear] all the rest. President Kennedy: Is this language clear enough? [reading] “Although we do not object to 20-man drops, we would not want to press this size drop.” Harriman: No, [unclear] we ought [to] argue along the lines of what John had in mind—that we do not believe you should press for any drops. But if they made one, we would cooperate with . . . But [unclear] says they . . . Meeting on China and the Congo 277

McCone: I was encouraged, and I was very willing to aid drops that they need up to 20 men. I said increase them when I was over there—for the purpose of this intelligence and testing the conditions on the mainland. President Kennedy: Do we want to say we would support drops up to 20 men? McCone: [Unclear] not the question [unclear]. Do you have the number? Forrestal: Do we want to support any such drops up to 20 men? Or are we saying we’re opposed? McCone: Uh, huh. Harriman: I think we might say to him that [what] we have in mind are smaller drops. Forrestal: [writing] “Soon, we will also have in mind—” Harriman: From the telegram, that they have in mind smaller [unclear]. Forrestal: We were talking about seven-man. Harriman: Seven-man drops. Do you have . . . And do you have the [unclear] put out this [unclear]— McCone: I wouldn’t say that entirely, but I have a certain feeling about pressing for a contingency study for various reasons. I think that— Bundy: I know what Kirk has in mind there and wants contingency staff officers and amphibious operations. You get a sense that if we can get them to look at this problem honestly it will cool the hell out of them. McCone: Is this what he said? Bundy: I have an inclination to believe that under his direction, it will have that effect rather than the reverse effect.39 McCone: Uh, huh. Harriman: I think that— Forrestal: The thing that is bothering us, Mac, is that this might get some publicity. The fact that overt representatives of the U.S.— Bundy: It’s not too hard to put this out on another channel that we’re engaged in bringing home the reality of his lies to these people. I think that . . . It is a hazard, but they live in a never-never land, which really does affect their behavior. We [unclear] really amphibious men would be needed. How many thousand tons of supplies are you going to have to get across the beach per day? I don’t know how you would have to con-

39. McGeorge Bundy has known Admiral Kirk a long time. In 1944 he served as an assistant to Admiral Kirk, who commanded the maritime component of the 6 June 1944 invasion of Normandy. 278 WEDNESDAY, AUGUST 8, 1962

trol and manage the . . . You could put that warning in that you will be glad—[unclear, as someone asks another for coffee]—has to be carefully handled so that it is not an appearance of current planning of a landing. McCone: That’s correct. Forrestal: That’s what I would [unclear]. FitzGerald: Kirk is under the—[Garbled voices.] McCone: —to educate and demonstrate how difficult it is, that’s fine. Harriman: Well, let’s use the word again encouraging because [unclear] encouraging contingencies. Forrestal: He said he would cooperate, but the study may generate additional requests for U.S. equipment and may have security problems or may . . . Bundy: Hadn’t you better make that a new sentence? McCone: Yeah, I think I would. FitzGerald: We want to avoid having a statement on the aspect of general planning. Bundy: I assume your purpose is educational and that you will make every effort to avoid any possibly damaging appearance of joint amphibious planning. [Several garbled voices.] Twelve seconds excised as classified information. Bundy: It’s been increasingly their line, Mr. President. It’s the argument they have used to justify the 200-man team. McCone: Well, he agreed about that and after we had two long discussions on this. We’d start off through the summer with 20-man drops, and if they were successful . . . And we would jointly agree upon each one of those, analyzing the success of the earlier drops. If they worked out successfully, then we’d drop about a 200-man drop in October and there would be five of them. Each one would be subject to concurrence. And the first one would go by the success of the 20-man drop. Then if the fire had been started, then we’d go to the other [unclear], but he said indeed that all actions could be concurred in to go step by step building up into the larger one, to be first started by allowing the 200-man drops. Finally he agreed that he didn’t have any intelligence findings to support their success. Therefore he agreed to the 20-man drops really as exploratory and as intelligence finding. Harriman: Then we swing back to the 7-man drop? McCone: The reason for the 7-man drop was that the 20-man drop would be from a C-54 and the electronic countermeasures for this left it somewhat exposed, so we reduced that to a 7-man so that he could fly them in on a P2V, which had a better chance of survival really than the C-54 transport plane, more maneuverable, and had somewhat better Meeting on China and the Congo 279 electronic gear but it would only take seven men, that’s why I proposed a 7-man drop.40 Harriman: The 123 would be better protected than any other planes we have. McCone: Yes, but it’s not there. It would be better protected and, it’s a better plane to drop them. It’s one of these things we’ve had to worry about with the 20-man drop. You can drop quickly and in a pattern rather than to—sure enough. The one serious problem, you know, these planes will be in the radar, and they have to pull up into slow motion. And I know that with 20 men, the radar will spot them so that then on the ground they will know almost where to go to find the team, whether it’s a 200-man team or a 20-man team. And this is a very serious problem for the whole operation. In other words, if you make it [unclear] high for them to establish their— Forrestal: [Unclear] they’re gonna have to make a visible pattern, but with a— McCone: —prepare to drop— Forrestal: —prepare to drop, you’re going a little bit slow— McCone: Quite slow. Sufficiently slower so that the radar operators can pinpoint where the drop is taking place. Forrestal: If they’re exactly on the [unclear], yes. McCone: [Unclear.] Observing that last U-2 plane, where they picked the plane up—the last U-2 we sent in according to [unclear] from [unclear]. They picked it up 12 minutes after it took off the runway at Taiwan, and they had it in the radar continuously until it was within 10 minutes away. The lights on all the time. They have very good coverage. President Kennedy: Did some planes come up from that last one? McCone: What’s that? President Kennedy: Did they have some planes come up from that last one? McCone: No, I don’t think so, Mr. President. President Kennedy: They didn’t try to . . . They didn’t get close? McCone: They were at 55,000 feet if I recall, and so they were . . . President Kennedy: They never charged us with flying U-2 flights, have they? McCone: Never have. Never have. And incidentally it was a very successful flight. [Unclear] 90 percent . . .

40. The P2V was a slightly smaller plane with two fewer engines than the C-54. It was primarily used as a land-based submarine hunter and therefore carried special detection gear and an electronic countermeasures package. 280 WEDNESDAY, AUGUST 8, 1962

Forrestal: That’s humorous. At 10,000 feet, we’ll give the President another U-2 disaster.41 [Chuckles.] McCone: You can talk [unclear] about how good the weather was. [Laughter.] President Kennedy: [Unclear] get our cover story? Unclear exchange. Several voices can be heard responding to President Kennedy’s joke about getting a cover story. President Kennedy: [chuckling] What is it going to be this time— the Chinese Communists? [Unclear] without warning, be it Vietnam and that’s going to be a [unclear]. McCone: [Unclear.] President Kennedy: [Unclear] the Chinese Communists or the Nation- alists doing anything [unclear] Formosa. Harriman: But I think he got into trouble because he admitted it.42 Khrushchev [unclear] told me so. He took me aside, and he said, “I publicly asked the President now not to admit, but he insisted upon saying he did.” McCone: [apparently jumping to Eisenhower’s defense] Well, I know he had a difficult problem, Averell. I sat in on some of those discussions.43 Twenty-three seconds excised as classified information. McCone: One of the reasons and [unclear] on that— President Kennedy: In drawing that up evidently Ambassador [to the Soviet Union Llewellyn “Tommy”] Thompson told us this morning that [unclear] the fellow from Stockholm the other day on account of [Andrew H. T.] Berding’s book.44 McCone: Oh. President Kennedy: And I guess Tommy didn’t feel comfortable that the President [Eisenhower] couldn’t very well deny it— McCone: With Tommy there he probably couldn’t. President Kennedy: —very well have denied it, I think . . . I don’t . . .

41. Thompson and Kennedy had talked at length about the U-2 affair of May 1960 in a conversation that morning. See note 2 in “Meeting with Llewellyn Thompson on Khrushchev,” 8 August 1962. On 9 September 1962, Communist China would down a U.S.-made Nationalist China U-2 flying a reconnaissance mission over East China. 42. Harriman is voicing the opinion that President Eisenhower had worsened his position because in May 1960 he admitted publicly that he had authorized the violation of Soviet airspace by Francis Gary Powers’s U-2. 43. In May 1960 John McCone was the chairman of the Atomic Energy Commission. 44. On 27 July 1962 the New York Times reported that Andrew Berding, assistant secretary of state for public affairs in the Eisenhower administration, argued in his recently published book, Foreign Affairs and You! How American Foreign Policy Is Made and What It Means to You (New York: Doubleday, 1962), that Eisenhower’s decision to accept personal responsibility for the decision to send a U-2 over Russia in May 1960 was “one of the greatest mistakes in the diplomatic history of the United States.” Meeting on China and the Congo 281

He didn’t say anything about whether there was an alternative statement. As I say, the only thing that I’ve ever felt . . . would have been something: “It’s a matter that . . . It’s being looked into.” Period. Or something. And not made it [the denial] fuller. But I guess [Berding’s] statement probably disturbed Presi[dent Eisenhower]— McCone: Probably so [unclear]. I think [unclear] would write a book on [unclear]. [Mixed voices and laughter, unclear exchange.] Harriman: [Unclear.] At one point, [unclear] Ike turned to Chris [Herter] and said, “Now why shouldn’t I apologize for this?” And [unclear], “No, don’t do it.”45 Now Chip [Bohlen] says that he never heard him say that. President Kennedy: He could have saved himself a lot of trouble by saying he would express regret. Harriman: I know. [Unclear.] I’m saying that this is what Khrushchev told me. It was President Eisenhower that turned to Herter and said, “Well, why shouldn’t I apologize for this?” Chris said, “No, you mustn’t.” Now Chip says he never heard that. Khrushchev told me that [unclear]— President Kennedy: You know, this has nothing to do with anything we talked about, but I was reading this week [Robert] Sherwood’s account of the [1945] Tehran meeting in which you played some role.46 [Unclear exchanges involving Harriman.] [referring to Harriman] He’s a real . . . [unclear] other interest meetings about that [unclear] . . . You’re a survivor. [Unclear exchange.]

Their discussion shifts to the civil war raging in the former Belgian colony of the Congo. The Kennedy administration found Moise Tshombe’s determination as exasperating as the unremitting pressure of Chiang Kai-shek. Tshombe was the leader of Katanga, a state that two years earlier had declared its secession from the newly independent Congo. The day before, a U.S. representative in Geneva had received information that Tshombe was anxious to speak directly with Harriman, who felt he grasped the complexities of the Congolese problem and could serve as Kennedy’s personal emissary.47 Harriman was one of the few open admirers of Tshombe within the Kennedy administration. The

45. Christian A. Herter was secretary of state from 1959 to 1961. 46. The President was referring to Robert E. Sherwood’s book, Roosevelt and Hopkins, an Intimate History (New York: Harper, 1948). 47. Roger W. Tubby (assistant secretary of state for public affairs) to Dean Rusk (secretary of state), 7 August 1962, “Tshombe” folder, W. Averell Harriman papers, Box FCL 18, Manuscript Division, Library of Congress. 282 WEDNESDAY, AUGUST 8, 1962

Department of State, especially the African Bureau, was the center of the anti-Katanga sentiment. On June 30, 1960, after virtually no preparation for decolonization, the Belgian Congo received independence and quickly degenerated into chaos. The Congolese central government was initially divided between President Joseph Kasavubu, a moderate nationalist who headed a regional party, and Prime Minister Patrice Lumumba, a radical nationalist whom many Western leaders considered a Communist. A host of regional and tribal parties, which preferred a confederated political system, created further divisions. Tshombe was head of the largest regional party, the Confédération des Associations Tribales du Katanga (Conakat), based in the mineral-rich Katanga province. Financially backed by the Belgian mining company Union Minière du Haut Katanga, Tshombe announced the secession of Katanga on July 11, 1960. President Kennedy sought the reintegration of the province because most of the developing countries considered Tshombe a Belgian stooge. The Congo posed a serious foreign policy dilemma for Kennedy. If he supported European clients in Africa, he risked antagonizing the developing countries and possibly paving the way for Soviet influence. Yet if he opposed his allies in Africa, he might alienate the NATO allies. Kennedy viewed U.N. intervention as a way out of this policy conun- drum. Outside aid poured into the fighting parties from East and West bloc countries. Foreign mercenaries supported various Congolese factions. Murder and political chaos prevailed. Lumumba was delivered to Katanga and killed by his enemies there. On September 17, 1961, U.N. secretary-general Dag Hammarskjöld died in a plane crash while en route to meet Tshombe in Northern Rhodesia. Speculation that Tshombe’s forces were responsible added to the confused state of affairs. The U.N. forces had helped prop up a fragile national government in Leopoldville (now renamed Kinshasa) but had not yet intervened decisively against the rebel government of Katanga. Kennedy, who was committed to a united Congo under a non- Communist leader, worried that as long as Tshombe’s secession continued, leftist separatist Antoine Gizenga (Lumumba’s successor) would draw Soviet support for his rival national regime at Stanleyville (now renamed Kisangani). From Kennedy’s perspective, the first major breakthrough in resolving the civil war came in 1961 when Cyrille Adoula formed a moderate central government. Despite continued U.N. mediation talks and intermittent cease-fire agreements, hostilities between Tshombe’s forces and those of the central government persisted. In early August 1962, the Kennedy administration worked with Meeting on China and the Congo 283

Belgian, British, and French representatives on a proposal for national reconciliation, which they planned to present to acting U.N. secretary-general U Thant.48 On August 3, Under Secretary of State George Ball submitted a four-phase course of action to Kennedy. The first phase would be the approval of the reconciliation plan by Adoula, while the second phase demanded Tshombe’s acceptance within ten days after receipt. The third phase asked for an embargo of Katangan copper, while the fourth phase called for U.N. enforcement of such an embargo.49 On August 6, President Kennedy approved the program. As the conversation shifted to the Congo crisis, uncertainty remained about Tshombe’s cooperation for reintegration.

Forrestal: Your next exasperation now, Mr. President—Tshombe. [Laughter.] President Kennedy: Did you realize that [unclear]. [Explosive laughter.] Tshombe wants to meet with Governor Harriman? Forrestal: Tshombe said that he is at his wit’s end and the man that could help him was Harriman. President Kennedy: He said that? Harriman: I was told to see him in Geneva, and I ended the telegram by saying I think this fellow could be made a good friend of ours if we pay some attention to him. Nobody’s paid any attention to him since . . . He’s never seen anybody. President Kennedy: Are you [unclear]. Harriman: And he told me on . . . He said he’d come back to meet with the four powers anytime.50 President Kennedy: When did the recent procedure— Bundy: He told David at the ILO a couple days ago that he would go anywhere to meet Governor Harriman.51 President Kennedy: How about going back to Geneva? [Laughter.]

48. For a text, see, “Proposal for National Reconciliation,” “Congo, 7/28/62–8/2/62” folder, National Security Files, Box 28a, John F. Kennedy Library. 49. Memorandum, George Ball to President Kennedy, 3 August 1962, FRUS, 20: 527–32. 50. Belgium, Great Britain, France, and the United States were the four nations involved in devising the plan for national reconciliation. 51. On 7 August, during a private dinner in Geneva, Tshombe told David Morse, the director general of the International Labor Organization (ILO), that he was “most anxious to talk to Averell Harriman under any circumstances, in any place that could be arranged” (FRUS, 20: 534). 284 WEDNESDAY, AUGUST 8, 1962

Bundy: He’ll go anyplace, but the Governor won’t.52 [Laughter.] Harriman: I think if— President Kennedy: Well, what about somebody seeing Tshombe? Forrestal: That’d [unclear] good idea. Harriman: Well, seriously, I could go to him and go and see, if there’s any reason to be— President Kennedy: How about let’s look into that. I don’t think we ought to just— Forrestal: I agree. Harriman: Harlan’s supposed to meet this morning.53 He said he’d go tonight— President Kennedy: I think you’re the one to go. I think it— Harriman: [Unclear] and I saw him. He kept his word to me. He came to see me with one of these native grandfathers. He came to the United States in May of 1960.54 Two black men— President Kennedy: Tshombe? Harriman: Tshombe and this other fellow. Unidentified: Lumumba?55 Harriman: No, no. The other fellow next to him who created trouble.56 Anyway, he told me then. He said, “Now, Lumumba’s going to win the election—because we haven’t got enough money. We can carry our tribes locally, and Lumumba’s going to be Communist and we’re going to have difficulty.” And so we discussed that. And I went to see him—called on him at the hotel, as I was asked to, and the press caught me there. I said, “I’m just going to tell him . . . I’m going to do nothing except tell him that you called on me in my house,

52. Harriman, who felt uncertain about President Kennedy’s opinion of his usefulness, often believed he had been “exiled to Geneva” and jokingly used that phrase with colleagues. 53. Harlan Cleveland was assistant secretary of state for international organization affairs. In that capacity, he worked closely with U.N. representatives to end the Congolese civil war. 54. On 3 May 1960, at his New York residence, Harriman hosted 34 corporation executives to garner support for an African trade and investment conference scheduled four months later at New York University. At this time, Tshombe was visiting the United States for the first time. He was in Washington, D.C., where he hoped to win political friends with his pro-Western stance. On 10 May 1960, at 4:30 P.M., in Washington, Harriman met with Tshombe and Chief Albert Kalonji. The meeting was not reported in the press, and no record of their conversation has been found. Kalonji, the principal leader of the Baluba tribe of South Kasai, traveled to the United States with Tshombe in May 1960 and later, in August of that year, followed his example and declared South Kasai an autonomous state. 55. Patrice Lumumba, former prime minister of the Republic of the Congo, had been killed in January 1961, just before Kennedy took office. 56. Reference to Chief Albert Kalonji. Meeting on China and the Congo 285 so I returned the courtesy call.” Well, we lunched together the next day, and he stuck to that story. There was no publicity about it at all. Now he could have used my having called on him very much to his advantage at that point. President Kennedy: Why don’t we look into this and see whether we can figure out some reason for the Governor to be going to Europe anyway. Bundy: He can go to Paris and serve the French some news on Laos. Or he can go to . . . There are lots of reasons for Averell to go. President Kennedy: Well, why don’t we wait and see how long Tshombe’s going to stay in Europe and whether we ought to respond to— Harriman: He’s only going to stay until Friday, I think, and Congress . . . Bundy: He would stay over. And then—I mean, if we could get the people who see to this. Harriman: I have no idea— Bundy: I think the hazard is that the U.N. crowd and Adoula crowd will then put a plan . . . President Kennedy: I think that would be— Harriman: On a fresh note, the news is that this fellow is as a confirmed non-Communist as the Communists are Communists. He was educated by a Baptist fishing house, and he is as intelligent in many ways, converted by a black man.57 They see things very rigidly. He’s concerned over what’s going on in Leopoldville.58 He says he trusts Adoula but not to run. . . . What he wants, of course, is a much looser federation than anything that anyone’s had in mind. And I’m not going to agree to that. I do have a feeling that if we paid a bit more attention to him he would be more amenable. I don’t know that he’d be completely amenable. He’s a very determined young man. I must say I respect the fellow in spite of the fact he may be on the wrong side. On the basis . . . They beat him up pretty badly. He described that they beat him, and so on, and put him in jail, and he said he was lucky to get out alive. And he didn’t want to go through that one again.59

57. Moise Tshombe was actually brought up in the Methodist religion by U.S. missionaries. The eldest son of 11 children, Moise, as a young adult, kept the account books for his father’s successful businesses, organized a troop of boy scouts, and directed a Methodist youth association. 58. Capital of the Congolese central government under Cyrille Adoula. 59. On 26 April 1962, Congolese soldiers of the central government detained Tshombe at the Coquilhatville airport and placed him under house arrest until his release on 22 June 1962. He was treated hospitably. Harriman’s reference to Tshombe’s beating is from an earlier undetermined incident. 286 WEDNESDAY, AUGUST 8, 1962

President Kennedy: Well, let’s check into that, shall we? Unclear conversation as meeting breaks up. The machine was turned off.

Ultimately President Kennedy did not send a personal emissary to Tshombe in Geneva. Harriman had been an unpopular choice for this mission among the Africanists in the State Department and was dis- carded in favor of Under Secretary of State George Ball. But Ball never made it to Geneva, either. United Nations officials opposed separate U.S. mediation, fearing this would undermine their own efforts at conciliating the parties in the Congo. And Kennedy himself began to have doubts that this initiative was a risk worth taking. If Tshombe refused to accept the reintegration of Katanga with the rest of the Congo, a presidential mission might only achieve international embarrassment. Director of Central Intelligence John McCone remained behind in the Congo meeting to speak privately with the President. Kennedy did not tape this meeting, which lasted 20 minutes, and no memorandum of the conversation has been found. Nevertheless, the topic was almost certainly Cuba. The members of the Special Group (Augmented), which included McCone and all of the rest of Kennedy’s covert action policy team, had received that morning a key paper on U.S. policy toward the Castro regime: “Consequences of (U.S.) Military Intervention (in Cuba) to include cost (personnel, units, and equipment), effect on worldwide ability to react, possibility of a requirement for sustained occupation, the level of national mobilization required, and Cuban counteraction.” The paper was to be the basis for discussion at the next meeting of the Special Group, scheduled for August 10. McCone may well have also raised in this short discussion with the President some new intelligence about developments on the island. A report then circulating in the intelligence community argued that the Soviets were establishing a submarine base in Cuba.60 Following the meeting with McCone, the President tidied up some loose ends in the office for three-quarters of an hour, then went to the Mansion for the day.

60. Indeed, at that time, in addition to their secret plan to place medium range and intermediate range ballistic missiles on Cuba, the Soviets had also decided to build a submarine base in Cuba. Seven ballistic missile submarines and four diesel submarines with nuclear-capable torpedoes had already been designated (see Fursenko and Naftali, “One Hell of a Gamble,” pp. 188–89). Khrushchev would get cold feet about the submarine base in September but, of course, would push on with plans to deploy the nuclear missiles. On 10 August, General Edward Lansdale, the chief of operations, Operation MONGOOSE, called the State Department to request a Meeting on Peru and Haiti 287

Thursday, August 9, 1962

The President had an especially difficult set of problems, foreign and domestic, to occupy his time. He was in the midst of two major discussions on future policy toward Peru and on the quickie tax cut that were being followed closely in the press. Any delay in those might signal indecision. The recognition of the Peruvian junta was the first decision he would tackle this day.

10:00 –10:55 A.M.

Mr. President, I think we ought to consider seriously whether or not the [Central Intelligence] agency should not be entrusted to continue with the evaluation of personalities and possibilities to see whether or not a plan could be developed with our help, which might be coordinated and sensible and might have some chance of success both in terms of removing [François] Duvalier and replacing him with something we can live with.

Meeting on Peru and Haiti1 President Kennedy faced two important decisions. Since the end of July, he had wanted to recognize the military junta in Peru if a way could be found that would not make him look like a hypocrite. The President had identified himself with the policy of not recognizing the government. To find a way out, the President used the State Department and his friend the jour-

paper outlining certain possible U.S. responses to the establishment of a Soviet submarine base in Cuba. Although State Department experts considered the possibility “too remote to waste time on,” Lansdale circulated the report anyway (see “Thoughts for 2:30 Meeting,” 10 August 1962, FRUS, 10: 920–23).

1. Including President Kennedy, McGeorge Bundy, Richard Goodwin, Richard Helms, J. C. King, Edwin Martin, Graham Martin, Teodoro Moscoso, and Frank Sloan. Tape 8, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 288 THURSDAY, AUGUST 9, 1962 nalist Charles Bartlett to present a three-point package to the Peruvian generals that would allow the U.S. government to recognize them. The junta had responded favorably to U.S. actions. In an interview with Ben Meyer of the Associated Press on August 5, the head of the junta, Major General Ricardo Pío Pérez Godoy, promised the restoration of civil rights, committed the junta to a free and fair election in June 1963, for which none of the junta members would be candidates, and added that, if asked, the junta would allow OAS observers during the election campaign. These were the three conditions for recognition established by the Kennedy administration. When President Kennedy read about this the next morning, he was prepared to establish relations with the junta. He was persuaded by Edwin Martin and Arthur Schlesinger, however, to wait until at least August 8, the date of a scheduled Organization of American States (OAS) Council meeting at which the Peruvian delegation might formally reaffirm these promises.2 The second issue for the President also involved making a choice between Edwin Martin, the assistant secretary of state for inter- American affairs, and other members of his Latin American policy team. Haiti’s leader, François “Papa Doc” Duvalier, had become an embarrassment to Washington. An ally of the United States since coming to power in 1952, Duvalier was diverting U.S. economic assistance to build monu- ments to himself while using U.S. military support to raise a civilian militia that only he controlled. Duvalier’s decision to “re-inaugurate” himself in May 1961 after only four years of a six-year term set off a reexamination of the Kennedy administration’s policy toward the dictator. There was much talk of possibly a military solution to remove Duvalier. But no new policy initiatives emerged. Secretary of State Rusk summed up the prevailing feeling: “[W]aiting for a chance to use force is no answer either, because the problem is neither military nor cloak and dagger.”3 Official U.S. patience with Duvalier, especially on the part of the State Department, waned over the next 12 months, especially as evidence mounted of the misuse of U.S. development assistance to build Duvalierville, a huge complex dedicated to the glorification of the dictator and his family. On June 1, in a meeting with U.S. ambassador

2. Memorandum for the Record, 6 August (Maxwell Taylor Papers), cited in FRUS, 12: 876. 3. Rusk to Department of State (from Paris), 2 June 1961, FRUS, 12: 757–58. Meeting on Peru and Haiti 289

Raymond L. Thurston and the deputy assistant secretary of state for inter-American affairs Richard Goodwin, President Kennedy authorized a policy of identifying and supporting a “viable alternative” to Duvalier, putting in motion what was termed a “probing operation.”4 Meanwhile it was decided to close down most of the Agency for International Development program in Haiti and to suspend deliveries under the Military Assistance Program [MAP].5 In early August signs that a coup to overthrow Duvalier might be at hand set off a policy debate in Washington. On August 2, Thurston cabled that a pro-American group of Haitian military and civilian officials represented the “most cohesive and effective challenge to Duvalier that has come to our attention.”6 Although both State and the CIA agreed that Thurston had probably exaggerated the capabilities of this group, the agencies disagreed over what to do about it.7 The CIA, in the person of Richard Helms, the deputy director for plans, and his chief of the Western Hemisphere Division, J. C. King, believed that there was little that U.S. covert assistance could do to undermine Duvalier in the short run. The State Department’s Edwin Martin, on the other hand, wished the CIA to take a more active stance. Just as this meeting with Kennedy was to begin, news reached Washington that seemed to confirm the CIA’s pessimism. On August 8 Duvalier had foiled a coup attempt by the chief of staff of the Haitian Army, General Jean René Boucicaut. Within hours of reporting his intentions to Colonel Robert Heinl, the head of the U.S. Naval Mission in the Haitian capital of Port-au-Prince, Boucicaut had sought asylum at the Venezuelan Embassy.8 For the State Department this was especially ominous news. Boucicaut had been considered Duvalier’s most serious

4. Memorandum from the Executive Secretary of the Department of State (Brubeck) to the President’s Special Assistant for National Security Affairs (Bundy), 1 June 1962, FRUS, 12: pp. 764–66. 5. Oral History Interview with Raymond Thurston, 9 June 1970, John F. Kennedy Library; Port-au-Prince to SecState, 7 July 1962, “Haiti” folder, National Security Files, Box 103, John F. Kennedy Library. 6. Telegram 56, Port-au-Prince to SecState, 2 August 1962, FRUS, 12: 769, note 4. 7. “The Situation in Haiti,” FRUS, 12: pp. 767–69. 8. Thurston’s cable describing Boucicaut’s flight to the Venezuelan Embassy reached the State Department at 10:45 A.M., 9 August 1962. Telegram 67, Port-au-Prince to SecState, 9 August 1962, National Security Files, Haiti, Box 103, John F. Kennedy Library. Comments by the CIA representatives of the 10:00 A.M. meeting with President Kennedy indicate that CIA headquarters learned of Boucicaut’s flight earlier. 290 THURSDAY, AUGUST 9, 1962

opponent. Now the question for President Kennedy was whether, in view of the failure of the local Haitian opposition, the United States should adopt a policy of creating a viable alternative. The meeting began with a report from Edwin Martin on the Peruvian junta’s statement at the Council of the OAS.

Edwin Martin: Yes, well, not very fully, but we did know about it a little before it was made public, fortunately. President Kennedy: Then why did . . . They [the Peruvian junta] had said there would be [unclear]. Didn’t they? Edwin Martin: Their man here had said that, but they didn’t live up to that. I think, we feel that we probably, in getting the formal statement to the OAS—of things they have said previously elsewhere—have gotten what they consider to be a major concession and are not going to [unclear] anything more.9 President Kennedy: Was there anything about the observers? Edwin Martin: They will not make any formal statement about observers. What they have said is that they will welcome representatives, individuals or groups, who will observe the election [unclear] the country, if they wish. And it is possible that they may invite somebody. What we’re hoping to show the Secretary this morning . . . is a statement on resumption which calls attention to the commitments they have made, emphasizes the fact that they have offered to let people in. They just need to come forward . . . for us to arrange to have— President Kennedy: When did they make the statement about inviting people in? Edwin Martin: Well, they made this first in the Godoy statement to Ben Meyer, of the AP; and then they reaffirmed it yesterday at the OAS, quite categorically.10 And . . . that we are looking forward to arranging

9. At the OAS, the junta’s representative agreed to permit OAS observers at the 9 June 1963 election. It was in hopes of getting this statement at the OAS that Martin had counseled delay in recognizing the junta. 10. Ben F. Meyer, “Peru Chief Pledges Anti-Red Stand,” Washington Post, 6 August 1962. For a text of the full interview see “Interview Granted by Major General Ricardo Pérez Godoy, president of the government Junta of Peru, to Mr. Ben Meyer, Associated Press correspondent in Washington,” “Peru” folder, National Security Files, Box 151, John F. Kennedy Library. In response to a question about “inviting an impartial group of eminent persons to observe the elections in June 1963,” Godoy said, “It is possible that qualified groups or persons will be invited for that purpose.” Meeting on Peru and Haiti 291 for people of international stature to be present to see how they carry out these commitments that they have made. President Kennedy: What about—Did you see, was it, Tad Szulc’s article this morning?11 Edwin Martin: Yes, we knew he had the—one of our people was there when the tape was shot. President Kennedy: How was the tape taken? Edwin Martin: I guess that if anything he just did [it] without telling anybody, he had it someplace around the room. President Kennedy: [Unclear.] Edwin Martin: Yes. Unidentified: I’d say he has a great deal of experience. [General laughter.] President Kennedy: But I would think that . . . that makes it a little more [unclear]. Edwin Martin: Oh, Víctor Belaunde has been running around town making very strange statements, I spent an hour with him and— President Kennedy: Does he represent the government here or is he sort of self-appointed? Edwin Martin: I think there was a certain amount of [unclear]. He’s not an official representative in any sense, but they are happy to have him come and use his international stature if that’s good to lobby for their cause. But I don’t think you could label him as an official representative, in any sense. They would be free to disown what he said if they chose. President Kennedy: How can we get this in a way in which these points that have been made . . . and there haven’t . . . I think we can point to quite a lot of— Edwin Martin: Yeah. President Kennedy: progress, verbal and— Edwin Martin: And the recognition of the inter-American system by making the commitment publicly and formally to the OAS. I think we’ve got to say that . . . which helps. President Kennedy: The thing is, what would you see as the time schedule on this? Edwin Martin: Well, I think it’s, as far as we’re concerned, I think we could be ready for tomorrow, [unclear] tomorrow noon, especially when

11. “Peru Bids Latins Oppose U.S. Move,” New York Times, 9 August 1962. Szulc reported statements made by Dr. Víctor Andrés Belaunde, a special envoy of the junta, during official visits in Washington. 292 THURSDAY, AUGUST 9, 1962

we know and give a little more time to the Latin American countries to notify their . . . We’re checking— President Kennedy: What about the Venezuelans, et cetera, what would be their position? Edwin Martin: Well, they, I think, from the start have made it clear that they will not resume relations. President Kennedy: What about the small, the small countries? Edwin Martin: I’m not so sure about Costa Rica. But certainly the Dominican Republic. Costa Rica and Honduras are a little less clear. But two would certainly not. President Kennedy: Do they feel that we have . . . ? Edwin Martin: Well, I think that we have a chance at helping with them. I don’t think they will feel hurt that we’ve resumed relations. They’ve expected this and [unclear] to be isolated on this. They accept that. But they introduced yesterday a modified resolution for a foreign ministers’ meeting; instead of asking for a decision then to convoke at another time, they said, “we propose that a committee be appointed to study the question of the time, place and agenda for a foreign ministers’ meeting,” which is a little less severe. And our present feeling is that, in view of the failure of the Peruvians to come forward with an invitation to the OAS, we perhaps ought to vote for this: a meeting at an indefinite future, perhaps with a somewhat broadened agenda possible. This is coming up for a vote tomorrow afternoon. President Kennedy: Will it carry? Edwin Martin: With our vote, we think it will. President Kennedy: Yeah. All right.12 Their statement with regard to observers, I heard you say, I didn’t see anything about it in the paper, really, today?13 Edwin Martin: There is not, no. But— President Kennedy: You said that they would correct the [unclear]. Edwin Martin: Yeah. President Kennedy: Clear it up. Is there any way we can still take that up, the . . . ?

12. The United States abstained on the Venezuelan resolution at the OAS meeting. It did not pass. In his memoirs, Edwin Martin writes that this vote took place 9 August. Edwin Martin, Kennedy and Latin America (Lanham, MD: University Press of America, 1994), pp. 355–56. 13. Kennedy is concerned that the junta’s 8 August statement at the OAS Council guarantee- ing an invitation to OAS election observers is not widely enough known. Meeting on Peru and Haiti 293

Edwin Martin: Yes. Well, I think we can take that up. President Kennedy: The OAS, up? McGeorge Bundy: Have they gone that far, Ed? Edwin Martin: Well, that they would be willing to receive, and that their country is open to observers, either individuals or from organizations. Bundy: That goes a little bit further than the interview then?14 Edwin Martin: A little bit I think, yeah. President Kennedy: Would we be, could we— Edwin Martin: Don’t have that. President Kennedy: We couldn’t get the OAS to accept that and say that they will send them, would they? Edwin Martin: No, I don’t think so at this time. The noninterventionists would oppose, would block an OAS resolution to say, “we accept we’re going to send.”15 We’ve explored that and we think not. If the situation should develop in a somewhat unsatisfactory [way] such that maybe next spring you could have a better chance of getting it; but this leaves it the [unclear] open for the OAS to make a decision. President Kennedy: Do you think that we ought to wait until next week or go ahead tomorrow? Edwin Martin: I think we ought to go ahead myself. President Kennedy: Yeah. Edwin Martin: I think that we’ve squeezed all the juice we’re going to get out of this. Jim feels, I think, the same way.16 We’ve got one other little problem that also presses for time. The sugar issue is ominous. The Department of Agriculture, not realizing the pitch, okayed a couple of shipments a couple of days ago. And, up to that point, the sugar companies, both [unclear] Grace did not apply; but one of the companies that is less cooperative did apply for two shipments and Larry Myers from Agriculture called me yesterday to say that we had just found out that one of his people had okayed it.17 Now this is a legal problem; there’s some question whether he was legally authorized to do so and Larry is trying to [unclear]—

14. The interview with Ben Meyer of the Associated Press; see note 4. 15. The noninterventionists were countries like Mexico that opposed all intervention by the OAS in the internal affairs of member states. 16. James Loeb was the U.S. ambassador to Peru and had returned to the United States after the military coup. 17. Lawrence Myers was the director of the Sugar Branch, U.S. Department of Agriculture. 294 THURSDAY, AUGUST 9, 1962

President Kennedy: How could he okay it with all that has been in the paper about Peru and . . . Did he not see it? Edwin Martin: One would have thought so. [Laughter.] Larry Myers is trying to persuade the company to let it sit in the in box until the end of the week, and not get any publicity on it. President Kennedy: Why . . . do you think that the publicity would . . . Edwin Martin: Well, the publicity would—we would have to explain how we did it under the law and this would give [unclear]. President Kennedy: What? Because we haven’t recognized them? Edwin Martin: Because we haven’t [unclear]. President Kennedy: Couldn’t we override the— Edwin Martin: Well, I don’t know if we could withdraw the authorization already given or not. This would be a little problematic [unclear]. President Kennedy: Well, in any case . . . the only thing would be, it seems to me, that Belaunde, that earlier Szulc’s et cetera, [Martin mumbles agreement] doesn’t it raise the question of whether we want to go ahead this week or [unclear] wait till Monday? But it’s a little bit like . . . Edwin Martin: We’re operating under pressure? President Kennedy: Well, yeah, particularly as their statements did not get the kind of publicity that would have— Edwin Martin: Yeah. President Kennedy: —made it easier, but we can think about that. Edwin Martin: We will. We’ll do that. I’ll talk to the Secretary about that. Bundy: Do we have a text that would, in fact [unclear]? Edwin Martin: I have not seen an English translation as yet, at the moment. [Unclear] or not. I didn’t get a chance to see it. [Unclear.] President Kennedy: You can’t think of any [unclear] way that, so that it doesn’t look like [unclear] . . . Edwin Martin: Yeah. President Kennedy: You see, we haven’t gotten really the kind of publicity yet. . . . He may [unclear] and get conscious of the degree . . . how far really they’ve gone. Edwin Martin: And of course, the most previous New York Times story that focused on Belaunde saying [unclear]. So that won’t be a surprise. [Unclear.] But it would be nice if the New York Times [unclear]. The New York Times [unclear]. Martin then turned the conversation to the principal item on the meeting’s agenda, U.S. relations with François Duvalier of Haiti. Meeting on Peru and Haiti 295

Edwin Martin: With respect to Haiti, Mr. President, I’d just like to make two or three general observations and then ask for various agency representatives here to comment on their situation. I think we have come to the very firm conclusion that the Duvalier regime is irredeemable, there’s no possibility of persuading them to adopt a more reasonable course. That it is one of the most brutal and dictatorial [regimes] that Haiti has suffered. They’re doing little, if anything, to help the people with their economic or social development of any kind. And it is following a consistent policy of encouraging a buildup of a militia devoted to Duvalier at the expense of the regular armed forces. As a result of this situation, we feel that we must consider seriously: one, the prospect that unrest within will accelerate and cause a crisis—particularly, unrest stimulated by the military fear that time is against them. And we must consider secondly, what it is in our interest to do, following upon this framework. There is also some reason for concern about Castro influence. Duvalier has replaced some of his top officials with people who’ve had Marxist-Leninist connections and there are some elements that might take advantage of chaos to move in this direction. I don’t think we feel Duvalier has any particular principles and would move in whatever direction that suited his purpose in maintaining himself in power. Within this framework, we have to some degree encouraged dissatis- faction by a series of actions making it clear or trying to make clear that we were not in full-hearted support of the Duvalier regime. And this is clearly known to Duvalier and to informed people in Haiti, I believe, at the present time. We have just taken some further steps which will be interpreted in this way, although their basis was essentially technical problems with the aid programs. And, I think it would be useful if Graham Martin could explain just where we stand on economic aid.18 And then [Frank K.] Sloan can explain where we stand on military aid at the present time.19 Because these do affect not only our aid program but the political situation in Haiti because of their impact. Graham Martin: When [Under] Secretary [George] Ball on July 21 signed off on the joint AID-ARA recommendation cutting down to a

18. Graham Martin was deputy coordinator, Alliance for Progress. 19. Frank K. Sloan was deputy assistant secretary of defense for international security affairs. 296 THURSDAY, AUGUST 9, 1962 hard core, we put in motion the cancellation of the Artibonite area development20 and the Poté Colé area development project.21 We decided to go ahead on the airport loan on the basis that we had to do something to stay within the policy guidelines about the [unclear]. This has the advantage as we understand it of providing a jet-capable airport that we assume [unclear] would be for military use.22 We decided not to go ahead with the road project because this would automatically trigger an IDB loan, which was a maintenance thing, which would come along afterward.23 We had canceled other parts of the program, leaving, in effect, those elements which were more of a humanitarian nature, fairly educational: A rural educational project which is small but fairly well based The malaria eradication program, which is largely and jointly, an international program under the WHO24 We can phase our personnel down from the current strength, the ongoing strength of about 70 to about 36 over the next few weeks. This about, I think, sums it up. Unidentified: Would you say . . . why were you in trouble there . . . the technical reasons? Graham Martin: Well, the technical reasons are that on the use of personnel there has been a progressive, both on equipment and personnel . . . a diversion of the resources for purely political uses of the Duvalier regime. Because of this, actually, the Artibonite and Poté Colé suspension

20. In the Artibonite Valley Project, the U.S. Agency for International Development [AID] supplied assistance to promote vegetable and fruit production in the valley. A State Department inspection in late June 1962, conducted by the Bureau of American Republics Affairs [ARA], concluded that AID should divorce itself from the Artibonite Project: “Massive expenditures over a long period of time, plus a level of Haitian administrative, technical, and financial support which we see no serious prospect of coming into being, would be required to make the project work” (J. K. Mansfield to Fowler Hamilton, 26 June 1962, RG 59, Haiti 1952–64, Box 4, Archives II. Mansfield was a special assistant to the Secretary of State for foreign aid coordination. See Oral History Interview with Raymond Thurston, 9 June 1970, John F. Kennedy Library). 21. The Poté Colé area development project was under joint U.S.-Haitian management, initiated in 1958, in the northern part of Haiti. The goal was to assist the development of small manufacturing plants and tourist facilities. (“Designation, Joint Responsibilities and Duties of Principal Haitian and American Officials in Operations Poté Colé,” 4 May 1961, RG 59, Haiti 1952–64, Box 4, Archives II.) 22. The Department of Defense (DOD) and the Commander in Chief, Atlantic (CINCLANT) were interested in the completion of the new commercial airfield in Port-au-Prince. In May 1962 the DOD was able to alter the specifications of the runway, lengthening it from 7,460 to 8,000 feet, to accommodate jets (see correspondence on the Airport Loan, ibid.). 23. The abbreviation IDB stands for the International Development Bank. 24. The acronym WHO stands for the World Health Organization. Meeting on Peru and Haiti 297 is not really being noticed, because in effect they had been suspended for quite some time while this technical issue was in debate over there. President Kennedy: Is there—did we make, did we make a commitment in front of [unclear] in regard to the [unclear] project or [unclear] project? Graham Martin: It’s a question of whether it actually was a commitment on the airport loan and the highway loan.25 And they were discussed. Unidentified: And I think that there was a commitment. President Kennedy: There was? Unidentified: Since we [unclear] at the time. Unidentified: Was it? Was it? It was— Unidentified: And they understood it as well. Unidentified: It was a commitment, Mr. President, that had certain conditions attached to it, that the Haitians were to perform in connection with the loans. That they were to meet normal requirements established for loans of this type and one of the serious difficulties we have had with the Haitians is that they have violated written assurances on the diversion of equipment as Mr. Martin has said from our projects for entirely political purposes. President Kennedy: To do what? Unidentified: They have used trucks and earthmoving equipment for a special project arranged by President Duvalier, which is entirely, almost entirely a shakedown of the business community in Port-au- Prince. This is supposed to be a model city called Duvalierville. The earthmoving equipment has been diverted to the preparation of the ground for this undertaking. In the May 22 ceremonies marking the reinauguration, the anniversary of the reinauguration of Duvalier, they stripped the Artibonite project of trucks and used them to haul civil militia and the peasantry into Port-au-Prince for the celebration.26 Edwin Martin: They were gone ten days, weren’t they? Unidentified: They were gone ten days—yes, sir. And they have, they . . . this kind of diversion which had existed in the past and on which we had received written assurances from the Haitians— President Kennedy: How much is involved in these two projects? Unidentified: The Artibonite, for the last year, took about 1 million

25. An AID loan to build a road to Aux Cayes. 26. On 22 May 1961, four years after his election to a six-year term, François Duvalier had “reinaugurated” himself for an additional six-year term, thus effectively canceling the presidential election scheduled for May 1963. 298 THURSDAY, AUGUST 9, 1962

of the total 7.25 million of the, what we call a hard-core aid program, aside from the loans. The Poté Colé has about 750,000 dollars. President Kennedy: Were these very important to him? Unidentified: The . . . this is the point I would like to make, Mr. President, one of the very important factors we have to take into account is Duvalier’s use of our economic assistance and the military assistance as evidence of U.S. support for him. He plays this line very hard and it has had a substantial impact in the past on the opposition to him, who look upon it as evidence of our— President Kennedy: How much opposition is there to him? Unidentified: The opposition—it’s hard to give in numerical figures, Mr. President, but it is very widespread. It is centered in the business community, in most of these military sectors and among the intellectuals. President Kennedy: Now, what about the . . . our Army mission there . . . Marine mission? What’s gonna—what are we going to do with that? Edwin Martin: Do you want to talk about the [unclear]? Frank Sloan:27 Necessarily, the status of it is, the MAP28 [unclear] deliveries were all suspended a couple of months ago for the very same reason, that they were, well first, that they were refusing to account for the material and to permit our people to inspect them.29 And I think you have a good bit of the ammunition in the basement of the palace and were not permitted to be examined and they were all—30 Edwin Martin: This is under the palace guard, which is not part of the regular military that is supporting us. . . . And the military did not have access to [unclear] [stock]piles. Sloan: Yes, that’s correct, and he’s building up also the militia units which have nothing to do with the MAP planning program for the regular army units with which we are working. President Kennedy: Is that Marine . . . Marine colonel in charge of it?

27. This is a tentative voice identification. Frank Sloan’s voice has not been identified. However, he is listed as the DOD representative at this meeting, and this is the voice that briefs the President on the DOD situation in Haiti. 28. The acronym MAP stands for Military Assistance Program. 29. Although the suspension took place, the United States chose not to make a public announcement of the suspension of military assistance. 30. The U.S. ambassador, Raymond Thurston, later recalled that the United States was “sending in a million dollars a year in ammunition, small arms and so on” (Thurston, Oral History, 9 June 1970, John F. Kennedy Library). Meeting on Peru and Haiti 299

Sloan: Yes, Colonel [Robert D.] Heinl.31 [An unidentified speaker also says “Heinl.”] President Kennedy: He’s living at the Palace? Unidentified: No, sir. President Kennedy: Where does he operate out of now? Sloan: He worked with the regular Army people. Unidentified: He works out with General [unclear]. President Kennedy: Now you keep him, you keep this mission there, will you. Sloan: Yes. We have 21 officers and 19 enlisted. The ambassador suggested that we might at one time consider letting this decrease gradually by normal attrition but counter to that is the problem of not only maintaining our connection with the military that is very friendly to us but also the use of these people on the ground in case of a coup or an uprising because the ambassador and General [Andrew P.] O’Meara have also suggested a thing which we are going forward with CINCLANT to consider at this time, the prepositioning of some riot stuff and small arms and things of that sort which can be put in there quickly.32 And the principal problem in this, from a strictly military viewpoint, is not getting the stuff there but getting it distributed and having it used in a controlled and sensible manner. And so, I think that we have determined, both for its military value and because it probably has very little effect on Duvalier anyway to try to reduce the number of missions as a pressure proposition, to just go along with them at their present strength and— Edwin Martin: We [unclear] assumption that we’ve made clear was that we did not want them to press Duvalier so far that he would throw the missions out— Sloan: Right, right. Edwin Martin: We thought it was important to keep them in. President Kennedy: Yeah. Now our relations are pretty good with the . . . Is the Haitian army disturbed by the development of the militia?

31. Colonel Robert D. Heinl, Jr., was a Marine officer who had written a history of the Marines. Thurston recalled him as “a very rambunctious, colorful guy” who “came down here with the idea that the Marines still had a historical role to play in Haiti.” He “pictured himself as kind of the chief American, you know, sort of reincarnation of the Marine occupation in somewhat different conditions.” However, as Thurston describes it, it was Duvalier who ultimately took advantage of Heinl, regularly inviting the large Marine component of the naval mission to attend presidential gatherings in their dress whites, seeming to act the part of Duvalier’s protectors (ibid.). 32. General Andrew P. O’Meara, commander in chief, Caribbean, visited Haiti on 23–24 July. 300 THURSDAY, AUGUST 9, 1962

Sloan: Oh, very much so. I— President Kennedy: The militia, they have what, about five thousand? Sloan: Yes, sir. President Kennedy: It’s [unclear] . . . What? . . . put to ten [thousand]? Sloan: Well, we’re applying all the pressure we can to— President Kennedy: Oh. Sloan: —prevent this; but they’re [unclear]— President Kennedy: What pressure can we put . . . what pressure can we put on Duvalier now? Not much, I suppose— Sloan: We haven’t been very successful. General O’Meara in his meeting there laid these things very hard out on the line to Duvalier;33 but apparently got very little response.34 And about all we can do is what we have done, suspend the deliveries and press forward with trying to keep the army, which is U.S.-oriented, in a better condition and better— President Kennedy: What about . . . the . . . possibly on the political, military . . . you keep the military mission there, you go ahead with this air base, which costs, this jet strip, which costs how much? Unidentified : Two-point-seven million, Mr. President. President Kennedy: And will be finished by when? Unidentified: Probably in late ’63 it would be— President Kennedy: The reason for that is primarily milit—, it is primarily military, partly political? Unidentified: Well, this is . . . [He shows a chart to the President.] The maintenance of the road loan, of the airport loan was a device to give Duvalier something in order to avoid a premature showdown with him. But an additional consideration, which was important, although not decisive, is this military interest— Unidentified: That’s right. Unidentified: —in a jet-capable airport in Port-au-Prince for contingencies.

33. General O’Meara met Duvalier for an hour on 23 July 1962. O’Meara raised four problem areas with the President: (1) civil militia, (2) continued closedown of military academy, (3) misuse of and premature retirement of U.S.-trained Haitian military personnel, and (4) Heinl’s difficulties in obtaining access to MAP materiel and ammunition in the basement of the National Palace (see Brubeck to McGeorge Bundy, “Haiti—Report on Conversation of General O’Meara with President Duvalier,” August 1962, “Haiti” folder, National Security Files, Box 103, John F. Kennedy Library). 34. According to Ambassador Raymond Thurston, who attended the meeting, Duvalier deflected O’Meara’s presentation with “characteristic tactics of distortion, evasion, obfusca- tion, and outright mendacity.” He pretended not to care that the United States had suspended MAP assistance (ibid.). Meeting on Peru and Haiti 301

Edwin Martin: The airport is to be run by Pan Am and [unclear]. Unidentified: Yes, I mean, this is a turnkey contract and the airport, as Mr. Martin points out, is to be administered by Pan Am. President Kennedy: What is, what are we saying to Duvalier? What is our political proposal to him now? Under what condition would we renew? Or what is it we’re, what is the attitude the United States has towards him, now? Edwin Martin: I think that we have not made any political conditions to him, only discussing aid matters, particularly in terms of technical factors involved in specific cases; but— President Kennedy: The stories in the paper—what, a week or ten days [ago] . . . it looked as if we’d [unclear] for political reasons, we had more or less— Edwin Martin: Well, I think that— President Kennedy: That’s all right. Edwin Martin: [Unclear] a story saying it was a technical factor. President Kennedy: Yeah. Edwin Martin: And this is the line we take with Duvalier. President Kennedy: What does, what is the opinion in Haiti in regard to? Is it known that we’ve— Unidentified: Oh, yes, this is— President Kennedy: —had a break with him? Unidentified: I don’t think that Duvalier is under any illusions about our unhappiness with him. We have not had a confrontation with him on the political level. On the public side, on the opposition side, the various actions which have been taken, specifically the recall of Thurston from the— Edwin Martin: I would think that a note disclaiming his assertion that the continuation of our aid meant we endorsed his artificial reelection— Unidentified: Reelection, yes. Edwin Martin: —for another six-year term, which he [unclear word from Martin because of an unclear interjection from another speaker] last year without the course of the term expiring, he got himself elected for another six years. . . . He said that our aid meant that we believed there needed to be a strong man in there and we’re supporting him. And we sent an official aide-mémoire which managed somehow to get out to a . . . public notice saying this was not true. President Kennedy: OK. Unidentified: No, on the—another very important recent development, Mr. President, along these lines was a letter sent from Heinl, as chief of naval mission to the chief of staff of the [Haitian] armed forces 302 THURSDAY, AUGUST 9, 1962

commenting on the technical level about the effects of the existence of the civil militia on the role of the naval mission and the limitations which it put upon the activities of the mission and the general negative effects it had upon the development of the Haitian armed forces. Now this is—boot- leg copies of this have circulated in Port-au-Prince—and have had the effect of indicating again that Duvalier is not our boy. So I think that in opposition circles and within government circles there is no question about our— President Kennedy: Right. Unidentified: —general posture. President Kennedy: But the only question is—what will all this cause him to do? What are we waiting . . . for what? Unidentified: [Unclear.] President Kennedy: Yeah. Edwin Martin: At this point I would ask the [Central Intelligence] agency— President Kennedy: Yeah. Edwin Martin: —to talk a little about the plotting that’s going on. [Unclear.] President Kennedy: Yeah. Richard Helms: I might say, Mr. President, that the plotting doesn’t seem to be very successful. General [Jean-René] Boucicaut, the chief of the armed forces, told Colonel Heinl yesterday morning that he is planning to have the coup in October. And by afternoon he and his family had sought asylum in the Venezuelan embassy. So [some others begin to laugh] it didn’t take Duvalier very long to move in on him, apparently. The other plotters that we know about— President Kennedy: I just wonder about the colonel, doesn’t that look . . . This was going on for some time? Helms: Apparently he’s had this in his mind for some time. He just told the colonel this quite openly, to qualify—35 J. C. King36: We’ve had reports for some time that he was interested.

35. During O’Meara’s visit to Boucicaut in late July, the Haitian general told Thurston that he found Heinl’s critical report on the civil militia very helpful (Thurston to State Department, 24 July 1962, “Haiti” folder, National Security Files, Box 103, John F. Kennedy Library). 36. This is a tentative voice identification. J. C. King’s voice could not be identified. However, King, the head of the Western Hemisphere Division of the CIA’s Directorate of Operations, is listed as a participant in this meeting, and this voice complements Richard Helms’s presentation of the intelligence situation in Haiti. Meeting on Peru and Haiti 303

Helms: Yeah, but apparently he’s had it now. There is a man here in Washington named [unclear], with whom we’ve been in touch, at the suggestion of the department, who also has a plan of action. He has four cells, one in New York, one in Washington, one in Caracas, and one [unclear] Puerto Rico or Santo Domingo. Whether this— King: He works for the Pan American Union.37 Helms: He works for the Pan American Union. He is a sort of an exile from Haiti. His family, though, is still there, a wife and four children, which makes this kind of complicated. We haven’t gotten far enough along with this to find out whether he is the strong reed, but he looks as though he might be. But he has an organization called the National Democratic Union which seems to stand for the right things and as far as anybody knows and from our conversations with him, is a relatively honest person. He is a 45-year-old man who used to be head of the Coast Guard in Haiti and is supposed to be a very good administrator. But frankly we haven’t gotten far enough along now to find out whether he really has the assets that he claims to have. Now we think it might be useful to try and spin this out. See if we can get down to brass tacks and [unclear] further, then find out if he indeed does have something inside and possibly this would be a useful mechanism. But this is all brand new now, and we are in no position yet to talk about any specific plans or anything of that kind. King: Our impression [is] that there are a good many different elements in the military in Haiti . . . have come to us. But the atmosphere there is such that none of them trust each other, and we know a lot more about the various people that are dissatisfied than any of them are willing to share with each other. Helms: That’s right. Unidentified: You have an impression there are congeries of little groups, all of them the same with not too many contacts with each other. President Kennedy: Right. Richard Goodwin: I say one thing that I think is important that Duvalier is surrounded by two or three militants—Dessimore Blancher and [unclear], who are very anti-U.S., [unclear] a Communist background. And I think that if Duvalier really loses hope that he can ever

37. The Pan American Union was a predecessor to the Organization of American States and, as an institution in Washington, D.C., was incorporated into the Secretariat of the OAS. 304 THURSDAY, AUGUST 9, 1962

deal with the United States it can’t help but strengthen their position within the government and their obvious efforts to strengthen their positions for the time when Duvalier goes. I think this is a danger [unclear interjection] of a holding operation that they will get stronger. At Punta del Este, the Haitians there were about as far left as Che Guevara was at his press conference and [unclear] just probably following instructions but those leaders there were fantastically . . .38 Helms: Well, Mr. President, one organization we haven’t even mentioned this morning: the secret police, known as the Ton Ton Macoutes (TTMs) which is, estimates say it varies in size from 1 to 5,000 people. It is a repressive force of no mean substance, and this is the one that goes into the houses and takes the people out to jail and shoots them and so forth and is pretty all-pervasive these days. So it makes plotting rather dangerous business. King: And it lives on theft. Unidentified: Extortion. King: Extortion. Helms: Graft, extortion and all the other undesirable things. Unidentified: The details . . . we really don’t have. I wouldn’t charac- terize it as the secret police. Say they are sort of the bully boys of the regime. They’re not— Helms: They’re goon squads. Goodwin: I think in a lot of ways, we really ought to avoid any more public anti-Haitian [unclear] until we have an idea that something’s definitely going to happen as a consequence. Because these people are very dangerous fellows and they’ll succeed in strengthening their hands with Duvalier if they feel that the U.S. is moving away from him very strongly. Edwin Martin: I might say, Mr. President, on this business of open moves that I was called in two weeks ago by the Latin American Subcom- mittee of the Senate Foreign Relations Committee for a session on Haiti. And this went for two hours. This was stimulated by a letter that Senator [Wayne] Morse had received from a Newsweek correspondent with a rather full account of a so-called crucifixion that got some publicity up here and with other charges against the brutality of the regime and—39 President Kennedy: Who are they supposed to have crucified? Edwin Martin: It was a watchman on a [unclear] project financed by

38. Ernesto “Che” Guevara was an Argentine-born Cuban revolutionary. 39. Senator Wayne Morse (D-Oregon) was the chairman of the Latin American Subcommittee of the Senate Foreign Relations Committee. Meeting on Peru and Haiti 305 the IBRD.40 [Unclear] the TTMs had tried to get the tires [unclear] come back a few minutes later and strung him up, apparently. I think that the committee, Hickenlooper and Morse, particularly, I think, are quite convinced that there is no hope for Duvalier.41 Capehart wasn’t quite so sure, although he, I think, tended in the end to accept our position.42 I think that . . . I emphasized the importance of training . . . of not getting in[to a] crisis before anybody was ready for it, which is very important. I think that this perhaps may have helped to dissuade some of them who had been thinking of a resolution on the Senate floor cutting off aid and the like [unclear] and so forth. But we would want to be sure that this may not happen. But at the moment at least, this seems to be sidetracked. But there is some active interest up there in this . . . President Kennedy: Now, Duvalier has a . . . The ambassador spoke to me about these left-wing people he has got around him, and then he has this militia. Then he has this secret police. Now [unclear] let’s hope in opposition to him. The question is really [unclear] what Dick brought up? How do we sort of adjust ourselves so that the Communists do not become his heirs and the opposition will? That’s why we really should just pursue our [unclear] I think that [unclear] antiseptic attitude towards him, somewhat removed but not in any way, not verbalizing it. Because another coup really doesn’t do any good if you don’t have anybody to work with. If all you’ve got is one fellow here in the United States and there is no evidence that he’s got anything in the island itself. And there isn’t really very much hope right now of doing anything about him [unclear]. Edwin Martin: I think that publicly our position should certainly be an antiseptic one, in which the aid actions are taken for technical reasons and we do have the paper. The inspector general was in there, and he was in trouble with the Port Authority, therefore he has it. He takes [unclear]. Unidentified: [Unclear] the heat. Edwin Martin: [Unclear] talked about a hearing [unclear] . . . Unidentified: It does raise the question about a Port Authority hearing and whether the stance that we take there will prevent this sort of [unclear] to emerge. Edwin Martin: Well, I think this would be desirable. On the other

40. The abbreviation IBRD stands for International Bank for Reconstruction and Development (World Bank). 41. Senator Bourke B. Hickenlooper (R-Iowa). 42. Senator Homer E. Capehart (R-Indiana). 306 THURSDAY, AUGUST 9, 1962

hand, Mr. President, I think we ought to consider seriously whether or not the [Central Intelligence] agency should not be entrusted to continue with the evaluation of personalities and possibilities to see whether or not a plan could be developed with our help, which might be coordinated and sensible and might have some chance of success both in terms of removing [François] Duvalier and replacing him with something we can live with. I would think that the next step that I would foresee would be in this direction. Now they have done some preliminary thinking . . . [unclear] discussions. President Kennedy: [quietly] What would the reaction to this be? Bundy: [whispered]—[unclear]. Edwin Martin: —discussions we have had. But . . . I would think it would be useful, if you agree, to move, to indicate you would like this to proceed— Thirty seconds excised as classified information. King: Not very much. He’s got—They have done fairly full reporting on people that come in and names of people that are [unclear interjection] good contacts. President Kennedy: What’s the last time he saw Duvalier? Unidentified: About three weeks ago, Mr. President. They had a long talk. He was flying on the 23rd July with General O’Meara. President Kennedy: Yeah. Unidentified: They had a long discussion at that time. King: They are in contact, I mean there is no breakup. [Unidentified speaker agrees.] President Kennedy: What is, what was the attitude at that meeting? Unidentified: Well, General O’Meara made the military pitch, our general unhappiness with the Haitian conduct on our military programs. Duvalier took note but made no promises of correcting the situation. It was, in other words the U.S. position was made very clear but there were no— President Kennedy: Promises. Unidentified: —promises of [unclear]— Edwin Martin: Since then we’ve gotten pretty much a brush off on the Heinl memorandum about the naval program. Sloan: Yes, [unclear interjection] [unclear] . . . a little rejection, that sort of thing. The thrust of Heinl’s memorandum was that he had built up this civil militia that was destroying morale and the usefulness of his army, his organized regular army. He sent him back with a two line . . . Unidentified: Yes. Edwin Martin: “The morale is fine. The militia is an essential adjunct of the military forces.” [He laughs.] Meeting on Peru and Haiti 307

Sloan: Right. Yes. Unidentified: “And this letter goes beyond the limits of technical advice.” President Kennedy: Oh, is that what he said? Unidentified: Yes. Thirty seconds excised as classified information. President Kennedy: Is it—do we want to encourage or discourage our military and State Department people from engaging in these conversations? Because then it becomes . . . But I’m sure it goes right back to Duvalier; and then if we . . . whether we produce anything from these rather gossipy things, about whether it’s Duvalier or some person very far up. Edwin Martin: People ask to come to see us; but it’s a little hard to turn these around. President Kennedy: Do you have any instructions, though, [about] what their response should be? Edwin Martin: The one question that has come up is [that] one or two of them have asked whether or not, in case they undertook a coup, we would come in to protect the Duvalier government as the established regime. We have sent back a response that “you should not volun- teer any response to this but if you continue to be pressed on this point, you should say that, well, you are sure that the normal U.S. policy of nonintervention would be applied.” And if this gets back to Duvalier, we see no harm in that either. This is good for both sides. [The President murmurs.] Unidentified: There is one point, Mr. President, regarding here, I think. Duvalier’s constitutional term of office expires in May of ’63. As you know there was this phony— President Kennedy: Yeah. Unidentified: —reelection in ’61 extending his period to ’67. Now from a legal point of view, we would be in a very good position to withdraw recognition from him after the first of the, May 15th, ’63. And, on that occasion, if I assume we would be joined by Venezuela, the Dominican Republic, Colombia, and others who are concerned about the Haitian situation—on that occasion we would have an opportunity if we wanted to take it, of a showdown with him. And this, in effect, this date is a touchstone to the opposition. If we were to continue to recognize the legality of Duvalier’s [unclear] beyond the 1st of, beyond May of ’63, this would crush all hopes on the part of the opposition— Edwin Martin: [Unclear] this recognition problem is a ticklish one. So, if anything’s going to happen, it’d be desirable to happen before May ’63. Unidentified: Right. Make it clear that [unclear]. 308 THURSDAY, AUGUST 9, 1962

President Kennedy: The fact that, it says here there are definite indications of awareness on the part of the Haitian officials that Duvalier no longer enjoys unqualified United States support [unclear]. Does it weaken him or is he able to appeal to the laymen? [Unclear response.] Unidentified: I think there’s no question that it weakens him, Mr. President. Edwin Martin: He’s liable to appeal to national sentiment. [Unclear.] Unidentified: [Unclear.] Unidentified: No, I think the great mass of the people are inert politically; I think that he can, he or any strong leader can get them behind it but they don’t identify themselves particularly with him. If there were a change, I think that the adjustment in the countryside would be relatively easy. President Kennedy: Well, all we want to be able to do now is to maintain a relationship with Duvalier sort of removed, we’re not going to, I mean we’re going to keep our military mission there, do the airport. Nine seconds excised as classified information. Unidentified: See if we can slow down the other program and the aid cut off. Edwin Martin: And see if we can develop some kind of program with the personalities that we know about that is worthy of consideration by you or perhaps the Special Group.43 President Kennedy: I think that probably we should not encourage . . . well, we know a lot . . . but this cancellation no matter whether we put it on about technical grounds or not— Edwin Martin: I think so. President Kennedy: —[should] be interpreted the best. We probably ought not to give him any more of an excuse because if it looks like we’re carrying out a—he will obviously go more and more off . . . and if the timing isn’t right then we don’t want [agreement from an unidentified speaker] [to] have him liquidate all our chances, so I think we oughtn’t to indicate any . . . you said that one of the recommendations [is] we carry out on occasion acts of hostility towards him. Now it doesn’t seem to me there’s much use in that now. We’ve made the point. I’d like to have you all meet again next month on the— Goodwin: I think also, [unclear] conversation between the ambassador [unclear]. We ought to keep open with Duvalier at least [unclear].

43. The Special Group (Augmented) of the National Security Council oversaw U.S. covert action (see “Meeting on Brazil,” 30 July, 1962). Meeting on Peru and Haiti 309

President Kennedy: Yeah. We’d set some conditions if he would do something about that— Goodwin: That’s right. President Kennedy: —these. We shouldn’t have him feel that this is a . . . We don’t, until . . . unless we see some alternative then there might become a time when we just break it. But when we don’t have any alternative today, I think it’s just foolish to push him into extreme positions. I’d like the [unclear] to find out . . . The only thing that I would like to have added here is: What is it that we’d like Duvalier to do? So that at least Thurston understands if he ever gets into a conversation, what it is . . . We have what appears to be a reasonable posture [unclear]. Edwin Martin: [Unclear] about that. Unidentified: Mr. President, if I— President Kennedy: [Unclear] Duvalier [unclear]. Unidentified: —might make one point, in connection with this Communist influence, I think we should all bear in mind that the continued existence of Duvalier in itself, the repressive apparatus does stimulate either the growth of Communist [unclear] or there is no . . . there are two sides to this question of his turning to Communists for support in the face of pressure from us. Even [unclear interjection] if we were to withdraw completely from pressure, Communism will be stimulated by his continuance in office. President Kennedy: Yes, I know he’s staying until we look like we have some opposition [unclear]. I suppose that we have to maintain—he may be, he may be, he may be all we have. Unidentified: That’s right. President Kennedy: I mean, if we had something else then I think, I agree go [unclear] him out; but it seems to me— Edwin Martin: We need to try to create something else. President Kennedy: Yes, but pending creating something else, you maintain at least a link which would permit either he or us to a degree to walk back towards each other, if that should prove desirable, if we don’t have anything else. So I think the odds are . . . But I think we ought to meet next month. I’d like to have . . . Perhaps we could see what it is we’re . . . instructions we’re sending to Thurston, as to what the conversation, what the response would be by Americans if they’re approached by Haitians asking for some assistance. We ought to have a rather formal answer. We don’t want a lot of different fellows talking to different people. Edwin Martin: So far we have just listened and given no answers . . . agreed to do nothing. 310 THURSDAY, AUGUST 9, 1962

President Kennedy: What do you think that colonel said to the chief of staff, though, yesterday morning?44 We ought to know. Sloan: Sir, that’s already done. [Unclear.] President Kennedy: I think we ought to, we ought to get a general line on these talks. Otherwise we may all be out there [unclear]— [Unclear response by Edwin Martin.] Meeting broke up. The President left the recording machine running as the Haiti team filed out and the next group of national security advisers arrived.

The concerns expressed by President Kennedy at the end of the meeting restrained U.S. policy toward Duvalier. There would be no active effort to remove him in the short term. On August 10, Ambassador Thurston in Port-au-Prince was advised that “subsequent discussions here at highest levels have led to conclusion that until we see more clearly path to better future we should keep channels open to President Duvalier should he attempt [to] seek accommodation with us.”45 Having just attempted to restore some control over U.S. government plotting against the Duvalier regime, the President now turned to a more-pressing security problem: Berlin. The cast of characters changed in the Cabinet Room. President Kennedy may have stepped out as the men got settled.

44. Kennedy is apparently asking whether Colonel Heinl encouraged General Boucicaut to stage a coup. 45. Martin to Thurston, 10 August 1962, “Haiti” folder, National Security Files, Box 103, John F. Kennedy Library. Meeting on Berlin 311

10:55 A.M.–12:15 P.M.

[T]here is still a lingering attachment to the old philosophy that if you simply threaten to use nuclear weapons, then the Soviets will be deterred from any military action or political aggression.

Meeting on Berlin46 President Kennedy was personally immersed in the ongoing Berlin crisis. Not content to deal with only the broad questions involved, he called a briefing meeting on Berlin contingency planning in order to educate himself again in the minutiae of the problem. Deputy director of the Berlin Task Force John Ausland used National Security Action Memorandum 109, approved by the President in October 1961, as the basic guideline for Berlin planning. Ausland’s briefing had already been given to General Maxwell Taylor, McGeorge Bundy, and Dean Rusk. The President now asked to receive it. The briefing covered not only current conditions in Berlin and contingency planning but also diplomatic, military, economic, and legislative aspects. It also dealt with positions, options, and possible actions of NATO, the United Nations, and the Soviet Union. President Kennedy had severe misgivings about the feasibility of NATO’s policy of massive retaliation—using all available nuclear weapons—as the West’s response to any sort of Soviet aggression in Central Europe. NATO, and especially the United States, faced either humiliation or nuclear war under that policy should the Soviets invade West Germany or escalate a situation over Berlin access routes to the point of conflict. The Kennedy administration’s proposals to increase conventional forces in Europe to allow a more-measured escalation of conflict met with little enthusiasm from the Western allies when Secretary of Defense McNamara presented them at the NATO Conference in Athens, Greece, in May 1962. The strongest reaction came from French president Charles de Gaulle, who resented the implicit attack on national nuclear forces. British prime minister Harold Macmillan also favored a policy of

46. Including President Kennedy, John Ausland, McGeorge Bundy, Walter Dowling, Carl Kaysen, Robert McNamara, and Dean Rusk. Tapes 8 and 9, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 312 THURSDAY, AUGUST 9, 1962

relying on national nuclear forces but, anxious to preserve Britain’s special relationship with Washington, was never as critical as the French. The West Germans objected to the new policy for different reasons. They believed that it would encourage the Soviets to grab as much German territory as possible while calculating at what point the United States would actually shift from a conventional to a nuclear response.

Unclear discussion occurs as the recording machine picks up the chatter of officials taking their places. Only fragments are intelligible. As the men settled down there is an intelligible segment of 27 seconds that has been excised as classified information. An unidentified official is then heard saying, “From a military point of view. . . .” The secretary of state, Dean Rusk, opened the meeting. Dean Rusk: Mr. President, we thought it would be helpful to give you a brief review of the probable sequence of events in the event of a major crisis on Berlin. Mr. [John] Ausland is going to give you the outline. There are a good many details under each subheading which we could [unclear] at any point which you might require. But you might want to see how this shapes up from beginning to end on a sequential basis. Mr. Ausland, would you . . . John Ausland: Mr. President, gentlemen. During the past year, the United States and its allies have devoted considerable time and effort to contingency planning for Berlin. The Berlin task force has prepared an inventory of this planning, with a view to determining what has been accomplished. This briefing is designed to review the results of this inventory. In doing this, we shall use the four-phase framework set forth in NSAM 109, which is commonly called Poodle Blanket.47 I shall begin by reviewing in general the four phases. I will then examine each of the phases in more detail. This examination will describe the political, military, economic, and covert actions which might occur in each phase. The description will also include an account of allied planning, the extent of allied agreement, and the degree to which governments are committed in advance to a given course of action. Following this review of the four phases, I would like to examine briefly the allied organizational arrangements for Berlin planning and operations. Finally, I shall review briefly the planning currently in progress. National Security Action Memorandum 109 divides the developing

47. See “Meeting on Berlin,” 3 August 1962. Meeting on Berlin 313

Berlin crisis into four possible phases. Phase I, during which Soviet or G.D.R. interference with access is short of a significant blockage of access to Berlin. Phase II, after there is a significant blockage of access, such as a blockage of civilian ground access to Berlin. This essentially noncombatant phase would be characterized primarily by intense diplomatic activity, a NATO military mobilization, economic countermeasures, and naval measures not involving use of force. Phase III, during which substantial blockage of access continues. The dominant event in this stage would be the use of force, which would include nonnuclear ground and/or air action in East Germany or possibly Eastern Europe. These could be supplemented by worldwide naval measures involving use of force. The purpose would be to induce the Soviets to restore access. Phase IV would take place only after nonnuclear actions had failed to restore access. The dominant event in this phase would be the use of nuclear weapons. Now, I should like to emphasize at this point that this is a conceptual framework which indicates the order in which we would prefer events to occur and is useful as a basis for planning. It’s not an attempt to predict necessarily how history will unroll. I might also mention that we have no idea of rushing from one phase to another. Our aim rather would be to stabilize the situation as early in the scenario as possible and work out an acceptable arrangement on Berlin with the Soviets. The four phases have now been examined quadripartitely by the U.S., U.K., France, and Germany in some detail. I believe it’s safe to say that there is considerable agreement on them. The differences regarding some of the details will emerge in the course of this briefing. Now I’d like now to examine the four phases in more detail. During phase I, allied vital interests remain substantially intact but are actively challenged by the Soviets or the G.D.R. I should say that we are presently in this phase. We will remain in it until some means of access to Berlin is interrupted or until an actual agreement on Berlin is reached. The recording stops. The following portion of the briefing was not captured on tape: The U.S. goal during this phase was to maintain its vital interests and to seek an agreement on Berlin with the Soviet Union. The bulk of allied planning had been devoted to this stage. There was general agreement on measures to be taken in this stage, particularly with regard to the preservation of ground and air access to Berlin. The major exception was related to naval countermeasures. The United States, France, and Germany believed that it might be suitable to use naval meas- 314 THURSDAY, AUGUST 9, 1962

ures not involving the use of force to supplement direct responses to Soviet/G.D.R. harassment of access. The United Kingdom, although agreeing to plan quadripartite naval measures, did not believe they should be used before phase II.48 The recording resumes in midsentence. Ausland: . . . preservation of ground and air access to Berlin. The major exception, as I shall explain, [unclear], is related to naval countermeasures. Now, I’d like to describe the events which might occur in phase I. This current phase, the same as phase II, is dominated by diplomatic activity. Although a summit conference is not excluded, the effort to reach agreement is pursued primarily at the foreign minister and ambassadorial levels. As specific problems arise, a resolution is pursued at the appropriate level. This might be the commandant in Berlin, as in the case of sector border incidents, or the foreign ministers in Geneva, as in the case last March with regard to the air corridor incident. Rusk: Or it might at this stage also include a reference to the U.N. in certain circumstances. Ausland: In 1959, the U.S., U.K., and France set up a tripartite staff in Paris known as Live Oak, under the command of the U.S. commander in chief for Europe. Within the framework of Live Oak plans, the allies have made military preparations to deal with possible interference with the allied access to Berlin. Considerable tripartite planning has been done to preserve air access to Berlin, for the most part within the framework of what is known as the Jack Pine plans. This planning includes provision for dealing with Soviet or G.D.R. efforts to threaten or interfere with civil flights. In event civil flights should cease, there is provision to continue flying civil aircraft with military crews. Should the Soviets damage, shoot down, or force down and destroy an aircraft, there is provision for the use of fighter protection. There is also provision for flights over 10,000 feet, in certain circumstances. At the present time, although we maintain the right to fly over 10,000 feet, we do not in fact do so. Finally, there is a plan for attacks on antiaircraft or [surface-to-air] SAM sites if they fire on allied planes. Now, within the framework of the Jack Pine plans, the U.S. and U.K. governments, but not the French, have delegated certain authority to

48. John C. Ausland, “Briefing for President Kennedy: Berlin Contingency Planning,” in Kennedy, Khrushchev, and the Berlin-Cuba Crisis: 1961–1963 (Oslo, NOR: Scandinavian University Press, 1996), p.159. Meeting on Berlin 315

[SACEUR] General [Lauris] Norstad. This existing authority extends up to, but does not include, attacks on ground installations. In other words, it extends through the introduction and use of fighter aircraft. There has also been planning to deal with interference with ground access. Since the end of the blockade in 1949, both German and allied access have been subjected to intermittent but frequent harassment. Methods of dealing with minor harassment have been developed informally. They are characterized by brief resistance and negotiation of each incident until the incident is resolved. Now recent, more formal planning includes serious forms of interference which border on blockage. Live Oak, for example, has submitted to governments proposals for rules of conduct for allied convoys in event they encounter unacceptable harassment. The U.S. has approved these proposals for use for U.S. convoys pending allied agreement, which we expect to reach in the near future. The rules of conduct and the delegation of authority under the Jack Pine air access plan, constitute the extent of advanced commitments by the U.S. government regarding precisely what we will do in various contingencies on Berlin. [Unclear], we would suspend with the actual decision, reserved until the event. If allied autobahn access appears to be blocked, Live Oak plans provide for several alternative tripartite military probes, which are known as Free Style. These range from a few vehicles to platoon size. Governments have, however, not delegated advance authority to employ any of these probes. Planning has also been done to deal with German access, largely through the application of countermeasures, economic countermeasures. We, the French, and the Germans have agreed that the allies might use naval measures not involving the use of force, such as in-port harassment and close surveillance at sea of Soviet-G.D.R. ships, to counter severe interference with access analogous to some of the interference last February and March. The British have, however, thus far resisted the concept of using naval measures prior to blockage of access, although they have agreed to plan for it. Now, with regard to economic countermeasures, the nearly complete ban on issuance of temporary travel documents to the East German residents, which was put into effect in September 1961 after the division of Berlin, continues. Although there might have been advantages to further relaxing the ban, so as to be able to use it again, on balance we have thought it best not to lift it, in order to bring pressure to bear on the G.D.R. to relax restrictions on travel to East Berlin. Quadripartite agreement has been reached in principle on mildly restricting bloc travel to the West if access to East Berlin is denied to the allies. Tentative 316 THURSDAY, AUGUST 9, 1962 agreement has been reached with the Germans and the French to take selective economic countermeasures [unclear] if persistent harassment of access to West Berlin occurs. The British, however, reserve their decision until the event. NATO has also agreed in principle to cut off air traffic to and from the Soviet bloc if a serious incident of physical interference with an allied airliner occurs in the corridors. Now, it is not possible to predict exactly how long phase I will last. By definition, it will end when it becomes clear that the Soviets or G.D.R. are prepared to use force to maintain a significant blockage of access to Berlin or until a viable agreement is reached on Berlin. The Soviets have given every indication thus far of preferring to minimize their risks and avoid a step which seriously challenges allied vital interests. There is no guarantee, however, that this will continue. There have been indications recently that the Soviets may be planning to sign their long-heralded peace treaty with the G.D.R. If they do, the scenario will obviously be significantly altered. I’d like, therefore, to examine this contingency briefly. Allied planning for a peace treaty, which now is once again under review, has been based on two assumptions. First, while we seek to discourage the Soviets from signing the treaty, in the last analysis we probably cannot prevent this step without the use of force. Second, we are prepared to continue our normal use of rail and autobahn access routes if the Soviets withdraw from the checkpoints and the G.D.R. personnel take their place and continue to carry out differing procedures. Now, these assumptions in effect set the limits for allied reactions to any Soviet move to sign a peace treaty. Prior to any peace treaty conference called by the Soviets, we would propose to take action designed to deter the Soviets from concluding a treaty, especially one which would infringe our vital interests. At the same time, we would not want to engage our prestige too heavily in the signature of the treaty itself. Our actions after the treaty would depend on our estimate of the possible effects of the implementation of its provisions. Our measures would be directed toward deterring the Soviets or the G.D.R. from taking steps which could lead to infringement of our vital interests respecting Berlin. If the Soviets decide to conclude a treaty, they could bring this about in a time period ranging from a few days to a matter of months. However, it seems most likely that they would first take time to enlist political support, including a possible U.N. initiative. Now, a peace treaty would undoubtedly precipitate a crisis atmosphere. Nevertheless, given careful handling and determination, it should prove manageable. In the absence of overt action on their part, we would attempt Meeting on Berlin 317 to treat the treaty as of no more significance than the Soviet agreements with the G.D.R. in 1955. It is, however, always possible that either intentionally or through miscalculation, Soviet or G.D.R. action will result in some infringement of our vital interests such as a significant blockage of access to Berlin. In this case, we would find ourselves in phase II. Phase II would provide our last chance to resolve the Berlin problem without the use of force. The prestige of both sides would be heavily engaged and tensions would be running high. We can expect the dominant pressure of world opinion would be to make concessions to the Soviets in order to avoid the risk of war, although there of course would be some pressures in the other direction. The allied goal during phase II would be to employ noncombatant actors to restore their vital interests. The Soviets, on the other hand, would probably aim at negotiations without access restored, on the assumption that this situation would exert maximum pressure on the allies to make concessions. Now it’s become evident in our quadripartite discussions that the U.S., U.K., France, and Germany are in general agreement as to the preferred configuration of phase II. Particularly as we have examined the alternatives available in phases III and IV, it has been agreed that we should be prepared to use all measures short of force to reach an acceptable settlement during phase II. During this phase, diplomatic activity would continue to dominate events. At an early point, we will probably find ourselves in the Security Council, if we weren’t there already, if not on our initiative, [then] on some other country’s. Plans have been prepared, for example, to go to the Security Council as soon as Soviet activity in the air corridors requires the introduction of fighters. This could be in phase I or phase II. We would at this point probably want to make unpublicized warnings to the Soviets as well as the satellites. We would, however, probably try to avoid a formal conference until the Soviets indicate a willingness to restore access. Now, this diplomatic activity would be conducted against a background of mounting pressure. To make clear to the Soviets our intentions, determination and prepare for the possible failure of our combination of diplomatic and noncombatant pressures, there is quadripartite agreement that NATO should engage in a further military buildup or mobilization. There have, however, been no commitments on details on this. Robert McNamara: May I interrupt just a moment, Mr. President, this is one of the weaknesses of our present plan: the lack of agreement on the extent and type of the schedule for mobilization in phase II. It depends to some degree on acceptance of the sequence of military opera- 318 THURSDAY, AUGUST 9, 1962

tions considered for phases III and IV, and until we can get further agreement on phases III and IV, it’s unlikely we can obtain any agreement on the type of mobilization for phase II. But I simply draw your attention to the fact that it doesn’t exist at the present time and we will have to work toward it in the weeks ahead. President Kennedy: What holds this . . . Now what is the difficulty of getting the planning on phase III? McNamara: Phase III. Well, it goes to phase IV, basically. There’s still disagreement as to the character and timing of nuclear operations. Several of our allies believe they should occur earlier than we do in the sequence of military operation, and this of course affects the extent to which they would be willing to mobilize in phase II. But these problems are being talked out at the present time and I think we’re making a little progress, but it’s very, very slow. President Kennedy: Where is the . . . Where do you have these discussions? McNamara: In the quadripartite military subcommittee. President Kennedy: Oh. Rusk: Mr. President, I can’t help but observe . . . I think that this difference, basically, though, is still a readiness in Europe to rely heavily upon the fact that if you threaten nuclear weapons nothing will happen. McNamara: This is exactly [unclear] point [unclear]. Rusk: It is based upon an actual sequence of events. McNamara: Neither do I, but it’s a. . . . Rusk: So the [unclear] agreement is [unclear]. The other side is not thinking about this on the same basis in which we’re thinking about it. President Kennedy: And in addition, of course, by . . . They feel that if we announce our willingness, that lessens the necessity for them to take some of the economic and military [unclear] measures. [Unclear exchange.] Rusk: On the one side, they want you to [unclear] ahead of the event. [To] threaten immediate use of nuclear weapons, but when you get around to talking about what you actually do, then the Germans, for example say, “Well, let’s go in with naval countermeasures at maximum risk” definitely rather than use the military measures, than phase III. McNamara: But because they talk and think in those terms, they can’t bring themselves to consider the mobilization actions necessary to provide an alternative capability. This is why we’re having trouble in phase II. And that trouble won’t be resolved until we resolve the differences in phases III and IV. President Kennedy: How much is . . . This story in the New York Meeting on Berlin 319

Times this morning, was there some background briefing in an attempt to . . . when we disagreed with [West German defense minister Franz Joseph] Strauss? There’s a story in the Times [unclear] be giving our view that we never asked them to go to 750,000 after this . . .49 Rusk: I don’t know the source of that and . . . McNamara: I don’t either. President Kennedy: So have you ever asked them to go to 750,000? McNamara: I personally asked Strauss to go above— President Kennedy: Five hundred thousand. McNamara: Five hundred thousand, not necessarily to 700,000, but to the point at which he could fulfill the NATO commitments. Rusk: My understanding is he asked you to ask him to go to that [unclear]— McNamara: He specifically asked me to ask him. Bundy: Exactly! President Kennedy: So now he’s saying that we asked him but that . . . well . . . [what] happened? McNamara: Well, he blows hot and cold, and at the moment he’s saying in effect that we asked him, and he refused. Now somebody has said this isn’t true, but it’s not true, on either account, that we did ask him and he didn’t refuse. [Laughter.] President Kennedy: Then I wonder who . . . That story this morning sounds like a very precise briefing.50 McNamara: It couldn’t have come from the Pentagon because there are only a hand[ful] . . . there are only three or four of us that know of this conversation—Ros[well Gilpatric] and I and Paul [Nitze]. We’re the only ones that know of it. President Kennedy: We didn’t put this out? That’s how [unclear]. McNamara: No, definitely not. Definitely not. Unidentified: The Times had been working on it for two or three days. [Unclear] called . . . [Unclear] asked me about a figure and I unfortunately never heard of him, so . . . President Kennedy: Well, I suppose this is all really tied in because

49. The day’s New York Times carried a story, “U.S. Aides Dispute Strauss on Army.” Officials in both the Defense and State Departments denied telling Strauss that the United States expected the West Germans to increase their forces from 500,000 to 750,000. For details about conversations between Strauss and Kennedy administration officials in early June 1962, see “Meeting about Berlin,” 3 August 1962. 50. With the Hanson Baldwin investigation still going on, the President is especially sensitive to the problem of leaks. 320 THURSDAY, AUGUST 9, 1962

this article this morning, there’s all this question of when, at what point to use nuclear weapons. Is there a basic, is this because they’re unwilling to do the conventional [unclear] responsibility for us for . . . by our own insistence on building up conventional . . . [unclear] ruining the credibility of this really genuine feeling or is it just because they want to put— Rusk: What they are worried about is that if we don’t use nuclear weapons or make it highly likely that we would early, that the Soviets will grab off a considerable part of Germany and then want to negotiate at that point, holding onto— Unidentified: What they’ve got. Rusk: —large bites of Germany. Now, what we’ve been trying to do is to get the conventional forces up so that we have a genuinely forward strategy in Germany, so that you don’t rely upon these plans that pull you back 1,500 miles that the General proposed in the [unclear]. President Kennedy: But even with the use of nuclear weapons, I thought the conventional force level of 30 divisions is a . . . that force level was set on the presumption that you could use nuclear weapons quite early.51 Walter Dowling: That’s right. Rusk: That [unclear] force level is the initial level. McNamara: But Mr. President, the analyses of last summer indicated that with 30 divisions, assuming the Soviet buildup didn’t exceed something on the order of 50, the 30 divisions would be adequate to carry on conventional warfare for some reasonable period of time during which negotiation could continue. [When] I say reasonable period of time, I don’t mean months, but at least weeks. Rusk: Several weeks. President Kennedy: I’m just trying to understand what the basis is for the last month’s difficulty which you connected with the change in demands at least as a signal and whether Strauss is putting these arguments out for his own purposes or whether there is a genuine dispute. Dowling: I think there is perhaps a genuine dispute coming from some . . . coming from one respect. That and I think that Strauss would never really, or at least his military men would [never], accept that there’s a concept that you really could carry on with conventional means for a very long period. There seems to be a feeling that very early on in this [unclear]. This is the only real basis of this. The rest of it is just [unclear]. . . .

51. NATO policy directive MC 26/4 of 1961 established Central European ground strength at 30 divisions. Meeting on Berlin 321

President Kennedy: That’s because they’re unwilling, though . . . that’s because they’re unwilling to pay the price of the conventional buildup, isn’t it? Dowling: No, I think actually the Germans are doing about as much as anybody in Europe in the conventional field, but they wanted to tie it in very closely with the use of tactical nuclear weapons. Is this right, Bob? McNamara: I would say, that it’s the result of three differences in judgment, or I would call them errors in judgment. One is an overesti- mate of the Soviet conventional capabilities. Dowling: Yes, yes, this is a great error. McNamara: This has been a point of difference. It remains a point of difference. It is not as great a point of difference today as it was a year ago but it is still a point of difference. We’re continuing to try to bring the two views closer together. Secondly, they believe that there is a salvation in tactical nuclear weapons. I think part of this is a function of lack of understanding of the use of tactical nuclear weapons and the results thereof. And thirdly, an unwillingness to build to the conventional force limits that they have agreed to in the NATO Councils. Now those three factors combined lead them to seek alternatives other than the use of conventional forces. So then I think we can attack all three of those problems and we have, and are making some progress. Rusk: So far as we know, Adenauer did not put any pressure on General de Gaulle to get de Gaulle’s contribution. Dowling: Increased. Rusk: Increased. [Unclear.] When I was there, but Adenauer isn’t trying to do something about that because it’s the French contribution that is standing in the way most now of this forward strategy.52 President Kennedy: Why is it, Ambassador, that they didn’t go into these . . . this at the meetings because it means it is difficult for us. We seem complacent. They spend so much time emphasizing that. And we’ll never take on this French issue, but the reason, I think . . . at least it’s high for us, which are highly publicized and never with the French? Dowling: I think that basically . . . Unidentified: Watching to see [unclear]. Unidentified: Which isn’t to say that [unclear]. Rusk: Oddly enough Mr. President, I think it also is that he [Adenauer] knows really that he can be more certain about American

52. France had shifted only two of its required four divisions under MC 26/4 to Central Europe. 322 THURSDAY, AUGUST 9, 1962

policy than he can about de Gaulle’s policy, so he doesn’t want to let de Gaulle win. This is the anomaly of the situation. Dowling: Yeah. That’s true. Rusk: And he can afford to be fretful about us because he knows he can rely on us [unclear] events. McGeorge Bundy: It doesn’t give you much comfort. [Unclear exchange.] President Kennedy: But I think [unclear] because we spend an awful lot of time reassuring, don’t we, and probably the French don’t do it. I don’t know whether . . . Dowling: Well, the French tend to, the French do, and I think that every time that de Gaulle and Adenauer meet, Adenauer comes away with a sort of euphoria: the most wonderful man in the world [referring to de Gaulle], a great leader, [unclear] but actually to a lesser extent, the problem isn’t between the French and the Germans. It’s [unclear] the continent. But it’s nothing they’d [unclear] debate [unclear]. Rusk: But they can rely upon us. Dowling: They can rely on us. But I think that—we’ve talked about this—I think the problem is to tie this to some [unclear]. [Unclear] tell Adenauer. [Unclear.] Rusk: But we’ve got to turn this inquiry around. If they can keep asking questions, and throwing up questions about our motives first, we’ve got to convert that into a flagging to us that there’s something wrong with their side; therefore they’ve got to find a way to reassure us about what they’ll do. [All sit silent for a moment. Ausland continues his briefing.] Ausland: If Soviet action resulted in . . . Rusk: [Unclear] just a little, Mr. Ausland? Speak up just a little [unclear]. Ausland: Okay. If allied ground access were affected by the Soviet action, plans exist for a garrison air lift to carry the necessary passengers and freight. If civilian ground access were blocked, it would become necessary to resort to the Berlin stockpile, and implement QBAL, or the Quadripartite Berlin Airlift. The quadripartite powers are also examining the possibility of the alliance taking civilian motor traffic at some point under their aegis. This would involve giving civilian motor traffic the outward character of allied military traffic. If such an attempt were resisted by the Soviets, which seems likely, the Soviets would have directly engaged the allies on the ground, and contingency planning for a blockage of allied access would become applicable. Now if the interruption in phase I were related to air access, the Meeting on Berlin 323

Soviet challenge would have been met within the framework of the Jack Pine plans, which I described in connection with phase I. These actions, such as the Military Sponsored Air Service, which would [unclear] civil planes, or fighter escorts, could carry over into phase II. Quadripartite agreement has also been reached that naval measures not involving the use of force, such as close surveillance of Soviet/G.D.R. ships, and declaration of exercise areas across sea lanes used by Soviet or G.D.R. vessels, could be used at this time to bring pressure on the Soviets. There is also quadripartite agreement that another form of pressure that we could bring to bear on the Soviets would be economic countermeasures. Now these fall into three categories: severing or limiting exchanges with the bloc in other than trade fields, such as cultural, restrictions on transport and movement of persons, particularly those involved in trade, and selective or full trade embargo, including inter- zonal trade. And the extent to which you would go in implementing full embargo I think would depend on the situation at the time. The NATO Council has examined these measures and substantial agreement has been reached, particularly regarding the total embargo and air countermeasures which would involve stopping Soviet flights into the West. The U.S. would also propose during this phase to encourage passive resistance in the G.D.R., and we are at present discussing this with our three allies. Now the question [is] sometimes asked, “How long would phase II last?” This has been hard to predict with any certainty. Since, however, unless blockage were ended, phase II would last until either we or the Soviets resorted to force to resolve the impasse, we could hope that it would be a matter of months rather than days. President Kennedy: How much of the selective or full trade embargo has been agreed upon for example, with regard to NATO countries as opposed to Soviet bloc countries? Is there any agreement on that? Ausland: They’ve agreed in principle, sir. The best that you have there is an agreement in principle. Rusk: I think if we have a complete embargo of Berlin, I think measures would move very fast. I really don’t think that in the face of that embargo you would have much trouble getting [unclear] agreement on this. Ausland: As I say, we would hope that phase II would last a matter of months rather than days. We and our allies would want to explore every avenue for a peaceful result. We would also want to give the pressures we will bring to bear on the Soviets a chance to take effect. Time will 324 THURSDAY, AUGUST 9, 1962

also be required for our mobilization, to place us in a position to use force, if necessary, with acceptable risk. We should keep in mind, however, that the length of phase II will be conditioned by the fact that allied prestige will be heavily engaged in the restoration of our vital interests. Since we are unable to predict the length of phase II, we believe that our plans should be flexible enough to provide for various lengths. Now, if despite the actions taken in phase II, allied rights are not restored, and there is a serious deterioration of the Berlin situation, the U.S. believes that the tripartite allies should take appropriate action to clarify whether the Soviets and G.D.R. intend to maintain blockage of ground or air access, while at the same time making clear allied intention to reopen access. This would be done with some sort of probe. Now, if it were clear that the Soviets or G.D.R. intend to maintain blockage of access, as a result of this probe, the U.S. believes that the allies should initiate military actions designed to induce the Soviets to reopen access. Now this phase, or phase III, would mark the commencement of offensive, nonnuclear combat. It would be implemented by means of a plan, or plans, drawn from the Live Oak or NATO catalogue. It is the U.S. view that phase III should start under tripartite control, and that the shift to NATO control would take place at the time when a tripartite operation came under attack by Soviet or G.D.R. forces.53 Now, plans available for phase III include, on the ground: the Live Oak battalion-level plan, Trade Wind, the division-level plan, June Ball, and the NATO BERCON Charlie plans, which range from one to four divisions.54 In the air: Live Oak Jack Pine III, which is an attack on antiaircraft or SAM sites in East Germany, and the NATO BERCON Alphas, which range from fighter sweeps of the corridors to large-scale attacks on Soviet bloc installations in Eastern Europe to attain local air superiority for a particular period [unclear]. At sea, quadripartite and NATO naval measures involving use of force, up to and including the worldwide blockade of the Soviet bloc. As you will recall, General [Lyman] Lemnitzer, on July 19, presented a more detailed briefing on these SACEUR and SACLANT plans.55

53. The tripartite countries were the three Western occupying powers of Germany, the United States, Great Britain, and France. 54. The acronym BERCON stands for Berlin Contingency. 55. See the memorandum for the record, 19 July 1962, FRUS, 15: 230–32. The acronym SACEUR stands for Supreme Allied Commander, Europe; SACLANT stands for Supreme Allied Commander, Atlantic. Meeting on Berlin 325

Phase IV, beginning in the U.S. use, first use of nuclear weapons in any form, follows phase III when it has become evident that the conventional measures which have been used have been unsuccessful in induc- ing the Soviets to restore allied rights to Berlin, and when conventional measures still in sight offer no reasonable prospect of success. BERCON BRAVO, SACEUR’s plan for the demonstrative use of a limited number of nuclear weapons, is the only Berlin contingency plan which is exclusively nuclear. The other plans, however, include nuclear annexes for provision of the use of nuclear weapons. These would be implemented with presidential authority under any one of the three following circumstances: First, prior use by the enemy; second, the necessity to avoid defeat of major military operations; or third, a specific political decision to employ nuclear weapons selectively in order to demonstrate the will and ability of the alliance to use them. In addition, depending upon the circumstances at the conclusion of phase III, phase IV could begin by direct recourse to general war. Now, I think it’s a little difficult to predict precisely what diplomatic activity would be taking place just before and during these operations. But it would be important that the allies make clear to the Soviets their intentions, particularly the terms on which they would discontinue any military operations. They should also make clear to the world their reasons for undertaking them. During military operations, the U.S. would propose to encourage isolated acts of active resistance in East Germany, such as isolated acts of sabotage. The U.S. would seek, however, to avoid encouraging an uprising, unless general war appeared imminent. We are now discussing these questions of types of these activities [unclear] with the U.K., France, and Germany. Now, having described the framework within which allied planning is taking place, I’d like to turn briefly to the machinery. Within the U.S. government, coordination is accomplished primarily by the Berlin Task Force, which meets regularly and includes all of the organizations listed here at the bottom: Commerce, Defense, JCS, State, CIA, Treasury, USIA,56 and FAA.57 The Ambassadorial Group is primarily responsible for the coordination of quadripartite contingency planning, and has under its aegis subgroups on East Germany information, contingency

56. The abbreviation USIA stands for U.S. Information Agency. 57. The abbreviation FAA stands for Federal Aviation Administration. 326 THURSDAY, AUGUST 9, 1962

coordination, and that’s really a political body, economic committee, and military subgroup. Then, on the . . . taking into account the organization in Europe as well, you get a fairly full picture of the organizational arrangement involved. The Ambassadorial Group is responsible, under the authority of the governments, for coordination of the activities of all these various groups. Live Oak is the tripartite body responsible for tripartite military planning with regard to Berlin and uses British Headquarters for ground planning, the U.S. Air Force headquarters in Wiesbaden [West Germany] for air planning, that also has a tripartite command post to conduct actual air operations. Live Oak also, of course, is U.S. CINCEUR58 and SACEUR, and in this capacity keeps NAC, the NATO Council, fully informed on what he is doing. We also look to our four permanent representatives to the NATO Council for pursuing our interests in the council. The Quadripartite Committee in Bonn is responsible for political planning, the commandants in Berlin for planning regarding Berlin itself, and for this purpose, they have a tripartite allied staff [unclear]. And then of course we look to our four ambassadors in the U.N., who are there. But that gives at least a simplified view of the machinery. Now, in conclusion, I’d like to review briefly some of the planning details on these works now in progress. The military subgroup of the Ambassadorial Group is at present, as Mr. McNamara indicated, discussing general strategic questions and, to that end, is preparing a draft four-phase paper for submission to the NATO Council in September in connection with consideration of the NATO military plans. President Kennedy: Are we really in such disagreement with them when we get down to the practice of saying [unclear]? Because there’s some theoretical argument that we’re [unclear]? McNamara: No, I don’t believe we are, Mr. President, but because the theoretical argument continues, we haven’t gotten down in the quadripartite planning to the level of detailed mobilization planning that we ought to have on hand as we enter phase II. President Kennedy: As a practical matter, there wouldn’t be really very much difference in the timing of the . . . using nuclear weapons, probably, once the situation began . . . ? McNamara: I don’t believe so. President Kennedy: It’s getting to be theoretical arguments; you’re

58. The acronym CINCEUR stands for Commander in Chief, Europe. Meeting on Berlin 327 never supposed to give way until . . . You’ll never get a compromise on theoretical arguments. . . . Rusk: I think this is a very important point, because in [unclear] case, when these decisions have to be made, you want to know an awful lot about the dozens of factors that have been proposed by every chief of government [unclear]. It’s a lot of help to know . . . what the question is . . . a little more accurately before he tries to give a final answer, so there’s bound to be a certain tentative element, and this tends to slow down the detail and the accuracy of planning, on some of these questions. McNamara: Yeah, but I think, therefore, we must seek to move over this potential theoretical disagreement and into some assumptions, in saying, “Well, assuming that we defer nuclear weapons, their use for a certain period of time, what kind of conventional forces should we have at that point and how should we plan to mobilize them?” To see if we can’t get some attention to this mobilization very quickly, which might come relatively soon. Now, in our own case I think we have some ideas of what’s required. But to the best of my knowledge, there are no detailed mobilization plans for phase II for our allies. President Kennedy: So they . . . Well, how would you see the time schedule as far as getting any . . . ? McNamara: Well, I think within the next four to six weeks we should try to arrive at those in the quadripartite military subgroup. Rusk: There are of course, events that could expedite that greatly because . . . simply of necessity. McNamara: Yes. Rusk: I think there are mobilization capabilities among our allies not directly related to phase II, if actually brought to bear, and the mobilization could start [unclear]— McNamara: But they’re so general. Rusk: Yeah. McNamara: They should be made far more specific. They’re the same kind of capabilities we had a year ago spring which had to be greatly refined and changed to serve the purpose of last summer and fall.59 Ausland: With regard to phase I, the contingency coordinating subgroup is conducting consultations on operational details such as Live Oak’s proposals for rules of conduct for allied convoys, and the question of possible G.D.R. efforts to require passports and visas for travel by

59. McNamara is referring to the Berlin Crisis of 1961. 328 THURSDAY, AUGUST 9, 1962

Germans to and from Berlin. We are also reviewing at present on an urgent basis, our existing planning for a peace treaty. With regard to phase II, the military subgroup is planning to examine the details of a NATO mobilization and the question of coordination of quadripartite naval measures. With regard to phases III and IV, the NATO standing group has now examined the BERCON/MARCON plans,60 and has returned the [unclear] submitted by SACEUR and SACLANT to them for amendment. At the same time, the field commanders are preparing the detailed plans. Rusk: Mr. President, you had a briefing about ten days ago on phases III and IV. One of the key purposes of this briefing is to let you see in broader terms everything that comes before it. So you can see that a great deal would have happened before we get to these phases III and IV. President Kennedy: When do we get on the . . . when do we . . . did you say you’re meeting in September on the—? McNamara: No, I said that I hope within the next four to six weeks that some of the mobilization questions will be advanced and answers will be developed within the quadripartite military subgroup. They’re meeting continuously. President Kennedy: I think that we ought to, if we can’t seem to get an agreement on this question at what point we use our tactical weapons . . . and then they say that until we get an agreement on that, they won’t go ahead with the divisions. It seems to me we ought to consider turning around and saying, “Well, we’ll [unclear] your position on tactical [nuclear weapons], providing you will and the French and others will agree to a satisfactory buildup of forces because the 30 divisions assumed the use of tactical nuclear weapons almost immediately anyway. McNamara: Yes, it did. President Kennedy: So that’s no excuse. It’s not fair [unclear] their NATO 30 divisions [unclear]. This way, it seems they’ve put it on us, that we are less sympathetic [unclear] they can use that as the excuse for not going ahead with the system of the French and all the rest, I should think . . . McNamara: However, Mr. President, I’m afraid that if we say that we would consider the use of tactical [nuclear] weapons early, they’ll then go on to say, and, of course, . . . it’s clear now that we don’t need 30 divisions under those circumstances. This is the next move. [Henry] Kissinger makes this very clear, for example, in his July Foreign Affairs

60. The acronym MARCON stands for Maritime Contingency. Meeting on Berlin 329 article, and I’m certain that this is an underlying belief in the minds of the Germans.61 Bundy: It’s a number they’d like to get away from— McNamara: Yes. But I think we can approach the problem somewhere along those lines, nonetheless, and say, “Well, assuming for the minute that we wish [for] an option at that point, either use nuclear weapons immediately or not use nuclear weapons [unclear], what kind of conventional forces should we approach at that point? Unidentified: But they say— McNamara: What mobilization should we have? President Kennedy: I completely agree that if you didn’t have the problem of Berlin then you would say that they’re right about this and then as the first Russian soldier comes across the West German border, then you’d consider using nuclear weapons. But given the problem over the probe into Berlin, and the fact that we would have to initiate it, and they have the forces up there, which may get involved in the fighting inside East Germany, that’s what causes, it seems to me, our position of the use of nuclear weapons to have validity. Now, they don’t agree with that? Even though . . . I think their position’s not valid because of the Berlin corridor part of it. McNamara: Well, as Secretary Rusk pointed out, they’re quite unrealistic when they imply that nuclear weapons would be used very early without question, because the heads of government at that point would wish to seriously consider the alternatives in a way that those alternatives are not currently considered. There’s no question in my mind but what that’s true of the British. And yet the British representatives at various points in the military subgroup have talked as though they were strongly in favor of immediate use of nuclear weapons. I am positive, based on my own discussions with the British, that their government would take a different attitude when they reached that particular point in time. President Kennedy: Well, the reason, though, for their theoretical position is that they don’t want to meet the conventional [targets]. Is it an economic . . . Unidentified: Well, he thinks—

61. Kissinger was a consultant to the Kennedy administration for German affairs. In July 1962, he published an article entitled, “The Unsolved Problems of European Defense,” in Foreign Affairs, which argued that a conventional NATO force based on 30 divisions “reflected psychological and not strategic considerations.” 330 THURSDAY, AUGUST 9, 1962

Rusk: Mr. President, [unclear] they are hoping that nothing will happen and they won’t have to pay the money for the additional [unclear]. Now this is just about what it amounts to. McNamara: And there is still a lingering attachment to the old philosophy that if you simply threaten to use nuclear weapons, then the Soviets will be deterred from any military action or political aggression. And it’s a combination of these two beliefs that leads them to the support of an immediate use of nuclear weapons. President Kennedy: Yeah. Carl Kaysen: Their older concept is just more comfortable with . . . McNamara: Yes. Dowling: I don’t think any of these people that would advocate the early use of nuclear weapons, would have endorsed the use of nuclear weapons to take some of the military actions we discussed on page 3. That would be the one to go out and seize, say, to the Kassel salient. I don’t think Strauss himself . . . [unclear] say that we should use nuclear weapons at that time because it presents a real hazard for West Germany. Bundy: They’re . . . It’s only a good thing to do if you’re never going to do it. Dowling: That’s exactly right. [Unclear exchange. Someone says, “Yes, I’d expect it.”] President Kennedy: Well, now what is it that we’ve got to do in this area? [Unclear] general [unclear]. Rusk: Well, I think we continue inspection on the political consultation, planning. The Germans want a final list to appear just before the [U.N.] General Assembly opens. And I know we probably ought to go along with that if the others agree. But I think the principal problem, really, is what Secretary McNamara was talking about, to get them moving on these military plans and reinforcement because those are the signals that the other side will pay some attention to. President Kennedy: Now, it isn’t considered likely that the peace treaty would be signed over a weekend? Rusk: Well, I think there’s a difference there, too. I don’t think that they could move very fast. We are inclined to think that they would go through a period of preparation, and not get, get a few of their bloc people together to sign a peace treaty in secret and then suddenly announce it. They could do that; and that could happen over a weekend, but we are inclined to think that would go through a much more elaborate period of political preparations, going to the U.N. or soliciting support from neutrals or a variety of other threats. So we don’t expect it, but it could happen, and we’ve got to be ready for it. Meeting on Berlin 331

President Kennedy: If Khrushchev comes . . . If they come to the U.N. with a proposal in regard to Berlin that they would—a free city—there’ll be strong pressure, I would think, that the U.N. for the recognition of East Germany. I don’t think the unification of Germany has much appeal up there. The only thing that does have some appeal is the free choice of the Berliners. Do you think at any time we can indicate that we’ll abide by the choice of the people as a counter to any proposal they might make at the U.N., that we will abide by the choice of the people of West Berlin: to either, one, accept the Soviet plan; two, provide for the continuation of the present arrangement; or three, accept U.N. supervision. Rusk: Well, I would think that we, in the first place, took the line completely, of the West Berliners, on that point. President Kennedy: That’s right. Rusk: Secondly, that we ought to make it clear that, if you could get to the U.N. that what the West Berliners think about [unclear] East Germans . . . would be very important to hear this at the U.N. I think in the U.N. that the weakest point the Soviets would have would be the lack of any self- determination for the East Germans as well as for the West Berliners. President Kennedy: That would be the theme we’d stress? Rusk: Right. Yeah. President Kennedy: Well, now, you say over the next two months the chief problem really will be the . . . to fill out this framework? [Unclear] this commitment? Rusk: Well, we’re . . . as you may recall at Geneva, I urged Gromyko to pay some serious attention to our deputy foreign ministers’ proposal, and he said that you’ll have to take it up again in Moscow; they’re not going to answer that in Geneva.62 He has not yet given us any reply on that, and [Anatoly] Dobrynin yesterday didn’t have any new instructions.63 But I think we may get a proposal from them of a sort that involves a ministers’ meeting of some sort, perhaps with some conditions or circumstances that make it difficult for us, but I don’t think they’ve dropped the idea at all yet of further discussions, either bilaterally or on a quadripartite basis. President Kennedy: Now, if they should sign this treaty overnight at the end of August, over a weekend, what is it . . . have we got our response? Are we clear?

62. Andrei Gromyko was the Soviet foreign minister. 63. Dean Rusk met Soviet ambassador Anatoly Dobrynin on 8 August. Dobrynin explained that Gromyko and Soviet leader Khrushchev were on vacation. See “Secretary’s Conversation of August 8 with Ambassador Dobrynin,” 9 August 1962, FRUS, 15: 262–66. 332 THURSDAY, AUGUST 9, 1962

Rusk and McNamara: Yes. President Kennedy: It doesn’t look like we— Rusk: We have a good many. . . . We have notes. We have public statements drafted on a quadripartite basis, and actually at the last minute we are going to see what changes would have to be made in view of the circumstances. . . . Bundy: Signing overnight, Mr. President, is extremely unlikely, because they do have to . . . They will at least have to issue invitations to those with a reasonable [unclear] the right to attend such a conference. Dowling: I think they want to make it quite a show, sort of, you know, a big event. But I think they won’t do it overnight, they were too [unclear]. Rusk: Mr. President, I think in the United Nations, whatever the attitude up there might be about the merits of the thing there would be powerful support throughout the Assembly for a simple [unclear] talk while you leave the situation [unclear] status and get the parties to get together and talk about it further. And that’s the recommendation from the [unclear]. That we move that way first. President Kennedy: What about this matter we were talking about the other day, about getting the Congress to give us powers to call up—?64 McNamara: Mr. President, we’ve looked into that. I think it’s our view at the present time that it would be unwise to attempt to obtain that authority now. We can obtain it rather quickly if it’s required. President Kennedy: [Unclear.] McNamara: Exactly, but we thought we might wait to that point. In the meantime, we’ve developed alternative plans, as I told you we would, to call up Army units, either those that we have just demobilized or, alternative units to fill in our strength, and similarly for the air units, we’re in a much stronger position, as you know, today than we were a year ago, and it wouldn’t be necessary, to achieve the combat effectiveness level of a year ago, for us to call very many men. In the case of the Air Force, for example, we could accelerate the readiness dates of these new squadrons that we’ve activated by calling up about 2,000 men, and have a rough equivalent of the force that we called up a year ago, with a total strength then of 25,000 men. In the case of— President Kennedy: [Can we] call up those 2,000 men [unclear]? McNamara: We cannot call them up, at best, unless you declare a national emergency or unless we have a joint resolution as authority for that action.

64. See “Meeting on Berlin,” 3 August 1962. Meeting on Berlin 333

In the case of the Army, a year ago we had 11 combat-ready divisions. We added the two Reserve divisions, and then had a total of five divisions in training. Today we have 16 combat-ready divisions, or near thereto. We could flesh out the support of those divisions by calling up some additional Reserve or Guard personnel, anywhere from perhaps 10,000 up to as many as 80,000. In the case of the Navy, we called up 40 destroyers last year, and 8,500 men, including the men for 18 antisubmarine warfare squadrons. Those 40 destroyers remain in what I call a semioperational condition today. They have not been deactivated. Each one of them has crews. We could place them on a fully ready condition by calling up something on the order of four or five thousand additional men, and the 18 antisubmarine warfare squadrons, if needed, could be called back to service. We’ve added to the Navy active strength over what it was a year ago by increasing the amphibious lift by about a third, and by increasing the logistical support ships. So, it’s conceivable that, apart from the political advantage associated with a call-up, we could avoid a call-up during phase II. President Kennedy: Though we could decide [unclear], I would be sure we could get them to give us authority to call up 50,000, between . . . from the middle of [unclear]? McNamara: Yes. Unidentified: That’s the point. [Unclear exchange.] Unidentified: If we call for a smaller number, it’s another period. McNamara: Exactly so, being back [unclear]. Unidentified: You wouldn’t have to have a lot of hearings. You can have a . . . speak to the leadership, you could get a joint resolution for this. McNamara: And I thought if it was agreeable with you I would talk to [Senator Richard] Russell and [Congressman Carl] Vinson myself about this, and explain our views next week or the week after.65 President Kennedy: Right. OK.

As the meeting broke up, there was considerable room noise. After five minutes of muffled and indistinct conversation, Rusk said, “Thank you very much, gentlemen, for your help.” A few moments later, the machine was turned off.

65. Senator Richard Russell (D-Georgia) was the chairman of the Senate Armed Services Committee. Congressman Carl Vinson (D-Georgia) was the chairman of the House Armed Services Committee. 334 THURSDAY, AUGUST 9, 1962

Meanwhile the President walked over to the Oval Office for a brief conversation with Philip Graham, the publisher of the Washington Post. Then, after making some telephone calls, the President went for his before-lunch swim. The President would spend the afternoon mainly on domestic issues. After a short speech to a group of Peace Corp trainees, the President attended a reception for Jewish leaders in the Fish Room, off the Cabinet Room. All of this was secondary to the important fiscal discussion set to start at 4:30 P.M. The newspapers that morning signaled that this day and the next would be the days of decision for the President as he considered whether to press for an immediate tax break this fiscal year to jump-start the economy. On this day he had a chance to listen to a group of business leaders explain their point of view on the matter. The President, in his remarks, would underscore one of the more salient themes of his earlier foreign policy conversations: If he smelled failure, he was quite capable of walking away from an initiative in which he believed. He had committed himself to a tough policy against Peru only to see support of nonrecognition dissolve in the region. Now he wanted out of it. Covert action against Duvalier in Haiti was another good idea; but as he had just reminded his Haiti team, the idea was good insofar as there was actually a chance of removing Duvalier. Similarly, for the President the tax cut debate was becoming less a matter of preference than of pragmatism. The meeting on Monday with the powerful chairman of the House Ways and Means Committee, Wilbur Mills, had left the President unsure Congress would let him get his tax cut, regardless of whether it was the right thing to do or not. The business leaders visiting President Kennedy this afternoon—traditional opponents of Democratic fiscal policies who were still carrying bruises from April’s steel price controversy—were also not likely to offer the political cover that Mills had been unwilling to extend. The President was looking for powerful allies. He would not seek a tax cut in 1962 alone. Meeting with Business Leaders on the Tax Cut Proposal 335

4:30 –5:47 P.M.

Let me ask you, isn’t it partly . . . if you want to stimulate the economy, of course, you want to pass the cut. Really what you want is a . . . is a deficit, and you want more money being spent than is being taken out of the economy.

Meeting with Business Leaders on the Tax Cut Proposal66 Following an earlier meeting (Monday, August 6) with Wilbur Mills, chairman of the House Ways and Means Committee, and anticipating a meeting the following day with his chief economic advisers, President Kennedy met this afternoon with a contingent of business leaders to discuss his tax cut and tax reform proposals. Republican secretary of the treasury Douglas Dillon joined the meeting as the President’s representative, a symbol of Kennedy’s appreciation for “sound financial policies,” a strong dollar and for the general concerns of the U.S. business and banking communities.67 Continuing to struggle with the business community after the April 1962 steel showdown, during which he famously referred to businessmen as “sons of bitches,” Kennedy remained skeptical about the possibilitiesfor cooperation from business leaders but knew, at the same time, that it would be hard for him to succeed on the economic policy front without their support and forbearance. The ostensible leader of the contingent meeting with the President, Roger Blough, chairman of the U.S. Steel Corporation, somewhat chastened by the steel price showdown earlier that spring, had become a leader of the drive to help President Kennedy mend fences with the business community at large. Along with Alan Sproul, recently retired president of the New York Federal Reserve Bank, Blough urged Kennedy to keep the balance of payments problem foremost in his mind as he delib- erated on his budget and tax policies. Sproul, who began the meeting by reading from a prepared statement,

66. Includes President Kennedy, Henry Alexander, Roger Blough, Harold Boeschenstein, C. Douglas Dillon, Crawford Greenewalt, Robert Roosa, and Alan Sproul. Tapes 9.2 and 10.1, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 67. For a first-person description of Dillon’s selection as secretary of the Treasury, see C. Douglas Dillon, “The Kennedy Presidency: The Economic Dimension,” in The Kennedy Presidency: Seventeen Intimate Perspectives of John F. Kennedy, ed. Kenneth W. Thompson (Lanham, MD: University Press of America, 1985), pp. 128–31, 140–41. 336 THURSDAY, AUGUST 9, 1962 had chaired a transition task force for President Kennedy in 1960–61. The international economic policy counterpart to Paul Samuelson’s domestic economic policy task force, Sproul’s transition task force outlined a program for the management of the nation’s international payments difficulties. These difficulties, both real and potential, remained his chief concern. The President was no stranger to Sproul’s opinions. The under secretary of the Treasury for monetary affairs, Robert Roosa, had worked for Sproul at the New York Federal Reserve Bank and would give much the same advice to Kennedy. In this meeting, the President would use Sproul as a sounding board for his own ideas and proposals. The other participants in the meeting were Harold Boeschenstein, president of Owens-Corning Fiberglass Company; Crawford Greenewalt, retired president and current chairman of E. I. DuPont de Nemours; and Henry Clay Alexander, chairman of the Morgan Guaranty Trust.

The recording begins in midconversation. Alan Sproul: [reading from a written statement]

. . . 10 percent in all income tax rates, both personal and corporate, with a greater percentage reduction in the highest personal tax bracket to the fixing of the lower maximum rate. And, three, the committee recommends that the administration, to avoid any possible loss of confidence in the dollar as a result of an enlarged deficit, cover a portion of the tax cut by reducing expenditures not less than three billion dollars in the current fiscal year, making reductions especially in foreign expenditures so that both the balance of payments and the domestic budget will be benefited. Further, that so long as the budget is in deficit, new programs that involve increased expenditures should be avoided. And finally, this recommendation assumes that every effort will be made to finance the deficit out of savings.

Then we pick up with the notes for discussion today:

Since we were here about a month ago, concern about the dollar has calmed down somewhat, but there has been no reliable improvement in its underlying position. Revised figures of the balance of payments for the second quarter of the year are not so good as earlier estimates indicated they might be and are really rather poor when the crisis flow of funds [unclear] from Canada to the United States Meeting with Business Leaders on the Tax Cut Proposal 337

during the quarter is eliminated.68 Nor do the July figures seem to be as good as they should be, taking account of the debt repayments to the United States by foreign governments during the month. The paradoxical situation is that a month ago the balance of payments was looking better and the dollar looked worse, while now the balance of payments looks worse and the dollar is acting better. That is the danger of our exposed liquidity position, as distinguished from our long-term solvency. The dollar is continually subject to swings in confidence and sentiment on the part of foreign holders of short- term dollar balances. Such swings within limits are an ordinary part of the currency arrangements of the world, but the predominant position of the dollar as the reserve currency of the world limits its tolerance of continued uncertainty. Meanwhile, the domestic economy has continued, in the aggregate, to lag behind our hopes and needs. The evidence of the leading indicators of business activity is that business is approaching the end of recovery from the recession of 1960–61. A certain amount of skepticism concerning the accuracy and timing of the signals given by these leading indicators is justified, particularly in view of the situation in steel during the past several months, but they can’t be ignored.69 At best the present prospect does not seem good enough in terms of continuing recovery and then sustained high levels of production and employment. We continue, therefore, to recommend a change in the mix of monetary and fiscal policy as the best way of moving to correct a precarious position of the balance of payments and to promote a more vigorous recovery of the domestic economy. The way to such a program, in terms of the balance of payments, lies through increasing the willingness of foreigners to hold dollars and reducing their tendency to convert dollars into gold by permitting interest rates to rise to more competitive levels and thus giving additional evidence of the firmness of our purpose to defend the dollar. The way to offset the effect of such monetary action upon the lagging domestic economy lies in a reduction of taxes such as we have recommended. The way to avoid the damage to confidence which a

68. Following the recent Canadian dollar devaluation. 69. The steel industry was then grappling with the problem of a widely reported lag in profits, caused chiefly by rising foreign competition. 338 THURSDAY, AUGUST 9, 1962

tax-induced increase in the budgetary deficit might create is to avoid further increases in government spending and to bring about some reductions. A planned budgetary deficit growing out of action taken to reduce the tax burden on economic growth is less destructive of confidence than an unplanned budgetary deficit growing out of the failure of a sluggish economy to produce adequate revenues. Our feeling of urgency has not abated. A loss of confidence in the dollar, illogical or irrational though it might be, is a constant threat. Our previous policy for meeting our responsibilities for the balance of payments and the domestic economy, which comprised balancing the budget for fiscal 1963, maintaining relatively easy money, and taking a number of special steps to improve particular items of the balance of payments, has now run down.

[Stops reading to interject.] And I might say there that we do not tend to play down what has been accomplished in the field of improving our financial relationships and our cooperative arrangements with international institutions and foreign central banks. We think a great deal has been accomplished, but we say, [begins reading again]:

that we are backing into a budget deficit, easy money no longer provides an obvious thrust to the economy, and that our various special moves to improve the balance of payments do not add up to a program which is easily understood and which gives assurance of strong purpose and ultimate success. We think the hazards of waiting for further definition of our domestic position before moving on taxes and of relying on a more favorable balance of payments position which may exist after 1963— these hazards are greater than the risk of acting boldly now while our strength is still great and our repeated affirmations of our intention to maintain the gold value of the dollar still carry conviction. We and the international monetary system cannot afford many more dollar crises. We ought to move decisively now from the program suggested to reduce the hazard inherent in our short-term liability position. In that way we shall earn the time to grapple with the more difficult longer-term problems which involve our technical equipment and skills, our innovational ingenuity, and our cost-price levels as compared with other advanced industrial countries, all of which will ultimately determine our balance of payments position. A strongly presented program for meeting the existing simple situation, which is simple in its outlines but comprehensive in its atten- Meeting with Business Leaders on the Tax Cut Proposal 339

tion to the discipline of the balance of payments and the requirements of the domestic economy, could galvanize sentiment at home and abroad. It could be much more effective than promises of a favorable balance of payments after 1963 and of a tax cut effective in 1963. We are not unaware of the obstacles for the adoption of such a program, which you can assess much better than we. We do think, however, that if such a program is not immediately feasible, you should support your declared intention of defending the value of the dollar with a further declaration that we will not countenance easier money and increased government spending as an alternative to the program we have outlined—an alternative which we believe would be disastrous to our balance of payments positions.

President Kennedy: You know . . . I don’t know what impression you got up there at the Joint Committee, but Mills told me that he thought the committee was not convinced that there was a majority for a tax cut, that a number of the members are rather fractious.70 He said that the . . . at least half of them were against any tax cut and the remaining half that might be for it, they’d all be for something so different that it’d be very difficult to get a consensus.71 Even though—looking over all the testimony—I would say that the general weight is probably more in favor of a tax cut, though a different kind. Crawford Greenewalt: Well, the impression I got was that there was no enthusiasm, whatever, for a quickie. President Kennedy: Yeah. That’s right— Greenewalt: By quickie, I mean a needle in and then to be pulled out later on. And I didn’t feel that there was any enthusiasm for a tax cut to save a business recession. I didn’t get the same feeling about a tax cut in principle, assiduously accomplished, which is the position I took very strongly. President Kennedy: Well, you . . . the problem is that . . . I think that’s right, that there’s some . . . Paul Douglas has an article—who is considered to be, probably would have thought that he’d be more in favor of a tax cut. . . . That he’d done an article in the New Republic in which he is debating against it. . . .72

70. Wilbur D. Mills was chairman of the House Ways and Means Committee. 71. See “Meeting with Wilbur Mills on the Tax Cut Proposal,” 6 August 1962. 72. Paul H. Douglas was a Democratic senator from Illinois, 1949 to 1967, and vice chairman of the Joint Economic Committee, 1959 to 1967. Having earned a Ph.D. in economics at 340 THURSDAY, AUGUST 9, 1962

So that we’ve got a very divided Congress here on this matter, and these problems are compounded by an election coming up in two and a half months. Most of their positions probably would be that they would only go in for a tax cut if the economic indicators were much clearer than they may be, number one, and, number two, that a cut in spending . . . And it’s pretty tough, they’re pretty good spenders up there this year. They will look pretty good on the cut in foreign assistance and security, but they put in a half a billion dollars more on defense. Their pay bill is tremendously more expensive than the one we suggested.73 We failed in agriculture, and they put 150 million dollars in the . . . on the improvements and increases in welfare, which, with the recent bill on reorganizing public assistance . . . So that . . . and they haven’t really done anything about the postal. So that the chances of getting a three billion dollar cut, as I said a month ago, unless you took it right out of the hide of defense and space, which would be . . . you’d have to change the whole space program, and you’d have to take a pretty heavy cut at Defense, I don’t know where you’d get the rest of it out. I know that you say . . . Greenewalt: [Unclear.] President Kennedy: But, you know, I know it’s always impossible to say until you say you’ve got to. But I would think the three billion figure . . . we’re going to hold back on the defense part. And we’re going to hold back on some of these others, but I think we, probably . . . the most we’d get out of it, the total, you could by law, really, would be, probably be a billion [unclear] what the Congress appropriates in the nondefense areas. Roger Blough: A few . . . a few of the members of the committee were talking about this. Mr. [Harold] Boeschenstein just returned from a little visit to the Midwest where he visited what, eight installations?

Columbia University in 1921 and taught labor economics at the University of Chicago, Douglas came to be recognized as one of the leading economic policy experts in the U.S. Congress. He voted against President Kennedy’s investment tax credit legislation in 1962, and he criticized the tax cut proposal for its eventual lack of progressive tax code reforms but ultimately voted for it in February 1964. See Paul Douglas, “A Tax Cut Now? II—It Would be Wiser to Wait,” New Republic, 13 August 1962, pp. 20–21. In this article Douglas suggested that “a tax cut now would inevitably make tax reform next year impossible” by leaving the administration nothing with which to “purchase” tax reform from conservative business lobbyists. He counseled easier money and stricter antitrust policy as a means to improve economic performance. 73. Legislation (H.R. 7927) signed into law by President Kennedy on 11 October 1962, just two months after this meeting. It passed in the Senate on October 3 and in the House on October 5, and it mandated that the federal government increase the salaries of its employees to levels more competitive with those prevailing in private industry. Its estimated cost for fiscal year 1963 was $504 million, and for fiscal year 1964, $1.049 billion. Meeting with Business Leaders on the Tax Cut Proposal 341

Unidentified: Yes . . . Harold Boeschenstein: Yes, some missile and space operators. I think there’s some opportunities there.74 I mean, I think three billion . . . three billion is an arbitrary kind of a figure. I think the important thing is establishing a principle . . . of holding the line and . . . and pulling some of this off wherever you can. President Kennedy: Well I agree. We did save [unclear] last year, just about—[Unclear exchange.] Boeschenstein: This is terribly important. This is really terribly important, and I think this is basically taken out of this kind of program. McNamara, who understands these things, is in a much better position because he’s got a seasoned organization, besides, to work with . . . to work these things out.75 I’m satisfied that he will. I think an agency like the space agency is like any new agency in government, in my experience, it is that they just aren’t organized to handle things as competently and consequently there’s just one hell of a lot of waste. I think there’s a failure, too, to profit by past experience. I spent three years down here during the war—the War Boardand ran the allocation of materials and production for a period of time.76 And what . . . we tried to coordinate everything by subcontracting, and handling all the subcon- tracts all over the lot is just an impossible undertaking. The logistics of it are impossible, and your control of the money and the time, are impossible. And I think they’ve got to learn to deal through trying . . . trying to deal through self-seeking, not established criteria and policies on all those things. This is part of the way of saving money and . . . and not losing effectiveness . . . but gaining effectiveness here. President Kennedy: I agree; I think the space agency— Boeschenstein: The same thing is difficult politically because the political pressures are terrific in these areas. President Kennedy: No, well, it’s not really that so much. . . . I agree with that and the space agency is the prime target for . . . And then it’s rather . . . Well, it’s the one area that the Congress gives them everything that [unclear]— Boeschenstein: It sure does. That’s right. President Kennedy: There’s no real congressional needle in as there is—

74. For cutting federal expenditures. 75. Robert S. McNamara, secretary of defense. 76. The War Production Board. 342 THURSDAY, AUGUST 9, 1962

Boeschenstein: Yeah. President Kennedy: —in a good many other . . . foreign aid and the rest of them. Instead, everything they ask for they get, so it puts a tremendous burden on us to make sure that they— Boeschenstein: Any new agency, as AECwas, they all are . . . the new ones coming up.77 Blough: Crawford, you had some ideas about this? Greenewalt: Well, there’s . . . there’s nothing very novel about anything I have to say. I just . . . take an example of our own book. We were having a rugged time in 1958, with sales and profits all off, and we thought we simply had to cut our costs. And it was perfectly obvious that you could not approach it by finding a few big items and lopping them off. It couldn’t be done that way. The way you did it was to [tape skips] tell our departments simply to do their job for less money. We didn’t cut out anything. There was no activity that we were engaged in that we could cut out. Well, the result of it all was we were able to get the cooperation of everybody in the management group right down to the foremen. There were some very silly little things that came up, but the net result of it was that we knocked 50 million dollars, annually, out of our costs. That was about 6 percent of our cost, ex raw materials. There was not an item that was as much as a million dollars. There were an enormous number of items for two thousand, three thousand, and some two hundred, and the way you had to do it—I could- n’t do it—but the way you had to do it was to get the cooperation of everybody, that had any control whatever of the purse strings and simply say, “Well, will you do your job for 5, 6, 7, 10 percent less money?” Just do it. And what this would mean is that Doug and his associates would have to start the line and get everybody down imbued with the idea of doing their job for less money.78 Not cutting out anything, but just doing it for less. This will work. It can be done, but the thing is what it takes is an esprit de corps, that goes from the top to the bottom with no delay. It can happen, and it . . . as a matter of fact, you’d be astonished at the results that you could get if you could get that kind of cooperation. I think that really . . . I took this same position about a tax cut associated with a reduction of government expenditure before the Ways and Means Committee. But I think that really . . . a determination to do it, and a clear feel on the part of yourself and to members of your cabinet that you are going to do it. I think that if that was made clear to the public, I think

77. The abbreviation AEC stands for Atomic Energy Commission. 78. C. Douglas Dillon, secretary of the Treasury. Meeting with Business Leaders on the Tax Cut Proposal 343 that would . . . that associated with a tax cut, would not be taken as an evidence of profligacy. President Kennedy: Let me ask you, isn’t it partly . . . if you want to stimulate the economy, of course, you want to pass the cut. Really what you want is a . . . is a deficit, and you want more money being spent than is being taken out of the economy. Greenewalt: Well, I was asked that question by Mr. Ullman . . . was- n’t it?79 And I replied to him this way, that if you look at the psychological point of view, you make a tax cut in personal income tax rates in the order that we’ve been talking about, and everybody and his brother has got some money in his jeans that he didn’t have before. This is going to be felt by 150 million people very directly and very personally. They’ve got money that they didn’t have before. Now, to me this is a very important psychological factor. Whereas, for example, a cut in government expenditures of the sort that I’m talking about and in the way I’m talking about is not really going to be felt in a detrimental way by anyone. There was an interesting study—I don’t know whether you saw it, Doug—by the [unclear] people, who evaluated the tax cut that was made in ’53. And they show that the leverage of the actual tax cut itself was multiplied by some three- or fourfold. Boeschenstein: The turnover? Greenewalt: So that it’s so that if the tax cut was of the order of three billion dollars, they had to run a multiplier of . . . well, I don’t think it was that much. But the effect on the GNP was something like three or four times that. There’s a leverage to it, due to a feeling of confidence that was important. And the reverse on the part of government expenditure would not be so.80 Blough: Mr. President, on the question of the economy, Mr. President, we had a lot of discussions about that. And we understand the problems that you know better than we do. I’d like, if Henry Alexander would comment on this, and give you a little bit of our thinking with respect to the timing.

79. Al Ullman was a Democratic congressman from Oregon and member of the House Ways and Means Committee. 80. President Kennedy’s Keynesian economic advisers recognized a similar multiplier but tied it to Keynes’s appreciation of a consumption function not materially affected in distinct ways by increased consumer or government spending. The tax cut to which Greenewalt referred became law in 1954. It totaled approximately $7.4 billion, $5 billion of which was due to the expiration of an existing Korean War income surcharge and excess profits tax. About $1.4 billion of the tax cut stemmed from tax reforms, much of which was offset by a concurrent $1.3 billion Social Security tax increase. 344 THURSDAY, AUGUST 9, 1962

Particularly, the question of the uncertainty with respect to when the . . . You may have to face up to a very, very major problem as far as the dollar is concerned. And there is a number in the Ways and Means Committee . . . if . . . unless you and Henry testify that it’ll actually recover with the total picture, that at least we’re talking about, that is, reduction of expense, reduction of taxes, and change in the interest rates. I think we— Henry Alexander: When I was here last time, Mr. President, I talked a good deal about my uneasiness about the dollar and gold. President Kennedy: Yeah. Alexander: And gold. And you asked me if I would cut taxes if we didn’t have a balance of payments or a gold problem just to stimulate the economy at this stage, and I would say no. And I so testified before the Ways and Means Committee. However, before them, as before you last time, I did stress the point of maintaining the value of the dollar, and that money was, if not running out of the country, it was certainly oozing out of the country. And my whole approach and interest in the tax cut stemmed from my uneasiness about the dollar and the gold problem. Then, I think, the first popular step that anyone would take is to level out the interest rates, but to the extent that that has any restraining effect, I favor the tax cut in order to ameliorate any conceivable degree of restraint with the [unclear]. I, obviously, just to my eyes, after three hours I suppose, I didn’t get much reaction except I saw considerable interest on the part of the chairman [of the House Ways and Means Committee, Wilbur Mills] in the balance of payments, and the dollar, the gold . . . [unclear] which had not been stressed in perhaps the whole course of these hearings. It had to do with shall we have a tax cut to stimulate the economy and create a very big deficit. My whole thinking and my whole testimony was to the fact that it’s a part of our job of defending the dollar. Secondly, there’s no quick trick that will do these. What’s been done and the cooperation that you’ve gotten have been terribly helpful. I would guess essential, essential. Some of these arrangements that you have worked out in the trade [unclear] whole balance of foreign investment. But the money is still oozing out, Mr. President. Your Telstar broadcast was effective; . . . there was some reaction to that.81 It was dramatic,

81. Due to the recent launching of the AT&T Telstar communications satellite on 10 June 1962, the first ten minutes of President Kennedy’s 23 July 1962 news conference was broadcast live in Europe. Included in his remarks transmitted to the Europeans, were the sentences, “The United States will not devalue the dollar. And the fact of the matter is the United States can balance its Meeting with Business Leaders on the Tax Cut Proposal 345 they saw you in person say that you were going to defend the dollar. But the flow of money is still outward, and the dollar is rather weak. And I’m uneasy that between now and even January we might have a heavy run on the dollar. It continues to be the subject of talk and conversation, both at home and abroad. And I think the orthodox, the clear way to cure that—and I believe this program would—is an increase in interest rates. And I’m not talking about high interest rates; I’m talking about a movement upward in the general area of foreign [unclear] long rate, that—offsetting any possible adverse effect by the tax cut—which in turn, I think would surely stimulate the economy. It surely would do it, more than any other way I could think of. Of course, the members of the Ways and Means Committee, many of them would want . . . They are against high rates. As I talked about rates like they have in the Argentine which run as high as 25 percent, but they can’t accept that [unclear] very well. We talked about currencies, then it’s profligacy, and we’re not talking about currencies that are depreciat- ing 25 percent a year. Of course rates are bound to be high. In a good discussion I got no idea of what they really were thinking about, but I had enough time and enough questions to emphasize the gold and soundness of maintaining the dollar. Whether any of them were interested in that approach, I could . . . I think the chairman was. President Kennedy: Probably there’d be a short-term flow of . . . tremendous [unclear] . . . losses. What are they primarily? [Unclear.] Robert Roosa: Well, Mr. President, a lot of the . . . these short-term capital flows . . . part of it is the backwash following the turn around in the main position—things that came down have gone back. Part of it is a continuing spread of an awareness by American corporations that the . . . whether or not the dollar is weak, they can hedge their bet by putting a little more money abroad, taking care in advance of needs that may come later, and I think at a time when they were still shell shocked by the surprise of developments in Canada.82 This brought home these possibilities much more to American businessmen than they had seen previously. So that a little bit of change by a number of firms caused a larger outflow for these reasons in July than anybody could have anticipated. I think that may already be slowing down. My own hunch is that this is

balance of payments any day it wants if it wishes to withdraw its support of our defense expenditures overseas and our foreign aid” [see Public Papers of the Presidents of the United States, John F. Kennedy, 1962 (Washington, DC: U.S. Government Printing Office, 1963), pp. 568–76]. The broadcast led to a temporary break in the price of gold on the London market. 82. After the Canadian devaluation and imposition of import surcharges earlier in 1962. 346 THURSDAY, AUGUST 9, 1962

partly borrowing against upward movement that wouldn’t come later so that it’ll still be a part of the same year’s balance of payments deficit.83 We just got more a little sooner. President Kennedy: Where are these funds going to? Roosa: Well, Mr. Alexander can tell Herb and I in detail, but broadly they’ve gone to Switzerland, Germany, Italy, and France. Now, in the case of Italy, I haven’t had a chance to talk with this about this group, where the biggest increase has been, we’ve completely neutralized that flow . . . absolutely locked up those foreign currency operations. We’ve got nine hundred million dollars locked up. It didn’t all come in this period, but all the increase, has— Greenewalt: This is Italy? Roosa: Italy. In the case of Switzerland, ourselves and the Federal Reserve, within the last three weeks we’ve locked up another two hundred million that went in there. So while it is bad . . . President Kennedy: When you use the phrase “locked up,” what do you mean? Roosa: We . . . oh, about . . . what . . . well, all we do is provide a way in which, through offering facilities for forward cover—I have a memorandum on this which is coming through to you tonight, it should be here84—providing forward cover for, that is, we sell the other currency forward to make it possible for them to maintain their dollar holdings without risk and keep investment here.85 It just means, however, that the transfer of ownership has been to a foreigner, and it shows up as a loss in our balance of payments. It does not, though, lead to a pressing of those holdings on the foreign exchange market, and that is locked up in the sense that it will not produce a demand for gold. Well— President Kennedy: Regarding the American companies’ stake, what are they doing with them in July? What would they do? What is . . . where are those dollars going? I mean what . . . Roosa: Well . . .

83. In the common parlance, particularly among political figures, the current account deficit— part of the overall balance of payments—was often referred to, incorrectly, as the balance of payments deficit. 84. “Memorandum from Secretary of Treasury Dillon to President Kennedy,” 9 October 1962, FRUS, Foreign Economic Policy, 9: 35–43. 85. In these transactions, the U.S. Treasury would contract to sell any one of the subject currencies at a future date (often three or six months afterward) and at a fixed price. Were this currency to appreciate against the dollar over this period, the issuing country would be protected against losses incurred by maintaining, rather than cashing in, their dollar holdings for gold. Meeting with Business Leaders on the Tax Cut Proposal 347

President Kennedy: For what purpose are they going? Roosa: Well, for the most part, these are short-term investments, bank deposits, and other money market instruments in these countries. Some also under France but France is a little different case. A lot of companies want to plug a little money in there. There isn’t much of a money market that goes into bank deposits there. President Kennedy: Why do they want to move it into France? Roosa: This is the most roaring, expanding economy. American businesses who are operating there, need funds. They can borrow or obtain the money here much more cheaply than in France. The borrowing rate in France is 7 percent. President Kennedy: Yeah, now the thing I . . . the thing that I’ve . . . even if you affected your interest rate by the amount we talked about last time, which is half a percent— Roosa: Yes. President Kennedy: —that wouldn’t, it seems to me, you’d still [unclear] it. You suggest that it would not have a very much of an adverse effect on our economy, it would seem to me it would not discourage a person who wanted to invest in France or get into the European . . . with that kind of a flow . . . Boeschenstein: That’s, that’s part of the—[Unclear exchange.] President Kennedy: Now despite these . . . even with these high interest rates, these . . . none of these European countries permit the kind of flow we’re talking about?86 Do they out there? Alexander: Yes they do. They— Greenewalt: They permit—[Unclear exchange.] President Kennedy: [Unclear] it’s just the interest rate differential that keeps the flow going in the direction it’s going? Is there a [unclear]? Alexander: Well, it’s— President Kennedy: Controls of the national government? Alexander: It’s the interest rate plus, I think, Mr. President, now, from the outflow is motivated to some extent [unclear] Canadian devaluation. President Kennedy: Yeah. Alexander: Or we might have it here. And just yesterday, I guess it was, before I left the office, there was a customer I [unclear], a fairly big one out in the Middle West. They make a consumer product. They said, “We are thinking of building a plant in Holland in the next year . . . year

86. Regarding the flow of foreign currencies into the country, particularly U.S. dollars. 348 THURSDAY, AUGUST 9, 1962

and a half. It’s cost completed is five million dollars. We think we’d like to go ahead now”—they have dollars—“and buy guilders.” Unidentified: Right. Alexander: They want to buy between five million dollars—they don’t have that [unclear] be enough—of guilders. But meanwhile, they could be employed, in Holland, at a better rate. They can rest there at a better short-term rate than they can rest here. We now have them in Treasury bills and commercial paper. Roosa: That difference isn’t very much, though. They won’t make more than— Alexander: I know. Roosa: —half of 1 percent. Alexander: [Unclear] what they’ve got there if they want to—that doesn’t cost them anything to do it. Unidentified: [Unclear] devaluation. Roosa: Uh-huh. Alexander: And that doesn’t cost anything. [Unclear exchange.] President Kennedy: What . . . for a half or a quarter of 1 percent? [Unclear exchange.] Sproul: You add slightly . . . a slight difference in interest rates to a concern about the dollar over the future. Then you can get quite a pull. Alexander: And the fact that we are willing to raise them in this lagging economy would be psychologically a very different pull as an expression that the United States will move to defend the dollar.87 President Kennedy: Let me just ask you, though, if this company . . . Now, I was just trying to figure out why if there’s only a half a percent, right, that’s some advantage. But they figure that maybe in two or three years we will have devalued the dollar? Alexander: In the hope that— Unidentified: [Unclear.] President Kennedy: And they don’t think the Dutch guilder would be devalued at the same time? Alexander: In a year or two, they think that they may be short. They may be used . . . to be needing the money to build a plant in the next year and half. Plus there may be some droppage in the economy and they won’t be allowed to move dollars abroad without a license [unclear]. President Kennedy: Well, now, I can see where that would be, really,

87. Raise interest rates. Meeting with Business Leaders on the Tax Cut Proposal 349 possibly, though I think probably we could get out of it if we wanted to get out of it by changing the tax laws here . . . if you really want to make it . . . prevent them from running away. I mean, these are all things you don’t want to do to defend the dollar. Alexander: These are things that— President Kennedy: But— Alexander: —people have some fear of, though. President Kennedy: They’re going to just induce all these things is what they’re going to do; that’s— Alexander: I know it. I just meant [unclear].88 Blough: . . . we don’t know, but the total industrial activity could be down somewhat next year. If any action is taken to . . . shall I say, move in a certain type of direction—I’d prefer not to name the direction, the direction we’re talking about—is delayed too long, the difficulty of moving in that direction is going to become just that much greater . . . just that much greater. The possibility of changing interest rates will be that much harder. The possibility of the tax reduction that would in turn stimulate investment in this country is going to be that much greater when a deficit looms that is greater than the deficit that you . . . that you’re now facing. The possibility of cutting government expenditures at a time like that is going to be that much greater because the . . . those who feel that the total amount of money that’s pumped into the economy is what’s necessary whenever you have a decline in economic activity are going to be that much more vocal in their approach. So the total . . . problem—and I’m sticking to the balance of payments now and not anything else—the total problems, as I see it, is going to loom a great deal larger from the standpoint of any corrective action, and in the meantime our friends abroad are going to look over here at something, and they’re going to say, “What are the avenues that are available to America?” And in my book they’re going to pick out some avenues that are going to be different than the ones we’re now suggesting. And when they decide that those are the avenues, then they’re going to do just what you suggested a while ago. They’re going to say, “Let’s protect ourselves.” Now, I think that—for the small contribution I might make to this— I think that the last paragraph of the statement that Alan Sproul read

88. At this point Tape 9.2 ends and Tape 10.1 begins. Tape 10.1 covers the same meeting, but an undetermined gap went unrecorded between Tapes 9.2 and 10.1. 350 THURSDAY, AUGUST 9, 1962

here is of a good deal of importance in the . . . in your immediate consideration. And we’re . . . I think we’re resolved among ourselves not to talk about politics, but we realize the problems that certainly could be involved between parties; we realize also a lot of other things. But when you’re dealing with the value of the dollar you’re talking about a national issue as distinguished from a party issue . . . at least that’s the way I look at it. And you’re dealing with confidence, both here and confidence abroad. And those things are not going to wait too long. So, my view is that some kind of resolution should be made, and that certainly this would be the direction that we would recommend. And the second view I would have is that the actual implementation of your . . . of this resolution, and I think Fowler or Henry, or Alan here, could indicate to you, Doug . . . Doug raises the question of how you would do this.89 Would you announce tomorrow a change in interest rates? No. But there are other things that could be done in preparation. [Unclear] or would you immediately come out for a tax cut now? No, not necessarily. I mean, we . . . we’re not trying to indicate whether you should or you shouldn’t; that’s something that’s way beyond us. But the kind of a . . . of a proposal, the nature of it, the timing of it, the separation, possibly, during the early months of 1963 between the stimulant-for-the-economy type of what we’re talking about, the investment type . . . But the separation of that from the . . . shall I say, the reform-type proposals. In the consideration by Congress, it could, at least we guess, be separated and the two worked out separately. President Kennedy: I don’t understand, though, what you say about the rescue of a sinking ship. We resolve this matter now and therefore proceed again . . . Blough: I’m talking about— President Kennedy: [Unclear.] Blough: —I’m talking about. I’m talking about your own options. President Kennedy: Yeah, but what I’m talking about is whether we go . . . for what the problem is, is that we have to decide is whether we go for this tax cut now with the chance of getting it before this session of the Congress ends and with that we increase interest rates, or whether you’re suggesting this is a matter that can be put off until— Blough: Well— President Kennedy: —after the election.

89. Henry H. Fowler was under secretary of the Treasury, January 1961 to March 1964. He was later appointed secretary of the Treasury by Lyndon Johnson in 1965, a position in which he served until December 1968. Meeting with Business Leaders on the Tax Cut Proposal 351

Blough: —I don’t think anybody knows. We were talking about that before. Sproul: I would say that we would like . . . If we could do it, we would go for it now, but we think you’re in a much better position to discern whether that’s a practical program or not. And, that if you decide you can’t get the whole program now, we . . . it’s not a piecemeal program that could be done. President Kennedy: I completely agree with you. If we had the administrative . . . if we had that set-aside power, we’d go right . . . I completely agree with you; there wouldn’t be any question about— Sproul: Well— President Kennedy: —doing it right now on both these areas. But the problem really comes down to the question of what the effect will be of our recommending a tax cut and failing. Sproul: I think that would be— Boeschenstein: I think we agree that that’s bad. Sproul: —that would be bad. President Kennedy: So therefore, as tax cuts go, your judgment would be that this . . . you know, you see, you could do it two ways. Say that you recommend it, give the arguments for it, probably not get it, but increase your chances of centering attention on the matter and therefore perhaps get it more quickly, perhaps in a special election, a special session after November or in January. The other thing is, or the other thing would be to say, “Well, if you can’t get it, then you shouldn’t try because the fight itself would be damaging,” particularly if you try and fail. Blough: But then, let’s see . . . there’s still a third thing; that’s the resolution for the program. Take a position, a direction . . . President Kennedy: Well, how do you mean? I don’t— Sproul: Could that resolution be in your own mind and in your executive branch that you have decided this is the approach to the dollar? President Kennedy: Well, yes, but I think we’ve decided about . . . we’re obviously going for the tax cut. We’re obviously either going for the tax cut now, or we’re going for it in January. With the economic indicators . . . if we do not go for it now, and the economic indicators become more alarming, then we would definitely separate the reform. . . . We’d go . . . it would be much more important to have the stimulation of the economy. So that’s, I think, quite clear.90

90. In a televised evening broadcast the following Monday, 13 August 1962, President Kennedy announced that there would be no quickie tax cut (cutting rates temporarily) but 352 THURSDAY, AUGUST 9, 1962

The question we have to decide is whether there’s any hope of . . . depending on whether—what we take a look at from our view of the economic indicators—whether they would be clearly alarming enough to cause the Congress to support the action. If they’re not, and they’re mixed, then you have to make a judgment on whether the Congress would act. And if you assumed that it would not, then, unless the economic indicators were quite clear, my assumption is that it would not. You then have to decide whether it would be . . . how disastrous it would be to try and fail . . . which I think, probably, what would happen is that we would fail probably. Now, when you say, therefore, we’re right about resolving it, I’d resolve it in my own mind what I’d like to do if I were able to do it, but I haven’t resolved what I’m able to do yet. Sproul: Well, is that your direction— President Kennedy: A little bit depends on, well, for example, if the November election continued the House in about the way it was now so that there wasn’t a sharp change, we could meet in November in a special session just on this one problem without the . . . Of course, if there’s a marked change in the House or the Senate, then it would be regarded as a lame-duck session. There’d be a paralysis there, you’d have to go over till January. So that these are some of the [unclear] . . . but when you say, but I’m not quite clear, therefore, I think it would be well for us to decide whether we’re going to do this—which we will over this weekend—now, or otherwise to wait. Is that what you . . . Unidentified: [Unclear.] Blough: Alan, you speak first. Sproul: Well, now, I think that it’s just possible that that resolution also include putting the quietus on talk and recommendations to you and recommendations outside from within the executive branch that no, you can do this by increased government spending and not increasing interest rates, or even lowering interest rates. President Kennedy: Yes, I think the government spending . . . I think we’re in agreement. I don’t think we’re going to . . . We’re doing it in a number of areas, even though the Congress acts, so that if you particu-

that the administration would, instead, send up permanent tax cut legislation in 1963 (see “Radio and Television Report to the American People on the State of the National Economy,” 13 August 1962, Public Papers of the Presidents, pp. 611–17). Use of the term quickie tax cut was derived from a 28 May 1962 memo sent to President Kennedy from CEA chair Walter Heller. It was sent on Blue Monday in response to the precipitous decline in the U.S. stock market witnessed that day. Heller saw the quickie tax cut as a way of shoring up business confidence while the administration planned for a permanent cut. Meeting with Business Leaders on the Tax Cut Proposal 353 larly do . . . if you’re going to . . . if you’re going to try to go for the tax cut. If you’re not going for the tax cut, then, of course, there really isn’t much use in attempting to squeeze too hard between now and January, because you don’t want to deepen the—91 C. Douglas Dillon: I think these gentlemen, one thing they’re talking about is . . . I think they’re very deeply concerned about the thrust of Mr. Patman’s hearings on monetary policies, is that right?92 Blough: That’s right. Yes. Unidentified: Yes. Dillon: My idea is they might need to have lower . . . lower interest rates— Unidentified: [Unclear] any route— Dillon: [Unclear] think it’s an alternative to a tax cut or something. [Unclear exchange.] President Kennedy: We’d like to be sure that you—[Unclear exchange.] Alexander: [Unclear] have made up your mind not to go for— President Kennedy: No, I’m not a . . . I’m not a . . . what Sam Rayburn called a money crank. Why bother to destroy a great career by becoming a— Boeschenstein: A lot of people are preaching to you, Mr. President. And I happen to think the dollar would go down the drain if you did— Greenewalt: I like it, I like that. That’s all I can say. Alexander: Having done that, if you’ve got a chance, after you see the figures, of putting this thing through now, I’d go ahead now. If you conclude, after seeing the figures and feeling around and all, that you can’t put it through Congress in any decent way or workable way, then—very soon—I’d find some occasion to say that you are not going that money- crank route, that you are going to deal with this problem in a way, that this administration is going to try to deal with it in a way that is sensible, and in a way that it will cure it . . . namely watching these government expenditures. You’re going to chance this for a higher level [of

91. Squeeze the budget. 92. Wright Patman, a populist representative from Texas and chairman of the Joint Economic Committee (JEC), had begun JEC hearings in the summer of 1962 on the state of the economy. Also as chairman of the House Small Business Committee, Patman had convened hearings in 1961 on the tax code abuses of charitable foundations. A perennial opponent of the Federal Reserve and the large banks that he believed dominated Fed policy, Patman also used these hearings as a platform from which to warn against the maintenance of artificially high interest rates. 354 THURSDAY, AUGUST 9, 1962

unemployment] . . . are going to [unclear] a high level abundantly clear, Mr. President. But besides that, and that you, are in favor of—as early as possible—a tax cut to alleviate that, and if circumstances remain the same. The sooner you make that point, and if you can’t get the legislation, you, the President of the United States, are for such a program, you’ll do a great deed. President Kennedy: Well, I intend to speak Monday night on that anyway.93 Alexander: Are you? Well—[Unclear exchange.] Boeschenstein: [Unclear] what’s the purpose of that and you have to state what the form of that would be. Greenewalt: Mr. President, I’d like to make a comment on this tax cut question, because this rather bothered me . . . something that you said bothered me a bit, but . . . and I was somewhat bothered by the attitude of the Ways and Means Committee. This question of a recession, or the indicators in July, to my way of thinking, has nothing to do with the case at all. Unidentified: [Unclear.] Greenewalt: Conceivably, if you really, if the economy really fell on its face, you might have to take strong medicine; I don’t think it’s going to. Furthermore, I think we’ve been rocking along under the present tax system for a great many years; the economy’s done very well. I think, however, it can do better. I think it can do substantially better. I think a tax cut will give a permanent, long-range stimulus to the economy. And I would recommend— Sproul: All this growth fever? Greenewalt: Growth? What growth? Sproul: That’s the word we use. Unidentified: That’s synonymous with stabilization. [Unclear exchange.] Greenewalt: I hoped to avoid . . . I wanted to avoid growthmanship, but I have a very strong feeling that the economy would do better if taxes were cut, than it is now. It’s now going at a very high level. Our company’s having a record year, a wonderful year. We could do better . . . the whole economy could do better. So I don’t think, really, a tax cut ought to be contemplated from the point of view of will it save us from some fate worse than death or will it do this? It ought to be contem-

93. As noted previously, the President delivered a live television and radio address on the economy and the tax cut proposal the following Monday evening. Meeting with Business Leaders on the Tax Cut Proposal 355 plated from the point of view that this will be a long-range stimulus to a higher rate of growth. President Kennedy: But of course, if you’d use that argument, then you really wouldn’t try to do it in this session, would you? Greenewalt: Well, that’s what . . . that’s what I said. I would . . . I think it’s so important, that I don’t think risks ought to be taken to having it turn out to be either no tax cut or the wrong kind of tax cut. Either one would be equally bad in my view. I’d like to make just one point on this stimulus question. . . . I’m not going to be argumentative, gentlemen. [Laughter.] We’ve got a few differences of opinion. But, I’d like to make this point about the potential for growth. The DuPont Company’s going to sell about 2.4 billion this year, which will be an all-time high, 8 to 10 percent higher than last year. We will operate this year at about 80 percent of capacity. This means that we have a[n untapped] sales potential of 600 million dollars. Now, if some needle could be stuck in the economy in a way that would encourage demand and would make people more willing to spend or buy things, so that we could realize some fraction of that 600 million potential sales that we have before us, without spending anything for capital investments, it’s there. All we have to do is open the valve wider and make it and sell it. Now, if we could . . . But this is built in. . . . I mean the whole chemical industry, I know, has this excess capacity. The fact that we’re not selling, the fact that there is the excess capacity, weakens prices, weakens profits, and is frustrating for all participants. The minute you start the thing going up, so that you’re approaching that capacity operations, your profits will improve, your competitive position will improve, and the capital investment program, at least as far as we’re concerned, will take care of itself. President Kennedy: I’d say, Craw—now what are you putting into capital investment this year, at DuPont? Greenewalt: Well, we’re authorizing—there’s this distinction I want to make between expenditures and authorizations—we’ll authorize this year some 400 million dollars. We’ll spend this year perhaps 250 million to 300 million. I mean, the difference between authorization and expenditure is a lag of about two [unclear]. Alexander: [Unclear.] Sproul: Now, while he is approaching it from the standpoint of a stimulus to the economy. I come in from the other side, from the balance of payments. While agreeing with what he says about seeing no need for a tax cut now to stimulate the economy if we’re not going to fall on our face tomorrow. From the standpoint of the balance of payments and the 356 THURSDAY, AUGUST 9, 1962 dollar and gold, it may be tomorrow, or it may be next month, it may be six months from now, that we might be faced with a run on the dollar, and that therefore the time element enters in aside from stimulus to the domestic economy. But that that gives me the feeling of urgency about this package of actions to meet the balance of payments problem, and not just as Henry says to ameliorate the effect of a rise in interest rates, [but] to alleviate it. I think we would get both relief of the balance of payments and an improvement in the domestic economy by a— Greenewalt: I agree with what you are saying. Alexander: Both purposes. I do say, both purposes. When you find out there in the thinking world, the tax reform bill is going to be—any way you figure it—they’re going to hold hearings, it’s going to be a long delayed thing, there are going to be arguments pro and con with the thing, and I do think that it would be important to think in terms of a two-part proposition. Greenewalt: I would like— Alexander: One that you can move on promptly, that accomplishes the package part of this thing, and the other to follow. That’s needed anyway. Greenewalt: I would like to second that very heartily. I would be very uneasy in the . . . if I understand the present temper of the Ways and Means Committee, in trying to pull through a tax cut right this minute, well, I’d be afraid. I believe it would fail, which might make it difficult to try again; or you’d get a tax cut, but it would be the wrong kind of a tax cut— Alexander: Uh-huh. Greenewalt: —from the point of view of the stimulus that I’m looking for. On the other hand, the thing that bothers me is that this tax cut question is wrapped up with tax reform. My God, you could go through a year and a half before you got anything. I was really hoping that the thing could be done in two packages; that you could recommend the kind of a tax cut that would do nothing to increase or decrease the inequities of the present system, and then do your tax reform question as a separate package.94 I would hope very much that that could be done. Alan

94. President Kennedy’s economic advisers were beginning to tell him the same thing, especially CEA chairman Walter Heller. On 7 June 1963, when Kennedy decided to postpone attempts at general tax reform, Heller conveyed his affirmation: “As you know, I opposed cluttering up the 1963 tax cut by the inclusion of tax reforms—and I never bought the argument that the vested interests, just because we fed them a high protein diet of tax cuts, would be any less venal or voracious when we kicked them in their private parts” (Memorandum, Walter Heller to President Kennedy, Tax Cut File, Papers of Walter Heller, John F. Kennedy Library). Meeting with Business Leaders on the Tax Cut Proposal 357 could speak of the sense of urgency with respect to the balance of payments problem. From my point of view, the stimulus to the economy, if you will. . . . I would far rather do it in an orderly way and get what you’re after, than to try to push it through now and fail. But this is a political decision, that— President Kennedy: This is a matter, really, which is . . . We’re ill equipped in this country, in Congress to deal with. Greenewalt: Yes. President Kennedy: The balance of payments, and move the tax program, really, underneath, sort of, a gun. With the domestic difficulty and also our foreign difficulty, it’s really almost too difficult a question for a system of divided powers like ours to deal with. We have got the Federal Reserve independent of the Executive and the Congress, and the Congress independent of the Executive, and the body or division which is quite close to all of us. That is unprecedented. I’m sure from your experience before the committee, they just, really . . . When you look at the . . . just like almost the rest of us, because really, you can’t . . . you don’t get the proper balance between [unclear] we all know [unclear] on tax system and monetary policy in terms of everything. Blough: Yes, it is in a way, but it’s going to become more pressing— at least some of it looks like it— President Kennedy: Then you’ve still got these carryovers, that are like Patman, where all . . . you know, this is [unclear] getting bribed [unclear]— Unidentified: Yes. President Kennedy: —on the money market. [Unclear exchange.] That’s the group. That group . . . sort of people. Blough: Well, Mr. President, you’re looking across the table at two different industries and two different companies.95 I shouldn’t let you go away with the impression that the steel business is like the chemical business. Here we’ll have a poor year. We would spend much more money if we had it this year to spend it. We would appropriate much more money this year. Now, Brother Dillon hears that well, you’ve helped some, perhaps, but we’re the picture of industry, [that] generally, is not, shall I say, completely portrayed by the rosy glow that comes from the— President Kennedy: Well, I won’t go away like that! [Laughter.] The . . . actually, the reason we put this in the [unclear] is because I thought the bill would . . . to get the Congress to act, and also this com-

95. Greenewalt’s DuPont and Blough’s U.S. Steel. 358 THURSDAY, AUGUST 9, 1962

mittee hearing of Wilbur [Mills]’s was an effort to try to see if we could see what the temperature was without having to go out. But I think that we’d better call an end to. Which we will over this weekend and see whether we’re going to or not. But I think this is very . . . this meeting has been very useful to try to . . . to try to— Blough: Yes. President Kennedy: —put this in a way that will have the most- desired effect. If we don’t go, tomorrow I think we ought to indicate that . . . consideration of the matter. Blough: I think what they’re saying, Mr. President, is that whichever way you decide, this is the time when a kind of sketch of the approach and the reconciling of domestic needs and the balance of payments requirements ought to be brought forth, taking advantage of all the attention that has now befallen us. President Kennedy: Probably— Blough: Rather than regarding it as a retreat. President Kennedy: [Unclear] but it’s terribly difficult— Sproul: It sure is. President Kennedy: —matter. Unidentified: This is the interesting— President Kennedy: I find it interesting that whenever I talk with anybody about it that the whole thing is very [unclear]. Well, I think that, well, I . . . in any case, I do think it’s time we indicated what we’re going to do about the taxes and I gather that you meant, Roger, that we indicate the sort of philosophy behind the action taken? Blough: Well, I think that— President Kennedy: The philosophy of [unclear]. Blough: [Unclear] balance of payments, and we’ll get the chance to [unclear]. Unidentified: Yes. Sproul: And as far as your official family is concerned, that’s it now, and not several contending parties who are trying to make up your mind for you. President Kennedy: Well, that’s a pretty good— Dillon: That goes beyond [unclear]. That’s a good order. [Laughter.] [Unclear exchange.] President Kennedy: Well, you know what happened one time when they asked Mayor O’Brien in New York to elect . . . who he was going to appoint sheriff, he said, “They haven’t told me.” [Laughter.] [Unclear exchange.] Dillon: I think at this point, that there weren’t very many people [unclear] knowledgeable about this particular subject, that I. . . . I would Meeting with Business Leaders on the Tax Cut Proposal 359 say that, really, we had a very good meeting . . . a very good meeting. [Unclear exchange.] Unidentified: I said before the meeting [unclear].

At this point, the meeting broke up and the participants engaged in less formal discussions that can often not be heard over one another. Only the following segments are clear.

Unidentified: Yes . . . Yes. Dillon: All right. Sproul: [Unclear] 23 percent, down now [unclear]. President Kennedy: The industrials?96 Boeschenstein: Yeah, they’ve moved ahead because, they apparently read your . . . the market is more concerned about a couple of strikes that they had had that had tied up construction in northern California for 54 days, and in Seattle and the Northwest for about 40— President Kennedy: What [unclear]— Unclear exchange. President Kennedy: [Unclear] broad industries index. Blough: Do you remember Mayor O’Brien’s platform? President Kennedy: No, I don’t think so. Blough: He was for a larger army and navy. He was for being kind to mothers and children. [Laughter; unclear exchange.] Unidentified: [Unclear] against . . . against everything. Unidentified: Well, Mr. President, we’ll keep thinking. President Kennedy: Right. Unidentified: And preaching. President Kennedy: As far as the short-term part, though, as far as the broad governmental effect of the thing, as far as the American . . . aside from American investments abroad, that part . . . Short term, do you think that it can only be handled by interest rate adjustments, and not by any other— Unidentified: Strategy? Unidentified: That’s right. Greenewalt: That’s right, Mr. President. Alexander: And that is not going to affect development. It reflects what [unclear] expand development of business. It isn’t that much.

96. Dow Jones industrial average. 360 THURSDAY, AUGUST 9, 1962

Blough: We have relied [unclear]. Unidentified: Thank you, Mr. President. Bye. President Kennedy: Bye. Blough: [Unclear.] We have operated the business on [unclear]. President Kennedy: Oh yeah . . . right. Blough: I have a suggestion. [Unclear exchange.] If you wish that the 20th anniversary of your [unclear] and I would suggest that you are getting too close to anything else that we’ve ever had in the first or second week of September. President Kennedy: If I can do it, could I do it the week after Labor Day? Do it the week after Labor Day? Blough: Oh, well then, that would be, say, Thursday the 6th? President Kennedy: Yeah. Blough: That’d be a good day? President Kennedy: Sort of . . . yeah. Blough: So we could . . . late Monday, September 3d. Is that the holiday? President Kennedy: Why don’t we do it Thursday the 6th, at four o’clock? Blough: Four o’clock? President Kennedy: Right. Blough: Fine. Right here? President Kennedy: Right here. Blough: One minute? President Kennedy: Right. Blough: And we’ll meet and we’ll talk with our people about this. President Kennedy: Fine. OK. Good. Blough: And shall I mention this thing to anyone else? President Kennedy: I’ll do it right now. I’ll tell [unclear]. Blough: Thursday, September 6th. President Kennedy: Good. Fine.97 Blough: Thank you. [Unclear exchange.]

Crawford Greenewalt seemed to espouse views most similar to those of the President. Indeed, during the meeting with his economic advisers the following day, Kennedy would cite none but Greenewalt in his pres-

97. From 4:00 to 5:15 P.M. on Thursday, 6 September, the President did meet with the Business Council, which included Roger Blough. FRIDAY, AUGUST 10, 1962 361 entation of the business community perspective.98 The idea introduced by Greenewalt was the notion that many large corporations were currently beset with excess capacity that might well be put to profitable use were a tax cut enacted that enlarged consumer purchasing power. And though the Kennedy administration had already introduced changes that promised to spur growth and investment with direct supply-side initiatives, it was this notion of demand-led growth and investment which seemed to captivate the President and to dovetail most favorably with the thinking of Kennedy’s chief economic advisers.99 For the remainder of the day, the President had a series of short meetings with Under Secretary of Commerce Clarence “Dan” Martin, Dean Rusk, Larry O’Brien, George Gardner, and Senator Thomas Dodd of Connecticut. He did not tape any of them.

Friday, August 10, 1962

The press reported the morning of August 10 that the President would not make his decision on an immediate tax cut for another week. Welcoming Wilbur Mills into his office at 9:30 A.M. for the second time in four days, the President needed to put an end to this policy debate. Although he and the powerful legislative leader disagreed over the advantages of a temporary tax cut, Kennedy had reason to be grateful to Mills. The House Ways and Means Committee, which Mills chaired, had just concluded two weeks of hearings on the tax cut without issuing a statement of any kind, though Kennedy assumed the committee opposed it. This had bought the administration some time, and now Kennedy wanted to talk with Mills about what came next. The President had likely given up on getting a quickie tax cut in 1962, but he remained committed to some kind of significant tax relief in 1963. He would need Mills’s support for that. Following their 30-minute chat in the Oval Office, which Kennedy did not tape, the President invited Mills to sit in on an administration discussion in the Cabinet

98. See “Meeting on the Tax Cut Proposal,” 10 August 1962. 99. The supply-side initiatives were a 7 percent investment tax credit, wending its way through Congress at this point, and the accelerated depreciation guidelines, already enacted by executive order earlier in 1962. 362 FRIDAY, AUGUST 10, 1962

Room about the pros and cons of tax cuts. In the room would be Paul Samuelson of the Massachusetts Institute of Technology (MIT), one of the first and certainly among the more eloquent proponents of a tax break for the American people. Kennedy wanted Mills to hear Samuelson’s views. It was also useful for the Kennedy team to listen to Mills, to sound him out on how quickly tax cuts could be enacted. The timing was important. Kennedy did not want his tax initiative to take so long that the economy slid into a recession. After the President and Mills walked over to the Cabinet Room, the meeting began. Kennedy decided to tape it.

10:10 –11:10 A.M.

Thinking about a tax cut next year, we’ve got a major budgetary problem because we’re going to have a deficit. So we’re going to have to cut taxes at the time of a deficit. As long as we don’t have an inflationary problem, do you see the cutting . . . running a prospect of a two- or three-year deficit as a very serious problem?

Meeting on the Tax Cut Proposal1 Continuing to solicit advice on the knotty tax issue—having met just the day before with five business leaders—President Kennedy convened his domestic policy advisers to decide, finally, whether to go for an immediate, or quickie, tax cut in 1962. Uncertain of the proposal’s merit and status within a jumble of strong congressional concerns, lukewarm economic numbers, and commitments to the long-range goal of tax reform, Kennedy asked his principal economic advisers to make the strongest case for or against an immediate and temporary tax cut before he killed it three days later, as he suggested he would on August 6 to Chairman Mills.

1. Including President Kennedy, Gardner Ackley, David Bell, C. Douglas Dillon, Henry Fowler, Arthur Goldberg, Kermit Gordon, Walter Heller, Luther Hodges, Wilbur Mills, Kenneth O’Donnell, Robert Roosa, Paul Samuelson, Robert Solow, Theodore Sorensen, Elmer Staats, James Tobin, and Robert Turner. Tape 10.2, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. Meeting on the Tax Cut Proposal 363

“Send me down some good economists,” Kennedy told Harvard law professor Archibald Cox in August 1960, launching a tutorial that would continue unabated throughout his presidency. And though nagging questions remained to the very end, by the time he convened this meeting, the President was very much in tune with the logic and analysis of advisers such as CEA chair Walter Heller and MIT economist Paul Samuelson, the latter being Kennedy’s first choice as the council’s chair who, as this meeting will attest, remained an important outside consultant even after turning down Kennedy’s offer. Chastened somewhat by his recent (April 1962) showdown with steel companies over wages and prices and by the adverse stock market reaction in May, the President still exhibited an unshaken faith in his economic advisers and a newfound confidence in his own ability to comprehend the economic prescriptions they had offered for his consideration.2 “Throughout Kennedy’s presidency,” James Tobin recalled, “Walter Heller taught him economics; we others helped, but no one could match Heller’s knack of making points in concise readable colorful language. The President was an apt pupil, intrigued by the subject intellectu- ally as well as pragmatically.”3 On June 7, 1962, at a White House press conference, President Kennedy announced his intention to seek a tax cut that was not revenue neutral. Four days later, in an address at Yale University, Kennedy assailed the prevailing and popular mythology that marked this type of initiative unwise or foolish, insisted that government debt and the deficit were bad things in and of themselves, and convinced many that economic cycles were natural and unavoidable. Beseeching his audience to discard these myths and others like them, he urged the Yale graduates to move beyond the “reassuring repetition of stale phrases to a new, difficult but essential confrontation with reality.”4 Called the “key manifesta-

2. The Dow Jones industrials, for example, had plunged from approximately 740 to 560 by the end of May. With price-earnings ratios that averaged approximately 26:1 just before the drop, many saw the stock market plunge as an event that was simply waiting to happen. Walter Heller noted that, in this case, Wall Street was a victim of its own propaganda regarding a squeeze on profits, while John Kenneth Galbraith read the drop as a positive signal, suggesting that it implied public respect for the administration’s inflation fighting efforts and the resulting recognition that common stocks would no longer appreciate forever for reasons of inflation [see William J. Barber, “The Kennedy Years: Purposeful Pedagogy,” in Exhortations and Controls: The Search for a Wage-Price Policy, 1945–1971, ed. Crauford Goodwin (Washington, DC: Brookings Institution, 1975), p. 177]. 3. James Tobin and Murray Weidenbaum, eds., Two Revolutions in Economic Policy: The First Reports of Presidents Kennedy and Reagan (Cambridge, MA: MIT Press, 1988), p. 6. 4. “Commencement Address at Yale University,” Public Papers of the Presidents, John F. Kennedy, 1962 (Washington, DC: U.S. Government Printing Office, 1963), pp. 470–75. 364 FRIDAY, AUGUST 10, 1962

tion of JFK’s conversion to the New Economics,” by CEA economist Arthur Okun, the Yale address signaled, at the very least, that President Kennedy was now eager to transform political rhetoric into substantive economic policy change. By the time he met with his economic policy specialists this August morning in 1962, President Kennedy believed that, given the existing circumstances, deficit spending was economically appropriate but politically uncertain, that a recession remained a distinct possibility in the coming months, that accelerating inflation was very unlikely, that increased purchasing power was what the economy needed most, and that tax reform—including new supply-side incentives—remained a feasible and perhaps necessary adjunct to tax reduction. How to succeed with Congress, when to call for the tax cut itself, and how to be certain of its medium- or long-term effectiveness were the questions foremost in the President’s mind as he commenced the following discussion. President Kennedy started recording as Walter Heller briefed the group on the latest economic figures.

Begins in midconversation. Walter Heller: . . . you’d find in unemployment, and the rebound in total retail sales, particularly automobile sales. I guess the poorest news was the downturn in housing activity and the further decline in the factory workweek. I’d say, by and large, the July indicators confirm an outlook for a continued slow advance in the economy. They do not indicate a recession in the next few months, but it is still a possibility because the pace of advance is slow. Now, as to some of the specific figures . . . as you know, unemployment dropped to 5.2 percent. Retail sales rose about 2 percent which brought them back to their May levels. Sales of new autos ran at about 6.9 million apace on an annual basis. The industrial production index, which won’t be announced for a couple of days, will probably be up a point. Luther Hodges: One eighteen-seven, we just got it, preliminary, through Mr. Dillon. President Kennedy: Well, they’re just . . . they’re going to round it out, aren’t they? Hodges: Yeah. President Kennedy: Say, one point? Heller: Yeah, I agree. It rounds out as far as public information is concerned; that means a rounding up from 118 to 119. Personal income increased at a slow rate, but it increased. Nonagricultural payroll employ- Meeting on the Tax Cut Proposal 365 ment rose about 124,000 . . . that was equal to the average of May and June. Those are all on the plus side. On the minus side, housing activities, I’d say, declined. Factory workweek declined. And we have an advance report on the capital appropriations by manufacturers in the second quarter. President Kennedy: That’s the Newsweek one? Heller: That’s the Newsweek one; that went down 10 percent. Ones that aren’t in yet are housing starts and construction contracts. President Kennedy: When do you get those? Heller: Those will come in next week. President Kennedy: Yeah. Heller: Thursday. President Kennedy: End of the week? Heller: But— President Kennedy: [Unclear.] Heller: —about Thursday. Building permits we got an advance notice on this morning. They’re holding at about . . . holding about level with June. New orders for durable goods, inventories, and manufacturers’ sales are the other three that will come in. Questions on the meaning— C. Douglas Dillon: One question I wanted to ask you: I notice that construction, new construction, was down about $900 million, oh . . . from June to July, but the entire decline was in the governmental field. Heller: Yep. Dillon: And it . . . I also noticed, when I look back last year—when we were starting up like this—that the exact same thing occurred. There was a billion dollar decline in the flow of governmental [unclear] and it was all picked up promptly in August. So I wonder if that might be some sort of a statistical aberration or something like that? Heller: Well, I . . . well, I don’t know. I think it’s important, though, to point out that it was— Unidentified: Private construction activity. President Kennedy: Why is that . . . oh, private not . . . why did the government decline? Dillon: Well, as I say, it may be a statistical aberration of the way they use— David Bell: It’s news to me, Mr. President. I haven’t heard about this figure before. President Kennedy: Paul? Bell: We’d better check it. It may well be a statistical aberration. Heller: But that’s [unclear] federal, state, and local, of course? Dillon: Yes. Federal, state, and local—all of them. Bell: The summer is the construction season, right? [Unclear exchange.] 366 FRIDAY, AUGUST 10, 1962

Dillon: Something [unclear] counting last year. This is the season— Kermit Gordon: It needs the right adjustments. Unidentified: Seasonal adjustments. Dillon: Seasonal adjustments. President Kennedy: Back to the drawing board. What are the . . . maybe we could just check that. Bell: Right. President Kennedy: Because it is peculiar, the end of June . . . Bell: Yeah. President Kennedy: I guess we’d— Arthur Goldberg: I’d like to mention something about the unemployment figure. It’s not as good, actually, as it sounds. You’ve got about a 5.3, and rounded out, a 5.345. If it had gone up an extra five one-hundredths [sic] it would have been reported as 5.4 . . . see? Unidentified: Yeah. Goldberg: Actually, they round it out. They round . . . so it was 5 . . . it fell to 5.345. Robert Solow: Not only that, but the whole decline in unemployment is a decline in the labor force, so there’s no increase— Goldberg: The labor force figures are absolutely . . . we’re not going to show—I mentioned to Wilbur, Wilbur’s committee—we’re going to show a total increase in the civilian labor force this year of only 150,000.5 That’s against a progressive increase—which would include the military, of about 350,000—of over a million. So we really have had a very dramatic lack of increase in the labor force this year. Dillon: I was talking to Stan [unclear] about that yesterday and he says that they didn’t know whether that was a good sign or a bad sign. He said it was just . . . didn’t know enough about it to know. President Kennedy: Well, Walter Reuther says it’s because they’ve gotten discouraged working, but I don’t think that could be. . . .6 Goldberg: No, no . . . President Kennedy: That can’t be it. Goldberg: That’s too glib.

5. Wilbur Mills (D-Arizona), chairman of the House Ways and Means Committee, was also present at this White House meeting. Mills had met privately with President Kennedy to discuss tax cut proposals just four days earlier (“Meeting with Wilbur Mills on the Tax Cut Proposal,” 6 August 1962) and stressed both the importance of timing and his appreciation of how administration economists and business leaders differed on the desired type of tax cut (creating added purchasing power versus incentives for capital investment). 6. Walter Reuther was the president of the United Automobile Workers, 1946 to 1970. Meeting on the Tax Cut Proposal 367

President Kennedy: There’s more to it than that. Goldberg: It’s a combination of three factors . . . we’re going to develop some figures. It’s a combination of three factors: one is the older people are retiring because of the improvements in Social Security. Unidentified: Sure. Goldberg: Second, we’re making a little hay among the youngsters about staying in school . . . which is good. I mean, both of those developments are good developments. The third is probably the decline of adequate job opportunities. The women in the middle ages are not going into the labor force at the present time in the same proportions that they had been going in previously. President Kennedy: Yet, would they be . . . I wouldn’t think . . . or is this so . . . Arthur, is that the group that would find it particularly hard to get jobs? Goldberg: No. The funny part is that even . . . I can’t make it that category because the women beyond that age are going in and finding jobs—over 45. It may be a good development. It may be that the factory earnings what they are, and the workweek coming up, there’s enough money in the family so they don’t have to go into the labor market. It doesn’t mean, necessarily, a bad development, but it’s what’s happening. President Kennedy: Do we have any figures on factory earnings— Goldberg: Yes. President Kennedy: —In July? Goldberg: Factory earnings in July were . . . fell 71 cents; $96.56 for average weekly factory earnings. The decline, even in this little amount, is due to the fact that the hours have dropped. President Kennedy: By that point-three-tenths [sic]? Goldberg: Point-three-tenths [sic] from June. Instead there are 40.4 hours. It’s over 40 hours. Heller: It should be noted on these unemployment figures that manufacturing unemployment increased, or manufacturing employment dropped. Isn’t that right, Arthur? You haven’t talked about June or July. Goldberg: That’s right. President Kennedy: Did anybody . . . we got some charts of the ’49 . . . ’48 and ’49 period, the ’53–’54 period, the ’57–’58 period, then ’58–’59. We ought to see if the ’60–’61 period, then this . . . . Is there . . . they’re all . . . there isn’t any general pattern, is there, that is . . . fairly foreshadows a—7

7. These are all periods of economic recession. 368 FRIDAY, AUGUST 10, 1962

Dillon: You mean by these indicators? Paul Samuelson: Well, my recollection is that in the ’53–’54 and the last three recessions—not the first one, the ’48 . . . I don’t remember that—the leading indicators went down very early, and then there’s a long period of shallow, just holding on. And it looks as if that’s about what’s happened here. And it would have seemed surprising if we actually had the downturn in the middle of the year, as some people thought, in terms of that previous pattern, because just applying the previous methods, there’s quite a lag between when the indicators first begin to go down. . . . That they cried wolf too soon, [unclear] too soon, some as early as the, as May of ’56 they were already calling the downturn which didn’t come until the summer of ’57. President Kennedy: Yeah. Dillon: One other thing that’s interesting here, remember we talked about this fallback in government expenditures, and that’s been reflected now in some revised GNP figures which showed that the total federal government purchases are half a billion less than they originally thought and were only identical in the second quarter with the first quarter. There’s no increased [unclear], and all our projections show that there will be increases after we find out who borrowed from [unclear] at this time. So if there will be bigger increases, then we have to expect it in the third quarter, you see? Bell: Most of what didn’t happen in the spring isn’t going to happen at all, because of this . . . differences in agricultural price supports and differences in housing financial transactions. And so that there’s not something pushing forward . . . Dillon: But housing things don’t come in under federal goods and services.8 Bell: That’s what I mean. Dillon: No, but let’s say I’m talking about this divergence of federal goods and services—down— Bell: Uh-huh. Dillon: —about 500, not your budget figure . . . a billion [unclear]. Bell: Well, our figures show only about $350 million pushing forward into [unclear] year. Dillon: Well, that’s . . . that’s it. That would compare with the 500 million or so. Bell: But I have it less here.

8. Government loans or government-backed loans are not included in the national income accounts budget. Meeting on the Tax Cut Proposal 369

President Kennedy: Well there’s a quarter . . . now, let’s say, for this, the . . . what are our expenditures going to be—the amount of money actually going into the economy—and where is the fourth quarter compared to the first and second? Bell: He’s using a . . . Doug is using the income and product figures9—purchase of goods and services by government. You’ve got the figures there, Doug, do you? Dillon: Yes, we have figures that we’ve estimated that we all agree on. Now the figures were . . . sixty-one-nine for the first quarter, sixty- two for the second quarter, sixty-two-eight estimated for the third quarter, and sixty-four for the fourth quarter. Bell: Yeah, that’s right. Dillon: This thing is— Bell: Yeah. Dillon: Sixty-two and the [unclear]. Unidentified: [Unclear.] Dillon: [Unclear] increase it a billion, another billion in the third quarter and another billion there. So it’s roughly a billion. So it’s going to be a quarter . . . well, roughly a billion every quarter right through. We go . . . we start at ’62 . . . we go to roughly— Bell: Yeah. One, two, three, four. Dillon: —in ’63, ’64, ’65, ’66. President Kennedy: How about other expenditures? They go . . . they go up a billion, don’t they? This goes up another billion in the fourth quarter. What’s the significance of the phrase “other expenditures” then? James Tobin: Nondefense expenditures. Bell: Nonnational . . . President Kennedy: [Unclear.] It says “purchases of goods and services,” and then it says “other expenditures.” What’s that mean, now? Unidentified: I don’t know. President Kennedy: Why do we separate goods and services and other expenditures? Bell: I’m not looking at the same table. Dillon: I don’t . . . I don’t know what that other [unclear]. Goldberg: Mr. President, you asked about the unemployment figures prior to [unclear] periods. And it’s . . . you may notice that if you’ll put together the [unclear]—

9. Figures associated with the national income accounts budget. See the definition of this budget in note 10. 370 FRIDAY, AUGUST 10, 1962

Bell: This is the other half of the other parts of the budget, Mr. President, including— Unidentified: Salaries and trust payments. Bell: No, salaries would be in here, because you deduct social services first, but this would be the transfer payments of various kinds. President Kennedy: Now they’re going up, aren’t they? Bell: Yes. President Kennedy: They’ll go up one billion in the third quarter . . . another billion in the fourth? Unidentified: Roughly. Bell: No, less than that. This is . . . these are the federal expenditures, national income base, total expenditures during the year.10 Goldberg: You know, if you put this little piece along with what you have—I’ve managed to mangle it up trying to get it out of my folder— you’ll see that in the . . . all those prior periods, the unemployment rate dipped lower and started to rise later than is happening now. That’s part of the problem. If you look back to ’48— President Kennedy: Yeah. Goldberg: —and ’54, and ’58 [unclear] now. That the chart indicates [unclear]. President Kennedy: [Unclear.] Goldberg: Also it’s true that at some point they went up higher. And the recession was a deeper recession than some of the prior ones. President Kennedy: What is the highest it has been since the . . . World War II? Is that ’49? Goldberg: Forty-nine. See, it went up past seven to— 11 Unidentified: Oh, but that was a coal strike. That was just one— President Kennedy: Incident.

10. The national income accounts budget differs from the traditional administrative budget in that it (1) includes trust fund activity (Social Security, transportation, unemployment compensation, etc.), (2) records transactions on an accrual rather than on a cash basis (when liabilities are incurred rather than when cash changes hands), and (3) omits transactions in financial assets and already existing assets (loans extended by the federal government, etc.). Because the trust fund activity was so large (approximately $25 billion for FY 1962) and because there was often a significant difference between accrued corporate tax liabilities and actual amounts rendered during a period of rising economic activity (an estimated $3 billion for FY 1962), the national income accounts budget would better reflect actual economic impact and would also produce substantially different deficit-surplus budget figures. 11. The civilian unemployment rates for 1949, 1954, and 1958, respectively, were 5.9, 5.5, and 6.8 percent. By comparison, the first two years of the Kennedy administration, 1961 and 1962, registered unemployment rates of 6.7 and 5.5 percent. Meeting on the Tax Cut Proposal 371

Unidentified: One incident. Unidentified: Yeah. Unidentified: Yeah. Goldberg: The long coal strike? Unidentified: Yeah, the ’58 figure is, I guess, the worst in the postwar period. Goldberg: We’re talking a [unclear]. Unidentified: Seven and a half. Unidentified: Seven and a half percent. Bell: Summarizing on those government expenditures, Mr. President, I think it’s accurate to say that the government outlays, the purchase of goods and services and other kinds of outlays, will be rising slowly through the next several quarters. These expectations have all been taken into account in the economic projections that have been put before you and that have been placed before the committee by these various outside economists and so on. These figures are all public and well known. Those who say that we’re going to have a sidewise movement, a downturn, or a very slow upturn are all basing those judgments on figures which include these projections here. President Kennedy: Professor Samuelson, would you care to . . . ? Samuelson: Well, I would . . . my own summary would be that if the case for a tax cut had to rest on disaster figures in July, the issue is already resolved. The July figures are a little better than might have been expected, even better in some of the aggregates. I think that—speaking now noneconomically—that that’s quite important politically because it makes it more difficult to identify a downturn with any particular governmental action that— President Kennedy: I heard your point. There isn’t any doubt that the longer we go from the May–June stock thing . . .12 Samuelson: Yeah. President Kennedy: Politically it’s to some advantage. And, in addition, the more of these figures come out about the difficulty in Germany and all the rest . . . all this changes somewhat this from being a personal to being a national problem. Samuelson: Yes, and it isn’t just politically in the sense of elections, but— President Kennedy: Yeah.

12. The precipitous decline in all stock market indices registered in the wake of Kennedy’s showdown with the steel industry over wage-price agreements. 372 FRIDAY, AUGUST 10, 1962

Samuelson: I never trust historians getting anything right, but they’re too tempted to get things very wrong. If certain things happen very close together then they take a superficial explanation. So I think that’s a very significant indication of July’s figures. It also pretty much precludes, in my mind, the notion that we’ve already had a downturn—which you couldn’t rule out. I mean, that’s your last kind. Now the question is that it may have very great implications for the political feasibility of any action right now, maybe [unclear]. But I’ve tried to address myself to the economics of the situation just to see what difference the July figures make in my mind on that. And although a lot of the July figures are incomplete, we do have one month’s more figures on even things that aren’t available in July. And it’s sort of a mixed bag there. It looks to me as if any initial shock of the stock market, precipitating a drop- off in the discounted . . . now on the basis of the July figures— Goldberg: Paul, can I interrupt you for one point? Samuelson: Yeah. Goldberg: What would be the effect . . . I got some information which has to remain confidential, that Republic Steel—Tom Patton came in to see me the day before yesterday—he said they’re going to have to announce a reduction in their dividend at their annual meeting, which may set off, in other steel companies, the same thing.13 Their dividend is three dollars and you cut it to two on August the 22nd because they say they’re not earning their dividends. [Unclear exchange.] I raise that as to whether we’re not going to have another stock market reaction. Dillon: Well, I think . . . the thing about other steel companies, the important thing there is that . . . the fortunate thing is that Bethlehem14 and U.S.15 have already taken their action. They— Heller: This . . . this quarter. Dillon: [Unclear] it was a difficult thing. Samuelson: That was a glancer.16 Dillon: They don’t, but there’s— Samuelson: But the real psychological danger has been averted now because U.S. Steel and Bethlehem have; even in the subsequent . . . maybe in a quarter from now— Dillon: Yeah.

13. Thomas F. Patton was president of Republic Steel Corporation. 14. Bethlehem Steel Corporation. 15. U.S. Steel Corporation. 16. Glancing blow. Meeting on the Tax Cut Proposal 373

Samuelson: —go down, but it won’t be bunched up all together. . . . That’s the big point. Goldberg: See [unclear], I fear this— Samuelson: Yeah. President Kennedy: Do you think he’s attempting to put it . . . Goldberg: Well, he came in as a matter of courtesy, and he says on the basis of their earnings that they have to recommend to the executive officers that they reduce their dividend, and they will do that when they meet on August 22nd. President Kennedy: Where would they have been if they had put in . . . with that price increase with all . . . with the difficulties?17 What would have happened there? Goldberg: Well, they say— President Kennedy: What do they say now? Goldberg: This may be a move for a price increase, Mr. President. That’s what may be behind it. They may say they just can’t meet their dividends and that the only way . . . and since operations—even in the last quarter—don’t promise to be much better, they think they’ll be improved some. President Kennedy: But you think they probably— Goldberg: Their only way is . . . to pay their dividends is to increase their prices. Unidentified: [Unclear.] Gordon: Well, you remember the steel companies, Mr. President, raised their dividends very sharply in 1956–57? Goldberg: Yeah. Gordon: Some, I think, even doubled their dividend on the basis of a rate of operations which was then around 90 percent of capacity, when they were earning, clearly earning enough to cover these higher dividends.18 Now that they’re running at about 50 percent of capacity, they simply can’t . . . they closed— Dillon: U.S. Steel is threatening to demand to cut their dividend unless we get the investment credit or unless the . . . oh, there’s an indication that there’s going to be some tax action and they can sort of stag-

17. The steel price increase of 10 April 1962 was rescinded after Kennedy moved against the action he considered both unfair and in violation of an earlier unofficial agreement. 18. Kermit Gordon, among Kennedy’s economic advisers, was the most familiar with the steel industry’s costs and pricing strategies and was the principal figure who urged that the wage- price guideposts be applied first in the early 1962 steel industry–labor contract negotiations. 374 FRIDAY, AUGUST 10, 1962

ger along for just another period, because the first half of the year they earned . . . $1.50, $1.52 and the dividend was $1.50.19 And they’ve had a labor increase the 1st of July which will add to that. And, the 3rd quarter it’ll be down, their production, so they’ll come way short. Goldberg: Well, Doug, they . . . let’s say I think their dividend is too high, so— Dillon: Well, that’s— Goldberg: They show . . . part of the projection that they showed me was that with the tax credit, with the depreciation allowance—which actually cuts down their profits on the surface—and with an anticipated permanent tax credit at the rate of operations, of course, that they’re going in now, they can’t earn their dividends at Republic with all, I guess, with all those tax features.20 Tobin: On the other hand, I think Inland Steel covered their year’s dividend the first half of the year. Goldberg: Oh well, Inland is sui generis. Joe . . . Joe Block did so much better than any . . .21 But what I worry about . . . the reason that I mention that, Paul, is that knowing the way the steel industry oper- ates—even in these days with a vigilant look on the part of Bobby at their operations—this indicates to me a movement by the steel industry to cut their dividends.22 Dillon: Well, U.S. Steel would have cut— President Kennedy: Cut their dividends. Dillon: U.S. Steel, I think, would have cut their dividends this time if they hadn’t felt it would— Tobin: Public reaction . . .

19. The Kennedy administration had proposed both an investment tax credit (signed into law at 7 percent) and a change in IRS Bulletin F depreciation guidelines (accelerated by executive order) as a means to spur new investment and garner additional business support for the administration’s overall economic strategy. At the time of this meeting the new depreciation guidelines had been enacted but the investment tax credit had not yet been signed into law. 20. Accelerated depreciation guidelines were issued in 1962 by President Kennedy’s executive order. They allowed a more rapid writing off of capital investments and equipment and, as a result, larger depreciation charges on the affected company’s balance sheet. This change diminished reported profits but increased corporate cash flow (by an estimated $1.5 billion for 1962). 21. Joseph L. Block was chairman of Inland Steel Company. 22. Robert “Bobby” F. Kennedy was U.S. attorney general and ostensibly the overseer of the antitrust division of the Department of Justice, headed then by Lee Loevinger. Though the Federal Trade Commission—headed then by Paul Rand Dixon, former counsel to Senator Estes Kefauver’s Antitrust and Monopoly Subcommittee—had primary responsibility for the antitrust analysis of mergers and acquisitions, the Justice Department generally exercised responsibility for the policing of price-fixing and the criminal activity implied by such action. Meeting on the Tax Cut Proposal 375

Dillon: —cause public reaction that would upset things at this time, and they wanted to carry on just as long as they could. Blough talked to me two or three days before the meeting . . . He said, well, he didn’t know what they were going to do but that they realized this was a very serious thing and that they’d look at it in the national interest and so forth.23 I thought that meant that they were just going to keep it on. They did keep it on, but— Goldberg: Well, I raise this because of the possibility— Samuelson: Well, I think that . . . I think that— Goldberg: —of a stock market reaction. Samuelson: —in terms of simple business prudence without any politics, which is very understandable, the implication of it to me is that I believe the 2nd quarter profits are now . . . estimates are now available— which weren’t yet available when we met last—and they aren’t good. They are . . . they do indicate, which is an open question, what I thought would be resolved in this way, that the fourth quarter of last year probably would have peaked more profits. So from now on there will be a lot of companies that if they don’t have the increase in GNP . . . but experience shows that in order to hold profits constant you can’t just hold GNP constant. At this stage of the business cycle you have to have an increase. So the profit picture is, I think, in overall totals, I think this year is somewhat down. And Ed and Mark, will have to reckon with that; everybody who receives their list will have to reckon with that. Goldberg: So we may not be through our stock market reaction. That’s the point I wanted to make. Bell: Hmm . . . yeah. Goldberg: Well, now, just return to two things at this point— Dillon: Though . . . because I think the stock market itself . . . oh, just looking at it, is on the high side of values and whether it will go for- ward24 . . . but it’s a . . . I would hope that any reaction that is ordinary and [unclear], that if it goes down that it goes down gradually and you don’t have any more of these [unclear] in services which you . . . President Kennedy: [to Paul Samuelson] Continue what you were saying. Samuelson: Well, I would . . . I am now addressing myself to the

23. Roger M. Blough was the chairman of the board of U.S. Steel Corporation. 24. Price to earnings ratios. Secretary Dillon is reminding the meeting participants again of the relatively high ratios that prevailed before the May decline. 376 FRIDAY, AUGUST 10, 1962

coward’s way to the pure economics of the problem. I would say that there is nothing in the July figures that I’ve seen that would shake the majority viewpoint that we’re in the final stages of a boom which will peter out the way booms have petered out in the postwar—not with a sharp peak and then down but just hold on, hold on, then finally go off. And the majority opinion now that it has . . . resolved it wasn’t . . . the turn didn’t come midyear but probably, say, around the turn of the year. The more optimistic view would be the middle of the year . . . that the thing could go on until the middle of the year. I’m not aware that, from the pure economics of the case, that a tax reduction is affected by which of those views is right, because it’s . . . Take these arguments for a tax reduction. There’s, first, that the early action is the efficient and, in the end, the dollar-saving action. Well, we still can take the action while it’s early if we want to do so now. It also, just in terms of the timing of the different deficits, I think, might have a politically slightly better timing. Rather than throw a big deficit into fiscal ’64—which to my mind is going to be the bigger deficit—you could move a little bit into fiscal ’63. Also, the total amount of the deficit, if you have early action that gives promising effect, it ought to be smaller. That part is the same. The argument that—against too early action, in the past . . . I think a very powerful and good argument has been there’s always been a danger that you’d keep up an inflationary boom and that there’d be a price increase if you acted prematurely. This time I don’t know any group who argue that there’s a price inflation danger from a tax reduction. I happen to think that a tax reduction, in the short run, is in line with the general direction of the intermediate run: a change in the tax structure that’s needed. I speak now not in terms of qualitative change, but quantitative change.25 And . . . and, finally, this hanging-on period means very slow growth and justifies the tax in . . . the tax cut. President Kennedy: Paul, I have just two questions for you. Samuelson: Yes? President Kennedy: First, let’s say we had between a 5 and 6 billion dollar tax cut now that would put 5 or 6 billion dollars more into the economy. But would that mean that we’re just going to postpone, say for six months, the downturn? Why would 6 billion dollars now give a . . .

25. Though President Kennedy eventually separated the two issues and then dropped most large-scale efforts at tax code reform, a tax reduction and tax reform were, at this point, considered equally critical policy proposals. Meeting on the Tax Cut Proposal 377 enough of a thrust to keep this thing going?26 Of course, to answer that question you’d have to . . . I’d like to ask you the question coming first: Why is it that this boom and downturn has been really so short? First— Samuelson: Yes. Well, I . . . let me, let me an[swer] . . . try to answer that question. As far as I can see, the thing has been so short because in the private investment sector—taking into account the level of capacity, taking into account the need for cost reduction, the availability of funds, and all the rest—there just has been no . . . no plus signs working for us. There hasn’t been any keenness to invest in advance. Business is pretty liquid; it promises to become more liquid if some of the things that we’re going to do for it go through.27 But the plant equipment thing has just not been like the first postwar period. Let’s take the 1948 downturn: it hasn’t been at all like the ’56–’57; it hasn’t had that feel at any time. It would be whistling in the dark, it seems to me, to dream up that kind of buoyancy in the private economy, though. The things we do are going to help but you can’t just put in a drop of water into the pump and then think the pump is going to start spilling forth things. At least there’s no evidence for it . . . for that. Now, I think in the case of the tax reduction—28 President Kennedy: Well, let me just ask before you go on . . . Samuelson: Yeah? President Kennedy: In other words, what . . . the unused capacity is so great in the economy that there really isn’t an incentive for more investment than modernization or technological changes require. But

26. This was a reiteration of a question Kennedy had been asking his advisers since the 1960 presidential campaign. “You know,” Kennedy asked Walter Heller in October 1960, “Paul Samuelson tells me that I can turn a $500 billion economy around with about a $5 billion tax cut. How is that possible?” [see “Walter W. Heller,” in The President and the Council of Economic Advisers: Interviews with CEA Chairmen, ed. Erwin C. Hargrove and Samuel A. Morley (Boulder, CO: Westview Press, 1984), pp. 172–73]. Okun’s law, the product of research undertaken by CEA staff economist Arthur Okun, was in part an attempt to answer this question. Underscored principally in the January 1962 Economic Report of the President, Okun’s law estimated that an extra 3 percentage points in unemployment meant a 10 percent gap between actual and potential GNP. 27. The estimated increased cash flow to corporations resulting from administration plans to change depreciation guidelines and to introduce an investment tax credit was $2.5 to $3 billion. 28. Despite the overarching emphasis on government action in the pronouncements of the Kennedy and Johnson administrations on economic policy, both Presidents and virtually all of their key advisers labored to point out that the response to new policies and changes initiated mostly in the private sector were just as critical to economic performance. 378 FRIDAY, AUGUST 10, 1962

doesn’t that indicate that . . . that’s the situation we’re going to face all through the sixties? Samuelson: Uhh . . . President Kennedy: It looks rather that way? Samuelson: Well, I would avoid long-term forecasting, but I would say for the next three or four years the burden of proof would be on somebody who turned it in the other direction. Dillon: There’s a big— Samuelson: Yeah. Dillon: —school of thought that thinks that we’re . . . this is . . . always has thought that this is the most difficult time, up until about, I’d say, ’65 when the mass of war babies—the bigger increase in population—begin to get married, go on to form homes, and become real consumers on themselves. And at that point that there would be a lifting effect. Samuelson: And also getting the economy moving does help. You can take industry after industry—the paper industry and others—where they’re growing into their capacities slowly and it’s— President Kennedy: Well, now, yesterday we had Mr. Greenewalt here.29 He said they had the best year in their history; they’re up 8 percent. But he said they’re only using 80 percent of their capacity. They still have 20 percent more and while they’re . . . He said they’re going to put in some . . . I don’t know if it’s between 250 and 300 million dollars for a new . . . And yet, obviously, there’s . . . for every dollar they spend, they could save that extra 20 percent. This is an industry which is having a good year. Unidentified: I don’t . . . President Kennedy: How do you see that . . . even if, therefore you . . . if this thing has run out of gas as quickly as it is, not because I had my fight on steel, or do you . . . How important, as an economic historian, do you consider that situation— Samuelson: Uhh . . . President Kennedy: —with steel?30

29. Crawford H. Greenewalt, chairman of E. I. DuPont de Nemours; Roger Blough, chairman of U.S. Steel; Harold Boeschenstein, president of Owens-Corning; Alan Sproul, retired president of the New York Federal Reserve Bank; and Henry Alexander, chairman of Morgan Guaranty Trust Company, met with President Kennedy and Treasury Secretary Dillon the previous afternoon to discuss the budget and the tax cut proposal. 30. Often referred to as “The Battle of Blough Run,” after the President’s chief adversary in this situation, Roger Blough of the U.S. Steel Corporation, President Kennedy’s fight with steel involved his efforts to rescind an April 1962 steel price increase that he believed to be a Meeting on the Tax Cut Proposal 379

Samuelson: I try not to be partisan. President Kennedy: Yeah. Samuelson: But I don’t think that’s the significant— President Kennedy: That might have had an effect on the vigor of the stock market decline, but not on this basic economic problem of the tax cut. Samuelson: No, it had an effect upon the rationalization and the degree of articulation of feeling. President Kennedy: Yes. Well, that you know— Samuelson: Uhh . . . President Kennedy: —that kind of [unclear]. Samuelson: Yeah. President Kennedy: But as far as just looking at the basic economic problem? Samuelson: No. President Kennedy: Well, if the problem is the . . . what we’re talking about, I don’t really see how much the $8 billion tax reduction, even if we did it today . . . Wouldn’t that just postpone our troubles because our troubles seem to be that we’re eating up our inventories? Is that what it’s coming to? Samuelson: No. I . . . my way of interpreting the mechanics is always just the reverse. This suggests to me that what you need is a tax reduction—and I want to comment on one part if I can. Some people think that what a tax reduction does is get you something at the beginning— with the announcement effect—then that wears off, now, what’s your new gimmick? That isn’t what I’ve . . . the way I think of it. I think of it as a change in the amount of the purchasing power in the hands of people, and every month, so long as the tax . . . the rate reduction is in effect.

double cross perpetrated by steel company executives. Kennedy believed he had been given a tacit guarantee by the steel companies that if he could convince the steelworkers to sign a new contract with wage or benefit increases less costly than the 3.2 percent figure representing average industrial productivity, then they would hold the line on prices. On 6 April 1962 the steelworker’s union signed a new contract with no wage increases and only a few cents’ worth of benefit increases, well below the 3.2 percent target. The President was taken by surprise, then, when U.S. Steel announced a 3.5 percent across-the-board price increase on April 10, followed by five other companies on April 11. Kennedy remarked to Ben Bradlee, “It looks like such a double cross. I think steel made a deal with Nixon not to raise prices until after the election. Then came the recession and they didn’t want to raise prices. Then, when we pulled out of the recession they said, ‘Let Kennedy squeeze the unions first before we raise prices.’ So I squeezed McDonald and gave him a good states- manship leg to stand on with his workers. And they kicked us right in the balls” [quoted in Benjamin C. Bradlee, Conversations with Kennedy (New York: Norton, 1975), p. 76]. 380 FRIDAY, AUGUST 10, 1962

So, I don’t look for . . . I’m not as optimistic, for example, as the secretary is on the immediate effects of these different—I think even quali- tatively. I just think the ’54 code had an effect upon equipment.31 It took years to take place. I think the investment credit will have its effect, but people have to sharpen up their pencils and . . . wake up. Dillon: What about the effect of the tax cut, immediately, on demand, though? On consumer . . . . If you cut income, personal income taxes now, doesn’t that reflect pretty quickly in— Samuelson: Yes, but it’s not by pronouncement effect.32 Dillon: Oh, no, no . . . Samuelson: It’s not because somebody reads in the papers that Mr. Mills has given him something. Dillon: [as Samuelson continues, below] No, no . . . I never said that. Samuelson: He finds at the end of the week that— Dillon: No, I think it’s just— Unidentified: [Unclear.] Goldberg: [Unclear] that Mr. Mills has given anybody anything. [Laughter.] Samuelson: No, I was just speaking in the subjunctive. Goldberg: Oh. [Unclear exchange.] Wilbur Mills: Mr. Samuelson? Samuelson: Yes? Mills: Were you talking, in response to the President’s inquiry, about a permanent tax reduction or a temporary tax reduction? I think it’s very important, in answer to his question— Samuelson: Yeah. Mills: —what you mean. Samuelson: I was thinking about a . . . an immediate tax reduction, but that was simply bringing in earlier a longer-lasting rate reduction. Mills: Which would be a permanent reduction? Samuelson: . . . be a permanent . . . yes. Mills: Yes, thank you. President Kennedy: Well, now, given the state of the economy and of the Congress, aside from all the . . . would you say that what we really should anticipate . . . Thinking about a tax cut next year, we’ve got a major

31. The 1954 revisions in the federal tax code included some tax cuts. 32. The psychological, or “pronouncement,” effect was precisely the factor highlighted by Crawford Greenewalt in the previous day’s meeting with the President and Secretary Dillon. Meeting on the Tax Cut Proposal 381 budgetary problem because we’re going to have a deficit. So we’re going to have to cut taxes at the time of a deficit. As long as we don’t have an inflationary problem, do you see the cutting . . . running a prospect of a two- or three-year deficit as a very serious problem? Increasing the size of the debt, increasing . . . I mean, obviously, giving the Treasury more of a problem as far as floating bonds . . . Is that a problem to you? Samuelson: Are you speaking now in terms of the economics of the problem? President Kennedy: Yeah . . . yeah. Samuelson: I would say definitely it is not a problem. This is . . . I’ve just come back from Europe . . . this is something that they just can’t understand in Europe, because in Britain . . . because they don’t know what the deficit is the way we measure it. And I was talking to officials and they just can’t understand why we wouldn’t realize that if the private investment were sluggish, that that would mean for some period of time you’d want to have lower tax rates. And that . . . that I’d say would be what the doctor ordered for this. President Kennedy: What is their debt, national debt, do you know? In England? Samuelson: Uhh . . . Bob? Tobin: I think that they must have a beauty, right now. Robert Roosa: Yeah, it’s about twice their GNP. Samuelson: Yeah, oh, it’s much heavier in terms of— Roosa: And ours was about three-fifths of the GNP. Samuelson: Yes . . . President Kennedy: Twice their GNP? Samuelson: Yes. Oh, it’s much— Dillon: But they, you know, they came through the war without writing off debts. They were the only country besides ourselves that did that. And so, therefore, they’re saddled with this tremendous debt. Whereas, all these other countries, oh . . . started out at what was zero. [Unclear] their currency . . . Solow: But that figure includes their local debt as well. We’d have to add in our local . . . state and local debt to be comparable. Unidentified: Yes. Roosa: And which might be true literally, then that . . . there’s a change in ratio. Our ratio, then, would be four-fifths of the GNP. Dillon: And theirs is twice. Roosa: And theirs is twice. Dillon: So theirs is still way . . . way ahead of us. 382 FRIDAY, AUGUST 10, 1962

President Kennedy: In other words, then, you—from an economic point of view, in fact—you’d recommend our running— Samuelson: I would recommend . . . I recommend it, in two senses. First, there is reason to think when you actually get into the figures that if you can keep the economy from going down and growing, that you . . . that capacity is . . . we’re growing into our britches and so we’d get help from the private economy.33 So . . . Heller: Paul, at that point, it’s worth noting— Samuelson: Yes? Heller: —that across the board, we’re at about 87 percent of capacity. That’s a . . . so it doesn’t take— Samuelson: Yeah. Heller: —many more points to push industry to expand their capacities, if they like to operate at around 90, 91 percent of capacity. Samuelson: And when you take the estimates that have been made . . . I mean take some of the governmental estimates that I’ve seen or take the Eckstein and so forth, when they put in the tax reduction, they pick up something.34 It isn’t that you’re giving away a dollar of revenue and then there’s no effect on the economy at all.35 But I would go farther and say that if you didn’t pick up anything—as would perhaps be the case in the Great Depression, in the 1933–34 period—every extra dollar of deficit . . . There was so much excess capacity that it wouldn’t get you much in the way of private investment; the economic case would be . . . wouldn’t be very strong. And, in a way, it purely is a matter of arithmetic. If you don’t get the private investment, naturally, and you have more people coming in all the time, you’ve . . . you have the need for production. To have that filled

33. Spurred by new demand and by relatively high capacity utilization, corporations would be likely to increase their capital investment, according to this conception. 34. The “Eckstein” is most likely a reference to the “Study of Employment, Growth, and Price Levels” promulgated in January 1960 by the Joint Economic Committee (JEC). This study is commonly referred to as the “Eckstein Report,” after Harvard economics professor Otto Eckstein, who served as the technical director for the JEC study. It recommended a combined fiscal and monetary policy designed to achieve 4.5 percent annual growth in the U.S. economy. Eckstein would later serve on the Council of Economic Advisers in the Johnson administration from 2 September 1964 to 1 February 1966. 35. Never under the impression that the tax cut would pay for itself, in the short term, in new revenue added by growth, President Kennedy and his advisers, nonetheless, did believe in and count on the generation of some new revenue that would partly offset the revenue lost with a general tax reduction. Meeting on the Tax Cut Proposal 383 in by a more expansionary governmental policy—taking out less from the economy—makes sense in terms of the arithmetic. In other words, things have to grow . . . The tape machine stopped.

Although his most persuasive economic adviser, Paul Samuelson, was still strong for an immediate and permanent tax cut, the President had decided not to go with even a temporary tax cut in 1962.36 The July economic figures were not bad enough for the administration to make a case to Congress that the country was on the verge of a deep recession. Kennedy had not shown his hand in the taped portion of the morning meeting; but after it had ended, the White House announced that the President would be making a special television and radio address to the nation on the economy, Monday night. It was his fourth special address since January 1961. On August 13, in an uncharacteristically leaden presentation that he would later describe as his worst as President, Kennedy would explain the reasons for postponing a tax cut and pushing for general tax reform in 1963. In an oblique defense of the permanent tax cut and the deficit spending he now sought, President Kennedy declared that recessionary deficits were different and that the federal debt, relative to our nation’s expanding wealth, had steadily declined since World War II. “This administration intends to cut taxes in order to build the fundamental strength of our economy,” the President intoned, “to remove a serious barrier to long-term growth, to increase incentives by routing out inequities and complexities and to prevent the even greater budget deficit that a lagging economy would surely produce . . . . And the right time for that kind of bill, it now appears in the absence of an economic crisis today . . . is January 1963.” Reminding his listeners that he had “not been talking about a different kind of tax cut, a quick, temporary tax cut, to prevent a new recession,” Kennedy wound down his presentation by noting that “timing is of the essence” and by noting his belief in the U.S. willingness “to bear the burdens of freedom and progress, to face the facts of fiscal responsibility and to share my view that proposing

36. The President may have tipped his hand a little when he asked Samuelson to describe the effect on credit markets of asking for a tax cut in the winter of 1963, when a recession would have already worsened the federal budget deficit. 384 FRIDAY, AUGUST 10, 1962

an emergency tax cut tonight, a cut which could not now be either justified or enacted, would needlessly undermine confidence both at home and abroad.”37 Tax cuts were not the only instrument Kennedy was considering to improve the condition of the U.S. economy. At the end of his meeting with Wilbur Mills on August 6, Kennedy had let drop that he was not as worried about the state of the U.S. dollar as he had been before. But he still thought about it. Besides the worrisome 25 percent drop in the stock market in the late spring, Kennedy had observed a huge drop in U.S. gold reserves, largely due to a sale of dollars by the French. Among the many factors that a U.S. president had to consider was the strength of the dollar. If foreigners did not want to hold it, then interest rates would have to rise or imports would have to be cut, either of which would mean more price inflation. Just as thoughts of Berlin had entered into Kennedy’s discussion of the politics of a domestic tax cut, so too, would the problem of European defense stand behind this discussion of the dollar overseas. Kennedy believed the Europeans were not carrying their fair share of the burden of NATO. Nothing brought that home more vividly than the amount of cash that flowed out of the country to subsidize European defense. On July 30, the under secretary of state, George W. Ball, had assured the President that he had found a way to work with Treasury on this.38 Ball had an idea for applying the concept of European burden sharing to the U.S. balance of payments problem. For a week the President’s chief domestic policy assistant, Theodore Sorensen, had been working with Ball to be sure this idea could be acceptable to Treasury. With the departure of some of his domestic economics team, Kennedy turned immediately to a discussion of international monetary policy. Advisers who served double duty like Sorensen, Paul Samuelson, James Tobin, Walter Heller, Kermit Gordon, and, of course, Treasury Secretary Douglas Dillon, stayed for both meetings.

37. “Radio and Television Report to the American People on the State of the National Economy,” 13 August 1962, Public Papers of the Presidents, John F. Kennedy, 1962 (Washington, DC: U.S. Government Printing Office, 1963), pp. 615, 616–17. 38. See “Meeting on Europe and General Diplomatic Matters,” 30 July 1962. Meeting on the Gold and Dollar Crisis 385

11:20 A.M.–12:30 P.M.

Mr. President, we’re in this situation, to put it in rather oversimplified terms, we’re running an enormous business. We’re running it on a demand credit basis. This is a business many times bigger than any of the biggest corporations in the United States and yet our notes can be called at a moment’s notice.

Meeting on the Gold and Dollar Crisis39 The conventional wisdom held that the Bretton Woods monetary system functioned smoothly in the early 1960s and that the United States benefited, both economically and politically, from the advantages the system bestowed on the dollar. But this meeting and those which followed on foreign economic policy told a story somewhat at odds with that conventional view. Beginning in 1958, a whole series of factors—including the move toward current account convertibility among the Europeans— enlarged the U.S. balance of payments deficit. As the U.S. payments deficit increased, the world’s central bankers became less inclined to hold surplus dollars in their reserves and began to convert them into gold instead. Many observers worried that a crisis of confidence in the dollar could spark a mass conversion into gold, rendering the dollar unusable as a reserve currency and in the process destroying a large portion of the world’s liquidity. This problem had come to be known as the “Triffin Dilemma,” after the Yale economist Robert Triffin published a book, Gold and the Dollar Crisis, in 1960 highlighting the confidence problem.40 The U.S. dollar and gold crisis worsened during the summer and fall of 1960. There were several causes, but the perception that the Kennedy administration would pursue looser fiscal and monetary policies in order to jump-start the economy stoked fears of inflation and even a dollar devaluation. In order to squelch such fears, Kennedy issued a statement the week before the election promising to maintain the gold convertibility

39. Including President Kennedy, George Ball, C. Douglas Dillon, Walter Heller, Kermit Gordon, Carl Kaysen, John Leddy, Robert Roosa, Paul Samuelson, Theodore Sorensen, and James Tobin. Tape 11, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 40. Robert Triffin, Gold and the Dollar Crisis: The Future of Convertibility (New Haven, CT: Yale University Press, 1960). 386 FRIDAY, AUGUST 10, 1962 of the dollar at $35 an ounce.41 Not long after the April 1962 showdown with U.S. steel companies and the subsequent stock market plunge, he would reiterate this pledge with his Telstar broadcast of July 23, 1962. Recognizing the potential dangers, political and economic, of a balloon- ing deficit and gold outflow, the new President immediately set out to correct the problem. A transition team issued a blue-ribbon report.42 A stalwart and fiscally conservative Republican, Douglas Dillon, was named secretary of the Treasury. Dillon’s under secretary for international monetary affairs, Robert Roosa, negotiated a whole series of innovative arrangements—the gold pool, swap arrangements, and the General Arrangements to Borrow—to ease the dollar and gold drain.43 On the political front, the members of NATO were pressured to make offset payments, in other words, to use surplus dollars obtained as a result of U.S. military expenditures in Europe to purchase U.S.-made military hardware. Despite the elaborate measures taken by the Kennedy administration in 1961, the balance of payments deficit did not disappear in 1962. The steel crisis and the dramatic drop in the stock market, though both crises of transitory import, appeared to signal economic problems at home. Overseas, Kennedy worried as political relations with the two countries holding the most surplus dollars—West Germany and France—became strained. In May, rumors reached the President that France—alone or with West Germany—might convert its surplus dollars into gold as a way to pressure the Kennedy administration into changing its European policies.44

41. See Theodore C. Sorensen, Kennedy (New York: Harper & Row, 1965), p. 406. See also John Kenneth Galbraith’s letter to the President from October 1960, in his Letters to Kennedy (Cambridge, MA: Harvard University Press, 1998), pp. 29–31. 42. “Report to the Honorable John F. Kennedy by the Task Force on the Balance of Payments,” dated 27 December 1960, from file AP/SD & WNA/Report to the President on the Balance of Payments, 25 February 1963, found in the Papers of Dean Acheson, Harry S. Truman Library. 43. The gold pool refers to the London gold pool established by the United States, Belgium, Holland, Britain, France, Germany, Italy, and Switzerland to feed a supply of gold to private buyers as demand for the precious metal increased. Swap arrangements are agreements between the United States and its major trading partners to exchange U.S.-held foreign currencies for U.S. dollars held abroad to forestall demands for U.S. gold. The General Arrangements to Borrow, entered into in 1962 by the so-called Group of Ten, introduced a standby credit of $6 billion designed to accommodate nations otherwise dependent on U.S. dollars with increased international liquidity. 44. Dillon, Memo for the President, 25 May 1962, National Security Files, Departments and Agencies: Treasury, Box 289, John F. Kennedy Library. Dillon told the President that a Bank of France official made a statement “which could indicate possible difficulties ahead with France. He said that it must be realized that France’s dollar holdings represented a political as well as an economic problem.” See also Memo of Meeting between the President, Ambassador Meeting on the Gold and Dollar Crisis 387

The international monetary issue came to a head in July when the French finance minister, Valéry Giscard d’Estaing, visited Washington. Giscard told U.S. officials that the dollar’s defenses against a speculative attack were weak and that cooperation was needed on a “grand scale.”45 Was Giscard making a threat or offering to help? Under secretary of state George Ball, concerned that Kennedy’s worry over the dollar and gold problem might tempt him to pull U.S. troops from NATO, saw Giscard’s statement as an opportunity to negotiate a new set of monetary arrangements with the Europeans to protect the dollar.46 To Ball, the problem was that European central bankers did not recognize that the deficit was a political problem caused by the United States’s worldwide security commitments. Ball produced a plan whereby NATO Europe would recognize the monetary costs of U.S. protection by agreeing to hold mostly dollars instead of gold for a period of two years.47 The Europeans and the IMF would provide temporary, large-scale financing to cover the U.S. payments deficit. In return, the United States would distribute an agreed amount of gold to the Europeans and would use the grace period to bring the U.S. balance of payments into equilibrium. At the end of the temporary arrangement, a new set of monetary agreements could be negotiated to replace the Bretton Woods structure. The State Department supported the plan because it would remove the pressure on the President to withdraw U.S. troops from Europe. The Council of Economic Advisers—and in particular, Yale University econ-

Hervé Alphand, M. Malraux, and McGeorge Bundy, 11 May 1962, FRUS, 13: 695–701, where Kennedy threatened to pull troops out of Europe if the French and/or the West Germans ever tried to use their monetary power against the United States. 45. Gavin to Rusk, 12 July 1962, “France” folder, National Security Files, John F. Kennedy Library. See also Heller, Memo to the President, 16 July 1962, President’s Office Files, Council of Economic Advisers, John F. Kennedy Library. 46. Memcon, “Payments Arrangements Among the Atlantic Community,” 20 July 1962, FRUS, 13: 733. Note Ball’s descriptions of the views of central bankers as “pre–Herbert Hoover” and “reminiscent of Dr. Schacht.” 47. Memo, Ball to the President, “A Fresh Approach to the Gold Problem,” 24 July 1962, the Papers of George W. Ball, Box 15b, “Memorandum to the President on the Gold Problem,” Seeley G. Mudd Manuscript Library, Princeton University. Note especially Ball’s comment: “What we must tell our European allies is, therefore, clear enough: If we are to continue to carry our heavy share of the Free World burdens we can do so only under the conditions where our exertions in the common cause do not imperil the dollar and in fact, the whole international payments system. To create those conditions is the first and most urgent task for the Atlantic part- nership.” For a similar plan produced by the CEA, see James Tobin, “A Gold Agreement Proposal,” 24 July 1962, Acheson Papers, State Department and White Advisory Report to the President on the Balance of Payments, 2-25-63, Harry S. Truman Library. 388 FRIDAY, AUGUST 10, 1962

omist James Tobin—advocated an amended version of the plan because it would give the dollar protection while the administration jump- started the economy with tax cuts and budget deficits.48 But Dillon and Robert Roosa from Treasury were adamantly opposed.49 They argued that Wall Street and international capital markets would see any standstill arrangement on dollar-gold convertibility as a declaration that the U.S. economy was in “receivership.” Dillon and Roosa contended that the steps they had already taken during the first year and a half of the administration—swap arrangements, offset agreements, the gold pool operation—were adequate to protect the U.S. dollar and gold supply. During this contentious and argumentative meeting on August 10, 1962, Ball, supported by James Tobin and Kermit Gordon of the CEA and special assistant Carl Kaysen, would argue in favor of a modified version of Ball’s plan.50 It was hoped that this plan, which would be presented by Theodore Sorensen, was something that the Treasury Department could live with. Paul Samuelson, who had just finished arguing for a tax cut and a fiscal stimulus, was brought in to help sell the modified Ball plan to Treasury. Kennedy began taping as Sorensen outlined the compromise plan.

Theodore Sorensen: This plan not to commit themselves as to whether it would be more preferable to rely on existing efforts. Many of their concerns are, I believe, however, met by the new subcommittee’s unanimous agreement on three other points. First, that the initiative for such a plan come from the Europeans and be kept highly confidential until implemented. Second, that the United States must use the two-year breathing spell to achieve a balance of payments equilibrium, which will increasingly

48. Memo, Heller to the President, “Why We Need an Interim International Monetary Agreement,” 9 August 1962, FRUS, 9: 139. 49. For Dillon’s views, see Dillon, Memo for the President, 7 August 1962, Acheson Papers, State Department and White Advisory Report to the President on the Balance of Payments, 2-25-63, Harry S. Truman Library; for Roosa’s views, see Robert Roosa, “The New Convertible Gold- Dollar System,” 9 August 1962, President’s Office Files, Treasury, John F. Kennedy Library; and for Treasury’s argument that better NATO burden sharing was the answer to the dollar and gold problem, see (Henry) Fowler, Memo for Dillon, “The Need to Couple High Level Political Negotiations for More Equitable Burden Sharing Designed to Correct the U.S. Balance of Payments with any Political Negotiations for Interim Arrangements Designed to Defend U.S. Gold Reserves,” 7 August 1962, Acheson Papers, State Department and White Advisory Report to the President on the Balance of Payments, 2-25-63, Harry S. Truman Library. 50. For an indication of Kaysen’s support, see Bundy to Kaysen, 21 August 1962, Departments and Agencies: Treasury, “6/62–4/63” folder, p. 289, National Security Files, John F. Kennedy Library. Meeting on the Gold and Dollar Crisis 389 involve both tightening existing procedures and engaging in other difficult negotiations of a burden-sharing nature with Western Europe and third, negotiations for a permanent plan. We need to have some prospect for success and we need to begin early in the two-year period.51 President Kennedy: Where’s the [unclear] . . . Sorensen: Do you have a plan [unclear]? President Kennedy: I’ve got this memorandum by Ball. I don’t know what it’s [unclear]. Unidentified: No. George Ball: There’s the plan itself. It’s [unclear] complicated. President Kennedy: I wonder if they made a copy of this? . . . You want to hand that . . . You’ve got an extra copy? Carl Kaysen: I have an extra copy in here. President Kennedy: OK, let’s go through this. Can anyone read this outline now? Why don’t we just read the thing, the line. Kermit Gordon: You want to leave it in? President Kennedy: Let’s start with, let’s start with the Secretary. Sorensen: It is not the purpose . . . President Kennedy: You have to be consistent with this broad objective . . . Unidentified: [Unclear] disappointed in the message . . . Sorensen: The current page is the . . . Once again, a Treasury statement that . . . they’re not necessarily going into the merits of this . . . This [unclear]— President Kennedy: I see. Ball: I don’t consider that they explore the answer to whether it’s possible, but this is just— Sorensen: This is the agreement that there is to be an agreement. This is the idea; this is the plan. The person has already been suggested, and the Secretary now gives you some idea of the . . . President Kennedy: Let’s read that.52 Sorensen: [reading]

Consistent with this broad objective of reducing the current strains on the dollars and gold, the arrangements described below contemplate as an integral part of the plan the sale of up to $1 billion

51. See Theodore Sorensen, “Report of Subcommittee on Gold and Monetary Agreement,” 10 August 1962, FRUS, Vol. 9 (microfiche supplement), document 355. 52. Sorensen begins reading from the document, “Outline of Proposal for Interim International 390 FRIDAY, AUGUST 10, 1962

U.S. gold to participating countries during the two year period of the plan, and in addition to recognize the possibility that during this period that the U.S. may have to sell as much as $500 million in gold to nonparticipating countries. And on this basis, the present U.S. gold stock of 16.1 billion would be not less than 14.5 to 15 billion at the conclusion of the interim arrangements within ’64 and our present requirements of the gold cover are approximately 12 billion. In other words, this will be a good saving [unclear]. Participation of the ten members of the Paris Club—that’s the U.S., U.K., France, Germany, Italy, the Netherlands, Belgium, Canada, Japan, and Sweden plus Switzerland—in connection with the IMF [unclear]. All participants would publicly accept certain responsibilities—10 percent of the proposal we see involving [unclear] . . . We envision a joint announcement that Canada and Japan, because of their own balance of payments problem, will not initially be called upon to provide additional resources.53 The essence of the arrangement includes two elements. First, what we call a standstill arrangement, under which the participating countries would not seek for the period of the agreement to convert into U.S. gold the official dollar balances they hold at the start of the agreement. Secondly, we would work out other financial resources to accommodate or offset accretions to their dollar balances of $10 billion, including U.S. gold sales to participants of up to $1 billion.

President Kennedy: Now does that mean that you expect that they will increase their balances by $10 billion over the next two years? Sorensen: No . . . but outside— C. Douglas Dillon: That means that this was set up as an outside limit much more than you would expect, that this would be a big impressive figure. President Kennedy: What do they expect would be the increase to their dollar balances?

Monetary Arrangement,” undated, Acheson Papers, SD and WHA, Report to the President 2- 25-63 on the Balance of Payments (2), Harry S. Truman Library. Much of the discussion that follows is a debate over the merits of this plan, which was a modified version of Ball’s plan. 53. The Paris Club, or the Group of Ten, were the signatories to the General Arrangements to Borrow, a large short-term borrowing facility that would allow the United States and the United Kingdom to use expanded resources from the International Monetary Fund to stabilize their currencies in the event of a speculative monetary crisis. This agreement was accepted by the IMF’s executive board on 18 December 1961. Meeting on the Gold and Dollar Crisis 391

Sorensen: How we reach the 10 billion dollars appears a little later in this paper. President Kennedy: OK. Sorensen: And more specifically, this breaks down into the following. First, the standstill. The other participating countries would agree that for the period of the arrangement they will not request the United States to convert into gold their existing official dollar holdings now totaling 7.9 billion. They could of course continue to be used in making international payments including the settlement of debts between the participants in their convertibility into other currencies. Secondly, and this is . . . this will probably be the biggest, newest. The IMF would establish assured drawing rights of approximately 5 billion dollars for the use of the United States. This is making use, making more automatic, I should say, the special IMF standby . . . Dillon: So it’s activating it. Sorensen: Activating it. I was trying to look for the right word there, which is . . . you know, we’ve been working on the last year in Congress. You signed the bill which Congress authorized and we’re now waiting for Congress to appropriate the money, in a way. This would mean a formal commitment by the IMF to provide funds from its ordinary resources supplemented by the formal undertaking of the other participants to provide upon call resources specified in the special borrowing arrangement agreed [on] last year President Kennedy: What is the significance of this part? What would be this 5 billion dollars? What . . . drawing rights? We would what? Dillon: That’s part of the [unclear]. President Kennedy: In other words we would borrow from the International Monetary Fund 5 billion dollars? Sorensen: We would . . . That is correct. We would draw on . . . Kaysen: We wouldn’t necessarily borrow it. We would have the assurance that if we wanted to borrow it, whenever we wanted to borrow it, in the currencies which are explained on the next page, we could borrow. Sorensen: The technical procedure for doing this requires the U.S. to request a standby accommodation after consultation with and approval of this request by the countries, and a hearing of the special IMF borrowing arrangements as well as the IMF. These resources would be available on call for specified periods required by the U.S. without further consultations. We considered but reject the idea that the U.S. withdraw the whole amount at once. It is assumed that the IMF would need to utilize some of its gold to 392 FRIDAY, AUGUST 10, 1962

provide the full amount of currencies as specified below. And this 5 billion dollars is based . . . as follows. So the ordinary IMF resource would be 750 million dollars in continental European currencies, and 700 in sterling. And from the special arrangements worked out with the IMF last year [unclear] it to 2.550 billion in continental European currencies and another billion purchased from the IMF in gold. Canada and Japan are not being included because their currencies are under pressure. They can be used at a later stage to replace other currencies when the situation changes. The U.S. would make drawings under these standby arrangements in the amounts needed to purchase additional dollars required by the participating countries after the effective date of the standstill arrangement, whereas, as they acquire . . . They have agreed now not to use their existing dollars, and as they acquire additional dollars, they would be able to purchase those dollars if they were not being converted into our gold. Ball: If they were offered? Sorensen: If the . . . Robert Roosa: Yeah, but if George is making the point they might be willing to hold them. Ball: Yes. Roosa: And if they are willing to hold them, then there is no problem. Kaysen: In fact one of the purposes of the whole arrangement is to make everybody more willing to hold dollars, both central banks and private holders, and I think that’s a very important qualification. Sorensen: And, yes, once it’s clear we have this big of a leeway and safeguard, there might not be as much as there would be around . . . [tape jumps] . . . currency of any participating country that purchased dollars from any other participating country provided they have already utilized all the currency of the latter country available to them under the standby. Third, swaps and borrows. This is a considerable step up from and extension of what the Treasury is now doing. The U.S. now holds $800 million in foreign convertible currency, most of which had been acquired in short-term swap and borrowing arrangements. The plan contem- plates that we add facilities for acquiring an additional 1.7 billion, and that both new and existing facilities would be placed on a firm basis for the two-year period of the plan. It is not done on that long-term basis now. Such foreign currencies could be used for the purchase of dollars acquired by other participants over and above of those falling under the standstill. On the other hand, it would be understood that dollars provided to other participants as a part of a swap arrangement would be Meeting on the Gold and Dollar Crisis 393 held during the two-year period unless needed to settle a balance of payments deficit with the other country.54 Fourth, there will be a step up in the Treasury’s—and I assume the Federal Reserve board, also—forward exchange operations. The Treasury would undertake a substantial increase in forward exchange operations designed to keep dollars out of foreign official reserves and thus reduce pressures on foreign central banks to gold conversion. This is the technique, as you know, by which the Treasury reaches into the dollars held by private banks and individuals and prevents them from being turned into their central banks. It is estimated that additional forward foreign exchange operations would enable the other participants to absorb as much as 1.5 billion dollars in private holdings beyond those that would voluntarily be held without assistance of this sort. In distinction to the arrangements specified above, these forward exchange operations would be worked out bilaterally as specific needs arose that in conforming with mutual understandings arrived at [unclear] initially. And the plan provides up to 1 billion dollars accruing to foreign business . . . could be absorbed with the sale of the U.S. gold. Because gold sales would be undertaken in a manner to enhance the general acceptability of the plan. So the 10 billion dollars, in other words, is from our point of view, the safeguard is made up of these four sources: 5 billion dollars withdrawn by the U.S., 2.5 billion dollars in swaps, including 800 now and 1.7 new, 1.5 in new forward exchange operations and 1 billion dollars in gold sales. And the 10 billion . . . we think we may need 10 billion that’s outside. That’s made up of three possibilities. The net accretions to the official dollar holdings of participants as a group as a result of our balance of payments deficit or the conversion of what they already—what the private citizens already owe. The liberal estimate is 5 billion dollars and we added to that a 3.5 billion dollar cushion to make certain there is no problem of magnitude, and there would be no other supplement necessary. That gives 8.5 billion. And then the . . . added to that an allowance for further accretions of dollars by some participants as a result of deficit by other participants. One billion, and an allowance for accretions of dollars by participants from nonparticipants. Primarily because nonparticipants will be drawing from the IMF, that’s half-a-billion of the total 10 billion dollars.

54. Robert Roosa had spent much of his time in 1961 and 1962 negotiating swap arrangements with the world’s major central banks. Essentially, these arrangements established short-term credits between central banks which could be used to stabilize currency markets in the event of a speculative run on a major currency. 394 FRIDAY, AUGUST 10, 1962

Procedurally, it is believed that additional legislative action would not be required in any of the participating countries. If it turns out that it is, well, then we’d have to reconsider. Our thought is that after careful and quiet preparation and negotiation—and the sooner the better, possibly in connection with the fund meetings this fall—the ten participating countries would issue a joint declaration making the following points: First, they have entered into the interim arrangement in order to assure a monetary stability for a substantial period ahead during which they will explore longer term arrangements to improve the international monetary system. Secondly, they would all announce their intention not to present their existing official dollar holdings to the United States for conversion into gold during the two year period of the arrangement. Third, they would state that they decided to make available their funds under the special borrowing arrangements in the IMF. And as this was just pointed out, 2.55 billion in continental European currencies. Fourth, they would announce the arrangements with the United States for increasing our swap and borrowing and foreign exchange operations. And five, the statement would indicate 10 billion dollars as part of the magnitude [unclear] and at the same time the IMF would declare that they had approved the 5 billion dollars in drawing rights. President Kennedy: What about, how much would we . . . gold do we expect to lose in this two years if we didn’t have this arrangement? We talk about selling them a billion, or a billion and a half worth of gold. Dillon: Wouldn’t make any difference . . . President Kennedy: I see. No, I am not saying— Dillon: The movement gives us the strength [unclear]. President Kennedy: —the amount of gold we’d lose. Ball: Well, the point is that with this arrangement we would have some limits on the amount of gold for several reasons. First of all because we would have in effect a kind of funding operation. We convert what are demand liabilities into two-year liabilities.55 Now, the, furthermore if the fund, if this scheme resulted in a feeling of confidence, which is assumed it would, then there would be less danger of speculating runs. The point is that under this scheme we have a protection against the possibility of speculating runs. Under the present situation we don’t. And the estimates that we make of upside gold losses here are say 5 billion dollars. If we were to have them.

55. Demand liabilities called for immediate conversion of dollar holdings into U.S. gold at $35 per ounce. Meeting on the Gold and Dollar Crisis 395

Kaysen: And those aren’t gold losses, George; they are dollar drain. Ball: Well, I know. Kaysen: Yeah. And, in fact, they’re not— Ball: No, Carl, it’s a payments deficit. Yes, but I mean to the extent that that were converted into a gold loss— Kaysen: Yes. Ball: —by the refusal of the countries to continue to hold the dollar, we would be in real trouble. This simply puts a net under the situation in order . . . long enough hopefully to permit the negotiation of a longer- term agreement. Dillon: We disagree completely on that because we think we have all that protection already. There is not a single new thing in here except the attempt to formalize what we already have. The swaps, for instance, that we are going to increase from 800 million to 2 billion-5, we don’t need it at 800 million so far, there is no indication that we can’t increase them and would increase them as time went on. The same thing applies to the other. As far as the International Monetary Fund drawing, we have the right to do that, assuming our Congress appropriates the money. Everybody else and [unclear] people who have agreed to activate it. Now we feel that actually trying to negotiate this sort of thing, announcing it, would have the opposite effect. It would make people feel that the dollar was no longer fully convertible, that it was in a terribly powerless situation, that all the things we’ve done over the past two years . . . they’ll lump these—swap arrangements, these international cooperative arrangements and so forth that are not workable and we’re afraid that they’re of no use. And that therefore it would diminish confidence that has grown among central bankers recently that we are on the way to a reasonable solution. In addition, all the people who are not involved in this arrangement, other countries, have some 3 billion dollars in official claims. Some 2.5 billion in private claims. So I feel that they would be . . . probably be influenced by any news of anything like this to turn in their money, and so we lose much more gold. Finally, I do think that one problem of our present thing is that it hasn’t been fully discussed publicly. It’s been gradually built up. I think it’s built up enough now so it’s at a situation where it needs more public discussion both by us and by other leading ministers of finance and people of that nature, which could be done at the IMF meeting. I do think we should also . . . and we can now, using the organization of this so- called Paris Club . . . probably sit down and start to work more formally and officially on what might be another long-term arrangement, eventual arrangement. That’s the one thing that isn’t, that we all agree isn’t 396 FRIDAY, AUGUST 10, 1962

totally clear, and of course isn’t handled by this. We have already of course started that some six months ago with the British and we have a paper that will be, I think, jointly agreed prior to the monetary fund, on that with them. And so that there is a basis for further moving ahead in that area which we think is important and can be done. And it’s the one thing that has to be done here anyway because this interim thing you just borrow money that you have to pay back either at the end of two years or at the end of whatever the IMF standby may be and you don’t; there isn’t any permanent . . . any solution here. All you’re doing is supposedly buying time and we don’t think that announcing this or trying to negotiate this sort of thing would do that. Finally, we don’t think the thing is negotiable. But we’ve had enough . . . I think the difficulties we’ve had in moving as far as we have is getting the IMF borrowing arrangement itself, which took about six months, eight months, to work that out. To go beyond this time . . . I just don’t think that the other eight countries would be prepared to accept this request, so we . . . this is open here because we agreed that we could go out in favor of a program. This has to be done, but this has to come from some European source. Because this fundamentally is Jean Monnet’s idea.56 Never thought out in any detail but just, you know, the big idea. And I am afraid in this case it is one of his big ideas that is not a practical or workable one that probably would not be able to succeed. President Kennedy: Can I just ask . . . we haven’t seen, you know . . . two or three things first. That run on the—sort of—dollar in June which was perhaps arrested to a degree by the Telstar statement.57 It’s just an awful way to be doing business. But we have no guarantees about a very, you know, immediate provocation of that . . . any time these bankers get nervous. God knows what will make them nervous. Republic Steel passes its dividends, the stock market goes down 20 points, and they all get nervous.58 So there’ll be, that’s the problem. Of how we can

56. Jean Monnet was Europe’s leading advocate of European economic integration and a European customs union or discriminatory trade bloc. This remark was probably a jab at George Ball too. Dillon knew very well, as did everyone else in the room, that Ball was a longtime colleague, friend, and coworker of Monnet. 57. On 23 July the President used his Telstar press conference, the first telecast carried live by satellite, to reassure the Europeans that the United States would maintain the value of the dollar in terms of gold. 58. The President here is repeating the concerns expressed by Arthur Goldberg, the secretary of labor, at the previous meeting on a tax cut in which he pointed out that Republic Steel had Meeting on the Gold and Dollar Crisis 397 strengthen at least our guarantees over a two-year period. By then we’re going to be able to get tough about the NATO expenditures and all the rest. So that what we want to do is to prevent a really major run between . . . for the next two years. Isn’t there any way we can get these countries to agree to hold dollars for this two-year period? Is that what we want? So that they will not cash in? Dillon: This is what . . . this, we think, is the only way they could do it. We just don’t think that this is really negotiable or workable. I don’t think that there is any other way. Of course, the problem on a major run, I don’t think that the danger of a major run is grown people running away from you. That is the fundamental danger. It’s the peril of Americans taking whatever it is, 100 million dollars and trying to run away. It gets— President Kennedy: They might buy francs? Dillon: They’ll buy anything that they can. And that, this wouldn’t stand up against . . . nothing would stand up against that. And that’s the real danger; a country like Canada or England, if any of these countries get into real difficulty, it’s not just foreigners running away, it’s their own people running away, and that’s what started in July, here. That’s what made this thing a bit difficult. I do think that the July experience is not maybe as negative as it sounds because it was the aftermath of the worst stock market shake-up we’ve had in many, many years, at least since the postwar period. It was followed immediately by the Canadian crisis and the fact that we were able to weather that for a period of three weeks without any really major troubles in the London gold market, I think, is an indication of the strength of the arrangements that we’ve already built up. Because we did use this swap technique. We used it to pick up 250 million dollars from Switzerland and, in other words, let them keep it and not turn it in. We did use substantial—hundreds of millions of dollars—with Italy in the same way. We were able to keep the London gold market from getting out of hand the way it did before. So these techniques are all . . . they are all still working. President Kennedy: Well, let me just ask you this. Isn’t it easier for the French to, or the Germans to continue to hold their dollars if they think that it’s part of a general plan in which maybe they’re bearing a greater burden than perhaps the British, who don’t have any dollars, but at least it’s moderately agreed, a two-year proposal instead of saying,

warned him of a bleak profit outlook and the need to reduce or forgo dividends to its share- holders. Goldberg was not at this international economics policy meeting. 398 FRIDAY, AUGUST 10, 1962

that my god, we have to watch it because the French are going up 10 percent.59 And that’s what it seems to me would be the only advantage, but . . . it’s too much—[Unclear exchange.]—to ask the finance minister of one country to take the burden when he sees that the French moved 10 percent in the last four or five weeks. Roosa: I think that maybe we can do it. Dillon: We can do that. We can work that out between the French, and the Italians and the Germans. There is a real problem with the British. The French have talked to the . . . Giscard d’Estaing . . . the French have some sort of vague agreement and not a plan like this.60 He mainly was here, and we told him that “Sure, if you could get anything like that [unclear] would be fine.” So he went over and talked to the British, and we haven’t heard from him what happened, but the reaction came most from the British, who came in and wanted to know what this is all about, whether we’ll keep the convertible dollar or not. And, so it’s, the reaction in England, I guess, is not very good. And, but, nevertheless, I imagine if you can keep at them that maybe you can do something with them. They certainly didn’t . . . The big dollar gainers, on balance of payments, are Italy and France. And both of those who are . . . we have arrangements with that are . . . have reasonably assured us that there won’t be any very big dollar drains over the next two years. Switzerland is not a big dollar gainer except when there is a flood in the capital, and actually they’re in deficit now and several months before this flight into the Canadian capital had started, they were losing money and started just selling its gold. Not that I think it can happen again. England is fairly balanced. It is . . . everyone can expect that they won’t have any very substantial gains. So all . . . The two countries that we’re really worried about are France and Italy and I think that they’re in pretty good shape. Actually, I think, very few people realize but we have by these overall arrangements we’ve done in the last two years, taken, avoided the loss of, conservatively, of over two billion dollars of gold. That’s a very big amount. And this is still continuing and will continue and I think that the buildup as we’re in a way really strengthening our situation. If we suddenly fly off on some new tangent here we think that the results will be catastrophic. Ball: Mr. President, we’re in this situation, to put it in rather oversimplified terms, we’re running an enormous business. We’re running it

59. Increase their gold holdings as a percentage of total reserves by 10 percent. 60. Valéry Giscard d’Estaing was the French finance minister. Meeting on the Gold and Dollar Crisis 399 on a demand credit basis. This is a business many times bigger than any of the biggest corporations in the United States and yet our notes can be called at a moment’s notice. We’re in a position, too, where our quick assets in the form of gold are less than our total demand liabilities. Now look . . . now, all that, what the essence of any scheme of this kind . . . and this is only one of a dozen different plans that could have been drawn up. There was another plan, and we agreed on this, because this was something which the Treasury thought was a better way to do it. . . . All that any plan of this kind attempts to do is to in effect to convert these demand liabilities into term liabilities. In this case for two years. In order to give us time to work towards equilibrium and also to develop a revision of the whole payments scheme which will prevent the kind of insecurity that exists in the world today and also take care of the longer- term liquidity needs. Now, I find, I think we’re in a position of continued danger as long as we go along on the present basis which involves, as Bob Roosa’s paper has pointed out, some brilliant financial operations.61 But these are all operations of very short term. In the most cases, 90-day operations, which give no security against the . . . a sudden speculating move against the dollar which could result from accidents in foreign policy; it could result from a wide variety of things, none of which we can foretell here today. The kind of arrangement which we contemplate, in my judgment, I see no reason why it isn’t negotiable. It seems to me to follow the line of thinking which has already been manifest in Europe. This is the kind of thinking which Giscard d’Estaing expressed to me independently of his conversation with Doug Dillon. I think he told Doug much the same thing. That they . . . there should be some kind of an agreement for the restraint in the disposal of dollars for a period until something can be worked out. In England, we have this shown by this Economist piece which was based on a Maudling briefing on the prime minister’s own concern over the state of the payments system which he expressed again to Dean Rusk when they were in Europe last year, but a month ago, as he expressed it to you last year when he was here in May.62 And it seems to us, I think, in this, the council and the State Department are in accord, that it’s only a part of prudence to try to

61. Under Secretary Roosa’s paper was an overview of current financial operations designed to improve the balance of payments and current account deficit to stanch the flow of gold exchanged for U.S. dollars held abroad. 62. Reginald Maudling was Britain’s chancellor of the Exchequer. 400 FRIDAY, AUGUST 10, 1962

move now towards getting a net under this tightrope on which the Treasury has been performing with such admirable dexterity. President Kennedy: Let me ask you, what do you think about the argument of the Secretary’s about the other countries feeling that it’s increasing their desire to cash in?63 Ball: Well, you mean the countries that are not members of the Paris Club? In the first place, there are some restraints that one has on them for . . . why, political reasons. President Kennedy: But Spain’s one of the rest I— Ball: Well we certainly have compelled . . . a good deal of moral suasion with Spain. These are countries which are recipients of aid. We . . . they’re not complete free agents in this situation. Dillon: Austria bears watching. President Kennedy: Austria? Ball: Now, as far as the arrangements which we have that— President Kennedy: I suppose we could negotiate a separate agreement. Ball: —give us security now, quite frankly I don’t find them in the very long and careful paper which the Treasury prepared. I do find suggestions that all of this is based on a continued element of confidence, and confidence can be disturbed in any of a dozen different ways, none of which we can foresee with any clarity now. I don’t know if you agree with this. Dillon: Well, I don’t. One thing might be interesting, here this . . . we just sent this after he got it done. He had no part in preparing it. To our executive director of the [International] Monetary Fund, Frank Southard, who has a great deal of experience, of course, for ten years there and he has contacted almost all of these different people and he wrote the bank just a brief paragraph which I think is worth reading.64 It says [reading] “As I read the comments in the memorandum, which said that you . . . about the subjects of the proposal.” First paragraph,

I find it extremely difficult to comment on this memorandum when it does not deal with these important questions of the case for or against such an agreement. I assume that in some other way the answers of senior officials to that question will be presented at the

63. The President is referring to Treasury’s concern that a standstill agreement would undermine confidence in the U.S. dollar and cause countries to sell dollars. 64. Frank Southard to Mr. Willis, “Proposal for Interim International Monetary Arrangement,” 9 August 1962, President’s Office Files, Council of Economic Advisers, John F. Kennedy Library. Meeting on the Gold and Dollar Crisis 401

same time that the President studies the proposal. In my own opinion, a formal agreement of the sort outlined, far from deflating speculative expectations of various sorts, can only stimulate distrust of the dollar because if the agreement formally and drastically limits the convertibility of dollars into gold, it also will serve as a formal notice to the world that the United States and the other participants have decided that it is no longer reasonable to expect that monetary authorities will hold dollars, and that a credit position in the IMF is preferable to the holding of dollars. I do not believe that a scheme which intends to bring official gold holdings under control in the way proposed can fail to discourage private holdings of dollars and to accelerate efforts by them to move into other currencies. When and if the time comes for the United States to draw on the IMF on a large scale, I strongly believe the safest way to do so would be to draw without making any change in the established pattern of the dollar exchange standard, just as the United Kingdom did without seeking to change the nature of the sterling exchange standard.

Then it goes on, having said that, it has a few technical suggestions, the main one of which is that, he thinks that to ask the IMF for a two- year standby would not be practical in order to [unclear] renewables, since that’s what we’ve always had. And secondly, which we would agree with, that brings up the question whether we shouldn’t do something to try to sterilize the London gold market to stop feeding that. We’ve had some thoughts on that, but in a way, Mr. Reierson has been over there, from the Bankers Trust company, and raised this very strongly with the British and he’s going to make a speech saying that this should happen.65 President Kennedy: What does he suggest? Dillon: That the central banks just [unclear] going in into the London gold market and just separate themselves from it and then call all transactions direct. Let the London gold market do what it wants to do. Ball: It seems to me Mr. President, that one of our key problems is the question of how we succeed in eradicating the incentive on the part of private persons to speculate against devaluation of the dollar. Now, the

65. Roy L. Reierson, an economist, was the author of numerous articles on international payments, including “The International Payments System: Is There a Shortage of International Liquidity?” in International Payments Problems (Washington, DC: American Enterprise Institute, 1966). 402 FRIDAY, AUGUST 10, 1962

strategy, I think, of this proposal is essentially to demonstrate in a most impressive and formal and international way to private speculators that they can’t break us. By putting behind the dollar as a line of defense against private speculation $10 billion in resources available for over two years. I think there is good reason to expect that the inference that would be drawn from private speculators is that it’s of no use. The game’s up; they’re covered. . . . President Kennedy: But they don’t . . . their purpose in speculating is not to break us so much as to get in . . . Ball: Well, it’s . . . I think that it’s essentially a speculation against the prospect of dollar devaluation which we might . . . which they think we might be forced to do if we were broken. If we lost so much gold, in such massive quantities. President Kennedy: Is that the motive . . . is that the great reason for the speculation, or is it that they think that there is more of . . . that might . . . having gold, looking at say the next five years and losing 20 percent interest over five years that the chances of having a free movement of gold over a five-year period, other restraints on the movement of capital are such that they are better off to take . . . their gold would be worth more than the 20 percent you might get holding those interest-bearing dollars? What is the motivation to speculate? Mostly devaluation? Ball: I think primarily speculation against devaluation. The thought that they can make money by getting into a foreign currency and after the dollar is devalued—if they hope and expect it will be—then they get the . . . into dollars and make a profit. James Tobin: Or into gold. Roosa: Well there is the other whole range of things that I suppose you include in devaluation broadly defined. The risk that we might suspend gold payments or that we might impose a kind of exchange control as a measure along the way. I think it’s this complex . . . Ball: On the magnitude, Mr. President, the likelihood that the announcement of an agreement of this magnitude would eradicate the speculative motivation. It’s the Treasury’s best estimate that even including a speculative outflow over the next two years we ought to guard against an accumulated balance of payments deficit of perhaps 5 billion dollars. This must include, perhaps, 2 or 3 billion dollars in speculative loss. In other words, without speculation it comes to something like 2 or 3 billion dollars. Now what we’ve set here against a prospective 2 or 3 billion dollar deficit for nonspeculative movement is 10 billion dollars in protection. And I would think that when the speculator looks at the comparison between the losses we are likely to take for nonspecula- Meeting on the Gold and Dollar Crisis 403 tive reasons and the amount of our protection against speculation, a great many of them will think of much better ways to put their money to work into the short . . . Tobin: And that applies to nonmembers as well as to private— Roosa: Yeah, there is a great deal in what the others have said that can be accomplished without the risks of having to attempt to negotiate a hard-and-fast agreement. And as illustration, I think two or three points: Mr. Ball mentioned that what we have is a three-month arrangement at best. Now, I don’t want to try to put it all into details but these are things that grow out of association and experience. We’ve now reached the stage where they’ve gone this far. Belgium now says they are quite happy to have six months. Switzerland has come to us and said, we’re going to get legislation which will allow us to do two to three years. And, can you do two to three years? So that we are evolving in this same way. And I think what this means is that it’s not a fragile confidence we are building. It’s a sharing in the working of a system that we’re building. And I think we’re at the stage where we can get almost the same effect and perhaps even more in terms of some of the advantages of vagueness. If at the meeting of the [International] Monetary Fund and subsequently we begin fairly frequent comments by leading financial officials in other countries, of the kind that Maxie Clay did a month ago in Switzerland, indicating the confidence of the rest of the world—or at least the leading countries—in the future prospects and present strength of the arrangements that have been developing. I think if that were done at the time of the [International] Monetary Fund meeting and something that we have been working toward and we’re hoping particularly that the British come to us since they have been the source of the worst rumors against us . . . not necessarily their government but their press. This can accomplish a great deal without either the risks or the wear and tear of trying to negotiate an agreement of this much detail. I think it’s very useful to have put down all of this because it shows that if you are going to do it by agreement you’ve got to take into the . . . a lot of detailed stuff to get ten different countries all to agree to. But if you aim at most of these same things you can probably, on the basis of the assurance we’ve now developed among them, and its still to be sure, partly fragile, but its growing, you can on the basis of that assurance accomplish a very large part of what is aimed at here and minimize the risks. Tobin: Mr. President, I think there are also risks in doing it on this piecemeal, ad hoc, small day-to-day basis. And that risk is that each time you do something, a little thing, it’s interpreted as a sign of weakness. 404 FRIDAY, AUGUST 10, 1962

And nobody puts together . . . all the pieces together and says it really is quite impressive what is being done. And you’re wasting your ammunition. Whereas if you could get it all laid out on the table, publicly known, all agreed to, recognized by the other countries, because we can’t create confidence and maintain confidence alone. It has to be that everybody understands the other countries are in this with us. And you get all the benefit of the one . . . lining it all up and having it all agreed to and publicly announced, which we’re not getting now, as the July episode shows. And we may even get the opposite, that people worry because we try to make efforts to avoid little losses of gold here and there. And the other thing that I see is, I think the Europeans themselves, at least some of them, are anxious that the bilateral arrangements we’ve been making separately with each of them be regularized and interna- tionalized and multilateralized so that they know what we’re planning to do with each of the other ones, all together, so that it’s not something where they have the suspicion that we’re playing off one against the other or planning to do things with England that France doesn’t know about. And it’s from their side, it’s not the same thing to have done it one by one as it would be to discuss it all together. Ball: Well, this was exactly what the French finance minister said, that he wanted to remove the element of unilateral action Roosa: I think this is perfectly right, and I would agree with everything you say except that I wouldn’t feel that an immediate effort to negotiate on this kind of an arrangement is the way. It isn’t consistent with the way in which we’ve evolved so far. I think up until now, there have been so many uncertain pieces of this pattern that had to be tried that we risked destroying our efforts if we tried to lay out the whole pattern before each piece had been tested. Now each piece has been tested. We are at the stage where we can do it. I think the evidence of that, and it’s growing, is you’ve got on the one hand here tremendous impact from a speech by Clay. What happened after the most recent developments and following the repercussions that were in Germany, the director of the Bundesbank came out, expressing his confidence in the arrangements that the Americans have developed. We have just reached the point where this is beginning to happen. And I think we can nourish and develop it. I think if I could sanitize a version of that paper I prepared for—it’s too late really for this meeting—last night—it’s of course very long—but I think to the central banking people, they’d probably read it; finance people would. Some version of that which gives them a basis for seeing how it all fits together. And if we indicate, as we have no reason to avoid, that we’re prepared now that the outline of the whole thing is clear, to consult Meeting on the Gold and Dollar Crisis 405 as we go forward with either Working Party 3 or the Paris Club or alter- natively, even some smaller group of finance ministers.66 Or all of those. I think this will provide a kind of a system in which we could accomplish what we’re after. Get them telling the world from time to time that these are sturdy, promising arrangements that have the capacity for meeting any dimension of unexpected development. And then we’ve reached the point where we can take the next step, the step which is crucial in this negotiation that is proposed, and that is to deal with the long run. And I think there one important hitch in this is that people are not going to want to enter into it until . . . unless they have a little more in mind, knowledge among themselves . . . what is the long- run sketch that you think you’re aiming at . . . whoever proposes this. Nobody really knows yet. I tried to put one kind of a sketch in my memorandum but it’s a sketch that is so distinctly pro and unilaterally American that it isn’t in a form that you can talk with others readily about yet. And yet there are prospects there. We’re working on those with the British. And, I think, if we—behind the protection of more widespread approval of these present arrangements—on the basis of understanding can go ahead and perhaps even at the time of the IMF meeting have an indicator that now the new, the Paris Club, the ten countries are going to . . . since they are assured that the present arrangements are strong. They’re now really going to meet together to look at the longer-run future and see what the . . . The present has now been bol- stered. We now have the standby arrangements and all the rest. Now we’re going to look at the future and see where we ought to go and come back with the recommendations next year at the IMF meeting for what additional steps seem to be indicated to plan for the future. I think we could, in that way, get most of what is desired here and not incur the risks. Tobin: And meanwhile you don’t have a standstill or a pause? Roosa: That’s right. And I don’t think— Tobin: Isn’t that a key element? Roosa: Well, the standstill isn’t really [a] key element, Jim. I realize this is a debatable point. The key point is, how do you account for the dollars that will be moving over this period. And if you have a complex

66. The Working Party 3 was a subcommittee set up by the Economic Policy Committee of the OECD in 1961 to review balance of payments disequilibria among member nations. The Working Party established the practice of holding its meetings at six- to eight-week intervals and consisted of finance ministry and central bank representatives from all countries in the Group of Ten minus Belgium plus Switzerland. 406 FRIDAY, AUGUST 10, 1962

of arrangements which will either immobilize the new dollars or, as the dollars move, will immobilize all or most of them. And that’s what we’re approaching. Tobin: But isn’t it also, Bob, to change the climate so as to prevent the movement of too many of these dollars? Roosa: It is, and I think the climate you’ll influence . . . I think you have a chance at influencing the climate and getting wider understanding of what we have done. And more comment on it. President Kennedy: May I just say one thing about . . . one of the problems is that the central bankers are those who may have some understanding of what the strengths of the dollar are, [Roy L.] Reierson’s speech in Cambridge and all.67 But these people that we’re talking about, yesterday, where they said that they had moved out, this company was going to move its . . . buy some Dutch guilders because they needed it for an investment in Holland to start a company two years from now and they didn’t know whether . . . what was going to happen to the dollar, what capital restraints [might follow].68 We have got an awful lot of uninformed people, really uninformed, considering what they’re dealing with, that, who feel that . . . they read the [New York Herald] Tribune and read other papers which suggest all these troubles and we get . . .69 causes it to collapse, without . . .70 As the stock market proved, there are an awful lot of people who don’t know very much about money and yet they’re involved heavily since . . . When you think of these American bankers who go around talking about these tremendous inflationary pressures in the United States when we don’t have any, you realize you’re dealing not only with sophisticated central bankers, but also a lot of [unsophisticated] people who have just as much effect on the movement of the dollar. And I think that there is some general feeling that the dollar is in trouble and that you either ought to get [financial assets] out of the country or they ought to take some other action. Now how do we, we’re going to have some economic difficulties next winter. Maybe the stock market dips before that. How do we prevent even the short-term movement of, what are we talking about, 2.5 billion dollars that you said that . . . over the next—?

67. For background on Roy L. Reierson, see note 65. 68. This hypothetical case was raised by Henry Clay Alexander, the chairman of the Morgan Guaranty Trust, at the President’s “Meeting with Business Leaders on the Tax Cut Proposal,” 9 August 1962. 69. The President had let it be known he had canceled his subscription to this conservative newspaper. 70. It is the U.S. dollar. Meeting on the Gold and Dollar Crisis 407

Ball: The kind of event which could be catastrophic: What if we suddenly became involved in a major war in Southeast Asia, for example, which our European allies were not terribly sympathetic about so that they wouldn’t rally around the same way as though it were over Berlin. Now, this is a situation where, against which I don’t find in the Treasury’s paper any— Roosa: George, the answer to that is a very simple one. There is not a financial official in the world who will sign an agreement that will bind him to give his own currency, or to hold yours in that eventuality. And they’re smart enough to know that that’s an eventuality that we might be trying to suck them into. That’s one of the reasons why you can’t negotiate this. Kaysen: Well, that’s it [unclear] we go in [unclear] a Southeast Asian war— Ball:[Unclear] this agreement [unclear]. Kaysen: Mr. President, may I make a point on . . . I’d like Bob and Doug of course to comment on it. I think one of the big differences in emphasis, difference I feel in reading Bob’s very interesting memorandum, is the question of whether you are looking forward to a future situation in which we’re still carrying most of the burden and difficulties of running the world’s reserve system or not. Bob has a very convinc- ing argument about how we can do it. And I have no doubt in my mind at all that if we’re going to do it, Bob is the man to do it. But I really had some question as to whether we want to look on the line of continuing in the future to be running, carrying a very large share of the burden of running the world’s reserve system. And I think one of the big differences between facing up to these questions in the negotiations, discussions with the Europeans now, and waiting and going along the line of pointing out these informal arrangements, making them a little more multilaterally known, is the difference between making it clear that it is our view that the burdens of running the world’s reserve system should be multilateralized. We’re not clear how. We understand that there is a real problem of how we get from where we are to a multilateral arrangement. But by working at a formal transition, and a multilaterally negotiated one, I think we’re giving notice that this is our thought. I think the other way, really, I would . . . it is too strong to say commitment, but it pushes us in the direction of a system in which we continue and we . . . the dollar continues and we continue with all the difficulty that this has for us, to run the world’s international monetary system . . . that’s too strong. To pay a large share, to carry a large 408 FRIDAY, AUGUST 10, 1962

share of the costs and burdens and difficulties of running the word’s international monetary [system]. I think this is an important part of the problem. Roosa: Well, if its . . . I wouldn’t disagree with that at all, Carl, except that I think my sense of the timing is a little different. I think we aren’t going to be able to get a sharing until the whole problem of “the Six” has been moved along much further.71 And whether that’s five years or ten I don’t know. What I’d like to see is an arrangement that works and that promises to be able to work for an indefinite period while that is evolving. But at the same time builds nothing in which cannot be readily shifted and adapted to the conditions we’ll have when “the Six” augmented to seven or eight is a going concern on a unified basis. And that type— Dillon: And have a common currency. Roosa: And then have a common currency for them and then a bridge with us. President Kennedy: That’s quite a ways, isn’t it? Roosa: That’s a long way. President Kennedy: And it’s not a problem, really, the next two or three years. . . . In addition, politically, we have much more political strength with them now than we’ll probably have two years from now. They are much more dependent upon us militarily than they may be, if they say let’s get together and they have their own common market. Dillon: But this business about handling the burdens of the world’s reserve system is . . . two sides. It’s . . . there are a lot of benefits that flow from it too. Being the trade center of the world, the financial [unclear] if you can afford it. And I think it’s ultimately a difficulty affording it— President Kennedy: But I can see where we can get our balance of payments in balance as far as the military and so on. But the only question is what we do about that short-term flow, and number one in which, what happens to— Dillon: You see I don’t think you have one that you get the . . . but basically the reason for the— President Kennedy: Interest rates are the problem. Dillon: That’s . . . two things: interest rates, and the other thing is the lack of confidence that we will get our balance of payments in order. President Kennedy: Well, we can’t get our balance of payments in order as long as this is added to our— Tobin: Our uncertainty.

71. Roosa was referring to the European Economic Community. Meeting on the Gold and Dollar Crisis 409

Dillon: Well, if you get your basic thing in order, I think that gives confidence to, to this other— President Kennedy: Do you have any thoughts about this? Paul Samuelson: Well, I’d like to really find out whether the Treasury’s reluctance has to do with the fact that if you don’t have this, maybe you’ll never get it and you’ll create a tremendous amount of harm in trying to get it. Or whether, or if you really had it, offered to you, whether you would really be against it. Roosa: Well, if anybody offered it, because it . . . in under the deal, you’d be silly not to take it in terms of this being a wide-open, free offer. But you can’t . . . you can’t start that. Samuelson: Well, what . . . see, if you think of the present arrangement, this would give you a 10 billion cushion against the vicissitudes of the next couple of years. Now, the present arrangement involves quite a cushion, I wouldn’t know how to quantify that, but let’s pose that it . . . it’s of the order of magnitude of 3 or 4 billion. Hmm? Roosa: More than that. Samuelson: Well, that would be a relevant consideration. I think it’s trying to work out what, how much additional, this is to the present amount. Ball: There’s also a standstill, Paul [unclear]— Unidentified: Yeah. Roosa: And the other important thing is, this is a declared amount, and as you say the other is difficult to declare. Sorensen: I think that’s the key, right there. If I might, Mr. President . . . if you were to go on television Tuesday night and propose this plan to the other nations and say this is going to be a substitute for what we have been doing and we don’t need to worry about the balance of payments anymore or what the Treasury’s been doing is not enough, then I would agree with it, though I think Secretary Dillon, all his fears and Mr. Southard’s fears, and so on, are well founded. I don’t think we contemplate that at all. We think that the initiative . . . that we ought to get other countries to take the initiative. We think this is in their interest as well as in our interest and we intend to use the two-year period to go ahead and to correct our balance of payments. And in as much as what this plan essentially proposes is a formalization of what Treasury is doing now, which is . . . and I agree that what they’re doing now is very good, it is sturdy and adequate and appealing, and so on. And I think it is negotiable. Ball: There is one very important reason, it seems to me, why it is clearly, it may clearly be seen by the other countries as in their interest. 410 FRIDAY, AUGUST 10, 1962

If it succeeds in eradicating or greatly weakening the speculative motivation based on the expectation or fear of dollar devaluation it will then have the effect for them of leaving them at the end of the period with fewer dollars and more gold than they would have if they didn’t have the plan. Fewer dollars because it would discourage a speculative flow of dollars into their hands and more gold because the leakage of new gold into private hands which is now going on at a very high rate would diminish if the speculative motivation diminished and more gold would flow into the hands of central banks. So that I would think that the interest in eradicating the speculative, present speculative climate, would be at least as much in their interest as in ours. Tobin: It also has the effect of relieving each central banker of his personal responsibility for holding too many dollars because his government is a party to a general agreement of which, he can’t be blamed in the end for having held too much dollars. Whereas, right now he looks at the central bank in the next country and he worries about how he may be criticized if on his own he— President Kennedy: That’s what I think [unclear]. In other words, you think that individual, that competition between them, that extra pressure . . . do you think that . . . you’re saying that in answer to Professor Samuelson that if you could get this free and clear tonight that you’d take it or you wouldn’t take it?72 Roosa: With minor modifications. President Kennedy: You’d take it. Now the question is whether you present them . . . whether you would . . . Your judgment is that you don’t think . . . you couldn’t [expect an offer] . . . that they would offer it to you that freely. Roosa: Yes. President Kennedy: That negotiation itself would be destructive and you’re better off with what you’ve got. Roosa: Yes President Kennedy: Why wouldn’t they offer it to you? Why would- n’t d’Estaing agree to let him propose it? How does this, coming to us then . . . how do we lose? Roosa: Well, the principal fear that this would generate would be one that the other principal countries, normally would, in a sense, depend, have decided that the present arrangements are inadequate. But they also see—what the other outside commentator would magnify—some

72. A standstill agreement from the Europeans. Meeting on the Gold and Dollar Crisis 411 imminent, serious, grave risk. And consequently, they’re having to get together in some way and provide a drastic new approach. And in the face of this there must be serious strains and . . . Someone seems to enter the room and whispers to the President for almost 30 seconds. President Kennedy: [Unclear] starts to go on the ticket . . . [Laughter.] Ball: I’d just like to say on this that what we’re talking about— President Kennedy: [Unclear] starts to go on the ticket, then you can go . . . Ball: —is the discussion with the sophisticated people and the very people who, in fact, in whom—that you’ve pointed out—you’ve built up this great reservoir of confidence? Now, they know we’re not going to propose this because we see something imminent happening, about which [it] is not being disclosed to them, nor do they . . . But they believe that we were proposing this because we intended to embark on a popular course and to pay no attention to our balance of payments. I can’t believe that for a moment. I mean the very fact that you have been able to build up this confidence is a basis on which you could now talk with [them], about things which they are themselves talking about. I mean Giscard d’Estaing himself said that what he was talking about was some kind of a standstill arrangement. A restraint which would be multilateralized. And which would be for a period of time while this problem could be worked out. Dillon: I think the basic thing we’re worried about, Mr. President, and this is that while this is being talked about, the press comes up and says this. . . . And this is simply what it says is, as Mr. Southard pointed out very well in one sentence, well, that this serves notice that major countries of the world no longer have confidence in the convertibility of the dollar and they’d prefer to have an IMF credit which is guaranteed in gold. That’s the difference. And the fact being is when they are making the credit available to the IMF, they have in effect achieved on that portion a gold guarantee and then haven’t done as well [unclear] spent more dollars. President Kennedy: But isn’t that really the situation you’ve got in any bank; I mean if everybody started to cash in at any bank, they’d wreck it. We’re not willing to cash in all, everyone’s chips at once. And that’s what they know! Everyone knows that we can’t cash in everybody’s chips tomorrow. That’s what causes everybody to feel that maybe I ought to get mine out. But as long as they’ve got more demand than we have gold, what’s actually going to be written there? 412 FRIDAY, AUGUST 10, 1962

Dillon: What they’re saying now is that “we won’t accept any more deposits unless they’re backed 100 percent by gold.” President Kennedy: Well, aren’t we saying really, that we’re not going, that everybody looks at the amount of demand on the available gold and realizes we can’t pay [tape stops, then replays] off if everybody asks [to convert dollars into gold]. They have no assurances that the next fellow to them won’t ask. So what we’re trying to do is to get them to agree that for a two-year period they’re not going to ask, while we’re working . . . while our balance of payments situation improves and while we work out other arrangements. I think what hangs over there is the fact they know we can’t pay off. And that being true, that makes everybody feel they better get theirs [now]. We got ourselves into a position. We should have been working three or four years ago on making these arrangements while we still had enough gold to pay off, then everyone would have been willing to sign up. Now we’ve got ourselves where we haven’t got enough gold. As long as those figures are written, 22 billion dollars in demand and 16 billion dollars in gold, how do we prevent, either individuals or countries, individual countries, deciding that they better get theirs out because there isn’t enough to go around?73 What’s the answer to that? Dillon: Well, I guess the only answer to that is that if they all try to get theirs out, the major ones, that depend on world trade, they know they’ll break the system on which their own world trade is based. President Kennedy: Yes, but that would be the argument for their accepting an arrangement such as this. I just don’t know. Dillon: Well, it’s also their argument for operating under the present system. President Kennedy: Well, only because it isn’t made multilateral enough. And, because it’s an individual competition between bankers, individuals, and finance ministers. If they just figured everybody was going to take a piece of the risk. Now, I don’t know anything about what a swap is. But I just would think . . . what is that? [talking to Press Secretary Pierre Salinger?] A. P.? What is that, part of your press conference? Salinger: Uh-huh. President Kennedy: Well, no matter . . . [unclear] to Mrs. Lincoln . . .

73. The United States possessed $16 billion in gold in its reserves. There were at least $22 billion in demand liabilities held by either private or official holders which could be converted into U.S. gold at any time. Meeting on the Gold and Dollar Crisis 413 in that order, we’ll ask Wilbur Mills, Ackley, Dave Bell, who have we kept in this room since the last meeting? [Room breaks into laughter.] Well, now it’s just a speculation. Salinger: You want to go with it? President Kennedy: I don’t see that . . . I think that’s all right. Let it go at 2:15. Salinger: Right. President Kennedy: I don’t think that that . . . all we’re just concerned about is we don’t want to sort of depress everyone in the world, do we? Always say something about [unclear]. All right, well anyway, that . . . It would seem to me that they’re . . . without knowing anything about any of these technical arrangements that there’s a problem of these different individual bankers and countries, to prevent them from feeling that everybody’s going to go. In other words, the same feeling that when the guarantee was given to the local banks in the ’30s and no one felt it necessary to cash in. Now, how do we get that feeling of a general acceptance of whatever risk there is? And their realizing that if everybody will accept the risk, there isn’t any risk. Roosa: Well, Mr. President, I think we get it in the way in which I was suggesting earlier and not by attempting to— President Kennedy: Formalize it. Roosa: —formalize . . . formalize the arrangement now. I’m afraid that they . . . to try to get it done at the political level, without the financial people involved would be in the nature of a coup, which I don’t think you could accomplish in ten countries. And that the financial people would either agree or offset. President Kennedy: But— Sorensen: The next one, Mr. President? Roosa: But, and one of the . . . But short of that, and without it . . . this is the secret of how we’ve done everything so far. We never got anybody to sign up on the dotted line for anything. We got them to agree in principle but avoided the darn wear and tear of having to negotiate the fine print. And you get them moving along the same way, get them all saying, assuring the world publicly of this, get them into a situation where, as we’re beginning to do now, they all talk with each other about how to minimize the taking of gold. Just this Monday, this week, the Swiss called up and said that we got another 50 million dollars and we don’t want to take any gold and we don’t know quite how to handle it— what do you suggest? President Kennedy: Where’d they get the 50 million dollars? 414 FRIDAY, AUGUST 10, 1962

Roosa: It was a continuing part of this inflow but it was not really from here. This was one of those shifts around in Europe. President Kennedy: Let me just say before I go. Do you have any thoughts about this plan, aside from it’s . . . whether it’d be acceptable and so on . . . or do you think . . . ? Samuelson: Well, the only question I would raise is to what degree are you depending upon personal diplomacy? Unidentified: Are you— Samuelson: As long as Montagu Norman and a few others . . . and Governor Strong were alive and working well, things worked very well.74 But you put . . . Governor Strong is only mortal. And conditions change. If you could nail this down . . . I don’t know what the feasibility of nailing it down is, but if you do have something that doesn’t depend upon the vicissitudes of everybody understanding and liking somebody else, it shouldn’t— Ball: And against . . . that this is . . . with some major event occurring which could really disturb the situation. President Kennedy: Here’s the thing. I get . . . I got to get this [unclear] lunch. I don’t even . . . we can’t settle this today, so I think what we might do is to come back on Monday or Tuesday and take another look at it. In addition we’ve got Gene Black coming in and we might talk to him about it . . . see what his thoughts are.75 It’s like . . . It’s hard for me to make a judgment, I don’t know enough about it. Roosa: You might want to get [Federal Reserve] Chairman [William McChesney] Martin in, sometime here. This is— President Kennedy: OK, well let’s meet next week on the [unclear] to continue our discussion. We could, just in view of the fact that there’s a very strong difference of opinion between the State [Department] and the council, and the Treasury it’s a matter about which, it’s a much . . . we better take another look at it the first part of next week. The committee has done a good job in giving us a proposal. Now, we’ll just have to see whether it has any merit. Meeting breaks up. Papers are shuffled; people begin leaving. President Kennedy: As I say, I needn’t reiterate how important it is that this matter be kept without any staff conversation, because—

74. Samuelson was referring here to Governor Montagu Norman of the Bank of England and Governor Benjamin Strong of the Federal Reserve Bank of New York. Norman and Strong had a close relationship and cooperated on international monetary affairs throughout the 1920s. 75. Eugene R. Black was the president of the World Bank from 1949 until 1962. Meeting on the Gold and Dollar Crisis 415

Dillon: Yes I would like to say— Unidentified: Here’s a copy of this. Dillon: This is already known in Europe, and some of the State Department people are talking about it. Ball: Well, Doug, that isn’t true. Dillon: It’s come back to [John] McCloy, and McCloy has—76 Ball: We’ve had nobody talking about this in Europe. Nobody in Europe knows about this. Dillon: Well, I [unclear] they didn’t. President Kennedy: What do they know? Dillon: Well, they know that there is an argument between the proposal put forward by the State Department and ourselves that’s . . . Ball: Well, John, you know, I mean, you have been in Europe, and you know as much as any of us would know about this thing.77 Dillon: I understand from [unclear], it came from our people in Paris so I can name the names if necessary, and they’ve been talking about it there and Monnet’s been talking . . . he’s been writing to McCloy about it. Ball: I have not been in touch with Monnet. John, let me ask, I mean, we’ve all—78 John Leddy: I have . . . President Kennedy: What? On this subject? I know we are a subject in the Tribune but how about, on this?79 Roosa: Yes. Yes, well, the subject came up because these regimented outlines of what he understood to be the debate that is going on. President Kennedy: How accurate was it? Roosa: Pretty accurate. President Kennedy: Where’d he get it, did he say? Unidentified: Who is this? President Kennedy: John McCloy. Where’d he get it? Roosa: Well, he got it from one of his people who had sat in on a meeting in Paris, and . . . President Kennedy: Between the Americans?

76. Then in private law practice, John McCloy had been chairman of the board of Chase Manhattan Bank and had extensive connections in Europe. 77. Ball was addressing John Leddy, the assistant secretary of the treasury. 78. It was well known that Ball was a great admirer and associate of Jean Monnet. Monnet had been Europe’s leading advocate of economic integration for years. 79. In the New York Herald Tribune. The Tribune, no friend to the administration, had been running a steady stream of articles asserting a declining confidence in the U.S. dollar in Europe. 416 FRIDAY, AUGUST 10, 1962

Roosa: Yeah, well, actually, I am sure this meeting occurred before our present group was set up, because it’s part of— President Kennedy: So in other words it occurred before our meeting two or three weeks ago? Two weeks ago? Roosa: I think so President Kennedy: Oh then it’s not directly related to our— Roosa: Not directly from here. Dillon: You see what happened is this is a picking up of this idea of Monnet’s that he’s been having for a long time. President Kennedy: I see. Well, in any case, let’s just, we’re not in any dispute because we’re not . . . we haven’t reached that point yet. Unidentified: [Unclear.] Roosa: I did make out all right with him on the other thing. Dillon: I just thought [unclear]. President Kennedy: Oh, yeah, I know; I heard it. I got that. But as I say, let’s just put it to bed right here [unclear]. Roosa: [Unclear] we ought to be able to— President Kennedy and others leave, but Dillon and Ball remain. Their argument continues. Ball: [Unclear] put a clamp on this thing. Any documents that are locked up with my safe . . . nobody knows a damn thing about it. Cross-talking. Ball and Dillon appear to continue their argument. Dillon: I haven’t [unclear]. Ball: Well, they don’t know enough about this. They don’t know . . . we’ve had meetings in hotels. They don’t know of any discussions. Dillon: But they do know about . . . [unclear] or maybe they don’t. They do know that you have agreed with the Monnet approach. And it’s [unclear] to get it done. Ball: This isn’t the Monnet approach. [Unclear] this is a wholly different approach. I mean, that what he’s talking about— Dillon: The final document is a different approach. But your original document is . . . Unclear exchange between Roosa and one other person. Ball: Well, I mean, I am not blaming you at all. All I am saying is that we have been damn careful about this. This is . . . We put absolute top security on this thing. Dillon: They know it exists. Ball: Well, I mean that if they know that I have been unhappy about the fact that we haven’t in my judgment come to grips with this thing, sure, I [unclear] think that this has gone on for years. [Unclear exchanges.] Yeah, well, I don’t want the impression created that we’re taking it up. Meeting on the Gold and Dollar Crisis 417

Dillon: [Unclear] or even about this whole business. Argument fades, moves outside the Oval Office. Tape runs for almost four minutes more. Sorensen: Did you call me? Lincoln: Yeah, Mr. [Arthur] Schlesinger wants to talk to you. Sorensen: Oh, . . . from his office? Lincoln: Yeah, he’s over in his office. [Tape ends.]

Confronted with another decision, the President discovered that the Sorensen compromise was no more acceptable to Treasury than the Ball plan had been. Dillon and Roosa refused to sign on to any negotiations that could lead to a gold standstill or gold guarantee. The President, aware of the lack of a consensus among his top economic advisers and unwilling to rule against his Secretary of the Treasury, tabled the discussion. He also took Robert Roosa’s advice to seek out the opinion of the chairman of the Federal Reserve, William McChesney Martin. The President had a lot to do before heading off to Maine for a brief campaign appearance. He planned to spend the weekend with boxing great Gene Tunney at Tunney’s John’s Island hideaway. The foreign news was not good this day. On behalf of the Kremlin, Soviet negotiator Valerian Zorin rejected the new U.S. test ban proposals, terming them “only a tactical maneuver.” On August 6 Arthur Dean had handed an informal note to the Soviets explaining that the U.S. government envisaged the possibility of lowering the number of annual on-site inspections and was even prepared to accept the concept of national control stations, so long as they were “internationally supervised.” As the British had predicted, the Soviets did not accept a proposal that fudged the nature of international participation in the national seismic monitoring stations.80 And there were some more worrisome signs from Germany. In an article published in Izvestia, Willi Stoph, the acting premier of East Germany who was visiting Khrushchev, endorsed the Soviet view that “if the Western powers stubbornly adhere to their unrealistic attitude then the peace treaty will be signed. . . .”81 Kennedy met briefly with the incoming Army chief of staff, General Earle Wheeler, who had been unanimously confirmed by the Senate Armed Services Committee the

80. Kendrick Oliver, Kennedy, Macmillan and the Nuclear Test-Ban Debate, 1961–1963 (London: Macmillan & Co., 1998), pp. 124–27. 81. New York Times, 10 August 1962. 418 WEDNESDAY, AUGUST 15, 1962

previous day. Then he saw Dean Rusk and the White House Middle East expert, Myer Feldman. Like the morning meeting with Mills, these meetings were not taped. The President’s afternoon schedule was light. After another editors’ luncheon, this time with publishers and editors from Utah, the President spoke with Arthur Goldberg and AFL-CIO president George Meany, who was at the White House for the second time in two days. The President’s political escorts for the Maine trip, Senators Edmund S. Muskie and Benjamin A. Smith, II, arrived next, as did Kennedy’s friendly escort for the private weekend to follow, old chum Congressman Torbert Macdonald of Massachusetts. The President, with the Maine contingent in tow, left the South Grounds at 4:50 P.M.

Wednesday, August 15, 1962

The Soviet achievement of putting two spaceships in adjacent orbits caught the world’s imagination. It also signaled one more area in the space race where the Soviets seemed to be ahead. The United States did not expect to be able to pull off a similar feat until 1964, at the earliest. The Soviet challenge was particularly evident today, also, in a decision the Kennedy administration had to make about the stalled disarmament talks in Geneva. In its instructions to Arthur Dean on August 3, the State Department had indicated that if Dean found that the Soviets would not budge from their opposition to on-site inspection, he could move to table a draft partial test ban treaty, outlawing atmospheric, underwater, and outer-space tests. Late on August 14, Dean had requested permission to go ahead and present the atmospheric option to the Soviet delegation. He would get a green light. The President attended St. Matthews Cathedral with Dave Powers and Captain Tazewell Shepard for the Mass for the Feast of the Assumption. Then he motored to the Navy Yard to address the Coast Guard cadets on the new training bark, Eagle. Once back at the Oval Office, the President had brief meetings with Myer Feldman and the widow of former Philippines president Ramon Magsaysay before greeting a delegation from the American Indian Chicago Conference. In the afternoon, the President had to evaluate two different kinds of programs designed to stop the spread of Communism in the Third Meeting on Laos 419

World. First, the President had to consider how much was enough to spend on development in Laos. While constantly concerned about the outflow of gold, and downward pressure on the U.S. dollar, the President did not wish to be, in his words, “pound-foolish and penny-wise.” Next the President was to be briefed on plans to overthrow the Jagan regime in British Guyana. Whereas the criticism in the first case was that the United States had spent too much in Laos—an estimate of $20 per person, more per capita than anywhere else in the world—in British Guyana the complaint was the opposite. The British, at least, believed that the current mess there could have been avoided had Washington only spent more money.

4:10 –4:45 P.M.

[W]e cannot afford to squeeze Phoumi so hard in the next three or four months because, as I say, we’ve got so much to lose if that thing goes sour . . .

Meeting on Laos1 Laos had been the first major foreign relations problem President Kennedy had to face as President. General Phoumi Nosavan, the strongman of Laos who enjoyed the support of both the CIA and the Department of Defense, had marched his troops toward the Laotian capital, Vientiane, in December 1960 and installed a government headed by Prince Boun Oum. He forced Souvanna Phouma, the previous prime minister, to flee to Cambodia. The Communist Pathet Lao, led by Prince Souphanouvong, had supported Souvanna, Prince Souphanouvong’s half- brother. With the United States supporting Phoumi and the Soviet Union providing direct support to the anti-Phoumi forces, the superpowers had managed to create a proxy war in this small, landlocked country. Despite Phoumi’s success in taking Vientiane, the Pathet Lao held large portions of the country, and the United States considered military

1. Including President Kennedy, Michael Forrestal, James Fowler, Averell Harriman, Carl Kaysen, and Roy Wehrley. Tape 11A, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 420 WEDNESDAY, AUGUST 15, 1962 intervention. On December 31, 1960, Dwight Eisenhower had told his closest advisers that “we must not allow Laos to fall to the Communists, even if it involves war in which the United States acts with allies or unilaterally.”2 The outgoing president had conveyed a similar message to Kennedy, who did take steps to deploy U.S. troops in the region but who also ordered a complete reexamination of the situation in Laos. Eventually, Kennedy decided to seek a neutralized Laos, though he continued the policy of assisting Phoumi’s government to resist the Pathet Lao insurgency. The President also authorized planning for U.S. military intervention, if necessary. Fourteen months after it opened in May 1961, the Geneva Conference on Laos temporarily ended the civil war there. On behalf of the United States, Dean Rusk signed the Declaration on the Neutrality of Laos on July 23, 1962, and a coalition government which included members of the three warring factions was to try to bring peace to the Kingdom of a Million Elephants. The Kennedy administration, which would have to withdraw all U.S. military personnel in Laos as a result of the accords, now had to decide how to proceed in Laos. The Eisenhower and Kennedy administrations took quite an interest in the struggle between the Pathet Lao Communist insurgents and the pro-Western Royal Lao government and granted Laos more foreign aid per capita than any other country from 1955 to 1963. The United States paid for nearly 100 percent of the Lao military budget and 80 percent of the civilian government, providing cash to cover Lao budget deficits. The Royal Lao government had trouble raising more than a few dollars per year in tax revenue from its approximately two million citizens. Instead of creating an effective army, the United States created a very powerful graft machine in Laos. A career in government service became a quick path to riches while the population received very little benefit from the influx of U.S. aid. In fact, despite the fact that more than 95 percent of Laotians made their living in agriculture, less than 1 percent of U.S. aid was spent improving it. After the Geneva Accords, the Kennedy administration made reforming the Laos aid program a top priority. Hoping that the accords would reduce the need for an army that proved very expensive (they were the best-paid soldiers in Asia) yet extremely ineffective, the Agency for International Development (AID) proposed terminating all direct budget support. The cash grants had led to a decline in local food pro-

2. Memcon, 31 December 1960, FRUS, 16: 1029. Meeting on Laos 421 duction and a concentration of imported goods in the hands of a few people. Instead of drastically reducing aid to Laos, AID proposed financing necessary imports of commodities such as steel and cement into Laos. Direct budgetary support would be provided only in “extraordinary cases”—envisioned as paying to demobilize the armed forces or to prop up political stability.3 Souvanna Phouma, the new prime minister of Laos, himself requested an end to the cash grants system and the enormous corruption it generated.4 To institute the new program, AID appointed a new Laos director, Charles Mann, and a new director in Vientiane, Roy Wehrley. The new plan would leave the Souvanna government in a somewhat precarious financial state. For fiscal year 1963, AID estimated that Souvanna would have $50 million in expenses and only $8 million in tax revenue. In addition to ending an aid program that had failed miserably, Kennedy also had a substantial interest in reducing gold outflow from the United States. The President expressed a near-constant concern with the balance of payments problem. Because this new proposal did not reduce the dollar drain, Kennedy pressed his advisers on this point. In fact, McGeorge Bundy felt that “old hardhead” Kennedy would reject the new program because it did little to alleviate this problem. The new plan hoped to end U.S. support for the bloated Lao military. President Kennedy turned on the recorder while James R. Fowler, deputy administrator, Far East, AID, began his briefing.

James Fowler: . . . a very respectable system for financing imports into Laos, both commodities and acceptable invisible transactions. This would mean that we’d have to waive a lot of our present rules and regu- lations, but at least we would control the dollars, and we would try to assure ourselves that on the first go-round they were spent in either the United States or the free world. They would not go to Communist sources. President Kennedy: Well now, just . . . Let’s start to go through this program [unclear]. Papers rustle for 15 seconds; people are probably reading AID’s draft memorandum.

3. Forrestal, Proposed Economic Assistance Program for Laos, 15 August 1962, FRUS, 24: 885–86. 4. See FRUS, 24: 878. 422 WEDNESDAY, AUGUST 15, 1962

President Kennedy: Do you want to, sort of, describe how we would proceed? [Unclear.] Fowler: The way we sketched this out, we have recognized that we really have three immediate objectives. One is to make the [unclear] work. Secondly, to get the military forces of about 100,000 men, all factions, reduced, compressed, to perhaps 15[,000] to 20,000, exclusively police. And thirdly, to institute a new and more rational form of providing aid. Now, these objectives are in some conflict, so our strategy is to begin to work toward a new approach, which we call here in our paper the basic policy, which is to finance acceptable foreign exchange transactions. Plus mounting a project program designed to make maximum impact in the rural areas of Laos. Then a transitional policy, which would be, if you will, an insurance, that when the pressures that this new approach would put on Souvanna become intolerable, we could by proper negotiation, make a cash grant, but hope to get something concrete for it, perhaps a deal for further, more rapid demobilization. These would be ad hoc. We would make it very difficult to obtain, and we’d try to extract some kind of a concession from him each time we did it. We feel the nature of the situation over the next year is such that we cannot really in all fairness say we’re not going to do this at all. We feel we probably will have to make cash grants. President Kennedy: Tell me, what are the French going to do? Fowler: They are doing now an educational program, providing teachers. They have not undertaken to make any financial assistance, direct financial assistance, available as yet. But we would hope, one aspect of our strategy, since we would pick a figure somewhat lower than their requirements, to put pressure on them [Laos] to seek aid from other sources, the French particularly, perhaps the Japanese, the Germans and the British. Because there would just not be enough foreign exchange available in the amount we would make available to them to cover all the requirements that— President Kennedy: Did the French or British ever indicate to you or anyplace else that they would contribute to the maintenance of this? Averell Harriman: Yes, they agreed to contribute to the educational program, but haven’t financed [that] yet. We’ve asked [the U.S. embassy in] Paris to see the French and to find out exactly what they’re going to do. Fowler: The forms of aid that the other governments so far have indicated an interest [in] are analogous to our project aid. They don’t really go to this question of financing the requirement for imports or foreign exchange transactions. We’ve been looking at the source of imports into Laos. These estimates are very, very rough, and we can’t Meeting on Laos 423 rely on them because they come from data that’s back in 1960, but this indicates that Japan, France, U.K., and Germany have been the origin of substantial imports into Laos during that six-month period. President Kennedy: What sort of stuff ? Fowler: Beg your pardon? President Kennedy: What sort of things? Fowler: [Pauses.] Well by country, I can’t really identify them. President Kennedy: Well not . . . but I mean, what sort of goods [unclear]? Unidentified: General imports, just across the board. Fowler: General imports include petroleum, food, luxuries, iron and steel, textiles— President Kennedy: Why is it that they can’t get those in the United States? Unidentified: It would be a good deal more expensive, Mr. President. President Kennedy: Yeah. Well, except in France, it wouldn’t be much more expensive. Unidentified: No sir, the freight from France to Southeast Asia is about half of what the freight is from the West Coast of the United States to a similar port. Unidentified:5 A lot of the expenditure in France has been invisible, too, in the form of sending children to school there, things of that sort. There still has been a tradition of pretty close linkage most of the time. President Kennedy: But what do you think it’s going to cost the French compared to what it’s going to cost us? I mean, have we ever sat down with the French and the British and said well now we all, this is no longer our government, this is your [government], Souvanna is after all your candidate. We’re not going to, what are they going to put in? Harriman: We’ve asked the French, we’ve asked the embassy in Paris to sit down with them on this. We’ve also tried to get them, from our military, to get a commitment in connection with what they’re ready to do when they [unclear] our aid. We haven’t [unclear]. President Kennedy: Who have we talked to? Harriman: Well they talked to, Bill Bundy talked to the French Foreign Office people, and we haven’t heard yet.

5. This could be William H. Sullivan, U.N. adviser, Bureau of Far Eastern Affairs, Department of State, who was not listed in the President’s Daily Appointment’s Diary but was listed in the White House memorandum of conversation for this meeting (Memorandum of Presidential Conference, 15 August 1962, FRUS, 24: 886). 424 WEDNESDAY, AUGUST 15, 1962

Michael Forrestal: Haven’t you also started conversations with the British? Harriman: We’ve asked the British at the embassy to take [that] up. The British have indicated an interest, but they haven’t given us any definite figure yet. Forrestal: I also think you might want to mention Jim, that the program which you propose here falls somewhat short of providing a complete cover of— Fowler: That’s correct. Forrestal: Of nonbudget [unclear]. Harriman: Now it seems, of course, the Japanese offered to complete their waterworks program, but [it’s] somewhat over a million dollars for Vientiane. [Unclear.] President Kennedy: Who paid for that? Harriman and Unidentified: The Japanese. President Kennedy: You mean, they’ve given this as aid? Unidentified: Reparations. Fowler: In this connection however it’s important to realize that aid of that sort is not really going to relieve the essential problem. That’s why I say it’s analogous to our project aid. These are not requirements which the Lao would otherwise need. We must— President Kennedy: Now what about our trying to get a conference with the British and the French, and maybe the Japanese? After all, the Japanese don’t contribute aid very much anyplace, do they? Unidentified: In Southeast Asia. President Kennedy: What? Unidentified: In Southeast Asia, but it’s more or less conscience money against these reparations. Unidentified: Reparations. Harriman: I think we’d better limit it, because since it’s the British and French, because they were with us, working together in Geneva— Fowler: Well, we noticed that. Harriman: And the Japanese were never directly involved, although they were quite enthusiastic about the settlement. Fowler: We took an annual amount of visible imports, ones that moved through customs channels which we could see in Laos for the period of 1960, and analyzed those by source. And for whatever it’s worth, we don’t know whether this pattern has been maintained or not, but for whatever it’s worth, the Japanese were responsible for 14 percent, the French for 12 percent, the U.K. for 5 and the Germans for 4 percent of imports during that period. Meeting on Laos 425

President Kennedy: Where did? The country of origin? Fowler: That’s country of origin. President Kennedy: And where were the remaining 50? Fowler: Now the remaining came from the United States, 13 percent, and from the underdeveloped countries— President Kennedy: Thailand. Fowler: Of which Thailand was the biggest one, 40 percent, and the remainder of the developed countries other than the four I mentioned make up 10 percent, which makes a total of— President Kennedy: Well, I think we ought to make sort of a more formal proposal to the British and the French about what we’ll do for the next 12 months, and 18 months under certain conditions, so that they have what, so that we don’t get to be the source. After all this is the solution that was very much recommended by them, Souvanna is their pro- tégé, and while we’ll be ready to help, I think we’re getting into the position of being the budget supporter. We’ll get ourselves in; then he’ll squeeze us more and more and keep saying to us if we don’t do it then we are going to have to turn to [the Soviet Union], and so on. We don’t know what the Russians are going to do, do we? Fowler: No we don’t. Harriman: We have no information on that at all. Fowler: One thought we have given some consideration to was the development of a special procurement policy for Laos, in which we might, in order to put some pressure on the French and British for instance, to agree that our money could be used to finance imports from any source of origin except say France or Britain. Then they stand to lose two million dollars or three million dollars a year worth of business. Now, this would be peanuts to them, but at least we would be putting pressure on. Our dollars would not be available for that kind of a transaction. President Kennedy: Yeah, we might as well let the dollars go to Thailand or someplace as go to, just can’t follow the dollar. Fowler: A tailored procurement approach for Laos and only Laos. President Kennedy: But what about our trying to make a, sort of a, Governor [Harriman], you’re getting in Alphand [Hervé Alphand, the French ambassador], and saying, we’re trying to think of the aid, and how we’re going to divide this up, just as if we had no program now, just say now, here’s what we’ve done, they’ve got 18 million dollars in the bank, that we’ve given them, but now we want to know what everybody’s going to do and just make it look like a mutual judgment. Now it may not work, but at least I don’t see that we’d be worse off. Once we decide what we’re going to, they’re not going to do anything. They always— 426 WEDNESDAY, AUGUST 15, 1962

Harriman: I think what we’ll get the French to do is quite generous in connection with their education program which they have funds for. You know, they’ve given quite heavily . . . they’re, paying a higher price for cocoa and coffee from the African countries. The ambassador in Cameroon has told me the total French expenditure in the Cameroons was over 50 million dollars a year, but that relates to certain subsidies on exports in addition to the education. But they have certain funds in their budget which relates to education, and we might get them to take over quite a little of the expenditure which the government is now making in the education field. Fowler: Unfortunately though, that wouldn’t help much in this problem of meeting these import requirements. Forrestal: I think maybe, you do want to emphasize the thing—that this particular paper to the President has before him—now is 15 million dollars short, roughly. Fowler: Roughly. Forrestal: Of what the Laos have been doing up till now. There’s 35 million instead of 50 million. They’ve got to get that 15 million from some other source. Fowler: If they wish to continue to absorb and utilize foreign exchange at the level of past years. President Kennedy: Yeah of course. Fowler: Now if that’s too high . . . President Kennedy: [Unclear.] Well, now what about getting the French and the British in, Governor? Harriman: Well if we could get them, that is one of the things that we hoped to do, to make up some of this deficit, and relieve— President Kennedy: I think we ought to say, why don’t we say to them, well, now here’s our figures on what their deficit is, and say here’s what we’ve done in the past, here’s how much money they’ve got, here’s what the [station?] figures. Now, what will we do? How much should the United States do, how much should the French do, how much should the British do? You’re not going to get an answer back. Well then, it’s on their . . . Then they come back and say they’re not to going do anything, that’s, at least we’ve asked them, and whatever satisfaction that is, at least we’ve asked them for a joint approach before we make up our mind. And I think we ought to be rather tough about it, just say, it’s a question of [whether] you’re going to do anything, and then we’re not going to because we have a lot of other obligations in Latin America or something and let’s see what they do; then if they do split, we can get it out of them, Meeting on Laos 427 fine. If we can’t get them to do anything then at least, I’d just like to have that on the record. How about that? Do you agree with that Governor? Harriman: Well I think, I certainly agree, sir, that we should bring them in and deal with them more formally than we have so far. We’ve rather waited for them to come forward with their proposals, and they haven’t done it, and I think we’ve got a perfectly clear-cut basis for bringing them in— Fowler: In this connection— Harriman: And I don’t think it’s going to help us a lot in the emergency period during which they have this very large military force. We have certain interests in maintaining Phoumi’s force at a reasonable level until we see whether this is going to work or not which they won’t contribute to, I’m quite sure. President Kennedy: Fine. Well, as I say, we’re gonna have to do more obviously, but I’d like to have— Harriman: I think we’re going to have to do something on an interim basis. President Kennedy: OK, let’s see. Let’s not even suggest we would do that until we see what they’re going to do. Then we’ll just have to go ahead, and they won’t do it and decide how much we’d be willing to do. [Unclear]— Fowler: I would like to make one point on that Mr. President, if I may. We are at the moment putting pressure on these very governments to help us with this same kind of problem in Vietnam. President Kennedy: Right. Fowler: Where we have a commercial import program of a very sizable amount that we’ve been carrying. We have recommended yesterday that Mr. [Fowler] Hamilton, that he call in the ambassadors and talk to them about this. Fritz Nolting is seeing them in the field in Saigon.6 President Kennedy: Now, what are we asking them to do in Vietnam? Fowler: Well, we’re just trying to get them to do something to help out because a great many of Vietnamese imports come from these sources, too. And we’re putting up the dollars. Or we’re permitting the Vietnamese to use their dollars for this by putting up some more ourselves even though ours are tied as closely as we can to limited procurement. I mention this only because I remember in previous years, when we’d gone to the Europeans, we used to do it in NATO, and they would say,

6. Frederick Nolting was the U.S. ambassador to South Vietnam. 428 WEDNESDAY, AUGUST 15, 1962

“Well now look, you fellows are asking us to do five different things; which one do you really want us to do?” President Kennedy: We want them to do all five. [Laughter.] That’s the way it is. That ought to work. Fowler: “Now, we’re prepared to help you, but give us a priority.” Now in Southeast Asia, the amounts in Laos would probably be rather small, but I think we would find ourselves having to answer the question, “Would you rather have us help you in Vietnam or in Laos?” President Kennedy: So, what we’re asking now, what sort of thing actually, what sort of help are we asking for in Vietnam? Fowler: To help finance some of this commodity import that goes— President Kennedy: You mean, by long-term credits, or what? Fowler: By long-term credits. By the same kind of aid, that we are . . . if they won’t do it on a grant basis as we do it, then do it on some long- term— President Kennedy: Now who did we ask yesterday, who did we talk to yesterday about that? Fowler: Well we haven’t actually done it. We recommended to Fowler Hamilton that he see the ambassadors of the principal European countries, Britain, France and Germany.7 President Kennedy: I see nothing wrong with asking them for both, because we’re going to ask them, tell them also about NATO. I think these are the burden sharing, and particularly on Laos. If we don’t get them at the beginning, we’ll never get them. Harriman: I agree. Fowler: So we ought to perhaps package this together, and talk about Laos. Harriman: It’s really a different program sir, because here there’s no chance of any return. There’s no chance of anybody extracting anything; it’s a question of making it possible for Souvanna’s government to work. And it’s got to be in some form [unclear] basis. President Kennedy: In addition, Vietnam has been much more our responsibility, and Laos is, Souvanna is much more an equal amount of responsibility. So let’s do it both. Harriman: We had been waiting to see what— President Kennedy: Well, let me see now, in addition, well at least that’s what, we’ll do one of those. Now let me see how we’re going to do, depending on these new . . .

7. Fowler Hamilton was the AID administrator. Meeting on Laos 429

Harriman: The figures in the back indicate that [unclear]. Fowler: I would call your particular attention to the section, Roman numeral three on page 2, because I think we have tried there to spell out some of the real risks we see in our taking this kind of an approach to Souvanna.8 [Pause.] President Kennedy: Thirty-eight million. That’s three times [reading from the memo]. Current investment [unclear] ’63 program proposed new amount is 38 million dollars. Now as I understood we used to give three million dollars before, that’s 36 million.9 Fowler: Well that was a rate which got established during the latter part of fiscal ’62. President Kennedy: Now we’re talking about two million dollars more though, aren’t we? Fowler: That’s correct. Our level in fiscal ’62 was only 27.5. President Kennedy: So we’re going to step it up. Fowler: Thirty-eight includes 4.5 which is for refugee relief, which is a nonrecurring item and was never a part of our strategic program, and we would hope would not continue beyond the end of, say, calendar ’63. Our regular project program, which was not operating at a very large level last year, would be increased. If you look at annex b, you can see the components there under the column fiscal ’63 appropriations, which adds to the 38 million. President Kennedy: Perhaps you could explain now, tell me about this program, and I’ll see if I can get it. We’ve been giving them up to now three million dollars a month, which we put in the bank that they could draw on, for any purpose they wanted. Fowler: That’s correct. President Kennedy: In addition to that do we give them any military equipment? Or is that? Fowler: The military hardware was furnishing the equipment to the . . . President Kennedy: That was in addition to the three million. Fowler: That was in addition. President Kennedy: All right. Now, what are we going to do now that’s different? Harriman: And also project aid, we were giving them— Fowler: Procuring it.

8. This reference has not been located. 9. The United States was paying the Lao government $3 million per month for budgetary support. 430 WEDNESDAY, AUGUST 15, 1962

Harriman: —at least a million dollars a month for relief and certain other projects. How much? Fowler: Yes, the relief projects were separate, but under our regular project program we were running at a rate of about five to six million dollars a year. These were projects in rural areas. President Kennedy: Good. All right. Tell me what we’re going to do now. Fowler: Now, our proposal, in lieu of cash grants, would be to put a fixed amount, we’ve here proposed 15 million, and say to the Lao we will finance acceptable transactions in foreign exchange up to 15 million. We will not give you cash. When you submit acceptable documentation, we will reimburse you in dollars for those transactions. President Kennedy: And what sort of transactions would we indicate to them we would approve of ? Fowler: This would be any kind of a commodity import, petroleum, food— Unidentified: Cement. Fowler: Cement, iron and steel, machinery, textiles, electrical equipment, vehicles and parts, that sort of thing. Invisible transactions, freight, remittances— President Kennedy: Wait, wait. And you think at least a lot of that stuff would be coming out of Western Europe, and some of it out of Southeast Asia? Fowler: It looks as though a total of about 50 percent almost origi- nates in the 19 developed countries. President Kennedy: And the reason they’re able to do it more cheaply is freight costs? Fowler: Freight and price costs. They just . . . President Kennedy: Price costs, [unclear]. Fowler: Freight and price are just lower. Unidentified: Also sir the fact that they’re the historical importers and they have the distributing situation all set up, and they’ve got the tie-in. Fowler: And I suppose there are some cultural preferences too, that affect this. Unidentified: You have this language. President Kennedy: Well, I agree, it seems to me that the things that come out of Europe they ought to be willing to [pay for]. Fowler: Now we identify that they probably will have a requirement, a legitimate requirement, for imports of about 24–25 million dollars, so we’re only offering at the outset to put up 15 of it. Let’s leave out— Meeting on Laos 431

Carl Kaysen:10 But by legitimate requirement Jim, though, you mean based on what the past history was. Fowler: That’s correct. Kaysen: It’s important to understand that the past history was based on the money we used to give them. So the question is can we maintain them in the style of which they had become accustomed to, Mr. President? Fowler: And we’re largely, this is not solely true in Laos. We’ve done this, over the years, this has happened in Korea, in Taiwan, every place where we were making grant defensive work type funds available. We were gradually building up consumption levels and consumption pat- terns in the sense that they were growing used to a level of imports partly because we were putting the aid in. Now, in all those instances we were putting in aid because we in those days had our eye on their budget. How would they pay their military forces? Where would they get the won, or the NT dollar or the peso or whatever, or the piastre?11 And because they had budget deficits, we were putting this stuff in in order to generate piastres or won, and they were beginning to live higher and higher on the hog. Well, there’s no end to this. There’s no incentive on their part when you do it this way to raise taxes, to cut expenditures. The disincentives are . . . So for the last two or three years in Vietnam, in Korea we’ve been putting the squeeze on. We’ve been, in effect, taking the policy line we’re proposing here. The business of U.S. foreign aid is to provide imported goods, not to finance your budget deficits. Now, you have to have some give in this. Obviously Vietnam has got a problem. We’ve got a war to win. So we have been tempering this purist approach with foreign exchange we knew the Vietnamese didn’t really need in any rigorous sense of the word, but because we knew also they could not increase their tax base overnight. They, and we had to pay the soldiers. Well we’ve been keeping the pressure on. Now our strategy, the strategy here proposed for Laos, is basically that same strategy. But I think it’s important that we recognize we’re putting it into effect at a time when as contrasted with say, Korea, or Taiwan, or Vietnam, where we have some political base to work with, we’re putting it in here against Souvanna, who’s got a lot of problems

10. Mr. Kaysen kindly assisted George Eliades with the voice identifications for this meeting. 11. These are all references to currency: the South Korean won, the Taiwanese NT dollar, the Philippine peso, and the Vietnamese piastre. 432 WEDNESDAY, AUGUST 15, 1962

of his own, and I think his budget is going to be one of his principal problems. President Kennedy: So is he going to get some help? . . . We don’t know what the Russians will do? Fowler: We don’t know what the others will do. Unidentified: They have said they would not give any assistance except against specifically designated projects. In other words they talked about building a hospital or building some tangible item that they . . . This doesn’t help their [Laos’s] budget. Fowler: This is a very rough line we’re proposing here. Because we recognize that, we have made provision for what we here assume to be really a guess, that about 10 million of cash would have to be put in, in addition to this 15 just to take the pressure off. If you look at annex E, you’ll see how we estimate that this will hit his budget. We start with his proposed, what our field mission tells us the proposed budget for ’63 would be, 50 million dollars equivalent. President Kennedy: That would be domestic? That’s not foreign exchange? Fowler: No, this is in dollars equivalent, rather than talking in kip terms. We’ve here converted it to dollar terms to make the figures easier. President Kennedy: [Unclear] 54 to borrowing 8. Fowler: Well, they have 40— Unidentified: Forty-two million is the deficit. Fowler: Their deficit is 42. Unidentified: That’s fantastic. Unidentified: Absolutely fantastic. President Kennedy: The budget is 50, the deficit would be 42. Unidentified: All right. Unidentified: It has to be understood that the major element of that budget is the military— Fowler: Fifty percent or more. Unidentified: [Unclear] building up this huge military machine. So that the level that they have been spending on in their budget and the level of foreign exchange they have been utilizing for imports because of the fact that we have provided free convertibility has come directly from the level of military activity that they’ve been carrying on, and that’s been decided by the military establishment. So that the budget squeeze, the import squeeze, and everything goes back to the question how fast you demobilize, indeed, dismantle the military. Harriman: We have not yet had a decision with the military [arm?]. Meeting on Laos 433

And we’re to some extent waiting to see what the reaction was in Vientiane, but my own view is that we ought to put [unclear] heat on Phoumi to cut back his 50-odd million— President Kennedy: Fifty thousand. Harriman: Fifty-odd thousand troops to a very substantial figure. But I hate to propose it from here because I don’t know what the confrontation is with the Pathet Lao, what they’re trying to hold.12 We have no very good information yet. But I think Mr. Mann should leave here with the idea that there ought to be a maximum reduction at once of the— President Kennedy: Well I think that— Harriman: There should be some expenditure in connection with it because the probabilities are that they’ll have to give some sort of termi- nation allowance to the soldier to get him home and to get his rifle away from him. President Kennedy: Well, I think that, of course, we’ve got such a stake in having this succeed, that we can’t have Phoumi . . . we can’t lose a lot more [unclear] . . . collapse so that, we don’t want to be pound[-foolish], penny-wise on the matter. Fowler: When you would see— President Kennedy: At least for the next six months until we see where it’s going, politically, economically [and so on]. Fowler: Reading down that same table, annex E, even with our proposals which include making available perhaps as much as 10 million dollars in cash, that he would still be faced with a deficit of around 22 which would have to be financed either by bank borrowing or by proceeds from someone else’s aid program. President Kennedy: How many people are there in Laos again? [Several people at once: “Two million.”] President Kennedy: We’re giving them a lot of aid. [A few unclear statements regarding the fact that it is a lot of aid.] Harriman: Two million, two. Fowler: It’s highest per capita in the world. Unidentified: Per capita we give them a lot of aid. President Kennedy: I think that . . . Fowler: It’s around 20 dollars per head. About twice what it is in any other country. This particular—

12. Harriman appears to conflate the words confrontation and concentration here. 434 WEDNESDAY, AUGUST 15, 1962

Unidentified: It hasn’t been productive aid. That’s the point. It’s mainly been a provision of dollars to mop up the— Fowler: Purchasing power. Unidentified: Purchasing power that’s been generated by this huge military establishment. In other words we’ve bought a fighting machine. Or what is purported to be a fighting machine. [Some laughter.] [Unclear] team with these dollars. That’s all. Fowler: I have no real confidence that if we were to undertake this approach that we could get by with only ten million. We’d certainly try. Our proposal is to make every cash transaction we give them really buy something, demobilization or some concession. Make them hard to come by, and make them smaller and smaller and less and less frequent. We recognize that this is going to require steel nerves, because the job Souvanna faces out there is going to put him under all kinds of pressure to keep this budget high. President Kennedy: Well, I think what we ought to do is to get indications from the French, and sort of indicate without saying what we’re going to do, and then say if you’re prepared to do such and such, then we would be prepared to put in 10 million dollars, or we might even go as high as 15 if they’re prepared to do something, not discuss this 10 million that we would go for in reserve. And if they just won’t go for anything, or if they just want to give the kind of aid which is completely tied and so on then at least that’s on the record. It’s just something that I want to know that they were given; they were asked and then refused. Harriman: This total program, this program here, is totaled with the budget assistance [complement or component]; it’s 22 budgetary support and how much project assistance? Fowler: Project assistance including the refugee program, would be 13 million, in dollar costs. There would then be about 5 million dollars worth of kip costs for those projects which would have to be met one way or the other and a variety of alternatives are open to us. We could either, as we do in some countries, say you must put these local costs into your budget. Now in Laos I think this would be undesirable as well as unfeasible. We could say that the counterpart generated by these commodity imports we would have the first charge against those to use for our project local costs. I think myself this is the preferable way to do it. The third alternative would be for us to take our dollars direct to the bank, buy kip, and this is tantamount to a cash grant. There’s no difference. Except from a domestic point of view we’ve had less trouble with justifying cash transactions when we were buying local currency to put Meeting on Laos 435 into a U.S. project. The Congressman seems to be willing to accept that as a legitimate kind of a transaction, whereas you just give them a cash grant, but this I think is largely a matter of appearances. Harriman: [Unclear.] As this is being presented in your memorandum, it’s a total cost of 46 million. Is that correct? Fowler: That includes 8.5 million of prior year funds, Governor, that are already obligated and available to us for— Harriman: So 38 million minimum. Fowler: Thirty-eight million in new money this year. But the level of activity would be 46 million because we would propose to take the money that’s already obligated for this road and begin to build the road. President Kennedy: This is the road along the Mekong? Unidentified: Yes, sir. Fowler: This is the Nam-Cadinh road at the moment. Forrestal: What did we ask Congress for last year? Fowler: Our request for Laos last year was, I believe, 80 [sic] million, and we told Congress this was just a guess. We have no way of measuring requirements, we don’t know what the situation will be by the time the appropriation is made so we put a 40 million dollar figure into the presentation, and we weren’t challenged on it on the Hill. The Congressmen understood that we weren’t trying to program money, we were just making a funding allowance. President Kennedy: Well, now, who’s going to conduct this negotiation with the British and the French? Then possibly after we go with them, we ought to go to the Japanese and ask what they would be willing to do. They should be willing to do something in South Asia. Harriman: Well, I think the first thing, I should call them in, and get Mr. Fowler or whoever AID wants. President Kennedy: Ask them both, I think. Harriman: [Unclear.] President Kennedy: I think if we ask them both, we’re better off than if we asked them one one day, and the next week the other one. I think you can get both of them. Harriman: We’ll try to get some answer before they come in as to what our embassies have heard from the two governments. And that would fall onto the French both the educational aid and such military assistance as they’re going to give. They’re going to be under some expense, quite an expense with their military mission which they’re taking up, which of course from our standpoint is a substantial economic saving. Our cost of operations is going down momentarily, drop off by 436 WEDNESDAY, AUGUST 15, 1962

1,000 Americans that are there now plus the end items which we’ve been giving them, military weapons.13 President Kennedy: Well as I say, maybe we can just figure out what it’s costing them, and what it’s costing us, and then we’ll do the best we can; otherwise it’s all right with me. Forrestal: I wonder if [unclear] if you leave it that way. Let this be all right on the assumption that they go ahead and get the French and British together in one place together in the same room, and . . . President Kennedy: And now you’re going to get the Japanese in, and say now we’re willing to give a lot of aid to a lot of places, you don’t give any. What will you do there? And ask them. I think that’s what we’ve got to do from now on. Harriman: I’d rather bring them in secondarily [unclear]. There are others I’ve talked to. I’ve talked to both the Australians and the New Zealanders. They are going to do a token amount, but it isn’t anything appreciable. [Unclear.] The Philippines might give a small amount, but they have very little. President Kennedy: What about foodstuffs? They don’t need much about food? That isn’t? Fowler: Well, yes, we would propose to use foodstuffs in the refugee relief program. President Kennedy: What about the Peace Corps? Have you talked to them about the Peace Corps? Fowler: We’ve talked to them about that; they prefer not to become involved in Laos. Harriman: I would think, sir, it would be a mistake to involve them yet. It’s pretty dangerous. President Kennedy: Yeah. Harriman: And I’m afraid that they might, some in the mountains, you know they might pick up some of our Peace Corps people then [we’d] have them captive, and then we’d have the miserable problem of trying to get them out. So I would hope we’d leave, pushing the Peace Corps— President Kennedy: OK, well, can I be— Harriman: At least 12 months until we see how safe this place is. President Kennedy: OK. I’d like to be kept sort of informed about how we’re going in this negotiation, both in Vientiane and with the British and the French.

13. Harriman is referring to the fact that the U.S. MAAG would have to be withdrawn to comply with the Geneva Accords. Meeting on Laos 437

Forrestal: Your prisoners, sir, should be out on Friday.14 President Kennedy: Friday [mumbles]. Harriman: I hope they’re signing this business in Indonesia, the Dutch at five.15 President Kennedy: That would be the end of it then? Harriman: [Laughs.] That would be the end of it yes, probably. [Unclear.] President Kennedy: Then we take up an economic program. Harriman: Then we have a big economic program to take up. [Unclear.] Kaysen: Then we can start talking about some real large scale sums of money, Mr. President. Forty million dollars. [Unclear.] [Laughs.] Unidentified: [Unclear] miserable 40 million. Unidentified: Mr. President, I’m leaving at five tomorrow afternoon. I’ll be in Vientiane on Monday and I shall spend two days in Paris to inform myself what is in the mind of the French. President Kennedy: Well, now, what should he say about any of this matter? Now they’re going to be asking him about what we’re going to do, aren’t they? Harriman: The French? President Kennedy: Yeah. Harriman: Well I think, I don’t think he’ll have to tell them exactly what we’re going to do. President Kennedy: I wouldn’t even give the amount. I would say to them, that you understand that Governor Harriman is seeing their ambassadors, we’re going out there to see what needs to be done, and just not give them any idea of what we’re prepared to do. Say to them I understand that the Governor is talking directly to them so that they don’t . . . We don’t want, in other words, them to know that we made the decision on the amounts until we find out what they’re willing to do. And then obviously, if the United States is going to give 25 and possibly some more that ought to take care of it. So that’s the first point.

14. Two days later, a Soviet plane and crew flew five U.S. prisoners and one Philippine prisoner to Vientiane, where they were released. One of the prisoners, Major L. B. Bailey, had a diplomatic passport accredited to the Lao government and had been shot down by Pathet Lao troops over the Plain of Jars on 23 March 1961. He arrived noticeably weaker than the others. The United States had brought Philippine teams to Laos to assist with the military mission. 15. At 6:20 P.M., 15 August 1962, representatives of the Netherlands and Indonesia signed an agreement at the United Nations transferring control of Netherlands New Guinea from the Dutch to Indonesia. The United Nations would take over the region until the formal transfer, 1 May 1963 (New York Times, 16 August 1962). 438 WEDNESDAY, AUGUST 15, 1962

The second point is, we cannot afford to squeeze Phoumi so hard in the next three or four months because, as I say, we’ve got so much to lose if that thing goes sour that we’ve got to rather than put more dough in there if that’s the difference, so as I say we don’t want to press him too hard until we see a clearer pattern. The next six months will be critical. Unidentified: True. Harriman: And certainly you’ll want Souvanna to put the heat on to reduce the military establishment to something that’s worthwhile. President Kennedy: Definitely. But I think the course is, he has to go down in relation to what happens with the Pathet Lao. And then of course we are going to expect that Souvanna will be asking the Russians and the others for assistance. Harriman: For assistance, that would be what we want the French to do is something that helps budgetarily. That is the education program and the military program. And not be [unclear] . . . [Talking over each other.] President Kennedy: It seems to me the imports that come in from France. We’ll be glad to finance the imports that come in from United States, aren’t we? That might be one of your proposals. [Unclear.] Harriman: [Unclear.] Fowler: This is our idea of excluding at least those two countries and perhaps Japan, too. And saying we just will not finance it, to the extent you have a market and interests down there you better finance this yourself. I don’t know whether this would be effective. President Kennedy: Well the governor can . . . he’s the one that will negotiate it. Unidentified: Mr. President [unclear]. President Kennedy: Thank you very much. Unidentified: Thank you very much. President Kennedy: Roy Wehrley, so you’re working with the— Roy Wehrley: I’m [unclear] in the Far East Division. President Kennedy: Far East Division. Of the AID? Unidentified: Of AID. Unidentified: [Unclear] and then on his vacation. [Unclear.] A door closes. People leave the room. The tape keeps running.

Before Kennedy taped his second conversation of the day, he met with the Secretary of the Treasury and Eugene Black, the president of the World Bank. This meeting with Black had been scheduled for a while. At the international monetary policy meeting on August 10, Kennedy had mentioned that Black was coming in to see him soon. The President was Meeting with John McCone 439 eager for Black’s opinion of the Ball plan for a standstill monetary agreement with the United States’s ten largest trade partners. Kennedy taped neither this meeting nor the five-minute chat he had with Walter Heller afterward. Fortunately for the record, he decided he needed a recording of his last meeting of the day.

6:35–6:53 P.M.

A marvelous collection or dictionary of your crimes.

Meeting with John McCone16 British Guyana was a British colony while Kennedy was President. In 1953, the British government had granted the colony a constitution that permitted elections and local self-government. The first elected government was headed by the Marxist Cheddi Jagan and his People’s Pro- gressive Party. Jagan’s tenure was brief and stormy; the British dispatched troops and suspended the constitution from 1953 to 1957. In subsequent elections Jagan was returned to office. In October 1961, Jagan came to the United States to negotiate an economic development program; he asked for $40 million. The administration decided to offer nothing concrete, but Kennedy did not rule out aid. Arthur Schlesinger, Jr., recalled the administration’s having reasoned that giving aid would reduce the odds of British Guyana’s “going Communist” to about 50 percent, refusing it raised them to 90 percent, “and that we would all catch hell whatever we did.”17 On January 12, 1962, Kennedy approved sending an economic mission to British Guyana and $1.5 million of technical assistance.18 This aid would be closely coordinated with the British. The decision to work with the Jagan government proved to be short lived. Vicious riots broke out in Georgetown, the capital of British Guyana, to protest Jagan’s austere budget, and the recently elected anti- colonialist leader requested British troops to restore order. On February 19, Secretary of State Rusk cabled the British secretary of state for foreign

16. Including President Kennedy, McGeorge Bundy, and John McCone. Tape 11A, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 17. Arthur Schlesinger, Jr., A Thousand Days: John F. Kennedy in the White House (New York: Fawcett, 1965), pp. 777–78. 18. Kennedy to Hamilton, 12 January 1962, FRUS, 12: 542. 440 WEDNESDAY, AUGUST 15, 1962

affairs that “I have reached the conclusion that it is not possible for us to put up with an independent British Guyana under Jagan.” Rusk proposed meeting to decide on “remedial steps.” The British remained reluctant to act, constantly asserting that there was no other choice than Jagan. After Jagan’s primary opponent, Forbes Burnham, visited Washington in May 1962, the Americans decided he was the alternative, despite British assertions that he was an opportunistic, racist demagogue. Jagan tended to represent the ethnic East Indian portion of the population; Burnham’s party represented most blacks. State and the CIA launched a sustained campaign to get rid of Jagan through some kind of elections, rigged if necessary. By July, Kennedy had still not reached a decision on the matter, though British-U.S. planning for British Guyana continued. McGeorge Bundy informed the President that while “Jagan will indeed go the way of Castro,” he remained reluctant to topple him because “I think it is unproven that CIA knows how to manipulate an election in British Guyana without a backfire.” Bundy recommended a “pretty searching meeting on the details of the tactical plans” before proceeding.19 Arthur Schlesinger, Jr., had similar doubts, telling Kennedy he should “bear down hard” on CIA. Could it “carry out a really covert operation”?20 While CIA planning continued for the operation, Kennedy tried to step up British-U.S. cooperation. He approved the British sending four officers to Washington, D.C., on August 14 to reach an agreement on an “assessment of the situation in British Guyana and the urgency of taking action to improve it.”21 A joint State-CIA meeting on the upcoming talks with the British agreed that the objective would be “to bring matters to a head by forcing consideration of political factors.”22 Kennedy turned on the tape recorder while CIA director McCone briefed him on the previous day’s meetings and the situation in British Guyana.

John McCone: . . . and who happens to be quite close to Frank Wisner, who was, even [unclear].23 And so Frank was able to get from

19. Bundy to President Kennedy, 13 July 1962, FRUS, 12: 542. 20. Schlesinger to President Kennedy, 19 July 1962, FRUS, 12: 578. 21. Bundy to Helms, 6 August 1962, FRUS, 12: 581. 22. Brubeck to Bundy, 8 August 1962, FRUS, 12: 581–82. 23. Frank Wisner was a legendary CIA officer, graduate of the University of Virginia, and head of the Office of Policy Coordination, the first U.S. peacetime covert operations direc- Meeting with John McCone 441 him on a confidential basis just what the purpose of that mission was. First place, the mission was set up by the prime minister with Home knowing about it,24 but Sandys not having been brought into it at all.25 And therefore its purpose was really to explore two things. One was whether there was a reasonable alternative to the Jagan regime. And secondly if there was an alternative, how could it be brought about from a political action point of view. In other words this was not, as you suspected, a system to establish policy. However, the fact that we had [William] Burdett, who is a very able fellow, and I got Dean Rusk to send him over because he had handled some of those British Guyana matters in the past, although he is now a deputy assistant secretary of state for European affairs. The fact that he was in the meeting pushed the thing further along than I think the British expected. As a result there was an agreement that the Jagan government is undesirable and Communist oriented, and in fact they succeeded in developing an agreed assessment, a joint United States–British assessment of the present situation in British Guyana which [U.S. ambassador to Colombia Freeman] Fulton has taken back with him. And that’s a pretty good paper, and it’s a good paper to have in an agreed form I think. President Kennedy: What’s the status of our economic assistance, I wonder, to British Guyana? Have we ever gone ahead and given them anything on that road?26 McGeorge Bundy: I think at least 80 percent of it is already in the pipeline. President Kennedy: Experts who share [unclear] [long pause while Kennedy reads] skepticism. You might want to have this thing . . . sort of . . . that the reason, that one of the reasons he’s [Jagan’s] turning to the [Soviet] bloc is because we haven’t come through in aid. That was one of the British . . . sort of the . . . that was a point in the British appreciation of that previous paper that I read, because we’ve sort of let them down.

torate (1948–1952). Joining the CIA in 1952, Wisner became the agency’s first deputy director, Plans (1952–1958). Later, he was CIA chief of station, London, (1959–1962). Wisner suffered a nervous breakdown and was brought home from England in the spring of 1962. He retired from the CIA in August 1962 and committed suicide, 29 October 1965. 24. Alexander Frederick Douglas Home (pronounced Hume) was British secretary of state for foreign affairs. Note that McCone pronounced the name “Home.” 25. Duncan Sandys was British minister of defence. 26. Reference to a proposed road between Atkinson Field and Mackenzie that the United States had considered spending $5 million to build. On 5 September1962, the United States approved a feasibility study for the road’s construction. 442 WEDNESDAY, AUGUST 15, 1962

Bundy: Never helped them enough, That was sort of Fraser’s attitude back in the . . .27 President Kennedy: Huh? Bundy: That was a little bit Fraser’s point of view— President Kennedy: Given, let’s see. Given this orientation of PPP leadership.28 Jagan’s skepticism about Western and particularly U.S. intentions with regard to aid and assistance, and the incompetence of the PPP government. I mean, it’s one of three points, the orientation of the leadership, no evidence [reading from report] [unclear] support. Bundy: Oh. I’m sorry, I’m looking at the wrong paper, John. Unidentified: No, I just . . . I had a copy of this [unclear]. Silence—nearly a minute, possibly a dog barking in the background. President Kennedy: OK. Three minutes and 45 seconds excised as classified information. McCone: Now here’s something that Max Taylor ought to bring in to you; he brought in to you the doctrine papers of the several departments, State, Defense, AID, CIA and USIA on this counterinsurgency matter. Our doctrine paper is highly classified because it tells about all the dirty tricks, and we don’t want to circulate it. It really is beyond the area of the Special Group, of the Special CI [Counterinsurgency] Group. So, Max has gone over it; it’s been coordinated with the members of the 5412 Committee, but not with the—29 President Kennedy: What is the purpose of this? In order to give you a basic mission? McCone: Just to give a basic mission yes. This is a completely coordinated paper. I wanted you to know that it has been done just as the doctrine papers for Defense and State, AID, and USIA. President Kennedy: [Unclear.] McCone: Also you asked for a review of what has been done in counterinsurgency activity since January 1, 1961, particularly in the 11 nations that you have asked the CI group to concern themselves with. This paper covers not only that but everything else we’re doing or have done. I wanted you to know of its existence. I just as soon not leave it around. [Unclear] think you’d be interested in it because [unclear].

27. Hugh Fraser, British undersecretary of state for the colonies, met with U.S. government officials on 17 March 1962 to discuss the problem. The Memcon is in FRUS, 12: 558–64. 28. The abbreviation PPP stood for Jagan’s People’s Progressive Party. 29. The 5412 Committee was another name for the Special Group of the National Security Council, an interagency body that oversaw all U.S. covert action. THURSDAY, AUGUST 16, 1962 443

Bundy: A marvelous collection or dictionary of your crimes [laughter].30 McCone: Oh yes, it’s indicative of the [unclear]. President Kennedy: Now what do we do with this? Bundy: Well, John would keep it in his place, and anytime you probably need to and you wanted to look at it— President Kennedy: I’d like to look at it sometime. Bundy: Why don’t you hang onto it? Is now a good time Mr. President? And I’ll just keep after it and get it back in a day or so, and get it back to John. President Kennedy: Well, let’s see. Bundy: Would you rather have it when you’re— President Kennedy: I just as soon take it with me on Friday. Bundy: Right. President Kennedy: And then I can read it on the plane. Bundy: I’ll give it to the aide to hold in personal custody on the weekend. President Kennedy: [Unclear.] End of tape.

Thursday, August 16, 1962

At the request of the White House, a representative of the FBI liaison section arrived for a 9:30 A.M. meeting with Kenneth O’Donnell. In recent days the FBI had reported to President Kennedy on the Hanson Baldwin investigation. By August 7, the Bureau had determined that between 300 and 400 people had had access to the National Intelligence Estimate [NIE] that informed the article. Of that group, 125 had already been interviewed. During his four-day research trip to D.C., Baldwin had had 21 meetings, but no one had yet confessed to leaking the NIE to him. The Bureau had passed all of this information to the President through O’Donnell, who was also the conduit by which President Kennedy was able to read the take from the tap on Baldwin’s telephone.1 Now O’Donnell

30. This document has not been found.

1. Top Secret Memo, J. Edgar Hoover to Robert Kennedy, 15 August 1962. It carries the handwritten notation, “like Memo to O’Donnell, White House 8-10-62.” Hanson Baldwin Collection, 444 THURSDAY, AUGUST 16, 1962 had some important information to pass to the FBI on behalf of the President. “In looking this case over,” O’Donnell explained, “the President and [I] have it figured out, that the finger of suspicion seems to point to one man.”2 According to O’Donnell, this individual had already been interviewed and had denied being the source.3 The President wanted him to be reinvestigated. O’Donnell also passed on Kennedy’s request that his name not be used in connection with this re-interview. As O’Donnell was meeting with the FBI officer, the President was signing two bills into law for projects in Colorado and Idaho. Kennedy then held a short meeting on the Middle East, which he did not tape. At 10:50 A.M., the President was able to take a break and indulge in a wide- ranging discussion about history.

Sterling Memorial Library, Yale University. This report is full of quotations from telephone calls made by Baldwin. 2. D. J. Brennan to W. C. Sullivan, 16 August 1962, Hanson Baldwin Collection, Sterling Memorial Library, Yale University. The name of the FBI officer who met with O’Donnell remains classified; so, too does the name of the official that President Kennedy wanted reinterrogated. Evidence that it may have been Under Secretary of Defense Roswell Gilpatric comes from Gilpatric’s daily diary, which shows that he had an appointment with Hanson Baldwin on 17 July, met with two FBI special agents on 2 August, and spoke with an FBI officer at 5:45 on 17 August (“5:45 OUT: Morris Taylor FBI,” Deputy Secretary of Defense, Daily Diary, Roswell Gilpatric Papers, Box 2, John F. Kennedy Library). In a study of the diary, there is no pattern of his having met with or spoken to FBI officers except around the time of the Baldwin investigation. The conversation of 17 August coincides perfectly with Kennedy’s 16 August request for an immediate reinterrogation of one of the members of his administration. Of course, it is possible that Gilpatric was merely being informed on 17 August of the results of the interrogation of some other culprit in the DOD family. However, there is other circumstantial evidence that points to Gilpatric. This comes from an oral history with Robert F. Kennedy done by Arthur M. Schlesinger, Jr., in February 1965. At one point Schlesinger asks Robert Kennedy for character sketches of the key players on his brother’s team. He asks about McNamara, and Kennedy says that his brother liked McNamara; then Schlesinger asks about a man whose name has been withheld from the transcript at the John F. Kennedy Library. In response to Schlesinger’s question, Robert Kennedy says:“ Yes [deleted] was not a very strong man, and the President had some reservations about him. There was the biggest—the major leak in the government was made in connection with Hanson Baldwin about the fact that we could tell that the Russians were not hardening their missile sites and how many missile sites they had. The only way we could obtain that information was from satellite photography [deleted] gave that information to Hans[on] Baldwin.” The next person Schlesinger asks about is Paul Nitze, another of McNamara’s high-level assistants. As of August 2000 the deleted portions of the Robert F. Kennedy Oral History have not been released to the public. (Robert F. Kennedy Oral History, 27 February 1965, John F. Kennedy Library.) 3. On 7 August, the Washington Field Office reported that all 125 people interviewed by them had denied being the source (D. E. Moore to W. C. Sullivan, “Article by Hanson W. Baldwin in the New York Times 7-26-62 Espionage–X,” 7 August 1962, Hanson Baldwin College, Sterling Memorial Library, Yale University). Meeting with Douglas MacArthur 445

10:50 –11:46 A.M.

You probably place more emphasis on these columnists who are the damndest bunch of penny-liars the world has ever seen.

Meeting with Douglas MacArthur4 Impressed by physical and moral courage, President Kennedy admired great military figures. General Douglas MacArthur, the legendary hero of the Pacific campaign during World War II, commanded the President’s respect. MacArthur’s strong convictions, egotism, and maverick qualities, which had led to his professional downfall in the Korean War, captured Kennedy’s fascination. Yet those same qualities led the President to keep the general at arm’s length. In August 1962, at 82 years old, MacArthur lived quietly in New York City and made few public appearances. He had met with Kennedy on one previous occasion in New York. On April 28, 1961, in the wake of the Bay of Pigs debacle and the announcement that Kennedy considered sending troops to Thailand, the retired five-star general rallied to Kennedy’s side. On that occasion, MacArthur made little effort to disguise his dislike of President Dwight D. Eisenhower, who had once been his chief of staff. MacArthur tried to boost Kennedy’s morale by blaming Eisenhower for Cuba, Laos, and other crises facing the young president. “The chickens are coming home to roost,” MacArthur declared, “and you live in the chicken house.”5 When MacArthur and Kennedy met on the morning of August 16, 1962, the President was less beleaguered. The General’s visit to the White House was a social call. MacArthur was scheduled to attend a luncheon ceremony on Capitol Hill to honor his “outstanding devotion to the American people, his brilliant leadership during and following World War II.” After talking with President Kennedy for over an hour, the two men posed for photographs with several congressmen who were at the White House to accompany MacArthur to Capitol Hill. After meeting with President Kennedy, MacArthur told the press

4. Tapes 12 and 13, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 5. Kennedy, Memorandum, 28 April 1961, Evelyn Lincoln Papers, Box 9, John F. Kennedy Library. 446 THURSDAY, AUGUST 16, 1962

that they had discussed the world situation and “reminisced about [their] old comradeship in the Pacific war.” In reality, their conversation was a tour de horizon of topics ranging from the upcoming congressional elections to advice about the merits of intelligence drops over mainland China. Their conversation is essentially a monologue by MacArthur, who speaks loudly and deliberately as he dispenses gratuitous advice and reminisces about World War I and II. Many of the anecdotes he shares with Kennedy appear a year and a half later in his autobiography. The tape recording begins with MacArthur’s sympathizing, as he had the year before, with the President’s present political and policy difficulties.

General Douglas MacArthur: You have inherited difficulties that you probably will just about settle [and] you’ll get through and then some other fellow will come in and get all the credit. President Kennedy: [Laughs.] That’s—That’ll be it all right. MacArthur: That’s the old story of the pioneer. President Kennedy: [Laughs.] MacArthur: There isn’t a single trouble that you have that isn’t a relic of either the—most of them from the Eisenhower administration and some of them from the preceding administration that he drove under the rug and left for you to clean up. But the general situation is undoubtedly on the up curve. You probably place more emphasis on these columnists who are the damndest bunch of penny-liars the world has ever seen. President Kennedy: Or second-guessers. MacArthur: But the . . . I’ve reached the age where I’ve no longer any, have any partisan political point of view whatsoever, so I get a pretty good bird’s-eye concept of what’s taking place. Your own popularity is, of course, tremendous. The problem is to work it all into your party. President Kennedy: [Mumbles.] MacArthur: Well, I believe that in spite of the estimates that are made by the so-called experts, is that as far as the next presidential election is concerned, it will be an avalanche for you. This next election in— congressional election—it’s a little difficult to prognosticate at this time because the situation is confused and bewildered. But if you lose more than 15 seats in the house I’d be surprised. This talk about the Republican party taking the House is a lot of hocus bull. They’ve got no more chance of taking the House than I have of flying over this house. President Kennedy: Well, you know, this system of divided power, Meeting with Douglas MacArthur 447 which has served us very well and still does, there have been so many other checks and balances, some worked into the system by the rules and procedures of the House and Senate, the seniority system, and all the rest, that the ability to prevent action now is almost unlimited.6 The Congress cannot initiate anything but its ability to prevent action on so many different areas makes it very difficult to function domestically. Abroad, we can do pretty well. But domestically it’s . . . MacArthur: The old concept that the Congress represented and responded to the voice of the people—the whole people—is in the disin- cline [sic]. These tremendous power groups that exist in almost every congressional district in the country, they control that man. President Kennedy: No doubt. MacArthur: He no longer looks to the whole country and says, “What is right for the country and what is wrong?” But he says, “What is right for me in that district?” So that there is a danger that the representative system as our Congress is now selected is going to eventually become a lot of professionals who are merely the glorified lobbyists of their various groups. And that’s what your trouble is now. President Kennedy: Yeah. Hmm. MacArthur: And in the last analysis, of course, on the great issues, the Congress always responds correctly. In security measures, they are always backing you. But there . . . what worked beautifully in the town hall systems of our forefathers with the enormous explosions of popula- tions, the enormous complications of modern living, the enormous power that the growth of civilized methods has given, produces the Congress sometimes no longer as representative of the voice of the people. And there have been a number of occasions recently where I’m sure they didn’t vote what the people would have voted if they had been given the chance. President Kennedy: [Mumbles.] MacArthur: Now up in New York, it might interest you to know I see everybody and know everybody up there. The Democrats have fum- bled their chances away with the schisms that have developed there. They can’t even decide who [sic] to run against the governor, and they

6. Kennedy was continually frustrated by the conservative Republican-Dixiecrat coalition that dominated the House Rules Committee and bottlenecked many of his bills. Unless granted a “rule,” bills reported by House committees could not reach the House floor for debate. Neither could bills passed in different form by both houses proceed to a Senate-House conference committee without going first to the House Rules Committee. 448 THURSDAY, AUGUST 16, 1962

can’t beat somebody with nobody.7 And the mayor, he went up—and he had some good victories there for himself—but then somehow the rockets started to come down and his power is pretty well limited now to the southern parts of the state—to New York City and its environs.8 He isn’t going to run; he told me himself he wasn’t going to run under any conditions. I really think he’s never fully recovered from that operation. President Kennedy: I agree. He looks bad . . . MacArthur: I think that he’s got some symptoms of cancer that couldn’t be . . . And whether he has physically, I believe mentally it’s gotten to him, so he isn’t going to run. And who [sic] they’re going to run, I don’t know. Now what class of the schisms in the Democrats of New York State applies to the Republican party and the rest of the country . . . [laughs]. President Kennedy: Yeah, yeah. Do you know this fellow Romney? Have you met Romney? George Romney?9 MacArthur: Only casually. President Kennedy: Yeah. Yeah. MacArthur: He doesn’t stand a chance. President Kennedy: What do you think—Rockefeller? You think he has . . . MacArthur: He’s a very presentable man, personally; he would fill the bill. He looks it and everything. But he . . . To begin with, Mr. President, he’s practically unknown. I tried it out. I talked with one hundred people the other day, just as I happened to meet them. The bellhops. They would be . . . They would be window cleaners. They were the maids. They were the servants. They were my own board of directors, and others. And of those hundred people, with the exception of the board of directors, there were only two that knew who Romney was. President Kennedy: [Mumbles.] MacArthur: You can’t pick the president that way. Now I know this piece came out yesterday, according to the New York Times, which is not always reliable—10 President Kennedy: [Laughter.]

7. Nelson A. Rockefeller had been governor of New York since 1959. 8. Robert Wagner had been mayor of New York City since 1953. 9. George W. Romney, chairman of the board and president of American Motors Corporation from 1954 to 1962, was elected governor of Michigan in November 1962. 10. Reference to an article entitled, “Romney Says He Will Not Seek Presidential Nomination in 1964,” New York Times, 14 August 1962. Meeting with Douglas MacArthur 449

MacArthur: —and said he wasn’t going to run in ’64. President Kennedy: Yeah, I heard those statements. MacArthur: Well, he [chuckles]—it was a pretty smart move because even if he got the nomination, he couldn’t win it. And he’d have to build himself up as the governor of Michigan and make a campaign from the bottom up. No, don’t worry about these smart-aleck columnists that have to write something—it’s their bread and butter, you know. And the easiest thing is to get the big figure and damn him. I remember listening to old Mr. Hearst once.11 You [unclear] Hearst. And he was talking to a group of young reporters that he had just assembled. And at that time, he was at the height of his journalistic empire. And he said, “Now,” he said, “the best way, the main purpose of my papers,” he says, “is to sell them.” And he says, “the dry and dull papers,” he says, “never make the grade.” Now he says, “when you don’t get something sen- sational,” he says, “make it.” And some little fellow says, “Well, Mr. Hearst, how do you make it?” “Well,” he says, “pick out the finest, the most honest, the most prominent man in your society, and attack him [unclear].” President Kennedy: [Laughter.] MacArthur: He says, “He’ll deny it,” he says, “and then you’ll have the sensation—” President Kennedy: Yeah. MacArthur: Then you’ll have it. And there are a great many of these horrors, they would be, they’d rise up and vehemently deny—but a great many of them do that. Their stock-in-trade is a tirade against the great. Your business since I talked with you in the Far East—you’ve done well.12 President Kennedy: Well, I remember your advice at that luncheon about not getting into a war in Laos. MacArthur: You’ve fenced and you’ve parried and without bringing on any conflagration, you’ve pretty well held your own. At least you, they haven’t made any major events along that line. I would say that the initiative that we should apply along strategic and military lines over there is lacking in at least one way. It lacks initiative. It allows the enemy to concentrate where he wishes and bring pressure where he wishes. Now we have two great forces over there. I’m not talking about our

11. William Randolph Hearst built up the nation’s largest newspaper and magazine chain. 12. Reference to their conversation at the White House on 26 April 1961. 450 THURSDAY, AUGUST 16, 1962

own Navy. I’m talking about the ground troops. There are about 600,000 men led by [the] Generalissimo [Chiang Kai-shek] on Formosa, and there are about the same number of South Koreans in the South Korean army.13 Those are two very powerful groups. And they are completely inert. Now they . . . The way—and this may impose . . . so that they will not be reckless and initiate a world war of course is correct. But in order to take the pressure away from the areas that were immune, there should be a degree of initiative applied to both of those groups. In the Generalissimo’s case, I believe that he should have small groups of specially trained men—not more than a hundred—about ten of those groups who’d be landed at various spots all along the Chinese coast, given ten days of provisions on them, tell them to go in and raise particular hell but to be back at a rendezvous point within ten days and pick them up. You can’t send in groups like that and sacrifice them. Men won’t give it. But if you send in groups like that, the amount of psychological damage that they can do is almost inestimable. And if you bring them back and then reward them with declarations and in the case of the Generalissimo’s troops, with a few dollars, you will have a professional group after a while that will be the best guerilla attack that the world has ever seen. The result of that will be that the Red China, the enemy if I can call it that, will believe those are reconnaissances in force. He will believe that you are getting ready to attack him. He will pull his forces away. He will pull them away from the Indian border. He will pull away from the Southeast there. He will tend to concentrate his forces there all along that line. You can easily . . . It falls within the provisions. It should get just as little publicity in this country as possible. You’ll get enough from Formosa itself to satisfy the situation. In that way, you will not only take the initiative; you will not only confuse the enemy, but you will take—what is [of ] the greatest importance—the pressure off of the Vietnam area, Laos areas. Now you take the other group [in South Korea] and they should also tend to confuse him. Now the armistice, that unfortunate paper that was signed, forbids us any effort along the 38th parallel such as the guerrilla movements or anything.14 But there should be, with the creation of advertisement, maneuvers announced. A maneuver would be announced that would tend to produce the concept that the troops from Formosa were going up to join the troops in South Korea. The use of our Navy

13. Formosa was another name for the Republic of China, or Taiwan. 14. Reference to the armistice that ended the Korean War. Meeting with Douglas MacArthur 451 would be in that, which will bring him to crowding up his troops, climbing north again instead of climbing south, which is what you want. You want him to relieve the pressure from the south. There also should be maneuvers by the South Korean army itself. Door opens. President Kennedy: [to a staffer] OK. Would you? [to MacArthur] My father is calling. [Unclear.] He isn’t able to talk much, but every now and then he tries to make a call. MacArthur: Give him my affection. President Kennedy: I will. I’ll tell him you’re right here [unclear]. He can’t speak too much so I’ll just say hello. [on the telephone] Hello. Oh yes. I’m fine. MacArthur: Do you want me to . . . President Kennedy: [on telephone to his father] Hello there, how are you? I’m glad to talk to you. I’m sitting . . . How are you getting along up there? How is everything? Well, I’m sitting here with General MacArthur, and he wants to be remembered to you. How are you getting along up there? Well, I’ll be up the weekend after next, and we’ll go out on the boat. Good. Let me talk to Ann.15 Yeah. [shifts to talk to Ann] He seemed a little upset. Yeah. Yeah. Well, no, when I’m . . . we’ll call here. Good. OK. Bye. Right. Tell him I’ll call tomorrow from my Western trip. Right. OK. Good. [speaking aloud after putting down the telephone] What’s going on up there? MacArthur: Your dad is [unclear] a great fight. He’s a fighter. President Kennedy: Yeah, he is. But you know, it is awful tough because he can’t speak anything, so he gets . . . MacArthur: The South Korean army itself should have several, so- called grand maneuvers in which the bulk of their troops should be moved first to the east side and then concentrated on the west side. So that the enemy will, he won’t know—he’ll expect something—but he won’t know exactly what’s going on. That way, you’ll get the initiative. Moreover, the morale of troops that are left in there always sinks. That is especially the case in Formosa.

15. Ann Gargan was the niece and nurse of the President’s father, Joseph P. Kennedy, who had suffered a stroke in December 1961 that left him partially paralyzed and unable to speak. 452 THURSDAY, AUGUST 16, 1962

President Kennedy: Formosa. MacArthur: They will be revivified if they can do something such as that to these small guerrilla groups. President Kennedy: Well, we . . . They asked us when they were here about a year ago, the vice president about . . .16 They talked about making some smaller drops than the ones you’ve described. And so we, I think, they were 20- or 25-man drops, so we said that was fine. Well, then they didn’t feel they could do them—either they were too small or all the rest. Well, then they wanted to do the 200-man drop. But the 200- man drop would require very special equipment. They’ve got the very good radar—the Chinese Communists—and to drop them would require special planes with special electronic gear. We’ve been getting out five of those planes, [of] which we’re going to make two available to them. So that, but they didn’t—we said they’d be free to do anything they want along the coast, but they’ve been reluctant to do it. Then they asked us for a hundred thousand tons of shipping. Well, we haven’t been willing to give them that because the minute we start to take a hundred thousand tons out of mothballs, the Chinese Communists are going to think it’s an invasion and are much liable to bring on an attack of Quemoy and Matsu, and we would be regarded as having initiated.17 So we haven’t given them that. We’re giving them the planes, and just trying to see what the situation is within China, which would . . . where the Formosa groups could play some role; but I don’t know—the situation is getting more and more desperate in China.18 But I’m not sure Taiwan has a role to play in whatever may develop in China. MacArthur: I would have given—I wouldn’t lend five planes or any conventional boats. All along that coast, there are these scows.19 You’re familiar with them. President Kennedy: [Mumbles.]

16. Wang Yun-wu was vice president of Taiwan. 17. Quemoy and Matsu are two island groups off the coast of Fujian Province of mainland China held by Taiwan. During the 1960 U.S. presidential campaign, Kennedy clashed with Nixon over the Eisenhower administration’s handling of the 1958 Taiwan Straits crisis involving the defense of these islands. Kennedy denounced the administration’s policy as nuclear saber rattling and called for a policy based on the defense of Taiwan itself. 18. Beginning in 1957 and 1958, Mao Zedong had led China through revolutionary upheavals in the management and organization of the economy, called the Great Leap Forward. By 1961 the resulting turmoil and bad crop years had combined to produce a horrific nationwide famine, a depression in industrial production, and widespread social unrest. 19. Large flat-bottomed boats with square ends. Meeting with Douglas MacArthur 453

MacArthur: You’ve probably sunk a lot of them with the Japs.20 They have those scows. They know how to row them, and they should land on the beaches. They shouldn’t drop them in the areas of the towns and the cities. President Kennedy: Do you see any prospect—? MacArthur: All along those beaches, there are at least 15 places where I could pick out myself where you could put these—you could get these scows and put them and row them in there. If you make a drop of them, the enemy will see it—the whole thing. You can’t conceal that. President Kennedy: Right. MacArthur: If you can get across those straits there at night, you understand, in one of those scows, and they’ll find these men that will work their way from these beaches into the various areas.21 And they won’t know where they came from or how they came from or anything else. But if you put conventional boats, big landing craft from the United States or these drops—why, of course, you come pretty close to violat- ing the basic concepts that are there, and you will not get what is the greatest element of success either in war, or athletics or any other competition, which is surprise. You can’t make an air drop with the element of surprise. It’s known almost immediately. You can’t get conventional weapons, conventional boats. The American fleet is under constant observation. I’m sure about that. And anything that you would do would be reported. But these scows would get over there and they wouldn’t attract the slightest bit of attention whatsoever. And, I should say that a group of 25 is too small, and a group of 200 is too large. President Kennedy: [Mumbles.] MacArthur: If I were doing it, I’d handle about 150 good men. And the very essence of it is their rendezvous after they get through. Now the Navy—our Navy—can protect them. They’ll know these rendezvous points and they should be there with our destroyers or smaller craft to protect them until they get back because the essence of this type of thing is not the glorified sacrifice where men die, but it’s where the men go and do the job and come back alive and get rewarded for it.

20. Reference to Kennedy’s World War II experience as commander of PT-109 in the Pacific theater. 21. Across the Taiwan Straits. 454 THURSDAY, AUGUST 16, 1962

President Kennedy: [Mumbles.] MacArthur: And up in South Korea, they’re entirely capable of this type of concentration and maneuvers. They’re somewhat limited, of course, but it will shock Peiping to death, when the maneuver shows the concentration, a maneuver showing a concentration, of the Generalissimo’s troops up in Korea. That will bring those troops back more . . . just as sure as I [am] sitting in this office. President Kennedy: [Mumbles.] MacArthur: And get the initiative. Now none of those things involve the United States directly. Any complaints . . . we’re perfectly in the clear because all we have to do, when they’re done by the other people and within the limits of the thing, [is nothing]. And I believe that in that way you can not only take the initiative in the Far East but can relieve the pressures of Southeast Asia and the pressure that may increase on the Indian border.22 Now if there’s any effort going to be made against India, it will be a two-prong effort. The Russians will come down through [unclear] and the Khyber Pass and the Rawalpindi and Sialkot and the Balochistan area and to Karachi up to Quetta. And there’s been no . . . nothing that I’ve seen in the papers of any Russian effort down through the Khyber Pass, so I’m sure that presently the Chinese are not contemplating any serious move against India. But you can’t guess what the enemy’s going to do— President Kennedy: [Mumbles.] MacArthur: —when he has the initiative. And if you take the initiative, you will force him to push northward instead of pushing south- ward, and you will leave him in a state of anxiety and confusion. Now, of course, the Achilles heel of the Soviets—of the Russians and the Chinese—is food, agriculture. And you can control that. The greatest weapon of war is the blockade. But if war should come that is the weapon by which we should attempt it. Now there are three elements: There’s the ground forces, the air, and the sea. The sea is beyond question, as long as we maintain the Navy, it’s ours. And that’s the key to a blockade. The air may be something of a standoff, but they certainly won’t get command of the air. The missile business within the first month will play itself out. The destruction may be enormous or [it] may not. But it will play itself out. And then the air forces, they will somewhat neutralize each other.

22. Reference to the expanding conflict in Vietnam and to Sino-Indian border skirmishes. Meeting with Douglas MacArthur 455

And in the last analysis, the grip will be the Navy . . . the Navy will apply the blockade. Now the conventional ground forces, you can assume they’ll use them to the maximum. It’s been my hope for years that we would—our atomic group would develop some type of cartridge, of atomic cartridge that every infantry soldier could use that would clear from 10 to 15 yards in front. If we should develop a weapon like that, their superiority on the ground would disappear immediately. Now when the Korean War started, I recommended that, and there was a professor from Cornell that came over to see me, and he asked what they could do and I said that was the thing that is absolutely essential. I said, “I’ve got the command of the sea and the air, but on the ground I’ll always be hopelessly outnumbered. And to get the checker for that, if you can get me this type of atomic cartridge so that every soldier will have that, one hundred men then could stop a division.” “Why,” he said, “that’s the easiest thing in the world.” And I was perfectly awakened. I called in my staff, and I said, “We’re going to get that,” and I said, “We’re just going to destroy this fellow.” I went over to Korea and was gone for three days, and when I came back, the officer in charge says, “Professor so-and-so is here to see you.” Well, I felt for sure that he was coming to reassure me that it was there. And he came in and I’ve never seen a man look so hangdog, never saw a man so embarrassed in my life. And he said, “General.” He says, “I’m sorry, I’ve got to eat all my words.” He says, “We’re not going to develop anything of that sort.” I said, “Are those your orders from Washington?” He said, “Yes.” And I dropped the matter right then. But I’ve told everybody that’s ever given me an opportunity since then, that that is the key—” President Kennedy: Let’s say that the cartridge would be fired, let’s say, at some man, or group of men, coming across a field at 200 yards. It would hit one man and what? You mean just explode, in a puff ? MacArthur: Yes! President Kennedy: —and go over 120 yards? MacArthur: Now, we have groups that are assigned that are supposed to do that, if you believe the press. But a group is a different thing. If every soldier has that—his psychology makes him feel that he’s just the king of the roost. And, Mr. President, there isn’t any reason in God’s world that they can’t develop that when they develop these wonderful things that are so much more difficult than that. President Kennedy: [Mumbles.] MacArthur: Tell them to develop you a cartridge of that sort, and 456 THURSDAY, AUGUST 16, 1962

don’t listen to them. And tell them you want it within six months. And see what the result is. They’ll be like most subordinates. They’ll instantly tell you in a hundred ways how it can’t be done. [Laughs.] President Kennedy: [Mumbles.] That’s right. MacArthur: I remember a story that Kitchener told me once when I was in India.23 I was there with most of the general staff.24 He was having a great fight with the Viceroy Curzon at that time.25 And I was down in Calcutta, and they had a polo team which was playing the Delhi team and their man had broken his leg, and they found out that I had played polo. So they asked me to come, and I played with that team so I was with them as [William Riddell] Birdwood was the chief of staff at that time.26 And the discussion was between Birdwood and the staff and Kitchener. And they were talking about Sir John French in the Boer campaign.27 He had the cavalry command at that time. President Kennedy: [Mumbles.] MacArthur: And Kitchener had decided that he would make a tremendous enveloping movement with the cavalry and he would go over a mountain range there—it was a very difficult mountain range— and close in with the cavalry on that flank and wipe the Boers out. And he said to French, and French . . . Kitchener says “I’ve talked with him.” And he says, “I’ve told him in great detail exactly what I wanted.” He said, “I’ve talked for about 20 minutes.” And he said, “I could see him getting madder and madder and madder and madder.” At the end of the 20 minutes, I said, “Now, Sir John, you’ve got the troops in.” He says, “French exploded.” He says, “He talked for 30 minutes.” He said, “By God, he couldn’t do it; he wouldn’t do it.” He says, “A goat couldn’t get over that.” He says, “I’ll lose every horse I’ve got. My lancers will die on the road and everything.” And Birdwood said, “Well, what did you say to him?” And Kitchener said, “I said: ‘Is that all you have to say, Sir John; you’ve talked yourself out?”

23. Viscount Kitchener of Khartoum was commander in chief of the British army in India, 1902 to 1909. 24. Then-Lieutenant MacArthur spent eight weeks in India from mid-January to mid-March, 1906, where he made an inspection tour of the northwest frontier and observed the British army in India. 25. Lord Curzon of Kedleston was viceroy of India from 1898 to 1905. 26. William R. Birdwood (1865–1951) served with the British Army in India and South Africa before World War I. During World War I, he commanded the Australian and New Zealand Army Corps (ANZAC). In 1938 he became Baron Birdwood of ANZAC and Totnes. 27. The Anglo-Boer War (1899–1902). Meeting with Douglas MacArthur 457

He said, “Yeah.” He said, “Now, Sir John,” he says, “you’ve given me the best reasons in the world why that can’t be done.” He says, “Now go and do it.” And he did do it, of course. President Kennedy: That’s where he got to be famous, didn’t he? MacArthur: And they’ll tell you probably the same thing. It would be a small thing for them, you know and better than no publicity at all and they’ll probably tell you it can’t be done. Well, I used to be an engineer, and I know enough about it that I feel sure that they can do it. President Kennedy: Have you read that book, The Guns of August . . . [where] there is a good deal about Sir John French?28 MacArthur: Who? President Kennedy: The Guns of August. It’s about the first 80 days of World War I. It’s very good. It’s a lot about Sir John French, who, as you know, was the commander of the British forces and not very distinguished at that time. MacArthur: Yeah. President Kennedy: I was wondering, having read that, whether in reading some other things—whether you thought the leadership by the British and the French was wholly incompetent, and left, particularly in ’17 [with] Passchendaele and all these tremendous casualties for 8, 9, 10 miles—from what—June till October, November? Was there any alternative action by the allies? Do you think they had to continue those assaults on those trenches, or was there anything else they could have done? MacArthur: I would have handled the campaign in a completely different way. With modern weapons, with the machine guns, and even the weapons which we had not talked about since 1917, frontal assaults were nothing but suicide. You must envelop. You must hit the lines of supply. There’s no other way to victory. You’ll have one of these tremendous assaults that go ahead and gain 3 or 4 kilometers. They’d be so deci- mated, and so exhausted and everything, that they couldn’t be exploited. And both sides made the same mistake. The Germans made exactly the same mistake. He [was] down there when he made that great attack through Champagne, we just slaughtered him. My division was right in the middle on the day they fought the French

28. Barbara Tuchman’s The Guns of August (New York: Macmillan Co., 1962) is a study of the political, military, and diplomatic background of World War I. Kennedy, the historian, was profoundly influenced by this book, which shaped his thinking about war and the dangers of miscalculations. As President, he recommended that his staff read it because he was concerned that the two superpowers would drift into war. 458 THURSDAY, AUGUST 16, 1962

army at that time. I put all . . . I put every gun of my artillery brigade on the line of the infantry, all the colonels of the brigade commanding just sweated blood. But we put them in there. And they just mowed those people down. You couldn’t get—nothing could penetrate. Now the firepower is so much greater that a frontal assault is just suicide. I’m sure that the British . . . They were under the influence, the old Wellington influence.29 And those soldiers that Wellington had, they were all volunteers, you understand. You only had about 60,000 small forces compared to that. And they were always magnificent. They could make a frontal assault that was always exceptional. Always they won on the peninsula. Always they licked the French. Always they licked everybody. And they had an idea that bravery, courage, and to face with your breast and go on with the drums beating and the fifes blowing and everything that they’d roll along. There never was any great leadership on the Western Front by the British during the war. Douglas Haig I knew well.30 He was a good, cautious, average type of, well, a pragmatic soldier. But the . . . There was nothing . . . There was no spark that was shown anyplace. Now in the French, they had some leaders who were magnificent. [Marshal Ferdinand] Foch himself I rate as a great captain. [Marshal Philippe Henri] Pétain was timid. He was something like [British Field Marshal Bernard Law] Montgomery.31 He always could see how he couldn’t do it, but never could quite see how he could do it. But they had men like [General Henri] Gouraud, who was magnificent, of the leaders I have known anyplace, anywhere. [General Jean] Degoutte.32 Oh, they had a number of them. The French leadership was not lacking, but the French leadership in the Second World War was beneath contempt. President Kennedy: [Mutters.] MacArthur: It was an interesting thing to me. I became the American chief of staff in 1931. I reached a definite conclusion that the horse was through. The horse cavalry had to be replaced by tanks. And after a bitter series of denunciations and attacks on me, I managed to accomplish it. And

29. MacArthur is referring to the Duke of Wellington’s command of the British forces, in the peninsular campaign in Spain, 1808 to 1814. The final campaign against Napoleon, 1814–15. 30. Sir Douglas Haig was British commander in chief in France during most of World War I. 31. Field Marshal the Viscount Montgomery of Alamein K.G. was the most famous British field general during World War II. 32. MacArthur is referring to General Henri Gouraud, commander of French forces in the 1915 Dardanelles Campaign and then of the Fourth Army, and to General Jean Degoutte, one of the victors at the Second Battle of the Marne. Meeting with Douglas MacArthur 459

I pulled out a brochure of the reasons that I believed that the tank had taken the place of the old horse cavalry. That attracted the attention of some of my old friends in the French army. The minister of defense was [André] Maginot. He had been wounded on our front, and my own doctor, the division doctor of the 42nd division, I sent over to help. So I knew him fairly well, and he felt grateful. The chief of staff was [General Maurice] Gamelin. He had been the youngest division commander. And I had been the youngest American commander. We were serving along side of each other at the end of the war. And our two staffs got together, and you may not believe it, but they grabbed the two young division commanders and [unclear] them. [Laughs.] President Kennedy: [Mutters.] MacArthur: In the face of the . . . So I knew him pretty well. And [General Maxime] Weygand I knew intimately. He was [Marshal Ferdinand] Foch’s chief of staff, and he was the inspector general of the French army.33 They invited me over to what they called, “the grand maneuver” near Rheims, the Champagne area there, which they were going to test the relative merits of horse cavalry and tanks. There were two enveloping movements—one by the cavalry and one by the tanks. They had about, I should say, three hundred tanks, perhaps more. And they had two cavalry divisions, these fine divisions from Africa . . . and their lieutenant general . . .who were there [in] full-length capes, you know, and everything and those little grey steeds, you know. They just made a magnificent appearance. And in the envelopment, of course, they took three days to get there, and it took the tanks about four hours. So there was no question that the umpires ruled completely in the absolute favor of the tanks, and the decision was then made to mechanize the French army. And they had a conference in which those . . . Maginot, Weygand, and Gamelin were present, which they called the lieutenant general of the cavalry to present his side, and he was a good talker and he made the best of a bad situation. And then they called in the commander of the tanks, a young lieutenant colonel. I’ll never forget him—long, lean, and lank, dirty in grime. And when he talked, his voice just poured out like Niagara Falls—his nervousness and everything. And the course of the decision was made for the tanks. It was de [Charles] Gaulle. [Pause.] President Kennedy: [Mumbles.] MacArthur: And then the question came up after they had made that

33. Foch was commander in chief of Allied armies in France in 1918. 460 THURSDAY, AUGUST 16, 1962 decision of what their strategy would be if the Germans would attack. I had been in Berlin shortly before that, and they asked me whether they believed that the Germans were going to attack. I told them specifically. It was just a question of time. Kennedy is interrupted by someone who has come to get MacArthur for his engagement on Capitol Hill. President Kennedy: You need us, sir? Unidentified: The General is supposed to [unclear]. President Kennedy: Oh. MacArthur: And they . . . I told them of an instance that had occurred when I was in Berlin. It was in Hitler’s office, and an officer came in and said it was a very important matter. And I said, “I’ll excuse myself.” He said, “No, no.” He says, “Sit there, sit there, sit there, General,” he said. So I heard this conference. I had an interpreter, and he gave it to me. And this was one of the officers who came in—was an ordnance officer, and he said that they could not produce that year more than a thousand tanks. And the other was a general staff officer, who said we must have at least three thousand tanks. And after listening to both, Hitler said, “We will now have ten thousand tanks.” And I told them of this, and I said there was no question, it was just a question of time. Then they said, “How are we going to meet a superior ground force of the Germans? We must go on the offensive.” We all thought of that. How can we get, with their superior force, a reserve force that’s big enough to have an enveloping movement on the Germans when they attack. They said they needed 35 divisions to go up through the Ardennes and around Belgium and turn what would be the right flank of the German attack.34 And it was Maginot himself that suggested . . . He says, “Along the Vosges area there,” he says, “we’ll put up permanent fortifications.” And he said, “We’ll be able to man them with one-fifth of the stock that we would usually put in and that would give us the 35 divisions to attack.” And the so-called Maginot line was put in as an offensive thing and has now become the symbol of defense.35 President Kennedy: That’s interesting. MacArthur: And when the . . . Gamelin meanwhile, when the war

34. The Ardennes is a forested plateau in northern France, southeastern Belgium, and Luxembourg. It was the scene of bitter fighting during World War I. 35. Reference to the elaborate defense fortifications constructed in northeast France during the 1930s. Named after Maginot, it became the symbol of permanent defense against German attack. Meeting with Douglas MacArthur 461 broke out, he was the inspector general of the forces; he was the boss. Weygand at the time . . . and I was in the Philippines at the time. I called my staff in—Eisenhower was one of them—and said, “Now within three days you’re going to see a great French movement turning this flank of the German effort.” Well, the days went by, went by, and there was nothing of the sort. I was amazed because Gamelin had sat in on this thing. He was [unclear] with the fundamentals of it. And then it came out—I got a French paper, somebody sent me a French paper. And there was the statement by Gamelin. He says, “I’m not going to start the war,” he said, “with a bloodbath of the best blood of France.” And that’s why they lost the war. President Kennedy: Are you surprised that Eisenhower went on from your aide to being the head of all these armies? MacArthur: I was amazed. President Kennedy: Were you? MacArthur: He’s just an average officer. President Kennedy: [Mumbles.] MacArthur: Good, good staff officer. President Kennedy: Yeah. MacArthur: Fine when you tell him what to do, make the decision. President Kennedy: Yeah. MacArthur: But he has . . . if you leave it to his own decision, he’ll come in with a paper and within a month he’ll come in with a paper that will be absolutely the other way. His mind will work that way. He cannot come to a definite conclusion. He varies from one moment— President Kennedy: What was he with you? As a major was he? MacArthur: He’s basically, he’s what I call a—not a timid man—but a man who is lacking in initiative. President Kennedy: [Mumbles.] MacArthur: And he’s a very selfish man. The tape cuts off abruptly. Most likely, the tape ran out. Several minutes elapse before the taping resumes. MacArthur is continuing to talk about Eisenhower. MacArthur: —of how this thing will affect me personally. Whether it’s meant for me or whether it’s bad for the . . . He’s . . . He would be, in my opinion, highly overrated as a general officer. Fine staff officer. The tape cuts off. When it resumes, MacArthur is making an inaudible statement at which Kennedy laughs. President Kennedy: I thought that statement that you went behind . . . [unclear] today was particularly wise. 462 THURSDAY, AUGUST 16, 1962

A staff member entered to tell President Kennedy that the photographic session for MacArthur was ready. Four congressmen had come to join the general for photographs: Leslie Arends (R-Illinois), Carl Albert (D- Oklahoma), L. Mendel Rivers (D-South Carolina), and Robert L. F. Sikes (D-Florida). Mixed voices are heard greeting one another and chatting about miscellaneous and unrelated topics. One congressman tells Mac- Arthur that he looks younger than when they met in Tokyo. Another remarks about a speech MacArthur made in which there “wasn’t a dry eye on the Republican side or a dry seat on the Democrat.” After several more exchanges of niceties, the voices fade and the tape recording stops a couple of minutes later. After lunch, President Kennedy filmed an endorsement for two candidates in Pennsylvania. Then he met with Kenneth O’Donnell and the Attorney General in the Fish Room of the West Wing. There was no taping system there. Given the morning’s conversation between O’Donnell and the FBI representative, it is likely that at least at one point the conversation would have turned to the Baldwin investigation. The three men spent 25 minutes in discussion, when the President had to leave for his meeting with the chairman of the Federal Reserve, William McChesney Martin. The standstill monetary plan was still alive, and Kennedy needed more advice.

5:50 –6:32 P.M.

[T]his is a tough, rough, mean gang. And there is very little altruism.

Meeting on the Gold and Dollar Crisis36 William McChesney Martin was the longest-serving chairman of the Board of Governors of the Federal Reserve System in U.S. history. Appointed by Harry S Truman in 1951, his tenure spanned five presi-

36. President Kennedy with William McChesney Martin and Theodore Sorensen. Tape 13, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. Meeting on the Gold and Dollar Crisis 463 dencies, until he was succeeded by Arthur Burns in 1970. Given the Fed’s power and ability to influence the U.S. economy, Kennedy thought it crucial to discuss the controversial interim monetary proposal with Martin. Martin was no stranger to controversy. In 1951, his predecessor as Fed chair, Thomas McCabe, decided to reverse the policy of the Federal Open Market Committee (FOMC) of supporting the price of U.S. government securities. Since the early days of World War II and because of the large size of and wide distribution of the federal debt, the FOMC had maintained low interest rates by purchasing the government bonds that private holders wanted to liquidate. Introduced to provide the Treasury with low-cost financing of a growing national debt and to avoid the postponement of private purchases of government securities in a tightening market, this approach placed the burden of anti-inflationary control on government fiscal policy. But the Korean War and associated U.S. military buildup induced strong inflationary pressures that the Fed tried to check with tight money and higher interest rates. This required at least a partial abandonment of the practice of supporting U.S. government securities. Harry S Truman’s secretary of the Treasury in 1951, John Snyder, was adamantly opposed to the Fed’s new assertion of monetary independence and convinced the President to pressure the FOMC to continue its policy of supporting U.S. bond prices to maintain low interest rates. The Fed relented, but McCabe resigned. At this point, Martin moved in to repair the damaged relationship between the Fed and Treasury. As assistant secretary of the Treasury with responsibility for monetary affairs, Martin had opposed Snyder’s position. Martin helped engineer the famous Treasury–Federal Reserve Accord in May 1951, which, among other things, freed the Fed from supporting the price of U.S. bonds.37 Truman rewarded Martin’s performance by appointing him the new Fed chair. And though Martin quickly established a reputation as a defender of Federal Reserve independence, he often noted that the Federal Reserve was “independent within the government, not of it.”38 Martin’s independence and his willingness to coordinate policy with

37. For a review of the accord, see “Opening the Books on Monetary Policy,” Morgan Guaranty Survey, March 1965, pp. 5–8. 38. Quoted in Nathaniel Jackendoff, Money, Flow of Funds, and Economic Policy (New York: Ronald, 1968), p. 503. 464 THURSDAY, AUGUST 16, 1962

the nation’s executive branch came out clearly during this remarkable meeting with President Kennedy to discuss the interim monetary arrangement that had been considered on August 10.

Theodore Sorensen: And that’s where the agreement ends, because of the doubts by Doug Dillon as to whether this is negotiable or not. President Kennedy: Don’t take too long a time, because the very fact that negotiations have begun [on a gold standstill agreement requested by the United States] is an official sign of weakness. My concern, as I’ve said, is the one that I’ve already said to you, and secondly, I think there is so much disparity between the attitudes of the banks and governments of Europe, of the British, and the Belgians and the Spanish are all wanting [to hold their reserves in] all gold, and the Germans hold a lot of dollars, and the French move from 65 to 75 [percent], and everybody may think, my God, this is the time.39 Quite obviously if everybody wants gold, we’re all going to be ruined because there isn’t enough gold to go around. Now if they could all assume a reasonable risk, in the sense of holding dollars [without trying to convert the dollars to gold], there’d be no risk. But the very fact that there is not the feeling of a community acceptance of risk. As you know, there’s a lot of difference if we all said well, we’ll all take a piece of the venture than [the risk] we will [face] if we’re all competing really to protect our own bank or national interest. Now I don’t know enough about money to know whether it is impossible to work out an arrangement quickly enough that would be more satisfactory than the ones we now have. The only thing is knowing how the pressures mount on finance ministers and how the British . . . I am convinced the British, either government or important influences in Britain, are trying to force us to devalue either because they think the pound is going to be devalued or because of their own goals. We got a letter from a very well known correspondent, European correspondent, a friend of mine did, who had been in London, and it says that we haven’t any idea of what the pressure is, of the desire on the dollar. And now you know, the things you were talking about, the sort of a tax on the dollar—there must be something—but anyway . . . So that we don’t, I don’t feel that, even though they’ve done excep-

39. President Kennedy was referring to the percentage of gold in France’s overall reserve holdings. Meeting on the Gold and Dollar Crisis 465 tionally well, that we have it [the gold situation and protection of the dollar] as strong as we should have it considering the shocks we’re going to get in the next two years, either domestically or something else. So I wonder whether looking over that, where you would come down? William McChesney Martin: Well, I can tell you in a nutshell I would be negative to that approach. My reaction to it is that it would be interpreted by most of the conservatives—and I think you have to take them into account in this just as well as the liberals—and I think it would be interpreted by most of them as receivership on the part of the United States.40 Now that is the simplest way I can put it, as a proffer to this sort of an agreement. Now what we’ve been doing with the central banks is quite different because there you’ve been having, not a contractual understanding, or a political understanding, if you want to put it that way, but just a recognition of the fact that access to gold carries with it a responsibility which means that you have a responsibility for the whole operation and [not as] if you are going to just grab gold because it is convenient for you to grab it. Now I think we are making enormous progress in this country. I think that under the leadership of your administration that it is amazing how much progress we have made. Now, we are now dealing with at the present time with more of a political problem than an economic problem. We’ve got 90 percent of our own people talking about devaluation. I may exaggerate when I say 90 percent but I was in Wall Street last Friday and I know a few people down there and I only talk to those I think are responsible and that I have had some contact with. And most everybody recognizes we’re making progress on it but there is this constant talk of, “Well, we’re going to have to go in for controls or we’re going to have to find some way to put the bee on people to do this.” And I just think it would be a sad thing to—when we’ve made all this progress—to appear to be soliciting an agreement that . . . Now [unclear] Cromer tried to get me—this is just a—he tried to get me this past weekend, to come over for a week, to spend a weekend.41 I am very fond of him and I like him very much, but his idea has been: “Well, if

40. As used here, receivership is a synonym for a national declaration of bankruptcy. Martin is arguing that the gold standstill proposal would be saying, in effect, that the United States does not think it can pay its debts (in gold to back the dollar) and would, in effect, be signaling its creditors (the foreign governments who are the principal holders of dollars) that the U.S. dollar may soon lose some of its value vis-à-vis gold or other currencies. 41. Presumably the third Earl of Cromer, governor of the Bank of England, 1961 to 1966, and a partner of the Baring Bank. 466 THURSDAY, AUGUST 16, 1962

you’d just agree to give us two billion dollars in gold”—I shouldn’t be saying this because we have a fraternity of central bankers—“but you just put pressure on your people to spill your two billion dollars in gold around here and maybe we could at the political level work out, something, an understanding.” Well, this is at a time when I honestly think that the weakest currency probably in Europe is the pound. President Kennedy: That’s right. Martin: We have a trade surplus of over five billion dollars. Now I don’t think we can expect to maintain that, as good as a surplus as that, over any long period of time because we’re all struggling with this problem of productivity. But, the figures for the U.K. are just out and I had a pretty good idea of them about a week ago and they show that they lost further ground this last month. President Kennedy: In what? In their costs? Martin: Their exports went up but their imports went up more than their exports went up, so that their adverse balance was larger. Well now, this problem in the financial departments, and I’m only, that’s all I am trying to deal with here, is not dissimilar to the same thing that we were having in ’51, ’52, ’53 when the political groups were saying: “The problem is not inflation. The problem is the Cold War.” Now we can’t let the central bankers and the businessmen, most of whom are lunkheads with the fetishes that they have, interfere with what’s necessary to fight the Cold War. Yet when inflation gets ahead of you it leads to deflation. That’s the only reason you fight inflation. Now what we’re getting now, and this is not directed towards this draft, please don’t misunderstand me. I haven’t studied this draft carefully enough to . . . But what I have seen arising in Europe—I was over there in May and spent two weeks . . . As a matter of fact, I sat next to Adenauer one night, for a little dinner, and the Germans were propelling this business along the lines of, “Well, I’ll tell you, what we really ought to do is have a meeting of Kennedy and Adenauer and de Gaulle and Macmillan and stop fussing around with this business of meeting these balance of payments problems of one sort or another.” Now, the people that I talked with in Germany are just as unhappy about that as they can be. They don’t say so. As I told Walter Heller a number of times, I said they talk one way sometimes to him and another way sometimes to me, I’ll put it that way. But in this financial sphere I am absolutely convinced that until—it may be that these are all fetishes, I make no bones about that. I’ve been a lifelong student of gold and the operations of the exchange market and I happen to believe that we could remove and should remove when we get Meeting on the Gold and Dollar Crisis 467 an opportunity the specific gold cover [for the dollar]. I don’t think it’s necessary. I’ve thought that for a long time. In 1945 I worked hard to get the cover reduced from [a fixed price of] 45 [dollars per ounce of gold] and 35 to the present 25 and I don’t think there is any necessity for it at the present time. But the only reason we have the gold is to use it. But we ought not to, at this juncture . . . You see the basic change that occurred to me in Vienna—this is the simplest way I can put it in my thinking—is, that after having been the lender to the world for a long time, as I told Doug, we were over there negotiating for the first time in my experience where the other people had the cards. And I think Doug did a perfectly marvelous job of negotiating at Vienna. I had never seen the man, never worked with the man. But I have more respect for him in pulling together what I would say as one hand after another where the cards were bad and the French and the Italians and the Germans were more or less jumping up and down and saying well now you’re in the soup and we’ll go along with you on increasing the resources of the International Monetary Fund but we want to tell you under what terms we would let you draw if you have to draw. And I must admit that galls me as an American. President Kennedy: Of course. Martin: But I saw that what had happened was that we had shifted in the period since the end of the war to where we were now a possible bor- rower instead of the lender to the world. And yet the most effective thing that you have said at any time in my judgment was what was on Telstar where you really said to them—and this really shook the exchange markets of the world—we could solve this [dollar] problem [the] day after tomorrow if we just stopped our foreign aid, or words to that effect.42 I was paraphrasing loosely. Now I checked with some of my friends on Wall Street. That went right straight through the exchange markets every place because they all know that. They’ve got a sense of guilt on this. On that aspect of it. Now I just think, to sum up here, that we would have difficulty negotiating this sort of thing, certainly in a short period of time, before the

42. Telstar was a new communications satellite built by the American Telephone and Telegraph Company. The U.S. government launched the satellite on June 10. The satellite made it possible for President Kennedy’s 23 July press conference to be viewed simultaneously in Europe. During the press conference, President Kennedy insisted that the “United States will not devalue the dollar. And the fact of the matter is the United States can balance its balance of payments any day it wants if it wishes to withdraw its support of our defense expenditures overseas and our foreign aid.” 468 THURSDAY, AUGUST 16, 1962

[International] Monetary Fund and [World] bank meeting here. You always have a buildup for that. And my best judgment and advice to you, and I have no dibs, is simply that we ought to be alert to the opportunities to impress upon the central bankers that this is a responsibility of theirs as well as ours. President Kennedy: Everything is up at the top. How do you . . . if the central banker is looking after his own problem and he is not by the nature of the way we have it now organized, the German has to look for his own, for Germany’s problem. And we might have the bilateral negotiations, but they are not at the political level. When I say the political level they’re not between Adenauer and myself, where I am saying to the Germans we keep our troops there providing you’re willing to at least assume some share of the risk [that goes with the resulting dollar imbalance]. But there is not the sense of a communal acceptance of the risk. There’s the competition. I mean, d’Estaing when he sat here said to me, “Well, why is it the British won’t hold any of your dollars?43 And the Belgians, we’re holding them, but we see that they’re not. They’re supposed to be your intimate friend and ally.” So there is this competition, in a sense, to protect themselves. And I am not sure that the proposal put forward has merit. But the thing is, I would like to see some way where they would all agree that the steps we’re now taking give us some assurance that the dollar’s going to be all right and that they would be willing to hold dollars. They must understand that they can’t all have gold. But what the trouble is now is that they all think that there’s not enough gold to go around, so we better get in early. Martin: No, I don’t, I don’t, I don’t really think so. I think what they think is that they’re not completely sold that we are going to manage our affairs in such a way that confidence in the dollar is justified. Now, that always puts pressure on the central bank. I happen to have very high regard and some confidence in Blessing, for example.44 And I am sure that’s what he’s pressed by his political people with respect to. Now he, I think that what you’ve got to realize there is, that they’re afraid that there might be an embargo on gold, of course.

43. Valéry Giscard d’Estaing was France’s minister of finance. Giscard’s discussions with U.S. Under Secretary of State George Ball in July 1962 inspired Ball’s proposal for an internationally negotiated interim monetary arrangement. 44. Karl Blessing was president of the West German central bank, the Deutsche Bundesbank. In 1961, Under Secretary of the Treasury Robert Roosa negotiated informal reserve management policies with Blessing to reduce speculative pressures on the dollar. Meeting on the Gold and Dollar Crisis 469

The biggest disservice that was done to us in this area was—this is intimate politically—but George Humphrey, who really didn’t have the faintest idea of what he was talking about, went up to the Hill one day and said, “Well of course, if we got down to this level I’d just slap an embargo on it.”45 Well it’s taken us five years to get away from that. I still have, I get letters from people, saying “Well, does Humphrey got any influence still?” President Kennedy: [laughing] Hell, no. Martin: In this thing, you see. I mean that’s the type of thing. Now I know that some of these things look like fetishes. But in the absence of war, or near war, you really can’t change the mechanics of finance by political agreements. Sorensen: Of course this agreement wouldn’t change any of the mechanics; it would simply formalize on a somewhat expanded basis exactly what the Treasury and you are doing now. Martin: But it’s the mere formalization, Ted, in my judgment, that causes you difficulty. And they see ghosts there that aren’t there. But all my experience in this field has led me to believe that it’s the formalization of that type of thing that leads to trouble. Sorensen: If we propose [it] . . . Suppose the initiative, if we can, Mr. President, is there some way of getting the initiative to come from elsewhere? Martin: Well, it’s awfully difficult because these people are, this is a tough, rough, mean gang. And there is very little altruism. President Kennedy: That’s it, but that’s true. But that’s because, I don’t know, I mean, they’re businessmen, who are by nature conservative and who are interested in their private . . . they have no interest in carrying a broader burden for the sake of the NATO alliance. Instead, they’ve got the problem with their own bank. And I recognize that. But it’s, what I would like to see . . . what . . . I wonder whether if the burden were put on a more, on a wider basis, a political basis in a sense, where the Germans said to Blessing, “Well, we don’t, we recognize that you are carrying more dollars than perhaps you ought to. Particularly in view of the way the British are acting, and the French, we ought to step up our gold percentage.” What is the gold percentage of the Germans right now? Martin: About 30 percent.

45. George Humphrey was President Eisenhower’s secretary of the treasury from 1953 until early 1957. Humphrey was under investigation in August 1962 for having profited during his term at Treasury from government stockpile contracts to a nickel company he owned. 470 THURSDAY, AUGUST 16, 1962

President Kennedy: That’s damn low, isn’t it? Martin: It is indeed. President Kennedy: I don’t know how he got the guts to do it in view of what the French have done, the Belgians, and the British. But if he felt that he was doing it because it was a political judgment of the Germans that they have wanted to sustain, help sustain, and then it would be matched by a comparable act by the French and the British would stop trying to beat us over the head. Rather than, this way he’s standing . . . I am sure people are saying to him, why are you carrying 70 percent dollars when the French are only carrying 25 percent, and the British 10 percent, and the Belgians none, and the Spanish none? You better start moving your . . . well now, if the French and Germans ever start to move it [their gold percentage in reserve holdings] up to 50 percent or 60 percent, we could find ourselves in terrible trouble. Now, why does he not do it [unclear]? I think it’s an awful burden to put on them, the Germans. To unilaterally accept it, while the French and the British and the Belgians, supposedly our allies— Martin: Well, you’ve got to make a distinction with the British, because they are a reserve currency, you see, the British. The pound and the dollar are the only two reserve currencies. I am not defending the British on this, but I mean they do have with their sterling—they had a reserve currency long before we had a reserve currency. We got thrown up to the reserve currency by accident, you see. We inherited the markets of the world at the end of the war and in the first seven years after. Well, I illustrated this to you one day by saying that when I was president of the Export-Import Bank I used to testify against tied loans, regularly, and used to receive applause on the Hill.46 Well I realize what would happen to me now if I went up to testify that way. The difference being that then our suppliers were overburdened with orders and they were glad to have somebody [else] take in an order to help them in a delivery. Therefore, it was easy to espouse the doctrine of untied loans. Well, we reached . . . we went through this period. And since about 1957 we have had a slippage in American industrial productivity. Some of my business friends get mad at me when I say this, but my best illustration of it is in several textile mills in Japan [which] can pay at

46. A tied loan is a loan that is tied to a condition that the money be used to buy from the country that makes the loan. At that time, in the early postwar years, Martin had opposed putting such ties or conditions on U.S. economic assistance. Meeting on the Gold and Dollar Crisis 471 roughly the same wages—I’ve been told by some people I have confidence in—that we pay and still undersell us over here. Now that is quite a marked change. Yet we have been doing an awfully good job overall. We wouldn’t have a trade surplus of 5.2 [billion] in the month of June if we weren’t doing a pretty good job of competing generally. But we’ve got to improve our plant and equipment, you see, and continue. Now what we are dealing with on the productivity/trade picture and the finance picture is partly our own people. That is why I say it is partly a political problem [in the United States] rather than an economic problem. We doubt that we’ll be able to continue this way and this is because we have gotten all tied up in the debate, [laughing] dialogue is the word, as to whether we can solve all the problems in the world by budget deficits and easy money. Well now I think the rank and file of the people around the world in the business community in all countries don’t believe that, because it’s been tried before. And I am not against a budget deficit when I talk that way. And I am not a Senator Byrd man.47 And I talked to Senator Byrd on these things. I think I understand him. I have great respect for the sort of budget direction that Dave Bell is giving. But I think you can magnify the virtues of a deficit. I defended Dave Bell.48 He wrote me a letter the other day from a group on Wall Street on this very point. They were making him out as to believe that the best thing in life is to have a sizable budget, that that’s the be-all and end-all of life. Instead of something that . . .of course we’d like to have [budget] surpluses. Now the Germans got ahead of us here because the word surplus has dropped out of our vocabulary in the last few years. But the Germans had a surplus come because their revenues exceeded what they expected to take in. The result is every little German community in West Germany is building a kur garden or a swimming pool or something to dispose of the money. Now you can spend surplus as well as deficit. Now I don’t think—I think we are a rich country. I think we can afford whatever is required for national defense and for our security and for our social security at home. I’m just as liberal as the next person on that. I really believe that.

47. Harry F. Byrd, Democratic senator from Virginia and chairman of the Senate Finance Committee, was a well-known advocate of balanced budgets. 48. David E. Bell was director of the Bureau of the Budget, January 1961 to November 1962. 472 THURSDAY, AUGUST 16, 1962

But I’ve been arguing with Mr. Patman all afternoon here.49 That’s why I was late. I’ve had four and a half hours with him today and I say to him—he was talking to me about, he said, “There are people, you know, who have a mystical belief in high interest rates.” “Well,” I said, “Mr. Patman I am glad you brought that up because I have been coming down here for 15 years now and I have never said that I believe that high interest rates is the cure-all. But,” I said, “there are also people who have a mystical belief in low interest rates. And I know from experience in the thirties that low interest rates have not produced all the things that people think they will. We can get low interest rates. In the last year we’ve had lower interest rates than we’ve had for a long time. I’ve had splendid cooperation from Bob Roosa on the debt management side of it by making debt management and federal reserve policy complementary. But you get it because you take savings [to finance the deficit, using higher interest rates]. And when the government runs a deficit you don’t try to create”—Mr. Patman gets mad at me when I say the printing press—“print the money to cover that deficit.” Now we have a managed currency and there is no reason why we shouldn’t manage it. But if we manage it so that we take this deficit and translate it into just [printing new] money, we are diluting the currency of everyone. Whereas if we print up . . . The only adjustment that we have under these circumstances [is to raise interest rates to finance the deficit] and in the first half of 1962 we didn’t have to resort to this. I’ve just been testifying all afternoon, we’ve accepted whatever risk there is in helping the domestic economy. Now you asked me the other day and I am afraid I wasn’t persuasive, perhaps, but I honestly believe that there are times when forcing easy money actually retards growth and causes unemployment. I’ve seen it work. I believed—I happened to believe that easy money would correct everything. 1930, ’31, ’32, I was a student at Columbia University and I was one of the strongest New Dealers that ever came out. I used to go up in the Bronx and make speeches for Franklin Roosevelt. And I really believed that we could solve everything—that all the problems were in the Federal Reserve. I read the records over here today and I still think

49. Wright Patman was a Democratic congressman from Texas. He was the chairman of the House and Senate Joint Economic Committee and a member of the House Banking and Currency Committee. Patman was a long-time opponent of traditional Federal Reserve policy and believed that interest rates had almost always been maintained at a level high enough to aid bankers at the expense of consumers and small business owners. Meeting on the Gold and Dollar Crisis 473 they made some grievous mistakes. I haven’t changed on that. But I was convinced by 1935 that we were not going to put these people back to work by forcing money down the throat of people who didn’t want to borrow. Now today the thing that bothers me is we’ve had a very successful adjustment in the stock market with a minimum of real disruption—lots of paper values lost, but very little real loss from that. But we are under- girding, in a great many areas, weak real estate situations because money is so plentiful and there is so much pressure to place these mortgages that a lot of situations—I was in Denver, St. Louis, Kansas City, and I talked to the people who were placing them here and there and they say, “Well, sure we’ve got the money. We don’t know what to do with it. Its coming in here and while this doesn’t look like too good, this operation 3 over here at this level, if we can get a 5 /4 percent mortgage on it, why interest rates will probably go down and we at least have got this investment and we’ll take a chance with the growth of the country.” Well, the country is going to grow. And no matter what happens, nobody can persuade me to sell this country short. I am just as sure as I am sitting here that we may have little adjustments here and there but we are going to have a tremendous expansion and development, both of population and growth in the country. But I don’t believe we help it by avoiding the process of saving and investment. And under certain circumstances, the saver is entitled to a return as well as the lender. Now I was interested in the Ways and Means Committee last week. Thursday afternoon I was up there for three hours and I told Walter [Heller], I said “I’d be glad to come, but I want you to know, I’m going to neither support nor oppose a tax cut. That I think puts me in the political arena and I have my own ideas.” I said, “If the President asked me I’d tell him directly.” But I said, “I am not going to get out on this area.” But I said, “I really think that we have supplied mortgage funds and kept lower interest rates here successfully and I want to continue to do that as long as I can. Better than any time since I’ve been in the federal . . .” And a little fellow from Tennessee named Howard Baker I don’t know very well got up and made the best speech—I wish that somebody had put it on the record—in which he said, “You know, I have a four million dollar bank, a little tiny bank. And I thought it was a terrible thing when the Federal Reserve permitted us to pay up to 4 percent for savings accounts.” And he says, “All the bankers are sore as pups about it because they’re not earning too much. Well,” he says, “I want to tell you that for the first time in my community people can get a mortgage now without having to shop. And we have had better municipal finance in 474 THURSDAY, AUGUST 16, 1962

Tennessee than we’ve had for a long time because there are savings available for this.” Now there are always two ways that you can create this money. You can have the bank write it up—you go to a bank, buy on one side of the ledger or the other. That’s bank-created money. Or you can persuade John Doe to deposit some money there and then you can give him a rate of interest that makes it worthwhile if possible. I think around 4 percent has been pretty successful. I think that our savings bond people through the years—at one time I was assistant secretary of the Treasury with John Snyder over here and I got myself all worked up emotionally about the problem and I said, “John, I can’t sign your report.” “Well,” he says, “you don’t have to, you’re not Secretary.” “Well,” I said, “all right then.” But, I said, “We are telling all of these people that we’ve got the best investment in the world, and we have in one sense, but we’re letting inflation eat up their advantages here.” And I said, “I think we’ve got to adjust the savings bond picture a little bit.” Well we did. I think they may face that problem in the next couple of years here in the Treasury again. Well I don’t think we want to get too high rates; we’re not seeking high rates. We’re seeking an equilibrium rate and we’re trying to get it as stable as possible. But I don’t think you can—on these courses—I don’t think we’ve yet developed the techniques. We’ve made some progress. But we haven’t developed the techniques to tell the tides to roll back when we want them to. Now the tides are big. The tides in this international financial operation are very big. And we’ve been level now. A lot of people, à la Bob Triffin, whom I like very much, [try to] persuade us that there is a shortage of gold in the immediate situation.50 There isn’t. That I know; nobody has been able to persuade me now. I’ve talked up [unclear]. There may be. That’s a different story. I think we can create the credit for that. I see no reason the Federal Reserve can’t create credit. And I have no intention—Mr., Senator [William] Proxmire and I bat- tled for an hour on this. He says, “The President’s suggesting the possibil-

50. See Robert Triffin, Gold and the Dollar Crisis: The Future of Convertibility (New Haven, CT: Yale University Press, 1960). Triffin, a Yale economist and frequent consultant to the Treasury, Congress, and the CEA in the 1950s, believed that gold production was insufficient to provide enough liquidity for an expanding world economy. He also believed that the use of natural currency holdings as a supplementary reserve would only undermine the key currencies used for this purpose, chief among them the U.S. dollar. Meeting on the Gold and Dollar Crisis 475 ity of a tax cut and you say you’ll finance it all out of savings. You’re going to take it away.” I said, “Senator, I’ve been through this over and over and over again.” I said, “It isn’t a mathematical operation basically.” This has been the most difficult field and yet an interesting one for me. I was good at mathematics. I don’t say that boastfully. But it’s nice to get an answer. [But] I’ve been working for the last twenty years in an area where there are no mathematical answers and where statistics—to use the phrase of Gilbert Chesterton that I like so much—statistics are used frequently as a drunkard uses a lamppost, for support and not for illumina- tion. And you have constantly—I sit down, I’ve played around with these things a little bit, I get good staff over here. I can almost prove to you almost any point I want at times, by a little bit of playing around with the statistics. But the problem of human nature that’s involved in this business process and saving and investment doesn’t work that way.51 President Kennedy: [New York governor Nelson] Rockefeller wants you to lower the interest rates some more, I think. Martin: What? Well, yes— President Kennedy: He wants you to, now that there is a deficit. He wants it to be funded out of what? Martin: He wants us to create the money to [finance the deficit]. President Kennedy: How much do you lose of the impact if you wanted to run a deficit because of deflationary pressure? How much do you lose by financing it out of savings as opposed to financing it out of— Martin: Well this is a very moot, moot question. I think you, if you, in the first place if there is going to be a normal growth in the money supply, I mean, I eliminate that. And I figure Henry Reuss is always trying to pin me down to 3 percent and I won’t be pinned down, but I think there ought to be a steady growth in the money supply.52 We’ve operated on that basis. You can remove that from it. Now, when you take that bona fide savings and you assume you’re making a tax provision here that is eventually going to create more revenue for the country by helping the business climate and the business turnover. I believe that upwards in the

51. “My gracious, here I am the new chairman of the Fed,” Martin recalled in a 1985 interview, “and I’m doing my best—I’m not the brightest fellow in the world, but I’m working hard on this—and I haven’t the faintest idea of how you control the money supply. Yet everyone thinks I have it at my fingertips” [quoted in William Greider, Secrets of the Temple: How the Federal Reserve Runs the Country (New York: Simon & Schuster, 1987), p. 329]. 52. Henry Reuss was a Democratic representative from Wisconsin and a member of the House Banking and Currency Committee. 476 THURSDAY, AUGUST 16, 1962 neighborhood of 60 to 70 percent of it can come out of savings without taking dollar for dollar away from it. As a matter of fact, I think it con- tributes to this overall confidence in the economy. Now I’ve never seen, as I said to you the other day, in that brief little talk, I’ve never seen a period of real business expansion and growth and development that hasn’t been accompanied by slightly higher interest rates. That’s just normal. Now, our job under those circumstances is to keep it from being beyond slightly higher. Now I’ve also never seen a real decline in business that hasn’t been accompanied by snowballing decline in interest rates. And that’s not the sort of decline in interest rates that I want to see. If we had a major depression in the next year or so, I can assure you there’d be no pressure on the Federal Reserve with respect to interest rates. They’ll come down of their own accord. President Kennedy: Uh-huh. Martin: Now that’s the . . . now how you keep this equilibrium in what is a moving stream, I don’t know. But I happen to think that it is the flow of funds that is important. Bob Roosa and I, I think, see eye to eye on this and that’s the important thing. Now in the early part of your administration, in January, February, and March of 1961, I reversed my position, as you know, on buying the long [bonds]. I said, and I didn’t do it under any pressure, I talked to Jim Tobin and I came and said, “Well, I’m not sure I have the answer. I can assure you that I think that humility is the most important thing in this area.” I sometimes think I have too much of it. But I don’t think that you can be lacking in convictions. And if you have humility, in the sense as I told Mr. Patman, here, I said, “Mr. Patman, I respect you, but,” I said, “you’re not responsible for the Federal Reserve Board. You wouldn’t respect me if I didn’t call my shots as I saw them.” And he smiled because we get along very well, and I never had any real trouble. Once in awhile he accuses me of making money out on the open market account, and then I just smile, and say, “Well, Mr. Patman, I am sorry you have such a poor opinion of me,” and when I don’t get mad he usually comes around and apologizes to me later. But of course his thesis is easier money all the time, you see. And I think that this is a fetish. It would be just as bad to have a fetish on the other side. What you’re seeking here is equilibrium. And you’re seeking really a rate, a reasonable rate of return for the saver and a reasonable rate for borrowers and for business. And under those circumstances, you will get the maximum on forward bonds. President Kennedy: Well the only thing is, and we’re going to have a chance maybe to talk Monday, but the only thing that, as we give India a loan at a half percent [interest] and a ten-year grace [period before Meeting on the Gold and Dollar Crisis 477 repayment], which no banker would ever do. But we do it as a matter of governmental policy. The only thing that I’m wondering is whether in this international [context], whether we are introducing into this very tough business, where half percents of interest become vitally important and where everybody is looking out for themselves, we introduce this question of national policy into the Atlantic community concept so that there is some forbearance. After all, that is what we’re asking them now. This operation which Bob Roosa’s carrying out, and the board are carrying out, is an attempt to work out these arrangements on a unilateral basis. I’m just wondering whether if we got the governments more in it, whether we would have them be willing to accept what they would not ordinarily want to accept. I don’t know why Blessing keeps it [the gold percentages of German reserves] at 30 or 35 percent, why he doesn’t just some day get up, when somebody passes a dividend or something and the stock market is down another 20, and he might figure, I better go to 50 percent. Because [he might think] the French have gone up again, and the Italians are moving up, and I’ve got to get up to at least 50 percent . . . which I don’t know how much gold that would take from us but it would be a hell of a wallop. Well, I mean I don’t think Bob Roosa can keep him from doing it. Maybe Adenauer could. If I asked Adenauer, but I don’t know whether he’s looking out just for his own problem, looking at this in a cold- blooded banker’s way, he’s liable to say, “Hell, I’ve got to get up to 50 percent.” Sorensen: Or it might be that, to put it in the words of George Ball, you might become involved in something in Southeast Asia, or someplace where Adenauer would say, “Well, I don’t want to be in there anyway.” But then it would be too late. You’d need to have the agreement ahead of time. President Kennedy: But our side, I think we ought to think a little bit. Let’s see . . . I don’t know why . . . Why do you think Blessing keeps gold so low compared to the others? Martin: I think it’s because he has real confidence that we are tightening the market [with interest rates] to benefit German finances and that we will come out of it. He also has less confidence in the pound than he has in the dollar. And I think that that weighs very heavily with him. For instance, I think he’s been under some pressure. I’ve never asked him to do anything on this. But I think also Blessing’s a fellow who really feels a little sense of guilt, if you want to put it that way, about the past Hitlerian excursion and they’re not many Germans that do. 478 THURSDAY, AUGUST 16, 1962

President Kennedy: That’s a pretty— Martin: It’s a very thin reed to lean on. President Kennedy: Yeah and when he sees the French. And the British, and the French . . . Well, anyway, we’ve got . . . I just think that . . . Martin: Well I apologize for talking so— President Kennedy: No, it’s just that . . . The meeting breaks up and they get up to leave. Conversation becomes very hard to make out. President Kennedy: Did I say here the French have decided to go without any . . . [unclear] in order to cover a rapid payment of about 50 percent [unclear]? Martin: [Unclear] don’t forget about the French. They don’t convert lightly. [Unclear] has been hounding me for years, and Walter [unclear] is a close friend of mine and it’s his tendency for buying [unclear] six or seven years ago— President Kennedy: [Unclear] what was his line? Martin: Well, his line then was that we shouldn’t be worried about this thing. This was nothing really to worry about at all. So the French Central Bank printed money [unclear] right up to the time where they literally reached the end of the road. In the early days of de Gaulle’s administration, my very close friend Jacques [unclear], who some people think is a bit crazy, who dragged in [Antoine] Pinay, [unclear] finally got it in control for a short time, and de Gaulle said, “Well, try to convert.”53 Now the French are on the road to financial rectitude. And they are putting the bee on us and everyone else now that we have a problem with this. And they attach more importance to gold than I think really belongs there at the present time. That’s what is wrong. President Kennedy: Well, we will try again Monday, Bill. Let’s talk about it.

The meeting with Martin had complicated the argument within the administration over resolving the nation’s gold problem. The chairman of the Federal Reserve was recommending a homegrown solution, setting interest rates high enough to reassure foreign holders of dollars,

53. Antoine Pinay was appointed finance minister of France by de Gaulle in 1958. Pinay, who had been the author of a successful 1952 stabilization program, laid the groundwork for current account convertibility for the franc at the end of 1958 Meeting on the Gold and Dollar Crisis 479 instead of a gold standstill agreement. Martin agreed with Kennedy’s concern about the narrow perspective of central bankers. Indeed, he had endorsed the President’s July warnings about the link between the dollar and the United States’s worldwide foreign aid policies.54 But Martin preferred to manage the fetishes of the foreign finance ministers and central bankers informally, easing their anxieties by showing them that the United States’s financial house was in order. Although coming in response to a foreign economic policy debate, Martin’s comments were as much a challenge to the general direction of the Kennedy domestic economic agenda, which contemplated tax cuts and higher budget deficits, as they were a rejection of the White House’s tentative international monetary initiative. The Fed Chairman counseled managing deficits not simply by accommodating the demand for money with Fed open market operations but also by encouraging and drawing on national savings and by raising interest rates to encourage savers to make deposits and to buy the bonds to finance the deficit. By this logic, the dollar’s value would stay solid because the administration had demonstrated it was serious about keeping inflation in check. Martin also parted company with most of Kennedy’s economic advisers in finding the country’s economy basically sound and doubting the need to act with any sense of urgency.55 In the course of the meeting Kennedy kept his own counsel on the domestic side of the gold problem. He still preferred to view the problem as largely international, concerned that those foreigners who were rushing to convert their dollars into gold were undermining the web of obligations and understandings that guaranteed Western security in the Cold War. Kennedy spent the last 35 minutes of his official day with two journalists from Look magazine. Once they left, the President went to the pool to cool off.

54. See note 39. 55. A CEA member, James Tobin, in particular, recommended a combination of fiscal surplus, investment tax incentives, and low interest rates to increase investment once the tax cut sparked an initial burst of growth and a move toward full employment. Other advisers, such as Walter Heller, believed there was ample room for a fiscal stimulus and low interest rates and that new investment, increased productivity, and moral suasion would help prevent price inflation. 480 MONDAY, AUGUST 20, 1962

Monday, August 20, 1962

Since losing the mid-July vote in the Senate on his administration’s number one domestic priority, Medicare, President Kennedy vowed to elect a Kennedy majority in Congress. Democrats already occupied nearly two- thirds of both houses. However, Southern Democrats, whose ranks included the powerful legislators Byrd of Virginia, McClellan of Arkan- sas, and Eastland of Alabama (called “living profiles in courage” by Senate Minority Leader Everett Dirksen), had consistently voted with the Republicans against the President’s domestic agenda.1 Since the last time he taped a meeting on August 16, Kennedy was out of town campaigning for a new majority. He went west, where it was believed there was a chance to pick up the 20 seats that he needed to turn the House around for his programs. In Pierre, South Dakota, on Friday, he had had his picture taken with a group of young Kennedy western candidates, including George McGovern, formerly in charge of the administration’s Food For Peace project. Later that day, in Pueblo, Colorado, Kennedy received an engraved frying pan, symbol of one of a handful of western conservation projects—in this case the Frying Pan Colorado–Arkansas project—that Kennedy had recently signed into law. By the end of August 17, Kennedy was in Yosemite National Park in California. Kennedy would spend the weekend in California, campaigning Saturday and relaxing Sunday with his sister, Patricia Kennedy Lawford, and her husband, actor Peter Lawford. Having been flown home overnight, the President entered the White House at 8:07 A.M. and was at his desk an hour later. Senator Richard Russell of Georgia, chairman of the Senate Armed Services Committee and yet another dogged opponent of Kennedy’s domestic agenda, was his first appointment. The Secretary of State followed. Rusk had some Berlin news, as usual not good, to discuss with the President.2 In the days since East German border guards shot and left to die a young man who had

1. Besides Medicare, the legislative casualties included bills on urban affairs and literacy tests. In addition, bills on educational assistance, farm controls, and civil defense were considered in trouble. “Come November,” New Republic, 16 July 1962; “Congress: The Case for Subtlety,” Time, 27 July 1962; “JFK Riddle: What to Do with ‘Won’t-Do’ Congress,” Newsweek, 30 July 1962. 2. “Berliners Stone Soviet Troop Bus,” New York Times, 20 August 1962. Transcript, Conversation Cash and Day, 19 August 1962, FRUS, 15: 272–73. MONDAY, AUGUST 20, 1962 481 been trying to flee East Berlin, groups of West Berliners had shown their outrage by stoning the busloads of Soviet troops who, by Allied agreement, drove everyday into the British sector of West Berlin to replenish the permanent watch at the Soviet World War II monument. There was pressure on the Western allies to prevent future tragedies at the Wall. The young would-be refugee, Peter Fechter, had bled to death in full view of West Berliners after being shot. Consultations had just started in Berlin to see whether an ambulance corps, for example, could be set up for the express purpose of rendering aid in East Berlin to people like Fechter. In addition to the deteriorating situation in Berlin, Kennedy faced another delicate national security problem. Over the objections of the British, in mid-July Kennedy had authorized another high-altitude nuclear test—the so-called URRACA test. The British, joined by some U.S. scientists, were concerned that these tests introduced artificial radiation into the upper atmosphere with possibly harmful effects to astronauts orbiting nearby and to the communications capabilities of satellites.3 During Kennedy’s western swing, some evidence had developed that the most recent high-altitude test—STARFISH—had added electrons to the Van Allen radiation belt, which stretched 400 miles wide and 4,000 miles long, around the middle of the Earth.4 The New York Times had a front-page story this day carrying James Van Allen’s concerns about changes to the belt he had first observed in 1958.5 Kennedy did not tape the Russell or Rusk meetings. He did tape the next meeting, however, which dealt with the CIA, Cuba, and counterinsurgency.

3. Glenn T. Seaborg, with Benjamin S. Loeb, Kennedy, Khrushchev and the Test Ban (Berkeley: University of California Press, 1981), pp. 152–57. 4. Ibid. The STARFISH test, which involved an explosion at 400 kilometers above the Earth’s surface, occurred 9 July 1962. 5. “Van Allen Warns of Threat in Rays,” New York Times, 20 August 1962. 482 MONDAY, AUGUST 20, 1962

11:48 A.M.–12:06 P.M.

[I]n terms of plausible denial, it’s a lot more effective than . . . things we generate ourselves.

Meeting on Intelligence Matters6 In 1961 the Kennedy administration had set in motion a secret CIA program, Operation Mongoose, to undermine and eventually overthrow Castro’s rule in Cuba. But by the summer of 1962 its efforts had gathered intelligence and little else. For the last month the Special Group (Augmented) had debated what more the United States could or should do. Kennedy’s military representative, General Maxwell Taylor, was the formal chair of this group; Robert Kennedy sometimes acted as its de facto chairman. Taylor had just prepared papers summarizing the outcome of this policy review. The group would only support a “somewhat more aggressive” phase II that authorized sabatoge and other harassment. In that report General Taylor wrote frankly to Kennedy that, “While we believe that this new course of action will create added difficulties for the regime and will increase the visibility of its failiures, there is no reason to hope that it will cause the overthrow of the regime from within.” Director of the CIA John McCone had been very unhappy with this outcome, arguing for more aggressive U.S. action. McCone had pressed his case by citing the new evidence that large-scale Soviet arms shipments had begun flowing into Cuba. In the conversation that follows, Taylor is discussing the outcome of the Mongoose policy review and its relatively modest recommendations with the President. After this meeting Taylor forwarded the guidelines for Mongoose phase II to his colleagues with a note that President Kennedy had read and approved them “today, 20 August 1962.”7 Also on the agenda was discussion of two documents related to the

6. Including President Kennedy, McGeorge Bundy, and Maxwell Taylor (Pierre Salinger enters at one point and then leaves). Tape 13, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 7. Taylor to President Kennedy, 17 August 1962, FRUS, 10: 944; see Graham Allison and Philip Zelikow, Essence of Decision: Explaining the Cuban Missile Crisis (2d ed.; New York: Longman, 1999), pp. 330–32. Meeting on Intelligence Matters 483

Kennedy administration’s strategy to defeat Communist movements overseas. The first, a highly classified paper drafted by the CIA describing all of its covert activities, had been given to the President by John McCone on August 15. As part of Kennedy’s effort to coordinate all U.S. counterinsurgency efforts, the President had requested a statement from each of the national security agencies as to what they had done in that area since January 1, 1961. In handing over this report, McCone had explained to the President that the scope of the paper went beyond the original requirement and listed “all the dirty tricks.”8 The second was a general mission statement to govern the national effort in counterinsurgency warfare. Instigated by Maxwell Taylor, the incoming Chairman of the Joint Chiefs of Staff, while he was still at the White House as the President’s military representative, the drafting of this document had taken over eight months, involving the Departments of State and Defense and the CIA. The end product, a paper entitled “U.S. Overseas Internal Defense Policy” (OIDP), set out the terms by which each national security agency would contribute to a national counterinsurgency strategy. In January 1962, the President had established the Special Group (Counter Insurgency) to select the countries where these instruments would be applied and to supervise the entire process. In the months since its establishment, the Special Group (CI) met to discuss 11 different global hot spots, including Colombia, South Vietnam, and Thailand. The paper was designed to be the group’s mission statement.9 In this meeting with Maxwell Taylor and McGeorge Bundy, the President would have to respond to the Special Group (CI) mission statement, which he had only just received for his approval. The CIA paper was just for his information. His guidance was also required on some lingering questions regarding the leadership of the Special Group (CI). Apparently it was felt that Robert Kennedy had assumed too much formal responsibility for the work of the group.

8. See “Meeting with John McCone,” 15 August 1962. 9. Established by National Security Action Memorandum (NSAM) No. 124 on 18 January 1962, the Special Group (CI) consisted of the Chairman of the Joint Chiefs of Staff, the Deputy Secretary of Defense, the Deputy Under Secretary of State, the Director of Central Intelligence, the heads of the Agency for International Development and the U.S. Information Agency, a staff member of the National Security Council, and Robert Kennedy, the attorney general. On the tor- tuous history of the drafting of the OIDP, see Charles Maechling, Jr., “Camelot, Robert Kennedy, and Counter-Insurgency—A Memoir,” Virginia Quarterly Review (Summer 1999), pp. 438–58. Maechling served as the assistant to the chairman of the Special Group (CI). 484 MONDAY, AUGUST 20, 1962

Cuba, however, came first on the agenda. President Kennedy turned on the tape recorder; Maxwell Taylor was outlining a recent operational failure on the island.

Maxwell Taylor: One of those guys was caught. [Door closes.] So he is having real trouble, real difficulty in introducing [unclear] a meeting with them. President Kennedy: Did he lose the whole team? Taylor: [Unclear] one, one, one equals three [unclear]. President Kennedy: Captured? Taylor: Two men have been picked up; one [unclear] really not heard from [unclear]. President Kennedy: What did he tell you? Are they killed . . . these two men? Taylor: We don’t know. President Kennedy: Yeah. The other team, is in there? Taylor: Ah, yes sir, the others are, there about three that are out there—at the present time. President Kennedy: Are they sending anything? Taylor: We are getting something out of them and that’s the problem. Actually most of the information is coming from other sources, coming from contacts we have in— President Kennedy: Other embassies and so— Taylor: —other embassies, travelers and that kind of thing. But [unclear]. Unidentified: [Unclear.] Taylor: [Unclear.] We find, however, that we get so much information from refugees, we barely sort it out and [unclear] we have improved our knowledge of what’s inside; but I don’t think any of us feels we really have our hands on the kind of [unclear] intelligence we’d like to have . . . for the contingencies we are really unprepared. President Kennedy: Right. Taylor: We do think we ought to bear down harder on the economic front, sir. They’re really hurting there, that anything that’s short of committing ourselves overtly we should be doing and that’s where, that would be where the major effort should go [unclear]. Also, as Mac has suggested to you, we ought to see how much we can get out of Cuban groups that are working for themselves, with our indirect support, without our actually directing and controlling— Meeting on Intelligence Matters 485

McGeorge Bundy: The agency has been very reluctant to enlist [unclear] the three or four friends of—Charles Bartlett’s group [and] some others—to give help to people who are really operating on their own, and who we figure, we ought to try and help them.10 Because in terms of plausible denial, it’s a lot more effective than— President Kennedy: Yeah. Bundy: —things we generate ourselves. Taylor: Well, if this is in agreement with you, we’ll go ahead— President Kennedy: Yeah. Taylor: —for two or three months and then see where we stand.11 President Kennedy: Yeah. Bundy: Well, nobody says this is producing things that raise the noise level, let alone have [unclear] a going concern. Taylor: You wanted to discuss these and look these over— President Kennedy: Well, I’ve read one of them. I haven’t read the second one. I think we just try to keep that [referring to the CIA report on covert action]. But I want to be sure there weren’t a lot of them lying around.12 Taylor: No, sir. [Bundy is speaking indistinctly at the same time.] There’s only one. That’s why I [unclear] to McCone . . . unless you want me to keep it.13 This is just . . . really extraordinary . . . this probably illustrates— President Kennedy: Well, I think it is good for us to have; but I don’t [unclear] being kept. Bundy: My theory about this stuff is that I would make that docu-

10. Charles Bartlett was a nationally syndicated columnist for the Chattanooga Times. A friend of John Kennedy’s since 1946, Bartlett introduced the future president to the future first lady, Jacqueline Bouvier. Bartlett was accustomed to being used as a back channel for the White House (Timothy Naftali Interview with Charles Bartlett, 5 December 1994). See Aleksandr Fursenko and Timothy Naftali, “One Hell of a Gamble”: Krushchev, Castro, and Kennedy, 1958–1964 (New York: Norton, 1997) pp. 251–52, 350, for information from Soviet Military Intelligence (GRU) records about Bartlett’s use in contacting the Soviet government by the Kennedys. 11. The “two or three months” are the time frame for trying out phase II of Operation Mongoose. 12. At the 15 August meeting with John McCone, the President mentioned that he wanted to take a longer look at this CIA paper. Initially, McGeorge Bundy had assumed that the CIA would retain custody and that McCone would bring it to the White House whenever the President wished to refer to it. But Kennedy had asked to take it with him on Air Force One to read during his long flight to Pierre, South Dakota, on 17 August. As of Monday 20 August he still had the paper. As of August 2000, however, neither this paper nor evidence of its withdrawal for national security reasons could be found at the John F. Kennedy Library. 13. John McCone was the director of the CIA. 486 MONDAY, AUGUST 20, 1962

ment a good takeoff point for really getting a sense of the history of what we’re into on Special Group stuff.14 I’ve talked with Helms and he can vouch in detail, as General Taylor has done.15 And we can go on in quiet. But this is a handbook of all our [unclear]. President Kennedy: How do we want to keep this, though? Bundy: Well, we keep it in a special safe. President Kennedy: Here? Bundy: Here, I— President Kennedy: OK. Taylor: Do you think we ought to keep it over here? [Door closes.] Bundy: [Unclear.]. Taylor: Yeah. All right. And this other, of course, is simply filled with [unclear]. [He chuckles.] President Kennedy: Well, now the only thing that I was concerned about this one—this is the description of a mission? Taylor: That’s right. President Kennedy: Now I [unclear] anyway—[Taylor is muttering in the background.] Bundy: Says who? President Kennedy: Well, says some of these [unclear]—[coughs]. Taylor: [Unclear] to negotiate between State and CIA, in other words, [unclear] looked at here, deciding on how to arrange cover for their agents and, in general, how to arrange them in battle. President Kennedy: Well, now the only thing is . . . this is an extraordinary document. Bundy: [Unclear.] The fact is that it’s been classified [unclear] last week. President Kennedy: [Unclear.] The President’s press secretary, Pierre Salinger, enters the Oval Office. President Kennedy: Oh, do you want something Pierre? Salinger: I want to find out [unclear]. President Kennedy: Yeah. Well go ahead. Salinger: [Unclear.] President Kennedy: OK. Right

14. The Special Group (Augmented) of the National Security Council, also referred to as the 5412 Committee, was the interagency body that oversaw U.S. covert operations. This is a reference to the fact that this CIA paper included a list of covert actions by the agency since 1 January 1961. 15. Richard Helms was the deputy director for plans at the CIA from February 1962. In other words, he was the CIA’s chief of operations. Meeting on Intelligence Matters 487

Salinger leaves and the President begins to read aloud. President Kennedy: “Failing the above, and when necessary in the interest of U.S. national security seek to replace local leadership with indigenous leaders who are more amenable and sympathetic to the need for eliminating the breeding areas for dissension and are willing and able to resist and prevent [a] Communist takeover of the entire country . . . seeking to insure that modernization of the local society evolves in directions which will afford a congenial world environment for fruitful international cooperation and our . . . for our way of life.”16 That’s a lot of crap. Taylor: Well, that sounds like a pretty abstract— President Kennedy: [scornfully] For our way of life. Bundy: That, that I must say is holdover language, Mr. President. They used to do that in the other administration. [He chuckles.] President Kennedy: [reading] “These actions are significant and in some [unclear] might be used as supplements to overt [unclear]. Because of national . . . the covert [unclear] unique approach available. In other countries a desire . . . perhaps mandatory expansion of private investment from the U.S. ought to be assisted by covert actions in support . . . ” Now, I hope that they’re not trying to take [unclear] expand the [unclear]. Bundy: You have to look at it in every case. Taylor: Every time, now that’s true. Bundy: [Unclear.] I think that charter is a little [unclear]. Taylor: But approving it, Mr. President, doesn’t move a wheel. Nothing happens until they come up with a specific proposal, that they prove that [unclear]. President Kennedy: But look at this, though. [reading] “By promoting the adoption of economic institutions and practices by the target country modeled along free-world lines of planning activity and the acceptance of free-world capital investment for economic development.” Now that’s a holdover language, isn’t it? We’re not really fighting for the private enterprise system. [continuing to read] “By identifying certain carefully timed, tangible commercial . . . [mumbles] . . . political figures support them.” [Unclear.] I just thought it was—[flipping through the pages]—I thought this was a rather amateurish paper.

16. From context, this second document appears to be a draft of the Special Group (Counter Insurgency)’s paper, “U.S. Overseas Internal Defense Policy,” produced in August 1962 and later issued as National Security Action Memorandum No. 182. Although the document remains classified, it is described in NSAM 182, issued by McGeorge Bundy as approved by the President on 24 August 1962 (see M&M, National Security Files, Box 319, John F. Kennedy Library). 488 MONDAY, AUGUST 20, 1962

Taylor: [Unclear] put it away [unclear]. President Kennedy: Yeah. And they can’t do these things then [unclear]— Bundy: [Unclear] response [unclear]. President Kennedy: Yeah. Taylor: This is not important that this is a top secret document. President Kennedy: [yawning] Yeah, but at least it shows what they’re thinking about. Taylor: The next question, Mr. President, is the chairmanship of the counterinsurgency committee, which we have been wrestling with downtown.17 I thought I had a tentative plan to try this out on Bobby.18 Trying it out in September before we do that. However, Mac has an angle here that’s come up, which I was— Bundy: Well, I—Dean Rusk told me over the weekend that he thought it would be wrong for any cabinet officer to chair this meeting. This fellow, David Marshall, he was, he would probably do it.19 His representative is the Deputy Under Secretary who’s going to be able to argue and state the case [unclear] who is the chairman now. Neither Max nor I think this is sound, but the Secretary thinks so. President Kennedy: But, I mean, God, they got . . . [U. A.] Johnson’s got enough to do with— Bundy: Johnson shouldn’t be chairman. The Secretary never proposed that. He feels, I think he shares a little of John McCone’s feeling, which John expressed at the meeting the other day, [unclear] an embarrassment for Bobby if it became known the Attorney General was running dirty tricks in favor of the counterinsurgency committee, which is essentially an overseas enterprise. President Kennedy: Go ahead. Bundy: I thought that it was the best way of looking at it until Viro broke in [unclear] that it wasn’t going to be a [unclear].20 President Kennedy: What’s Viro going to do?

17. The counterinsurgency committee is the Special Group (CI), a committee of the National Security Council formed in January 1962. In April 1963, W. Averell Harriman, the under secretary of state for political affairs, would be named chairman. Until that time, U. Alexis Johnson, the deputy under secretary of state for political affairs, remained chairman (see Maechling, “Camelot, Robert Kennedy and Counter-Insurgency—A Memoir”). Johnson later told Maechling that Harriman was chosen because “he could handle Robert Kennedy.” Johnson, who was a traditional foreign service officer, was happy to rid himself of this job (Naftali Interview with Charles Maechling, Jr., 21 August 2000). 18. Attorney General Robert F. Kennedy. 19. David Marshall is unidentified. 20. We were not able to identify Viro. Meeting on the Gold and Dollar Crisis 489

Bundy: Viro is in a—if he works, would hypothetically take on the chairmanship with the Senator [Alexander] Wiley and that [unclear].21 Taylor: You see, I think we can get an agreement. In fact, [unclear] on Viro. Bundy: He’s got Philippines experience. President Kennedy: [to Maxwell Taylor? ] You be the chairman then. Taylor: Have you, have you anything [unclear]. Unidentified: [chuckling] That would be good and [unclear]. President Kennedy: When would you have him? Bundy: He’s on a trip in charge of one of these Latin American survey team enterprises that started—[tape cuts out briefly] September and starting on— For the next 6 minutes and 24 seconds, the tape is running, but there is silence.

Kennedy went for his customary prelunch swim and was back to the Oval Office in the late afternoon. He spent a few minutes with California state senator Eugeen McAlteer and his son, then went into the Cabinet Room for the next installment in the administration’s review of foreign monetary policy. The President needed to settle the bitter dispute between the Treasury Department and the State-CEA alliance over what, if anything, to do about the gold situation.

4:00 –5:30 P.M.

[W]e’re not persuaded that it is at all vital to the United States that we do return to a situation in which the dollar would be the principal reserve currency.

Meeting on the Gold and Dollar Crisis22 Many top government officials were ready to consider dramatic departures from traditional monetary policy to solve the problem of declining U.S. gold reserves. Gold guarantees, gold standstill agreements, and raising the

21. Alexander Wiley was a Republican from Wisconsin and the ranking minority member on the Senate Foreign Relations Committee. 22. Including President Kennedy, George Ball, C. Douglas Dillon, Kermit Gordon, Walter Heller, Carl Kaysen, John Leddy, William McChesney Martin, Robert Roosa, Theodore 490 MONDAY, AUGUST 20, 1962

dollar price of gold were all debated. The State Department even prepared a draft memo for the use of the President should he want to end the U.S. policy of redeeming gold on demand.23 Carl Kaysen sent the President an essay written by J. M. Keynes proposing an international payments system that dispensed with gold altogether, telling the President that “the great attention paid to gold is another myth. . . . As you said of the Alliance for Progress, those who oppose reform may get revolution.”24 Under Secretary of State George Ball and CEA member James Tobin were the most articulate advocates of a negotiated monetary arrangement with the Europeans. Ball’s original memo had argued that the strength of the dollar should not trace to the “daily whims of private and official ‘confidence’ but to a structure of long-run reciprocal assurances by governments.”25 Ball claimed that whatever the central bankers thought of the U.S. payments deficit, Europe’s political leaders would understand the explicit link between a solution to this problem and continued U.S. military protection. “Central bankers may regard our expenditures to defend the Free World as a form of sin, but the political leaders of our Western allies do not.”26 Tobin had responded enthusiastically to Ball’s plan and produced his own monetary proposal that would establish a uniform ratio of gold to foreign exchange to which all countries would have to adhere.27 The President’s interest in Ball and Tobin’s plan had led to the small, interdepartmental group from State, the CEA, and Treasury that produced the interim monetary arrangement discussed on August 10. But as became

Sorensen, and James Tobin. Tape 14, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 23. Memorandum, Coppock to Johnson, 1 August 1962, Declassified Document Collection 1993 (microfilm, University of Virginia Library). 24. Memorandum, Kaysen to the President, 6 July 1962, FRUS, 9: 138. Kaysen’s mention of “another myth” was an allusion to the President’s 11 June 1962 address at Yale University in which he assailed the myths that governed political economics [see Public Papers of the Presidents, John F. Kennedy, 1962 (Washington, DC: U.S. Government Printing Office, 1963), pp. 470–75]. 25. Ball to the President, Memorandum, “A Fresh Approach to the Gold Problem,” 24 July 1962, Papers of George W. Ball, Box 15b, “Memorandum to the President on the Gold Problem,” Seeley G. Mudd Manuscript Library, Princeton University. 26. Ibid., p. 14. 27. James Tobin, “A Gold Agreement Proposal,” 24 July 1962, Acheson Papers, State Department and White Advisory, Report to the President on the Balance of Payments, 2-25-63, Harry S. Truman Library. Among other things, Tobin’s plan would require countries with gold in excess of this ratio to sell some of their gold for foreign exchange. Instead of only the dollar and sterling, the currencies of all participating countries would be equally acceptable as reserve currencies. Each country would provide a gold guarantee for its currency against devaluation. Over time, the nongold component of reserves would increase, and the currencies of the participating countries would increasingly share the burden borne increasingly by the dollar. Meeting on the Gold and Dollar Crisis 491 clear in the course of that meeting, the Treasury Department’s top two officials, Douglas Dillon and Robert Roosa, were adamantly opposed to the interim agreement.28 Since that meeting, the Treasury position had hardened even further. Dillon believed that the actions proposed would close the gold window for redeeming official dollar balances, an abandonment of traditional gold policy similar in scope to the U.S. devaluation of 1933.29 Moreover, using the word standstill would evoke memories of the German standstill agreement of 1931, an event associated with the world economic collapse. Roosa felt the United States had handled recent problems and was well prepared to meet any attack on the dollar. He warned that any public discussion of gold guarantees would seem to reinforce all those who questioned Wasington’s commitment to a strong dollar and could thus damage or destroy the world payments system. Treasury found an ally in Federal Reserve Board chairman William Martin, who said the plan for a standstill monetary agreement would “hit world financial markets as a declaration of U.S. insolvency and a submission to receivers to salvage.”30 The contentious August 10 meeting had failed to resolve the impasse, and in the following week both sides angled to strengthen their positions. Kaysen was infuriated when Dillon testified before the Joint Economic Committee on August 17 and called gold guarantees a “dangerous experiment” and “a poor idea . . . not to be seriously considered.” Dillon also ruled out changing the value of the dollar. McGeorge Bundy was worried that Dillon’s public statements would preclude the changes in international monetary policy that the administration was considering.31 At the same time, Dillon’s warnings had been echoed by Fed Chairman Martin in a private meeting with the President.32

28. See “Meeting on the Gold and Dollar Crisis,” 10 August 1962. 29. “Appraisal of Problems in the Proposal for an ‘Interim Monetary Arrangement,’ ” 16 August 1962, (no author given but included with a cover letter to Ball from W. N. Turpin, Dillon’s special assistant), ibid. Dillon also contended that after the two-year period, no central bank in the world would ever hold U.S. dollars in their reserves. This would choke world liquidity and abruptly end the privileges of seignorage enjoyed by the United States (the financial advantages that came from having the dollar used as the world’s reserve currency). Furthermore, the plan assumed that the Europeans would agree to such a scheme, an idea Dillon found preposterous. 30. William McChesney Martin, Jr., “Commentary on ‘An Interim International Monetary Arrangement’ Presented by Chairman Martin,” University Press of America, microfilm, President’s Office Files, Treasury, 25, p. 1. 31. Bundy to Kaysen, 21 August 1962, NSF, Departments and Agencies, Treasury, 6/62–4/63, 289, John F. Kennedy Library. Bundy asked Kaysen, “Is Doug Dillon pinning us to his position by such public statements?” 32. See “Meeting with William McChesney Martin,” 16 August 1962. 492 MONDAY, AUGUST 20, 1962

President Kennedy gathered his economic advisers for the second time in ten days in search of a consensus on how to solve the country’s gold problem.

William McChesney Martin: We would have to do it by increasing the 1 discount rate by 1 /2 percent. We’d have to charge, you see, beyond that. . . . We charge a nominal amount up to that point. It’s a very complicated procedure but it’s, again, within our authority at the present time. President Kennedy: Does the . . . probably, it serves no purpose, does it? What is it, just sort of an anachronism or what? That would be [unclear]. Martin: Well, it was just an arbitrary figure that was arrived at starting in 1913 and then revised from 40, 35, to the 25 in 1945 with some measurement by which you related the amount of credit that could be created to the amount of gold that you had.33 President Kennedy: But the amount of credit that can be created, is that related to the 12 billion or is it. . . . ? Martin: It’s not related, is it? Unidentified: Yes. President Kennedy: It’s not related, is it? Martin: It is not related any more. President Kennedy: Yeah. That’s what . . . sort of . . . therefore— Martin: Well, I hope that we can get it removed at the appropriate time, because I don’t think it serves any [unclear]. C. Douglas Dillon: We’re the only country in the world that has such a— Martin: Belgium and Switzerland are the only two countries of any importance that have any statutory requirement at all for gold. President Kennedy: Gold really should be used for international payments. Martin: International payments under present conditions and that’s all. Dillon: The only reason they haven’t pursued this in Congress is that there is this division in the banking fraternity with people who know something about foreign markets, like [the] New York banks, generally in favor of removing it, and the people from the Middle West, violently opposed because they think it means we’re going to have printing press money. And

33. The numbers refer to the Fed’s ratio of gold to money supply which was changed several times. Meeting on the Gold and Dollar Crisis 493 so [we] didn’t want to pick up that argument and also we didn’t find it necessary [because] the Federal Reserve has this power just to waive that. President Kennedy: Envisioned for how long? Unidentified: [Unclear] 60. Dillon: What? Forever. James Tobin: Well, do you— Unidentified: [Unclear.] Martin: Maybe we’d have to do it for 30 days then we’d have to renew it after 15.34 Dillon: The international renewals of it wouldn’t [unclear]. Martin: Heretofore, when it’s been done, it hasn’t even been made public, but this was for individual reserve banks. George Ball: Bill, do you think you can do it? [Unclear] . . . I thought your counsel said you couldn’t. Martin: What does this require? Well, there’s no question. Ball: But [unclear] can keep waiving it? Martin: That’s right. [Unclear.] Ball: Because when we originally discussed this I understood that the Federal Reserve counsel had expressed doubt as to whether the power to give temporary waivers meant a power to make those, in effect, permanent by renewing them [unclear]. Martin: Well, if we did it ad infinitum, I think there’d be a question, George. But I think for a reasonable period of time, up to six months— Ball: Well, then . . . six months we’re good. Martin: Well, I would be . . . in my mind, in six months, yes. Robert Roosa: One other way you’ve expressed it, Bill, was long enough for the efficiency, so called, to be permanent . . . be clearly permanent and thereby give a basis for conventional action. Martin: That’s right. That’s right. President Kennedy: How are we doing on the dollar in the last week or two weeks with the developments? Dillon: Well, we’ve had—well, gold has been fine. Now we’ve had a . . . we’re continuing to run during August, a quite substantial overall payments deficit, [unclear] all the short-term capital flows. Those have been 90 percent or more to Canada, which is just the undoing of their position and therefore, it will not affect our gold drain because it’s just Canada building back their usual balances which they had lost before. But as far as

34. The Federal Reserve would have to waive the gold–domestic currency ratio. 494 MONDAY, AUGUST 20, 1962

the rest of the world, the dollar has been reasonably strong. In Europe, the situation has been fairly good. We probably will . . . the French ordinarily wouldn’t operate on the basis where they take 32 million dollars in gold a month. The time they usually take it would be next week. We haven’t heard from them. I guess we have to assume they’ll do it. That would be the only transaction that will have taken place. The only other transaction is, it didn’t affect us . . . but it’s the Israelis’ . . . bought about 18 million dollars of gold on the London market with a [unclear] note. President Kennedy: But . . . what are their holdings, the Israelis’? Are they in dollars? Dillon: Very small change. Roosa: Their dollars are very high. They have 94 percent in dollars. So they feel they have to have a little bit more gold—it’s one of those fetishes. President Kennedy: What about the, the French, you say are taking out 30 million a month? It’s because, what, their dollar balances [unclear]? Roosa: But, it won’t go on much longer if they follow the pattern they have outlined. They want to just increase their overall balances another roughly 2[00] to 300 million of which about two-thirds would be gold and then they’ll follow their present balance for about four or five months [unclear]. President Kennedy: Well, the question really is, what is it . . . who has the proposal . . . ? You want to make any comments, George, as to where we are? Ball: Well, Mr. President, I think some of us had hoped after the meeting last time that we had narrowed the area of disagreement. Really, basically, to the question of negotiability based on the fact that Roosa had responded to Paul Samuelson’s question as to whether they would like this agreement if it were given to them without the problem of negotiability in the affirmative. And with that in mind, it occurred to me that . . . with some of the rest of us, that it might be useful if some exploratory work could be done before the bank and fund meeting in Europe to see the extent to which the French were prepared to take some initiative,35 or even possibly to explore with the British in view of the repeated concern that Paul has expressed on this. I have talked this morning with Doug Dillon and later with Bob Roosa. [Unclear.] And I think as a result of that, we more or less agreed

35. World Bank and International Monetary Fund meeting. Meeting on the Gold and Dollar Crisis 495 among ourselves that the area of disagreement is rather larger than we had thought. But I would suppose that it really comes to rest on two questions: One is the degree of risk that, to which we are exposed under the present arrangements. And on this, I think that the Treasury feels that the risk is not considerable in view of the tacit understandings that they have. So far as we are concerned I think we feel that it’s substantial. The kind of situation that we are concerned about, looking at it from the point of view of the State Department is, for example, a situation where we should become more heavily involved in Southeast Asia. Or say on the west coast of South America if there should be some . . . a takeover which had Communist implications, or if the Congo thing should become more complicated and our involvement greater. Under any one of those circumstances there is a fair chance that our European friends would walk away from us to, in effect, say that this is something which really we shouldn’t get into, and they don’t want to have any part of it. And where it would be a real temptation to exploit our own balance of payments difficulties, and our own problem with the gold flight for political purposes, or at least not to be sympathetic to what we were trying to do and therefore not rally around it with . . . I don’t know. . . . But the second area of difference which is, which is not unrelated to this, although I guess it’s quite different in general philosophical direction, concerns this that. . . . I believe that the Treasury—and I won’t speak for them—but I’m just . . . in analyzing our own discussions, I think the Treasury feels that if we were to arrive at an agreement along the lines that have been outlined, that after the conclusion of that, it will be difficult if not impossible to return to a situation in which the dollar was the principal reserve currency and bore the responsibility of a reserve currency. Our own view is that we are not persuaded that it would be impossible, on the one hand. But on the other, we’re not persuaded that it is at all vital to the United States that we do return to a situation in which the dollar would be the principal reserve currency. We can see many disad- vantages as well as advantages. But we would hope that this period of an interim agreement, could be utilized to develop some longer-range solution to the whole payments problem which would meet the future requirements for liquidity. And at the same time, provide an element of stability which is not provided under the situation where the dollar bears such an extraordinary burden as a reserve currency. 496 MONDAY, AUGUST 20, 1962

President Kennedy: Can I . . . Let me just stop you. What is the advantage to the United States of our being a reserve currency? I see the advantage to the Western world to have a reserve currency and therefore it’s an advantage to us as a part of the Western world, but what is the national, narrow advantage? Dillon: Well if we are, if we can afford it, to the extent we can afford it, we make more money off of it because we finance a lot of the world’s business that we wouldn’t otherwise have financed because it’s in dollars [unclear]. It’s the same thing with the British when sterling was the basis of world finance; they made money out of international finance in London for many years. I think that’s to our national advantage. Roosa: Yes, and then there is the related one that this makes it possible for us to, year in and year out—and apart from situations that get completely out of whack such as we’ve had—year in and year out to finance any deficit we may run very readily, because you have the world accustomed to holding dollars. When you run behind for a year you don’t have to negotiate a credit, they just hold dollars. And assuming that you are not adding to the total supply of dollars too fast, it means that you are able to live on the basis of a ready financing of your own trade requirements. The ups and downs in it are— Kaysen: You wouldn’t describe this as an advantage right now, would you, Bob? Roosa: No, that’s why our planning [unclear]— Kaysen: We’ve tried. . . . We’re trying desperately to avoid this [unclear]. Roosa: It’s that this is a situation similar to that of any commercial bank. If it controls the rate at which it creates credit, it can go on creating credit and perform a general service as well and make a profit. But if it abuses it and goes too far as we did by overdoing the balance of payments deficit, then you have to have a period of pulling back. Unidentified: [Unclear] growth in Europe. President Kennedy: [Unclear.] Ball: Well, these are two of the, basically the two points of difference, Mr. President. And I talked to Doug this morning about the possibility that it might be useful to do some exploration in the sense of the meeting of the bank and fund along two lines. First, along the line of the readiness of the Europeans toward some kind of a joint declaration, but also along the line to see what the French, for example, were doing with this initiative, which Giscard d’Estaing talked with us about when he was here. Because the impression that he gave at that time was that he intended to pursue this on his own with the Meeting on the Gold and Dollar Crisis 497 other members of the Six.36 And then ultimately to talk to the British about it. Now he went from here almost directly to London, so he didn’t have time to talk with the Six because we . . . Whether he has done so in the meantime or to what extent that he will be prepared to meet us someday, which seemed to us to be useful to find out in advance of the meeting. But I think this is where it rests. I think that the differences are, probably, pretty close to what I have described, differences over negotiability, differences over the question of the appraisal of the risk which the present situation poses and differences as to whether or not it would be possible to return to a reserve currency, and if not, how serious it would be if we couldn’t. And this has led to the dollar as a reserve currency as the [unclear] come down. Dillon: I would agree with George. I think that’s a good statement but I think our . . . we view our present [unclear] a little different from the State Department. We don’t think . . . Well, George used the word tacit understandings. . . . As far as the [International] Monetary Fund is concerned, it’s a formal agreement that has been ratified by governments, through their parliaments, and it does contain, explicitly, a provision saying that you can’t walk away from it, by anyone, except for their own internal balance of payments reasons. In other words, if they have balance of payments difficulties they have an out. If they don’t have balance of payments difficulties there is no other out. And this was put in specifically to stop any such political use of this thing as George was worried about. We think it’s . . . technically does. And it’s effectively the interest of these countries not to see the difficulties happening with the dollar around the world as shown by Giscard d’Estaing’s idea. And that putting this only . . . and putting up all this money. So we don’t think there is any doubt that the Monetary Fund troubles and Bern thing would be all right. So that’s the present thing. I think on the longer-range thing, our basic view is that something like this would, in effect, destroy the dollar as a world reserve currency. Would . . . we’re in a very difficult position, an inflationary position, because the dollar’s the [unclear] that doesn’t include primarily the U.S. private citizens. And we run a very grave risk that we could almost certainly be coming to a period of chaos in international monetary thinking before—when a long-run idea has been worked out—and by so doing creating the most difficult situation to work out a long-term result.

36. The Six is the Common Market. 498 MONDAY, AUGUST 20, 1962

We don’t think that the present situation that we are talking about is one that will necessarily be viable for more than ten years . . . maybe even five, six years only. But we do think we have to work hard to develop a long-range system . . . that we’d be prepared to sit down and do that as rapidly as possible. We’ve started with the British . . . getting our joint evaluation of the problem on that which we hope to have completed by the time of the Monetary Fund meeting. We’ve exchanged papers in two directions and we should be at a working level, [to] subject to a higher level of scrutiny [an] agreement about then and what the problem is. Which we think would be the necessary precondition for starting on any wider talks. And we should certainly have wider talks along with our own thing. There is a real, there are advantages to the dollar being a reserve currency. There are always . . . but it’s a valid thing that we should discuss as to whether that is what we want to aim at or whether we want [unclear] the creation of something else. Our own feeling is that there isn’t anything else readily available to substitute for it until such time as the Common Market has gone a little further, which I think they will in a couple of years, and has established some sort of currency or monetary arrangement of their own, whereby there is a single unit of currency, a Common Market currency, that could be used equivalently to the dollar in international trade rather than having half a dozen different currencies they have, which are still a source of confusion. It would never [unclear] us to . . . to trade in dollars for sterling, now we don’t do it. Deutsche marks or francs or anything else just revisits . . . that we have to do it some for the sake of simplicity. President Kennedy: Let’s take a look at this proposal of the Treasury’s and see what other . . . Do you have a copy of this? Martin: I have seen it, Mr. President, but I don’t [unclear]. President Kennedy: [Unclear] . . . You want to start going through that, Doug? Dillon: Yes, well the first thing is the various ways, which we mentioned, that we could strengthen the immediate things that we already have before us. These Federal Reserve swap contracts are ready, except one of 50 million dollars.37 But we think that they could be substantially

37. Swap contracts, or reciprocal currency arrangements, were instituted early in 1962 by the U.S. Federal Reserve. They were bilateral agreements between central banks under which the Federal Reserve acquired convertible foreign currencies in exchange for the current equivalent in U.S. dollars. Both parties would then agree to reverse the transaction on a specific date, Meeting on the Gold and Dollar Crisis 499 increased. The Treasury, I think, the Federal Reserve on that point if they deem that it’s necessary and [unclear]— Ball: How long a term would you . . . could you extend those to? Dillon: Twelve [unclear]. Roosa: The longest we have now outstanding, that the Fed has, is six months. The longest that has been proposed by anybody else is two to three years. The Fed itself wanted to advance cautiously with this. And Bill I understand hasn’t gone beyond the six months yet, not feeling a need. Is that right? Martin: Yes. I might point out on this, George, that I helped on 12 [unclear] . . . 11 with myself in this picture and that we have been moving without any clear lines, but we naturally want to keep them as short as possible and the extension is only made when we think that we’ve got a clean [unclear] appealing case for it. President Kennedy: What is the goal? What are the reasons that you want to keep them short? Martin: Well, it keeps us in control. We don’t . . . we don’t want lights to [be] put out, you see. We’ve had our problems with the Congress on this. We don’t like to put out a swap arrangement that they say, well, you’re just really getting into this for good.38 Ball: This is essentially a gold value guarantee. Martin: Yes — Dillon: Of course one thing we . . . one thing we— Martin: It is, yes, a temporary expedient. Dillon: One thing we think of these . . . one reason we keep them short term is that . . . Take the one that we have with the Netherlands: it is both our view and shared by the Netherlands Central Bank and the Netherlands foreign finance minister that this is a temporary thing. Due largely to the Philips financing which they did over a year and that by doing this they feel that we will be picking up dollars from the Netherlands in the long run . . . in the next . . . and not be losing dollars in the six months or so and that this thing will work itself out. Now we’ve done that with the German one [unclear] some of the German banks where we actually have a . . . [The] Federal Reserve bank is picking up spot Netherlands guilders, so . . . because this is beginning

thereby offering protection against the depreciation of one of the two currencies. The first of these was announced on 1 March 1962 in which the Federal Reserve provided $50 million for the Bank of France. 38. See Federal Reserve Bulletin, March 1963, for an overview of existing swap arrangements, then totaling $1.1 billion with ten central banks. 500 MONDAY, AUGUST 20, 1962

to look this way. So, we’re getting there. . . . Now the different . . . I’d say the Italian one is the most permanent one because there they have a big balance of payments surplus and that probably just has to be continued in Italy for some time. But Switzerland is in the same situation. Switzerland has a balance of payments deficit. And last spring, before this stock market scare occurred, it started to run our way, we were beginning to gain gold and funds from Switzerland. The Swiss authorities would like us to. And I think that’s . . . they think that’s apt to arise again and we do, too. And so, that’s a very reversible thing because Switzerland was running bigger and bigger deficits in their regular balance of payments, and only governed by what capital that’s going in there. You stop the flood of capital [from Switzerland], or slow it down, you immediately go into deficit. This begins to unwind [unclear]. Kermit Gordon: If we execute a swap contract, is there any understanding that the other government will not convert the gold as regular dollar holdings? Roosa: No. As regular dollars? Gordon: As regular dollars? Roosa: No. No, sir. Gordon: So that the country would be perfectly free to execute a swap contract for some dollars, but use other dollars to buy gold? Dillon: But did not offset . . . I mean, not . . . the theory isn’t that they would get these dollars and then dump then their dollar reserves and buy gold in some [unclear]. Ball: What you are, in effect, saying to a country is that to the extent you make a swap contract, you have given them a gold value guarantee for that amount. . . . Dillon: And they have given you a gold value guarantee.39 [Lots of voices. Someone can be heard saying, “The reason . . . the reason . . . ”] Gordon: [Unclear]—a guarantee. Unidentified: At least you change— Unidentified: Yeah. Dillon: It’s a reciprocal guarantee.

39. By protecting their central bank against dollar devaluation for the length of the swap contract or by “mopping up” dollars in excess of amounts normally held by that bank. In the first case, dollars would be deposited at the foreign central bank and then repurchased at a later specified date. In the second, foreign currency holdings of the U.S. Federal Reserve would be exchanged for dollars held abroad. Meeting on the Gold and Dollar Crisis 501

Unidentified: Yes . . . a reciprocal— Gordon: This implies no understanding on their part as to what they will do with their regular dollars.40 They’re perfectly free to— Roosa: Well, all of these things come out of the context, Kermit, that we don’t make a swap with anybody if we don’t already know what their practice is with respect to the holding of dollars. We know that the British have held 200 million, they are now going to hold 300 million and any swap they have would be above that. You don’t have— Gordon: I would agree, Bob. That’s why it would make no sense to make a swap or a borrowing arrangement unless there is an implicit standstill on the regular holding— Roosa: But the difference is we don’t sign them up to an agreement. Gordon: No. Roosa: If you try to sign them up to an agreement, then they have to look all around it and they squeeze the total down. Gordon: Yes, but— Roosa: But if you just do it in this rather archaic, gentlemanly manner, you get a lot more out of it. Dillon: With the Swiss, you see, it was implicit that they would not then do a lot of other conversions and they didn’t. Tobin: There are three points on this. One is some concern on the European countries’ side that they would like to have a multilateral discussion of these swap arrangements, then— Roosa: Yeah, but I think we’re obscuring [unclear]. [Unclear exchange.] Tobin: [Unclear] how they are being used in the whole system rather than one country at a time. Secondly, they have viewed them so far, at least I think so, and you have, as something like the Basel arrangements that would be funded into an IMF operation.41 If we were in difficulties that required us to use it, that these would be the first line of defense, so that we would fund them into IMF drawings, so you can’t really add them together as defenses against . . . against a run on the dollar. The third point I’d make is that the fact that they are done bilaterally, and as Kermit says, you’d have the thing . . . an implicit standstill, with

40. Regular dollars refers to dollar balances considered to be normal and held in foreign central banks. 41. The Basel arrangements were effected in March 1961 at the monthly meeting of the Bank for International Settlements in response to revaluations of the German and Dutch currencies and amidst corresponding fears of a devaluation of the British pound. These arrangements involved central bank cooperation and the extension of IMF credits to the United Kingdom. 502 MONDAY, AUGUST 20, 1962

each country, whether you make a new agreement . . . That really does have the effect that you pointed out in your paper of immobilizing certain dollars, whereas the general multilateral agreement would not because there all we’re interested in is immobilizing or “standstillizing” the total and we don’t care how they move about among the various countries and the dollars are still good from each country’s, individual country’s point of view. In case they have a balance of payments deficit, they can pass them on to— Roosa: Well, see they’re perfectly good in this situation, too. As a matter of fact, I want to raise a question, if from day to day or week to week, a country that had a swap used its dollars and ran them down to zero, it’s just at this moment it happens to bring Doug’s illustration up to date. But we only described where the Dutch [situation] has already turned, and that the 200 million dollar balance that they held is not [unclear] that they started, is now run down to 115, and the whole thing is going to unwind itself just as we expected that it would. But what is coming out of it is that they are perfectly free to use these dollars if their balance of payments requires it. But they don’t turn them into gold because they understand that this would in effect make . . . using the proceeds of the swap to get gold. You don’t have to spell that out for them, but they could use the dollars if their own balance of payments position leads to that. And then at the end they’ll pay the swap off with it. And when they reach that point, they will convert the outright swap into a standby. Kaysen: The nature of these informal bilateral standstills is exactly the same as the multilateral standstill in that the dollars can be used to settle international payments, but will not be used to draw gold. Roosa: It accomplishes that purpose without us having to be set up in such a way that each politically agrees to what all the others do. But we know. And that— Dillon: It is not a formalized agreement which has all the things which we feel and the Fed feels is wrong. The formalized agreement is the point when it says, “The dollar is no good anymore.” Roosa: Now Jim’s other point is that whether a swap is in the end unwound through the IMF, it all depends on whether, what kind of a situation has given rise to it. But if it is in one of these emergency situations, that is likely. And to the extent that happens it would be fair to say that this is a kind of double counting. The only other side of that is that . . . the one other part of the Basel agreement, which this provides for is that when funds are running to a country we remain flexible enough to absorb everything that goes to them. And if more goes to them then you Meeting on the Gold and Dollar Crisis 503 can fund out through the IMF or any other way, this is the way in which you can handle it. And we could just as well, without even having to go to the IMF, work our way out of it by turning a short credit into a long credit, so that there isn’t anything airtight about it. Martin: The reason the Federal [Reserve] wants to keep it short, Mr. President, is because it’s directed against speculating for a rise not as a permanent operation. If it doesn’t unwind within a period of time, it worries us, you see, because we want to keep this as a resource against speculating movements. We don’t want it to become a permanent— Dillon: Or a temporary movement such as this Dutch one. Roosa: Yes. Dillon: It’s not necessarily speculating, but it was just a temporary outflow because of this Philips financing [unclear]. President Kennedy: Well, the proposal here is to make it, as I understand it, is to raise it to a billion dollars. Is that the Treasury’s? Dillon: Well, as to the . . . particularly to confirm our understandings with other countries that we could have expansions when they’re needed. Ball: These are a series of bilateral deals with each individual country. This is one of the big elements of difference, I think, in our conceptual approach to it. Because it retains the bilateral character and, consequently, means that you don’t get any fundamental agreement among the complement . . . major creditors here, one with the other. Roosa: Well, we don’t want to get into a situation where we’re dealing with the creditors tough—we’re not that poor. But we . . . this, after all, is something that has been completely introduced into the whole world of international finance within less than a year and we’re in process . . . at another stage, which we ought to be able to reach soon, is one in which each country participating here is given a fair amount of information about all the other contracts. They have a right as a creditor to know what our other important obligations are, but not to put them in a situation where they get together as a club and freeze conditions on us. They could be informed and to some extent they have been. We probably ought to do more. Unidentified: What would be the [unclear]? Gordon: Mr. President, Secretary Dillon a moment ago I think put his finger on the key point of difference among us, the observation, that the execution of the multilateral agreement will be taken to mean that the dollar is no good any more. Now obviously this is the main point of difference in our appraisal of the multilateral agreement. It seems to me this points the . . . raises very sharply the question, 504 MONDAY, AUGUST 20, 1962

“Would the Europeans sign . . . have any interest in a multilateral agreement if they agreed that this would be interpreted to mean the dollar is no good any more?” If they interpreted it that way this would mean that they would then look forward to a massive flow of dollars out of private holdings into official holdings that would cause them very great embarrassment. So, I think we could assume that if the Europeans were receptive to the idea, they didn’t share this appraisal whereas if they did share the appraisal they wouldn’t be receptive. And that’s why it would seem to me that the logical step is a sounding out. If, in fact, the Europeans share this view there is no chance at all of evoking any interest on their part in a multilateral agreement. Ball: On the other hand, though, the one thing I think that Giscard d’Estaing did say when he was here,42 quite clearly, was that he would like to see this removed from the area of unilateral action to then be put in a multilateral context, whether he agreed to a common— Dillon: He wasn’t talking about this— Roosa: He was talking there about, really about, competitive relations in the taking of gold, I think. Ball: Well, that’s right, and how the dollars would be used. Roosa: And . . . that’s something that all of this moves toward, too. Theodore Sorensen: Now if . . . to the extent that we use swaps and foreign exchange operations to take back their dollar holdings, are we not saying at least to that extent we do not want them holding the dollars in reserve? Roosa: Well, it comes up, really, the other way Ted; since this has been developed and they’re in a position now to think about it, they come to us and say, “Now, we’ve got more dollars than we need at the moment.” We might want to fight to keep a string on them because it may turn out our own position will turn around and we want to use them. But there isn’t any need of our having them in our reserves at the moment. How can we work out some way in which these will be temporarily parked in some other way? This just happened with the Swiss two weeks ago today. They had an extra 50 million dollars and we worked out three different versions of what’s in this memo. Took care of their 50 million dollars and now they are happy. It would have been . . . it . . . Fifteen months ago, there would-

42. President Kennedy met with Giscard d’Estaing at the White House on 20 July 1962 from 10:00 to 10:51 A.M. George Ball met with him later that evening at 6:00 P.M. For a record of Ball’s conversation with d’Estaing, see FRUS, 8: 731–35. Meeting on the Gold and Dollar Crisis 505 n’t have been anything to it, it would have been a 50 million dollar gold purchase. Nobody would have thought anything about it. Now they try to work out something within this framework. Kaysen: Looks to me like he’s getting a guarantee [unclear] will cover it. And this— Roosa: They’ll do it. In this case, I won’t go into all the details, there were three different things done, but there was no guarantee because from their point of view they ended up not even holding the dollars. We did a forward contract for the most part, two different kinds which kept the dollars in the hands of private Swiss banks and outside [unclear]. Kaysen: That means giving the guarantee to the private Swiss banks. Roosa: Well, no, all of them had a hedge transaction in the market for the use of dollars, which is a currency guarantee in the same way that hedging in any market is a guarantee. But it isn’t . . . Kaysen: An exchange rate guarantee. Roosa: That’s something that you do with fringe amounts in the payments transaction, which the world has always done and is fully used to. And you can do as among any sets of currencies except that this is the first time the U.S. has taken advantage of it. Kaysen: But Bob, there is a real difference in principle or philosophy between a situation in which the hedging transactions you’re talking about are carried on by private international banks. They have been by operators in the exchange markets for a long time, ever since we’ve had sophisticated exchange markets. But there is a difference. I mean, don’t hide your light under a bush. There is a difference when the U.S. Treasury or the Fed gets into this market. And I think the, a part of the issue is the question of whether this kind of transaction is a better way to deal with the problem than the kind of situation in which you lay out on the table what you’re doing and everybody looks explicitly at what you’re doing because every hedge transaction or every swap does involve offering two motives to either a central bank, or a private bank, or for holding dollars instead of asking for gold. One motive is an opportunity to earn some interest instead of holding gold. The other motive is to take away the risk from that opportunity by the hedge transaction or something which takes away for the period of that transaction, the devaluation risk. And it’s the combination of the opportunity to earn some interest and the removal for that portion of its holdings to the risk of devaluation that induces the bankers to do it. I think the argument we’ve been having . . . there’s different weights to be assigned to the sort of incentive effects of trying to do this, so to speak, a piece at a time than trying to do it on a rather larger and more- 506 MONDAY, AUGUST 20, 1962

agreed scale. But the substance of what you are trying to do in each transaction is really the same. You are trying to take advantage of the fact that if you can take away by one means or another the exchange risk, it’s then advantageous from the other fellow’s point of view, to hold balances on which he can earn interest rather than holding gold. And there are different methods in which we can try to remove that risk. And I think the big discussion has really been, “What’s the impact of using these different methods on people’s expectations about the future?” I don’t think there is any disagreement about the fact that in order to make use of this you have to offer some kind of implicit or explicit guarantee, if you want to use that word, some kind of arrangement which says to the holder of dollar balances rather than gold, “Look, you are not running this risk for this period.” Roosa: Oddly enough, Carl, the way in which we have been able to work it out, very often the guarantee, if we want to call it that, has been given by the other central bank to its own people. Kaysen: Yeah. Roosa: And we are in an environment where the Bank of Italy says, “All right, we’ll take now the first 500 million of forward contracts as they build up. But from there on this is getting too hard for us to handle technically, for one thing, and yes, if you people will come in and share with us 50-50, we’ll go on.” This is a case where the absolute position that you described has not been reached. It’s a case of sharing in a technical operation rather than a position in which we provide the guarantee; the others always get it. In the case of our big German operation, the Germans put up 600 million dollars forward in equivalent marks before we ever put up a nickel. And then we began to share because the time came we could get some money out of the debt repayment to help them. This is an entirely different atmosphere— from where you put it all in an adversary relationship, which is what the multilateral alignment, vis-à-vis the United States, would do. Sorensen: And I get just the opposite reaction. Now I’ve read your paper, your new paper, and it seemed to me that, Robert, that the only new substantive point made against the plan was that somehow it diminished the concept of the dollar as an international reserve currency. It would mean, for the layman . . . I thought maybe that was a good, valid point. Roosa: Sure. Sorensen: But now I read your plan for action and I find almost everything you start out recommending—increasing swaps, increasing foreign exchange operations, increasing borrowings—has exactly the same effect except you do it unilaterally and you do it informally. Meeting on the Gold and Dollar Crisis 507

Roosa: Yes, but that’s—there’s another very crucial word in here— as needed. And you do it on the basis of the development of need, which, for the most part in the circumstances that we’ve now reached, will be need expressed to us by the other country indicating that here, here are circumstances that have arisen in which we want to take the initiative in working something out and we have this range of possibilities for providing a way of doing it. Kaysen: And the alternative assumption, Bob, is that if you are in a position . . . if you have 10 billion dollars which you are able to flourish this reduces the likelihood that you will need it, in this instance. Roosa: Yes, well, yeah, this, this . . . Dillon: Depends what you happen to need it for. If it scares American private business as I think it would, 10 billion dollars is just not . . . and— Kaysen: If it has that effect— Dillon: The other basic thing that I see in this is that we have achieved a mechanism here which is working and which can, indeed, be expanded and continue to work. The one thing that we have not been able to do so far, and not . . . it is perfectly clear, is to make it visible enough. We haven’t . . . not enough people understand the ramifications of this whole thing. They are beginning to understand it. I just had an interesting telephone call today. Jack McCloy called up and said that he had really looked into this and just had a . . . finally understood what we are doing . . . and felt it was really tremendously effective, and he hadn’t understood this before and just wanted to say so.43 Roosa: Is that right? I thought . . . Dillon: [Unclear] he hoped we’d keep on, and so that was a very useful thing. But the basic thing here is that we do intend to get this group together and that’s one of the— President Kennedy: Why don’t we go through this thing then? Let’s see, where we get on the [unclear] paper. Now A, is, involves the Federal Reserve. As I understand it, the Treasury feels that we should try to increase the swaps to a billion dollars with the current understanding that where the substantial expansion, et cetera . . . What is the situation with regard to that? That’s the judgment of the Federal Reserve, then, at least.

43. John McCloy, who advised and befriended nine presidents (from Franklin Roosevelt to Ronald Reagan), was the third World Bank president and a friend of Secretary Dillon. See “Meeting on the Gold and Dollar Crisis,” 10 August 1962, in which Dillon addresses an earlier conversation he had with McCloy on the balance of payments problem. 508 MONDAY, AUGUST 20, 1962

Roosa: Yes it is— Dillon: As needed. Roosa: And as needed. And— President Kennedy: OK. You would increase it from 500 million dollars to a billion. Would that . . . Is that part of the . . . ? Roosa: Approximately so, but there is this at bottom, Mr. President, that after a swap is first started, the Fed very often goes over to a standby basis rather than keeping it outright just because the technique is established. And it may well be possible to go much beyond this figure in terms of standby arrangements which are, for all the purposes we’re talking about here, just as good. And there, the Fed has hardly begun to scratch the surface in terms of negotiating possibilities. And it is my own judgment that the place to start is with the U.K., the other reserve currency, and if that should break, whenever it happens, and this has to be worked on over the next few weeks. . . . Well, I am sure that they could easily double this figure, but we didn’t want to put in too big a figure and fall short. President Kennedy: Do you have a comment? Martin: No, I have no comment on that. I agree with that completely. I just mention that we have to move slowly on it and have to do it as needed. President Kennedy: Right. Martin: Not to put it out and say [unclear]— President Kennedy: I guess here it says to do it and it would be, if needed, beyond a billion, go to a billion. Roosa: Yes, this is what would be undertaken. Now the question is whether we can get very far beyond that without cracking the British for a much larger figure and that’s a detail, an important one that isn’t actually put in here but one which we are working on. President Kennedy: Now let’s . . . B—Treasury forward exchange operation to be enlarged as funds flow to countries with dollars, can practically be moved [unclear] over this way.44 Possible total at least two billion. What does that require, to do that? Dillon: How much have we got now? Roosa: Well, it’s now down to about 750 per day. And this can be done without any further legislation or other action on our part at all. It only means that there must be a flow of additional dollars to some country

44. President Kennedy was reading from an unidentified Treasury memorandum. Meeting on the Gold and Dollar Crisis 509 where it is technically possible to execute the forward contracts. And the only one where that . . . it doesn’t work is France. With France we’ve got other arrangements. There just isn’t an active forward market. They’ve never really encouraged the development of those facilities. But in every other European country of any consequence we can do it, technically. Dillon: [Unclear.] Roosa: Yes. President Kennedy: Well . . . we go, in other words, from 750 million to 2 billion, possibly? Dillon: Yes, as funds, as the need arises, in other words, as funds flow to the countries, where this is necessary. Unidentified: These are in [unclear]? Roosa: Yes. Dillon: That’s probably where it will continue to be, at least. Sorensen: These are also very short-term arrangements. Roosa: Yes, but they are, in general, renewable. The usual practice in these is you simply roll them over until they are reversed. They can go on for years if they have to. President Kennedy: What about C? Dillon: Well, the French have . . . The French have told us they’ll do this thing. And the proviso is provided they continue to have a surplus. If they don’t have a surplus, then that problem’s over . . . so it’s [unclear]. . . . If they have a surplus, they said they will repay their debt over the next few years. President Kennedy: French surplus, how much of it is tourist expenditures and defense expenditures in those? How much of their surplus . . . What is their surplus a year in dollars? Do we know? Dillon: Five billion. President Kennedy: And, how much in defense? Dillon: About 300 million is . . . it’s 300, about 300 million. President Kennedy: What about tourists? Dillon: Out of that there’s probably, a million . . . a billion. President Kennedy: Well, I don’t. Yeah, well, OK . . . that’s the biggest because we lose . . . I just saw the figures. . . . We have a billion dollars a year we lose in tourists over what we take in. So that would certainly be 250 million [unclear] we lose. Dillon: The rest of it is [unclear] surplus. They have a very substantial— President Kennedy: With us? Dillon: No—with the world. [Unclear] surplus. Not with us now we’ve got a small surplus of relative . . . 510 MONDAY, AUGUST 20, 1962

President Kennedy: Where do they get the dollars, in addition to, [unclear]? Sorensen: Income [unclear]. Unidentified: That’s right. Unidentified: You always just get the— Gordon: This debt prepayment point was already taken into account in the estimate of the probable magnitude of the deficit in the background figures for the multilateral agreement. So that they’re not properly added in. They were taking it as a deduction on the deficit. Tobin: That’s true . . . that’s true. Dillon: You were saying . . . this really is put in because the [unclear] forward exchange operations are not practicable in France, and the debt prepayments really . . . takes care of the situation of currency in France. President Kennedy: D—The Treasury borrowings in foreign currencies could reach as much as a billion providing European financial assistance and technical [unclear].45 Roosa: Well, Mr. President, there our biggest concern is what the attitude in the United States would be toward this. This is quite a feasible thing, but it carries with it a little bit of what would be enormous in the case of the proposed multilateral interim arrangement. The feeling in the United States [is] that this gives an impression that the United States is somehow sinking and having to [unclear]— President Kennedy: Well, is this the Export-Import Bank? What happened to that Export-Import Bank? Roosa: That’s going forward. That’s different. It’s the sale of European assets that we already have. And we’re just going through now with two pilot operations. We run into, as we knew we would, or we’re learning from them, legal obstacles of all sorts. And we are now about to start one in Belgium and one in Austria, which will be little pilot tests. And as we complete those then we’ll go forward with larger amounts. Tobin: Mr. President, could I ask Bob if this refers to selling U.S. securities denominated in foreign currencies—? Roosa: Yes. Tobin: . . . on private markets? Or to simply to those governments and central banks? Roosa: Well, that isn’t defined here because this is part of what we

45. These bonds, denominated in foreign currencies, came to be known as Roosa bonds and were designed to reinforce the swap arrangements by offering an additional hedge against dollar devaluation and a way to “mop up” excess dollar holdings in foreign central banks. Meeting on the Gold and Dollar Crisis 511 have to test. We have to test . . . Americans will . . . for example, Senator Byrd, our friend, is opposed to this whole thing.46 I went up earlier and tried to talk with him about it and it may be that we just have so much opposition here that we can only borrow in dollars and not in foreign currencies ever. If we borrow only in dollars we might get this much but it’s not going to be as useful as if we could borrow foreign currencies, because of the market mechanics. If we go into the actual market, it would be— Tobin: You know, to be concerned with market mechanics . . . you could find yourself selling securities to foreign governments. Roosa: That’s right, provided the governments have the surpluses to buy them it’s all right but— Tobin: But you could [unclear]. Roosa: But even France now claims, that . . . well, this isn’t open but they’re now telling us that they can’t even buy very many of these Ex-Im Bank regular notes because at the moment they don’t have the internal franc surplus to match the counterpart. And so, we will have to cross the bridge some time. Now the Dutch have been telling you and me for 12 months, “Why don’t you borrow in Europe?” Now the Dutch are telling our Ex-Im Bank people who are over there, “Well, nothing can be done unless you would borrow in our own market, and in guilders, and in units of 50 million guilders. That’s 10 million dollars. Because our market won’t handle anything bigger and our government has no counterpart to handle this operation. This is what you find when you go into it. They talk big but they don’t act quite as big . . . not some of these states. Tobin: The other point I would make is that this is another way of giving an exchange guarantee, and it still seems to be if we are going to hand out exchange guarantees, we should hand them out to official holders of dollars as this is an alternative to official holding of dollars and not to private holders. Roosa: That’s been our policy. Tobin: If you had . . . If you start selling to these securities on the private European financial markets they can be bought by private people of all nationalities, including U.S. Roosa: Yeah, well . . . Tobin: It ought to be confined to official holders, it would be a lot more effective.

46. Harry F. Byrd, Democratic senator from Virginia and chairman of the Senate Finance Committee, was a well-known advocate of balanced budgets. 512 MONDAY, AUGUST 20, 1962

Roosa: The only way to do this, if you’re selling a foreign currency, is to sell at a . . . at any . . . I’m not sure we should, unless we go along very carefully, but . . . Obviously first if you can do it with the governments, you do it that way. That’s the only way we have done it so far. But if you go beyond that then I would say it could only be done at rates of interest that are clearly lower than our own. Now, if you say all right, that that’s . . . still that’s what America gives to guarantee. Well, if he’s willing to go abroad at a rate of interest lower than our own, he’ll find something else, any kind of other paper . . . any kind . . . so that won’t have . . . We’re just competing in a world market. Tobin: Well, I find it paradoxical . . . is that you objected so strenu- ously to guarantees, which we have proposed to be confined exclusively to official holders and your proposal hands them out to private holders, both under B and under D. Roosa: Well, the difference is that they are only handed out in those countries where there is an actual surplus currently there to be dealt with and where dealing with a surplus in this way allows you to handle it, in the amount that is visible and available and actually apply surgery to the specific problem instead of just a scalpel [unclear] operations. Tobin: That wasn’t proposed in there, either. Just the general price level. Roosa: Well, I have a feeling that that’s the effect it would have if it’s across the board and all [unclear] fixed positions. President Kennedy: Well, I don’t see how . . . I think the . . . the declaration of intent. Well, that’s enough of that. Ball: What is the framework of multilateral understanding? [Some whispering is heard in the background.] Sorensen: You really have to read the declaration on the top of page 3 that gives— President Kennedy: Let’s leave that a second and go on to the . . . [reading] “U.S.”—I want to talk to you about that declaration—“U.S. access to the IMF” [unclear] fund. [Unclear] changes the [unclear] for informal confirmation of our present understanding, special resources would indeed be available under present circumstances. [Unclear] probably, over the weekend, if necessary to activate the resources should they be needed. Up to 4 billion dollars would presumably be available to the United States from the IMF—2.55 capital currency [unclear].” Dillon: That speaks for itself. That’s what we think it means now but there are a number of new [unclear] ministers, and this would be the first time that that’s actually in effect assuming that our Congress gets it done by then. Meeting on the Gold and Dollar Crisis 513

Gordon: Under the terms of the agreement the other participating countries could deny us access to the resources only on grounds of balance of payments difficulties. Dillon: Their own. Gordon: Need this be present or might it be prospective? Might it be their own estimate of developing trends in their own balance of payments? Dillon: This [unclear] balance would have to be immediately prospective right there in the next six months— Gordon: And they will be the judge . . . You’re the judge, I mean [unclear] judged whether they have prospective balance of payments difficulties? Tobin: That is the second hurdle. There is a first hurdle which is the weighted vote—a certain majority required that we . . . our application meets the criteria— Roosa: Yeah. Tobin: —of the agreement. That doesn’t require any judgment about our own balance of payments to refuse. John Leddy: Well, that’s [unclear]. Our suggestion in order to keep it from being a unanimous arrangement . . . We now have two choices here: one is to make it completely automatic where you assume a weighted voting system. Otherwise some people have a definite veto. Tobin: All I wanted to do is correct the idea that it is completely automatic, subject only to escape by a plea of balance of payments difficulties on the part of one of the lending countries. It would require— Leddy: There’s no underlying understanding on this, Jim. We pledged with you because it comes up so often right through negotiation. There is no doubt about the understanding in the minds of these governments that it is intended to be used for us in the case of need when we should ask for it. I think this is the same thing that . . . well, if there’s a doubt about it here then we want to get it cleared up with this thing so that there will not be any further question on it. I think the weighted voting was put in not at their . . . not on their request at all. They’ve been quite happy to have no voting procedure rather than the one requested by the United States. Kaysen: So you’re saying, John, that the only uncertainty of part one is the uncertainty whether every present finance minister has the same understanding as to what was negotiated last year, the people who were in the negotiation last year and wanted to refresh their memories, essentially . . . what they may have approved. Dillon: Yes, so we don’t really think there is any uncertainty— 514 MONDAY, AUGUST 20, 1962

Kaysen: Yes. Dillon: —but we understand— Kaysen: Yes. Dillon: —that some of you may and so, therefore, we’re ready to reconfirm this, and also there are some new people and it’s a good time to talk about it. It’s a year after it was first brought up and it’s actually— Leddy: The same question was raised in the Congress, when it was in the Congress first in order to [unclear] . . . President Kennedy: Did you? And the next is the declaration of the Ten. The French would be asked pursuant to the recent indication of readiness to initiate help for multilateral action. We call a meeting of the ten members of the Special Resources Group in Washington during the course of the IMF meeting. Such a meeting could minimize the danger of competitive behavior by central banks exercising claims upon U.S. gold. We reached an agreement on a public declaration along the following [unclear] line. Ten leading industrial countries which participate in arrangements to make additional resources available through the national [unclear], et cetera. First of all, the financial officials of these countries took advantage of this opportunity to appraise the development of the past year relations that we are undertaking. Unidentified: Yes. President Kennedy: Third, the coming into existence of the special resources arrangement alongside the growth and cooperative arrangements between the United States and a number of the other leading industrial countries during the past 18 months to assure the stability of the existing system of exchange rates and the maintenance of the existing price of gold. The ten countries also agree on future arrangements for cooperation in order to utilize effectively and decisively all presently available facilities for the maintenance of adequate financial resources in support of international monetary stability in a worldwide economic [unclear]. That’s the framework for multilateral understanding? What does this mean when you say, alongside the growth, assure the stability of the existing system of exchange rates. Is that the sort of commitment by all the countries that they will not devalue? Roosa: That’s a little different. You see, it doesn’t say—and they’ll quibble over this—if you ever get to looking at it, and change it some more. What it doesn’t say is that all exchange rates will remain unchanged, but the system will be generally stable because there can be circumstances in which one or another, such as Canada recently, will make this change. Meeting on the Gold and Dollar Crisis 515

Now when they change, while it’s a problem of mutual concern, it isn’t going to upset the whole world payments system. So what we are after here is that there will be general stability in these relations, whereas with respect to the price of gold this means that they are all saying that the present price of gold is the right price. Ball: Bob, how does this declaration minimize the danger of competitive behavior by central banks in exercising claims upon U.S. gold? Dillon: The last sentence. The main countries also agree about future arrangements for cooperation. Ball: And they would agree on gold ratios? Dillon: Well, no. That’s covered in point 4, you know, which is the next thing on the— Ball: Well, what sorts of arrangements under that heading would meet this statement of minimizing the danger of competitive behavior and exercising claims on it? Roosa: Well, the most important thing is that the countries outside the ten would have been assured that all of these ten have now, in a sense, given public declaration that they believe the 35 dollar price is the right price. So that, first of all, that whole range of 75 other central banks and governments that can draw gold are now given the assurance that for the first time ten countries instead of just the United States have declared that 35 is a good price. That is how you assure it within. The continuous . . . I would think that what they would agree upon was that this group of ten, finance ministers and their designates, would meet from time to time and would be the forum in which such things as the existing composition of our overall arrangements would be made available to them, so they know what they are. Not that they have a veto on them, but that they are kept informed. And this vacuum of knowledge that some allege now [unclear] would disappear. Just as we now have finally worked it out in the case of gold, there are no secrets in actual gold transactions among the . . . not quite the same group of countries because we have to have Switzerland in it. But in this one, we wouldn’t be able to have Switzerland and we would have to work out some way of getting them in. They aren’t in the IMF.47 But if . . . That’s the reason why I’m . . . I’ve come here to say that a number of

47. In March 1963 the ten countries were joined by Switzerland with a contribution of the equivalent of $200 million. This was equal to the contributions, under the General Arrangements to Borrow, of the Netherlands and of Canada. 516 MONDAY, AUGUST 20, 1962

the leading industrial countries [unclear]. We haven’t done any with Japan yet but we have with Switzerland, who isn’t in the IMF. These are little details that can be taken care of. The important thing is that a group undertake from this point forward to keep under review these arrangements which have a bearing on the working system. Not that they have the veto, but they are discussed and aired. Dillon: As a group? Roosa: As a group, yeah. Ball: It seems to me it implies a good deal of optimism to assume that a fuller exchange of information would be sufficient to minimize the danger of a competitive drawing of gold from the U.S. which is essentially, I think, what you said. Dillon: Well, maybe lessen is a better word than minimize. They all know exactly what they mean by minimize. You wouldn’t remove it but you would diminish it. Roosa: Diminish it. Yeah. Dillon: Diminish it. Right. President Kennedy: The impact of this would be that sentence about the price of gold. Is that the important part? Dillon: That’s . . . and also, I think that final sentence where it says they’d all agree to work together and utilize all the presently available facilities to maintain adequate financial resources to support it . . . stability to instability. Sorensen: Don’t you think you can also get them to say that this is the kind of confidence we have in the future and we will conduct our own conventional policies, and that’s good. Roosa: Well, you might very well. Sorensen: I think you at least ought to ask them for a little stronger statement than this. Roosa: Well, this is borne out of our experience in starting strong and weaseling down and we find— President Kennedy: Weasel first, then strong? [Laughter.] Roosa: But I think our aim here was just to give you an illustration of the sort of thing that might come up. President Kennedy: Well, I think the point that . . . I suppose if you ask them for more than . . . this thing down at the bottom . . . This should not be contingent about . . . give promise of neutralizing harmful competitive relations. See, that’s the key in what we’ve been talking about for a month now. I don’t know whether . . . if we can’t get this . . . whether the informal Meeting on the Gold and Dollar Crisis 517 understandings or . . . try to develop at this bank, at this meeting led really, if we could, by the French, as to sort of the percentages these countries are willing to hold and just discuss it among themselves. Really not in which we wouldn’t be particularly participants—can’t we get—? Dillon: That’s what, this is— President Kennedy: Our understanding is, let’s say, well, we’ll hold about 75 percent. Dillon: Well, actually a little less than— President Kennedy: Yeah, but maybe we have to . . . 75 or . . . Dillon: They’d likely want to be around 70, 75. President Kennedy: Well, of course the others, the Germans are holding 35, so I suppose it’s pretty hard for d’Estaing to call in the Germans and say, “Let’s all hold dollars.” Roosa: The Germans are a little— Dillon: It will take about six months. Roosa: — around 52 or 3 and they have customarily held 60 in the past. President Kennedy: Let’s see. . . . Well, what we would like, of course, is to . . . more or less a freezing of what we’ve got now. If we can get that. We’d like for the Belgians to hold more dollars. Roosa: It’s interesting to know why the Belgians don’t hold that many— President Kennedy: I guess that’s the sterling experience? Roosa: Yes, because they felt that they got burned and they’ll never forget it, at the time of the devaluation— President Kennedy: Of sterling. Roosa: —of sterling. And so, they have never been long . . . of course the nickel in sterling and they’re very . . . won’t even let them be long in dollars. They have come to this position just because they got burned once and then they gradually, very gradually come back to some confidence in the use of the dollar. But I think the worst thing we could do vis-à-vis the Belgians, is to try to get them to sign any agreement on the dotted line with respect to the arrangement. Or they would just fly right away from us again. President Kennedy: Well that sentence, such procedure, proposal . . . which we say the French Bank should give promise of neutralizing the problem before we ever . . . Actually, we haven’t any suggestions for them. Suppose, with respect to the bank [unclear]. Well, what is it you would like for me to suggest? 518 MONDAY, AUGUST 20, 1962

Dillon: Well, he’s the one that has come to us first, you see. President Kennedy: Yeah, but he’s probably going to say, “Well, what is it that you think would be helpful?” Do you have any thoughts about what we . . . ? Dillon: Well, I think all you’d say is we thought that your original suggestion, if you could get some agreement to . . . put one, oh . . . more mutual, more even policy of converting excess dollars into gold. If you can do that, that means . . . That’s the same thing you said last time. You say, “Look . . . ” I don’t think you hold back because he [Giscard d’Estaing] did go and talk to the British about this, you see. The British came back and were very upset and excited about it because they thought we put him up to it, that we were going off the gold standard. We told them that that wasn’t the case and that this was purely a French initiative and exactly what he meant. They both understood this and said, “That’s fine.” Roosa: And then the next weekend . . . let’s move to The Hague. President Kennedy: [Unclear.] Roosa: The British, they still can’t believe that we didn’t put d’Estaing up to it and they are trying to figure out what it is that we are trying to put over and they are also saying if you want to put something over, why didn’t you come to us? [Laughter.] President Kennedy: Well, the only thing is, I think we ought to be . . . this statement and so on . . . these statements have sort of a . . . some effect, but I think we really ought to . . . such a proposal. I suppose we ought to have something in mind ourselves. And see, then, if we want to submit them to d’Estaing. And therefore we’d endorse them. Otherwise it would seem to me that— Dillon: Well, what the proposal he cited is that there be . . . a specific proposal . . . is that there be some sort of agreement among the Euro- pean countries to adopt, in general, a general position of France, Italy, and Germany that they would keep substantial sums of dollars and they even went so far as to [suggest that] they ought to be harmonized, and I don’t think we want that because they, then, would say, “You would have to be harmonized at his level—” President Kennedy: That’s right. Dillon: —and the agreements that you’d go up . . . that there’d be an agreement to keep a substantial thing but . . . He would, then, try and get the Dutch, the Belgians, and the British. The British being the big bunch. The important thing in this area, is to agree to some point . . . is to hold more dollars. Now, at least he told us when he was here, that the way he meant to do this was, to George, that he was going to talk with Meeting on the Gold and Dollar Crisis 519 the Six . . . to try, and he felt that would be relatively easy because of the French-German-Italian agreement.48 If you get the rest to come around, and that then he would talk to the British for the Six and he said . . . he used the words, “that maybe I have some bargaining leverage in view of all that the British are asking, trying to get into the Common Market there.” If you use it in the context of this whole Common Market thing. So what we’re really trying to inquire is, has he talked to the Six? Push him ahead to do it if he hasn’t and . . . it is quite a specific thing that I’ve heard he wants to talk about— Ball: Really, the question that we face is how much encouragement do we want to give him? And what indications or direction do we want to give? Because I don’t think he’s going to do this all on his own without knowing that this is something which we would welcome and deploy. I asked him specifically, if he undertook to describe the same thing that he described to Doug? “Do you mean going to real political agreements on these things?” And he said yes. So, that if this [is]—an agreement—I mean, a real political agreement. He said, “I want to take the unilateral character out of this and put it on a multilateral basis.” Now, I don’t know what he’s done, or whether he’s done anything since then or not. I don’t think there’s anything to speak of— Dillon: I doubt if he’s done much because all the continental people . . . and he said this: “We don’t know; they all go away in August and nobody is available to talk to us.”49 So, if not, we would presume that he would like to encourage them in September. And that’s why we felt it would be useful for someone to go over and talk to him, both about the first item, as the chairman of this group, and also about this other thing. President Kennedy: I’d like to see if we could get, Doug, what the direction would be to the person who went to talk to him . . . what our odds might be. . . . In other words how we could fill out that sentence of the proposal. Roosa: There is one other thing to think about, Mr. President, which is all in the same setting, but the Germans have sometimes thought of this one, which is simply an agreement among them that whatever they have, or some rounded amount near that in gold would be all they would take for awhile. See, the Germans have three billion; the French now have about two billion.

48. The membership of the European Economic Community, or Common Market, in 1962. 49. August is the traditional European vacation/holiday month. 520 MONDAY, AUGUST 20, 1962

President Kennedy: In gold? Roosa: In gold, see . . . yeah, two-four. And the Italians have about two, the British have almost three. And, if we could get among them an agreement that would [unclear] enough gold for us for the time being. Well, then you don’t have to quibble about ratios or anything else. It’s a little easier and Blessing had this notion when we were in Rome and would like to talk about it.50 Ball: Giscard talked to me . . . about in terms of two years. Which is, again, what this is, really, is the kind of agreement that we tried to work out here, but perhaps not worked out as elaborately, I don’t know. I think this is a question to determine, but the real problem is how much encouragement do we give the French to go down this road? Do we give them an indication clearly of what’s necessary? Do we indicate that we would regard this with enthusiasm? Or do we suggest that we don’t want to see anything that impairs dollar convertibility here by any exercise of an . . . by any agreement on their part not to, not to exchange their dollars into gold? I mean that this raises all the questions, really that are raised by our proposal. So, the question is to the extent to which we encourage the French to try to go down this road or not. Dillon: Well, we think there is a difference in the other proposal in that this would be something they would just unilaterally decide among themselves if they were satisfied with it. That’s up to them. I don’t think that has the same connotation [unclear] a big international agreement. That we’d have to— Ball: Why, I’d say I had a very clear impression, Doug. Maybe yours was different: that he contemplated putting this in terms of an agreement. He said a political agreement—I asked him specifically. Dillon: Well that— Ball: —in which we would be a party. Dillon: That’s the thing . . . I don’t think he made that . . . I don’t think after he— Ball: Well, he didn’t make it explicit, so you— President Kennedy: Well, what I think . . . what we ought to do is pursue this, because I think this is really the area where we may be able to make some progress if it’s done in the most desirable way. Which is, would be, have a general consensus, in view of the progress we’re now making you will now be reluctant to do . . . to inflate our economy by increasing our interest rates too much or putting in capital exchange controls, et

50. Karl Blessing was president of the Deutsche Bundesbank, the West German central bank. Meeting on the Gold and Dollar Crisis 521 cetera . . . that they would be willing to, more or less, go along with what they’ve got in the way of gold. This gets into the advantages and disad- vantages of what for . . . of any section, the limitation on convertibility, so it would have to be done with some sensitivity but I still think it would be very helpful [if] out of this IMF meeting there came a general feeling that in view of our rate of progress in this area and in view of the programs which we had undertaken that they are all going to go easy on the taking [of] gold, and if they all felt that, then it seems to me it would have a very desirable effect. And it would ease this sort of . . . any competitive feeling that they all [unclear; tape skips] general acceptance of this point of view, there’d be some breaches of it, but at least. . . . But that’s what we would like to have come out of it, in any case . . . at some point. Now, how can we, sort of, get moving towards that? And obviously, d’Estaing is the . . . Blessing of the two would be the . . . others would be . . . we should start, I would think, with the French, Germans, and Italians. So it is completely their call. Ball: Doug and I talked this morning about some kind of exploratory mission on a very low, I mean, on a level of low visibility. Perhaps John Leddy and perhaps Griff Johnson from our shop might go along, and they just would do this talking about this as one possibility. I think that this would be between the first of September and the time of the Bank and Fund meeting. The idea would be to get some feeling as to what the situation— President Kennedy: We’ve got to move a little quicker than that, don’t you think? Ball: Nobody’s home before the 1st of September in Europe; that’s the trouble. President Kennedy: Is d’Estaing away? Ball: I’d be amazed if he were— Kaysen: That’s my concern— Ball: You could . . . You know, [in August] you can shoot a bullet down there through the Rue de Rivoli where the French Treasury is and not hit anybody. President Kennedy: Well, what I would like to see us do, Doug is to see what—let’s consider the suggestion which George has made about who ought to go. And second, what they ought to say. Third, what we’d like ideally to come out of this meeting with this particular area of this IMF meeting. Dillon: Then we finally come to this [unclear]. President Kennedy: [Unclear] instituted by which we are [unclear] international . . . 522 MONDAY, AUGUST 20, 1962

Dillon: I don’t know how long that will take, but I think we really ought to . . . we can work on that ourselves; we can’t really start talking, I don’t think, now within a large group of countries until we know where we want to go. I mean, we, we think we all know after that . . . work a little, probably with the British to reach an agreement on the inside where we can . . . let’s say we make some progress. Now whether that affects Macmillan . . . President Kennedy: We have been talking about our desire, to try to settle this problem by the end of 1963, in order to bring our balance of payments . . . [unclear] but we’ve got to . . . I agree. That’s just in view of the overhanging balance. . . . But obviously, the effect— Dillon: [Unclear.] President Kennedy: I don’t know how we can get an . . . I don’t know whether we’ve got a very good sort of an analysis of how we are going to achieve that goal by the end of ’63. Dillon: We know the number; I’m [unclear]— President Kennedy: Yeah. Dillon: Actually this wasn’t only designed to do that— President Kennedy: I see that’s . . . I understand, I understand. Dillon: —it was designed to get liquidity for other people. Ball: In other words, whether you want this as the long term based on the dollar as the major reserve currency, or whether you wanted to move towards some kind of internationalization, of course, internationalization of reserves and so on, all these questions. . . . I think it would be very useful to . . . President Kennedy: Well then you’re going, Treasury is . . . ? Dillon: We’ll go right after this. President Kennedy: Well, now, is somebody from the council . . . [unclear] someone? Now the only other, as I say, I’d like— Ball: Are we [unclear] excluded? We’d like to participate in this study, if we could. President Kennedy: Oh, of course. Sorensen: The only problem, Mr. President, is you appoint a subcommittee for long-range planning, as you did for [unclear] meeting . . . President Kennedy: Well, all right, well why don’t we just see if you could have the Secretary of the Treasury agree about the same people, as the one, the previous one. Dillon: I think it would be helpful if we could also have someone— President Kennedy: Federal Reserve? Dillon: —from the Federal Reserve group. Martin: We’d be very glad to have someone work [unclear]. Meeting on the Gold and Dollar Crisis 523

President Kennedy: All right, that’s perhaps, this really ought to be run out of Treasury, I think. So, who would be in charge of the . . . ? Dillon: Of these [unclear] will be . . . Well, John have you [unclear]? President Kennedy: Well, why don’t I ask Ted to zero in on this as part of his committee work. Sorensen: Sure. President Kennedy: But now, in the meanwhile, we’re going to try to get this proposal that we might make to the French or set of instructions— Dillon: I thought what we might . . . might be helpful, Mr. President, if we did do what you suggested, to try to sort of get down a set of instructions— President Kennedy: Yeah. Dillon: —to be given to— President Kennedy: What we’d like to have. What would be the ideal position? Dillon: Well, no, because that would show that— President Kennedy: OK. Dillon: [Unclear.] President Kennedy: Now the other thing would be, I would like to see if we could get a paper on how we can conceive of our bringing this situation into balance at the end of ’63, which is, I’m repeating that without having any background about what it is we’re supposed to be doing. So, I’ve got to stop from saying it unless we . . . I’d like to see how it is that we could conceive of it being done. Leddy: Mr. President, we’ve got a target and I’d hate to say that was a prediction. President Kennedy: No. Leddy: The reason we’ve got a target that’s a little ambitious is to keep the shooting match from going public [unclear]— President Kennedy: Well, can you . . . I’ll tell you what, could you give it to me as an outline, can you give me a memorandum on it so that I can see what it is that we ought to be doing in Defense and AID and these other in order to . . . so that we can . . . to reach this target? We don’t want to set that target with too much . . . I might want to change some of our phrasing on this thing so that we don’t have to find ourselves . . . if we fail. Leddy: I think where it’s really on the high side, Mr. President, is our estimate as to what might be achieved on the export assistance. . . . This is quite high in terms of. . . . Dillon: Well, our targets show a surplus of a billion and a half dollars and I don’t think it any of us think it could reach that but it’s— 524 MONDAY, AUGUST 20, 1962

President Kennedy: If I could just get that account . . . which areas, so we could see it. Sorensen: Put that on— President Kennedy: What everybody has to do in order to reach this. Kaysen: Mr. President, it might be a useful thing, [unclear] machinery to have John and I do that through the Cabinet Committee with Doug, because all the departments concerned including Commerce and so on, are represented and that would be a way to get everybody involved in the question. I think that would be . . . Dillon: [Unclear.] President Kennedy: Yeah, I’d really . . . I’d like to see if working up the instructions for this, to the . . . It would seem to me that we could go to the Treasury-prepared draft. . . . Dillon: Yeah, we’re working with George Ball. President Kennedy: You might have to get him [unclear] and make some [unclear]. Meeting ends; there is a shuffling of paper. President Kennedy: [Unclear.] I wonder if I [unclear]. Sorensen: Mr. President, I want to talk to you about that. I just had a long discussion with Dave Bell this morning, and he said, “I’ll talk about all this with the President tomorrow.” President Kennedy: Yeah, but I thought you might be [unclear]. Unidentified: Well, I’ll give you the memorandum, [unclear] the memorandum. President Kennedy: Why don’t we just come right now and talk about that— Unidentified: [to Assistant Secretary of State C. Griffith Johnson] Griff, do you know where that story comes from? Unidentified: Yeah. Sorensen: Mr. President, do you want to get into that, now? [Unclear.] Unidentified: Here we go again. Leddy: Yeah. Unidentified: [Unclear.]

The meeting had not resolved the gold debate, but Kennedy now had a sense of how to proceed. He would seek a standstill agreement, albeit quietly to avoid roiling currency markets. In the days that followed, Kennedy overruled Dillon and agreed to have Assistant Secretary of State C. Griffith Johnson and Assistant Secretary of the Treasury John Meeting on the Gold and Dollar Crisis 525

Leddy sound out the Europeans on the possibility of an interim arrangement on gold and payments. The President stated that the purpose of any agreement would be to limit foreign purchases of U.S. gold and to strengthen the international monetary system. But the President insisted that it had to appear to be a voluntary European initiative. Any evidence of U.S. pressure could have shaken the confidence of financial markets and led to a run on U.S. gold.51 The Johnson-Leddy mission, which left in September, would fail to elicit the hoped-for initiative. Fearing that any leaks would disrupt gold and currency markets and aware that the administration didn’t want to appear to be actively supporting any particular plan, the U.S. representatives neither pushed hard for a gold deal nor were completely straight- forward with the French and the British about what they wanted. When Johnson and Leddy asked Valéry Giscard d’Estaing in September what British chancellor of the Exchequer Maudling’s thoughts were on the subject, Giscard replied that “the two were in agreement that there should be high-level secret discussions of the subject.”52 Giscard did not tell Johnson and Leddy what the subject actually was. Was it the hoped- for initiative to limit gold takings? Giscard didn’t say, and the U.S. representatives apparently thought it imprudent to ask. Several days later, British representatives asked the Americans what Giscard had said and, after being told, observed that “the whole affair was mysterious.” The next day, French officials said the same thing! The U.S. team decided to drop the issue until after the IMF and World Bank meeting because they believed that “open pressure on the French might lead them to think that political questions could be successfully interjected.”53 The President was scheduled to speak to the central bankers and finance ministers of the G-10 at the IMF and World Bank meeting in Washington on September 20, 1962. Kaysen urged the President to use the opportunity to convey to the Europeans how important the dollar

51. Memo, President for the Secretary of the Treasury, the Under Secretary of State, and Chairman of the CEA, 24 August 1962, Departments and Agencies, “Treasury, 6/62–4/63” folder, p. 289, National Security Files, John F. Kennedy Library. Kennedy suggested that an acceptable arrangement would be for the Common Market countries and the United Kingdom each to set an absolute target for gold holdings, as opposed to a ratio, which could be controversial and might involve increasing the amount of gold held by certain countries. The President suggested that another solution would be to limit the amount of gold taken from the United States to a small percentage (say 30 percent) of the overall payments deficit. 52. Memo from Dillon and Ball to the President, 12 September 1962, with attachment, Memo for Dillon and Ball from Johnson and Leddy, 10 September 1962, FRUS, 9: 146. 53. FRUS, 9: 146–47. 526 TUESDAY, AUGUST 21, 1962

and gold problem was to the administration and how willing the United States was to accept fundamental reform of the global payments system.54 Not surprisingly, Dillon thought Kaysen’s strategy was far too risky. “A statement by you that we are prepared to study new ideas and welcome new initiatives would in all probability be misinterpreted . . . as indicating a lack of confidence on your part in our ability to handle our balance of payments problem within the framework of the existing monetary system. This could have dangerous and immediate effects this fall.”55 Perhaps because the Johnson-Leddy mission had not produced a specific European plan, the President followed Dillon’s advice and avoided a public discussion of proposals aimed at dramatically reforming the global payments system.56 By the time of the Cuban missile crisis, when an unexpected Soviet challenge brought the Western alliance closer together, President Kennedy had taken no further steps toward a special agreement on gold. Kennedy had a couple of other meetings scheduled on August 20. Before heading to the White House theater for a brief screening, Kennedy met with Secretary of Commerce Luther Hodges, George Ball, Jack Behrman, Larry O’Brien, and Theodore Sorensen to discuss Congress and foreign trade. This was not recorded. Before his predinner swim, the President again met with Sorensen, this time alone, for another unrecorded talk. Kennedy’s official day ended at 7:25 P.M.

Tuesday, August 21, 1962

This was to be a better week for the President’s legislative agenda. While the House remained in virtual recess, the Senate was moving ahead on some Kennedy initiatives. Senate Majority Leader Mike Mansfield had told reporters on Sunday that he believed a farm bill

54. Memo, Kaysen to the President, 18 September 1962, FRUS, 9: 149. 55. Memo, Dillon to the President, 18 September 1962, FRUS, 9: 152. 56. Kennedy did suggest that less formal arrangements negotiated by Roosa “contain within themselves the possibility of wider and more general application,” and the United States was receptive to suggestions for expanding and improving these arrangements. “Remarks to the Board of Governors of the World Bank and International Monetary Fund,” 20 September 1962, Public Papers of the Presidents, John F. Kennedy, 1962 (Washington, DC: U.S. Government Printing Office, 1963), pp. 691–94. Conversation with Orville Freeman 527 could clear the Senate by midweek, at which time the Senate would consider a bill to strengthen the Food and Drug Administration’s control over the drug industry and a bill to reimburse the Philippines for World War II damage.1 The President had breakfast with the Democratic leadership to discuss how Mansfield’s predictions were holding up. Following the breakfast in the Executive Mansion, the President entered the Oval Office, where he first made some telephone calls.

9:30 A.M.

And I can assure you that ’64 dances in front of my eyes every minute on it.

Conversation with Orville Freeman2 The President calls the Secretary of Agriculture to discuss the farm bill, which is still in the Senate.3 The House had killed the bill; but it was hoped that with positive action from the Senate, a stopgap measure would come from the House. At the beginning of 1962, Freeman had announced that net farm income had increased 9 percent in 1961 and that the government had cut its feed grain stocks for the first time since 1952. This claim and the administration’s legislative agenda for agriculture inspired harsh attacks from Republicans. In conjunction with the American Farm Bureau, they succeeded in defeating the administration’s plan for mandatory acreage limitations for feed grains. The plan had been controversial because of its implications for the cattle, poultry, and dairy industries, all of which were large consumers of grain. The lobby also succeeded in defeating a plank that would have imposed sales quotas and penalties on dairy products. Congress did pass the administration’s plan to allow the Secretary of Agriculture to set wheat acreage allotments as low as he thought nec-

1.“Senate to Renew Farm Bill Fight; Wheat Key Issue,” New York Times, 20 August 1962. 2. Including Theodore Sorensen. Dictabelt 44.1, Cassette L, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 3. The Agriculture Act of 1962, or H.R. 12891 Public Law 87703, was approved on 27 September 1962. 528 TUESDAY, AUGUST 21, 1962

essary for domestic and export purposes. The bill also gave the Secretary the authority to conduct periodic polls of wheat farmers to see what type of price support system they preferred.

Orville Freeman: How are you? President Kennedy: Very good. Freeman: You look real good coming out of that ocean down there.4 President Kennedy: Covered with photos. Freeman: That picture in the paper last night was worth a million. I hope that got that one all over the country—it was damn good! President Kennedy: Ah, thank you. Freeman: That was real good. President Kennedy: Yeah. Freeman: I wanted to check with you quickly. The Farm Bill up today in the Senate. President Kennedy: Right. Freeman: [The Democratic] Leadership, as you probably reviewed this morning, made a decision that it was too risky to go for the mandatory Feed Grain Program.5 President Kennedy: All right. Freeman: It was by way of alternative my first choice that we repeal the ’58 act altogether. . . . President Kennedy: Right. Freeman: And extend the present one. I was with [Senator Allen J.] Ellender until late last night.6 It was his judgment—although he’ll do that if I wish—that this would be extremely difficult and have some political hazard ’cause they’d accuse us of being vindictive where corn is concerned because soybeans and the other feed grains would be under a 0 to 90 percent provision in the law of 1949. His proposal is, and he has entered an amendment to that effect, that we repeal the ’58 act—which gets this monstrosity off our back—provide a 0 to 90 percent discretion,

4. Front pages of many newspapers on 21 August carried a photograph of President Kennedy in a bathing suit at Santa Monica beach. 5. At the legislative leadership breakfast, 8:45 to 9:20 A.M., Senator Mansfield had told the New York Times that the prospects for the farm bill would brighten if the feed grains control provisions were dropped. See “Senate to Renew Farm Bill Fight; Wheat Key Issue,” New York Times, 20 August 1962. 6. Senator Allen J. Ellender, a Democrat from Louisiana, was the chair of the Senate Agriculture and Forestry Committee. Conversation with Orville Freeman 529 as the other feed grains and soybeans have, subject to the proviso that the Secretary could not set supports, so as to add to the surplus. Now this has some dangers that I want to alert you to. President Kennedy: Well it seems to me that it makes us then responsible, where if we don’t have 90 percent support price, everybody can accuse us of saying, “We could but we won’t.” Freeman: Well, this of course is the danger—this of course is the danger. Now the alternatives here are that we can start . . . and this act would also mandate the Secretary to submit a program next January. As a part of that we could make it very clear that in the absence of some legislation that we would have to set supports according to that proviso. We got a year—two years almost to bring this home around the country. . . . President Kennedy: Yeah. Freeman: It is the judgment of a number of people, who I have checked with, that our most effective opponent, which is the cattlemen on this, will begin to get shaken up when they realize that this kind of corn is gonna knock hell out of their prices. We could get some kind of accommodation and get some kind of a program through, all the time protecting ourselves from the [unclear] by pointing out this is a law; this is what we’ll have to do. Further, we believe here now—I’ve set all this down in a memorandum that’s on its way to you—we believe here now that if the feed grain program continues as successful as it has been that we will have the surplus on feed grains, which was 85 million tons when we came in, down to about 50 to 55 million by the end of ’63. President Kennedy: Yeah. Freeman: If this is correct, and we need to do so, the determination . . . I mean, adequate stabilization and security reserves is something we would decide. And if in ’64 that’s . . . we can decide accordingly. President Kennedy: Yeah. Freeman: So on balance it would be my judgment, that rather than take it here all together, which would mean not even an extension, which would mean next January, we would be exactly where we were . . . [skip in tape] . . . that we’d probably ought to follow this course of action. President Kennedy: Well, I know, you know, on agriculture that I . . . I’m prepared to . . . whatever your judgment and Ellender’s judgment would be, I’m just, I, I just have two or three things [unclear]: one, that we don’t break ourselves with this goddamned bill, and two, that we have a . . . try to get as much as we can in the way of . . . [unclear word] . . . bill out of the books. Now, how you put all that together, I don’t really know. Freeman: Well, as you know, it’s a bitch. And we came so—and it 530 TUESDAY, AUGUST 21, 1962

just makes me sick every time I think of it because we came so goddamned close— President Kennedy: Yeah. Freeman: —to something no one thought had a prayer. Well, of course, when you do, do that it’s almost better to lose big, you know. . . . President Kennedy: Yeah. Freeman: Than what . . . I think, the, the Republicans, the Farm Bureau, the chamber, the business groups, and all now are in a “no bill” posture.7 Now this is what they want to do is pass nothing. President Kennedy: Yeah. Freeman: And if we’re not careful we could end up with nothing. President Kennedy: And then what would happen? Freeman: And then we’d just go back to the, to the ’58 law and we’d come back here next January and we’d really have our tit in the ring. President Kennedy: Why would we? Freeman: Well, because we’d then go back to, to a minimum 65 percent under the law, the same thing we’re fighting in dairy, and we’d never move ’em. See with 0 to 90 at least I can say to these guys and that we’d have a whole year to dramatize: if you don’t do something they’re going to have 70 cent corn. And . . . President Kennedy: Right. Freeman: And to say this to every farmer in the country . . . and then we’ve got something [unclear]. President Kennedy: Oh, no, he’ll say we’ll put the support price up to 90, won’t he? Freeman: Well, he, you couldn’t do that, you see, because the law would provide that you could not put it at a level that would add to surpluses, you see. President Kennedy: Yeah. Freeman: See that’s got that, that . . . President Kennedy: Yeah, but I . . . of course when it happened in the case of milk they all took it out on us when we had to drop the support price, didn’t they? Freeman: I don’t think so. The milk thing has not had as adverse an effect . . . President Kennedy: I saw some poll out there, taken by some Wisconsin thing, which showed that only 29 or 30 percent of the farmers . . . or 38 percent . . . as opposed to a year ago, 49 percent approved of us.

7. The chamber is the U.S. Chamber of Commerce. Conversation with Orville Freeman 531

Freeman: That’s me not you. President Kennedy: No, no. Me. Me. Me. [Chuckles.] Freeman: No. I looked at this last night—you go back and look—I think that one . . . No, you were much higher than that. Same thing in Iowa; you’ve held up very well . . . President Kennedy: Yeah. Freeman: Which is the way we’ve tried to play it. And I’m not very popular now but we expected this when we didn’t get that control program through early— President Kennedy: Yeah. Freeman: —and dragged this out and gave these bastards—this regi- mentation club—why you’re bound to bleed. President Kennedy: Yeah. Freeman: And I’m bleeding. President Kennedy: Well, you’d, Orville you’ve watched it enough as I say. All I’m . . . we want to . . . we don’t want to gut ourselves politically in ’64, number one. [Freeman agrees.] We don’t want to . . . on the other hand we don’t want to break ourselves by having this bill go out of sight. So whatever you think is the best bet. Freeman: All right. Well, I wanted to . . . I don’t think as a practical matter we have any alternative. And I can assure you that ’64 dances in front of my eyes every minute on it. President Kennedy: Right. Freeman: But if we . . . it’s a question of choosing between some tough alternatives and . . . President Kennedy: Right. Okay. Well, why . . . okay, well you do what you think best and Ted Sorensen wants to talk to you about the problem we’ve got in the trade bill on cotton—wait a second.8 Freeman: Yeah. Theodore Sorensen: Hello, Orville. Freeman: Good morning, Ted. Sorensen: I don’t want to take up your time when you’re working on your bill, but if you could have someone just prepare a memorandum for me on the [Senator Herman] Talmadge approach to cotton—produc-

8. Because they hurt domestic textile manufacturers, U.S. cotton subsidies were a controversial aspect of the administration’s Trade Expansion Act, which was formally presented on 25 January 1962 and finally made law on 11 October 1962. There was great domestic and international protest against the subsidies, but they were highly valued in cotton-producing southern states [see Thomas Zeiler, “Free-Trade Politics and Diplomacy: John F. Kennedy and Textiles,” Diplomatic History 2, no. 2 (Spring 1987): 127–42]. 532 TUESDAY, AUGUST 21, 1962

tion payments and so on.9 You see, on the trade bill we’re getting into a problem with all these textile people— Freeman: I know. Sorensen: —about the equalization fee.10 If the equalization fee is turned down, what can we tell them we will do to . . . you know, if it’s, say, all right in our domestic mills . . . they’re going to have a fair, equal break on the price of cotton? Freeman: Ted, here, I’ll send that right over. We’ve been . . . I’ve been working on this ’cause I’ve seen this coming—the night before the trade bill this week. Here’s the situation, I think both economically and politically, the compensatory payment thing à la Talmadge, I think, is politically impossible. It’d be my guess [unclear]— Sorensen: Yeah, well, one of the things we’d need, by the way, the President would like to have, would be just a list of, who’d be for it and who’d be against it in terms of senators, congressmen, and interest groups. Freeman: Yeah, well, the . . . I can certainly do it. It has been discussed: A kind of a middle ground on this, which kind of covers it over a bit, by the means of making payments to some of the mills through the shippers who don’t object [to] doing it. I think we could sell this. I think we could sell this and get by with it, and . . . I think it’s highly desirable also. One of the things— Sorensen: Oh how . . . well, I don’t know how . . . well, why don’t you send it over and let me take a look at it and then I’ll call either you or . . . [unclear name]? Since you’ll be busy why don’t you tell me who you can call. Freeman: Tell you what: you’re busy now Ted. I’m gonna be here this morning. When you have finished reviewing with the President, will you give me a ring? Sorensen: OK. Freeman: Then we’ll have a little more time. Then I’ll send something over and then maybe we can discuss it a minute ’cause there’s some ramifications—

9. Herman E. Talmadge was a Democratic senator from Georgia and member of the Agriculture and Forestry Committee. He would succeed Ellender as its chair on Ellender’s death. Because of the large textile industry in Georgia, Talmadge was a leader in the fight for 1 cotton textile import quotas and, in this case, the 8 /2 cent equalization fee. 10. Bowing to intense congressional and industry pressure, on 2 May 1961, the President pro- 1 posed an 8 /2 cent per pound fee on cotton textile imports to help textile manufacturers compensate for the higher price of cotton produced by domestic subsidies. Conversation with Orville Freeman 533

Sorensen: OK. Freeman: —that I should put down on paper. Sorensen: Well, all right do them. You wouldn’t want to send it over now so then I’d . . . by the time I’m through here I’d have it on my desk? Freeman: What I have here, ’cause you just asked, this is the economic analysis of cost and effect, not the political. Sorensen: Yeah, well why don’t you send that over anyway. Freeman: All right. Sorensen: Just so I’ll know what proposal it is we’re talking about. Freeman: I’ll get that up here—I’ve got it on the way up here now— and I’ll send it right over, and, then you call me. Sorensen: Very good. Freeman: Very good. Sorensen: Thanks. Freeman: Thanks.

The President next taped a telephone conversation with Dean Rusk to discuss the situation in Berlin. An attempt to work out a quadripartite approach to the rising tension in the city had failed on August 20. The acting Soviet commander in East Berlin, Colonel P. V. Siganov, turned down a request from the U.S. commander, Major General Albert Watson II, for a four-power meeting. Over the course of the day, the situation had worsened. There were riots along the Western side of the Wall. West Berlin police had turned water cannons on residents, and the buses carrying Soviet guards to the War Memorial were still being stoned.11 At 8:45 P.M., Rusk had sent a telegram to the U.S. mission in Berlin authorizing, in the name of the President, the use of U.S. forces if the West Berlin police could not control the crowds. A long-standing U.S. fear was that the Soviets would capitalize on civil unrest in West Berlin as a pretext to move in force into West Berlin.12 With the use of U.S. troops a live option, the President had to pay special attention to the behavior of the German crowds. Apparently he found the information he had received about the riots contradictory.

11. The attacks occurred on 18, 19, and 20 August. For a description of the West Berliners’ reaction to the death of Peter Fechter, see Transcript of Conversation Between Frank E. Cash, Jr., and Arthur R. Day, 19 August 1962, FRUS, 15: 272–73; “West Berliners Fight Own Police in Riots at Wall,” New York Times, 21 August 1962. 12. Rusk to Hulick, 20 August 1962, FRUS, 15: 274. 534 TUESDAY, AUGUST 21, 1962

10:00 A.M.

I think we just have to ride through this one.

Conversation with Dean Rusk13 The conversation begins with Rusk reporting on some movement toward four-power talks with the Soviets. Dean Rusk: Now the Soviet side has been nibbling a little by sending a deputy commandant without a prior appointment over to call on Watson and, um, so we think we might be able to push them into an actual meeting.14 President Kennedy: Yeah. Rusk: But if we could get these commandants together and talk about this Wall business—and the incidents along it—it might help. But, I will try to take a little initiative here to throw responsibility on their side, too, so that they won’t be in such a good position to beat us over the head for the stoning of those buses and so forth.15 President Kennedy: Did those . . . I just sent a memorandum over—did those stonings take place over a period of three days?16 Or just one day? Rusk: I think, well, the stoning of the buses was chiefly in one day. President Kennedy: I see. ’Cause I’d said that the impression that I had from the paper is that it took place . . . I thought we might check into it . . . over three days. Rusk: Right. President Kennedy: And if so, I was wondering why the West Berlin police didn’t do anything about it and I was wondering on what . . . Rusk: Yes, well we’ve . . . The British did provide an escort on this, I think, the third day, at the request of the Soviets. The Soviets refused escorts before that. President Kennedy: Yeah. Rusk: But I talked to Berlin last night and made it very clear that first we wanted the West Berlin police to take this very seriously, indeed,

13. Dictabelt 44.2, Cassette L, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 14. Major General Albert H. Watson had been commandant in Berlin since May 1961. 15. Rusk was scheduled to meet Soviet ambassador Anatoly Dobrynin in an hour to discuss Berlin. For that conversation, see Memcon, 21 August 1962, FRUS, 15: 278–79. 16. Memorandum not found. Conversation with Dean Rusk 535 and deal with the situation. But that if it got to the point that the . . . allied forces would have to assist in maintaining law and order. President Kennedy: Yeah. Yeah. They’re meeting today are they? Rusk: Yes, they’re meeting in about an hour. President Kennedy: They, they’re gonna put out some statement? Rusk: Yes sir, Mayor [Willy] Brandt, as you saw, made a pretty good statement.17 President Kennedy: Yeah. Yeah. Rusk: Calling on people to be quiet. President Kennedy: Yeah. The . . . On this refugee . . . I sent over my memorandum also just to find out how long it . . . on what . . . whether they had had any contingency planning for that sort of an incident. Cause there’d been so many ones that have been close to that whether we ever had any . . . Rusk: Well, we have some for larger episodes. In other words— President Kennedy: What about a single episode like this though? Rusk: But not . . . but not, because, you see, these fellows they, no one case is like another.18 I mean . . . and the canals are . . . for example, our people don’t fish them out of the canals. That’s handled on the eastern side. I think perhaps the mistake that was made locally was not offering some medical care.19 President Kennedy: Yeah. Rusk: But I’ll check. . . . We are checking. President Kennedy: Well, what we’d like to do . . . this memorandum anyway is but . . . just to see what the time schedule was . . . Rusk: Right. President Kennedy: [Of] course the West Berliners are not very generous but . . . either to us but . . . that’s all right. I think we just have to ride through this one. Rusk: All right. Thank you, sir. President Kennedy: All right.

Kennedy’s next telephone call involved a different Soviet challenge, the space race.

17. Willy Brandt was the mayor of West Berlin and an important figure in the Social Democratic Party in the Federal Republic of Germany. 18. Eastern Germans trying to cross into West Berlin. 19. For U.S. policy toward escapees from East Berlin, see Norstad to McNamara, 21 August 1962, FRUS, 15: 274–75. 536 TUESDAY, AUGUST 21, 1962

10:14 A.M.

This is just an Air Force effort to get in, isn’t it?

Conversation with Robert McNamara20 The recent Soviet achievement of launching two space missions within 24 hours had reignited controversy over the conduct of the U.S. space program.21 The Soviet space craft, piloted by Major Andrian G. Nikolayev and Lieutenant Colonel Pavel R. Popovich, climbed to adjacent orbits, allowing the cosmonauts to radio and wave to each other. Kennedy publicly acknowledged that the United States trailed the Soviet Union in the space race but refused to launch a crash program to catch up. Top Air Force officials, long jealous of NASA’s funding, complained that their military space programs were underfunded. Kennedy started taping as McNamara explained his annoyance at Air Force carping.

Robert McNamara: Yes, I met with him at 7:30 this morning—made me so goddamned mad!22 And I pointed out to Cannon that you presented, in your first budget supplement last year, about a 170 million increment to the Eisenhower program and in the second budget supplement about a 70 million increment for a 240 increase in the Eisenhower program and that today we’re spending a billion and a half dollars on military space, which is three times the expenditures in 1960 and double the expenditures in ’61.23 And to the best of my knowledge we’re doing everything that the Air Force has asked for on any major systems’ program. And then I went over the major items [unclear].

20. Dictabelts 44.3, 47.1, Cassette L, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 21. On 11 August 1962, the Soviet Union launched a Vostok rocket into space. While the capsule orbited 17 times around the Earth, nothing seemed out of the ordinary, until the Vostok IV took off to join Vostok III in space. While the ships did not dock, the joint flights of cosmonauts Popovich and Nikolayev captured the world’s attention. The United States would not undertake such a task for two more years (“Two Soviet Space Craft Circling Earth in Adjacent Orbits after New Launching; Pilots Keep in Touch by Sight and Radio,” New York Times, 13 August 1962). 22. It is not clear whom he met at 7:30 A.M. 23. McNamara met with Howard Cannon, Democratic senator from Utah and member of both the Armed Services and Aeronautical and Space Committees, at 9:15 A.M. Cannon was also a brigadier general in the Air Force Reserve with a keen interest in space issues. Conversation with Robert McNamara 537

President Kennedy: And what did [he] say then? McNamara: Well, he’s been talking to the . . . he’s a brigadier general in the Air Force Reserve. President Kennedy: Yeah. McNamara: He just came from an Air Force Reserve meeting; they meet at eight o’clock, the congressional unit, and he’d been up there for an hour and a quarter when I saw him at a quarter after nine. And, and, this is just pumped into them week, after week, after week. So I’ve asked [Secretary of the Air Force Eugene] Zuckert to try to throttle it back; I don’t know what the result will be. I’m going to talk to Senator [Richard] Russell later today, my objective is to avoid a congressional investigation on this if I possibly can. President Kennedy: Is that what they’re thinking about having? McNamara: Well, that’s what Cannon would like to have. President Kennedy: An analysis of what we’re doing in space? What do they recommend that the budget . . . the Air Force? McNamara: Well, the . . . we have about a billion and a half now and for fiscal ’63 there is no, to the best of my knowledge, no substantial amount, I mean in excess of a million or two here and there, that the Air Force wants that hasn’t been provided for them. President Kennedy: Yeah. Yeah. McNamara: And I just talked to Zuckert, as I said this morning, on that exact point. President Kennedy: What does he say? McNamara: Well, he said that there is no major Air Force systems project for space that is being delayed in any way that he knows of. President Kennedy: Yeah. McNamara: There are, I think, some differences on a million here— and I mean literally a million dollars for, an investigation of some particular kind of a sensor or something like that they may want that we haven’t seen yet that will come up. President Kennedy: Yeah. Yeah. This is just an Air Force effort to get in, isn’t it? McNamara: This is just an Air Force effort to get in. What they really are upset about is the assignment to NASA of the major part of the space program—the civilian space program. This has been a burr under their saddle since it happened in 1958 and ’9. But I have told them that that’s the national policy and that’s the way we’re organized to work and that’s the way we’re going to work. President Kennedy: Yeah. Yeah. 538 TUESDAY, AUGUST 21, 1962

McNamara: But that is one of the subjects that they hope to get discussed publicly. I think it would be a serious mistake to have such an investigation at the present time. President Kennedy: Yeah. Yeah. Yeah. And especially when there’s really nothing that they . . . any particular great system that they want us to appropriate the money for. McNamara: No, certainly not. Now I think that they are probably also smarting under some of the controls we’ve put into effect here that require that they put down on paper what they want before we proceed to give it to them. President Kennedy: Yeah. McNamara: And, and we just canceled, Mr. President, this Navy . . . There is a gap in the recorded conversation. Dictabelt 47.1 begins at this point. The President and the Secretary of Defense have apparently moved on to discuss the provisions of the Communications Satellite Act of 1962, which had just gotten through the Senate after a long filibuster by a few liberal Democrats. This bill created a private communications satellite corporation for profit but subject to government regulation to operate a worldwide commercial communications satellite system. They then return to the question of Air Force requests for appropriations. McNamara: After spending 150 million dollars we have nothing in the sky; AT&T spent 40 million dollars and has Telstar up there.24 President Kennedy: Yeah. McNamara: Now, it’s the mismanagement of projects like this that we must avoid for the future. So, we have put into effect a set of financial controls that requires that they lay out what they want the money for before we proceed. We just approved on August 11 this Titan 3 program—it’s 808 million dollars for Titan 3. I think we . . . President Kennedy: Is this Martin-Marietta [Corporation]? McNamara: Yeah—Martin-Marietta. President Kennedy: How’d that fellow Dominick get it, do you figure?25 McNamara: Oh, hell, somebody in the Air Force undoubtedly gave it to him. President Kennedy: Yeah. Yeah.

24. The Telstar satellite. 25. Peter Dominick was a Republican representative from Connecticut and a lieutenant colonel in the Air Force Reserve. Conversation with Robert McNamara 539

McNamara: Colorado’s full of Air Force people and there’s a very close relationship with some of the Republicans out there and I suspect that’s what happened. I don’t know this for a fact and I really shouldn’t make the accusation. President Kennedy: I wonder if there’s any speculation in the stock as a result, I wonder? McNamara: Kenny . . . Kenny O’Donnell told me yesterday— President Kennedy: Yeah. McNamara: —he thought there had been. I haven’t been able to— President Kennedy: [Unclear.] Look at it. McNamara: —to ever spend a moment [unclear]. President Kennedy: Well, I tell you what I’d like to do, Bob is I’ll . . . I’m going to have this press conference tomorrow. McNamara: Yeah. President Kennedy: We’re going to get in on this; we’ll get into this. I wonder if you could send me over or have somebody over there prepare a memorandum of what we’re doing— McNamara: Surely. Surely. President Kennedy: —about the military aspect of space—and how we’ve stepped up the program. Of course part of this is due to what I think was the unwise press conference of [James] Webb in which they tried to pooh-pooh too much what the Russians were doing instead of just saying, “Yeah, we’re behind; here’s what we’re doing.”26 McNamara: Yes. President Kennedy: But, but, however that, but I think if we can get into this question of what we are doing in space militarily, what the requests are, and whatever else I might need for even— McNamara: I . . . President Kennedy: —an opening statement or a request. Now do you have any objection if I call . . . talk to Zuckert and just say that I think . . . ?27 McNamara: Oh, no, I’d be delighted to have you do that.

26. James Webb was the administrator of the National Aeronautics and Space Administration (NASA). According to Robert Kennedy, the President had little use for Webb, whom he considered a blabbermouth. Webb was also seen as a Lyndon Johnson man. The Vice President was head of the Space Council [Edwin O. Guthman and Jeffrey Shulman, eds., Robert F. Kennedy In His Own Words: The Unpublished Recollections of the Kennedy Years (New York: Bantam Books, 1988), p. 341]. 27. Robert McNamara had brought Eugene Zuckert into the Kennedy administration. The two were old friends who had gone to Harvard Business School together [Deborah Shapley, Promise and Power: The Life and Times of Robert McNamara (Boston: Little, Brown, 1992), p. 39]. 540 TUESDAY, AUGUST 21, 1962

President Kennedy: OK. Good. Righto. McNamara: Thank you very much, Mr. President. President Kennedy: OK.

The President next called the Secretary of the Air Force to continue the discussion of the U.S. commitment to space.

10:20 A.M.

[T]hey may be able to force us to do something that we don’t think is wise by doing it this way, but we’ll just take it away from the Air Force . . . and then . . . someplace else.

Conversation with Eugene Zuckert28 The recording begins in midconversation with the President’s describing Air Force pressures to spend more money on the military space program. President Kennedy: Get out of it that way. I mean we may . . . they may be able to force us to do something that we don’t think is wise by doing it this way, [unclear interjection by Eugene Zuckert] but we’ll just take it away from the Air Force . . . and then . . . someplace else. Eugene Zuckert: I know it. President Kennedy: So I think that’s . . . but I find that tendency in those fellows over there all the time. We have more trouble with them than we do all the . . . both the other services together; because they’re so used to playing this game that they just don’t understand that it’s very self defeating and that, you know, you’re running it and Bob McNamara’s running it, and that their attempts to try to club us, we can, they can win and get something more out of us on this area and then we’ll take it out of them some other place. If they could just understand that. Zuckert: I know. You’re just incurring a hell of a lot of resentment, that’s all. President Kennedy: Yeah. OK. Good. Fine. Right.

28. Dictabelt 47.2, Cassette L, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. Conversation with Lyndon B. Johnson 541

The Soviets were not the only challengers to the status quo. In the United States, Kennedy faced contradictory pressures on the future of civil rights policy. On this day, a member of the Kennedy civil rights team was preparing to resign. Robert Troutman, who served on the President’s Committee on Equal Employment Opportunity (PCEEO), arrived at the White House for a 10:20 A.M. meeting. The President kept him waiting while he called the Vice President, who chaired the PCEEO, for some advice.

10:25 A.M.

It seems to me we’d be better off not to have Troutman resigning and appoint this Negro the same day. . . . [I]t will then . . . sort of look like we’d gotten a southerner and sort of accentuate our problem.

Conversation with Lyndon B. Johnson29 On March 6, 1961, President Kennedy issued Executive Order 10925, which established the President’s Committee on Equal Employment Opportunity (PCEEO). Its aim was to “ensure that Americans of all col- ors and beliefs have equal access to employment within the government.” Lyndon Johnson was chosen to chair the committee. At its first meeting, Kennedy told the committee that “federal money should not be spent in any way which encourages discrimination, but rather should be spent in such a way that it encourages the national goal of equal opportunity.” The following month, government departments and agencies were ordered to report to the committee their plans to end discrimination in employment. In 1962, Robert (Bobby) Troutman, a PCEEO member from Atlanta, became embroiled in difficulties that flowed from the PCEEO’s mandate to help end discrimination in government employment. Troutman had attended Harvard Law School with the President’s brother, Joseph P.

29. Dictabelt 47.3, Cassette L, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 542 TUESDAY, AUGUST 21, 1962

Kennedy, Jr., and been an early supporter of John Kennedy. He was responsible for promoting an idea, the Plans for Progress program, which encouraged voluntary cooperation to end discrimination on the part of employers, specifically those holding government contracts. Under this voluntary plan, contractors would survey their employment practices and, if necessary, make improvements. The first employer to do so was Lockheed Aircraft of Marietta, Georgia, in a highly publicized announcement made in late May 1961. Tensions developed within the committee, between its executive director, John Feild, who supported compulsory compliance, and Troutman, who, often acting as an independent agent, worked to foster a more voluntary approach. On June 18, 1962, the internal tensions became public when the New York Times published a story revealing the rift. Feild, apparently, had leaked his distress to the newspaper about Troutman’s influence. The Vice President wrote to the paper, denied the existence of the disagreement, and claimed both approaches were necessary and would be pursued. Ultimately, Troutman became a political liability to Kennedy, and at the end of June, he tendered his resignation. The Troutman resignation raised an additional problem for the President. The PCEEO had another important vacancy to fill. Earlier in the year Jerry Holleman, the assistant secretary of labor and the executive vice chairman of the PCEEO, had had to resign for accepting a gift of $1,000 from Billie Sol Estes, a Texas wheeler-dealer. Johnson was eager to fill that position with his executive assistant Hobart Taylor, Jr., a lawyer who for the past year had been the PCEEO’s special counsel, and planned to announce Taylor’s appointment that week, before leaving on a 19-day tour of southern Europe and the Middle East. Kennedy, however, worried about the timing of the new appointment. He did not want to create the impression that Troutman, a white southerner, had been removed in favor of an African American. The President called the Vice President for suggestions as to how handle the matter.

President Kennedy: Oh, Lyndon? Vice President Johnson: Yes, sir. President Kennedy: Evidently, Troutman’s in the other room. He’s resigning today. It seems to me we’d be better off not to have Troutman resigning and appoint this Negro the same day.30 ’Cause it will then, I

30. The appointee was Hobart Taylor, Jr. Conversation with Lyndon B. Johnson 543 would think, sort of look like we’d gotten rid of a southerner and sort of accentuate our problem. Wouldn’t we be, is it possible, therefore, that we announce Troutman today and this other fellow next week? Vice President Johnson: Well, you’re going to have all kinds of heat every day you wait. Now . . . President Kennedy: Well, it’s all right with me. The only thing is that it seemed to me that Troutman has become such a figure of controversy that when we put him out, that when he resigns and . . . Vice President Johnson: What do you think about doing it tomorrow? President Kennedy: Well, as long as there’s an interval. Vice President Johnson: That’s right. Do it. Do it— President Kennedy: How about Friday? Vice President Johnson: —in the morning and let him do it tomorrow. President Kennedy: Well, we can do Troutman . . . Vice President Johnson: We’ve got a big committee meeting, see, and I want this fellow, uh, Ken assured me it would be done Monday.31 President Kennedy: Well, you see . . . Vice President Johnson: So we called the committee for Wednesday.32 President Kennedy: I see. Well, Troutman has evidently been more difficult than . . . now why don’t we just put Troutman out today and this other fellow then tomorrow? Vice President Johnson: That’s good. President Kennedy: At least there’s a 24-hour difference. Vice President Johnson: Put Troutman out for the afternoon papers. President Kennedy: Right. Vice President Johnson: Now, incidentally, Troutman’s report is a good one.33 President Kennedy: That’s right. Vice President Johnson: Troutman’s a pure victim of hate Atlanta. President Kennedy: Right. Vice President Johnson: That’s all. President Kennedy: That’s right. Vice President Johnson: He’s done a good job. President Kennedy: Right.

31. The Vice President may be referring to Kenneth O’Donnell, who handled President Kennedy’s appointments. 32. On Wednesday the Vice President was scheduled to go abroad. 33. On 22 August 1962, Troutman submitted a report to the President on the Plans for Progress program. The report, which impressed Kennedy, asserted that the voluntary program had been responsible for a significant degree of economic progress for African Americans. 544 TUESDAY, AUGUST 21, 1962

Vice President Johnson: He talked a little bit, uh, peculiar at times and, you know, that problem. President Kennedy: Yeah. Vice President Johnson: But we all have that sometime. President Kennedy: Yeah. Vice President Johnson: But he, I read his report last night and he’s done a hell of a good report. President Kennedy: Right. Vice President Johnson: And I think that you can sincerely tell him that you think so. President Kennedy: Can we . . . do you have any objection to that report being put out? Vice President Johnson: No-no. No-no. President Kennedy: Right. OK. Vice President Johnson: It ought to be. President Kennedy: OK. Vice President Johnson: We’re going to take it up tomorrow and I’m going to commend him at the committee. President Kennedy: Right. Vice President Johnson: But I’m going to have this Negro there and, after all, the southerner is not going to get mad at the Negro. The Negro is from Wayne County, Detroit— President Kennedy: Yeah. Vice President Johnson: —but he was born in the South and he’s the ablest man they got and he deals with all of them satisfactorily.34 President Kennedy: Good. OK. Fine.

The President had a ten-minute meeting with Troutman, who, as expected, tendered his formal resignation. This meeting was not taped. Kennedy decided not to take Johnson’s advice to appoint Hobart Taylor promptly. The White House only announced Taylor’s appointment on September 10, 1962.35

34. Taylor was born in Texarkana, Texas. After attending the University of Michigan Law School, where he was editor of the Law Review, he became a law clerk for the chief justice of the Michigan Supreme Court. Later he went into private practice and served as chief legal and financial adviser in Wayne County (Detroit). In 1961, Taylor came to Washington and helped draft the executive order that established PCEEO. 35. New York Times, 11 September 1962. Conversation with James Eastland 545

Just before a scheduled talk with the chairman of the Senate Finance Committee, Robert Kerr, the President did some other congressional business.

10:30 A.M.

You’re a man of your word.

Conversation with James Eastland36 The President called James Eastland, senator from Mississippi and chairman of the Senate Judiciary Committee, to thank him for moving the administration’s drug safety bill to the floor of the Senate. Originally proposed by Senator Estes Kefauver of Tennessee to regulate the drug industry, the bill had been substantially watered down by Eastland’s committee earlier in the summer. But in the wake of national concern about thalidomide, an antinausea drug tested on some pregnant women in the United States, the administration reopened discussion of the bill in July, proposing a series of amendments that gave it back some teeth. This is the bill that Eastland’s committee had just sent to the Senate floor.

Unidentified: He’ll be with you in just a moment, Senator. James Eastland: Thank you, ma’am. Unidentified: Thank you. Pause. President Kennedy: Hello? Eastland: Mr. President, how are you, sir? President Kennedy: You’re a man of your word. Eastland: Well, thank you, sir. President Kennedy: You got that bill out there in great shape. Eastland: Well, thank you, sir. President Kennedy: I wanted to tell you that I appreciated it very much. Eastland: Ah, we’d a gotten it . . .

36. Dictabelt 47.4, Cassette L, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 546 TUESDAY, AUGUST 21, 1962

End of conversation. A brief recording begins made by the Dictabelt machine of a conversation picked up in the Oval Office. A voice can be heard in the background saying, “[Unclear] switch will go on and then any conversation in the room will be recorded, [unclear].”

Robert Kerr, the senior senator from Oklahoma, was one of the wealthi- est men in Congress. His company, Kerr-McGee Oil Industries, controlled about 25 percent of all known uranium reserves in the United States. He also had one of the best senses of humor on Capitol Hill. Caught once saying that Dwight Eisenhower was brainless, Kerr remarked on the floor, “I do not say that the President has no brains at all. I reserve that broad and sweeping accusation for some of my cherished colleagues.” Although Kerr played a central role in the defeat of the administration’s Medicare proposal and in general voted with the President only 59 percent of the time, he liked John Kennedy and was a key player in the drive to pass foreign trade and tax reform legislation.37 After a lengthy meeting with Kerr, the President stopped by a meeting already in progress in the Cabinet Room, chaired by the Vice President, on foreign aid. He was tightly scheduled this morning. Next he saw a group of administrators from the State Department followed by the foreign minister of Rwanda, Callixte Habimenshi. Another ten minutes were devoted to the Health Advisory Committee before Robert Troutman returned for his second meeting of the day in the White House. The President did not tape any of these meetings. The next time he flipped the switch came after his customarily long midday break.

5:05–5:15 P.M.

What about Berlin?

Meeting on U.N. Strategy38 President Kennedy was committed to strengthening the United Nations as an international instrument of law and order. He also regarded it as a

37. “Oklahoma’s Kerr: Man of Confidence,” Time, 27 July 1962. 38. Including President Kennedy, McGeorge Bundy, Harlan Cleveland, Dean Rusk, Adlai Meeting on U.N. Strategy 547 possible third force to prevent any need for unilateral intervention from either the East or West in the developing countries. The U.N. General Assembly was scheduled to convene on September 20, and the President called a meeting to discuss strategy for the 17th session of the General Assembly. A week before, an extensive strategy paper had been circulated within the Department of State and at the U.S. Mission to the United Nations.39 Although the United States intended to focus on the issues of international dispute resolution and international development, there was concern that Nikita Khrushchev would use the start of a new U.N. session to call on that organization to oversee a separate peace treaty between the Soviet Union and the German Democratic Republic (G.D.R.). Besides Berlin, Washington expected three main topics of discussion in the U.N. General Assembly: U.N. finance, colonial issues, and disarmament and nuclear issues. The finances of the United Nations were a major challenge confronting the organization. The Congo crisis, which had become the litmus test of U.N. effectiveness, was draining the organization’s coffers. The United States was paying the lion’s share of the cost of the U.N. peacekeeping forces. On September 13, the U.S. Senate was to debate a U.N. bond issue and decide whether to authorize up to $100 million in assistance. On August 2, in a report on U.S. participation in the United Nations, President Kennedy had appealed to Congress to authorize the bond. A host of colonial issues would also likely dominate the General Assembly debate. The Kennedy administration believed the U.N. Com- mittee of 17, which was mandated to resolve those issues, had been acting irresponsibly. The list of problem areas was long, including Angola, East Africa, South Africa, the Congo, West New Guinea, and British Guyana. The President sought a reconstitution of the committee along moderate lines without Soviet participation. In the meantime, Kennedy wanted to discuss with his advisers whether the United States should continue to participate on the Committee of 17. Kennedy’s advisers also anticipated that disarmament and nuclear issues would come up in the General Assembly debate. The United Nations had created the Eighteen-Nation Disarmament Committee in

Stevenson, and Jerome Wiesner. Tape 15, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. Given the poor sound quality of this meeting, the bracketed “unclears” are often more than one word. 39. George Ball, Memorandum for the President, 16 August 1962, “United Nations” folder, President’s Office Files, Box 109, John F. Kennedy Library. 548 TUESDAY, AUGUST 21, 1962

Geneva as a forum for disarmament negotiations. The record of its activity, however, was not encouraging. In the face of the stalemate in the Dean-Zorin talks in Geneva, U.N. resolutions calling for a moratorium on nuclear testing were also expected. The President began taping in midsentence as he discussed the current U.S. nuclear test series. The tape is of very poor quality. As a result, long segments of conversation are unintelligible.

President Kennedy: . . . test [unclear] could be carried out. One is the Atomic Energy Commission’s test, which is a very high altitude test. One is, less—a third—which is possible, so I’d say it is either two or three that have been earmarked. Now this was before this [Van Allen] belt that came so . . . You remember when that pad blew up, and that test never took place. We monitored the test to be rescheduled at a later date.40 There are two launches that they are very anxious to make. And then we did one high altitude test over two others, and now we’re trying to take a look at what the radiation effect would be and whether we could change the megatonage or the kilotonage and drop it to such a percent that it would not have any effect.41 Quite obviously if it’s going to be a repetition of this one, we’re not going to do it. We may cancel one of those tests and do the other at a much lower level with much less yield. Jerome Wiesner: The future test we conduct [unclear]. The question is [unclear] do we want. The Russians, of course, are the great testers and we believe this would phase out most of their tests. President Kennedy: That’s right. I mean, it is just so unfortunate that the pad blew up. We had two difficulties with those other ones—the radio.42 So that slowed us up by two months. But anyway we’re repairing the pad, but now, we’re going to get a group working now and see

40. On 4 June 1962, BLUEGILL, a high-altitude nuclear test, was aborted because the missile tracking system failed to operate. The BLUEGILL PRIME test was a more dramatic failure. On 4 July the Thor rocket that was to carry the nuclear device into space burst into flames, destroying the launchpad and causing widespread plutonium contamination. Glenn T. Seaborg, with Benjamin S. Loeb, Kennedy, Khrushchev and the Test Ban (Berkeley: University of California Press, 1981), pp. 155–56. The device would have provided information about the Van Allen radiation belt. 41. One megaton is equivalent to approximately 1 million tons of TNT, or 50 times more powerful than the atomic bomb dropped on Hiroshima. 42. Another high-altitude test, STARFISH, had to be postponed from 20 June to 9 July because of technical difficulties. Seaborg, Kennedy, Khrushchev and the Test Ban, pp. 155–56. Meeting on U.N. Strategy 549 whether this new—will give assurances that we’re not going to have any repetition of that. Wiesner: We anticipate the Russians are going to begin testing at higher and higher altitudes. President Kennedy: Well, they detonated; they had the one high-altitude [test] with a much lighter yield. Ours was megatonage; theirs was kilotonage. We ought to know within a reasonably short time how they can cancel these tests at very high altitudes that Los Alamos is very interested in. But I think we might be able to cancel that one. And then there would be the question of the other one which I think is regarded as essential. Really, what might be the most impressive test was the day before the testing began. We ought to make sure that the yield will be such that you won’t have a repetition. Wiesner: Sir, somebody told me that the Russian test will be very serious this time. President Kennedy: Certainly not yet. McGeorge Bundy: The fact that they haven’t exploited last weekend’s is a problem.43 Dean said that their own astronauts didn’t have any separate radioactive effects [unclear] as their heating latch opened since they tested it.44 Seems like that’s—45 President Kennedy: We’ll have to see about that. But anyway, we’ll get onto this in the departmental committee, which will set our position on this.46 Bundy: Right. President Kennedy: On the colonial issues, what about this getting off the Committee of 17? Adlai Stevenson: Well, this committee is behaving rather irresponsibly, and [unclear] Soviet [unclear].

43. Bundy may have been referring to the fact that the Soviets did not publicize the AEC’s admission that the STARFISH test had added radiation to the Earth’s magnetic field. Before Soviet astronauts Major Andrian G. Nikolayev and Lieutenant Colonel Pavel R. Popovich went into space, the Soviets had requested that the United States postpone any high-altitude tests. Although the United States hadn’t any tests planned for mid-August, the Soviet request was treated coolly. 44. Arthur Dean, chairman of the U.S. Delegation to the Eighteen-Nation Disarmament Committee at Geneva. 45. The United States assured the Kremlin that it would refrain from nuclear testing while Nikolayev and Popovich were in orbit. They were launched on 11 and 12 August, respectively, and returned safely to Earth on 15 August. 46. The President set the policy on 5 September. See Volume 2, “Meeting on the DOMINIC Test Series,” 5 September 1962. 550 TUESDAY, AUGUST 21, 1962

President Kennedy: Do we get off if they get off ? Stevenson: They won’t get off voluntarily. We’ll have to lubricate them off. Dean Rusk: —get someone to throw them off. [Unclear] embarrassing [unclear]. Bundy: [Unclear] the thing is to get off and get them off. Rusk: [Unclear.] The chairman [unclear] very much [unclear] isn’t there. [Unclear] going out of town yesterday. President Kennedy: Who’s the chairman? Rusk: [Unclear.] He’s no longer the [unclear]. [Inaudible exchange.] President Kennedy: [Unclear] won’t be back, I suppose? Rusk: Apparently so. Bundy: The British are in favor of linking this— Rusk: Also, [we’re bringing] the new French ambassador in [unclear] Morocco [unclear] Tunisia. This is very very—[Inaudible exchange.] Bundy: This is very embarrassing to [unclear]. The French, as you know, they want no part of the U.N. [Unclear] whether the French say they are going to do that. Harlan Cleveland: They haven’t. It’s put him on somewhat of a longer leash apparently—partly because they have to do that in order to curry favor with their French Africans who are very enthusiastic about the U.N. They can’t be too reluctant about the U.N. to keep that bilateral relationship maintained. President Kennedy: What about Berlin? Bundy: Now, Mr. President, do we have a conclusion on this or . . . Are we in favor of having . . . of trying to get off the— President Kennedy: No, as I understand that, the Governor [Steven- son] will try to maneuver in going into that. Stevenson: Yeah. Rusk: I have something in [unclear] for that. President Kennedy: Berlin— Rusk: I don’t think we can answer the question yet, Mr. President, whether Simpson has put it on the agenda [unclear].47 We’ll handle that. [Unclear.] We’ll have British, the British are going along [unclear]. Cleveland: Khrushchev is counting, of course, on the constitution [unclear]. Rusk: We’re not too concerned about it, in some ways, the issue is perhaps quite clear [unclear].

47. Simpson is unidentified. Meeting on U.N. Strategy 551

President Kennedy: Well, maybe he can talk to you about your difficulty of [unclear]. [Rustling of papers.] Rusk: Well, I’ll go ahead and take up this copy [unclear]. Ball: Well, I only asked . . . Let me speak to Charlie Yost next week.48 Rusk: Yeah. Cleveland: Mr. President, are you inclined to say something about the bonds?49 President Kennedy: Well, I am at the right time. I’ve got to say something about the trade bill.50 It may not— Cleveland: It’s going to be your last press conference before it comes out. President Kennedy: When is it supposed to come out now? Cleveland: It’s coming out Wednesday. President Kennedy: You’ll give me a statement tomorrow? Cleveland: Yeah. I have a draft here. President Kennedy: OK, why don’t you give that to me. A rustling of papers is heard as the meeting breaks up. As the participants depart, the following exchanges are heard. Unidentified: I was wondering about that. Rusk: You want a ride over? Cleveland: Yes, sir. Unidentified: Thank you, sir. Unidentified: OK, Harlan. Unidentified: See you.

The tape continued to run for several more minutes before someone slipped in and turned off the machine. The U.S. ambassador to the United Nations, Adlai Stevenson, remained behind to speak to Kennedy alone.

48. Charles Yost was deputy representative to the U.N. Security Council and representative to the U.N. General Assembly. 49. President Kennedy was scheduled to hold a press conference on 22 August 1962 from 4:00 to 4:30 P.M. 50. Kennedy is referring to his proposed Trade Expansion Act, which if passed by Congress, would give the President the authority to negotiate reciprocal tariff cuts up to 50 percent. On numerous occasions, the President spoke of the Trade Expansion Act as the most important piece of legislation before Congress in 1962. On 28 June 1962, the House of Representatives passed it by a vote of 298 to 125. It was presently under consideration in the Senate. 552 TUESDAY, AUGUST 21, 1962

5:15–5:55 P.M.

I can understand their wanting to get us out of Berlin. The problem is that our getting out of Berlin would be disastrous to us. That’s why I think we have so much trouble.

Meeting with Adlai Stevenson51 As the chief spokesman of U.S. interests in the United Nations, Adlai Stevenson wished to speak alone with the President about strategy for the upcoming session of the General Assembly. Kennedy began to record at least ten minutes into the meeting as he and Stevenson discussed the themes of development and peace settlement. At the opening of the 16th session of the U.N. General Assembly the year before, Kennedy pro- claimed his hope for a U.N. Development Decade. The President also wished to see improvements in U.N. peacekeeping operations. Many related issues were on Stevenson’s mind that interested the President. Stevenson had recently returned from a five-week holiday in Europe. He shared his impressions of meetings with various leaders. On July 24, during a brief stopover in Rome, he paid a courtesy call on Italian prime minister Amintore Fanfani. On August 3, through a meeting set up by the U.S. ambassador in Rome, Stevenson met with Yugoslav president Josip Broz Tito. Two days later, Stevenson arrived in Madrid for a three-day visit that included talks with Spanish foreign minister Fernando María Castiella y Maíz and vice premier Muñoz Grandes. Berlin was not far from the President’s mind. Although most of the President’s taped meetings on Berlin dealt with immediate problems involving contingency plans and access rights, in this discussion Kennedy put the protracted Berlin crisis within the broader question of European security. In a highly discursive conversation, Stevenson returned to a host of

51. Tape 15, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. The sound quality of this meeting is extremely poor. Both speakers, especially Stevenson, are frequently inaudible. Due to the fact that significant clusters of words could not be deciphered, the length of the unclear sections is indicated in the text. The “unclears” range from a word to a sentence. When possible, an approximation of the number of words is noted in the bracketed “unclear.” Given the extraordinarily bad sound quality of this tape, the reader is encouraged to refer to “United States Strategy at the 17th General Assembly,” “United Nations” folder, President’s Office Files, Box 109, John F. Kennedy Library. Meeting with Adlai Stevenson 553 regional problems on the U.N. agenda. Those range from U.S.-Bulgarian relations to the newly granted independence of Trinidad. The quality of this recording is very poor.

Adlai Stevenson: I may have mentioned the importance of trying to get a better status for the economic and social programs of the United Nations and the [unclear: several words]. This is becoming very hard to . . . Most of these small [unclear: one word] have no hope of application in the [unclear: several words] raised some concern. But they are extremely anxious and even frightened about the rigidity of the Soviet and about the notification of weapons threat [unclear] tests and so on. But I do see, they hope things like [unclear: several words]. I think we could probably at this time—I don’t know just how to do it, opportunities that you have to speak, to talk about national security in terms of the improvement of equality in the world, [unclear: many words] describe for the World Trade Conference, could cause us some embarrassment. On the other hand, we might convert it to our advantage if we could manage [unclear: two words]. The Russians would try to take this— President Kennedy: I’d like to see— Stevenson: —as a common reaction to the Common Market. President Kennedy: It would put some heat on the Common Market, anyway.52 Stevenson: We may have, I think, Mr. President, some changes that will emerge to make our own operation more efficient. The aid organization felt that, it was recommended in the package, [unclear: several words] gave you that after the election in 1960, is a step in that direction. It hasn’t gone all the way. We still have a multiplicity of activities. Whereas we’re calling upon everybody else to coordinate, clean up their shops . . . I’m just not sure. What we’ve got is so many activities in the economic field going on over development, which obviously leads to suspicion of competition between each other. I do see ambition in organization, administration and [unclear phrase]. I’m not sure of the answer. [Unclear sentence.] President Kennedy: Yeah.

52. President Kennedy was irked that the European nations were allowing the United States to carry most of the burden of the developmental policies in the developing countries. According to the 22-page paper, “United States Strategy at the 17th General Assembly,” the administration wished to see “a reinvigorated European group in the United Nations, willing to take greater leadership in the Assembly and to step up its activities with the Latin Americans, Africans, and Asians.” 554 TUESDAY, AUGUST 21, 1962

Stevenson: Maybe for a while [unclear: a couple of words] discussion just to see if we both can’t [unclear: several words] especially more reasonable. I think we’re also [unclear], when you have missions abroad, especially in the military field, are overstaffed. Just crawling all over each other. President Kennedy: Are you sure of that? Why is everything overstaffed? Stevenson: I wish there were some way we could, I was telling the secretary, foreign service involved [unclear phrase] making the people have these so-called [unclear: several words] suspected [unclear phrase]. President Kennedy: This would be? What missions are you thinking about? Stevenson: Well, I’m thinking mostly of our military missions and our overseas programs of various kinds. I think the answer [unclear phrase]. It’s pretty hard to do more than generalize. As you know, it’s— President Kennedy: I didn’t know whether in your trip, you had been any place or talked to any people that gave any— Stevenson: I saw [unclear: several words]. He’s an honest man [unclear] about the timing of programs [unclear phrase]. Generally, I just think it’s something on the order of economic [unclear phrase]. I had a very interesting talk with [Italian prime minister Amintore] Fanfani.53 He said he thought that Khrushchev was feeling more confident, although he found it very grave that he keeps [unclear word] calculations to himself. And he thought that Khrushchev had nowhere near as much freedom of action as we in the West generally think he has within the Soviet scheme. In the Soviet Union, he points out, there’s no outlet for an opposition party, which makes possible a chance to express these different points of view and that Khrushchev continues under very great pressure. And again, this type of organization can’t always take that. This is a conversation, a performance within the Communist family. He says this is very serious, and he must continually prove that he’s tough and also, for the sake of this conversation, because of the various differences with the Chinese Communists. And this creates a distortion within which his real intentions . . . And Fanfani thinks that time is working against the Communists, and that we should continue to negotiate with them. He strongly urged him that contacts be made more and more with dramatic representation rather than, I mean through diplomatic representation, rather than through

53. For a memorandum of the conversation of 24 July 1962, see “Italy” folder, National Security Files, Box 120, John F. Kennedy Library. Meeting with Adlai Stevenson 555 diplomatic agents. He used the phrase [unclear: several words] you know how good a diplomat is if he’s concealing information [unclear: several words] long time [unclear word ] Soviet attitude establishing some sort of a contact with Khrushchev [unclear: several words] can do [unclear phrase] and also to talk with the Russians. You won’t accomplish this [unclear phrase] about ten hours—hours and hours and hours. [Unclear phrase] curious the account he based such a thing, he volunteered to me strong representation [unclear: several words] diplomatic agents. He says it’s clear to him that on his part Khrushchev treats anything with contempt. It’s an attitude he has [unclear: several words] importance [unclear phrase]. He felt there was little hope for disarmament because of the Soviet spy station and, of course, the problem of the refusal of the Chinese to cooperate, and he said the Soviets did not want to expose themselves [unclear: several words] Chinese. [Unclear: couple of words] twice as hard as the [unclear word ] Khrushchev’s successor. The greatest single difficulty is, of course, the fear of Germany and he suggested that one of the only things we could do, when I asked him, [unclear: couple of words] nonaggression pacts and the kind of assurances for the Berlin situation. It’s not for the purpose of exploiting a united Germany concept. He made it clear that no [unclear: couple of words] unification of Germany is going to deprive us of the security [unclear phrase]. And then— President Kennedy: Did he say we should say this? Stevenson: Yes. President Kennedy: Come with that again. Stevenson: He said we should say—make it clear to the Russians that we are no longer exploiting the reunification of Germany. It’s a constant point of— President Kennedy: I think they have. . . . Of course, whether that is true or not we have not really discussed it for quite awhile. Stevenson: As you can see, no one wants the reunification of Germany. He says himself, “It’s not worth it. We are utterly against the reunification of Germany.” And he said, “When the chips are down, the point at which—” President Kennedy: Why don’t any of the Europeans ever say that? Stevenson: Hmm? President Kennedy: Why don’t any of the Europeans ever say that? Stevenson: Maybe they do. They do on their own—say so. President Kennedy: Privately. Stevenson: Privately. I think you see it’s a long strand we should be talking about sometimes. It goes back to the early days of the last admin- 556 TUESDAY, AUGUST 21, 1962

istration. [Unclear: two words] clearly is at the bottom there. I think Dean—I always had highest esteem, respect, for Dean Acheson and it appears to me [unclear phrase] success at reuniting Germany.54 Very badly [unclear: several words] capable in the end, this appeared to be a challenge to the Russians. We were trying to extend, to pass the olive branch as they were extending the peace branch— President Kennedy: You mean this was after Vienna?55 Stevenson: Yeah. President Kennedy: There wasn’t any olive branch at Vienna. That was the difficulty there. It was really very [unclear word ]. Stevenson: Well, we . . . a series of dealing with Khrushchev in comparison [unclear phrase] [President Dwight D.] Eisenhower. President Kennedy: Eisenhower. Stevenson: [Unclear: couple of words.] President Kennedy: But in any case . . . As I say, I think the fact that we both worked up to this point about Laos has been useful. It’s just the problem’s been in Berlin. I don’t blame him for wanting to get us out of Berlin. It’s quite obvious it just makes their whole situation. . . . They have the Wall; they have this country that’s always disturbed as long as there’s Berlin. They have the difficulty, the problem with the reunification. I can understand their wanting to get us out of Berlin. The problem is that our getting out of Berlin would be disastrous to us. That’s why I think we have so much trouble. Stevenson: Well, I think, we never talked in terms of the whole matter of Europe with the Russians. You know that part of Berlin is isolated; it is a separate problem. Maybe we’ve got to be interested in solutions in terms of the whole problem. The whole problem on the basis of establishing [unclear: several words] seeds [unclear: several words] eventual reunification of Germany and turning the state of our position on Berlin and the existence East Germany would have to recognize that certain positions formally [unclear: couple of words] continue to insist on the specific contribution to the security of Western Europe contribution of German strength [unclear phrase]. One of these days, sooner or later we’re going to have to deal with that. President Kennedy: Well, you know, we’re having a pretty good fight with the French. There’s just so much we can take on. We’re having a pretty good fight with the French about the nuclear problem. We’ve made

54. Acheson was secretary of state under President Harry S. Truman. 55. The Kennedy-Khrushchev summit of June 1961. Meeting with Adlai Stevenson 557 it pretty clear . . . We’ve gone quite a long way really from our position in ’59 about the question of East Germany. There isn’t any doubt that we’d certainly be willing to go further than we were going before in regard to its status. But, of course, the position which we’re now in disagreement about which is the troops in West Berlin is pretty hard for us to give up. Stevenson: Well, I don’t think you have to. That’s the point. France and Germany—four other nations [unclear: couple of words] on the reunification [unclear: couple of words] East Germany, and we won’t have the same problem. If the emphasis remains on Khrushchev we’ll reassure him on the points where he’s weakest. I’m not . . . I mean where he’s most sensitive. I’m not sure we know quite clearly where they are. Until the talks have taken place [unclear: couple of words] that’s kind of calculating this whatever we don’t know. Maybe they wouldn’t come back to that. At least I thought it was best. President Kennedy: [Mumbles.] Stevenson: I made one more point. I suggested to him that he would be a good, fair person to negotiate between us and the Soviet Union. He asked to please be excused from that. [President Kennedy laughs.] He wouldn’t budge. President Kennedy: How’s he feel about the French? Stevenson: Well, he thinks they’re impossible. President Kennedy: Really? Stevenson: Because of this situation [unclear phrase] pressures on Algeria, in particular, subside. He [de Gaulle] wouldn’t be able to address himself to any of these other considerations. And he [Fanfani] doesn’t think the test ban treaty will help very much to erase Soviet fear of Germany, which the Russians are convinced is going to be in effective control of NATO in two or three years. President Kennedy: They think that what? Stevenson: Germany’s going to be in effective control of NATO in a few years. And this is going to [unclear phrase] their nuclear ambition. And he thinks that the Polish leaders have a very moderating influence on Khrushchev. That our program—our policy—with respect to Yugo- slavia [unclear phrase].56 He suggested we try to use [unclear phrase]. President Kennedy: I think that’s a good point. Stevenson: We discussed at length the [unclear: several words] situation given the strikes and the nationalization [unclear: couple of words] of elec-

56. According to Stevenson’s memorandum of his conversation with Fanfani, the Italian prime minister praised the Kennedy administration for its policy toward Yugoslavia. 558 TUESDAY, AUGUST 21, 1962

tric power [unclear: couple of words] conquests [unclear: couple of words]. I must say he was [unclear phrase] much better than that nation’s attitude toward France [unclear: several words] in relation to [unclear phrase]. He also revealed that this curious exchange of letters between [unclear word] and Khrushchev in which [unclear phrase]. [Unclear word] sat down and wrote a letter back to Khrushchev, which he never informed his [unclear word] ministry. Khrushchev returned the letter unopened. I must say if [unclear: several words], I think it would [unclear phrase] Soviet attitudes, which did not always leave the impression of seeking peaceful coexistence, and the interpretation of [unclear phrase]. He cautioned Khrushchev against any actions, which would lead to counteractions on the other side. Extremely good letter [unclear phrase and unclear sentence]. [Unclear phrase.] And only one possible fight. This is Bulgaria and talks about Bulgarian relations. They’re very firm about cutting off their [unclear phrase]— President Kennedy: Support? Stevenson: —price support [unclear: several words] psychological reason [unclear: couple of words]. President Kennedy: Well, the only thing . . . You know, they don’t have to give defense support because they don’t carry that much anymore—because we’ve put—you know—we’ve been emphasizing the economic in last year’s foreign aid bill. Stevenson: I know. If we can face it down rather than cutting it off altogether. President Kennedy: I’ll find out a little more about it. But I know they’ve been very upset about it. Stevenson: I sent a message back from Europe telling them—the Department—urging them to take up the . . . to deal with you— President Kennedy: He’s such a good fellow, [unclear: two words]. Stevenson: —and see if we couldn’t [unclear: couple of words] rather than cut them off altogether. President Kennedy: Just look at it again. How’s the . . . We what? Stevenson: [Unclear: couple of words]. Maybe cut it to [unclear word ]. President Kennedy: Yeah. [Unclear] cut much. Let me find out about it. Stevenson: [Unclear: two words] next year. President Kennedy: What is your . . . How is [Henry] Labouisse getting along? Have you seen him?57

57. Henry Labouisse was ambassador to Greece from March 1962. Meeting with Adlai Stevenson 559

Stevenson: He’s getting along all right. His health hasn’t been very good. [Unclear: several words] but he’s happy—happy as a lark. And he’s just—he’s delighted to be there. Under the circumstances, he’s OK and when asked, his health seems to be forgotten and so forth and so on. [Unclear: several words]. As to [unclear: several words] more effective than [unclear: several words, followed by several unclear sentences]. I had a very interesting time with Tito. I hadn’t met him since [unclear phrase] come back from [unclear phrase]. He had heard I was coming in with the ambassador from Rome [unclear: couple of words] sent me a telegram asking to see me, and he sent his plane down. [Unclear: several words] which is [unclear: couple of words] beach house [unclear: couple of words] beach house and the wine cellar [unclear word ]. President Kennedy: Very luxurious? Stevenson: Good, yes [unclear phrase, followed by unclear sentence.] [Kennedy laughs.]58 [Unclear sentence.] It was a curious sort of meeting. He was extremely affable, extremely affable—backpacking and throwing rocks and doing all those sorts of stuff and [unclear phrase] and so on. Very closed with [U.S. ambassador George F.] Kennan. Four hours—I talked to him for over four hours, and he never asked me once whether or not [unclear: several words] the struggle to replace Kennan. President Kennedy: I would have thought that the effort Kennan made coming back here about the—make sure this [trade expansion] bill turned out all right would have . . .59 Stevenson: You know I came at a time which was just after that and I’m not sure he fully appreciates that gesture. I mentioned that. I talked about that in statements with [unclear: several words] tried to build it up. President Kennedy: I think, you know, he saw it coming with Kennan [unclear phrase] after that speech because I think Kennan thought that he was misled by them as to what Tito was going to say, and I think that Kennan was quite critical of him so this may be the hangover and he might not realize that Kennan really worked awfully hard back here.

58. It is possible that Kennedy is laughing at Stevenson’s report of Tito driving him and U.S. ambassador to Yugoslavia George F. Kennan 100 yards somewhat erratically in a brand-new golf cart. 59. On 1 July 1962 U.S. ambassador to Yugoslavia, George F. Kennan, returned to Washington to lobby the U.S. Congress against amendments to the foreign aid and trade expansion bills that would have barred aid to Yugoslavia and withdrawn its most-favored- nation trade status. Kennan failed. Later he wrote: “The experience . . . showed me, as nothing else ever had, the enormous gap in understanding and outlook that separated a person like myself from the likes of these I was talking with” [George F. Kennan, Memoirs, 1950 –1963 (New York: Pantheon, 1972), pp. 299–300]. 560 TUESDAY, AUGUST 21, 1962

Stevenson: I think that’s all true. Plus one other thing, that is, I think he suspects Kennan had leaked the [unclear: several words]. I can say this about him, though. President Kennedy: How was Popovic?60 Stevenson: He showed no disposition to discuss U.S.-Yugoslav relations—he talked as though extremely anxious—as an old man. He’s an old man. He’s an old man. He’s suddenly become an old man. Playing with very expensive toys. This creates a kind of confusion among his associates. He had Popovic there—his foreign minister [unclear: several words] and a couple of other guys. It’s very clear to me that they are very uneasy about this. In certain respects, asking them [unclear: several words] to create austerity on the part of the people—cutting wages. It’s quite inconsistent [unclear phrase]. It looks like something an erratic old man would do. [Several unclear sentences.] I’m frightened [unclear: several words] to try to find some way to reestablish his position among the Old Guard of Communists. As the senior sort of member on the staff from which he has felt ostracized for too long. And he’s moving definitely back in that direction. Not necessarily politically but personally. I think he’s very much concerned with the fact that the American program—American relations—with Yugoslavia appear to have turned backwards with the United States. And this is in turn in conflict with his ideological concept [unclear phrase] of the East and the West. I also think that contrary to George Kennan’s writing, his estimate that power is actually moving very rapidly from Tito to [unclear name] and Popovic. I don’t mean Popovic, I mean [unclear name]. These two fellows are the new generation. These fellows are pro-American, pro- West. I don’t think we have too much to worry about. He’s very upset by the effect of the Common Market on his trade. As I told you, he lost 40 percent [unclear phrase], and he’s going to have to move from West to East. He raised again—talking about Khrushchev and our relations—he said Khrushchev might stray. He said the secret to peace with Khrushchev is Germany first: elimination of any possibility of threat from Germany [unclear: couple of words]. Second, [unclear] and he said something along that line [unclear: couple of words] in terms of the talks between Kennedy and Khrushchev. [Unclear sentence.] I may have detected some change in policy towards, and an anxiety

60. Koca Popovic was the Yugoslav foreign minister. Meeting with Adlai Stevenson 561 to free themselves from United States aid. They may be looking in other directions for economic ties. I think, the thing to look forward to as a result of the African Congress [unclear: several words] in an effort to find [unclear: couple of words] economic somewhere else. Kennan was much more confident of this than I was, but I didn’t expect him to put up [unclear phrase] much less tendency [unclear: several words] than he had in the past, it seems to me, sadly. [Several unclear sentences.] I felt that he was out of touch with the contemporary [unclear: several words] and overanxious to [unclear: several words ]. I’d say [unclear: several words] more and more [unclear] anti-imperialist, anti-Western basis. [Unclear sentence.] He said he was planning to go to Russia to talk to Khrushchev in the next six months and one of the major objectives would be better relations with the United States. Well, in Spain, I talked to the foreign minister María y Maíz and Muñoz Grandes, who’s [unclear: several words] the general chief of staff during the [Spanish] Civil War. He’s now [unclear: several words] vice president offices [unclear]. He was very much [unclear: several words]. Admiral— President Kennedy: Who? Stevenson: Admiral [unclear word ]. President Kennedy: Oh yeah, yeah. Stevenson: He was the guy . . . He was the fellow who beat [unclear: several words] and he taught exclusion. He’s written a letter that said I [unclear word] the president, the King of Morocco, was asking him for my help. He said I told him I’d come back to Morocco, come back give him my help, raise my tribes only on the condition that makes his unqualified guarantee that [unclear: several words] West. [Unclear: several sentences.] Could be, you never know about this [unclear: several words followed by unclear sentence]. [Unclear: couple of words] comes closest to our kind of person [unclear phrase]. And I have subsequently [unclear]. [Several unclear sentences.] President Kennedy: [Mumbles.] Stevenson: [Several unclear sentences.] I didn’t respond. I didn’t think that. . . . Nor did our ambassador. Very subtly. Now that’s about all I have to say on that, except [unclear phrase]. There’s another thing. [Long pause.] I think I know all about what’s going on with respect to Israel. But what I would like to know is when you can let us know whether this thing is on track.61

61. Stevenson was referring to the administration’s hopes of linking an Israeli request for the Hawk missile with the Johnson Plan for the settlement of the Palestinian refugee problem. On 562 TUESDAY, AUGUST 21, 1962

President Kennedy: As soon as Mike [Myer Feldman] comes back. Stevenson: Which will be what—on— President Kennedy: Thursday. Yeah. Stevenson: The 23rd? President Kennedy: When he gets back Thursday we ought to know whether there’s any interest on the part of the Israelis—of sufficient interest—on the part of the Israelis and the part of the Arabs—the part of Nasser. I don’t see how it’s possibly going to work—at least [unclear: several words] to deserve making the effort. Stevenson: Well, when he come back . . . When he comes back . . . Once we know and you approve. Johnson doesn’t know about [unclear] these positions [unclear]. President Kennedy: But he knows about the problem, all right? Stevenson: He knows about the problem. He doesn’t know about Feinberg.62 President Kennedy: He knows about . . . Feinberg went with him? Stevenson: Feinberg went out to talk to— President Kennedy: Feinberg went with Feldman? Stevenson: Yeah. To talk to Golda Meir. President Kennedy: Yeah, but the reason that Feldman supposedly went is he had an invitation of the [unclear word] Institute of which Feinberg is [the] head. So I told Feinberg to go ahead with Feldman so that he could helpful . . . Tape recording ends abruptly. There is a strong possibility that Kennedy himself did not stop the recording. There appears to have been a mechanical failure of sorts. A few minutes later, the taping resumes. Stevenson: [Unclear phrase], and he thinks he can also get a million dollars and a half out of [unclear: several words] additional costs to the U.N., [unclear: couple of words] six hundred people. It would be much less expensive to all the delegations in the Western Hemisphere. Delegations [unclear phrase]. When I asked him why he was even interested in this, he said because [unclear: couple of words] political campaign in 1956, he decided [unclear phrase]. And he said [unclear: several words] anticipated the same situation again I think in 1964. [Unclear:

19 August 1962, President Kennedy sent his deputy special counsel, Myer Feldman, as his personal emissary to Israel to explore the possibility of linking the sale of the Hawk to Israel’s acceptance of the Johnson Plan. For a more detailed account of this issue, see “Meeting on the Middle East,” 27 August 1962. 62. Abraham Feinberg was the chairman of the Bonds for Israel Committee in the United States. He headed a group of Jewish community leaders from New York City. Meeting with Adlai Stevenson 563 several words] operation outside of the United States. That’s what I don’t like, personally. President Kennedy: The precedent isn’t very good, is it? Stevenson: What? President Kennedy: The precedent isn’t very good. Stevenson: No. I don’t know if it’s good or not. He said he’d like to know. We could talk about that. I was certainly confused about it. [Unclear sentence.] President Kennedy: No, it just seems to me— Stevenson: Good idea to get him out of here during the campaign ’64 [unclear] commitment. I didn’t feel as though I could— President Kennedy: They couldn’t come and have the meeting in November of ’64, could they? So we don’t have such a terrible [U.N.] resolution just one week before the election. Stevenson: You see, nobody wants to do that because then Christmas interferes, and they want to go home and then they’ve got to all come back again and [unclear phrase followed by several unclear sentences]. President Kennedy: Oh, did they? They’ve done that? Stevenson: That was by 1950, I would say, ’49, I think it was. Yeah, that was done [unclear: several words]. I was there. President Kennedy: What would they use as the reason? I know that the real reason is the presidential campaign. What would they say is the . . . Stevenson: [Unclear phrase] distraction [unclear: several words] these delegates involved with the campaign [unclear phrase, followed by several unclear sentences.] President Kennedy: [Unclear sentence.] Do you think that would be the first step toward getting them out for good? Stevenson: No, I doubt that because they’re already going ahead on plans for a ten million dollar endorsement [unclear phrase]. Maybe it’s not a bad thing to have the meeting outside the United States. Now there’s one other thing I wanted to mention here, and that is this whole Congo thing, this matter [unclear phrase] Tshombe was set up. That whole story [unclear phrase, followed by unclear sentence]. President Kennedy: Yeah. Stevenson: [Unclear: several words] newspapers [unclear: several words] reported on this blow by blow and day by day. This has made it hard, almost impossible to disguise what we have done, as an American plan. [Unclear: several words] embarrassed the secretary-general more than anything that’s happened since I’ve been involved. And that’s the reason why he has insisted on [unclear: several words] premature leaks [unclear: several words] antagonize Tshombe. [Unclear: several words] program 564 TUESDAY, AUGUST 21, 1962

under such pressure [unclear] newspaper. [Unclear sentence.] He was very much [unclear word ] about it. President Kennedy: Where did the primary leaks come out of— London? Stevenson: Came out of Washington. President Kennedy: Washington. Stevenson: All the leaks came out of Washington. President Kennedy: Well, you know Washington. Stevenson: It’s just awful. Well, it raises that point, that here was the point, here was an unfortunate embarrassment, like the Swedish ambassador, who was called in down here in Washington.63 The ambassador up there [at the United Nations in New York] knew nothing. The foreign minister, [unclear: several words] call[ed] her from Stockholm, to find out what’s going on. She had to say she didn’t know anything about what was going on. [Unclear word ] said, “You’re ambassador to the United Nations, aren’t you?” [Chuckles.] I don’t know. It’s the same old problem, of a project or program which is a United Nations matter being handled in Washington. I wish [unclear]. I think it would be better. We’ve got better security up there [at the U.S. mission at the United Nations in New York]. I don’t know why that is, [unclear: several words] but I just think— President Kennedy: Well, they’re terrible down here. They’re terrible. Stevenson: Too many people talking [unclear: several words]. Against us, shooting off how much they know all the time. I think that one— President Kennedy: Well, as I understand that, of course, Washington has to do something because we were the ones supposed to be carrying on negotiations with the British and the Belgians. So obviously— Stevenson: Those negotiations weren’t very [unclear phrase]. President Kennedy: Rather than London—or here? Stevenson: Well, London, sure. London’s all right. President Kennedy: Well, we had some of them in London, some of them in Brussels. Stevenson: I have no objection to that. I just think that maybe we ought to . . . When we start a major program like that we ought to consider whether it should be centered in New York [unclear: two words] or in Washington [unclear: several words]. I say in this case, we’re embarrassed. I don’t know whether that will always be true. President Kennedy: Well, I agree. But I think it’s unfortunate. At least

63. Gunnar Jarring was the Swedish ambassador to the United States. Meeting with Adlai Stevenson 565

[Under Secretary of State] George Ball’s becoming more active in the Congo thing now. I don’t think it’s been handled particularly well, even though it’s very complicated, but I don’t think George [unclear phrase]. Stevenson: I think we ought to try to center these things that relate to the United Nations up there as much as we can, using the people down here as [unclear phrase]. President Kennedy: Yeah. Stevenson: So when one of these comes up again, we just have [unclear: several words] a chance to discuss whether or not it should be here or there. President Kennedy: I think that’s good. Stevenson: I think this one should be up there. One other thing, I had a call last night from [unclear phrase] asking [unclear: two words] if Trinidad would be [unclear word] independence celebration. [Unclear: several words] this is a matter of major [unclear] to you. Of course, I’d much prefer not to go. It just happens to be one weekend I have a chance [unclear phrase]. President Kennedy: Well, let me get on that right away. I think that probably the argument is that because of the friction between Trinidad and Jamaica and the Vice President went to Jamaica, they probably wanted . . . 64 Stevenson: Well, that’s what . . . They asked for me by name because they know me. President Kennedy: Yeah, now maybe you might get Sarge [Shriver] and Eunice to go or something.65 Stevenson: Something like that would be great. President Kennedy: All right. Stevenson: Or if we could get, I wrote some— Tape recording ends.

With Stevenson’s departure, the President returned to economic matters. The Congress was due to return to consideration of the administration’s trade bill.

64. Vice President Lyndon Johnson represented the United States at the ceremonies marking the independence of Jamaica on 6 August 1962. 65. Eunice Shriver, the President’s sister, was married to Sargent Shriver, director of the Peace Corps. They did not represent the U.S. at the independence ceremonies in Port of Spain, Trinidad, on 31 August 1962. The U.S. delegation was headed by federal judge William Henry Hastie of the Third Circuit Court of Appeals. 566 TUESDAY, AUGUST 21, 1962

6:00 –7:05 P.M.

[W]e’ve gone a long way to help the industry, and there comes a time when you have to say, “Well, we’ve really got to get something out of you.”

Meeting on Trade and Textile Policy66 President Kennedy’s decision to encourage trade liberalization through official U.S. policy came quite early in his presidency. His eagerness to advance and to adopt European—and, in particular, European Common Market—approaches to both domestic economic policy and international trade complemented what was already a fairly well entrenched ideological predisposition toward free trade and lower tariffs. When Walter Heller, Theodore Sorensen, and others suggested that Common Market economic growth rates were to be encouraged rather than feared, a development that might well increase rather than threaten U.S. exports, Kennedy readily adopted their point of view. “As I said the other day,” President Kennedy remarked in Janu- ary 1962 when asked about his proposals for trade liberalization, “the fact is that the Common Market countries have had an extraordinary economic growth, full employment, and all the rest . . . it is to increase our employment and our opportunities that we are recommending this.”67 Kennedy’s appreciation of textile industry vulnerabilities and political sensitivities, on the other hand, made it obvious that trade liberalization had to be achieved only with a fair measure of compromise and concession directed principally toward this industry. Partly through his past representation of Massachusetts textile interests and partly through his awareness of the prominence of the industry in the U.S. South—the elec- toral base of most congressional committee chairmen—Kennedy viewed this industry as one that deserved special, prompt attention in the debate on his trade policy proposals.

66. Including President Kennedy, George Ball, John P. Duncan, Jr., Luther Hodges, Lawrence O’Brien, and Theodore Sorensen. Tape 15, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 67.“The President’s News Conference of January 15, 1962,” Public Papers of the Presidents, John F. Kennedy, 1962 (Washington, DC: U.S. Government Printing Office,1963), p. 17. Meeting on Trade and Textile Policy 567

Having allied with fellow members of Congress who had vigorously opposed President Eisenhower’s unwillingness to impose quotas on major textile exporting nations and sensing later, as president, that special treatment of the textile industry might prove politically useful in the adoption of a more-liberalized and overarching overall trade policy, Kennedy appointed, in February 1961, an Inter-Agency Textile Com- mittee to develop proposals that would accompany any general trade policy proposal. Headed by Secretary of Commerce Luther Hodges, former Governor of North Carolina and textile industry executive, this committee also included Under Secretary of State George Ball—the administration’s most ardent proponent of free trade—Secretary of Agriculture Orville Freeman, Secretary of the Treasury Douglas Dillon, and Secretary of Labor Arthur Goldberg.68 Though textile industry interests were suspicious of George Ball’s predilection for free trade, believing it little more than a romantic, even naive attachment, Ball’s position on this committee was designed so that the Kennedy administration trade policy—slanted clearly toward trade liberalization—could not help but consider special industry needs and political strength.69 Though Ball functioned largely as a naysayer in the face of various protectionist proposals, he also appeared to comprehend the President’s pragmatic approach and peculiar political position. Maintaining that the textile problem caused him “more personal anguish than any other task I undertook during my total of twelve years in different branches of the government,” Ball, nonetheless, proved to be an effective, if somewhat isolated, champion of free trade amid negotiations over textile industry protection.70 The centerpiece of President Kennedy’s textile industry proposals was the seven-point program introduced in May 1961.71 Requesting that

68. Luther Hodges worked for Marshall Field & Company as general manager of the company’s textile mills, eventually rising to vice president before entering politics. 69. See Thomas W. Zeiler, “Free-Trade Politics and Diplomacy: John F. Kennedy and Textiles,” Diplomatic History, Spring 1987, pp. 127–42, for a detailed analysis of this pragmatic approach combining compromise and reform. 70. Quoted in James A. Bill, George Ball: Behind the Scenes in U.S. Foreign Policy (New Haven, CT: Yale University Press, 1997), p. 66. Bill notes, as well, how in meetings with U.S. textile industry representatives, Ball “pointedly wore a suit made in Britain, shoes manufactured in Hong Kong, and a silk tie made in France” (ibid.). 71.“Statement by the President Announcing a Program of Assistance to the Textile Industry,” Public Papers of the Presidents, John F. Kennedy, 1961 (Washington, DC: U.S. Government Printing Office, 1962), pp. 345–46. 568 TUESDAY, AUGUST 21, 1962 the departments of Agriculture, Commerce, Treasury, and State carry out specific objectives, this program sought:

1. The promotion of new research 2. Tax and investment incentives 3. Financial aid for plant modernization 4. The equalization of domestic and foreign raw cotton prices 5. Legislation to assist industries adversely effected by increased imports 6. GATT escape-clause provision protection for 12 textile products 7. A multilateral conference of textile exporting countries designed to expand trade72

Although point number four initially met with great opposition abroad (when it encompassed a halfhearted equalization fee proposal), Kennedy was eventually able to carry out most of the seven-point program, chiefly because few points caused much consternation among principal U.S. trading partners and because it represented an effort to help a still profitable industry that had come to expect less of the favored treatment to which it had long been accustomed. The three major international agreements that involved the textile industry also did much to convince its representatives that the Kennedy administration had given careful consideration to its needs and policy prescriptions. Though it conspicuously exempted wool and synthetic fiber products, the Short-Term Cotton Textiles Arrangement of July 1961, created under the auspices of the General Agreement on Tariffs and Trade (GATT) and agreed to by 17 countries, established that any country that suffered import-related market dislocations could curtail imports back to the level prevailing at the end of the 1961 fiscal year (June 30, 1961).73 Against the Japanese demand for a 30 percent increase in U.S. import quotas, a separate accord was also reached with the Japanese which raised these quotas by 6 percent, effective January 1962. And finally, on February 9, 1962, the original 17 signatories of the short-

72. Warren M. Christopher was chosen to represent the Kennedy administration at this meeting in July 1961. George Ball’s biographer, James Bill, suggests that while Ball often felt as if he were a “minority of one” as he pushed for liberalized trade, he received considerable assistance and encouragement from Warren Christopher and from economist Carl Kaysen, both of whom served as special assistants in the Kennedy administration (Bill, George Ball, p. 66). 73. See “Memorandum from Secretary of State Rusk to President Kennedy,” 28 August 1961, FRUS, 9: 473–74. The short-term arrangement would expire on 30 September 1962. Meeting on Trade and Textile Policy 569 term arrangement, along with Denmark and Portugal, agreed to a Long-Term Cotton Textiles Arrangement. The long-term arrangement proposed to eliminate import quotas after five years but also established that existing import quotas would remain in place for 1963 and 1964 and would increase by an additional 5 percent per year in 1965, 1966, and 1967 before being eliminated afterward. As the following meeting was convened, the administration had begun its final push for approval of both the Long-Term Cotton Textiles Arrangement and the far more significant, wide-ranging, and free trade–oriented Trade Expansion Act. Signed into law on October 11, 1962, the Trade Expansion Act of 1962 would receive support from a substantial majority of New England’s representatives and from 87 House members from southern textile states.74 Carefully crafted textile industry policy, discussed here, played no small part, then, in the passage of what was the major free trade initiative of the Kennedy administration, and according to George Ball, “the most important development in U.S. trade policy since 1934.”75 Paving the way for the Kennedy Round of GATT negotiations, which resulted in a reduction of import duties on manufactured goods by an average of 35 percent (and by an average of 64 percent for U.S. tariffs), the Trade Expansion Act stood as one of President Kennedy’s more notable legislative triumphs in a period otherwise characterized by stalemate or outright defeat. And it was the politics and technical details of the administration’s textile policy that influenced the fate of the Trade Expansion Act of 1962.76 The President began taping as his legislative assistant, Lawrence O’Brien, described Congress’s role in setting cotton subsidies.

Lawrence O’Brien: . . . explaining to you about that [unclear] measure, because the Congress is the one that’s responsible for it. We’d be delighted

74. Much support here was mustered by Carl Vinson, Democratic House member from Georgia. Vinson had formed, in early 1961, a Textile Conference Group made up mostly of interested southern congressmen. Though this group began its deliberations by warning the President that trade liberalization could not be realized without new protections for the textile industry, Vinson eventually came to urge the industry and industry-friendly congressional colleagues to be grateful for what little support the Kennedy administration could offer. See Zeiler, “Free Trade Politics and Diplomacy,” p. 132. 75.“Circular Telegram from the Department of State to Certain Diplomatic Missions,” 30 January 1962, FRUS, 9: 512. 76. President Kennedy had discussed these matters with George Ball the day before (20 August 1962) and would subsequently convene a meeting on the textile problem with interested congressmen three days afterward (24 August 1962). 570 TUESDAY, AUGUST 21, 1962

to have the [unclear] taken away, and the way to do it would be not to add a new set of subsidies—which is one solution—or add to the subsidies that we are now giving to the growers and the exporters, and a new set of subsidies to the mills, but instead to do away with these subsidies, having a compensatory damage program by the cotton growers [unclear] price . . . the mills wouldn’t . . . would be happy and they wouldn’t need the subsidy, the exporters would be happy, and they wouldn’t need the subsidy, and you give compensatory payments to the growers.77 And, as I understand it, more than 98 percent of the growers in this country, including all our friends in the Southeast, would be happy with that. And what the big growers are fearful of is that the Congress will put in a limitation [unclear] five hundred dollars to any one grower, and less than 2 percent of the growers in the country would be affected by a [unclear], obviously. President Kennedy: And, what is the problem with the— Luther Hodges: You have a problem, Mr. President, with two organizations that . . . The first strongly against us, this is the National Cotton Council, [unclear] federal policy rule [unclear] who is ready to propose some large producers to come up here and lobby against compensatory payments. I think the mills in the last year have come around to this. I have talked to a lot of the mill folks, and they seem to like it all right. I don’t see who could be against it because the farmer would get what he’s getting now. I’d say that it’s probably 95 percent of them, because it’s amazing . . . out of 762,000 cotton farmers in the United States— President Kennedy: How many? Hodges: Seven hundred sixty-two thousand. Six hundred fifteen of . . . 615,000 of these have less than 30 acres. And there’s only 9,000 that have over 200 acres. So you see you . . . those 9,000 are the ones that are coming to Washington and lobbying against compensatory payments, because they are afraid of the limitation that would be put on this. Now, if you put a limitation of $12,500 on payments, there would only be approximately

77. As a way of equalizing raw cotton prices between U.S. textile producers who paid a higher price for cotton with price supports and foreign competitors who did not, the administration wanted to consider the removal of the price supports in exchange for direct, government- funded grower compensation. This represented a gradual shift in general food and fiber agricultural policy accelerated afterward by the Johnson administration (principally with the Food and Agricultural Act of 1965) and often termed a “cash-out” reform in the tradition of the Truman-era Brannan plan. See David Orden, Robert Paarlberg, and Terry Roe, Policy Reform in American Agriculture: Analysis and Prognosis (Chicago: University of Chicago Press, 1999), for a detailed survey of presidential agricultural policy reform, especially pp. 46–84. Meeting on Trade and Textile Policy 571

9,000 farmers in the United States that wouldn’t be fully covered, you see, under this limitation thing. So, out of 762,000 farmers, 753,000 of them would get back— President Kennedy: Now, it would save . . . it would obviously be of help to the textile mills. Hodges: It would because they would be getting cotton at a lower price. President Kennedy: And it would help the textile workers . . . it would. . . . Would it help these other farmers? Help the what? Theodore Sorensen: The exporters, because they get . . . they would- n’t have to take the subsidy, they’d— George Ball: Well, according to the textile mills, it’s better than getting the equalization fee, because it means that their cost of the finished textiles is less and, therefore, they can compete better with other fibers—such as man-made fibers.78 As it is now they are being priced out of the market by these . . . President Kennedy: Even if they . . . they would just deal with their farm problems, not with their man-made competition. Hodges: That’s right. Ball: That’s right, their imports. Hodges: [Unclear] written a letter to you, Mr. President, [unclear] compensatory payment system would provide a more sound and realistic solution [unclear] logical [unclear] it’d be my judgment that sharp political opposition makes it impossible [unclear] happened twice in the last 48 hours, he said. It was up again last week. He said he’s brought it up four times, and he says he doesn’t get to first base. [Unclear] or not. O’Brien: No sir, he didn’t. Hodges: [Unclear.] He had it up . . . [unclear] decrease, but he— Sorensen: [Unclear] southern counties, and others in the House. President Kennedy: You mean Arkansas? Sorensen: Yeah. O’Brien: Yeah.

1 78. The equalization fee, pegged then at 8 /2 cents per pound, was an alternative method of equalizing the prices paid for raw cotton by foreign and domestic producers and was to be applied to the cotton content of all textile imports. Ostensibly, it was designed to compensate domestic producers whose costs were greater due to the price supports accorded domestic cotton farmers. This became a sticking point in the acceptance of the Long-Term Cotton Textiles Arrangement, openly opposed by all but the United States and Great Britain, and was at this point considered a dead article (see “Statement by the President on the Differential in Cotton Costs Between Domestic and Foreign Textile Producers,” 6 September 1962, Public Papers of the Presidents, John F. Kennedy, 1962, pp. 664–65). 572 TUESDAY, AUGUST 21, 1962

Sorensen: And the difficulty is they haven’t made enough trades on that committee. The committee is [unclear]. O’Brien: My feeling is, Mr. President, why should the Congress be putting pressure on you, if this is going to make them . . . It’s their own members who are committing such a major [unclear]. Hodges: It’s completely logical, but unrealistic politically that they might not be able to sell them that [unclear] administration [unclear]. John Duncan: I think, Mr. Secretary, that with the mills, if they realize that they need to get in behind this, and these folks will support us on it, I think some of this political— President Kennedy: But they, themselves, muddy the atmosphere, every one of the little farmers accuse them of . . . they get the short end. We have to sell it to them. We have a job trying to sell [unclear]. O’Brien: Well, how much Russell could help on that [unclear].79 President Kennedy: I don’t know whether Russell— Duncan: Russell is for this. He said . . . I was over there the other day, and he said, “I’d like for you to carry to the Secretary a message.” I said, “Well, Senator . . . ” He said, “He’s never going to solve this farm problem, this cotton problem, unless he goes to compensatory payments.” President Kennedy: Well, if you have Russell on— Unidentified: Russell is for it. Russell [unclear] get in behind it strong. President Kennedy: It would make a big difference, and then they couldn’t [unclear] hurting the— Hodges: There’s nothing [unclear] with these textile makers; it’s a question whether in the committee meeting you get by— President Kennedy: Well, then the question of whether the time to start it is now . . . whether we want to start launching that now and complicating the . . . whether it may be the only way to get the big ones to say, “Well, when we get the compensatory . . . ” I think we . . . maybe our device is to say, “Well, now, if we get hard up, that we will . . . if the Tariff Commission doesn’t report favorably on compensatory, then—” Sorensen: On equalization. President Kennedy: On equalization. “Then we will take another and include in it the consideration of compensatory.”80 Ball: All right. Let me suggest, Mr. President, there’s a very serious question as to whether you have the power to impose an equalization fee

79. Senator Richard Russell of Georgia. 80. As President Kennedy expected, the Tariff Commission rejected the request by the 1 Department of Agriculture for an 8 /2 cent equalization fee. Meeting on Trade and Textile Policy 573 if there’s an adverse finding in the Tariff Commission. I . . . It could . . . you could resolve it either way. I think that you could make a stronger case that you do not have the power to do this. Hodges: [Unclear] yesterday, thought he said he did. Ball: No. There’s . . . the Tariff Commission has expressed the view that you would not have the power. The Department of Agriculture in the [unclear] case took the position that you did. I’ve had our own legal adviser look at it, and the opinion of the legal adviser is that you do not have the power. I have a memorandum— President Kennedy: On what grounds? On what grounds? Ball: Because the statute requires that you act on the basis, not on . . . merely on the findings but on the recommendations of the Tariff Com- mission. And if the recommendations are adverse, then there is nothing on which you act. And that you fix such relief as is required by the findings of the report, I believe it is, of the Tariff Commission. I’ll give Ted a memorandum on this, but all I can say is—81 President Kennedy: Can you take a look at that and— Sorensen: Are you talking now about the National Security clause? Unidentified: No. Ball: No. Hodges: This isn’t about the Tariff Commission’s negative findings [unclear]. Ball: No, I understand that, but what the textile people say is that you can’t do it from that— Unidentified: Oh, maybe [unclear] national security. President Kennedy: Yeah, that’s what they’re talking about. Ball: Oh, I see . . . no, I was . . . all I was saying was that— President Kennedy: I don’t know on what possible grounds of the national security you could use the equalization fee. I could see where you— Sorensen: That textiles are essential to national security?82 President Kennedy: Yeah, but the equalization fee, I don’t know how you could prove that. Sorensen: Straight out-and-out tariff. Hodges: You know, I recommended yesterday, Mr. President, [unclear] associated with [unclear] in two would be put on four and a half, four and a

81. Referring to Ted Sorensen. 82. Textile industry representatives had argued prominently that textiles ranked second only to steel in their significance to national defense. 574 TUESDAY, AUGUST 21, 1962

quarter [unclear] the other [unclear] compensatory or trade incentive through the [unclear]. President Kennedy: What’s the trade incentive? Hodges: Well, that’s . . . that simply fixes it so that the shipper can turn in his documents, and you pay him. Isn’t that right, John? Duncan: Yes, but it does . . . what complicates things with the President is the much . . . man who is the buyer of the cotton from the farmer and who sells it to the mills. Hodges: Right. Duncan: He would get the . . . he would get the compensatory payment and then pass it on to mills. Unidentified: It’s like [unclear]. Duncan: That’s right. Sorensen: That’s the third set of subsidies. Duncan: That’s right. O’Brien: Yeah . . . that’s right. President Kennedy: Well, I have . . . we got ourselves in to this [unclear]. I’ve never . . . this isn’t a . . . we don’t want to let the textiles push us to getting a commitment from us on this equalization fee, because we’ve never gone for that. And this description of George Ball’s memorandum, the effect of it . . . 83 We might as well not almost have the bill.84 Is that a fair statement, or not? Ball: [Unclear.] Hodges: I haven’t seen it. It wouldn’t . . . it wouldn’t create a— Ball: It would open a Pandora’s box for us. It would be enormous trouble around the world. O’Brien: We’d have to pay compensation.85 Hodges: [Unclear.] Ball: Yes. As a matter of fact, this was something I got over to the President this morning before he saw Sidney [unclear].86 President Kennedy: Not an equalization? Ball: This isn’t an attempt to put this stuff down the drain.

83. See “Memorandum from the Undersecretary of State (Ball) to President Kennedy,” 21 August 1962, FRUS, 9: 532–36, particularly pp. 533–34 under the heading “Cotton Equalization Fee.” 84. The Trade Expansion Act, introduced by the President in January 1962 and under consideration by Congress at the time of this meeting. 85. To other countries for having transgressed earlier trade agreements. 86. The President met with a Sidney H. Woolner, commissioner, Community Facilities Administration, at 11:55 A.M. Meeting on Trade and Textile Policy 575

President Kennedy: Now, what is it we’ve got. What can . . . what grounds . . . what can we stand on? Sorensen: Well, I think, Mr. President, that the language of your . . . there’s a pledge number four—in the seven-point program—is sufficiently broad so that you are not on the hook on the equalization program.87 President Kennedy: Hell, I never got on the hook on equalization. They’re trying to ride it into it. Now, let’s just assume the Tariff Com- mission comes out—negatively, what are we going . . . where are we going to be about the 1st of September? Sorensen: I think you need to make the pledge that if they come out with . . . negatively—you might even want to make that ahead of time— that you intend to go back to the Department of Agriculture to carry out this recommendation, and find some means, and we’ll submit legislation, legislation that gives . . . we’ll submit legislation to direct . . . We don’t even need to go into details. President Kennedy: What . . . we don’t want to suggest what these alternate terms might be? Sorensen: No, because I think, probably the Department of Agriculture— President Kennedy: I think they’re going to have to just stick with it. I think we’re going to have to agree with this [unclear]. If the Tariff Commission . . . just say first it’s before the Tariff Commission. The Tariff Commission acts negatively on the matter. Then we are going to come up with some other means . . . alternate means to provide . . . this is all I can give you now. You just have to take your chances on it. If you go ahead and gut the bill . . . I could say, now, if you go ahead and gut the bill, on this ground, what is it . . . what sanction could we use against them?88 What sanction? Ball: Well there’s . . . the main sanction is that they won’t get even their long-term agreement.89 President Kennedy: They won’t get the long-term agreement, which would be what? Then that— Ball: They have no protection, then, against imports . . . textiles.

87. As noted in the introduction to this meeting, this point (4) called only for the equalization of prices without specifying how that would be accomplished. 88. The Trade Expansion Act. 89. As noted above, the Long-Term Cotton Textiles Arrangement included provisions for maintaining import quotas at the current 1962 levels in 1963 and 1964. 576 TUESDAY, AUGUST 21, 1962

President Kennedy: You think it would be foreign imports? [Unclear] because they could pay the— Ball: Well, the tariff has never been an innovation. President Kennedy: Yeah. Ball: [Unclear.] President Kennedy: So instead of their getting a 6 percent limitation, they’re liable to get it up to 10 percent.90 And if they try to put it in the bill, we’ll veto the bill. We won’t have any trade bill . . . we won’t have the trade bill; we could just run along. O’Brien: That’s a strong point. The sanctions that are available [unclear] no question about it. Hodges: We haven’t even discussed those. Unidentified: [Unclear.] Hodges: [Unclear.] Ball: No, I mean, you . . . we’ve gone a long way to help the industry, and there comes a time when you have to say, “Well, we’ve really got to get something out of you. You can’t squeeze us to [the] last drop here because we’ve given you so much, we could also take it back.” The United States hasn’t signed a long-term agreement yet. President Kennedy: Then what would happen? Then, all right, they say, “All right, if you do that, we’ll defeat the bill.” Sorensen: The point is they might as well defeat the bill, if we’re going to have— President Kennedy: That’s the attitude we ought to take with them. Sorensen: —an equalization fee which uses an [unclear]. President Kennedy: If you get an equalization fee, you’re not going to get the long-term agreement, anyway, are you? Ball: No, certainly you’re not. Hodges: We’ve said that to the industry regularly. They . . . as I told you yesterday, they have really come to the conclusion, I think, that 1 [unclear] defeat [unclear]. They’d rather have the 8 /2 cents. Ball: Well, the point . . . the difficulty with that is that that doesn’t at all meet their problems as far as— President Kennedy: Well, the only thing is, if they can’t . . . unless they get it out of the Tariff Commission, they can’t . . . they can’t get it out of us. Because if we say, “No, we won’t give it,” their only choice after that is to defeat the bill. If they defeat the bill, they defeat the long-term agreement, and they gut it. Now, they can say, “Well, we’ll screw you in two years” or

90. Limitation on cotton textile imports as a percentage of U.S. production. Meeting on Trade and Textile Policy 577 something, but the point is . . . I think the difficulty is that to really talk to them without any recognition that this is not completely a one-way street. There isn’t much really they can do to us. Because we don’t need . . . we can survive another year without this bill . . . if they wanted to do that. O’Brien: The only thing they can do is—right now—is defeat the bill. President Kennedy: Yeah. That’s all they can do to us. Now, if they defeat the bill, our bill is defeated, but we might as well have the bill defeated as we are having them put in something that’s either going to cost us two or three hundred, four hundred million dollars, now, isn’t it? Ball: Mr. President, I don’t think there’s any serious intent for the industry to defeat the bill. President Kennedy: Well, they want to get me, though. The price of their supporting the bill is to put in an equalization fee. I tell you, once we write that into the statute, how much would it cost us [unclear]? Number one, what would it cost us budgetary-wise, and number two, what would it cost us . . . what will it do to the long-term agreement and what will it do here and there? That’s the problem isn’t it? Ball: And with compensatory payments we’d have to make concessions on other products because these things are bound up together.91 Sorensen: Two hundred million dollars, Mr. President, is not going to cost you budgetwise, it depends on what you’d have to make in concessions— President Kennedy: Yeah, but how would it not cost us budgetwise? It wouldn’t cost us anything? Ball: It would mean that we would use up a great deal of the authority we get under the bill for no quid pro quo.92 President Kennedy: Except for the protection of the textiles. That’s [unclear]— Hodges: If you put on an equalization fee, you’d have to— Ball: You’d have to pay compensation on something over 200 million dollars in fees.93

91. Compensatory payments to other countries and not to U.S. producers of cotton as discussed earlier. 92. The Trade Expansion Act allowed the President to make limited tariff concessions. It was Ball’s contention that since an equalization fee (on the raw cotton content of imported goods) would curtail the importation of primary finished textiles such as yarns but not apparel (with its much lower percentage of value tied to its cotton content), it would do little to offer relief to the U.S. textile industry. 93. Reference to GATT arrangements by which compensation in other categories of goods would be required as a penalty for reneging on a portion of the overall tariff and quota arrangement. 578 TUESDAY, AUGUST 21, 1962

President Kennedy: And they could pick their target? Ball: Sure. They could retaliate against us there on any kind of trade item they want. President Kennedy: Agriculture? Ball: If they didn’t feel we were making an adequate compensation offer. Sure, on agriculture . . . on the most sensitive things is what they would do. President Kennedy: Well, let’s get a list of what those might be. O’Brien: They could . . . tobacco. Hodges: On wool, you know, we had that wool and coffee thing.94 They brought in [unclear]. O’Brien: Tobacco is the one they talked about the most. Unidentified: And carpet and glass. President Kennedy: Tobacco, carpet, and glass? Ball: In the carpet and glass case, they were talking about retaliation.95 They would rather pick the tobacco one when we got our friends [unclear]. Hodges: [Unclear] chemicals. Ball: Yeah, but tobacco was first. Sorensen: Yeah. President Kennedy: Well, all right. We’ve been around a little on this. Now, what about the rest of these points? Hodges: Well, let me send Tommy on this thing. We’ll make it seem more likely [unclear] and if you decide that we might want to [unclear] the international [unclear]. I think the thing to do is [unclear] at the time that you get this announcement from [unclear]. I’d rather that it would be after September, but if it would have to come now, I’d make a strong statement going back to the number four [unclear].96

94. When the administration asked Eric Wyndham White, executive secretary of GATT, to make discreet soundings on behalf of the U.S. interest in reduced wool import quotas, the request was leaked to the European press, and the French, British, and Japanese governments, in particular, responded with vehement protests. The U.N. Coffee Conference was then meeting in New York (July–September 1962) and hatched an agreement among 56 countries to assure that coffee prices did not decline below the prevailing 1962 levels. The agreement obliged coffee-importing countries to restrict their imports from nonparticipating countries to the average level of the previous three years and was designed to prevent nonparticipants from profiting from expected increases in consumption. 95. Due to U.S. tariff increases on carpet and glass, particularly troubling to the Belgians, the EEC decided to take retaliatory measures on 4 June 1962. See the telegram from Secretary of State Rusk to the U.S. Embassy in Belgium, repeated to Bonn, Luxembourg, Paris, Rome, and the Hague, FRUS, 13: 100–1, 102–3. 96. Heeding this advice, President Kennedy issued a statement on the differential in cotton prices cited above. Meeting on Trade and Textile Policy 579

Ball: Do you think we have to make much about it? Hodges: We have to wish he didn’t do it, but I’m going to ask them now to work out something which will [unclear] whatever, and take this strong statement and we’ll have to fight it. O’Brien: After all, all that a President can pledge is to send up legislation; he can’t pledge to pass it. Hodges: No, but he can be strong for the fact that it’s a wrong thing to have if they pass it—if he says that point of view. I’d like to tell people down there [unclear] on the Hill, so when it gets back to us then we might be able to do it. But if he just says, “There’s nothing I can do about it since they reported it,” then we’re in a weak position. But that’s the only part that I would have [unclear] that’s not crucial. President Kennedy: Well, now, if we get what the governors are sug- 1 gesting, what they recommend . . . suggesting, which is 4 /2 cents. Governor? 1 1 Hodges: Yes. 4 /4 to 4 /2 . . . I just— President Kennedy: [Unclear] import fee? Hodges: That’s right, [unclear] an import fee and an annualization on . . . fee for that compensatory payment. [Unclear.] Let the Congress take half of it, and we’ll have a [unclear]. It doesn’t necessarily satisfy anybody, but it doesn’t make them whole, but it’s [unclear]. President Kennedy: Well, what about that? Ball: Well, I think you still lose the long-term agreement. This has become a vital point of issue with these people.97 They’ve served notice on us that they’re not going to sign the long-term agreement— President Kennedy: How important is the long-term agreement? Would you say that’s— Ball: Well, there’s no protection for the industry at all against this kind of Hong Kong textile that [unclear] the long-term agreement. Unidentified: It’s absolutely vital to establish the point. President Kennedy: The long-term agreement [unclear]. Do they understand that yet, the industry, about the long-term agreement? Unidentified: [Unclear.] Ball: The leadership, yes. 1 O’Brien: Bob thought they’d take 8 /2 cents— Hodges: If he doesn’t, that’s true. That would be illogical. O’Brien: That’s why I’m dealing with people that are, at the moment, quite illogical.

97. The equalization fee. 580 TUESDAY, AUGUST 21, 1962

Ball: Well, I reasoned, Larry, that they’re prepared to say that we’ll 1 take the 8 /2 cents in the long-term agreement, because they know that if . . . if the long-term agreement were defeated, then they would try to press for mandatory quotas. They just— Hodges: My point is, the President goes through a fight like this and they [unclear] to me . . . I don’t think the rest of the Congress will support protectionist [unclear]. President Kennedy: On what? Hodges: On coming in later in the year, two years from now, try to get— President Kennedy: Well, not if you kept the quota amount . . . if you kept the import at 6 percent? Hodges: But I would assume, that if . . . if what George says is that they don’t the agreement— President Kennedy: Oh. Hodges: —then they won’t have any 6 percent. They’ll [unclear]. 1 Duncan: Now, the 8 /2 cents, I think . . . equalization fee does not solve all the problems. [Unclear.] With all the cheap labor—grown like it is—they can still ship it in much cheaper— Ball: See, it makes the difference— Duncan: —[unclear] China.98 Ball: It makes the difference on greige goods and yarns; it makes very 1 little difference—the 8 /2 cents—when you get into finished fabrics because there you’ve got a big labor component and a lot of other costs go in, and the raw cotton cost is only a minor element.99 President Kennedy: Well, now you . . . this letter Vins[on] . . . which Kalman wrote, is that . . . did we show him that? Unidentified: No. President Kennedy: He’s got three points: he doesn’t like the [unclear]; he doesn’t like the [unclear]; he doesn’t like the state of the nation. [Unclear.] [Laughter.] Probably . . . well, anyway we don’t want to get too [unclear] . . . we have to have an answer to that letter, though. Hodges: Yeah, I had thought that it might be [unclear]. We’ve covered this . . . the others haven’t [unclear] we’ve covered this short-term

98. President Kennedy was particularly concerned at this point that the Japanese, who still imported substantial amounts of cotton from the United States, would turn more and more to the Chinese instead. 99. The equalization fee as proposed would have applied only to the raw cotton content of finished textile imports. Meeting on Trade and Textile Policy 581 agreement, there, and I wanted you to take a look at what happened under the short-term agreement in the first . . . in the first nine months. [Unclear] usually we were running 304 percent [unclear], and it is this kind of thing that [unclear]. We are hopeful we can get it down by [unclear] to 6 percent or slightly under, and that the [unclear] big corporations, everybody— President Kennedy: That’s right, the majority, and since they understand we’ve got a . . . that’s a commitment we’ve got to meet . . . Ball: Well, we’ll prepare the background. Hodges: What about the working parties? Aren’t you [unclear]? Ball: Well, we’re prepared to do that. President Kennedy: What can we do with Bob Stephens?100 They say he’s . . . [unclear] said he’s a . . . Ball: He came up and testified for the Bush amendment, which is really gutting the bill.101 President Kennedy: Well, now, what about the . . . who’s going to do the negotiating when [unclear] going to be on the advisory committee, and so on? Hodges: The negotiating team? President Kennedy: Yeah. Hodges: That guy down in Fayetteville? President Kennedy: Yeah. Ball: Well, you’ll have . . . you’d have a chief negotiator. The so- called special representative, who you appoint with the advice and con- sent of the— President Kennedy: I have no idea. If we could ever initiate [unclear]. Ball: Well, I’ve got a suggestion that I will make to you tomorrow afternoon because I’m lunching . . . Ralph Dungan and I are lunching with a fellow whose been very highly recommended by McNamara,102 whose been a—Gossett—vice president and general counsel at Ford Motor, and numerous executive . . . and he was just retired . . . 56 years old.103 He’s a

100. Robert G. Stephens was a newly elected Democratic congressman from Georgia. First elected to Congress in 1960, Stephens was a member of the legal staff at the Nuremberg trials. 101. Protectionist amendment offered by Prescott Bush (R-Connecticut) that would have restored the powers of the peril point, the limit at which a tariff cut was considered a threat to domestic industry (with corresponding powers to alter tariff rates upward) and a provision removed under Kennedy’s Trade Expansion Act. 102. Ralph Dungan was an assistant to Presidents Kennedy and Johnson and supervised presidential appointments. 103. William T. Gossett, eventually named deputy special representative under Christian Herter. 582 TUESDAY, AUGUST 21, 1962

lawyer originally, he’s moved all over the world for them, and McNamara tells me he’s the best fellow in the world for this job. And he’s available, I think. President Kennedy: Well, we just have to . . . we have to [unclear], what is his reputation? Hodges: [Unclear] the first one. O’Brien: Higher reputation than Boggs, Mr. President.104 President Kennedy: It would have to be some fellow who . . . we could get some fellow before this thing came to the floor. It’ll make a hell of a difference [unclear]. Ball: Well, he’s coming into lunch with me tomorrow, and [unclear]. Hodges: You don’t understand my suggestion; you’ve got to be sure that neither you nor I or anyone in the department is connected with it [unclear]. It’s got to be presidential and it’s got to be from the business community, such as you suggested. Ball: I wholly agree. Hodges: And I really mean that. Because it’s going to get down to where somebody at the State Department or the Commerce Department has picked a man and you’re going to hurt— President Kennedy: Oh no, it’s got to be somebody who can . . . is going to be . . . help us. You need a guy whose reputation is sufficiently enjoyed.105 Hodges: [Unclear] White House and— President Kennedy: Not only good, but he . . . not only will be good but at the least— Hodges: Well, listen, I didn’t know you . . . just as you had . . . you and Mills had [unclear] a trade policy committee, [unclear] you have a chief negotiator. The question is, if we could agree—State, Commerce, and the rest of us with you—that it would be done by a chief negotiator, responsible [unclear] and not the State Department nor— Ball: Or a [unclear] in accord with this. Hodges: Then I think then that’s . . . that’s the way you could . . . then you could make that statement. As it is now, you could say, “Well, we aren’t going to do that because the State Department convinced us that [unclear].” We just have to keep quiet—

104. Possibly Democratic congressman Hale Boggs of Louisiana. 105. President Kennedy ultimately appointed Eisenhower’s secretary of state, Christian Herter, as special trade representative, a position outlined in Chapter 5, Section 241, of the Trade Expansion Act of 1962. Meeting on Trade and Textile Policy 583

President Kennedy: Well, now if we get this fellow, and his reputation’s not good, then what about the . . . is there an advisory committee also? Hodges: There would be an advisory committee. Ball: An advisory committee— President Kennedy: How many are on that? Ball: Well, the last one we had was, what . . . about 12 . . . 16 active. . . . They’re drawn from industry, from agriculture, and from labor. President Kennedy: Now, what about if we could indicate . . . is there a chairman of that body? Ball: No, they’re not a committee, they’re advisers. Because they would be . . . as a group they’re advisers to the chief negotiator. Hodges: In order to reconvene them, if you— President Kennedy: Well, if Curtis doesn’t think that if Stephens were going to be one of those advisers . . . that would help.106 Hodges: Who? President Kennedy: Stephens. [Unclear.] Hodges: Well he would be, probably, an adviser from the . . . of the industry group that’s called in every time you have it. President Kennedy: Well, I’m just trying to dress this thing up, and can’t we, therefore, say that he will be one of the advisory group, if he could do it? O’Brien: Why don’t we . . . I think we have enough time. President Kennedy: Yeah, well . . . so, I would think—

At this point, Ted Sorensen attempted to shift the discussion to the more specific problem of wool imports which, unlike cotton textiles, did not originate from low-wage countries attempting to flood the U.S. market. Italy, Great Britain, and Japan accounted for most of the wool textiles exported to the United States.107 An overall trade surplus with Japan, a long-standing and reasonable trade relationship with the United King- dom, and the recent modernization of the Italian wool textiles industry all suggested little room, diplomatically, to negotiate new protections for the U.S. wool textile industry. Major exporting countries had also made it

106. Representative Thomas Curtis (R-Missouri), who had recently denounced the Kennedy administration for its willingness to shield textiles while purporting to promote free trade. 107. Wool textile imports from these three nations made up approximately 75 percent of the total. Hong Kong had risen rapidly to the fourth spot among these importers and also merited close attention by the administration. 584 TUESDAY, AUGUST 21, 1962

explicit that agreements on cotton textiles under the Long-Term Cotton Textiles Arrangement were not precedents for similar agreements in other fields. Moreover, new, historically high wool textile import duties had become effective on January 1, 1961; it was entirely possible that higher duties might do nothing more than price wool textiles out of the domestic market by encouraging the production of synthetic fabrics. “As was made clear in the discussion of the Textile Committee,” George Ball wrote to Deputy Special Counsel Myer Feldman in December 1962, “There is no cheap, quick, or easy way to achieve the required restraint on woolen textile imports.”108 Momentarily diverted by Secretary of Commerce Hodges’s comments on estimates of cotton textile imports (as a percentage of U.S. production), President Kennedy and his advisers began a lengthy discussion of wool textile import levels, of the upper percentage level to which the administration was committed, and of the method by which the administration could report actual import levels without causing further alarm.109

Sorensen: I think the big unresolved problem with this group tonight is wool. President Kennedy: What about wool? Hodges: Couldn’t they . . . one second say that they’ll do it from the short term to the long term . . . is it . . . are we all agreed, the State Department and the rest of us, that we will hold this long term to the . . . not more than 6 percent, whatever it takes? Is that what your committee [unclear]. Then this . . . the short term has gotten out of hand, and— President Kennedy: We’re going to hold the long term at 6 percent. Sorensen: That’s right. Ball: Sure, that’s the . . . that’s the— Sorensen: That’s right . . . that’s right. Hodges. We have, what do we have [unclear]? Unidentified: We have no commitment for that. Hodges: Huh? Unidentified: We have no [unclear].

108.“Letter from Undersecretary of State (Ball) to the President’s Deputy Special Counsel (Feldman),”5 December 1962, FRUS, 9: 547. Ball’s emphasis. 109. Wool textile imports, as a percentage of U.S. production, rose from approximately 13.6 percent in May 1962 to approximately 19.3 percent by May 1963. Meeting on Trade and Textile Policy 585

President Kennedy: OK. Ball: I don’t think that . . . you’re going to find it, mechanically, that for a certain period you may step over, you may have to go back, as long as it’s from an administrator— President Kennedy: I think we’re clear on that. How about wool? Hodges: On the wool I think will be different than [unclear]. [Brief pause; shuffling of papers; whispered voices.] President Kennedy: [reading] The Commerce Department [unclear] imports in the 12 months ending May 31st of ’62, of 50 million pounds, compared to 45 million pounds in ’61. The Commerce Department projects that [unclear] category, ’62 imports will total over 71 million pounds . . . the final result of a budget of something over 20 percent. The projection makes the unlikely assumption that the imports of Italian wool cloth, [unclear] duty-free by the Virgin Islands, can be stopped immediately.110 That would force scattered disruption of domestic wool [unclear] and imports [unclear] is obvious. No action taken by the United States under the present seven-point program respecting imports of woolen textile products as of July of this year [unclear] international— Hodges: Sixteen months after [unclear]. President Kennedy: A wool study group was requested for late Nov- ember.111 The various governments involved have formed a non-[unclear] international woolen textile agreement [unclear] meetings. Soon the Commerce Department’s projections [unclear] imports rise in the last half of ’62. We must take prompt action if limitations are being imposed on woolen imports, to restore the 15 percent level. There are only three methods by which this can be accomplished: individual quotas imposed unilaterally by the United States through a [unclear] fee; bilateral [unclear] to negotiate formative arrangements with . . . in the [unclear], together which account for 75 percent; an increase in duties in all segments of the wool textile product industries [unclear] State Department [unclear] delay. Sorensen: Well, the State Department has an alternative. President Kennedy: That’s a sad story . . .

110. Woolen imports from the U.S. Virgin Islands were being reduced significantly, but by the end of 1963 they still amounted to approximately 10 million linear yards annually. 111. A London-based international wool study group was arranged by U.S. under secretary of state George Ball. This group, made up initially of British and U.S. representatives, met for the first time in December 1962. This was followed by meetings in Rome in December 1963 and in Paris in March 1964 which included other interested European countries. 586 TUESDAY, AUGUST 21, 1962

Ball: Well, let me . . . let me just raise one question which I think is . . . we ought to . . . we ought to agree among ourselves on. I don’t think there’s been any commitment to 15 percent.112 The commitment was, we intended to implement this policy with regard to all textiles, and particularly to prevent market disruptions such as would result from an increase over current levels of imports. Now, if you take . . . if we seasonally adjust those current levels of imports—which is what you’ve done in your figures to arrive at an estimate for this year—then there never was a commitment to 15 percent. Fifteen percent was the figure which did not take into account the seasonal adjustment. Hodges: No, it did that into account, because you have a full year . . . in arriving at that 15 percent. Ball: Well, you were taking the 15 percent, anyway. Unidentified: [Unclear.] Ball: OK. O’Brien: But that’s not current levels. We were complaining about— Hodges: It says right here . . . O’Brien: —[unclear] May, June or July of this year. Hodges: [Unclear.] Sorensen: May was the latest figures . . . Ball: Yes, I understand that. O’Brien: What was the [unclear] percentage, then, in May? Hodges: Fifteen even. [Unclear] ending in May. O’Brien: Well, what was it in May? Hodges: May 7 . . . O’Brien: Sixteen-three . . . Sorensen: So we could certainly say the current level is sixteen-three, [unclear]? So, wait— O’Brien: No, we [unclear] one month, yes. President Kennedy: Well, let’s see, limit . . . we . . . limitation of tex-

112. Reference to the percentage of wool textile imports as a percentage of U.S. production. By the end of the year, adjusting somewhat to the rapidly increasing levels of imports, the popularly suggested limit had risen from 15 to 17.5 percent. See “Letter from (Ball) to (Feldman),” p. 546. Perturbed by the suggestion that he signed off on a commitment to limit wool textile imports to 15 percent, Ball told Carl Kaysen, “What happened was that after the commitment was made I simply said, ‘I don’t know how in the hell we’ll do it, but we’ll do our best.’ This is the only thing one could say. But now I find myself in a position where I am getting blamed for getting him into a misguided commitment, which couldn’t just be further from the truth” (Memorandum of telephone conversation, George Ball to Carl Kaysen, 25 February 1963, Ball Papers, Balance of Payments, 1963, John F. Kennedy Library). Meeting on Trade and Textile Policy 587 tiles to prevent market disruptions [unclear] increase over current levels of imports. This was August 7th, written? Hodges: That’s right. The last figures, sir, were May figures. So we had to interpret in terms of May figures. President Kennedy: Well, I suppose July gives us a different figure, wouldn’t it? We’re going to set terms. Hodges: [Unclear.] President Kennedy: Yeah, but I mean— Ball: [Unclear] the current. If you take August, of course, it was a [unclear]. President Kennedy: On August 7, that would be . . . you’d have to take July if you wanted to— Ball: Take July— Sorensen: [Unclear] May, June, or July. O’Brien: But nobody really knew what imports were during that period. Ball: But he said, “current level.” Sorensen: I don’t think you could take anything less than a year, it would be grossly . . . O’Brien: Certainly, that’s their understanding of the . . . what [unclear]. President Kennedy: Why? That’s what it was in May. Hodges: That’s what it was, the 12 months ending May 2nd. [Unclear exchange.] O’Brien: As far as the members up there are concerned, that’s the figure that they keep in mind. Ball: Well, where did they get it from? President Kennedy: I suppose they took the figures from May to May? Hodges: They knew, as everybody knew, that May was the last figure. So they took it [unclear]. Sorensen: Well, at least on as far as the record goes, you’re not up to 15 percent. Hodges: No, there’s no 15, just like there’s no 6 percent. [Unclear.] President Kennedy: Yeah, as far as . . . no, I told Larry O’Brien . . . I told Bill . . . Brian [unclear] it was 6 percent. That I told him. I hadn’t heard 15 percent until last night. Current levels . . . say that the current levels are the figures that . . . the level that we last have figures for as opposed to the actual level that is coming in. I must say that, I would say that . . . we ought to try to make a case right now. I would say that the current levels mean things that are coming in at this point. It doesn’t 588 TUESDAY, AUGUST 21, 1962

mean that it happens to be the last one for which we have statistics. That’s just gratuitous. Hodges: Would you take a single month, Mr. President, or a period? President Kennedy: I would say a period . . . I would say the . . . if I were going to do it. If I thought of it I would say, probably, from January to the end of July. Ball: Well, the trouble is that the Commerce Department has shown that they always go up toward the last six months of the year. So if you’re taking the low six months and extrapolating it . . . Hodges: Well, in that case, let’s take a year. Ball: [Unclear.] Hodges: Let’s take a year. You’d have to take a year, wouldn’t you? You’d have to take a year. President Kennedy: We’d have to go, say, from the 1st of July to the 1st of July. You’ve got 1st of May to the 1st of May. Actually, you’ve got the 1st of June to May 1st— Hodges: Well, we have both here on this page, and we also have— President Kennedy: One is 15 percent. Suppose you went— Sorensen: The next month is 15.9 percent . . . at the end of June. President Kennedy: Well, in any case, I don’t think we’re talking about 16 . . . 15 to 16 percent— Hodges: Closer to 16 or 17, the problem is exactly the same. Unidentified: It was 19 percent in 1960. President Kennedy: Nineteen percent for the year? Unidentified: For the year, 1960. President Kennedy: OK. Ball: It is imperative that there be some sort of a specific figure which you base it on. Now, what for 500 — President Kennedy: By what means can we give them a figure, whether 15 or 16 or 17 percent? Have we got a chart . . . I’m familiar with what happened in cotton textiles about the ratio of increase, have we got a chart showing how they were from ’57 up to ’60, so we can say that it’s less now than it was? O’Brien: That’s not in chart form, Mr. President, but we do have it for . . . we do have it in [unclear]. [Unclear exchange.] Sorensen: Yes, I have a chart from ’59 on [unclear]. President Kennedy: It was 10 percent in ’57; 12 percent in ’58, ’59 . . . 18, 19 . . . ’61 it was down a quarter. Sorensen: Fifteen percent. President Kennedy: [Unclear.] Meeting on Trade and Textile Policy 589

Sorensen: Well, then you’re— President Kennedy: Now they’re talking about a projection for ’62 back to 19 [unclear]. What could we do to squeeze that down? Ball: Well, there’s one small thing, which has already been done— President Kennedy: The Virgin Islands.113 Ball: This Virgin Islands thing. President Kennedy: Well we’re going to offer . . . We’re going to offer an amendment, are we? Ball: Huh? O’Brien: That’s not included in there. Unidentified: These figures assume that we will be able to stop [unclear]. President Kennedy: Oh, does it? Unidentified: Yeah. Hodges: Whatever the figures [unclear] between 16 and 17 [unclear] it will take some pleading with the industry—which we can do. The question is that you’ve got to take a position how we’re going to hold it to any of these figures. Ball: Yeah. Hodges: Whatever it is. President Kennedy: Are there any other means by which it can be held? Ball: There is one point that should be brought out and that is we don’t know yet that is going to be significantly above 15 or 16. This is a projection based on— Hodges: Well, we’ve got a projection that [unclear] detail, plus the projection of an industry which we checked into [unclear] just yesterday. Ball: Yes. Yes . . . well, I have a suggestion in a memorandum, there, about the way to get them to approach this thing rationally. Again, I have just given a copy to Ted. Sorensen: I just gave it to the President. President Kennedy: Where is that? Hodges: A full-blown crisis? Ball: Yeah. Sorensen: With McNamara that’s even more popular. Unidentified: I wouldn’t doubt that. Sorensen: It’s cotton compensatory payments . . . it’s cotton—

113. Reference to the discussion, above, regarding Italian wool being imported duty-free through the U.S. Virgin Islands. 590 TUESDAY, AUGUST 21, 1962

Hodges: Well, it’s that compensatory— Ball: Well, [unclear] Walter Heller, himself, said— Sorensen: In my opinion, I’d like to have Agriculture take a look at your memorandum. I think that makes a lot of sense. Hodges: I think you’d be in . . . I wouldn’t make that trouble, because you’re trying to make up [unclear] and special wool payments. Ball: They already have special wool payments. Hodges: Huh? Ball: They already have special wool payments. [Unclear exchange.] Unidentified: [Unclear] million dollars last year. Sorensen: The senator from Massachusetts was . . . cosponsored—114 Unidentified: Yeah, the Wool Act of [unclear]. [Unclear exchange.] Sorensen: It’s not a bad bill . . . program now. It solved a lot of our foreign relations problems.[Unclear exchange.] President Kennedy: Now, let’s say about . . . what are the . . . what do you think that we . . . let’s say that it’s either 15, or let’s say that it’s 17 percent—whatever the figure is—by what means can we, or can we give any commitment on this? Ball: Well, I would say this, Mr. President, that after the long-term cotton agreement is signed, it will be some time in October, we can start talking with the British and Italians. The British have always said that they would never make a deal and they only entered a long-term agreement on the assumption that we wouldn’t extend it to other fibers. But the fact is that the British have some motive for being interested in a possible deal because they’re missing the mark. They’ve had a long-term market here which they’re gradually being forced out of by the Italians and the Japanese. So we might be able to get some support from the British for stabilizing. Now, the Italian problem is a different problem because they’ve brought in a lot of new machinery and a new . . . whole new milling complex in Prado, in Italy. We’ve had some trouble, but we could probably do something with them. The Japanese, we’re . . . we spend most of our time trying to put the screws on them for one thing or another, and I suppose we could do it again, but— Unidentified: Mr. President, I saw George Ball singlehandedly do one of the most beautiful jobs of negotiation that I could imagine in this cotton textile agreement, which is even infinitely more complex than

114. Republican senator Leverett Saltonstall. Meeting on Trade and Textile Policy 591 what we’re talking about here. I’m perfectly convinced that he could do this simple little—[Laughter.] President Kennedy: Now, tell me, what is it that we can say to these fellows? Or what do we need to say to them? Ball: I think the most you can say and the least you can say, perhaps, is that you will find a way to do this thing once the cotton textile agreement is signed, to get it down to. . . . I hate to see a commitment to 15 percent, but to a level that . . . 15 or 16, skip. . . . I think you ought to have some leeway. Hodges: If you use the same current figure, that word current— Ball: Current. Yeah. Hodges: [Unclear] I think we’ll be all right. Ball: I think this is the most and least case— Hodges: OK, can you get beyond, Larry, can we get beyond the October date [unclear] agreement . . . to give them any kind of answer? O’Brien: Oh no, they’re quite happy with all the . . . I think this . . . you just mentioned . . . to say that “current figures,” so both of the [unclear]— President Kennedy: We’ll just say “current figures” and then if they start bothering us about them, I’ll just say, “I don’t know what the hell the current figures are, but they . . . whatever it is— O’Brien: They’ll say 15 percent— President Kennedy: We’ll just say, “Well, that’s the current figure.” I won’t get into what it is. O’Brien: [Unclear] because they’re not often [unclear]. They think they know more [unclear] than they have. [Laughter.] Sorensen: And also, they’re represented, primarily, by the same congressmen who do not want to see the cotton agreement on sale. [Unclear.]115 President Kennedy: OK. What about now? What else do we have? Unidentified: [Unclear] I think that— President Kennedy: What about the letter from Vinson?116 Hodges: Yes, we have [unclear] draft [unclear]—

115. As George Ball would note later in correspondence to Secretary of State Dean Rusk, “The most important companies in the industry make both cotton and woolen textiles; thus they have already greatly benefited from the Long-Term Cotton Agreement” [“Memorandum from Undersecretary of State (Ball) to Secretary of State Rusk,” 25 February 1963, FRUS, 9: 567]. 116. Most likely a reference to the letter signed by 70 congressmen, including Carl Vinson of Georgia, who spearheaded the effort to organize a textile conference among these mostly southern, mostly Democratic representatives from textile-producing states, forwarded to the 592 WEDNESDAY, AUGUST 22, 1962

Sorensen: A draft . . . Hodges: —but I told Ted that I think I would put in [unclear]. President Kennedy: Let me see that. [Unclear.] Is this your draft? Sorensen: No, no, that’s the [unclear] if you do that. President Kennedy: Now, what about . . . don’t you think we ought to— Sorensen: [Unclear] do that if we’re not going to have any meeting down here. O’Brien: Perhaps I’ll . . . President Kennedy: Get them in here [unclear]. Unidentified: [Unclear.] President Kennedy: You want to set that up, Ted? O’Brien: Well, actually, this meeting takes place unless we [unclear] from both sides [unclear] the House [unclear]. It’s a question of [unclear] hold up that bill [unclear]. President Kennedy: You’ll set it up, then? Unidentified: I’ll set it up.

The President left the Oval Office 20 minutes after the end of this meeting.

Wednesday, August 22, 1962

The President received mixed news this day. After again pressing the Soviets for a meeting of the four military commanders in Berlin, Secretary of State Rusk had little to report on the basis of his meeting with Ambassador Anatoly Dobrynin.1 Moscow had not sent any instructions to Dobrynin, so the ambassador could only say that Moscow’s policy had not changed. Meanwhile, the United States announced with its allies a plan to go to the assistance of any refugees injured by East German border guards. In Africa, the separatist government of Moise Tshombe in Katanga was sending hints it might join in a loose federation with the rest

President in June 1961. The letter warned that the administration’s Trade Expansion Act would be jeopardized by the failure to protect the nation’s textile producers (see “Letter from Members of Congress to President Kennedy,” 22 June 1961, FRUS, 9: 469–70).

1. State Department Memcon, (Rusk/Dobrynin) “Berlin,” 21 August 1962, FRUS, 15: 278–79. Meeting on Intelligence Matters 593 of the Congo, although it had not yet officially received a U.N.-sponsored peace plan. On the domestic economic front, for the first time since February, 10 of 17 leading economic indicators showed improvement. The President had a working breakfast with a group of domestic and foreign policy advisers, perhaps to plan for a press conference scheduled for that afternoon. The President headed over to the State Department for the press conference after bidding farewell to Vice President Johnson, who left the South Grounds on a two-week trip to the Eastern Mediterranean and Asia. The President had few official appointments this afternoon. After five minutes with reporter Sander Vanocur, the President saw John McCone and Maxwell Taylor for an update on policy discussions about the increasingly alarming developments in Cuba.

6:10 –6:37 P.M.

It’s clearly a, it’s kind of a, of a directive that . . . [to] avoid getting involved, you or your office getting involved . . . [unclear] I can do under the law—there’s nothing wrong [with it ]— By the National Security Act . . .

Meeting on Intelligence Matters2 A new crisis was brewing. For weeks the President had expected a severe challenge to the Western position in Berlin. But, in recent days evidence had accumulated of a remarkable Soviet effort in the Caribbean. Allied air reconnaissance had photographed dozens of Soviet merchant ships in the Atlantic, apparently weighed down with military supplies. The arrival of this information sharpened the debate over how to remove Castro from power. As Kennedy would tell a group of congressmen, “If I could get rid of him easily, I would.”3

2. With President Kennedy, John McCone, and Maxwell Taylor. Tape 15A, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. In 1992, the CIA released a heavily redacted memorandum of conversation written by McCone in his office after the meeting. As is clear from the tape transcript, the long black spots reflect the removal of paragraphs on China and Hanson Baldwin [see Mary S. McAuliffe, ed., CIA Documents on the Cuban Missile Crisis, 1962 (Washington, DC: Central Intelligence Agency, 1992), document 7]. 3. See “Meeting with Congressional Leadership,” 4 September 1962. 594 WEDNESDAY, AUGUST 22, 1962

John McCone, the director of central intelligence, did not believe that Castro could be removed without U.S. military intervention. Although not yet in government in April 1961 (he became Director in November), McCone already concluded this to have been the lesson of the Bay of Pigs. McCone was adept at cultivating powerful allies. He was considered so close to former President Eisenhower that Kennedy often used McCone to keep a finger on the older statesman’s pulse.4 Among the New Frontiersmen, McCone became good friends with Robert Kennedy. The Robert Kennedy–McCone friendship had helped to raise the decibel level of dire warnings within the administration of Soviet designs on Cuba. As early as May 1961, Robert Kennedy had warned his brother that it was only a matter of time before the Soviets made a missile base out of the island. By the summer of 1962, John McCone was making the same prediction. After August 20, when President Kennedy approved a stepped-up program of sabotage and underground political activity to weaken Castro at home and undermine his credibility abroad, McCone apparently arranged a high-level meeting on Cuba in Secretary Rusk’s office. Distributing new CIA estimates, McCone presented two powerful arguments: (1) the Soviets did not believe Cuba was an economic basket case and (2) the Soviets had begun to invest the island with serious amounts of military supply.5 In short, Cuba could limp through despite U.S. economic warfare and, in time, grow into some kind of military power. “There was general agreement that the situation was critical and that the most dynamic action was indicated,” McCone wrote in his summary of the meeting.6 But only the President could authorize this “dynamic action.” McCone noted that Rusk and Bundy, in particular, had a hard time sep- arating the Cuban problem from Berlin. The State Department and the White House, or at least Bundy, assumed the real Soviet initiative would come in Berlin, that Cuba was a sideshow, dangerous in that it might dis- tract the United States from Europe.7 McCone met with the President not only to brief him on the previous day’s meeting on Cuba at the State Department but also to discuss

4. See McCone memoranda in Post-Presidential (Augusta–Walter Reed) Series, Dwight D. Eisenhower Library. 5. CIA reports, “Recent Soviet Military Aid to Cuba” and “Soviet View of the Cuban Economy,” cited in “Discussion in Secretary Rusk’s Office at 12 O’Clock, 21 August 1962,” John McCone, FRUS, 10: 947–49. 6. Ibid. 7. Ibid. Meeting on Intelligence Matters 595 other items, for he was due to leave the United States on August 24 for a three-week honeymoon with his new wife. The Hanson Baldwin matter remained a concern of the President and, therefore, a McCone priority. Three weeks earlier the President’s Foreign Intelligence Advisory Board (PFIAB) had recommended the creation of a press leaks investigation unit in the Central Intelligence Agency. Kennedy was still exercised over the leak associated with Baldwin’s July 26 New York Times piece on the hardening of Soviet intercontinental ballistic missile sites and wanted to move on this matter. He had concluded the leak came from a high-level member of his administration and only a week earlier pressed the FBI to re-interview this official. As a result, despite the potential for political embarrassment, Kennedy was intent on widening the CIA’s role in domestic security. The meeting began with a discussion of yet another intelligence matter: the CIA’s joint operations with the Nationalist Chinese to improve intelligence gathering in the People’s Republic of China.

John McCone: There’s three things I wanted to mention: One is that, as you know, some kind of [unclear] connection with the Chinese nationalists, we approved some of these 20-man— President Kennedy: Yeah. McCone: —20-man drops. And then they didn’t go forward. President Kennedy: Yeah. McCone: And we discussed it here a couple of weeks ago.8 President Kennedy: Right. McCone: And I suggested that we let them come up with the initiative and support it if they do come up, but not be in the position of pressing them and urging them. They have come now suggesting one 20-man drop during the period of 27th of August through the 2nd of September. President Kennedy: General MacArthur was in and went into this in some detail and says that what we ought to . . . they ought to have amphibious landings and not try to do the air thing. He said they’d pick it up, the people will pick it up on radar and they’ll be caught much quicker than they would if left by [the] seacoast. And I don’t know why they’ve never used the sea.9

8. See “Meeting on China and the Congo,” 8 August 1962. 9. See “Meeting with General Douglas MacArthur,” 16 August 1962. 596 WEDNESDAY, AUGUST 22, 1962

General Maxwell Taylor: They have to a certain extent; but they find the coast is pretty well guarded. And the sensitive area where they might have a guerrilla operation, build up something of a guerrilla nature, isn’t found on the coast. I do think, though, that the take we’ve got out of the . . . intelligence take we’ve got from China has been surprisingly low. You’d think with all our contacts [unclear] on the continent, we could have done a lot better. But they have not been aggressive at sea primarily because they say they don’t do the right places. President Kennedy: But you have heard General MacArthur address himself to these? Taylor: Oh, yes. President Kennedy: We had . . . Did you spend much time with him? Taylor: Oh, when I was chief [of staff of the U.S. Army], I always used to call him once a year. And I thought when I get in office [unclear], I’d call him.10 President Kennedy: Did you know him when he [was]—in Korea? Were you under his command at all? Taylor: No sir, I never saw him at all during World War II. I had the feeling [unclear]— President Kennedy: How about Korea? In the Korean War? Taylor: No, sir. [Unclear.] President Kennedy: He’s a very impressive fellow, MacArthur. Taylor: Oh, yeah, no doubt about it. No doubt. . . . President Kennedy: God, he can—You’d have to put him up near the top, wouldn’t you? Taylor: [Unclear.] Very much so. Very much so. President Kennedy: [Unclear] this . . . with that unfortunate [unclear]. Taylor: Militarily he exposed himself in that, in the Yalu operation. President Kennedy: Yeah. Taylor: —[unclear] his forces. President Kennedy: But you know . . . but he is still. God, he can talk— Taylor: You think someone at . . . President Kennedy: —even at 82. I will say he had several ideas

10. Taylor is referring to the fact that he would become the Chairman of the Joint Chiefs of Staff in September. Meeting on Intelligence Matters 597 which seemed wholly cockeyed. He said that what we ought to do is to use our control of the sea and the air in order to [unclear] to compel a withdrawal of the Communist troops from the borders of China in the south by moving Nationalist troops up to South Korea, which would cause them to build their—move forces up and this is the way you use this powerful arm. But I decided [unclear]. Taylor: That . . . that’d upset the equilibrium in the Far East . . . might do some good. President Kennedy: Right. [reading] “The wild dragon can acquire the shark.” Well, [unclear] I guess. McCone: We’ll do that. We’ll try that. Six minutes and 42 seconds excised as classified information. President Kennedy: How are we doing with that setup on the [Hanson] Baldwin business? McCone: Well, I’ve got a . . . finally got a plan in which CIA is completely in agreement with. It does a number of things that were recommended, including the setting up of this task force, which would be a continuing investigative group reporting to me. We are recommending that DIA set up a similar group with respect to leakage of sensitive and classified information which is not—11 President Kennedy: DIA? McCone: Yeah. That’s not of an intelligence nature— President Kennedy: What’s DIA?12 Taylor and McCone: That’s [the] Defense Intelligence [Agency]— President Kennedy: Oh, I see, it wouldn’t be the— McCone: Or somebody else . . . President Kennedy: Would you have supervision over the leakage from the Department of Defense? McCone: As far as intelligence information is concerned. President Kennedy: Yeah. What would this DIA group [do]? McCone: Well, they would be for nonintelligence type—

11. The abbreviation DIA stands for Defense Intelligence Agency. 12. It is interesting that Kennedy did not recognize the abbreviation DIA. His defense secretary, Robert McNamara, created the DIA in 1961 to weaken the military’s influence over the drafting of National Intelligence Estimates on Soviet power. McNamara believed the service intelligence units tended to exaggerate the size of the Soviet military, especially its nuclear force. For a treatment of the setting up of the DIA, see Patrick Mescall, “The Birth of the Defense Intelligence Agency,” in North American Spies: New Revisionist Essays 1, ed. Rhodri Jeffries-Jones and Andrew Lownie (Lawrence: University Press of Kansas, 1991), pp. 158–201. 598 WEDNESDAY, AUGUST 22, 1962

President Kennedy: Right. McCone: —of leaking. President Kennedy: I saw that memorandum, I got, about what the other two New York . . . the previous leaks had done to—13 McCone: Yeah, yeah. That’s a terrible event. Then— President Kennedy: I also saw— McCone: We’re recommending that the head of each department arrange to keep a, to have all people in their departments maintain an active log of their press conferences, press meetings, and discussions and memoranda on what they talked about. President Kennedy: All right. That’s going to go to who? McCone: Well, I haven’t got it checked out who, under instructions from you with Defense and State and the Attorney General. President Kennedy: And then that, that— McCone: Then it will come to you as a recommendation from me. President Kennedy: Then anyone who had intelligence would have to log their meetings? McCone: That’s right. President Kennedy: This would apply to State? McCone: State, Defense, AEC. AEC does it anyway. At least they always did when I was there. And CIA always did. President Kennedy: Yeah. That’s why— McCone: I get a log every week of all the contacts they make and memoranda of the discussions. Taylor: Do you? McCone: I write a memoranda— Taylor: Has that ever been revealed to the press? [Have] you ever been— McCone: Oh, no— Taylor: —pinned with this? McCone: No, nothing’s been [unclear]— President Kennedy: Oh, well I would think we are going to get some abuse. And, I think, [I’m] delighted to take it on this issue. If they ever get mean enough, because this—this is really . . . Taylor: Well, it’s long overdue to do, to do something about it. McCone: It’s clearly a, it’s kind of a, of a directive that . . . [to] avoid getting involved, you or your office getting involved . . . [unclear] I can

13. This document may have been written by PFIAB. No CIA document meeting this description has been found. Meeting on Intelligence Matters 599 do under the law—there’s nothing wrong [with it]—By the National Security Act, I’m charged with [unclear].14 President Kennedy: Well, I think they’re scared that . . .You know . . . I think these fellows who’ve been talking to Charlie Murphy . . . and they’re the top group, as you know, it’s everybody, it’s not the low fellows.15 Charlie Murphy and Hanson Baldwin and these fellows who’ve got these very good contacts over there. [Taylor or McCone quietly agrees.] They’re all well regarded and they talk to them so frankly. [Another positive grunt.] So I think if they begin to think they’re going to have to write a report on it [McCone mumbles assent], it’s going to have a very inhibiting effect, I think. And especially when I saw from [FBI Director J. Edgar] Hoover that they figured there were 761 people that had this secret information. [Kennedy suppresses a laugh.] McCone: Yeah. Yeah. Yeah. President Kennedy: That’s an awful lot of people. McCone: Yeah, that’s what he told me the other day [unclear]. I haven’t seen his report at all. I talked to him [unclear] on Friday.16 Six minutes and 46 seconds excised as classified information. McCone: Now the other subject is Cuba. I reviewed in particular detail with Secretary Rusk and McNamara and General Taylor and others yesterday for . . . because the evolving situation was . . . appeared more alarming to us than it did on August the 10th when we last reported and gave the information,17 which was the basis of the commu-

14. The National Security Act of 1947, which created the Central Intelligence Agency and the National Security Council, endowed the new position of director of central intelligence with sole responsibility in the executive branch for the “protection of sources and methods.” This is clearly the authority that McCone is referring to in this conversation. Had the establishment of this unit become known, McCone’s legal opinion would have been sorely tested. The National Security Act also prohibits the Central Intelligence Agency from engaging in domestic intelligence operations. A decade later Congress would launch a wholesale investigation of the CIA in part because of newspaper allegations that the agency was operating within the United States. 15. Charles J. V. Murphy was a freelance writer, whose assignments included serving as ghost- writer for polar explorer Richard Byrd and the controversial Duke and Duchess of Windsor. Kennedy disliked him for his work as a longtime contributor on defense issues to Time-Life publications. Murphy’s stinging critique of Kennedy’s handling of the Bay of Pigs affair laid the basis for later assumptions that the operation might have succeeded had it not been for President Kennedy’s last-minute decision not to send a second air strike against Cuba. Murphy had benefited from many high-level interviews for that piece. 16. McCone spoke with J. Edgar Hoover on Friday, 17 August, the day before the report on the Baldwin affair was issued. 17. The meeting occurred at noon, 21 August, in Secretary Rusk’s office. McCone’s memcon for this meeting appears as document 6 in CIA Documents, McAuliffe. 600 WEDNESDAY, AUGUST 22, 1962 nication from General Taylor to you and the guidelines, which you approved.18 What has happened is that a substantial number of ships have come into Cuba: 21 in July and some 17 in August. They’ve brought in substantial quantities of materiel, military as well as special electronic equipment, many large cases, which might contain fuselages of fighter airplanes or it might contain missile parts. We do not know. Many of the ships were unloaded very mysteriously at night in areas with all Cubans excluded from the area. In some instances, they even went to the extreme of dropping the trailers into the holds of the ship, loading them and covering them with tarpaulins, taking them out. There have been 4[,000] or 5,000 Soviets, [who] have come in on five passenger ships that are docked. One of them, with 1,500, docked publicly and was given a great deal of publicity on the radio and [in] the press. The other four were docked out of Havana under rather covert arrangements. The people were kept away from the Cuban people, and an atmosphere of secrecy surrounded the whole business, not only getting the passengers off the ships but also the unloading of the ships. Areas in Cuba have been isolated by having Cubans evacuate their homes on 72 hours’ notice, to provide compounds for some unexplained reason. And all of this has been going on. Thirty-nine seconds excised as classified information. McCone: . . . he said that today that he had seen a great many Soviets and Orientals who had recently entered the country. He estimated that there were 4,500 Soviets, including a substantial number of Soviet doc- tors and physicians, many of whom are women. And about 2,000 Orientals, presumably Chinese but possibly North Vietnamese. Many of the Soviets were civilians; a great many were dressed in Cuban military uniforms. He personally and others in the embassy and other dependable sources have observed large quantities of Soviet military materiel, trucks, electronic equipment, et cetera.19 Two seconds excised as classified information. Castro’s position was more secure than it was ten months ago when he visited Cuba. Moreover the population is resentful, but they’re apa-

18. President Kennedy approved the guidelines for phase II of Operation Mongoose on 20 August (see “Meeting on Intelligence Matters,” 20 August 1962). 19. The United States had closed its embassy in Cuba in January 1961. McCone was talking about an unidentified foreign source whose country has an embassy in Cuba. Meeting on Intelligence Matters 601 thetic and nonbelligerent. Very few military personnel were witnessed in the streets and, in fact, few police were in evidence. As contrasted with the situation ten months ago when police and military were stationed every few yards with Tommy guns in hand. Two seconds excised as classified information. The Soviets are there to render technical assistance to agriculture and industry and to the military. More particularly, to take control of the situation should there be an uprising. His confirmation, an eyewitness and a man as close to us as he, more or less substantiates this sheaf of reports that we have had. We’ve examined into the economic situation. We feel that with proper technical assistance Cuba could be made so that it would not necessarily be a continuing liability to the Soviets. We think that’s the appraisal that the Soviet economists have put on Cuba. President Kennedy: They can make it viable? McCone: Make it viable. Taylor: But this looks like massive aid to restore an economy that is definitely going down. McCone: Going down. Taylor: Yeah. McCone: It looks . . . It seems to us, Mr. President, that they saw this going down, they saw they were going to lose it. So they thought they ought to do a [unclear]— President Kennedy: Now that would be separate from the question of whether they are building some missile bases, isn’t it? McCone: Well, no, I think the two are related. I think they’re doing both. I think that they’re . . . We have evidences of some construction being handled, having been started recently, by Soviet technicians with newly imported Soviet equipment. We don’t know just what it is. We’ve had a U-2 standing by for two days now; but with a front over Cuba and [unclear] to go today—20 Taylor: We’ve had very good coverage of that in the past, Mr. President. President Kennedy: So we haven’t had any idea what they could—we have to wait and see what—[Taylor speaks at the same time as the President but his words are indecipherable.] McCone: We have to wait and see. And we will have that—and it will be reported it to you. We think politically that the Soviets have two

20. The cameras on a U-2 required clear skies to produce usable photographs. 602 WEDNESDAY, AUGUST 22, 1962

things in mind: one, that they have, their prestige is at stake here; and secondly, if they can establish this as a viable place, they first have a communist society which can be an example for all dissident groups on the continent. President Kennedy: Yeah. But it seems to me what we ought to try to do is to get— McCone: Secondly, a bridgehead. President Kennedy: —is to see if we could get the amount of estimated assistance technically, economic and so on, that they are giving. I think this would be helpful up on the Hill when we get our own Alliance for Progress—if they could hear what they’re giving to Cuba— Taylor: Well, it is very substantial— McCone: They have over 750 million dollars . . . Taylor: How they can afford this— President Kennedy: For how long a time? McCone: Well, from the start except— President Kennedy: Could you get me, could you have somebody, John, send me over a memo on that because I might . . . ? McCone: Yeah. I can do that. President Kennedy: I’ll give it to the proper people up on the Hill. Taylor: Now tomorrow, Mr. President, it is planned after your 10:30 meeting which is on the net evaluation of the study report—21 President Kennedy: Yeah. Taylor: —to discuss Cuba with Mr. Rusk and Mr. McNamara and— President Kennedy: OK. McCone: Our feeling is, for what it’s worth, that this is going to, that if they, that the evidences of the type of assistance that they are putting in there, we can expect a more formidable situation to confront us in Cuba with the passage of time. We don’t think that it’s going to disinte- grate, Cuba. And that’s our appraisal. Left alone it probably would disin- tegrate because of lack of competence but we think that they can put in enough competent people, technicians and so forth, and with the natural resources and the agriculture and the industrial base that they’ve got, they can bring this up to a viable economy. Taylor: But at a real price, I would think. McCone: At a real price.

21. Taylor may be referring to the meeting on Cuba scheduled for the next morning after the Net Evaluation Subcommittee Staff and the Joint Chiefs of Staff security personnel reported to the President. The Net Evaluation meeting was scheduled for 10:00 A.M. THURSDAY, AUGUST 23, 1962 603

Taylor: Eight hundred million thus far, isn’t it? Their . . . price tag will be much higher than . . . President Kennedy: I’d like to be able to—I think this would be very valuable for the Hill to be able to show what they are putting into Cuba alone. [Unclear] we don’t want to, sort of . . . But, anyway, we’re going to have a meeting on this tomorrow. McCone: Yeah. Taylor: Good. McCone: And I’ll have the . . . I’ve got those figures now. President Kennedy: OK. The meeting ends.

The meeting with McCone and Taylor was the last on the President’s calendar this day.

Thursday, August 23, 1962

The President’s schedule was neatly divided between foreign and domestic policy on this day, with foreign policy the focus of the morning. The day started with a Rose Garden reception for a group of teachers in the exchange program named after Arkansas senator William J. Fulbright. Immediately afterward, the President returned to the Oval Office to make a telephone call to lobby a senator. 604 THURSDAY, AUGUST 23, 1962

9:36 A.M.

If we get that temporary unemployment compensation, the public works, and this tax thing, and a decent trade bill, and these other things, we’ll end up in a hell of a lot better than they have almost any time since World War II.

Conversation with Philip Hart1 Kennedy called Senator Hart to lobby for an investment tax credit that the administration supported. President Kennedy wanted to soften the business community’s general political opposition to him as well as provide a mild economic stimulus. The bill passed. The President also wanted to require investment banks and brokers to withhold a certain percentage from the sales of stocks and bonds the same way the government withheld money from paychecks to cover future tax liability. While this was not a new tax, just a means to help the government collect taxes it was owed, the banking community vigorously opposed this measure, much to President Kennedy’s chagrin. The President and Hart also discussed the status of Kennedy’s nomination of Thurgood Marshall to the U.S. Court of Appeals.2 Marshall was the first African American appointed to the Federal Appeals Court, and his nomination was not supported by the southern members of the Judiciary Committee that Hart sat on. On August 20, the committee had postponed a decision on the nomination for the third time in ten days.3

Philip Hart: Very good, sir, and you? President Kennedy: Very good. How are you doing? Listen, I hate to bother you, but I wanted to talk to you about that investment credit for a minute, which I make . . . I don’t know what our condition is up

1. Dictabelt 35.1, Cassette K, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 2. The great-grandson of a slave, Thurgood Marshall successfully argued Brown v. Board of Education. In all, Marshall appeared before the Supreme Court 32 times, winning 29 of his cases. In 1965 President Lyndon B. Johnson named him solicitor general, and in 1967 Marshall became the first African American member of the Supreme Court. John C. Jeffries, Jr., Justice Lewis F. Powell, Jr. (New York: Scribner’s, 1994), pp. 258–60. 3.“Hearing on Thurgood Marshall Is Recessed Again,” New York Times, 20 August 1962. Conversation with Philip Hart 605 there, and I know that McNamara has indicated some displeasure,4 but I think that for the amount of the, that it’s the most effective tax stimulus that we can get for the amount of money that’s involved, number one. And number two, while Byrd’s substitute, this alternate language to withholding does not bring back a complete balance.5 It nevertheless brings us back a good deal more than has been estimated according to the Treasury, and in addition will cause the banks so much misery that they’ll go for withholding, we think within a year or two years. So that while you were thinking about it, I did want you to know it seems to me it would be helpful to us and the country if we could get the thing by. Hart: Sir, I almost apologize for having caused you to take two minutes out to check with me. President Kennedy: No, no. No. Hart: I had only two dilemmas. One reflecting my ignorance really of what was going on in the finance committee, and second, my realization that having offended the UAW and the unions on the satellite cloture vote on the satellite bill— President Kennedy: Yeah . . . yeah. Hart: —I was stepping into a second go-around with them on this.6 President Kennedy: Do they care much about the satellite [bill]? I never heard much about it from them. Hart: Oh, my Lord, yes. President Kennedy: Well they’ve got to, but I wondered, whether, well— Hart: Anyway and then having marched out of step with Pat McNamara on that and caused a flap at home and [in] the party, I hated to see a second approach. So— President Kennedy: I see. Hart: —I will try and persuade Pat to take a good, careful look at this so we can be together on it. President Kennedy: Right, OK, fine. Well, I think that it’s—

4. Pat McNamara was Democratic senator from Michigan. 5. Harry Byrd was Democratic senator from Virginia and chairman of the Senate Finance Committee. 6. Senators Albert Gore, Sr., and Douglas led a filibuster against the Communications Satellite Bill for over a month, protesting that AT&T would reap enormous profits from a communications satellite it would operate that was built at taxpayer expense. For the first time since the 1920s, the Senate voted for cloture to end a filibuster on this bill, which then passed. 606 THURSDAY, AUGUST 23, 1962

Hart: [Unclear.] President Kennedy: I will . . . I think that it’s not an issue, which as I say, I know the rank and file would be interested in, and I think for the amount of money that’s involved it gives a good deal . . . it gives stimulus. In addition, I think it . . . as I said yesterday at the press conference, I think that with some luck we could end up with a pretty good record this year. [Hart mumbles assent.] If we get that temporary unemployment compensation, the public works, and this tax thing, and a decent trade bill, and these other things, we’ll end up in a hell of a lot better than they have almost any time since World War II. So that’s . . . we’re so close to it, and higher education if we can get Wayne Morse back to— Hart: Back to earth. President Kennedy: Back to earth. Hart: Add one more thing, and I have all your troops doing everything they can . . . but this Thurgood Marshall confirmation . . . 7 President Kennedy: Oh, we’re going to . . . [unclear] home without it. Mansfield [unclear] when I was speaking with him yesterday and will discharge the committee. Hart: Great. President Kennedy: It’s just that they’re screwing around on . . . Johnson’s got some trouble down there. But it’s definitely going to be done, and I said I’m goddamned tired of seeing Keating sitting with Marshall—8 Hart: Amen. President Kennedy: —so I said yesterday— Hart: Amen. President Kennedy: What? Hart: He and I are neither on that subcommittee, but we both appear to run it. [Unclear] member of the minority. President Kennedy: Well I said yesterday in the press conference that there were seven circuit [unclear] in the New York area.9 Four of

7. President Kennedy had appointed Thurgood Marshall to the Second Circuit of the federal bench, but the Judiciary Committee would not approve him, so Kennedy appointed Marshall during a recess and hoped to get confirmation later. 8. Kenneth Keating, Republican senator from New York, charged the Democrats with employing delay tactics to prevent Marshall’s confirmation. 9. At his press conference of 22 August, the President said: “In regard to Senator Keating, I do think it’s interesting to point out that there were seven Circuit Court vacancies during the previous administration which the Senators from New York had something to say about the appointments to those, and Thurgood Marshall was not nominated on any of those occasions” [“The President’s News Conference of August 22, 1962,” The Kennedy Presidential Press Conferences (New York: Coleman, 1978), p. 368]. Conversation with Philip Hart 607 them came from New York, and Thurgood was never nominated. So that, that was just. [Laughs.] OK. Hart: Thank you very much. President Kennedy: All right. Hart: Good-bye.

At 10:00 A.M. the Joint Chiefs of Staff and the leadership of the Defense Department met with the President in the Cabinet Room to discuss the U.S.-Soviet military balance. Following this meeting, where the Presi- dent was probably briefed on Soviet nuclear inferiority, Kennedy moved to a discussion with his Cuba policy team on John McCone’s prediction of a Soviet nuclear missile base on the island. This meeting would mark a turning point in the administration’s Cuba discussions. For the first time, the President authorized contingency planning to respond to a possible Soviet deployment of nuclear missiles in Cuba.10 For weeks he had resisted acting on the alarms sounded by McCone and the Attorney General. Dean Rusk and McGeorge Bundy had assured Kennedy that the Kremlin would not gamble with putting nuclear weapons on a Caribbean island. Now the President was prepared to instruct the U.S. government at least to study a full range of options, including “blockade or invasion or other action beyond MONGOOSE B plus,” in the event the Soviets sought to close the nuclear gap with a base in Cuba. In addition, the President called for a study of the possibility of removing U.S. Jupiter missiles from Turkey, where they had long been considered militarily obsolete. McCone, for one, had registered concern that the U.S. missile base in Turkey—and a similar one in Italy—was vulnerable to attack from the Soviets in retaliation for any action against a Soviet surface-to-surface missile base in Cuba. It is not known how highly the President rated the probability of a Soviet decision to break all precedent and deploy nuclear missiles outside of Soviet territory. Once in the meeting the President apparently made a point that indicated he thought a Berlin crisis still the more likely scenario for the fall. Nevertheless, to be in a better position to know what was happening on Cuba, the President called on the intelligence

10. John McCone, “Memorandum of Meeting with President Kennedy,” 23 August 1962, FRUS, 10: 953–55. A series of decisions issued from this meeting. These are in National Security Action Memorandum, No. 181, FRUS, 10: 957–58 608 MONDAY, AUGUST 27, 1962 community to step up its surveillance of the island. Another U-2 mission was scheduled for August 29. President Kennedy may well have taped the Net Evaluation and Cuba meetings. Tape number 16 in the Secret Service tape series, which was most likely made on this day, is described by the John F. Kennedy Library as being blank and has not been released. The series picks up with Tape 17, which contains conversations recorded on August 27.

Monday, August 27, 1962

The President had spent the weekend in Newport, Rhode Island, and reached the White House just after 10:00 A.M. He had no scheduled appointments until noon, when he was to be at Walter Reed Hospital to present the Bronze Star for Meritorious Service to Major Lawrence R. Bailey, who had been kept a prisoner in Laos for over a year. Sometime during the day the President dictated a memorandum to Eugene Zuckert, the secretary of the Air Force.

Time Unknown

I do not know how Time secured this quotation, but I would be interested to know suggestions for improving the “tone and pace of our program.”

Dictated Memo to Eugene Zuckert1 After his conversation with the President on August 21, 1962, Zuckert replied by memorandum, criticizing Kennedy for focusing in his public statements solely on the peaceful uses of space. This emphasis, he argued, created an international perception that while NASA programs were peaceful, the U.S. military’s programs had to be “war-like and aggressive.” Zuckert told Kennedy that “this philosophical limitation

1. Dictabelt 35.2, Cassette K, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. Dictated Memo to Eugene Zuckert 609 must be removed if we are to provide the climate for an energetic space program aimed at the national security.” He stressed that this change in rhetoric was the “most important single action” that the President could take “in behalf of the military space program.” As if this confidential criticism were not enough to irritate the President, Time magazine published a short piece about the space program which quoted Zuckert as saying “The tone and pace of our program are not right.” The article also stated that the Air Force “had consistently had its proposals turned down by the Department of Defense.” The President needed to respond.

President Kennedy:

1. For fiscal ’63, that were not approved by us, and secondly what programs they now recommend. 2. The latter matter I understand is under consideration at the moment, coming to me after having been submitted to the Secretary. 2. [sic] I noticed in Time magazine of this week, August 31st, has a quotation ascribed to you, taken from a conversation between you and McNamara. “The tone and pace of our program is not right.” I do not know how Time secured this quotation, but I would be interested to know suggestions for improving the “tone and pace of our program.” 3. Paragraph 3. Quite obviously there must not be duplication between the Air Force and NASA.

[to Evelyn Lincoln] No, leave that out. Just send that over to him. [Unclear.]2 The dictation ends.

After the presidential midday break, Kennedy met with Congressman Sidney R. Yates to make a film for Yates’s campaign. Then the President entered a meeting with his budget director, David Bell. His first recorded meeting came right afterward. Although the Middle East did

2. The memorandum as sent reads:

Thank you for your memorandum to me on space. I am not so much interested in quotations from my previous speeches as I am in finding out exactly what programs the 610 MONDAY, AUGUST 27, 1962 not require as much of this President’s time as it had for his predecessor or would for his successor, the region did make demands on the Kennedy White House. With so much now in the air about the possibility of the Soviets’ sending some kind of missiles to Cuba, the President found today that he had to consider the consequences of his own decision to sell surface-to-air missiles to an ally.

5:00 –6:06 P.M.

It’s like a Negro wanting to go back to Mississippi, isn’t it?

Meeting on Arab-Israeli Questions3 The Kennedy administration tried to perform a delicate balancing act in the Middle East. The United States had two separate and sometimes competing objectives: to limit Soviet influence in the region and to moderate the Arab-Israeli conflict. It was hard to pursue both objectives simultaneously and particularly hard when dealing with Gamal Abdul Nasser, the ambitious leader of Egypt, and the United Arab Republic, created by a federation of Egypt with Syria in 1958. Egypt received Soviet military aid and was the strongest of the Arab states hostile to Israel. As of August 1962 Kennedy faced a dilemma. When Kennedy paid a state visit to Israel in May 1961, the Israelis asked him for Hawk antiair-

Air Force recommended to us for fiscal 1963 which were not approved by the Defense Department or me. Secondly, I would like to find out if there were any programs which were proposed by the Air Force between our budget and the recent Soviet flight. Thirdly, I notice that TIME magazine of this week, August 31st, has a quotation ascribed to you taken from a conversation between you and McNamara—“But the tone and pace of our program was not right.” I do not know how TIME secured this quotation, but I would be interested in having your suggestions as to how we can improve the tone and pace of our program.

Zuckert later responded with three suggested improvements: (1) the United States needed to expand its ground-based detection and tracking network for outer space, (2) [deleted], and (3) a manned military space station. The Air Force Secretary also denied giving the quotation to the Time reporter. These memoranda can be found in “Air Force 7/62–12/62” folder, President’s Office Files, Box 69A, John F. Kennedy Library. 3. Including President Kennedy, Walworth Barbour, McGeorge Bundy, Myer Feldman, Dean Rusk, Robert Strong, and Phillips Talbot. Tape 17, John F. Kennedy Library, President’s Office Files, Presidential Recording Collection. Meeting on Arab-Israeli Questions 611 craft missiles as protection against Soviet MiGs being acquired by Egypt. Kennedy had temporized. He knew now, however, that the Israelis had begun to dicker with British suppliers for Bloodhound missiles which would serve the same purpose. He knew, too, that the Israeli government was eager to have nuclear weapons of its own and had begun to receive assistance of various types from France. If he continued to deny Israel the Hawk missiles, he might not only cause U.S. contractors to lose out to British contractors but also spur the Israelis to speed up their nuclear program. The one chance for giving the Israelis Hawk missiles without driving the Egyptians further into the Soviet camp seemed to lie in requiring, as a condition, that Israel make concessions regarding Palestinian refugees who were protégés of the Egyptians. The United Nations had a Pales- tinian Conciliation Committee (PCC) consisting of representatives from France, Turkey, and the United States. Secretary general of the United Nations. Dag Hammarskjöld had appointed Dr. Joseph E. Johnson, head of the Carnegie Endowment for Peace as a special representative of the PCC, and Johnson had quietly worked out a plan for repatriation, compensation, and resettlement of the refugees.4 In mid-August, the President had sent his deputy special counsel, Myer Feldman, to test Israel’s reaction to the Johnson Plan. On August 24, a day after returning, Feldman met with Kennedy to report Israel’s grudging willingness to consider the Johnson Plan provided that Egypt did not press too hard for the return of the refugees to Palestine.5 Kennedy now needed to know whether Nasser would accept the Johnson Plan and the sale of the Hawk missiles to Israel. On August 24, 1962, John S. Badeau, U.S. ambassador to the United Arab Republic, and Robert Strong, director of the office of Near Eastern affairs at the Department of State, had met with Nasser at his vacation cottage in Alexandria, Egypt, for a little over an hour.6 The meeting in the White House began with Strong’s report on Nasser’s reactions.

Robert Strong: The mood became a little bit more sober than it had been at the beginning. However, he showed no signs of perturbation in

4. For a text of the Johnson Plan, see FRUS, 17: 39–47. 5. Memorandum of Conversation, 24 August 1962, FRUS, 18: 73–74. 6. For a summary of conversations with Nasser, see Badeau to Department of State, telegram, 24 August 1962, “U.A.R., Security, 1962” folder, President’s Office Files, Box 127, John F. Kennedy Library. 612 MONDAY, AUGUST 27, 1962

any way but also made no comment on it. In starting the conversation, Ambassador Badeau remarked that it had been our understanding that we could talk over our differences and our problems fully and frankly. And with this, President Nasser agreed—concurred. On the missiles, he denigrated the military importance of them but said that we could expect to have adverse political effects from it in the Arab world. He predicted that there would be strong political attacks on us by the Arabs and said that that would include not only the United States but the West, in general. He remarked that the Soviets would prove willing to sell rockets to the Arabs as a result of this. He gave us a reassurance on the nonaggressive intentions of the U.A.R. towards Israel and he remarked that the U.A.R. was building a deterrent force only, that the stress was being placed on air. He indicated again that whoever started the war would not know how it was going to come out and that for the U.A.R. there was no military solution to the problem in sight or contemplated. He added that U.A.R. policy was going to continue in this respect, but it did not intend to respond to the charges by the other Arabs that it had made a deal with us over Israel in exchange for aid for this policy. And you— President Kennedy: Have there been such challenges? Strong: Yes, the other Arabs have charged frequently and openly that our aid is the price for Nasser’s agreeing to keep the lid on Israel. McGeorge Bundy: Any recent development? Strong: This has been going on for several months. It became—it heightened after Kaissouni’s visit here and after word got around that considerable aid [was] given, promised to the U.A.R.7 On the missile part, the implications as Ambassador Badeau saw them, and as we discussed them, were that the U.A.R. may well try to use the sale of the Hawk, or similar missile to Israel, to justify its own acquisition of missiles from the Soviet Union. The fact that the U.A.R. is acquiring those things from the Soviet Union is not publicly known. Presumably, therefore, an effort will be made before there is knowledge. President Kennedy: Are they acquiring them? Strong: So far as our intelligence shows, we believe that they are.

7. Abdel Moneim Kaissouni, minister of economy and planning for the United Arab Republic, visited Washington between 19 and 26 April 1962. The purpose of his mission was threefold: to reach an agreement on a multiyear PL 480 sales program, to seek U.S. support for organizing a consortium to meet the United Arab Republic’s foreign exchange problems and long- term economic development, and to ask for help on an IMF stabilization program. Meeting on Arab-Israeli Questions 613

President Kennedy: But he . . . They’ve never admitted this. Strong: They have not admitted it and the. . . . But President Nasser did not touch upon what they had under order. He merely indicated that, in the future, as a result of this sale to the Israelis, that then the U.S.S.R. would be willing to sell— President Kennedy: But he didn’t indicate . . . But we are sure that they have done it already anyway. So he was rather misleading on that point, is that it? Strong: We believe that they have, in fact, placed orders. They are not in being as yet. They’re not installed. President Kennedy: What kind of missiles, do we know? Strong: Our intelligence would indicate that they have acquired ground-to-air missiles of the Nike-Zeus type.8 They have air-to-air missiles coming within another 21— Bundy: [Unclear] Nike-Zeus [unclear]? Strong: Yes, sir. Bundy: Yeah. Strong: The Soviets apparently do not have a smaller round. And that they are obtaining also surface-to-surface missiles for naval vessels. These are the three types known so far. President Kennedy: Where is . . . Can I see the report on which we base that assumption? Bundy: Yeah. President Kennedy: OK. Dean Rusk: Under the present circumstances, this is partly irrelevant because the Hawk missile is aimed at aircraft, and there’s no question that the Egyptians already have the aircraft to which the Hawk missiles are a defense. President Kennedy: Yes, but because the Israelis already have a comparable aircraft—in comparable quantity . . . Myer Feldman: No, no they don’t. President Kennedy: I believe I saw those figures, though. Feldman: No, they claim they don’t have bombers. I asked that question. President Kennedy: I saw that line of battle right before we went . . . You looked at that, and I thought that what was underneath to be quite similar, but however that . . . Feldman: What did they say?

8. Developed by the U.S. Army in 1956, the Nike-Zeus was a ground-based system of radars and missile interceptors that used command guidance. 614 MONDAY, AUGUST 27, 1962

Walworth Barbour: Mr. President, they . . . The Israelis do have the fighters, but I think they do claim that they don’t have the bombers. Feldman: They do not have any bombers. Unidentified: I agree. President Kennedy: What have the U.A.R. gotten in the way of bombers lately? Phillips Talbot: They have . . . TU-16, which is a low-flying [Soviet] bomber. They have that already. President Kennedy: How many of those? Talbot: Not many, but they have a lot on order. They have, what—14 or somewhere— Feldman: In the teens. Talbot: —so far. Strong: They may have had up to as many as 40 on order. I think for sure 20. The second implication from the discussion of the Hawk missiles was that we believe that the U.A.R.— Talbot: Excuse me, one minute, I think the relevance of a comment on surface-to-surface missiles, though, that the U.A.R. has [is] that would probably be the next Israeli request because the U.A.R. has surface-to-surface missiles— President Kennedy: Naval vessels? Strong: Naval vessels and also, I’m told— Unidentified: Ground to ground. Strong: Ground to ground. Yeah. I think we [should] be prepared for that kind of— President Kennedy: [Have] we made some sort of . . . One of the things we talked about was making the proposition that we wouldn’t give them the Hawk missiles if all missiles were removed. Is that proposal . . . ? Strong: Yes, that’s coming in on the arms limitation, which follows immediately here. The second implication we thought was that since Nasser emphasized that their present policy would continue—their policy of restraint, their policy of continuing to cooperate with us to a degree—that there may be some restraint in their reaction to the sale of the Hawk other than the matter of endeavoring to cover their own purchase by pointing to the sale of the Hawk. I think we must expect some U.A.R. reaction, however, to the Hawk. It must . . . I believe it will be within the limits of what we can live with. On arms limitation, the ambassador followed— President Kennedy: We indicated to who . . . that we would sell the Hawks. . . . Would we sell the Hawks to him and then we indicated that? Meeting on Arab-Israeli Questions 615

Strong: The discussion of the Hawk included a remark by Nasser that, of course, we would not sell missiles to the Arabs. Ambassador Badeau responded immediately to that, that he had not said that. He wanted to make it very plain that his instruction had not included that he say anything of that nature. Nasser, however, did not pursue the matter. He did not then say, “Well, would you sell them to us?” At no point did he ask— President Kennedy: Did he ask this question whether we would offer to sell them to the Arabs? Feldman: He decided more or less that it would be useless to offer them to him because he could get what he wants without them. Strong: Ambassador Badeau’s instructions included the authority to respond that we understood that the U.A.R. preferred to obtain its weapons from the Soviet Union. However, if he wished to make a request to this government for the Hawk missile, we would give it serious consideration. However, when Nasser made the comment that we would not sell it to the Arabs, the ambassador merely responded at that point that he had not so indicated. His presentation did not include that. Nasser did not pursue it. The opening was given to him. He did not pursue it. On arms limitation, the ambassador made a strong presentation on the desirability of it, pointed out that the decision on the Hawk was one in principle only and that if something in the way of arms limitation could be worked out then this could be allowed to go by the boards. Now Nasser’s response was to review the facts as he saw them, that in 1948, the Arabs had not been able to obtain arms from the West for use in their war with Israel, whereas Israel had been able to obtain arms.9 Second, in 1956, the French had supplied aircraft, pilots, and maintenance facilities to Israel for use in their Sinai campaign.10 He also pointed out that two of the three signers of the Tripartite Declaration of 1950 had themselves participated in aggression against Israel.11 Therefore— Feldman: Against the U.A.R. Strong: Yes, against the U.A.R. Therefore his conclusion was that he could not count upon the West to administer controls in an impartial

9. The reference is to the first Arab-Israeli War, of 1948–49. 10. The reference is to the secret French arms deliveries to Israel in the months prior to the Suez crisis of October–November 1956, when Great Britain, France, and Israel initiated military attacks against the U.A.R. 11. The Tripartite Declaration of May 1950, signed by Great Britain, France, and the United States, pledged restraint in the delivery of arms and a common effort to prevent a renewal of war between Israel and the Arab states. The British and French participated in the military actions against Egypt during the Suez crisis. 616 MONDAY, AUGUST 27, 1962 manner. He could not count on the limitations being placed on Israel to stand. Thus, he did not show any interest. He did not pursue the matter then nor did he pursue it later. And the only conclusion that we could draw was that he was entirely negative on the subject. However, the matter was left open for later discussion. On the Johnson plan, he referred to his previous talks with Johnson, indicating the two principal points: first, that the problem of Palestine could not be settled so long as the Arab citizens in Israel were treated as second-class citizens. Second, that what he understood to have been a proposal by Johnson for a quota of 20,000 refugees to return to Israel was not satisfactory, that it could not be made to work that way. He said that he, in fact, saw no solution in sight for the Palestine problem up to, perhaps, 70 years from the present time. He then referred to the previous interest of the U.A.R. government in resettling perhaps 70,000 refugees from the Gaza Strip in Egyptian territory to the east of [the] Suez Canal in the Sinai Desert.12 He said that the refugees had refused to accept such resettlement for fear of losing their rights to repatriation at a later date. However, he did demonstrate considerable troubled mind over the future of the refugees in the Gaza Strip, particularly the younger generation, which is being educated—educated generally along technical lines—pointing out that last year he had to take 4,000 of them, unemployable in the Gaza Strip, into the U.A.R. government in order not to have unemployed, perhaps intellectual types, stirring up trouble. And he considered that it would be necessary for the U.A.R. government to continue to take even larger numbers as their numbers increased of the educated types from the Gaza Strip. He then went on to the matter of repatriation. He pointed out at least three times that numbers should not be made a matter of discussion. Repatriation, he said, that we should not discuss in terms of 10,000, 20,000, 50,000, or 100,000—we should stay away from numbers entirely. He said that if the Johnson Plan, or any plan, held out the hope to the refugees that there would be continuing repatriation, or return of groups of refugees to Israel over the years—over a longer period—there is hope that the plan would be accepted by the refugees. This was really the most optimistic statement made in the discussion. He made no com-

12. The Gaza Strip is a coastal district along the Mediterranean and adjoining the Sinai Peninsula. Then administered by Egypt, the Gaza Strip held the highest concentration of Palestinian refugees. Meeting on Arab-Israeli Questions 617 mitment of any kind, except that he agreed the plan would be studied very carefully by himself and his government, and that later on, his comments would be made available—that either he would discuss them with the ambassador or ask [a member] of his staff to do so. Feldman: Well now, did you give him the actual [Johnson] plan or— Strong: No, that has not been given to him. That will be given if we go forward in New York to his representative there.13 The implications as we saw them on the Johnson Plan were first, that there was no hostility in his manner at all—there was no turndown in any way. He gave his most concentrated attention to it. He showed no particular perturbation at the discussion. Unlike his response to the proposed sale of missiles to Israel, he made no dire prediction of an adverse political reaction in the Arab world to this point. He did not react to the ambassador’s repeated insistence that the refugees must be given free choice in their preferences, that there must be no pressure placed upon them. However, it is clear that he understood that particular point. Rusk: [Unclear] but not necessarily accepting the same thing. Strong: Not necessarily, no. There was the implication as I mentioned earlier that if we stay away from the numbers game and allow the refugees to do their own conjecturing as to how many will return over the coming years, that he might be willing to let the plan run along. Yeah. This is an optimistic assumption. In no way did he link the discussion of the Hawk or the sale of the Hawk missile to the Johnson Plan. He did not draw any conclusion that the two would in any way be interlinked. And finally I would refer again to the fact that the President had stated that his policy would remain unchanged regardless of the attacks upon the U.A.R. by the other Arabs on its policy toward Israel and its cooperation with us. That this, it seemed to us was—although he did not mention it the second time in the discussion of the Johnson plan—was an optimistic sign, as well. This, I think, covers [the] highlights and conclusions of the— Rusk: I wonder if I could ask Mr. Feldman, Mr. President, whether you think it’s possible for us to go ahead without getting into numbers. Feldman: Oh, yes, yes— Rusk: The numbers are for opposite reasons— Feldman: Yes, yes.

13. Mahmoud Riad was the permanent representative of the United Arab Republic to the United Nations. 618 MONDAY, AUGUST 27, 1962

Rusk: —are just as difficult for the Israelis. Feldman: The only, as I said in my cable, the only time, I mentioned numbers was when they said, “We think they’ll all take repatriation because of the pressures brought on them.”14 And I said, “This isn’t our own analysis. Our own analysis would indicate they don’t endanger your security.” And they said, “Well, what do you mean by that?” I said, “Well, from the conversations that Dr. Johnson has had and from indications we’ve had from other people, it’s our best guess that not more than one in ten would take repatriation,” and they accepted that. That’s all. President Kennedy: What did they figure? It’s like a Negro wanting to go back to Mississippi, isn’t it? Or is that . . . ? Feldman: It’s different because it’s as if the dominant doctrine were [the] Black Muslim doctrine in a sense . . . [He laughs.] President Kennedy: [Unclear.] Well, the whole question really is how much economic value they can get without . . . It’s a quite different thing to say that you want to go back as the only means of getting com- pensated . . . that you get compensation without going back. Of course, they both have a different view, don’t they? Nasser will think they all want to go back. He doesn’t think the Israelis will take them so he thinks it’s going to collapse. The Israelis are— Strong: They place a great deal of stress on the arguments that I made about—concerning the disincentives to going back. President Kennedy: Yeah, but, aren’t they . . . ? Isn’t one group going to be horribly disappointed, either the Israelis— Strong: Yeah. President Kennedy: —by a lot more than one out of ten coming back, or the Arabs when only one out of ten want to go back? Isn’t it going to blow up, then, the plan when this fact becomes a pattern? Strong: I would think that’s a fair assumption. Bundy: The problem is—and what I’d like Mr. Strong’s reaction on is whether—to what degree Nasser could stand still in the face of propaganda about repatriation from all the other Arabs. Was he saying, “I’m not going to start something but I’m not going to be caught in a non- Arab position here”? Or how do you interpret his position on that? Strong: Well, this is a little hard to be certain of. All that I think we can conclude is that the—there was no turndown, that Nasser did state

14. Telegram from the embassy in Israel to the Department of State, 21 August 1962, FRUS, 18: 69–70. Meeting on Arab-Israeli Questions 619 that he had been under attack from the Arabs and did not intend to change his policy nor to respond to such a— President Kennedy: That’s sort of a self-serving statement. Has he really been under attack? Strong: Yes, quite serious attack from the Saudis, from the Jordan- ians, and from the Syrians. Feldman: Of course, this is about the only counterattack that these other countries have been able to devise yet, that we have seen, in response to the threat of Arab socialism that he has put forward as an ideal for the Arab countries. Rusk: I think it’s entirely possible, though, and consistent with the promises that he made, or may have made, that he would now . . . already be laying on preparations in the Gaza Strip camps to be sure this is knocked out. Strong: What is done by means of overt propaganda and what is done by means of agents or clandestine operations? They are clearly separable in the Egyptian mind. President Kennedy: What is the . . . How far . . . Is this stage by stage, and can be dropped conveniently at different stages? Strong: No. President Kennedy: Or once we launch this thing are we . . . have we really got hold of it there? Strong: The Israeli concern is over initiating it and not completing it. They say [if ] it’s initiated and then they are compelled to withdraw because too many are coming back and then the onus will be on them. And— President Kennedy: What would you begin to . . . ? There’s no way to sort of get this first stage going? Let’s say you get 10,000, 9,000 [who] choose not to go back; 1,000 go back. Would that be acceptable to the Arabs? Strong: Well, I don’t . . . President Kennedy: It would be acceptable to the Israelis. Would it be acceptable to the Arabs? Strong: I don’t know. This remains to be seen. This is an imponder- able, Mr. President. Rusk: That’s right. There are several steps here. First, that the French and the Turks may not, for various reasons, be willing to go along on this, with this in the PCC, which means, I think . . . We couldn’t bowl over both of them if they refused to go along with it. As soon as we put it to the PCC, we’d like for Johnson to start talking about it with the parties—while the PCC is still thinking about it. 620 MONDAY, AUGUST 27, 1962

Now that . . . Of course, in about a week or ten days’ time, you may have such a reaction from the parties that it just isn’t worth trying to go ahead with it. Feldman: Well, now Mrs. [Golda] Meir made a point of asking that she talk to Johnson about it before any further studies were taken.15 She said they’ll consider it—just as Nasser said, “Yeah, I’ll consider it.” But she was very anxious to talk to Johnson about all of the details, and how it was going to work out. She doubted the legality of it at first. She said, “This is an illegal plan since it didn’t call for a United Nations resolution. It wasn’t this much authority.” Now this I understand was checked—this was U Thant’s original thought, also, that it was illegal. Is U Thant convinced that it’s a legal plan? Talbot: His legal adviser is; but he has yet really to be heard from finally— Rusk: Well, you can see U Thant’s problem. If he starts spending U.N. money and puts up some U.N. machinery on a plan which has not been agreed to by the parties, he’s exposed—[in] a very badly exposed position, so he’s interested in somebody telling him that it’s all right— either the parties, or a U.N. resolution. And so this is, I think, unless we can tell him that the parties are going to acquiesce . . . I think we will have a real problem with U Thant. Talbot: But it may be that we could, if we really play it down the middle—a slightly grudging acquiescence on the part of the parties, and then the confirmation two, three months from now of an ongoing administrative thing that’s already started, in a very small way, on the ground in a U.N. resolution. Feldman: In my own mind, I don’t see the need for doing it right now any more than I did before. It seems to me that it needs so much additional groundwork. You have only a tentative agreement from Nasser to consider it and I have more or less the same kind of agreement from Israel to consider it. They’re going to consider it for a while, and it may take some time for it to sink in, and for them to finally agree and acquiesce. And during this time, Johnson can perform some very useful work by going back and talking to both the U.A.R. and Israel. Rusk: Let me ask my colleagues who have been working on this. If we have a meeting of the PCC on Friday, and we put this to the PCC and then Johnson puts it to the parties, what is then the pressure of time on the other end? Suppose it takes two months rather than ten days for

15. Golda Meir was foreign minister of Israel. Meeting on Arab-Israeli Questions 621 them to explore this thoroughly with the parties. What’s the problem with time? What deadline are we running into? Feldman: Our feeling has been that once this process carries the plan to the parties, then they will begin to build up formal positions and [unclear] very likely positions and propositions. Johnson feels that we don’t want to get into a situation in which their agreement in advance is necessary because that would be very difficult. But if we can move ahead quite steadily, and fairly promptly after putting it to them with their minimum acquiescence—grudging acquiescence, the chances of success are pretty decent. Talbot: The real deadline is the moment at which this and all the related subjects about the UNRWA and so on, all comes up in the General Assembly, which probably won’t be in any case—16 Feldman: November. Talbot: —until sometime in November, but the idea is then to have something going on, even if it is in a relatively small way that can be protected against it. Rusk: Well, there’s a very important point, Phil. When Joe Johnson’s analysis runs out—in other words, acquiescence is all right for the purpose of getting the views of the refugees, but when the time comes to repatriate, or resettle, a refugee, then somebody’s got to do something more than acquiesce; they’ve got to agree. Talbot: They’re not going to agree to a ten-year plan. [Mixed voices disagreeing.] Bundy: One step at a time, gentlemen. [Unclear] one at a time. Strong: As each step is taken, it becomes a little more difficult for them to be responsible— Talbot: A point which is quite plain— Strong: —for calling the whole show off. Talbot: —be very plain to them. Feldman: The Israelis made clear they would have to respond to Arab pressures upon the refugees to select repatriation. At this point, you’d get a turndown if the Arabs started propagandizing refugees. We’d immediately get a statement from the Israelis that they weren’t going to accept any refugees, in fact. Rusk: Did you see any difficulty on going ahead and putting this to the PCC—the French and the Turks?

16. The abbreviation UNRWA stands for U.N. Relief and Works Agency for Palestine Refugees in the Near East. 622 MONDAY, AUGUST 27, 1962

Feldman: Well, I wonder . . . So long as our own prestige isn’t committed at that point—behind the plan. I think before we commit ourselves to it, we want to make sure that it at least would be . . . it would work in the— President Kennedy: Do you know if Joe Johnson will be regarded as an independent agent putting it forward a [unclear]? At what point do we become the sponsor of the Johnson Plan? Bundy: That is what our draft dispatches would, in effect, do. Rusk: Well, I think we have to assume that the French and the Turks will not themselves come along prior to a commitment of ours and will be in need of persuasion on our part. Talbot: I don’t think we’re kidding anybody about our sponsorship. But I think it’s . . . as in the Bunker case, if the parties see enough advantages in letting this process proceed, then the cover sticks.17 If anybody wants to blow it off, the cover can be blown off quite easily. President Kennedy: He’s working for U Thant, is he, Johnson? Talbot: No, he’s working for the PCC. He’s hired by the U.N., by the U.N. Secretariat at the request of the three governments—18 Rusk: U.S., France, and Turkey? Talbot: U.S., France, and Turkey, with Turkey in the chair. So that he’s a staff member, hired by the U.N. and assigned to work under the PCC as the executive really of— President Kennedy: Well now let’s see, Mike [Feldman], at what point do you think that the—

The tape recording then stopped. Later that night, Rusk sent a telegram to the U.S. mission at the United Nations that explained the next step as the submission of the Johnson Plan to the PCC.19 The Kennedy adminis-

17. During the spring of 1962, U.S. diplomat Ellsworth Bunker mediated between the Dutch and the Indonesians over the sovereignty of West New Guinea. The Kennedy administration had hoped to play the role of honest broker but found itself angering both sides. Earlier in August, after five months of negotiations at Middleburg, Virginia, the parties reached an agreement that authorized the United Nations to provide interim administration over an eight-month period as sovereignty passed from the Dutch to the Indonesians. The agreement also called for the Papuan inhabitants of West New Guinea to decide, in 1969, whether they wished to remain part of Indonesia. 18. The Secretariat is the administrative arm of the United Nations. It is headed by the secretary-general. 19. Telegram from the Department of State to the Mission to the United Nations, 27 August 1962, FRUS, 18: 77. WEDNESDAY, AUGUST 29, 1962 623 tration anticipated resistance within that body, especially from the French representatives. Reflecting President Charles de Gaulle’s general political outlook, France opposed the use of the United Nations as an instrument to resolve international issues. On August 31, Dr. Johnson submitted his refugee plan to the PCC, which deferred approval but authorized the presentation of the plan to Israel and the relevant Arab countries. After his Middle East team left, Kennedy turned to a jousting match with one of his most prolific liberal critics, the economist Leon Keyserling. Keyserling was outspoken in characterizing the administration as overly cautious and conservative. He had called, for example, for an immediate tax cut. Kennedy respected him nonetheless. On August 6, during the conversation with Wilbur Mills that apparently sealed the fate of the quickie tax cut, the President had joked about the economist, “He can talk like a bastard, can’t he? He’s the most articulate fellow.” This evening, the “fellow” got nearly an hour alone with the President. Unfortunately, Kennedy opted not to tape the session. After the Key- serling seminar, Kennedy went to the pool and then to the Mansion.

Wednesday, August 29, 1962

On this day, Kennedy had to make up his mind whom he would select to succeed the venerable Felix Frankfurter on the Supreme Court. Justice Frankfurter had been on leave from the Supreme Court since suffering a stroke in March. Hopes that Frankfurter could return for the Court’s fall term faded over the summer, and on August 28, he submitted a letter of resignation to the President. The Kennedy White House already had a shortlist of strong candidates. Harvard professor Paul Freund was very well regarded, as was the solicitor general, Archibald Cox. However, Kennedy had promised the job to Arthur Goldberg. He wanted to appoint a Jewish American and thought highly of Goldberg’s talents as a lawyer and as secretary of labor.1

1. On the selection of Goldberg, see Edwin O. Guthman and Jeffrey Shulman, eds., Robert Kennedy in his Own Words: The Unpublished Recollections of the Kennedy Years (New York: Bantam, 1988), p. 117; Ken Gormley, Archibald Cox: Conscience of a Nation (New York: Perseus Books, 1997), p. 171; David L. Stebenne, Arthur J. Goldberg: New Deal Liberal (New York: Oxford University Press, 1996), pp. 309–10. 624 WEDNESDAY, AUGUST 29, 1962

11:06 A.M.

[T]here may be a hitch in it.

Conversation with David McDonald2 David McDonald, the president of the United Steelworkers Union, had worked closely with Arthur Goldberg for over a decade.3 Before joining the Kennedy administration, Goldberg had been the powerful general counsel of the steelworkers union. The working relationship with McDon- ald continued after Goldberg became secretary of labor. It was the successful deal with McDonald to hold down steelworker wage demands that had set the stage for the administration’s strong attack on Big Steel’s efforts to increase prices in April. This short and cryptic conversation may well have related to the President’s pending decision to ele- vate Goldberg to the Supreme Court. Goldberg’s brief tenure at Labor had been a tumultuous one, as organized labor lost some confidence in Goldberg because of his strong emphasis on voluntary wage constraints. The conversation may also have involved the scheduling of an appointment for the President to film greetings to be shown at the forthcoming United Steelworkers Convention.

Evelyn Lincoln: Hello? David McDonald: Hi. Unidentified: Mr. McDonald on the line for the President. Lincoln: OK. President Kennedy: Hello. McDonald: Hi, Mr. President. President Kennedy: How are you doing? McDonald: Well, I’m nervous already. [Laughter.] President Kennedy: Well I don’t know, there’s, there may be a hitch in it. McDonald: Yeah. [Laughter.] I know who’s going to get the hitch. President Kennedy: But, is there any place I can reach you at 8:15? McDonald: I can make, can I call you at 8:15? President Kennedy: Yeah. Why don’t you call me. McDonald: I’ll call you. What extension?

2. President Kennedy and David McDonald. Dictabelt 33.1, Cassette K, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 3. Stebenne, Arthur J. Goldberg, pp. 100–102. Conversation with David McDonald 625

President Kennedy: I’ll be either at the pool or upstairs. McDonald: All right. I’ll just ask for you at the switchboard. How’s that? President Kennedy: Right. Yeah. Yeah. I’ll be at the pool or upstairs. McDonald: Because, see I would ordinarily, I’m in my office now, I’d get a bite to eat, then I’d be leaving for the apartment, but you might not catch me so it’s better for me to call you. President Kennedy: 8:15. McDonald: 8:15. President Kennedy: OK, David. McDonald: Right, John.

President Kennedy announced Frankfurter’s resignation and his selection of Goldberg at a 4:00 P.M. press conference. Besides the news about the Court, the press conference touched on developments in Geneva. Kennedy had just received information about the Soviet reaction to the U.S.-U.K. decision to propose an atmospheric test ban treaty as a “first step” to a comprehensive treaty. With the talks stalled, the administration had authorized Arthur Dean to propose the partial test ban at Geneva, which he did August 27. The Soviet response was a conditional yes. Vasily Kuznetsov, the Soviet first deputy foreign minister, told the Eighteen- Nation Disarmament Committee in Geneva that the Soviet Union proposed a package deal. A moratorium on underground testing would go into effect on January 1, 1963, along with the atmospheric test ban offered by the United States and Great Britain. The underground test ban would continue as long as it took to negotiate a comprehensive treaty, and there would be no inspection system or internationally supervised control system established to verify the moratorium. At the press conference, Kennedy tried to put the best possible spin on the Soviet proposal. He welcomed the Soviet target date of January 1 for the cessation of all atmospheric testing but reminded the world that any agreement with the Soviets would have to be ratified by the U.S. Senate. Kennedy did not mention the Soviet requirement of a moratorium on underground testing. He said simply that “gentlemen’s agreements and moratoria do not provide the type of guarantees that are necessary.” He urged the Soviets to move forward in negotiating an atmospheric test ban.4 In Berlin, there had been significant developments since his last

4. Opening Statement, President’s Press Conference of August 29, 1962, The Kennedy Presidential Press Conferences (New York: Coleman, 1978), pp. 375–76. 626 WEDNESDAY, AUGUST 29, 1962 press conference. Amidst Western calls for a meeting of all four military commanders to discuss civil unrest in Berlin, the Soviets had abruptly closed their command headquarters on August 22. With tensions still high, the Soviets began using armored personnel carriers to ferry their guard details to the Soviet War Memorial in West Berlin. On August 23, a diplomatic tug of war had started over how and whether Soviet armored personnel carriers would be allowed into West Berlin. A U.S. proposal that Western military police escorts accompany Soviet vehicles was met by a Soviet demand that all Western convoys along the highway designated for traffic through East Germany to West Berlin should be escorted as well. On August 24, a U.S. convoy had been held up for half an hour. And the next day, another convoy had to wait six and a half hours to go through an East German checkpoint. Meanwhile the Soviets accepted the U.S. demand for escorts in West Berlin. In the morning’s newspapers there were reports that the Soviets were again hinting that they might agree to a four-power meeting on Berlin. At the press conference this day, Kennedy denied having received any proposal like that from the Soviets. Finally Cuba was acquiring ever greater public importance. Since August 24, there had been press reports of a large fleet of Soviet supply ships headed to Cuba. Estimates of the numbers of Soviet technicians aboard ranged between 3,000 and 5,000. Soviet sources denied any military supplies on board. However, leaks of intelligence about 44-foot crates on board and rumors about surface-to-air missiles (SAMs) suggested that something other than farm implements was being trans- ported.5 Sources in the U.S. government confirmed that some weapons were on board, though in his press conference, the President said that he had not as yet received any proof that there were SAM emplacements or that the Soviet technicians on the ships were troops. Following the 4:00 P.M. press conference, Kennedy held two unrecorded meetings: the first with Randolph Hearst and Frank Conniff, and the second with the U.S. ambassador to Italy, G. Frederick Reinhardt. Then he could turn to the United States’s next move in the Berlin chess game.

5.“Russians Step Up Flow of Arms Aid to Castro Regime,” New York Times, 25 August 1962; “Moscow Discloses Shipments to Cuba Will Double in ’62,” New York Times, 29 August 1962. Meeting on Berlin 627

5:46–6:35 P.M.

[T]he whole situation there is so irrational. We’ve got them in an elaborate system of symbols. And one of the difficulties is what message the Soviets would get if we, over a little thing . . . They might make the wrong conclusions . . .

Meeting on Berlin6 Kennedy held his first formal meeting on Berlin contingency plans since August 9. At issue for Kennedy was whether the United States should continue to permit the Soviets to use armored personnel carriers to transport their guard details to the War Memorial in the British Sector near the Brandenburg Gate, now that the attacks on Soviet troops had stopped. The recording starts with Dean Rusk discussing the U.S. position on what to do if the Soviets were replaced by East Germans at the checkpoints on the highway (autobahn) to West Berlin.

Dean Rusk: Well, we won’t be doing any more than just an individual passage on the autobahn, is it? It’s a routing ticket— General Maxwell Taylor: Travel order. Rusk: A travel order. Taylor: This could be the requirement. To show the same papers to the East Germans as we now show the Russians, which is in our planning, we’ve accepted as being something undesirable, but something that we would permit. Now aren’t we taking a harder position in Berlin, than we’re . . . presumably we take on the autobahn. Paul Nitze: We don’t show any papers. Our military don’t show any papers when you cross the [unclear]. It seems to me though— McGeorge Bundy: Max, the point is really, which do we . . . We care about access to West Berlin. We don’t really care about . . . If we could trade off today our access to East Berlin against their access to West Berlin, I think we would do it. And I take it from what [Willy] Brandt is

6. Including President Kennedy, Robert Brandin, McGeorge Bundy, Frank Cash, Paul Nitze, Dean Rusk, and Maxwell Taylor. Tape 17, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 628 WEDNESDAY, AUGUST 29, 1962

quoted as saying in the papers this morning, very interesting report, he feels the same way.7 And I think this is really the point. That we have nothing left in East Berlin that’s of any interest to us. If we continue to, if we don’t cash that in, it’s going to be worth nothing and the Soviets are going to have chips left in West Berlin which are dangerous to us. I think that’s really the nuts, the nut of the problem. President Kennedy: On the other hand, they’re not denying us admission to East Berlin. They’re merely saying that we ought to show paper. We’re then saying we won’t go in. So they haven’t really denied us admission. But instead we are saying if you insist on getting paper, we’re not going to let you into West Berlin at all. Bundy: I think you can turn it around, Mr. President, and argue [it] the other way. If they insist . . . German troops insist on access, that, on our showing papers, that destroys entirely the notion of [the] four-power Berlin arrangements. If we are to have to answer to Germans to East Berlin, that’s of no interest to us. We assume by the same token that the Soviet government, whose commandant has disap- peared, has no further interest in West Berlin. It seems to me you have to lift it to that level. Rusk: You see they haven’t asked— Bundy: Look in the eye the fact that you’re going to have a quite different West Berlin–West relationship. Rusk: This is a sort of an uneven struggle because the Soviets are trying to create the Wall in East Berlin into a state boundary. Therefore they practically . . . They have to show passports in visas—do everything of that sort. Whereas if we do that, then they are in West Berlin, we are not really in East Berlin. They can build up their armed forces in West Berlin by—as one of our colleagues in Berlin suggested, [unclear]—of putting in ten armored personnel carriers instead of four. Bundy: Three. Rusk: And steadily build up to a point where they then can laugh at everybody and say, “Look we are sharing occupation of West Berlin.” President Kennedy: Well, so they do have the ten, or we don’t have

7. That day’s New York Times carried the story, “Brandt Sees Berlin as a 3-Power City.” At a meeting of the West German Social Democratic Party, Brandt told his audience that “It does not alter reality to say that the Soviet Union has broken the four-power status 25 times or 27 times. What is vital now is allied guarantees for West Berlin and the fact that the Western powers stand here and will remain here.” Meeting on Berlin 629 to let them have ten. Just say the traffic is unreasonable. But I . . . These are three areas which are really beyond the . . . Spandau really isn’t a Berlin issue. The War Memorial really isn’t of a Berlin issue and the air center is not a Berlin issue.8 It seems to me that we shouldn’t attempt to interfere with these rights. And I don’t see the very fact that these rights are exercised by them particularly embarrasses us. Personally I don’t like it, but I don’t see that it causes any disturbance in the viability of West Berlin, which is our issue. The viability, our presence and our control there. It seems to me we still have those. Nitze: I think we’ve got to, though, assert now, hurriedly, because I think it’s going to be harder to do later, that we have control. That they come into West Berlin at our pleasure and under conditions which we approve of. I would think it important to nail that down promptly. Bundy: So that it does not get used against our access to West Berlin later on. Nitze: If it’s nailed down that they come in under our control, where we say they should and in what form abide by their commitments, and they give them at the checkpoints, they didn’t . . . they said they’d keep their arms inside, but then put [them] outside after they got through the checkpoint. If we can’t maintain control there, I think we’re lost then. Because then they can put in any number of things into West Berlin, and establish the fact that West Berlin remains a four-power responsibility and that they have complete rights in West Berlin. [Unclear] the Polish Communists— President Kennedy: Wait a minute. We’re shutting ourselves out of East Berlin. And I talked to Gromyko, and I asked for these— Taylor: Would you not say Paul, that we are doing that now, though? Our behavior thus far has been consistent. What’s your [unclear]? Nitze: What? Taylor: We made— Rusk: Well, this is why we’ve asked for a complete inventory, to see just how far this has gone. Nitze: I think we’re talking about two things though, Mr. President. One is the current situation, what we do now about the APCs and the

8. Spandau Prison and the Berlin Air Safety Center (BASC) were under quadripartite control while the Soviet War Memorial was unilaterally controlled. President Kennedy did not view any of them as vital to Western access rights. 630 WEDNESDAY, AUGUST 29, 1962

Brandenburg Gate.9 The second thing is what we might do in the contingency of their denying papers. They haven’t raised this paper issue. Bundy: We don’t really think they’re going to right away. President Kennedy: But now . . . you think we ought to do anything about the APCs at this time? Nitze: I do. President Kennedy: To say what to them? Nitze: Say to them that the tension has now ceased and in our judgment it would be appropriate for them to return to the buses which they were using prior to this stoning incident. After that time they used other buses, and there hasn’t been any difficulty in the last few days, and it’s our terms that they should come through in buses. If they don’t come through in buses, we won’t let them through. If they try to come through in APCs, [we’ve got] to establish our control. President Kennedy: All right. Do you want to then turn them to the Brandenburg Gate? Or do we want to deny them admission. What about sending them to the Brandenburg Gate then? Nitze: Permitting them to come in, in buses. President Kennedy: Yeah, but for them to come in in buses, they’d have to have a reason for that. But otherwise they’d, it’d be better to make them go through Brandenburg Gate, how about that? Nitze: I’d prefer just to say the situation is not one in which where APCs are necessary and appropriate. We’re not denying them access. President Kennedy: Do they have any tanks or APCs? Rusk: We considered— Bundy: We have done this in the past— Rusk: —[doing this] the other way around. President Kennedy: There’s no evidence that they’d stop us, is there? Bundy: We did it successfully, if I’m correct, at the time of the Friedrichstrasse confrontation last fall.10 Robert Brandin: We didn’t send them in, sir. We sent them up to the checkpoint. Bundy: Sent nothing through? Brandin: No. No armor. Rusk: Better to use the Brandenburg Gate, which is literally connected physically to— President Kennedy: With the Wall.

9. Armored personnel carriers (APCs) are military vehicles for transporting troops. 10. The reference is to the U.S.-Soviet tank showdown at Checkpoint Charlie in October 1961. Meeting on Berlin 631

Rusk: —the Wall, and is all surrounded by barbed wire so that there are no West Berliners in that area anyhow. It’s a hundred yards away. I wouldn’t care what they came in through . . . the barbed wire there, through that. It’s all one big open plaza there. Bundy: We used . . . What kind of military vehicles did we use when we were circulating in East Berlin? I know we didn’t use tanks? Bundy: We used jeeps and sedans. Rusk: Jeeps and sedans. Frank Cash: Unarmed ones, I believe, weren’t they? Rusk: Beg your pardon? Cash: Unarmed ones, weren’t they, Mr. Secretary? Rusk: Well, they weren’t armed ones. I think the military personnel had their sidearms. Nitze: The military personnel had arms which were inside. Cash: That’s right. Bundy: Yeah. That’s right. President Kennedy: Well, we would have to . . . what, discuss this with the British and the French? Rusk: Right. What we . . . Yes, what [unclear] to get out [unclear]? President Kennedy: Now tell me again, Paul, why is it you think we do this now? So that what, at a later date they can’t say any limitations upon them can’t be used as an excuse for cutting off the [access]? Nitze: To nail down it: they haven’t got an unlimited right of access without our permission. President Kennedy: You think that’s in doubt? Nitze: I think they’re trying to establish this being in doubt. President Kennedy: By what means? I don’t see that . . . What— Nitze: Their whole ploy here is saying that we shouldn’t escort them. Related to that is they say, “We’ve got the right to go to the War Mem- orial. We’re going to go, and we’re going to undertake our own protection. We’re not looking to you for protection.” I think this is the whole reason for their emphasis on not escorting. Taylor: Now, [unclear] on that point at the present time, about it. Nitze: We do not call this an escort. Taylor: Well, we actually, we in fact have escorts. Nitze: We have accompanied them. But they continue to press it, to protest this. [Unclear] protested this, didn’t he, in the last [unclear] session? Cash: There’s an outstanding request to us to stop sending our vehicles, to stop, sending, having West Berlin police anywhere around it. President Kennedy: I suppose we could say, “Well we’ll stop sending the vehicles, stop sending escorts for use, if you return to buses,” maybe. 632 WEDNESDAY, AUGUST 29, 1962

Taylor: Well, we must say that we will use our vehicles as we see fit in our sector. I don’t think we could accept any kind of limitation on escorts . . . [Pause.] President Kennedy: All right, now we’ve got one thought right here; we’d better take a look at this, what was suggested by this business about [unclear] that we should at this time. And if that idea seems to have merit, we ought to think about whether it ought to be done as a direct, whether we ought to say that we think you ought to come by bus. Have them come by bus, in [unclear] through the Brandenburg Gate. Or whether we ought to wait until such time as they do the paper routine. At that time, tell them this is [unclear] Brandenburg Gate [unclear]. And with this other question, whether we include the War Memorial in our limitation as a possible contingency. My chief view, judgment, is if we are going to let them into Spandau and the air center, we shouldn’t cut them out of the War Memorial.11 Nitze: Wouldn’t you agree that one ought to restrict to the minimum? It might very well reverse the way in which they do it. Rusk: Well the purpose of this telegram would be to ask our people in Berlin and Bonn what they think about it. The alliance then . . . this will not in itself make a decision until we get their comments on the handling of the . . . of this, then. Nitze: The draft— President Kennedy: This is the draft, then.12 Rusk: The draft. Right. [Pause.] But it aims at the problem of building up a four-power West Berlin. President Kennedy: Has this been approved by the Four or any other—? Rusk: No this is totally an American . . . This has not been discussed yet by the quadripartite [ambassadorial group] . . . yet. [Pause.] Nitze: I think it should be pointed out that the moment we request them to do anything, move to the Brandenburg Gate or not to come through in APCs, we face the issue of what we do if they say no, if they ignore our request. I think we could try . . . presumptive to be prepared to say, “All right you don’t come in,” and block them. President Kennedy: I think we ought to do this, in reaction to some-

11. Spandau, the air center, and the War Memorial were all in the British sector of Berlin. 12. Draft not found. For a copy of the telegram as transmitted at 9:10 P.M. that evening, see FRUS, 15: 295–97. Meeting on Berlin 633 thing they do, but for us to initiate it, and therefore give them an excuse for saying, “Well, in that case, we’re not going to come in and not going to put our . . . a person in the air center and we’re not going to do something else.” I would think that we’re just changing this: “We believe that this is [a] risk we might have to take” instead of “we would have to take.” I don’t know whether we want to get, go as far as this to make a point, which I don’t know what . . . Paul [Nitze] appears to be making . . . But I think there still is sufficient doubt about whether it’s a question or not. I don’t know that we ought to take on the chance of our being the initiator of escalation at this point or rather [we should] hold it until they do something, and then at that time when we do it, it is clearly a response to some action they take. Rusk: The only doubt about it, Mr. President, is the whole situation there is so irrational. We’ve got them in an elaborate system of symbols. And one of the difficulties is what message the Soviets would get if we, over a little thing, what appears to us to be a very little thing, like showing identification or letting them go ahead with the APCs here indefinitely . . . They might make the wrong conclusions about what the tolerances are on our side. Nitze: It might be better to take some risks now than later, Mr. President. Rusk: Now the Soviets, if they have in mind things in this range of action, now that would settle the problem. They could kind of talk about it. President Kennedy: They don’t want to settle. They want to keep— Rusk: Now, I don’t know what the answer is. Now, if you don’t have, on the showing identification, we don’t have a— President Kennedy: What harm does it do? These APCs, which we could stop any day, we want, what . . . when they are going to those three [places]?13 What is the harm that they’re doing to us? The three principles of our actions in this area. What is it that their presence, the fact they’re traveling in APCs? What is it that . . . ? Rusk: Well, I think that if they continued to travel in APCs, it would deprive us of the right to use, [unclear]. The Soviets would insist that if we [unclear] stop posts that— President Kennedy: Then they could do that. Even if we stopped buses, they could do the same thing.

13. The War Memorial, Spandau, and the air center. 634 WEDNESDAY, AUGUST 29, 1962

Rusk: Then they’d come right back to— President Kennedy: Then we would have to stop buses. This is just a different kind of a truck. Taylor: Well I think they had a . . . probably a reason why . . . whether this was a shenanigan at the outset I wouldn’t be sure; I read it when the cables came as quite a reasonable thing. When the troops were being . . . in something where they can go in safely. I think you can accept it on that basis, when that condition, just to know that data. Now that condition is past; I think we have quite a reason to say, “Now, from here on, this warlike type of vehicle isn’t necessary and isn’t permitted.” If again this order came about, it might well be worth it. Rusk: The paragraph at the top of the page illustrates the [unclear]. President Kennedy: Yeah, but I know about the West Berliners raising questions. They’re the champions. I think that’s what happens there every week, everybody’s raising questions. Editorials. Taylor: That affects our representatives, [who] have been through this, constantly beaten by [the] West Berlin press— President Kennedy: Saying why don’t you do this and that. I read in a place where . . . that Bonn is going to cut its defense budget [unclear]. Have you seen anything about it? Unidentified: Yes, I— President Kennedy: It said something about the last week or so that they’ve— Nitze: The finance minister [Ludwig Erhard] cut Strauss’s budget from 17 billion reichsmarks down to 15.8, I think. President Kennedy: Well, yeah, but I mean even that’s [unclear]. They are not embarrassed at all about it. I wonder if we have to prove it to them, [unclear] pleading with them to do that. Nitze: I would agree that that isn’t the issue. But I think the issue is between us and the Russians. President Kennedy: The only thing is, Paul, it seems to me that when they move to the APCs, you probably have to get these things the first day, or let them get the APCs because the West Berlin police have not given them the protection which the Russians are entitled to. So they did have a [unclear]. Nitze: [Unclear] is, the first day when there’s been enough period of no threat so it is reasonable for us to request that they go back to buses. [Pause.] President Kennedy: They go in buses now to Spandau? Bundy: They haven’t been through. They just go through every fourth month. Meeting on Berlin 635

Nitze: That’s right. It’s our . . . Rusk: November is their month again.14 President Kennedy: Well, you know, as I say, I don’t get worked up about this yet. But I think it’s easy for us to do something. It seems very easy for them. I think it’s much better to keep it. After all they’ve been somewhat careful about what they’ve done about us around Berlin. And I think, therefore, we shouldn’t get . . . rather than doing something that just pushes this sort of burden of the escalation on us. They’ve been pretty . . . They haven’t done very much about this [unclear]. Our movement there—there is no indication our military can’t go in there or even they . . . They haven’t got to show passes; our civilians can go if they show passes. I don’t think we ought to start . . . The APCs . . . I don’t . . . I understand all of the problems that you feel when they do come. But we will only do that in response to some action they take. Nitze: I think that question of the identification is some problem that’s off in the future. I don’t think they’re going to deny us access to East Berlin in the near future. I think it’s going to come . . . President Kennedy: Let’s say they do the papers. Can’t we just say well in that case then you can go through the Brandenburg Gate. That’s our reprisal to their act. This way we initiate action— Rusk: Now this is what we need to do. We need to have a better judgment on them than we have now, some [unclear] needs to study this. Whether we ought to move in entirely the opposite direction, trying to get more and more of our people into East Berlin. See, we cut off our military personnel from casual entry into East Berlin— President Kennedy: They get in trouble. Rusk: Going over to restaurants and going over to opera houses and things like that. President Kennedy: The only trouble is we might get in trouble if they drink. Nitze: This isn’t a long-range thing that you’re going to stick with. Bundy: We don’t— Nitze: At any time they can cut us off. They can just cut that off. And then we’re not going to do anything about it. So it doesn’t really get you anywhere to build up your presence in East Berlin. Bundy: They’d stick a half a dozen of them in the clink as hooligans; you’ve got a really very messy situation, it seems to me.

14. Administrative control of Spandau Prison rotated on a monthly basis among all four occupying powers. 636 WEDNESDAY, AUGUST 29, 1962

Nitze: Denying them West Berlin or at least asserting our authority over West Berlin is much more important. President Kennedy: Well, I think this ought to be reexamined if we could in light of our conversation today, and see if this is what we want to do. I’d like to then have you just take a look at [the] wire [instruction] before we send it. [Pause.] Bundy: Get back just a moment, Mr. President, to the question of why we shouldn’t show passes. Rightly or wrongly, we did engage our prestige very strongly on this point back at the end of last year. And we did regard it as a serious matter, and we refused to circulate people who were asked for their passes in what we regarded as inappropriate circumstances, making it very clear that our military personnel were not subject to this kind of requirement. If now they are put under it and we accept it, it would be taken, I think, both by the Soviets and by the Germans as an indication that we just didn’t know our own mind. President Kennedy: Well then we just say, “All right, we won’t go over.”15 Now, then when they ask for passes along the autobahn or something, which obviously they’re going to, we’re going to go for that. But let’s just make sure we don’t engage our prestige because that we have to. Bundy: That we settled a year ago. President Kennedy: So we just won’t go over there. There’s no value in going over there anyway. Bundy: Yeah. It’s at that point that we would need to make some clear equation, I do think, of our access to East Berlin as against theirs to West Berlin. President Kennedy: Well now— Bundy: The ground would have to be that they, having abandoned their responsibilities in one part of Berlin, could hardly claim rights in another part of Berlin. President Kennedy: Could we say we would show passes to the West, to Soviets . . . ? We would not show— Bundy: This has always been true. President Kennedy: Always been true. We do not show? Bundy: We show them to officers isn’t that right? You send for a Soviet? Nitze: That’s right. President Kennedy: Well, then, if we don’t have the Soviet officers, then what—

15. To East Berlin. Meeting on Berlin 637

Bundy: Then we would say the Soviets seem not to be in Berlin, why should they come to West Berlin? Taylor: That may well be the proper solution. It probably is, but we shouldn’t lose sight of the fact that this will have an adverse effect on West Berlin, because it is another form of acceptance of the permanence of this [unclear] city. Bundy: But my impression is, really, and I think this is quite important, that Brandt is himself now saying don’t trade off anything that matters in West Berlin against nonexistent rights in East Berlin. He said this to the Social Democrats yesterday.16 Taylor: Well I think it’s a point that ought to be checked on and carefully before we . . . We should take that into account, [unclear] whether Brandt can speak for the whole West [unclear]. President Kennedy: Well, we don’t care about East Berlin, we know. So the rights, we just aren’t interested in. But I say, these rights that the Soviets have that we talked about, it seems to me, that are restricted to three areas, which really don’t go to the government control of West Berlin. . . . Spandau Prison has really got nothing to do with West Berlin. Bundy: I don’t see why the War Memorial is any more significant. Spandau and BASC are four-power vestiges.17 But I don’t think the War Memorial is. Nitze: Mr. President, in the U.K., the question would be— Taylor: Well, that’s true, but I share the President’s view, to their military, this is a very sensitive thing. Here’s a monument to the heroes who destroyed Hitler, and to interfere with their rights— Rusk: It’s not just limited to Spandau, the War Memorial, or BASC. The Soviet military presence in West Berlin, at the present time, is considerably more substantial than that. Bundy: No, we’re talking about after interruption. Rusk: Oh, after interruption. Bundy: Yeah. President Kennedy: It is more substantial now? Rusk: Yes. They, for example, come over and give performances by troops even though they have been asked not to. President Kennedy:[Unclear] three things. Rusk: They have these bloc military missions in West Berlin. Families, tourists come over in considerable numbers to the War Memorial.

16. See note 2. 17. The abbreviation BASC stands for Berlin Air Safety Center. 638 WEDNESDAY, AUGUST 29, 1962

Bundy: Yes, the difference between what you’re asking to have studied and the existing contingency plans right now is precisely the War Memorial. It’s the stickier part. President Kennedy: Yeah, well then the second point is the one raised by Paul. Bundy: That’s right. President Kennedy: This time rather than as a response to something that . . . Bundy: I think that the force of your comments really is very strong. If we look as if we’re escalating, the question is really whether, if we act promptly, we can say now the turmoil which you aroused by your act of brutality [the killing of Peter Fechter] is over. We will now require you to go back to normal visas, year-long, years’-long process— President Kennedy: They refuse to do it, then they will refuse to come into West Berlin, then— Bundy: Then they self-blockade themselves, which— President Kennedy: Yeah, but I would think they will have to take an action then against us. They can’t just accept that. Bundy: Well, they did accept both escorts stowing their weapons on the 23rd of August. Or, a little later. President Kennedy: Those two, let them come. I’m inclined to have the escort, and they can stow their weapons, but if they continue to ride in that thing, I don’t think they would appreciate telling them you can’t come in to West Berlin, obviously. Taylor: I think— President Kennedy: We might get away with it; we might not. If we didn’t, I think you’d find yourself rather embarrassed about it. Taylor: You have the lesser course of action, though, which I think it would be, probably preferable to take, is that you give them a choice of coming in buses to the War Memorial or coming through the Brandenburg Gate. In other words, if that’s [unclear] position, then you can’t come at all. Rusk: Mr. President, the commandants, the Western commandants are going to discuss on Friday, probably will discuss on Friday, the British proposal to get the Soviets to come through the Brandenburg Gate. The British, too, have come up with this idea and . . . Bundy: The British on the other hand think we should live with the APCs, as I read it. Rusk: Yes, and about that, I wouldn’t object to that myself, if they use [the] Brandenburg Gate. President Kennedy: For the War Memorial then come— Meeting on Berlin 639

Rusk: That’s right. Mr. President on the . . . I think you might want to read this. [Unclear] how we reviewed the War Memorial part of that. But this has to do with the showing of identification, and shows why we are worried about having a situation where Soviet presence in West Berlin is the price we pay for access to Berlin, with East Berlin gone, and no Western influence present there at all. President Kennedy reads the document. President Kennedy: [Unclear] get back about equating [unclear]. Nitze: Get a long-term deal out of it whereby access continues forever and a day, or maybe it’s just that little access [unclear] bottom. I’m afraid this is one more slice. Rusk: From a purely U.S. point of view, we shouldn’t say this before witnesses, but if we could agree on the contingent of Soviet forces necessary to view the War Memorial and Spandau in advance. President Kennedy: Based on previous numbers they’ve used over a period of time. Rusk: Let them be on this. Let them be stationed at the Brandenburg Gate; let them into West Berlin. Bundy: As long as they don’t sneak— Rusk: If I could take that much of their original proposal to have the four Western powers in West Berlin. That’s right. Bundy: We might get that, but we’d never get that by saying so. Nitze: To get that, you’ve got to make it tough for them, so they think that says something. Bundy: You’ve got to make like Nitze to get out like you, Mr. President. [Laughter.] President Kennedy: Vice versa [unclear]. [Unclear exchange.] Rusk: This might be the kind of thing which you would be drawn into in a U.N. discussion [unclear]. It’s bound to occur in the U.N. President Kennedy: Well now, we’re going to, as I understand it, Mr. Secretary, we didn’t get a chance to hear . . . is a decision to say to them, under the commandant’s advice . . . we have another discussion as to whether we would say to them: they either . . . they’re coming in the regular route, and they come by bus; they’re going by personnel carriers, they go through the Brandenburg Gate— Bundy: Mr. President, do you want to see a revision of this message? Or can a message essentially along the lines— President Kennedy: I would like to have . . . I wouldn’t mind . . . I don’t care about seeing the revisions provided it’s put in the form of questions, and not attempting to— Bundy: Correct. 640 WEDNESDAY, AUGUST 29, 1962

Rusk: I think we might put at the end of it, [unclear interjection by President Kennedy] an overall question about— President Kennedy: We ought to put in: “It has been suggested we’d like to get your views on.” This way it was just a little bit too much— Bundy: It [sounds] as if we had a view. President Kennedy: Yeah. Taylor: With regard to General [Lucius] Clay’s visit, Mr. President, do you have any special question, you’d like to, would you like some questions suggested, or do you?18 President Kennedy: No, I’d like to hear some of his views. Rusk: He’ll undoubtedly have some views on [unclear]. Bundy: He’ll be briefed on this range of problems. President Kennedy: And then we come back . . . Rusk: I think not right at this moment. It might be . . . You mean for the [unclear]. President Kennedy: Yeah. The tape recording abruptly ends.

A few hours later, Dean Rusk would send out a cable, to the relevant U.S. missions at NATO and the Joint Berlin Planning Group (Live Oak), based on the President’s instructions. The missions were asked to consider ways to reduce the Soviet presence in West Berlin in combination with or as an alternative to reducing the allied presence in East Berlin. The possibility of trading Soviet access rights in West Berlin for allied access to East Berlin had been discussed with the President.19 Dean Rusk and McGeorge Bundy stayed behind for the President’s meeting on Congo policy, which followed the Berlin discussion.

18. President Kennedy would meet the next day with General Lucius Clay, who shared his impressions of his talks with West German leaders following the shooting of Peter Fechter. For a memorandum of Kennedy’s conversation with General Clay, see FRUS, 15: 297–301. 19. Rusk to USRO, Stoessel, McGuire, and U.S. Element Live Oak, 29 August 1962, FRUS, 15: 295–97. Meeting on the Congo 641

6:35–6:46 P.M.

[W]e don’t want to have the U.N. lose face. We don’t want to lose face. We don’t want to have a situation where everything goes flat and Tshombe really thinks we’re a bag of wind.

Meeting on the Congo20 President Kennedy continued to support the U.N. effort to reintegrate the Katanga province with the Republic of the Congo. On August 20, 1962, the acting secretary general of the United Nations, U Thant, officially announced a national reconciliation plan.21 Accepted almost immediately by Congolese prime minister Cyrille Adoula, the plan was submitted to the Katangan government. Just before officially receiving the U.N. plan, Tshombe had said he would consider reintegration with the rest of Congo as an “autonomous region,” but then said nothing more. The plan carried with it a ten-day period for Tshombe’s consideration. Kennedy’s Congo advisers expected the African leader to stall. The President called a meeting to discuss the four-phase course of action program approved on August 6 and discussed on August 8.22 The third phase asked for an embargo of Katangan copper, while the fourth phase called for U.N. enforcement of such an embargo. The failure of the European powers to agree on a course of action exasperated Kennedy almost as much as Tshombe’s intransigence. France refused to endorse the plan but did not oppose it. The French government shared the broad objectives of the United States in resolving the Congolese civil war but objected to the United Nations as an instrument of enforcement. The British objected both to economic sanctions and to military enforcement of a political settlement. As the former metropolitan power, Belgium had a strong political and economic stake in the Congo. As a chief importer of copper, the Belgians objected to

20. Including President Kennedy, George Ball, McGeorge Bundy, Dean Rusk, and G. Mennen Williams. Tape 17, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 21. U Thant’s plan stipulated that the government of the Congo would receive a half share of the mining revenues that were in dispute with Tshombe, and that Tshombe’s armed forces in the breakaway province of Katanga would have two months to be integrated with those of the central government in Léopoldville. The United Nations would impose economic sanctions against Katanga if this plan failed. 22. See “Meeting about China and the Congo,” 8 August 1962. 642 WEDNESDAY, AUGUST 29, 1962

phases three and four, which called for a boycott of Katanga copper and U.N. action to block its export. The Belgian government argued that an embargo should include cobalt since the United States was a major importer. The Katanga province provided almost 80 percent of the world’s supply of copper and cobalt. President Kennedy also faced domestic trouble over the Congo. He was anxious about the upcoming Senate debate over authorizing the U.N. bond and did not want any perceived U.N. failure in the Congo to derail a positive vote. And it was not just the United Nations that was vulnerable in Congress over the Congo. On August 3, Senator Thomas Dodd had devoted a two-hour speech in the Senate to denouncing Kennedy’s handling of the Congo crisis. The Connecticut Democrat contended that the administration’s proposal to apply economic sanctions to Katanga would probably lead to resumed fighting in the Congo. Dodd did plan to vote for the U.N. bond, but he wanted the withdrawal of half of the United Nations’s 6,500 peacekeepers in the Congo. Now the end of U Thant’s deadline was fast approaching. The United States never liked the ten-day limit, and the Kennedy administration faced some difficult choices if, as expected, Tshombe answered in shades of gray. President Kennedy began recording midsentence during discussion of a draft Action Program for the Congo.23

President Kennedy: [Unclear] still requires it? McGeorge Bundy: What do you think? George Ball: Yeah. Bundy: What do you think here? Ball: Definitely. Bundy: This is pretty good. [Unclear.] Dean Rusk: Mr. President, I think you saw the long telegram from the Governor [ambassador to the United Nations Adlai Stevenson]? President Kennedy: Will we get more from [Lewis] Hoffacker or is that about the only—24

23. “Action Program for the Congo,” “Congo, 8/11/62–8/27/62” folder, National Security Files, Box 28, John F. Kennedy Library. 24. Lewis Hoffacker was first secretary at the U.S. Embassy in the Congo. Earlier in the month, Ball had recalled Hoffacker to Washington and removed him as U.S. consul at Elisabethville in the Katanga. Meeting on the Congo 643

Ball: No, there’s another one coming in on the [Robert] Gardiner one, which covers the rest of the Gardiner post—which he says is going to cover the separate message.25 Rusk: I would think, if there were a series of bad news, he [Tshombe] would have preferred to adhere rather than just hold any reference to it. G. Mennen Williams: I think probably the other’s true, too. If there were real good news, he’d probably—[Laughter.] Rusk: Well, he would have rejected it? Williams: Yes, totally. Rusk: The fact that this message is not— President Kennedy: Well, now where are we with this ten-day ultimatum? What we hope is that, what? [That] there will be sufficient progress so that we can say we’re . . . ? What is supposed to happen at the end of ten days? Ball: Well, I think what is probably going to happen is that the answer from Tshombe is going to be a little of both. It’s going to be indicating a kind of acceptance en principe but some qualification on details and a desire to discuss. I think this is the posture in which it is most likely to be presented. Would you agree with that? Williams: Yes, sir, that’s our— Ball: Now that means— Rusk: And to some extent, Adoula has done the same thing.26 Williams: He did to begin with, but then his public statement just cut the thing. Ball: Well, the fact is, I think to be realistic about it, at the end of the ten days, if we wanted to fire off a cannon, it would very likely be very much of a dud because the sanctions which we have are, I think, likely to evaporate into thin air. In the first place, the French and the British have run out on the idea of an embargo, which leaves really the Belgians as the only one to oppose the embargo plus ourselves. Our interest in the embargo, our relevance to the embargo, is in cobalt, where we consume three-fourths of their cobalt production. For us to impose an embargo would mean, the implication of it will be, [the] Trading with the Enemy Act, which we didn’t do even against Cuba until two years after Mr.

25. Robert Gardiner had been officer in charge of the U.N. Operation in the Congo since February 1962. 26. On 23 August, in a letter to Gardiner, Adoula formally accepted the U.N. national reconciliation plan. 644 WEDNESDAY, AUGUST 29, 1962

Castro came in. I think to invoke the Trading with the Enemy Act against Katanga would put the United States government in a very curious posture, which would mean— President Kennedy: Are we buying the cobalt?. . . The government isn’t targeting . . . what’s privately purchased? Rusk: We’ve got a six-year supply on site now, I understand. Williams: Mr. President, we have a new plan that we— President Kennedy: We always, we could always. . . . Is this the only place that cobalt comes from? [Unclear] of the cobalt— Bundy: Is there another way of doing it, Soapie? Williams: Yes, we’re working with . . . We haven’t completed our study of it, but we think that it may be possible to go to the cobalt buyers—if they’re a small number and ask them voluntarily to do this. Now the question is would they be liable on their contracts? And we’re examining the law to see whether—if—the Congolese government had said this was an illegal export, this would give them an adequate answer and we haven’t . . . Chayes is working on it.27 We don’t have the final word yet. President Kennedy: Did you say we’ve got a six-year supply of cobalt? Williams: Yes, something— President Kennedy: And then [unclear], if we started to sell cobalt, who would that hurt besides the Katanga people? Rusk: We can offer to supply our own suppliers in lieu of Katanga cobalt from our stockpile. Williams: Yes, sir, we could do that, but we wouldn’t want to just dump it on the market because these people would probably want to retain their contacts with their suppliers and wouldn’t just buy from us just because it might be a little cheaper. But we could protect them against any loss of cobalt. President Kennedy: You’re taking a look at that, then, and see whether that’s feasible? Williams: Yes, sir. President Kennedy: How much of their income depends on this sale? Williams: Well, I think the combined cobalt and copper—and those would have to— President Kennedy: But you said— Williams: [Unclear.] President Kennedy: Why don’t we start selling that cobalt anyway? Unidentified: There is a disposal program—

27. Abram J. Chayes was the Department of State legal adviser. Meeting on the Congo 645

President Kennedy: On cobalt? Unidentified: —to put back on cobalt, yes, sir. It’s under consideration by an interagency committee under [unclear]— President Kennedy: Why don’t you ask them about it? Williams: I think these two together, sir, would be most of their revenues in relation to [unclear]. Ball: What this really comes back to is the . . . whether the Belgian government will just go ahead with an embargo against its—as it’s a kind of one government out of many that is doing this—wanted to be against its own company and where it would create very serious economic problems within Belgium because this is the source of copper for the Belgians.28 They’d have to buy it elsewhere on the market, and then I can imagine that the political problems that would be created at home would be very considerable. It’d be different if the British and the French and everyone were in the act. I think they’d have a better time holding out longer. Rusk: Mr. President, on the ten-day business, when we move, at this point, when we move into the courses of action. Having lived through Laos and West New Guinea, I would think that these ten days are measured politically [unclear] rotation of the American . . . 29 [Laughter.] And if we see what these two people come back with—Tshombe and Adoula—if we see a possibility of getting the men to agree [to] keep knocking at it and working at it and finally not just drop the gate at the end of ten days . . . If we already had a specific period starting on the— President Kennedy: It was U Thant’s ten days, wasn’t it? Was he the one who set it? Williams: Yes, it was in the original agreements that we worked out with the other parties, but the secretary told U Thant that this was not our wish that he announce this. President Kennedy: Have the British and the French agreed to the ten days, ever? Unidentified: They have agreed to have it in the paper, but they wouldn’t— Williams: It was out in the paper, yeah. I may say that your idea that

28. On 2 August, U Thant asked the Belgian government to induce that country’s mining company, Union Minière du Haut-Katanga, to stop paying taxes to Tshombe’s government. U Thant also promised the mining company that the United Nations would protect its property against reprisals if it would comply. 29. Both the Laotian accords and agreement on West New Guinea had been protracted mediation processes. 646 WEDNESDAY, AUGUST 29, 1962

this is the political problem is exactly right because every word you said I said half an hour ago to [Congressman Walter H.] Judd because Judd said that this ten-day thing was what hurt him most in trying to get votes for the U.N. bond.30 And when I told him that you had told U Thant that we were opposed to it, he said, “Well, I’m glad of that.” President Kennedy: When is the U.N. bond thing supposed to come up? Williams: The 13th— Bundy: It’s not supposed to come up until the 13th. And this is the problem. State thought that. Williams: —the 13th. Ball: They’re going to debate the vote on [unclear]. That’s a week from Wednesday. President Kennedy: Well, we just can’t do anything until then, anyway, so we might as well just think of some excuse now for them to act, to say, “because the parties were in negotiation” or “because of the response of the parties to renegotiation—” Williams: —And whatever U Thant [unclear]. President Kennedy: Can somebody take care of that? Williams: Yes, sir. We have a cable we’re working on now. Bundy: Yeah, to do that. But the problem is that it’s a little hard to tell the U.N. what we think they ought to do before we know the nature of the equivocal reply that we expect from Tshombe. President Kennedy: I agree. Let’s start at the end by saying there isn’t anything we can do. Bundy: Well, but I think we ought to alert them ahead of time that we’re not going to be able to do anything anyway during this. President Kennedy: Well, what is it they would like us to do? Can we just . . . So we don’t get looked upon as if we’re saying “no” to them. What is it they are ready to do at the end of ten days that they can do themselves? We don’t want them always blaming the United States. What is it they’re ready to do, or want to do? What would he want to do? What day is the [unclear]? Williams: Labor Day. Bundy: Labor Day. President Kennedy: OK, what does he want to do, then? Williams: Well, according to his announced program, at the end of

30. Representative Walter Judd (R-Minnesota) served on the House Foreign Relations Committee. Meeting on the Congo 647 ten days, he said he was going to think about the sanctions and would ask the other people, that is ask us— President Kennedy: The British and French will reject sanctions? Williams: Yes. Ball: Of course if they rejected sanctions . . . But actually, under the announced program, under phase two of the announced program, during the ten-day period, if there’s delay, then the governments are to say to Tshombe that they have some economic sanctions up their sleeve— Williams: Yeah. Ball: —which they are going to be prepared to use against him. And I don’t think we should be in the position of saying this, and I think we ought to get out, off this hook at this point. But I think that any threats to Tshombe during this period are going to be immediately played back over here and get us in great difficulty. Williams: I think there’s an invisible repealer in the agreement, which nobody’s doing— Rusk: Did he say that the ten days run out on Labor Day? Williams: Yes, sir. Rusk: Surely the ten days do not begin to run in any event until Gardiner talked to Tshombe? Williams: Well, that isn’t the way the statement looks here. Rusk: Yeah, but . . . Williams: Why it shouldn’t, but— Rusk: Well . . . Williams: Well . . . Ball: You could interpret it that way. Rusk: Yeah. Williams: He delivered it Friday to Kimba, so there was a—31 Ball: Specially constructed receipt by Mr. Tshombe. Rusk: Well, I think . . . I wouldn’t . . . [Chuckling.] Williams: Well, I mean there are lots of arguments and— President Kennedy: Now the only thing is . . . we don’t want to have the U.N. lose face. We don’t want to lose face. We don’t want to have a situation where everything goes flat and Tshombe really thinks we’re a bag of wind. So what about having whatever comes out of this thing— we’re going to have to keep these negotiations going. If it works with U

31. On 24 August 1962 Robert Gardiner handed the U.N. resolution to Katangan foreign minister Evariste Kimba in Tshombe’s absence. There is some confusion because they do not know precisely when Tshombe received the plan. 648 WEDNESDAY, AUGUST 29, 1962

Thant . . . on his own [he] says that we ought to appreciate the fact that within ten days they had a preliminary response and we hope now that they will immediately work together and then we just keep this thing vague enough until we get our bond issue done . . . [If] they’re going no place then we just have to decide. We’re not going to get anyplace with the sanctions anyway. The sanctions are out because we can’t get the British and the French . . . Ball: So the problem is— President Kennedy: They are out. Bundy: Do we really fear that without the British and the French, there’s nothing we and the Belgians could do in a pinch? Ball: Well, I think the answer to it is that looking at it realistically, the chances of the Belgians holding out alone . . . when they’re the only ones that are applying them on the copper, which is the pretty significant— Williams: Significant. Bundy: Actually, the French aren’t wholly clear on this. I mean— Unidentified: They have said they wouldn’t object. Bundy: They haven’t said no— Ball: No, they said they wouldn’t participate in the sanctions, but they wouldn’t take any active efforts to destroy their effectiveness. But I mean for practical purposes in Belgium . . . Belgium is alone on the copper sanctions and I just don’t think that we can ever expect them to do this because it’s as contrary to the conduct that they have shown in the past every time they— President Kennedy: Well I’d like to have it if it’s going to be sort of a . . . if we can’t go for . . . Are we concluding that we can’t operate sanctions, then? Ball: [Unclear] only sanctions. Williams: I want to put in a reconsideration. Rusk: I don’t think we want to say that often. I think we could— President Kennedy: We might say it, but, I mean, say it to ourselves. Rusk: No, I think we could probably find a good many harassments and vexations that we could throw at Tshombe, but I think we ought to concentrate on not getting to that point. President Kennedy: All right. Then what we want is U Thant to say that [on] this ten-day business, just say that, in view of the fact that both parties are [unclear], we assume he is going to do something. Focus now on whatever they should do. We just won’t get into this thing of having them come up with a lot of stuff in ten days, which we’re not able to come up with. We don’t want to start sanctions ourselves next Monday because we might not get the U.N. bond, so I think we better just find Meeting on the Congo 649 that U Thant better get some language which would protect him and yet keep this thing going. I’m sure that Tshombe will give some equivocal answer but that’s all we’re asking for. Bundy: U Thant won’t get back until about the middle of next week. Rusk: Well, we’ll— President Kennedy: The ten days will be up, won’t they? So what are we going to do then at the end of ten days? Bundy: And he’ll be— President Kennedy: Somebody’s got to say— Bundy: At the end of ten days U Thant will not be in New York. Therefore, nothing’s going to happen on that day. President Kennedy: I think that’s worse. I think that makes it look awfully feckless. I would rather have him issue a statement from the U.N. and say, “As soon as we find out what they’ve said—as soon as we get some public thing which we can say, Adoula’s given a response. Tshombe’s given some sort of . . . For that reason, therefore, we hope that they will.” And that ends the ten days. Otherwise, the ten-day—everybody says, “What the hell, the U.N.’s failed again.” So I think— Bundy: The statement of putting the most optimistic face on the situation then prevailing is really what we would like. President Kennedy: At least reasonably optimistic. Then if we get the bond issue by, then we decide if he’s screwing around we can expect to hear from him as a result of the Dodd thing, and we’ll know by the 17th [of September] whether we can do the sanctions.32 In the meanwhile, we ought to really examine the sanctions—what we can do with the Belgians unilaterally. Williams: I think we are examining them. President Kennedy: And then we ought to decide what sort of military harassments or other things that we could do. Williams: I think, Mr. President, there’s one other thing that we have to have in mind, and that is it’s not only holding U Thant’s hand, but we’re going to have to keep an eye on Adoula because he expects us to lower the boom at the end, so we may have to give him some— President Kennedy: I think what we ought to do. I saw [U.S. ambas-

32. On 17 August 1962, Senator Dodd wrote President Kennedy and offered assistance in con- vincing Tshombe to comply with the U.N. plan. On 24 August, after a telephone conversation with the President, Dodd drafted a letter to Tshombe with the help of Hoffacker, who would deliver it to Tshombe. For a copy of Dodd’s letter, see FRUS, 20: 558–59. The President and his advisers were awaiting Tshombe’s reply. 650 WEDNESDAY, AUGUST 29, 1962

sador to the Congo Edmund] Gullion’s thing.33 I think Gullion ought to be informed. And until we get this bond thing by, there’s not much we can do. Just been given the schedule on the bond and say that Adoula can appreciate that and at the same time keep the heat on, that’s what we’re trying to do. We can’t seem to . . . Unless you can tell me what we can do, what else can we do? Williams: Well, one of the things with respect to Adoula is that we have this token shipment of military things that if we told him this was on the way, at least it would let him know— President Kennedy: I have no objection to that, do you? Rusk: Not at all. Ball: No, nothing. Unidentified: Where are the papers on that? Williams: Well, the papers— The tape recording ends in midsentence. On September 3, 1962, Tshombe accepted the U.N. plan. Implementation became another question, and the Congo crisis continued.

The Congo meeting was the last on the President’s official schedule. During the day another event occurred that would have enormous consequences for President Kennedy. After three weeks of delay due to bad weather in the Caribbean, a U-2 sent by the CIA finally made an end-to- end reconnaissance run over Cuba. This was the first U-2 flight over Cuba since August 5, 1962.34 The President may have been informed this evening that the mission took place. In any case, the results would be reported to him on August 31. There were Soviet surface-to-air missile (SAM) sites in Cuba.

33. The day before, Gullion sent a lengthy telegram to the Department of State which warned the administration to be prepared for renewed hostilities in the Congo if sanctions were implemented (see FRUS, 20: 562–66). Kennedy feared that a resumption of fighting in the Congo at that juncture would jeopardize the U.N. bond authorization. 34. Gregory W. Pedlow and Donald E. Welzenbach, “The CIA and the U-2 Program, 1954–1974,” (Washington, DC: Center for the Study of Intelligence, 1998), pp. 200–1. Conversation with Walter Reuther 651

Thursday, August 30, 1962

The President did not tape any meetings on August 30, just some telephone conversations. Choosing a successor to Arthur Goldberg as secretary of labor was the first order of business for Kennedy. The President was not acquainted with Willard Wirtz, Goldberg’s deputy at Labor, but Wirtz had influential allies in the labor movement. Minutes after entering the Oval Office this morning, Kennedy called one of them, Walter Reuther, the president of the United Auto Workers, to discuss nominating Wirtz.

9:30 A.M.

I don’t know Wirtz, you know, very well.

Conversation with Walter Reuther1 Walter Reuther was prepared to give his warm support for Willard Wirtz, the under secretary of labor. Wirtz, a labor lawyer, had previously taught law at the University of Iowa and Northwestern University and had been a member of both the War Labor Board and the National Wage Stabilization Board. He had also been a key member of Adlai Stevenson’s 1956 presidential campaign. The recording begins with Reuther’s endorsement of Wirtz.

Walter Reuther: Members of the labor movement would hope that you could get somebody from the labor movement. I think that under the circumstances that Willard Wirtz is perhaps the person best qualified to take Arthur’s place at the moment. President Kennedy: Yeah, yeah. Reuther: And I think that he would receive very wide support.

1. Dictabelt 33.2, Cassette K, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 652 THURSDAY, AUGUST 30, 1962

President Kennedy: Right, right. I don’t know Wirtz, you know, very well. Reuther: [Unclear.] President Kennedy: You know, I just see him very— Reuther: Well he’s a man of great integrity and competence. And I think who has a good understanding of what the labor movement is about, and I think would be able to work quite well with people. President Kennedy: Yeah, yeah, yeah. Reuther: See, I think that to try to get somebody in the labor movement very quickly would create a very, there are very serious stresses and strains at the moment. You perhaps have been reading the papers. I don’t know whether Arthur’s talked to you or not. President Kennedy: Yeah, yeah. Reuther: But the meeting we had in Chicago, the council, was a very sad one.2 President Kennedy: Yeah, yeah. Reuther: And as a matter of fact I was going to get in touch with you. Arthur and I ought to sit down before he moves over and talk about where we’re going. President Kennedy: Right, right. Well, I’ll tell him to do that. Reuther: Because, you know, what happens in the AFL-CIO affects you and affects everyone. President Kennedy: That’s right, that’s right. Reuther: And we’ve got some very very serious problems. And I think it might be well if the three of us could really sit down to chat about them. President Kennedy: Well, I’ll get him as soon as he comes back from Chicago. Reuther: I’m going to be in Washington next week. President Kennedy: Well, why don’t we meet then? Reuther: All right. We ought to try to do that before he goes over. President Kennedy: Could you give Kenny a call?3 Yeah, I’m not going to send his name up for a week or so because I want him to do a few more things.

2. At an AFL-CIO executive meeting in Chicago on 14 August 1962, Reuther and Meany had gotten into a shouting match over Meany’s veto of the nomination of Reuther’s nominee to head the Packinghouse Workers, Ralph Helstein. Meany and Reuther were bitter rivals [see Nelson Lichtenstein, The Most Dangerous Man in Detroit: Walter Reuther and the Fate of American Labor (New York: Basic Books, 1995), p. 367]. 3. Kenny was Kenneth O’Donnell, special assistant to the President. Conversation with Walter Reuther 653

Reuther: Yes. President Kennedy: Perhaps you could let Kenny know when you’re going to be here. Reuther: I’ll let Ken know, so we can sit down and chat. President Kennedy: Now, if we’re going to take somebody from the labor movement who would you suggest? Reuther: Well, really offhand, I’m not in a position to make a suggestion. President Kennedy: Yeah. Reuther: It’s a very difficult decision because of these internal stresses and strains. President Kennedy: Yeah, yeah. Reuther: And I think that under the circumstances, Willard Wirtz. I talked to a number of our friends in the labor movement about this, and their reaction to Willard Wirtz is very good. President Kennedy: It is, yeah. Reuther: I think that he would be a good choice, and I think that most people would be quite happy about him. President Kennedy: Right. OK, fine. Well, I’ll be in touch with you as soon as I get this thing in shape. I want to do it today anyway, and I wanted to get your judgment. Reuther: Very good. And I’ll be in touch with Kenny [O’Donnell] about our getting together. President Kennedy: OK, good. Reuther: Bye. President Kennedy: Thanks, Walt. Reuther: Bye.

After this call to Reuther, the President shifted to other matters. Surrounded by the congressional leadership and a representative from the government of the Philippines, Kennedy signed the Philippines War Damage Claim Bill. Left for dead by midsummer, this bill had revived along with most of Kennedy’s legislative agenda in recent weeks. Another pleasant duty followed, as representatives of the Tenth International Games for the Deaf dropped by to see the President for a few minutes. Finally, before returning to his quest for a secretary of labor, the President spent half an hour with the Venezuelan minister of defense, Brigadier General Antonio Briceno-Linares. George Meany of the AFL-CIO entered the Oval Office at 11:00 A.M. It was not enough for Kennedy to have secured Reuther’s support for 654 THURSDAY, AUGUST 30, 1962

Wirtz. He wanted Meany on board as well. The AFL-CIO president demanded veto rights over any administration nomination on labor issues and had not warmly supported Goldberg’s nomination in 1961. But today Meany was prepared to support the President’s choice. Having received both Reuther’s and Meany’s support, Kennedy was ready to make the offer to Willard Wirtz.

11:26 A.M.

Listen, I wondered if you would come along on this secretary of labor?

Conversation with Willard Wirtz4 The President called Wirtz to ask him to be secretary of labor, replacing Arthur Goldberg. Wirtz would serve as secretary of labor for the next seven and a half years, leaving in January 1969.

President Kennedy: Hello? Lincoln: Yes? President Kennedy: Do you want to get me Secretary Wirtz on there. What? Hello? Hello? Willard Wirtz: Hello, Mr. President. President Kennedy: Will, how are you? Wirtz: Good. President Kennedy: Listen, I wondered if you would come along on this secretary of labor? Wirtz: Why, yes sir. President Kennedy: Good. Fine. [Wirtz laughs.] Well, that would be fine. I’ll go ahead and announce it then in the next half hour or so. Wirtz: Well, very good Mr. President. President Kennedy: I talked to George Meany, and he’s very strong for it, and will issue a good statement—

4. Dictabelt 33.3, Cassette K, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. Conversation with a White House Operator 655

Wirtz: Good. President Kennedy: —and Walter [Reuther], so that I think we’ll get good support. Wirtz: Sorry we couldn’t end up with one out here last night. President Kennedy: I know it. Well, Goddamn it, they’re crazy. Wirtz: Blue-chip game, too. President Kennedy: Yeah I know it, with the— Wirtz: Wouldn’t be right to legislate. President Kennedy: Yeah, yeah. Good, OK, fine, well, we’ll move ahead then, and I’ll put it out in the next hour or so. Wirtz: Much obliged, Mr. President. President Kennedy: Thanks a lot. OK, bye. Wirtz: Bye.

After speaking with Wirtz, the President welcomed General Lucius Clay and General Maxwell Taylor for a discussion of the situation in Berlin. Before beginning this meeting, Kennedy decided to inform the country’s labor leadership that Willard Wirtz would be replacing Arthur Goldberg.

11:30 A.M.

Now, wait a sec, have to get them all in the next, just be sure and sort of keep them separate.

Conversation with a White House Operator5 Operator: Waiting. President Kennedy: I want to get Walter Reuther in Detroit— Operator: All right. President Kennedy: —George Harrison of the Railroad Brotherhoods who’s in Washington— Operator: Um-hm. President Kennedy: —and Dave McDonald of the Steelworkers.

5. Dictabelt 33.3, Cassette K, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 656 THURSDAY, AUGUST 30, 1962

Operator: All right. President Kennedy: Now, wait a sec, have to get them all in the next, just be sure and sort of keep them separate. Operator: OK. President Kennedy: Right, thank you. Operator: All right sir, thank you.

The White House operator was able to reach George Harrison before Walter Reuther. The President relayed the news about his selection of Willard Wirtz first to Harrison of the Railroad Brotherhood.

11:33 A.M.

I don’t know why they all want to go into retirement up there [to the Supreme Court], but they do.

Conversation with George Harrison6 Kennedy began recording after the start of the conversation with the head of the Railroad Brotherhood.

President Kennedy: Substitute that would be at least at this point as satisfactory as Will [Wirtz]. George Harrison: Yeah, well, and on the other hand too, I want to offer my congratulations on the appointment of Arthur Goldberg. President Kennedy: Yeah, well I hate to lose him. I don’t know why they all want to go into retirement up there [to the Supreme Court], but they do. Harrison: Yeah, you’re losing a good right arm there. President Kennedy: Good, fine. Well, I’ll see you soon, George. Harrison: Well fine, many thanks. President Kennedy: Thank you. Harrison: Bye.

6. Dictabelt 33.4, Cassette K, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection Conversation with Walter Reuther 657

11:35 A.M.

Listen, I’m going ahead with Willard Wirtz. . . .

Conversation with Walter Reuther7 President Kennedy: Hello? Unidentified: Hello. Operator: [Unclear.] President Kennedy: Hello? Operator: Yes, sir. President Kennedy: You got Mr. Reuther on there? Operator: No, just . . . Ready, sir. President Kennedy: Hello? Reuther: Hello. President Kennedy: Hello, Walter. Listen, I’m going ahead with Willard Wirtz, and I’m going to announce it in just a few minutes. Reuther: Very good. I think that’s a good choice. And I think that most of the public generally, and the labor movement will accept that. President Kennedy: Oh, good, fine, well that’s good, and I’ll be looking forward to seeing you. Reuther: Very good. Now, I’m going to get ahold of Arthur [Gold- berg], what about late Tuesday or sometime on Wednesday for our getting together? President Kennedy: Oh, that would be fine. Reuther: I’ll be in touch with Ken [O’Donnell] about it. President Kennedy: OK, good. Reuther: Very good. President Kennedy: Thanks a lot. Reuther: Thanks for calling. President Kennedy: Bye, Walt. Reuther: Bye.

Following these telephone calls and the conclusion of his meeting with Generals Lucius Clay and Maxwell Taylor, the President walked over to

7. Dictabelt 33.5, Cassette K, John F. Kennedy Library, President’s Office Files, Presidential Recordings Collection. 658 THURSDAY, AUGUST 30, 1962 the Fish Room to announce the appointment of Willard Wirtz. A visit from Prince Juan Carlos of Spain and Princess Sophia followed, and then Kennedy spent some time with older Peace Corps volunteers. In the afternoon, after his customary three-hour midday break, the President had only one scheduled meeting. He saw Maxwell Taylor, the incoming Chairman of the Joint Chiefs of Staff, for a second time that day. The President did not tape any meetings or telephone calls on August 31. Index

Abrams, Creighton W., xxxi Aid to Families with Dependent Children ACDA (Arms Control and Disarmament (AFDC), 57n Agency), xxxiii, xxxvi, 83, 98–99, 117, Aiken, George D., 113 132–33, 135n, 145 aircraft, 179, 272–74, 278–79, 452, 600 Acheson, Dean, li, 386n, 556 in Berlin planning, 314–17, 322–24, 326 Ackley, H. Gardner, xxxi, 362n, 413 in Middle East, 611, 613–15 acoustic monitoring, 100, 144 airdrop nuclear tests, 85n, 92n Adenauer, Konrad, xxxi, 217–18, 220, 321–22, Air Force, U.S., xxxii, xxxvi, xxxvii, xxxix–xl, 466, 468, 477 118, 126n, 129n, 326, 454 Adoula, Cyrille, 282–83, 285, 641, 643, 645, space programs of, 536–40, 608–10 649–50 Air Force One, 4, 485n Advanced Research Projects Agency, Defense Air Force Reserve, U.S., 223, 228–29, 232–33, Department, 81n 536n, 537, 538n AEC, see Atomic Energy Commission, U.S. Air Force Technical Applications Center aerial reconnaissance, 131, 204, 212–14, (AFTAC), 81n, 117–18, 121, 126n 261–65, 593, 601–2, 608, 650 airports, 296, 300–301, 308 Aeronautical and Space Committee, Senate, Albert, Carl, 462 536n Alexander, Henry Clay, xxxi, 335n, 336, 343–45, AFDC (Aid to Families with Dependent 347–49, 353–56, 359, 378n, 406n Children), 57n Alexandria, Egypt, 611 Afghanistan, 153 Algeria, 143, 557 AFL-CIO, xxxvii, 241n, 260, 418, 652–54 Allen, Ward P., xxxi, 26n, 29, 35 Africa, 143, 284n, 547, 550, 553n Alliance for Progress, xxxvii, xliv, 5–6, 9, see also specific countries 11–12, 23–25, 295n, 490, 602 African Bureau, State Department, 282 alluvium, in nuclear tests, 89, 100–102, 104, African Congress, 561 116, 129 AFTAC (Air Force Technical Applications Alphand, Hervé, 387n, 425 Center), 81n, 117–18, 121, 126n Alsogaray, Alvaro, 30 Agency for International Development (AID), Alsop, Joseph, 196, 200 xxxii–xxxiii, xxxvii, xxxix, 14, 442, Alsop, Stewart, 196, 200 483n, 523 Alves, Aluisío, 12, 15 in Haiti policy, 289, 295–96 American Farm Bureau, 527, 530 in Laos policy, 420–21, 428, 435, 438 American Federation of Labor, 241n agriculture, liii, 56–57, 296, 480n, 527–33, American Indian Chicago Conference, 418 570n, 583 American Newspaper Publishers Association, in Cuba, 601, 626 197n–98n in federal budget, 66, 68–69, 254, 340, 368 American Publishers’ Association, 189n in Southeast Asia, 420–21 American Republics Affairs, Bureau of (ARA), Soviet, 267–68, 270, 454 295–96 Agriculture Act (1962), 527n American Revolutionary Popular Alliance Agriculture and Forest Committee, Senate, (APRA), 26, 32 528n, 532n American Society of Newspaper Editors, 198n Agriculture Department, U.S., xxxiii, 42, 68n, American Telephone and Telegraph Company 71, 268, 293, 527–33, 567–68, 572n, 573, (AT&T), 467n, 538, 605n 575, 590 amphibious operations, 273, 276–78, 333, AID, see Agency for International Development 595–96 660 INDEX

Anderson, Clinton P., 113 Army Reserve, U.S., 202–3, 222–24, 228–29, Anderson, George W., xxxi 332–33 Andrews Air Force Base, 4 Art, Bill, 46 Anglo-Boer War, 456–57 Artibonite development project, 296–98 Angola, 546 Asia, seismic monitoring of, 177 announcement effect, of tax cuts, 379–80 Associated Press, 198n, 290, 293n, 413 Annual Report of the Council of Economic AT&T (American Telephone and Telegraph Advisers, 238n Company), 467n, 538, 605n antiaircraft fire, 314 Athens, Greece, 311–12 antidiscrimination policy, in government Atlanta, Ga., 543 employment, 542–43, 606 Atlas missiles, 179–80 Antitrust and Monopoly Subcommittee, Senate, atmospheric nuclear testing, 83–85, 92, 94–96, 374n 98–100, 136n, 139, 146, 148, 162, 233, antitrust policy, 340n, 374n 481, 548–49 ANZAC (Australia and New Zealand Army ban on, xliv, 80, 88, 94, 95n–96n, 106, Corps), 456n 113–14, 121–22, 136n, 141, 163, 168, APCs (armored personnel carriers), 626–27, 171–74, 178, 185, 265, 418, 625 631–34, 638–39 see also nuclear test ban “Appraisal of Problems in the Proposal for an atomic cartridges, 455–46 ‘Interim Monetary Arrangement’ ” Atomic Energy Commission, U.S. (AEC), xxxiv, (Treasury Department), 491n xxxviii, 84, 86, 91, 121, 280n, 342, 548, Appropriations Committee, House, xxxv, xxxix 598 APRA (American Revolutionary Popular limited test ban proposed by, 95–96, 171 Alliance), 26, 32 Atomic Energy Committee, see Joint Committee ARA (Bureau of American Republics Affairs), on Atomic Energy 295–96 Ausland, John C., xxxi, 311–17, 322–28 Arab-Israeli relations meeting, 562n, 610–23 Australia, 46, 87, 436 Arab nations, 106–7, 116, 562, 610–20 Australia and New Zealand Army Corps internal dissension among, 612, 618–19 (ANZAC), 456n Archivist, U.S., xxi Austria, 400, 510 Ardennes forest, 460 autobahns, 45, 316, 627, 636 Arends, Leslie, 462 automobile industry, 239, 364 Argentina, xliv, 8, 30, 32–34, 38–40, 48, 345 Aux Cayes road project, 297n Argentine Supreme Court, 33 Arinos, Afonso, 9n B-52 bombers, 179 Arkansas, 571–72 B-57 bombers, 272 Armed Services Committee, House, xxxix, 333n baby boom, 378 Armed Services Committee, Senate, xxxviii, Badeau, John S., 611–12, 615 113n, 184, 333n, 417–18, 536n Bailey, L. B., 437n, 608 armored personnel carriers (APCs), 626–27, Baker, Howard, 473–74 631–34, 638–39 balance of payments, 77, 236n–39n, 248, 385, Arms Control and Disarmament Agency, U.S. 398, 402, 405n, 409–11, 500–503, 507n, (ACDA), xxxiii, xxxvi, 83, 98–99, 117, 509–13, 523–24, 525n 132–33, 135n, 145 agreements on, see monetary policy arms race, xliv, 80, 89, 93–94, 103–4, 133, 162, definition of, 237n 179–80, 186–87, 607 foreign aid in, xlii, 400, 421, 467n, 479, 523 see also nuclear test ban; nuclear weapons security commitments in, xlii, 384, 386–87, Army, U.S., xxxi, xxxvi, xxxix, 73n, 162, 388n, 408, 466–70, 479, 490, 495, 523 417–18, 458–59 tax cut effect on, 242–43, 259, 335–39, in covert operations, 21–22, 37 344–51, 355–58, 479 in military assistance programs, 298–300, U.S. deficit in, 385, 402 306 Balance of Payments Task Force, xxxviii, Army National Guard, U.S., 222–23, 333 386 INDEX 661

Baldwin, Hanson, 186–90, 196, 199–201, 319n, Benton, Thomas Hart, xlixn 443–44, 462, 593n, 595, 597–99 Berckemeyer, Fernando, 27, 35 Balkans, xlvi BERCON plans, 204, 228n, 324–25, 328 Ball, George W., xxxi, l, 396n, 477, 526, 547n, Berding, Andrew H. T., 280–81 641n, 642–45, 647–48, 650 Berlin, xxxii, xlvi–xlviii, li, 43, 202–31, 269, covert operations and, 283, 286, 295, 565 310, 384, 407, 552, 655, 657 in monetary policy discussions, 384, 385n, access routes to, 45, 311, 313–16, 322–24, 387–89, 392, 394–95, 398–404, 407, 327–28, 626–40 409–11, 414–16, 439, 468, 489n, allied prestige in, 317, 324 490–91, 493–500, 503–4, 512, 515–16, ambulance service in, 481, 535, 592 519–22, 524, 525n checkpoints in, 212, 626–31 at Peruvian recognition meeting, 26n, 31, civil unrest in, 480–81, 533–35, 626, 630, 42–46 638 in trade discussions, 42, 44, 566n, 567, 568n, as conflict flashpoint, xxiv, xlvi–xlviii, 202–4, 569, 571–91 214–16, 263, 266–69, 311–12, 533, Balochistan region, 454 592–94, 607 Baluba tribe, 284n contingency plans for, xlvii, 187n, 202, Bankers Trust, 401 204–5, 210–12, 216–18, 221–24, Bank for International Settlements, 501n 227–31, 271n, 311–34, 535, 552, 627–40 Banking and Currency Committee, House, 256, in election cycle, xlvii, 131, 220, 223 475n in German reunification, 331, 555–57 Bank of England, 414n, 465n NATO role in, xlvii, 202–5, 216n–17n, bankruptcy, 62n, 388, 465n 219–21, 311–13, 319–24, 326, 328, 557, banks, 50–51, 70, 248n, 335, 396, 411, 604 640 central, 387, 392–93, 395, 401, 404–6, 410, negotiation over, xlvii–xlviii, 45, 203–10, 412, 462–70, 477–79, 490, 491n, 494, 221, 225, 228, 260–61, 311, 313–17, 496–511, 514–22 325, 481, 533–35, 547, 550–51, 552, international lending by, 296, 305, 396, 555–57, 592, 626, 632–39 412–13, 434 nuclear deterrence in, 142n, 205–8, 216–19, in money supply, 472–74, 477, 492–93 311–13, 318, 320–21, 325–30 Barbour, Walworth, xxxii, 610n, 614 police in, 534, 631–32, 634 Baring Bank, 465n press coverage of, 187n, 202, 213–15, 216n, Barnett, Ross R., xxxii 222n, 223, 318–20, 534, 626, 634 Bartlett, Charles, 27, 485 in taping decision, ln, 202 BASC (Berlin Air Safety Center), 204, 212, 629, U.N. action on, 123n, 203, 208–10, 268–69, 632–33, 637 311, 316–17, 326, 331, 547, 550, 639 baseball, 54 Berlin, meetings on: Basel arrangements (1961), 501–2 of August 3, 1962, 202, 205–26 Bay of Pigs invasion, xliv, lin, lii, 188, 197, 261, of August 9, 1962, 311–34 267, 445, 594, 599n of August 29, 1962, 626–40 Behrman, Jack, 526 Berlin Air Safety Center (BASC), 204, 212, 629, Beijing (Peiping), 207 632–33, 637 Beirut, 49n Berlin blockade (1948–49), 315 Belaunde, Víctor Andrés, 291, 294 Berlin crisis (1961), 203, 327, 630, 638 Belaunde Terry, Fernando, 40 Berlin Task Force, xxxi, 45, 202–4, 230n, 311 Belgium, 218n, 282–83, 564, 578n, 641–43, 645, Ambassadorial Group of, 325–26, 632–33 648 Berlin Wall, 45, 203, 480–81, 533–35, 556, 628, monetary policy of, 386n, 390, 403, 405n, 630–31 460, 464, 468, 470, 492, 510, 517–18 Betancourt, Rómulo, 27–28, 34 Bell, David E., xxxii, 52–79, 271, 362n, 367–66, Bethe, Hans A., 140 368–70, 375, 413, 471, 524, 609 Bethlehem Steel, 73n, 75n, 77, 79n, 372 Bell, Elliot V., 246 Bethmann Hollweg, Theobald von, xlvi Bennett, Philip, xx Bill, James A., 567n–68n 662 INDEX

Billings, LeMoyne, xxxii Brookings Institution, 254n Birdwood, William Riddell, 456–57 Brown, George, 218–19 Black, Eugene R., 414, 438–39 Brown, Harold, 129 Black Muslim movement, 618 Brown vs. Board of Education, 604n Blancher, Dessimore, 303 budget, federal, xxxii, 52–79, 236–37, 244, 391, Blessing, Karl, 468–69, 477–78, 520 394–95 Block, Joseph L., 374 agriculture in, 66, 68–69, 254, 340, 368 Bloodhound missiles, 611 computation of, 58–64, 368–70 Blough, Roger M., xxxii, 335, 340, 342–44, deficit spending in, 54, 59–61, 65–67, 349–53, 357–60, 375, 378n–79n 248–49, 338, 471–72, 475 BLUEGILL nuclear test, 83–85, 548n foreign aid in, 340, 342, 419, 435–36 BLUEGILL PRIME nuclear test, 548n military spending in, xxiv, xlii, 55, 66–68, Boeschenstein, Harold, xxxii, 335n, 336, 222n, 236, 244, 340–41 340–43, 347, 353–54, 359, 378n spending cuts in, 254, 338–42, 349, 352–53 Boggs, Thomas Hale, xxxii, 210, 582 surplus in, 237, 238n, 471, 479n, 509–12, 523 Bohlen, Charles E. “Chip,” xxxii, 152, 226, 260, tax cut in, see tax cut proposal 281 unemployment calculations in, 58, 66–67, Bolshakov, Georgi, 130–31, 152n, 261 239n, 257, 369–70 bomber aircraft, 179, 272, 613–14 budgets, foreign, 426, 431–33 bonds, government, 75–76, 463, 474, 476, 479, Bulganin, Nikolai, 142n 510 Bulgaria, 553, 558 Bonds for Israel campaign, 562n Bundesbank, Deutsche, 404, 520n Bonn, FRG, 326 Bundy, McGeorge, xxxii, ln, li, 5n, 166, 233, Boston Globe, xx 300n, 387, 421, 439n Boucicaut, Jean René, 289–90, 301–2, 310n on administration dynamics, lii, 117–18, Bouck, Robert, xvii–xviii, ln, 3 125–26, 128–30, 491 Boun Oum, Prince, 419 on Berlin, 45, 203n, 204–7, 209–14, 218–26, boycotts and embargoes, 27, 32–33, 283, 231–32, 311, 319, 322, 329–30, 332, 293–94, 323–24, 468–69, 641–50 594, 627–31, 634–40 Boyd, Paul, 78n on China, 272–75, 277–78 Boyer, Ken, 54 on Congo, 272n, 283–85, 640–42, 644, 646, Bradlee, Benjamin C., 379n 648–49 Brandenburg Gate, Berlin, 627, 630–32, 635, on congressional relations, 113–15, 120, 122, 638–39 127, 225 Brandin, Robert, 627n, 630 on covert action, 273–75, 277–78, 289n, Brandt, Willi, 535, 627–28, 637 440–43, 482–89 Brannan plan, 570n at European affairs meeting, 43n, 44–51 Brazil, xxxiv, xliv, 5–25, 37–38, 148n on foreign service, 46–47 covert activity in, 8, 16n, 18–22 in Latin American policy, 5n, 7–9n, 26n, elections in, 6–8, 16 32–33, 37, 39–40, 42, 287n, 293–94 meeting on, 5–25, 130, 237n at Middle East meeting, 610n, 612–13, 618, U.S. business interests in, 7–8, 13–15 621–22 U.S. economic aid to, 5, 10–12, 14, 237 on nuclear cheating, 89–90, 101–2, 161 Brazilian Expeditionary Force, 21n at Peru recognition meetings, 26n, 32–33, 37, Brazilian student delegation, 13–14, 25, 130 39–40, 42, 287n, 293–94 Brennan, D. J., 444n at test ban meetings, 80n, 83–86, 88–90, 92, Bretton Woods monetary system, 385, 387 96, 98, 101–2, 104–5, 107–11, 113–20, see also currency; gold; monetary policy 122, 125–30, 132n, 134–39, 141, Briceno-Linares, Antonio, 653 144–47, 150, 152–64, 169–70, 172, Britain, see Great Britain 174–75, 178–81, 183, 185–86 Brizola, Leonel de Moura, 7, 9, 14–15, 20 on U.N., 285, 546n, 549–50 Brochado da Rocha, Francisco, 7 Bundy, William P., xxxii, 423 Bronze Star medal, 608 Bunker, Ellsworth, 622n INDEX 663

Bunker Hill, Battle of, 239n Carnegie Corporation, 62n Burdett, William, 441 Carnegie Endowment for Peace, 611 Bureau of American Republics Affairs (ARA), carpet tariffs, 578 295–96 Carter, Marshall S., xxxii Bureau of Far Eastern Affairs, State Carter administration, 129n Department, 423n Cash, Frank E., 533n, 627n, 631 Bureau of Inter-American Affairs, State Castiella y Maíz, Fernando María, 552, 561 Department, 29n Castro Ruz, Fidel, xx, xxxii, xliv, 43, 295, 440, Bureau of the Budget, xxxiv, xxxviii–xxxix, 52, 482, 593, 600–601, 643–44 53n, 56n, 471n Cater, Douglass, 78–79 Burke, Arleigh, 49–50 cattle industry, 527, 529 Burke, Richard, xix cavalry, horse, 458–59 Burma, 148n CEA, see Council of Economic Advisers Burnham, Forbes, 440 Celebrezze, Anthony J., xxxii, 130, 260 Burns, Arthur F., 235–37, 259, 463 Cellar, Emmanuel, 36n Burundi, 143 cement, 421, 430 Bush, Prescott, 581n Central America, 260, 292, 307 business community, 237n, 355, 542 see also Latin America administration concessions to, xlii, 72n, 243n, central banks, 404–6, 410, 477–79, 491n, 494, 378n–79n, 472n, 567, 576, 591n 496–511, 514–22 cost-cutting in, 342 gold holdings of, 392–93, 395, 401, 464–69, covert support of, 487 494, 499–500, 505–6, 514–16, 519–21 foreign investments of, 237n, 345–49, 359 self-interest of, 387, 462, 469–70, 479, 477, foreign opposition to, 9, 13–15 490 JFK opposed by, xlii–xliii, 257n, 378n–80n, swap contracts among, 412, 498–508, 510n 604 Central Intelligence Agency (CIA), JFK overtures to, xlii, li, liii, 243n, 334–36, xxxii–xxxvi, li, 7n, 273, 325, 440–43 378, 386 anti-Castro efforts of, lin, 188, 482–83, Southern, 531n–32n, 566–67, 570 485–86, 594 tax breaks for, 64–65, 242, 366n, 374n, 377n, domestic operations of, xxiv, 194–95, 199, 475–76, 605n 595, 597–99 Business Council, 360n elections influenced by, 16n, 439–40 business cycle, 236n, 363–64, 375 in Haiti policy, 289, 302–4, 306 Business Week, 246n in Laotian civil war, 419 Byrd, Harry F., Sr., 62n, 244, 247, 251, 471, 480, Chamber of Commerce, U.S., 63, 78n, 530 511, 605 Champagne offensive (1918), 457–58 Byrd, Richard, 599n Chase Manhattan Bank, 415n Chattanooga Times, 27 C-54 transport aircraft, 278, 279n Chayes, Abram J., 644 C-123 transport aircraft, 272–74, 279 chemical industry, 355, 357, 378, 578 Cabinet Committee, 524 Chesterton, G. K., 475 California, 359, 480 Chiang Kai-shek, 272–74, 281, 450, 454 Cambodia, 131 Chicago, University of, 62n, 340n Cameroon, 426 Chile, 30, 202 Camp David summit (1959), 262–64 China, People’s Republic of, 39, 177, 580, 600 Canada, 46, 48–49, 86, 175, 177, 515n covert action against, 272–81, 446, 449–54, currency crisis in, 336–37, 345, 347, 390, 595–97 392, 397–98, 493–94, 514 meeting on, 271–81, 595n Cannon, Howard, 536–37 nuclear capability of, 87, 163, 207, 265n, 272 Capehart, Homer E., 305 in U.S.–Soviet relations, 264, 266–67, 554–55 Caplin, Mortimer, 250 China, Republic of (Nationalist China), 181, Caracas, Venezuela, 303 272–81, 431, 450–54, 595–97 Caribbean nations, 260 China lobby, 272 664 INDEX

Choate Academy, xxxii Community Facilities Administration, 574n Choctaw test, 93 compensatory payments, 532, 568, 570–72, see also nuclear test ban 589–90 Christian Democratic Party, German, 218 to other countries, 574n, 577–78 Christian Democratic Party, Italian, 16n see also equalization fees Christmas Island testing facility, 91–93, 96n, Confédération des Associations Tribales du Katanga 168–69 (Conakat), 282 Christopher, Warren M., 568n Conference on the Discontinuance of Nuclear CIA, see Central Intelligence Agency Weapons Tests, see Geneva disarmament CI Group, 442–43 talks CINCEUR (Commander in Chief, Europe), 326 Congo, xxxix, 281–86, 495, 547, 563–64, CINCLANT (Commander in Chief, Atlantic), 592–93 296, 299 meeting on (August 8, 1962), 271, 283–86 civil defense, 480n meeting on (August 29, 1962), 640–50 civil liberties, 27–28, 31–34, 36, 197–98 Congress, Brazilian, 6–8, 13n, 18–20, 38 civil rights movement, xxiv, liii–liv Congress, U.S., xiii, xix, 57, 163n, 215, 285, 462 civil rights policy, 541–44 budget review in, 62–64, 68–69, 72–73, Clardy, Sandra, 232 234–35, 239–40, 244–50, 259, 339–42, Clark, Ramsey, xxxii 350–58, 471–76, 577 Clay, Lucius D., xxxii, 640, 655, 657 conference committees of, 447n Clay, Maxie, 403–4 Democratic majority in, liii, 236n, 480 Cleveland, J. Harlan, xxxii, 284, 546n, 550–51 farm aid in, liii, 56–57, 480n, 526–33, 570n, Clifford, Clark, xxxii–xxxiii, lii, 77, 195n 571–72, 574 at PFIAB meeting, 186n, 188, 196–201 foreign aid in, 57, 340, 342, 480, 602–3 Clifton, Chester V., 233 investigations by, 537–38, 599n Cline, Ray S., xxxiii JFK opposed in, xli–xlii, xlv, liii, 57n, 222, Coast Guard, Haitian, 303 225n, 446–47, 480, 529–32, 604–7, 642, Coast Guard, U.S., 418 649 cobalt, 642–45 Latin American affairs in, 6, 36–37 coffee, 14, 578n MacArthur on, 446–47 Coffee Conference, U.N., 578n monetary reform in, 391, 394–95, 469, Colavito, Rocky, 54n 470–76, 474n, 491, 499, 511–12, 514 Cole, Charles W. “Bill,” 30, 202n New England bloc in, 569 Colombia, 23, 48, 307, 483 nuclear test ban in, 107, 112–15, 120–30, Colorado, 444, 480, 539 133–34, 153, 166, 183–86, 225, 625 Columbia University, 340n, 472–73 reserve mobilization authority of, 222–24, National Bureau of Economic Research of, 267, 332–33 235n rules of, 247n, 447n, 605n Commerce Department, U.S., xxxiv, 62n, 72, Southern bloc in, liii–liv, 447n, 480, 566, 325, 524, 567–68, 582, 584–85, 588 569–72, 581, 591n–92n, 604 Committee of Principals, 82–84, 94, 99, 179 tax cut plan in, 53–54, 77n, 243, 244n, Committee of 17, U.N., 547, 549–50 249–51, 334, 356–57, 361–62, 380, 383, Committee to Re-elect the President, 62n 473–75 Common Market, European, xxxi, 43–45, 408, trade bills in, 244, 531–33, 546, 551, 559–60, 497–98, 519, 525n, 553, 578n 565–70, 572, 574–83, 590–92, 606 Communications Satellite Act (1962), 163–64, U.N. bond in, liii, 57, 547, 551, 642, 646, 538, 605 648–49, 650n communism, Communists: see also House of Representatives, U.S.; in British Guyana, 439–40 Senate, U.S. in Latin America, 8, 12, 18, 32, 37, 237, 295, Congress of Industrial Organizations, 241n 303–5, 309, 495, 602; see also Cuba Connally, Tom, 243n in Southeast Asia, 272, 419–21, 433 Conniff, Frank, 626 in Soviet bloc, xxxv, 263, 561 Constitution, U.S., liii INDEX 665 constitutions, foreign, 6–7, 23, 38, 439 against Cuba, lin, 188, 482–85, 594, 607 constitutions, state, 75–76 disclosure of, 275, 277–78, 482, 485, 478, construction industry, 365–66 563–65, 599n containment doctrine, li, 8, 418–19, 602 domestic, xxiv, 194–95, 199, 595, 597–99 contracting and procurement, government, 64, in Haiti, 287, 289–90, 306–10, 334 67–69, 341, 365, 368–70, 469n, 542–43, military support for, 21–22, 37, 273–81 644 oversight of, 8, 16, 38, 273, 278, 442–43, control posts, nuclear, 82–84, 96–103, 118–21, 482–89, 594–95 134–36, 156–57, 174–78, 625 Cox, Archibald, xxxiii, 363, 623 cost of, 143, 145–46, 155 Crash of 1929, 258 manning and supervision of, 83–84, 97, 109, Cromer, Earl of, 465–66 118, 134–36, 148, 157, 164, 167, Cuba, l, 5–6, 43, 271, 445, 643–44 169–71, 224–26, 417 Bay of Pigs invasion of, xliv, lin, lii, 188, 197, number of, 82–83, 96–100, 102–3, 106n, 261, 267, 445, 594, 599n 107–12, 120–21, 123, 135, 138, 143–46, covert operations against, lin, 188, 482–85, 171, 174–75, 177 594, 607 in Soviet Union, 97–99, 102, 107–9, 121, economy of, 594, 601–3 134n, 147, 171, 224–25 meeting on, 602n, 607–8 see also nuclear test ban proposed occupation of, 286, 607 conversations, taping of, xiii, xix, xlix, 443–44, Soviet deployment in, 131, 286n–87n, 533, 538, 540, 544–46, 604, 624n, 593–94, 599–603, 607–8, 610, 626, 651–57 650 Copenhagen, 45, 268n surveillance of, 131, 177, 261, 593, 601–2, copper, 283, 641–42, 644–45, 648 607–8, 650 Cornell University, 140n, 455 currency, 431–32, 434–35, 477, 501n corn prices, 528–30 common, 408, 498–99 CORONA satellite program, 187 exchange of, 337, 344–48, 384, 386–87, Corps of Engineers, U.S. Army, 73n 397–401, 403–8, 467, 493–94, 498–501, Costa Rica, 27, 292 511–15, 520 cotton industry, 531–32, 568–83, 588, 590–91 guarantees on, 511–12 see also textile policy reserve, 337, 385, 407–8, 470–71, 474n, 489, Council of Economic Advisers (CEA), xxxi, 491n, 495–98, 506, 508, 522 xxxiv, xxxvii–xxxix, 241n, 254n, 257n, see also dollar, strength of; monetary policy 360–61, 363–64 Curtis, Thomas, 583 economic projections of, 52–61, 65–66, 238, Curzon, Lord, 456 240n, 245 Czechoslovakia, 142 on monetary policy, 387–88, 474n, 479n, 489–91, 501–2, 510–13 dairy industry, 527, 530 in other administrations, 51n, 235n–36n, Dalton, George, xviii–xx 255n, 382n Dardanelles campaign (1915), 458n Council of Ministers, Soviet, 142n Davis, Tommy, 54 Counterinsurgency (CI) Group, Special, Day, Arthur R., 533n 442–43 Day, J. Edward, xxxiii coups d’état, xxxvii, xliv, 17–21, 26–43, 299, DCM (Deputy Chief of Mission), 50 305–10 Dean, Arthur H., xxxiii, 163, 417–18, 548–49, in Latin America, 8, 17–18, 26–42, 287–89, 625 293n comprehensive test ban advocated by, 104, Court of Appeals, U.S., 604, 606–7 107, 111, 115, 122, 172–73 Couve de Murville, Maurice, 209 congressional appearance of, 123, 127, 184 covert operations, xx, xxiv, 16–22, 419, 619, misstatement of, 82, 125 648–49 on neutral nations’ test ban proposals, 104, in British Guyana, 419, 439–43 106–7, 116–17, 119–20, 124–25, in China, 273–81, 450–54, 595–97 142–43, 148, 152, 172–73, 175, 185 666 INDEX

Dean, Arthur H. (continued) depreciation schedules, 64–65, 249, 257, 361n, at test ban meetings, 80n, 82–83, 97–98, 374, 377n 103–7, 109–13, 115–30, 132n, 134–38, depression, 239–40, 248, 452n 140, 142–57, 160, 165–67, 169–78, Depression, Great, xli–xlii, 382, 413 182–86 dollar devalued in, 472, 491 debt, federal, 61–62, 363–64, 381–83, 463, Deputy Chief of Mission (DCM), 50 472 Detroit, Mich., 544 decision-making, of presidents, xi–xii, xxiv Deutsche Bundesbank, 404, 520n Declaration on the Neutrality of Laos, xliv, 205, dictabelts, xviii–xxii, xlix 420, 436n see also Kennedy tapes decolonization, 282, 553, 565 Dictaphone equipment, xiii, xvii–xix, xlviii–xlix Defense Department, U.S. (DOD), xxxii–xxxiii, Dillon, C. Douglas, xxxiii, 52n, 55n, 63, 166, 55, 166, 182, 523, 607–10 342, 438, 467, 567 Advanced Research Projects Agency of, 81n at gold and dollar crisis meetings, 384, 385n, in Berlin Task Force, 204–6, 222–23, 227–31, 386, 388, 390–91, 394–401, 408–12, 231, 311–12, 325–26 415–17, 464, 489n, 491–94, 496–503, covert operations and, 21–22, 419, 483 507–10, 512–24, 525n, 526 in federal budget, xxiv, xlii, 55, 66–68, 222n, as pro-business appointee, xlii, li, 335, 386 236, 244, 340–41 on tax cut proposal, 255, 335n, 350, 353, first-strike doctrine of, 187, 325 357–59, 362n, 364–66, 368–69, 372–75, in Haiti policy, 295n–96n, 298–300, 306–7 378, 380–81, 384 masculinity in, 47, 49–50, 444n diplomacy: monitoring data released by, 82, 104, 117–18, back-channel, xliii–xliv, 21–22, 27, 31, 35–36, 126, 128–29, 156n 39, 81, 130–31, 170, 261, 287–88, 485n, press leaks from, 186–87, 192–96, 199–201, 564–65 319–20, 443–44, 597–99 Berlin and, xlvii–xlviii, 45, 203–10, 221, 225, in test ban deliberations, 82–86, 90, 95–96, 228, 260–61, 311, 313–17, 325, 481, 104, 113, 117–18, 123, 126, 128–29, 533–35, 547, 550–51, 552, 555–57, 592, 132–33, 137–39, 156n–57n, 168n, 171, 626, 632–39 174 burden sharing and, 216–21, 425–28, Defense Intelligence Agency (DIA), 187, 434–38, 467–70, 477–78, 490n, 553n 194–96, 597–99 Cold War maneuvering vs., 141–43, 151, deficits, 54, 59–62, 65–67, 381, 431–33 161–63 in tax cut plan, 67, 234, 244, 248–49, 335–38, in Congo crisis, 281–86, 547, 564, 592–93, 343–44, 349, 363–64, 376, 380–83, 641–50 471–72, 475 economic, 11, 14–16, 39, 41–45, 231, 387, de Gaulle, Charles, xxxiii, 209, 218n, 220–21, 395–413, 464–70, 477–79, 490, 229–30, 263n, 557, 623 496–504, 506, 510–26 in monetary discussions, 459, 466, 478 inter-American, 5–6, 23–25, 27–32, 35, nuclear force defended by, 311, 321–22 38–39, 43 Degoutte, Jean, 458 levels of, 208–9, 221, 314, 331, 581–83, 622 demand liabilities, 394n, 399, 412n masculine image in, 46–50 see also monetary policy in Middle East, 561n–62n, 610–23 Democratic Party, Democrats, xxxv, l, 247, 480, nuclear test ban and, see Geneva disarma- 605 ment talks liberals in, xliii, 238n–39n, 538 summit meetings and, xliv, 262–67, 314, 556, MacArthur on, 446–48 560 Southern, liii–liv, 447n, 480, 566, 569, 581, third countries in, 155, 557 591n–92n, 604 in trade agreements, 44, 430, 568–69, Democrats for Eisenhower, 235n 581–83, 590–91 Denmark, 569 U.S. prestige in, 8, 34–35, 38–43, 622, Dennison, Robert S., xxxiii 636–37 Denver, Colo., 473 U.S.–Soviet, xliii–xliv, xlvii–xlviii, 43, 45, 49, INDEX 667

80–84, 96–103, 106–25, 134–43, Dowling, Walter C., xxxiii, 311n, 320–22, 330, 148–57, 172–78, 184–85, 203–10, 221, 332 225, 228–29, 261–71, 313–17, 325, 418, drug safety legislation, 233, 527, 545–46 533–35, 548–49, 554–57, 629 Dryfoos, Orvil, 197–201 diplomatic cables, 275–76, 283, 289n, 578n, 646 Dulles, Alan, li on Berlin, 45n, 232, 261, 268n, 632, 634, Dulles, John Foster, li 639–40 Duncan, John P., Jr., xxxiii, 566n, 572, 574, on Middle East conflict, 611n, 618, 622–23 580 diplomatic recognition, 8, 17n, 27–43, 272, Dungan, Ralph, 581 287–88, 291–93, 308, 331, 334, 556–57 Dupont Company, xxxvi, 252n, 336, 342, Dirksen, Everett M., xxxiii, 480 354–55, 357, 378n DiSalle, Michael V., 232 durable goods orders, xlii disarmament negotiations, xxxiii–xliv, 106, duties, import, 569, 584–85, 589 136–37, 141–43, 178–81, 614 Duvalier, François “Papa Doc,” xxxiii, 287–90, arms production in, 179–80 294–310, 334 Berlin in, 207–8, 555–57 opponents of, 289–90, 298, 301–8, 310 military bases in, 180–81 private militia of, 288, 295, 297, 299–300, opponents of, 141–43, 151, 161–63, 555 302, 305–7 see also Geneva disarmament talks; nuclear Duvalierville, Haiti, 288, 297 test ban discrimination, in government employment, Eagle, 418 541–42 earthquakes, 81n, 101, 153, 158–59 dividends, corporate, 372–75, 396, 477 East Germany, see German Democratic Dixon, Paul Rand, 374n Republic Dobrynin, Anatoly, xxxiii, xlvii, 49, 206, 207n, Eastland, James O., xxxiii, 480, 545–46 210, 265, 266n, 331, 534n, 592 Eccles, Marriner, 62n DOD, see Defense Department, U.S. Eckstein, Otto, 382n Dodd, Thomas, 361, 642, 649 Eckstein Report, 382 dollar, strength of, 50–52, 385–417, 464–79 Economic Club, New York, 234n–35n, 242n domestic economy and, 242–43, 259, 335–39, economic cycle, 236n, 363–64, 375 344–51, 353, 355–57, 406, 463, 466, economic indicators, leading, xlii, 53, 337, 340, 478–79, 520, 523–24 351–52, 354, 364–71 European defense and, xlii, 384, 386–87, economic policy, xlii–xliii, li, 52–79, 335–417 388n, 466–70, 490, 523 consensus-building for, liii, 234–35, 241–45, Federal Reserve and, 414, 417, 462–70, 334–36, 339, 342–43, 357–58, 374n 477–79, 491–93, 498n–500n, 502–3, 505, in international monetary system, see mone- 507–8, 522–23 tary policy foreign aid and, xlii, 400, 421, 467n, 479, 523 Keynesian, xliii, 53–54, 236n, 343n, 490 gold linked to, xlii, 51n, 344, 346, 385–86, in 1960 election, 385–86 391–95, 396n, 398, 401–2, 410–13, 417, political criticism of, 53–54, 61–62, 76, 419, 464–69, 474n, 477–79, 489–94, 238n–39n, 241–45, 247–49, 253–54, 499–500, 502, 505–6, 514–16, 518–21, 256–58, 350–58, 371–75 525–26 press coverage of, xliii, 52, 62n, 76–79, press coverage of, 77–78, 242–43, 259, 399, 238–43, 258–59, 339, 361, 365 403, 406, 411, 415 private sector behavior in, 377–82, 406, 463 private speculation and, 393, 395, 401–3, 406, supply-side, 361, 364 410, 412, 479, 503–5, 510–12 Wall Street reaction to, xi, xliii, 70, 257–58, Southeast Asia policy and, 407, 477, 495 352n, 371–72, 375, 386, 406 see also gold and dollar crisis meetings see also budget, federal; tax cut proposal Dominican Republic, 17, 292, 307 economic warfare, 313, 315–16, 318, 323, 485, Dominick, Peter, 538–39 594 DOMINIC nuclear tests, 83–85, 164, 549n see also boycotts and embargoes Douglas, Paul, 73–75, 239n, 339–40, 605n Economist, 240, 242–43, 259, 399 668 INDEX economy, international, 50–51, 77–78, 243, elections, foreign: 336–38, 385–417, 464–79, 489–526 Brazilian (1962), 6–8, 16, 25 agreements on, see monetary policy CIA intervention in, 8, 16n, 439–40 gold in, xxiv, xlii, 51n, 237n, 337, 344, 346, Haitian (1963), 297n 356, 384–86, 391–95, 398, 401–2, Italian (1948), 16 410–13, 417, 419, 464–69, 474n, monitoring of, 31–32, 35, 38, 43, 288, 290–93 477–79, 489–94, 499–500, 502, 505–6, Peruvian (1962), 26–27, 31–32, 35, 37, 40, 514–16, 518–21, 525–26 288 private speculation in, 393, 395, 401–3, 406, elections, U.S.: 410, 412, 479, 503–5, 510–12 of 1956, 651 U.S. prestige in, 388, 395, 400–406, 408–13, of 1960, xliii, 385–86, 452n, 553 464–68, 506, 510–11 elections of 1962, U.S., xliv–xlv, l, 379n, 462, economy, U.S., xlii–xliii, 52–79, 245n, 337, 480, 609 364–72 Berlin crisis in, xlvii, 131, 220, 223 foreign view of, 381 MacArthur on, 446–47 in 1962 elections, 232, 247–48, 250, 256, tax cut plan and, 232, 247–48, 250, 256, 350–52, 371 350–52, 371 projections of, 53, 55–61, 64–66, 238–40, elections of 1964, U.S., 446–49, 529, 531, 563, 243–51, 253, 256–58, 345–46, 354–56, 576–77 371–72, 375–83 gubernatorial, 447–48 seasonality in, 365–66 trade policy in, 531, 563, 576–77 economy and budget meeting, 52–79 electromagnetic nuclear monitoring, 99–100, accounting differences discussed at, 51, 53, 144 55–56, 64–66 Eliades, George, xiii–xiv, 431n Ecuador, 24n Elisabethville, Katanga, 642n education policy, 78n, 239n, 480n, 606 Ellender, Allen, 238n, 528–29, 532n Egypt, xxxvii, 87, 610–11, 613, 615–16 embargoes and boycotts, 27, 32–33, 283, see also United Arab Republic of Egypt and 293–94, 323–24, 468–69, 641–50 Syria Emminger, Otmar, 242–43 E. I. Dupont de Nemours and Company, xxxiv, Employment Act (1946), 238n 252n, 336, 342, 354–55, 357, 378n environmental politics, 73n Eight, the (neutral countries), 104, 106–7, equalization fees, 532n, 568, 571–77, 579–80 116–17, 119–20, 124–25, 135n, 142–43, Erhard, Ludwig, 634 148, 152, 171–73, 175 Estes, Billie Sol, 542 Eighteen-Nation Disarmament Committee, 97n, Ethiopia, 148n 104n, 107n, 124n, 137n, 141n, 143n, Europe, xliin, xlvi–xlvii, 42–45, 87, 552, 594 148n, 171n, 224n, 547–48, 625 currency exchange in, 337, 344–48, 384, Eighteen-Nation Disarmament Conference, see 386–87, 390–401, 403–8, 467, 493–94, Geneva disarmament talks 498–501, 511–14 Eisenhower, Dwight D., xxxiii, xxxvi, xliii, 22, financial institutions in, 387, 392–93, 395, 229, 420, 546, 594 401, 404–6, 410, 464, 468–69, 477–79, Khrushchev’s talks with, 262, 264, 280–81, 491n, 494, 496–502, 504–6, 509–11, 556 514–22 MacArthur on, 445–46, 461 German role in, 552, 555–57, 560 popularity of, xliii, xliv nuclear deterrent in, xxiv, xlviii, 142n, 204–8, taping practices of, xii, xlvin, xlviii 216–19, 227, 265n, 311–13, 318, in U-2 affair, 262–63, 280–81 320–21, 325–30 Eisenhower administration, 65–66, 188, 487, in trade policy, 44, 498, 566, 571n, 578n, 583, 536, 567 585, 589n, 590 economic policy of, 235n, 236, 469n U.S. forces in, xxiv, xlviii, 181, 202–3, 205, foreign policy of, xliii, xlviiin, li, 48n–49n, 208, 212–14, 222–24, 266–69, 311–18, 142n, 203, 420, 452n, 555–56, 610 321–28, 332–33, 533, 557, 592–94, 607, elderly, programs for, xli–xlii 627–40 INDEX 669

European affairs, meeting on, 43–52, 384n deficit spending in, 337, 349, 471–72, 475 European Economic Community, see Common interest rates in, 248n, 337, 339, 344–45, Market, European 347–50, 352–53, 356, 384, 408, 463, Executive Office Building, xviii 472–79, 520 executive orders, 64n, 257n, 361n, 374n, 541, money supply in, 248n, 339, 471–73, 475–76, 544n 478, 492–93 Exner, Judith, xix savings in, 473–76 Export-Import Bank, 470, 510–11 see also economic policy; monetary policy Fisher, Adrian, xxxiii, 80n, 114, 132n, 134–35, FAA (Federal Aviation Administration), xxxiv, 144–46, 184 233, 325 FitzGerald, Desmond, xxxiii, 272, 274–76, 278 factory workweek, 364–67 5412 Committee, see Special Group fallout, radioactive, 80, 83, 89n, 96, 106 (Augmented), National Security Council fallout shelters, 57 Foch, Ferdinand, 458–59 Fanfani, Amintore, 552, 554–58 FOMC (Federal Open Market Committee), 463 farm aid, liii, 56–57, 480n, 526–33 Food and Agricultural Act (1965), 570n Farmers Home Administration, 71 Food and Drug Administration (FDA), 233, 527 Farm Security Administration, 71n food exports, 420–21, 430, 436 Fawcett, Stephanie, xxi Food for Peace project, 480 FDA (Food and Drug Administration), 233, 527 Food Stamp Program, 68–69 Feast of the Assumption, 418 Ford Motor Company, xxxvii, li, 581–82 Fechter, Peter, 481, 533n, 535, 638, 640n Foreign Affairs, 328–29 Federal Aviation Administration (FAA), xxxiv, Foreign Affairs and You! (Berding), 280n 233, 325 Foreign Affairs Committee, House, xxxvii Federal Bureau of Investigation (FBI), li foreign aid, xlii, 57, 400, 470, 546, 558, 560–61 leaks investigated by, 186, 190n, 192, 195–96, anticommunist aims of, xliv, 418–19, 425, 200, 443–44, 462, 595, 599 431, 438, 439, 441–42, 602 Federal Open Market Committee (FOMC), 463 burden sharing in, 422–26, 428, 434–38, 523, Federal Power Commission, 72n 553 Federal Republic of Germany, see Germany, conditions attached to, 421–22, 425, 427, Federal Republic of 430–32, 434, 470 Federal Reserve Bulletin, 499n corrupt use of, 420–21, 431–34 Federal Reserve System, xxxvi, 62n, 235n, 346, cost of, 340, 342, 419, 421, 423, 425–38, 353n, 462–79 602–3 independence of, 357, 462–64 to Haiti, 288–89, 295–98, 304–5, 308 in monetary policy, 248n, 393, 414, 417, to Latin America, 5, 10–12, 14, 33, 39, 462–79, 498n–500n, 502–3, 505, 507–8, 41–42, 237, 293–94, 426, 553n, 602–3 522–23 military, 288–89, 298–300, 306–7, 429, Federal Trade Commission, 374n 435–36, 561–62, 610–15, 650 Feed Grain Program, 527–29 to Southeast Asia, 419–38 Feinberg, Abraham, 562 Foreign Office, French, 423 Feldman, Myer, xxxiii, 418, 562, 584, 586n, Foreign Relations Advisory Board, 77n–78n 610n, 611, 613–15, 617–22 Foreign Relations Committee, House, 646n FGR, see Germany, Federal Republic of Foreign Relations Committee, Senate, xxxiii, Field, John, 542 36–37, 113–15, 184, 304–5, 489n Figueres Ferrer, José María, 27 Foreign Service corps, xxxv, 43–50, 488n, filibusters, 163, 538, 605 553–54 Finance Committee, Senate, 62n, 244, 471n, see also State Department, U.S. 511n, 545, 605 Foreign Weapons Evaluation Group, 140n Financial Consultants Mutual Fund, 72n Forrestal, Michael V., xxxiii, 272–74, 276–80, Finletter, Thomas K., 220–21 283–84, 419n, 424, 426, 435–37 Finney, John, 197 forward exchange operations, 393, 508–10 fiscal policy, 59–60, 248n, 470–78, 511n see also monetary policy 670 INDEX

Foster, William, xxxiii G-10 nations, see Paris Club data release defended by, 105–6, 127 Galbraith, John Kenneth, xlii, l, 386n limited test ban proposed by, 95–97, 111–14, Gallup polls, 241 120–22 Gamelin, Maurice, 459–61 at test ban meetings, 80n, 83–85, 95–98, 103, GAO (General Accounting Office), 15 105–6, 109, 111–16, 120–22, 125, 127, Gardiner, Robert, 643, 647 132n, 133–35, 139, 147, 159–60, Gardner, George, 361 171–72, 175–80, 182–84 Gargan, Ann, 451 Four, the (Quadripartite Group), 175–76, 182, “Garincha” tactics, 7 209, 313–18, 323, 326, 328, 632, 638–39 Gasperi, A. de, 16n Fourth Army, French, 458n GATT (General Agreement on Tariffs and Fowler, Henry H., xxxiii, 52n, 53, 55–65, 71, Trade), 568–69, 577n–78n 350, 362n Gaza Strip refugee camps, 616, 619 on press criticism, 76–78 GDR, see German Democratic Republic Fowler, James, 419n, 421–36, 438 General Accounting Office (GAO), 15 France, xxxii–xxxiii, xlvi, 30, 263, 550, 578n General Agreement on Tariffs and Trade in Berlin defense, 203, 205, 207–11, 214–15, (GATT), 568–69, 577n–78n 218–20, 230, 311–17, 321–22, 325–26, General Arrangements to Borrow, 386, 390n, 328–29, 631 396, 515n Congo policy of, 283, 285, 641, 643–45, see also International Monetary Fund 647–48 General Assembly, U.N., 106–7, 116, 123, in disarmament negotiations, 125, 175, 181, 142–43, 203, 208–10, 330–32, 547–48, 207n, 265–66, 556–57 551n, 552–54, 621 foreign aid from, 422–26, 428, 434–38, 611, general obligation bonds, 75–76 615 Geneva conference (1954), xlviiin MacArthur on, 457–61 Geneva Conference on Laos, xliv, 205, 420, 424, Middle East policy of, 611, 615, 619, 436n 621–23 Geneva disarmament talks, xxxiii, xl, 79–83, monetary policy of, 346–47, 384, 386–87, 96–103, 106–25, 131–86, 202, 233, 418, 390, 397–99, 404, 464, 466–70, 477–78, 549, 625 494, 496–97, 509–10, 517–21, 523, 525 Berlin in, 207–8, 314, 331 as nuclear power, 80–81, 86n, 88, 104, 106, Congo in, 281, 283, 286 114, 117, 207n domestic politics in, 82, 96–97, 107, 112–15, Frankel, Max, 39 120–30, 133–36, 153, 157, 183–86, 225 Frankfurter, Felix, 623, 625 language in, 112, 135, 141, 145–48, 153–58, Frankfurter Allgemeine Zeitung, 242 164, 166–70, 180–81, 224n–25n Frantz, Joe, 235n neutral nations at, 104, 106–7, 116–17, Fraser, Hugh, 442 119–20, 124–25, 135n, 141–43, 148, Freeman, Fulton, 48, 441 152, 171–73, 175, 185 Freeman, Orville L., xxxiii, 527–33, 567 on nuclear arms, see nuclear test ban Free Style military probes, 315 private channels in, 81, 130–31, 170, 265n freight charges, 423, 430 George III, King of England, xliii French, Sir John, 456–57 Georgetown, British Guyana, 439 Freund, Paul, 623 Georgia, 532n FRG, see Germany, Federal Republic of German Democratic Republic (GDR) (East Friedman, Milton, 235n Germany), 142, 211–16, 313–17, Friedrischstrasse confrontation (1961), 630 323–25, 327–31, 626–27, 636–37 Frondizi, Arturo, 32n, 33–34 civil unrest in, 323, 325 Frying Pan Colorado-Arkansas project, 480 diplomatic recognition of, 269, 331, 556–57 Fujian Province, China, 273, 275n, 452n plebiscite envisioned for, 268n, 331 Fulbright, J. William, xxxiii, 603 Soviet treaty with, xlvii, 45, 202–5, 208–12, Full Employment Act (1946), 238n 215–16, 221–22, 263, 316–17, 328, fusion weapons, 80–81, 89–91, 93 330–33, 417, 547 INDEX 671

see also Berlin gold pool, 386 Germany, Federal Republic of (FGR) (West Goodrich, Alan, xx Germany), xxxviii, 30, 50–51, 87, Goodwin, Richard N., xxxiv, lii, 5n, 16, 18–25, 268–69, 312, 327–28, 371, 471 26n, 34, 237n, 287n, 289 constitution of, 6 Gordon, A. Lincoln, xxxiv, 5, 8–25, 130, 237 defense commitments of, 205, 216–20, 229–30, on Brazil coup, 17–21, 37–38 313, 315, 319–22, 325, 329–30, 634 Gordon, Kermit, xxxiv, 362n, 366, 373, 384, in disarmament talks, 142, 265–66 385n, 389, 489n, 500–501, 513 East German relations with, 211, 214–16, Gore, Albert, Sr., xxxiv, 605n 327–28, 331, 480–81, 626, 634 Gore, David, see Ormsby-Gore, David foreign aid from, 422–24, 428 Gossett, William T., 581–83 monetary policy of, 346, 386–87, 397–98, Goulart, João “Jango,” xxxiv, 5–12, 15–23 404, 464, 466–70, 477, 499–500, 506, political ambitions of, 6–7, 10, 18, 20, 38 518–21 Gouraud, Henri, 458 nuclear deployments in, 142n, 205–8, Graham, Billy, xxxiv 216–19, 265n, 557 Graham, Philip, 334 see also Berlin grain stocks, 527–29 Germany, Imperial, 457–58 granite, in nuclear tests, 104–5, 116 Germany, Nazi, 458–61, 477 Gray, David, 230 Germany, reunification of, 331, 555–57, 560 Graybeal, Sydney N., xxxiv Germany, Weimar, 491 Great Britain, xxxvi–xxxvii, xlvi, 42, 78, 419, Gilpatric, Roswell L., xxxiii, 8n, 22, 132n, 162, 457–58, 564 319, 444n in Berlin crisis, 203, 209, 212, 214–15, Girls Nation, 232 311–18, 324n, 325–26, 534, 550, 631, Giscard d’Estaing, Valéry, 387, 398–99, 404, 637–38 411, 468, 496–97, 504, 517–18, 520–21, as colonial power, 439–43, 456–57 525 in disarmament talks, 81, 91–93, 96n, 134n, Gizenga, Antoine, 282 137, 148–49, 153, 159, 168–69, 171n, glass tariffs, 578 176–77, 181, 185–86, 224–26, 233, GNC, see Group of Nonaligned Countries 265–66, 417, 625 GNP (gross national product), 58, 64, 66n, 71n, foreign aid from, 422–26, 428, 435–36, 439 238n, 240, 245, 258, 343, 368, 375, 381 foreign policy of, xlv, 30, 35, 38–39, 283, 550, Godber, Joseph, 148–49, 224–25 564, 641, 643, 645, 647–48 gold, 62n, 237n, 337, 356, 384, 421 GNP of, 381 dollar conversion to, xlii, 51n, 344, 346, Middle East policy of, 611, 615n 385–86, 391–95, 398, 401–2, 411–13, monetary policy of, 386n, 390, 396–99, 401, 417, 419, 464–69, 474n, 477–79, 403–5, 464–66, 468–70, 478, 494, 489–94, 499–500, 502, 505–6, 514–16, 496–98, 501, 508, 518–20, 522, 525 518–21, 525–26 as nuclear power, 80, 86n embargo on, 468–69 nuclear test protested by, 481 guarantees on, 489, 490n, 491, 500–501, 505–6 parliamentary power in, 6 standstill agreement on, 387–88, 390–92, in trade policy, 466, 571n, 578n, 583, 585n, 405–6, 409–12, 417, 439, 462, 468–69, 590 479, 489, 491, 501–2, 524 Great Leap Forward, 452n Gold and Dollar Crisis, The (Triffin), 385, 474 Greece, 558n gold and dollar crisis meetings: Greenewalt, Crawford H., xxxiv, 252, 254, of August 10, 1962, 385–417, 438–39, 335n, 336, 339–40, 342–43, 347, 490–91, 507n 353–57, 359–61, 378, 380n of August 16, 1962, 414, 417, 462–79 Grew, Joseph, 50 of August 20, 1962, 489–525 Grey, Edward, xlvi Goldberg, Arthur J., xxxiv, 260, 362n, 366–67, grey goods, 580 369–75, 380, 396n–97n, 418, 567, see also cotton industry 623–25, 651–52, 654–57 Groat, Dick, 54 672 INDEX

Gromyko, Andrei A., xxxiv, 136, 141, 149, 103–4, 110, 113, 119, 122, 139, 205–6, 210, 265n, 269n, 331, 629 167n–68n, 177 gross national product (GNP), 58, 64, 66n, 71n, Haya de la Torre, Víctor Raúl, 26, 32n, 41 238n, 240, 245, 258, 343, 368, 375, 381 Health, Education, and Welfare Department, Group of Nonaligned Countries (GNC), 141, U.S. (HEW), xxxii, 13, 260 268–69 Health Advisory Committee, 546 in disarmament talks, 104, 106–7, 116–17, Hearst, William Randolph, 449 119–20, 124–25, 135n, 141–43, 148, Hearst, William Randolph, Jr., 626 152, 171–73, 175, 185 Heck, Sylvio, 8n–9n Group of Ten, see Paris Club Heckscher, August, 233 GRU (Soviet Military Intelligence), 485n Heinl, Robert D., Jr., 289, 299–302, 306–7, Gruenther, Alfred, 229 310n Guanabara State, Brazil, 15 Heller, Walter W., xxxiv, 201, 257, 363, 384, guerrilla warfare, 273, 450–54 385n, 439, 466, 479n, 489n, 566, 590 Guevara, Ernesto “Che,” 304 at economy and budget meeting, 52n, 53, 55, Guido, José María, 8, 32n–33n 58–59, 61–62, 65–67, 71, 74 guilders, Dutch, 347–48, 406, 501n, 502–3, 511 in tax cut deliberations, 67, 241–42, 243n, Gullion, Edmund, 650 251, 352n, 356n, 362n, 364–65, 367, 372, Guns of August, The (Tuchman), xlvi, 457 382, 473 Guyana, British, 419, 439–43, 547 Helms, Richard M., xxxiv, 287n, 289, 302–4, 486 Habimenshi, Callixte, 546 Helstein, Ralph, 652n Haig, Douglas, 458 Henderson, Douglas, 27, 31, 42–43 Haiti, 30, 287–310 Henderson, Leon, 62n aid to, 288–89, 295–300, 304–8 Herter, Christian A., 281, 581n–82n Communist influence in, 295, 303–5, 309 Heusinger, Adolf, 219 coup attempts in, 287–89, 293n, 302, 305, HEW (Health, Education, and Welfare 310 Department), U.S., xxxii, 13, 260 covert action in, 287, 289–90, 306–10, 334 Hickenlooper, Bourke B., xxxiv, 305 meeting on, 295–310 highway funding, 58n, 236n Halaby, Najeeb E., xxxiv, 233 Hillenbrand, Martin J., xxxiv, 203n, 206, Haldeman, H. R., 1n 211–14, 218–19 Halleck, Charles A., xxxiv Hilsman, Roger, xxxiv Hamilton, Fowler, 296n, 427–28 Hiroshima, Japan, 548n Hammarskjöld, Dag, 282, 611 historians, xiv–xv, xxiii, 372 Harriman, W. Averell, xxxiv, 131, 272, 277–78, presidencies ranked by, xlv–xlvi 488n Hitler, Adolf, 460, 637 as administration insider, lin, 284 Hodges, Luther H., xxxiv, 72, 362n, 364, 526, Africa policy and, 281, 283–86 566n, 567, 570–74, 576–92 at Laos meeting, 419n, 422–30, 432–38 Hoffacker, Lewis, 642, 649n Harrington, Frank, xix–xx Holifield, Chet, 82, 183 Harrison, George, 655–66 Holleman, Jerry, 542 Hart, Philip A., xxxiv, 604–6 Home, Alexander Frederick Douglas, Lord, Hartington, Marquis of, xxxvii 137, 148, 169, 441 Hartke, Vance, 202n Honduras, 46, 292 Harvard University, xxxii, xlv, li, 46, 50–256, Hong Kong, 579, 583 539n, 541–42, 623 Hoover, Herbert H., xxxiv, 387n economics at, xxxv, 44, 51, 363, 382n Hoover, J. Edgar, li, 188, 195, 443n, 599n foreign students at, 13–14, 25, 130 Hoover Commission, 63 Hastie, Henry, 565n Hopkins, Harry, 62n Havana, Cuba, 131, 600–601 House of Representatives, U.S., xxxiv, 234–35, Hawk missiles, 561n–62n, 610–15 244–49, 446–47, 480, 527, 551n, 646 Haworth, Leland, xxxiv, 80n, 86, 88, 91–95, Appropriations Committee of, xxxv, xxxix INDEX 673

Armed Services Committee of, xxxix, 333n 154–55, 164, 184–85, 224n–25n, Atomic Energy Committee of, see Joint 265–66, 417–18 Committee on Atomic Energy of suspicious events, 151n, 152–53, 155–61, Banking and Currency Committee of, 256, 177–78, 265n 475n Intelligence Board, U.S., 190n, 195 Foreign Affairs Committee of, xxxvii intelligence drops, 272–81, 446, 452–53, 595 Foreign Relations Committee of, 646n intelligence meetings, xx, 286, 482–89, Rules Committee of, 247n, 447n 593–603 Small Business Committee of, 353n intelligence reports, 45, 104–6, 186–87, 190, trade issues in, 244, 569, 571–72, 583, 484–86 591–92 Inter-Agency Textile Committee, 567, 584 Ways and Means Committee of, see Ways and Inter-American Economic and Social Council, Means Committee, House 24 see also Congress, U.S. intercontinental ballistic missiles (ICBMs), housing starts, 51, 364–65 186–87, 595 Houthakker, Hendrik, 51n interest rates, 337, 339, 463, 472–79 Humphrey, George, 469 in monetary policy deliberations, 344–45, Humphrey, Hubert H., xxxiv, 114 347–50, 352–53, 356, 384, 408, 492, 512, Hyannis Port, Mass., l, liv, 3–4, 221n, 229, 232 520 hydrogen bomb, 89n Interlochen, Mich., 233 Internal Revenue Service (IRS), 250, 259, 374n IBRD, see World Bank International Bank for Reconstruction and ICBMs (intercontinental ballistic missiles), Development, see World Bank 186–87, 595 International Development Bank (IDB), 296 Idaho, 444 International Labor Organization (ILO), 283n IDB (International Development Bank), 296 International Monetary Fund (IMF), 252n, 468, ILO (International Labor Organization), 283n 494, 498, 501–3, 612n IMF, see International Monetary Fund confidence-building through, 403, 405, 514, import duties, 569, 584–85, 589 521, 525–26 import quotas, 384, 532n, 567–69, 575n, 576, dollar reserves vs., 387, 392, 395, 400–401, 578n, 580, 585 411, 501 India, 87, 106–7, 116, 119, 148, 155, 456, membership in, 497, 515–16 476–77 Special Resources Group of, 514 Chinese threat to, 450, 454 U.S. borrowing from, 390–96, 467, 502–3, Indiana sand dunes debate, 73–77 512–13 Indonesia, 437, 622n voting procedure in, 513, 515–16 industrial capacity, 355, 373–74, 377–79, 382 “International Payments System, The” industrial production index, 365 (Reierson), 401n infantry tactics, 455–58 International Telephone and Telegraph inflation, xliii, 363n, 364, 376, 384, 474, 479n, Company (IT&T), 6–7, 17 520 interstate highway system, 236n in international finance, 243–44, 406, 463, inventories, business, 64–65, 238n, 246, 361, 466, 479, 497 365, 379 Information Agency, U.S. (USIA), xxxvii, xl, investment, foreign, 237n, 345–49, 359 146n, 325, 442, 483n investment tax credit, 64–65, 244n, 257–58, Inland Steel Company, 374 340n, 361n, 374, 377n, 380, 604–6 inspections, nuclear, 80–84, 89n–90n, 92, invisible transactions, 237n, 421, 430 96–103, 106–25, 148–56, 159, 184–86, Iowa, 531 625 Iowa, University of, 651 number of, 96, 106n, 107, 112, 115, 134–35, IPES (Instituto de Pesquisas e Estudion 137–39, 149–56, 161, 173–75, 178 Sociais), 16 Soviet opposition to, 80–81, 84, 103, 110–11, Iran, 103 118–21, 123, 135–37, 140–43, 148–52, Iraq, 46–47, 103 674 INDEX

“Irish mafia,” lii Joint Chiefs of Staff, U.S. (JCS), xxxii, xxxix, IRS (Internal Revenue Service), 250, 259, 374n 179, 216n–17n, 227, 228n, 231, 483, 596, Israel, xxxii, 494, 610–22 602n, 607, 658 military aid to, 561–62, 610–15 in Berlin talks, 204, 230n, 325 as nuclear power, 207n, 265n Joint Committee on Atomic Energy, xxxvii, 82, refugees from, 561n–62n, 611, 616–23 113–15, 127–28, 133, 183–84, 225n Italy, 16, 30, 49, 218n, 552, 554–55, 607, 626 Joint Economic Committee (JEC), 210n, 248n, monetary policy of, 346, 386n, 390, 397–98, 339, 353, 382n, 472n, 491 500, 506, 518–21 Jordan, 619 political unrest in, 16n, 557–58 journalists, xi, 39, 41, 76n–77n textile industry in, 583, 585, 589n, 590 in back-channel diplomacy, 27, 131, 287–88, IT&T (International Telephone and Telegraph 485n Company), 6–7, 17 FBI investigation of, xxiv, 186–90, Izvestia, 417 195–201, 319n, 443–44, 462, 593n, 595, 597–99 Jack Pine plans, 314–15, 323, 324 see also press Jackson, Henry M. “Scoop,” 82, 114, 133, 153, Journal of Commerce, 51 183 Juan Carlos, Prince, 658 Jagan, Cheddi, 439–42 Judd, Walter H., 646 Jamaica, 565 Judiciary Committee, Senate, xix, 545–46, 604, Japan, 50n, 87, 103, 390, 392, 453, 516 606–7 foreign aid from, 422–24, 435–36 June Ball plan, 324 textile industry in, 470–71, 568, 578n, 580n, Jupiter missiles, 607 583, 590 Justice Department, U.S., xviii, 374n Jarring, Gunnar, 564n Javits, Jacob, liii Kahn, Herman, xviii JCS, see Joint Chiefs of Staff, U.S. Kaissouni, Abdel Moneim, 612 JEC (Joint Economic Committee), 210n, 248n, Kalonji, Albert, 284n 339, 353, 382n, 472n, 491 Kamchatka, 153 Jernegan, John D., 46–47 Kansas City, Mo., 473 Jewish War Veterans of the U.S.A., 25 Karachi, Pakistan, 454 John F. Kennedy Presidential Library, xix–xxii, Karlshorst, GDR, 204, 212 608 Kasavubu, Joseph, 282 Johns Hopkins University, 5n Kashmir, 153 Johnson, C. Griffith, 521, 524–26 Kassel salient, 229, 330 Johnson, Gerald W., 168n Katanga Province, secession of, xxxix, 281–86, Johnson, Herschel, 50 592–93, 641–44 Johnson, Joseph E., 611, 616–22 Katzenbach, Nicholas deB., xxxv Johnson, Lyndon B., xviii, xxxiv, 53n, 222, 243n, Kaysen, Carl, xxxv, xxxviii, 80n, 118, 129–30, 250n, 539n, 546, 565, 593 167n, 178, 330, 568n, 586n anti-discrimination efforts of, 541–44, 606 at gold and dollar crisis meetings, 385n, appointees of, 350n, 581n, 604n 388–89, 391–92, 395, 407, 489n, 490, on nuclear test ban, 80n, 121–22, 125, 132n, 496, 502, 505–7, 513–14, 524–26 154–56, 164 at Laos meeting, 419n, 431, 437 taping practices of, xii–xiii Keating, Kenneth, 606 Johnson, Sam Ealy, 248n Keeny, Spurgeon, xxxv Johnson, U. Alexis, xxxiv, 8n, 488 Keezer, Dexter Merriam, 246, 257–58 Johnson administration, 68n, 72n, 78n, 235n, Kefauver, Estes, 374n, 545 382n, 570n, 610 Kennan, George F., 16n, 559–61 Johnson Plan, 561n–62n, 611, 616–23 Kennedy, Caroline, xliii, 232 see also Middle East policy Kennedy, Edward M. “Ted,” xix–xx, xliii, 39, Johnston Island nuclear tests, 83–85, 92, 164n 250n Joint Berlin Planning Group, see Live Oak plans Kennedy, Jacqueline, xix, xliii, 232, 485n INDEX 675

Kennedy, John F.: nepotism ascribed to, xliii advisers of, xii, xlv, li–lii, 72n, 77n–78n, 126, New Economic paradigm of, 363–64, 490n 243n, 335–36, 343n, 363, 568n, 581n on nuclear proliferation, xliii–xliv, 80, 86–88, ambition of, xli–xlii 90, 139–40, 161–63, 205–8 approval ratings of, xliv–xlv, 530–31 papers of, xviii–xix, xlviii–xlix, 242n assassination of, xii, xviii, xxii, 235 pragmatism of, 334, 351–53, 358 on Berlin, xlvi–xlviii, 43, 202–31, 269, press relations with, 27, 41, 78, 186–87, 189, 310–34, 384, 552, 556–57, 607, 627–40, 197–201, 334, 446, 449, 528, 598–99 655 as senator, xlviii–xlviii, 130, 566 Big Business relations with, xlii–xliii, li, liii, on separation of powers, 357, 446–47 237n, 243n, 257n, 334–36, 378–80 social programs advocated by, xli–xlii, liii burden sharing urged by, 53, 205, 397, 428, Southern opposition to, liii–liv, 447n, 480, 468–70, 553n 566, 604 ceremonial duties of, 130, 232, 418, 653 speeches of, xlviii, 197–98, 234n–35n, 242n, on civil-military relations, 537–38, 540 344–45, 354, 363–64, 383–84, 386, 396, on civil rights movement, xxiv, liii–liv 467–68, 490n on coups, 8, 27, 33–34, 39, 41, 305–10 state visits of, 610–11 covert actions considered by, xxiv, 8, 16, steel industry confronted by, xlii–xliii, 74n, 20–22, 38, 273–81, 287, 289–90, 77–79, 257n, 334–35, 363, 371–73, 306–10, 334, 419, 482–89, 594–95 378–79, 386 Daily Appointments Diary of, 29n, 131n, taping practices of, xii, xvii–xviii, xxii–xxiv, 423n xlv–xlvi, xlviii–l, liii–liv, 82, 131, 202, on diplomatic corps, 43, 46–50, 553–54 271, 310, 361–62, 388, 421, 439–40, on domestic investigations, 186–89, 595, 481, 484, 526, 533, 546, 569, 642, 650 598–99 war service of, xli, xlixn, 453 economic concerns of, xxiv, 52–79, 234–59, working schedule of, liii, 52, 130, 166, 201–2, 334–36, 339, 361–64, 366n, 380, 232–33, 259, 334, 418–19, 489, 526, 546, 384–418, 462–79, 489–525, 623 593, 603, 608, 623, 625, 650, 657–58 foreign leaders received by, xliv, 6, 11–12, 30, Yale commencement address of, 363–64, 653 490n friends of, xxxii, xli, lii, 130, 287–88, 417–18, Kennedy, John F., Jr., 232 485n Kennedy, Joseph P., xli–xlii, xlvi, 43, 50, 188, 451 as generational exemplar, xli, xlv Kennedy, Joseph P., Jr., 541–42 health of, xlix, liii Kennedy, Robert F. “Bobby,” xviii–xix, xlvi, l, intellectual interests of, xlvi, 363, 444–45, lin, lii, 165, 250n, 462, 539n 457n antitrust oversight of, 374n on intelligence establishment, 188 in budget planning, 72 on leadership, xlv covert actions planned by, 8n, 22, 482–83, legislation championed by, xli–xlii, xlv, liii, 488 64–65, 233, 444, 447n, 526–33, 545–46, on Cuba threat, 482, 594, 607 551n, 569, 579, 604–6, 653 in domestic surveillance, 186n, 187–88, 190, legislators’ relations with, xxiii, liii, 122, 444n, 598 234–59, 334–35, 339, 361–62, 366n, in foreign policy, xliii–xliv, 81, 131, 261n, 594 380, 384, 413, 418, 446–47, 527, in nuclear negotiations, 81, 131, 152n 545–46, 593n, 604–7 Kennedy administration: liberal opposition to, xliii, 238n–39n, 538, 623 African-American appointments to, 542–44, management style of, lii–liii, 122 604, 606–7 on masculinity, 46–50, 444n, 445 dissension within, 32n–33n, 51–52, 85n, 91, mass celebrated by, 418 98–99, 105–6, 108–22, 387–88, in midterm elections, xliv–xlv, xlix, 131, 220, 395–409, 414–17, 464–66, 479, 489–91, 223, 232, 247–48, 256, 350–52, 462, 494–99, 503–8, 512–13, 522–26, 542, 480, 609 608–9 multilateral solutions favored by, 546–47 insiders within, lin, liii, 284 676 INDEX

Kennedy administration (continued) Korea, Republic of (South Korea), 431, 450–51, Republicans in, xlii, li, 72n, 335 454, 597 Kennedy tapes, xi–xxiv, 3, 130n, 608 Korean War, 126n, 343n, 450, 463, 596 historical value of, xi–xiii, xvi, xx, xxii–xxiii, Kreer, Robert G., xxxv xlv–l, liv Kroll, Hans, 210 impetus for, xxiii–xxiv, 82, 202 Kubitschek de Oliveira, Juscelino, 18, 22–25 knowledge of, xviii–xix, xxiii, xlix–l Kuchel, Thomas H., xxxv sound quality of, xii–xiv, xxi, 84, 547n, 548, Kurile Islands, 153 552n Kuznetsov, Vasili V., 206, 625 transcription of, xiii, xiv–xvi, xviii–xx, KY9 telephone, 227 xxi–xxiii Kennedy Tapes, The: Inside the White House during labor, organized, xxxvii, 241–42, 260, 271, the Cuban Missile Crisis (Zelikow and 373n, 379n, 583, 605, 624–25, 651–57 May), xiii, xxii Labor Department, U.S., xxxiv, xl, 567, 623–25, Kennefick, Mary, xxi 651–58 Kent, Sherman, 166 Labor Party, Brazilian, 6, 9–10 Keogh, Eugene J., xxxv Labor Party, British, 218n Kerr, Robert, 545–46 Labor Rackets Subcommittee, Senate, lii, 130 Kerr-McGee Oil Industries, 546 Labouisse, Henry, 558–59 Keynes, John Maynard, 490 Lachs, Manfield, 137n Keyserling, Leon, 238–39, 255–57, 623 Lall, Arthur, 155 Khrushchev, Nikita S., xxxv, li, 43, 260–71, Land, Edwin, xxxv, 186n, 190–91, 193–94 286n, 558, 561 Landrum, Phil, 249n on Germany, xxiv, xlvi–xlvii, 45n, 123n, 131, Langer, William, 188 202–3, 260–61, 263, 266–69, 331, 417, Lansdale, Edward, 286n–87n 547, 550, 556–57, 560 Laos, xxxix, 261, 267, 285, 418–38, 445, internal pressures on, 263–64, 267–68, 449–50, 556, 608, 645 554–55, 557 allied contributions to, 422–26, 428, 434–48 in nuclear talks, 81, 84, 112, 123n, 141–42, cease-fire agreement in, xliv, 205, 420, 424, 149, 152n 436n at summit meetings, xliv, 262–67, 556, 560 meeting on, 418–38 in U-2 crisis, 262–65, 280–81 military establishment in, 420–21, 432–34, U.S. visit of, 261–62 438 White House meeting on, 261–71 Latin America, xliv, 23–30, 202, 291–93, 334, Khrushchev, Nina Petrovna, 270 489 Khyber Pass, 454 anti-Americanism in, 9–10, 13–14, 304 Killian, James R., Jr., xxxv, 186n, 188–201 armed forces in, 17–19, 21, 36–38 Kimba, Evariste, 647 communism in, 8, 12, 18, 32, 37, 237, 295, King, Cecil, 242 303–5, 309, 495, 602 King, J. C., xxxv, 287n, 289, 302–4, 306 coups in, 8, 17–18, 26–42, 287–89, 293n Kinshasa (Léopoldville), Congo, 282, 285, U.S. aid to, 5, 10–12, 14, 33, 39–42, 237, 641 293–94, 553n kip, Laotian, 432, 434–35 U.S.–owned assets in, 6–7, 17, 41 Kirk, Alan G., 273–76 Latin American Subcommittee, Senate, 304 Kirk, Christina, 77n Laura Spelman Rockefeller Memorial, 62n Kirkpatrick, Lyman B., Jr., xxxv Lawford, Patricia Kennedy, 480 Kirwan, Michael, xxxv Lawford, Peter, 480 Kisangani (Stanleyville), Congo, 282 leading economic indicators, xlii, 53, 337, 340, Kissinger, Henry A., 328–29 351–52, 354, 364–71 Kitchener, Horatio H., 456–57 Lebanon, 49 Kliesing, Georg, 218–19 Leddy, John M., xxxv–xxxvi, 385n, 415, 489n, Kohler, Foy, xxxv, 203n, 207, 209–11, 216, 513–14, 521, 523–26 219–20, 223, 279 LeMay, Curtis E., xxxvi, 128–29 INDEX 677

Lemnitzer, Lyman, xxxvi, 80n, 91, 167n, McCloy, John J., xxxvi, li, 126–28, 130, 166, 179–82, 216n–17n, 227–32, 324 415, 507 lending, government, 62, 368, 370n at test ban meetings, 132–33, 136–41, foreign, 296–97, 300, 470, 476–77 143–46, 156, 158–59, 167n, 173–74, 176 small business, 69–71 McCone, John A., xxxvi, xlvin, lin, 80n, 122, Léopoldville (Kinshasa), Congo, 282, 285, 641 128, 199, 593–603 life insurance, 67n, 69 covert actions planned by, 8, 272–81, 439n, Lima, Peru, 27, 35 440–43, 482–83, 485, 594–95, 597 Lincoln, Evelyn, xiv, xxxvi, 226, 235, 240, 252, on Cuba, 286, 593–94, 600–603, 607 412, 445n, 609, 624, 654 on government leaks, 199, 595, 597–99 tapes saved by, xviii, xx–xxi at test ban meetings, 132–35, 147, 158, taping system operated by, 1, 130, 166, 201, 164–66, 167n, 184 232 McCormack, John, xxxvi Live Oak plans, 314–15, 323, 324, 326–27, 640 McDonald, David, xxxvi, 624, 655 Lleras Camargo, Alberto, 23–25 MacDonald, Torbert, xxxvi, 418 loans, tied, 470 McGovern, George, 480 lobbying, 272, 447, 527, 532, 570–71, 573n, machine guns, 457–58 576–77 Macmillan, Harold, xxxvi–xxxvii, 209, 214, Lockheed Aircraft Company, 542 263n, 311–12 Loeb, James, xxxvi, 26–27, 36–38, 40–43, in monetary discussions, 399, 466, 522 45–46, 293 in test ban deliberations, 149, 168–69, Loevinger, Lee, 374n 175–76, 185–86, 224n, 225 Loftus, Joseph A., 77n, 258 McNamara, Pat, 605 London, 441n, 564, 585n McNamara, Robert S., xxxiii, xxxvi–xxxvii, ln, London gold market, 386, 397, 401, 494 21, 166, 231, 597n, 602 Long, Franklin, xxxvi, 80n, 84, 88, 98–106, business background of, xxxvii, li, 581–82 110n, 121, 132n, 167n, 177 on defense budget, 341 Long-Term Cotton Textiles Arrangement, in German strategy, 205–6, 216–17, 222–23, 568–69, 571n, 575–76, 579–80, 584, 311n, 317–21, 326–30, 332–33, 535n 590–91 in press leak investigation, 187, 193, Lonning, Stanley N., 21n 199–200, 319–20, 444n, 599 Look, xxxix, 479 on space program, 536–40, 609–10 Los Alamos, N.M., 549 in test ban deliberations, 80n, 86, 88–91, Los Angeles Dodgers, 54 117–18, 125–26, 128–29, 132, 137–38, Los Angeles Times, xli, 62n 140n, 167n, 170–72, 174, 182–83 Lovett, Robert A., xxxvi, li–lii, 166 in trade negotiations, 581–82, 589 congressional relations of, 127 Macy’s Corporation, 62n, 256n diplomacy opposed by, 141–43, 151, 161–63 Madrid, 552 at test ban meetings, 126–28, 130, 132–33, Maechling, Charles, Jr., 483n, 488n 136, 140–42, 146–51, 154–55, 157–63, Maginot, André, 459–60 167, 173, 181 Maginot line, 460–61 Lumumba, Patrice, 282, 284 Magsaysay, Ramon, 418 Lundahl, Arthur C., xxxvi Maine, 417–18 Lundgren, Bernd, 104 malaria eradication, 296 Luxembourg, 218n, 578n Malraux, M., 387n Mann, Charles, 421, 433 MAAG (Military Assistance Advisory Group), Mann, Thomas C., 48 436n Mansfield, J. K., 296 McAlteer, Eugeen, 489 Mansfield, Michael J., xxxvi, 36, 526–27, 528n, MacArthur, Douglas, xxxvi, 445–62, 595–97 606 McCabe, Thomas, 463 Mao Zedong, 272–73, 452n McClellan, John, 480 MAP (Military Assistance Program), 288–89, McClintock, Robert M., 48–49 298–300 678 INDEX

MARCON plan, 204, 228n, 328 on Peru recognition, 26–43, 287–88, 290–94 Marine Corps, U.S., xxxviii, 204n, 298–300 of PFIAB, xxxiii, xxxv, lii, 186–201, 595, Marine One, 4, 232 598n mark, Deutsche, 501n, 506 on Soviet Union, 261–72, 280n Marshall, Burke, xviii–xx, xxxvi summit, xliv, 262–67, 314, 556, 560 Marshall, David, 488 on tax cut, 67n, 77n, 233–59, 334–84, 406n Marshall, George C., xxxviii on trade and textile policy, 566–93 Marshall, Thurgood, 604, 606–7 Meir, Golda, 562, 620 Marshall Field & Company, 567n Mekong River, 435 Marshall Plan, 5n, 22n, 23n, 24 memoranda, xi, 80n, 286, 423n, 445n, 547n, 598, Martin, Clarence “Dan,” 361 602, 607 Martin, Edwin M., xxxvi, 23–24, 26n, 28–43, on Berlin, xlix, 204–5, 210n, 214–16, 220–21, 45, 287n, 288–99, 301–2, 304–9 227–28, 231, 324n, 534–35, 640n Martin, Graham, 287n, 295–97 on covert actions, 273n, 275–78, 288n–89n, Martin, William McChesney, xxxvi, 414, 417, 482–83, 593n 462–79, 489n, 491–93, 498–99, 503, 508, diplomatic, 7n, 31, 33, 42, 44–45, 83n, 301, 522 554n, 557n, 611n Martin-Marietta Corporation, 538 economic, 52n–53n, 55n, 67, 346, 352n, 356n, Massachusetts Institute of Technology (MIT), 386n–88n, 400–401, 404–5, 407, 490, xxxviii, 188, 243n, 362–63 504, 508n, 523–24, 525n–26n massive retaliation doctrine, 311, 318–21, on press leaks, 189–90, 193, 196, 201, 328–30 443n–44n, 593n, 598 Matsu, 275, 452 on space program, 539, 608–10 Maudling, Reginald, 399, 525 on test ban, 83n, 95–96, 104n, 117, 121–22, Mazeroski, Bill, 54 132n–33n, 143, 148, 168n, 224 MC 26/4 goals, 216–17, 218n, 320n–21n on trade and textile policy, 528–29, 568n, see also North Atlantic Treaty Organization 573–74, 586n, 589–90 Meany, George, xxxvii, 241, 255, 260, 418, Merchant, Livingston T., 48–49 652–54 Meredith, James H., xxxvii Medicare, liii, 480, 546 mergers and acquisitions, 374n meetings, xi, xx, 83n, 90n, 121, 130–31, 152n, Methodist missionaries, 285n 235, 375, 447, 593n Mexico, 30, 48n, 124n, 148n, 293n of AFL-CIO, 652 Meyer, Ben F., 290–91, 293n on Arab-Israeli relations, 562n, 610–23 Michigan, 448n, 449, 544n on Berlin, see Berlin, meetings on Michigan, Lake, development of, see Indiana on Brazil, 5–25, 130, 237n sand dunes debate with business leaders, 252n, 378n, 406n Michigan, University of, 544n on China, 271–81, 595n Middleburg, Va., 622n confidentiality of, 414–17 Middle East policy, 226, 418, 444, 609–23 on Congo, 271, 283–86, 640–50 meeting on, 562n, 610–23 on Cuba, 602n, 607–8 refugees in, 561n–62n, 611, 616–23 on domestic surveillance, 186–201, 595, U.N. action in, 611, 617, 619–23 597–99 weapons sales in, 561–62, 610–15 on economy and budget, 51–79 MiG fighters, 611 on European affairs, 43–52, 384n Military Applications Subcommittee, Senate, on gold and dollar crisis, see gold and dollar 82n, 183n crisis meetings Military Assistance Advisory Group (MAAG), on Haiti, 295–310 436n intelligence, xx, 286, 482–89, 593–603 Military Assistance Program (MAP), 288–89, on Khrushchev, 260–72, 280n 298–300 with Khrushchev, xliv, 262–67, 556, 560 military installations, xlii, 180–81, 182–83, on Laos, 418–38 340–41 on nuclear test ban, 80–186, 224n Military Sponsored Air Service, 323 INDEX 679

Miller, Chester, xviii stock market reaction to, 388, 396–97, 404, Miller Center of Public Affairs, University of 406, 465, 467 Virginia, xiii, xxii in tax cut deliberations, 242–43, 259, Mills, Wilbur, xxxvii, 67, 344–45, 358, 366, 582 335–37, 344–51, 355–58 White House visits of, 67n, 77n, 234–59, monetary policy meetings, see gold and dollar 334–35, 339, 361–62, 366n, 380, 384, crisis meetings 413, 418, 623 money supply, 248n, 339, 471–73, 475–76, 478, Minnesota, University of, 241n 492–93 Minuteman missiles, 179–80 Mongoose, Operation, 286n, 480–89, 600, 607 missiles, 83, 164, 179–80, 186–87, 189, 197, monitoring stations, nuclear, see control posts, 341, 454, 548, 561n–62n, 595, 607 nuclear surface-to-air, 314, 324, 610–15, 626, 650 Monnet, Jean, xxxi, 396, 415–16 missionaries, 285 Monnet Action Committee, 23–25 Mississippi, xxiv, xxxii, 618 Monroe, Marilyn, xix, 233 Mississippi, University of, xxxvii Montgomery, Bernard Law, 458 MIT (Massachusetts Institute of Technology), Moore, D. E., 187n xxxviii, 188, 243n, 362–63 Moore, Geoffrey, 235n MLF (multilateral nuclear force), 205, 207n, Moreira Salles, Walter, 10–11, 19 216n, 265, 266n Morgan, Thomas E., xxxvii Mollenhoff, Clark, 130 Morgan Guaranty Trust, xxxi, 336, 378n, 406n monetary policy, 248n, 382n, 384–417, 489–526 Morgenthau, Henry, 62n, 252n bilateral arrangements in, 400, 404, 498–503 Morocco, 550, 561 confidence-building emphasis in, 243, Morrison, DeLesseps S. “Chep,” 29 400–406, 408–13, 464–65, 468–69, Morrison, James, 57n 490–91, 516–17, 524, 526 Morse, David, 283n congressional attention to, 391, 394–95, 469, Morse, Wayne, 36–37, 113, 304–5, 606 470–76, 491–93, 499, 511–12, 514 mortgage rates, 473–74 convertability limits in, see standstill Moscoso, Teodoro, xxxvii, 13, 23, 287n (standby) arrangements most-favored-nation status, 559n currency exchange in, 337, 344–48, 384, multilateral nuclear force (MLF), 205, 207n, 386–87, 390–401, 403–8, 467, 493–94, 216n, 265, 266n 511–14, 520 Muñoz Grandes, Vice Premier, 552, 561 European, 346–47, 383–84, 386–87, 390, Murphy, Charles J. V., 599 396–99, 401, 403–5, 464–70, 477–78, Murrow, Edward R., xxxvii, 132n, 141, 146n, 491n, 492, 494, 496–502, 504–6, 164, 167n 509–11, 514–22 Muskie, Edmund, 418 gold supply in, 237n, 337, 344, 346, 356, Myers, Lawrence, 293–94 385–95, 411–12, 464, 468, 474, 489, Myrdal, Alva, 104, 116, 142–43, 185 525n IMF lending in, 391–96, 411 NAC (North Atlantic Council), 220–21, 326 interest rates in, 344–45, 347–50, 353, 356, Naftali, Timothy, xiii–xiv 384, 408, 478–79, 492, 512, 520 Nam-Cadinh road project, 435 internal disagreement over, 51–52, 387–88, Napoleon, Emperor of France, 458n 395–409, 414–17, 464–66, 479, 489–91, Nasser, Gamal Abdul, xxxvii, 20, 268, 562, 494–99, 503–8, 512–13, 522–26 610–20 multilateralism in, 407–8, 412–13, 464–70, National Aeronautics and Space Administration 477–78, 490, 496–504, 506, 510–22, (NASA), xxxix, 340–41, 536–37, 539n, 525 608–10 personal relationships in, 414, 501 National Archives, U.S., xv, xviii–xix, xxi press coverage of, 77–78, 242–43, 259, 399, National Bureau of Economic Research, 403, 406, 411, 415 Columbia University, 235n short-term vs. long-term, 387, 394–400, National Cotton Council, 570 402–5, 408, 411–12, 463, 495–500, 509 National Democratic Union, Haitian, 303 680 INDEX

National Estimates Office, 190n, 194–95 JFK appointments in, 542, 544n, 604n National Guard, U.S., 222 Peru policy in, 27, 39, 41, 290–94 National Intelligence Estimates (NIEs), space stories in, 481, 536 186–87, 190n, 443, 597n New York University, 284n National Recovery Administration (NRA), 256n New Zealand, 436 National Security Act (1947), 195n, 593, 599 Nicholas II, Czar of Russia, xlvi National Security Action Memoranda (NSAM), NIEs (National Intelligence Estimates), xlix, 204–5, 231, 483, 487n, 607n 186–87, 190n, 443, 597n see also Poodle Blanket Nigeria, 148n National Security Council, xxxiii, xxxvi, 192, Nikesic, Marko, 233 227, 273, 599n Nike-Zeus missiles, 613 covert actions directed by, 8, 308, 483n Nikolayev, Andrian G., 536, 549n Special Group (Augmented) of, 8, 16n, 286, Nitze, Paul H., xxxvii, 230, 271, 319, 444n 308, 482–89 at Berlin meetings, 203n, 214, 216–24, 627, National Service Life Insurance, 67n, 69 629–39 National Steel Company, 73n, 75n at test ban meetings, 80n, 86–90, 93, 162n, National Wage Stabilization Board, 651 167n, 175–76, 185 NATO, see North Atlantic Treaty Organization Nixon, Richard M., xlviiin, 22n, 51n, 257n, 379n naval operations, allied, 313–15, 318, 323–24, taping practices of, xii–xiii, xix, ln 328 Nixon administration, 235n–36n Navy, Egyptian, 613–14 Nobel Prize, 53n Navy, U.S., xxxi, xxxiii, 92, 165, 333 Nolting, Frederick, 427 MacArthur on, 450–51, 453–55, 597 nonaligned countries, 141, 268–69 Navy Reserve, U.S., 333 in disarmament talks, 104, 106–7, 116–17, Nehru, Jawaharlal, 268 119–20, 124–25, 135n, 141–43, 148, Net Evaluation Subcommittee, 602n 152, 171–73, 175, 185 Netherlands, 218n, 221n, 347–48, 437n, 622n nondiffusion agreement, 96n, 208, 265n monetary policy of, 386n, 390, 499, 501n, Norman, Lloyd, 187n 502, 511, 515n, 518 Norman, Montagu, 414 Netherlands New Guinea, 437n, 622n Normandy invasion, 218n, 277n Neustadt, Richard E., xxxi Norstad, Lauris, xxxvii, 216n, 227, 229, 315, neutron bombs, 80–81, 90–91 535n Nevada nuclear tests, 105 North American Air Defense Command, 6 New Deal, 71n, 413, 472–73 North Atlantic Council (NAC), 220–21, 326 New Economics, 363–64 North Atlantic Treaty Organization (NATO), New Forces in American Business (Keezer), 246n xxxvi–xxxvii, 5n, 22n, 216–21, 232 New Frontier, xli in Berlin crisis, xlvii, 202–5, 216n–17n, Newport, R.I., 608 219–21, 229, 311–13, 319–24, 326, 328, New Republic, 339 640 Newsweek, xliii, 187n, 304, 365, 480n cost burden of, xliin, 220, 329–30, 384, New York, N.Y., 229, 303, 358, 445, 447–48, 386–87, 388n, 397, 427–28, 469 492, 564 in disarmament talks, 142n, 181 New York Federal Reserve Bank, xxxviii, 237n, German commitment to, 205, 216–20, 335–36, 378n, 414n 229–30, 319–22, 557 New York Herald Tribune, 77n, 78, 406, 415 nuclear policy of, 142n, 205–8, 216–19, 265n, New York (state), 606–7 311–13, 318, 320–21, 325–30 New York Times, xlvn, 280n, 437n, 448, North Carolina, 567 527n–28n, 626n Northrup, Doyle, 81n, 117–18, 126, 132 Berlin crisis in, 202, 213–14, 222n, 229n, Northwestern University, 651 318–20, 480n, 628n Novaya Zemlya atmospheric test, 233 economy in, 76n–77n, 233, 239, 241n, 258 Novello, Angie, xviii intelligence leaked to, 186–90, 197–201, NRA (National Recovery Administration), 319n, 444n, 595, 626 256n INDEX 681

NSAM, see National Security Action language debated at, 112, 135, 141, 145–48, Memoranda 153–58, 164, 166–67 NT dollar, Taiwanese, 431 negotiations challenged at, 141–42, 151, nuclear doctrine, U.S., xxiv, xlviii, 142n, 204–8, 161–63 216–19 nuclear tests, 164 nuclear power, 87, 546 airdrop, 85n, 92n nuclear test ban, xliv, 79–178 alluvium in, 89, 100–102, 104, 116, 129 abrogation of, 92, 94–95, 139, 168–69 atmospheric, see atmospheric nuclear testing allies in, 81, 89n, 91–93, 96n, 134n, 137, granite in, 104–5, 116 148–49, 153, 168–69, 171n, 176–77, of Soviet Union, 81, 84–85, 87, 89, 104n, 181, 185–86, 207–8, 224–26, 417, 557, 105–6, 114, 117, 123, 124–25, 139, 146, 625 173–74, 233, 267, 548–49 atmospheric, xliv, 80, 88, 94, 96n, 106, in space, 80, 95n–96n, 98–99, 148, 418 113–14, 121–22, 136n, 141, 163, 168, tuff in, 100, 102, 104 171–74, 178, 185, 265, 418, 625 underground, xliv, 80–82, 88–89, 94, 96n, cheating in, 89–91, 93–95, 100–101, 119, 99–105, 108, 110n, 114, 119, 139–40, 136–40, 149n, 150, 152, 160–61 148, 160, 172–73, 625 comprehensive, xliv, 89–90, 93–97, 107, 115, underwater, 80, 95n–96n, 418 121–22, 141, 168–74, 625 nuclear weapons: control posts in, 83–84, 96–103, 106n, cost of, 86–88, 90, 92, 139 107–12, 115, 118–21, 123, 134–36, delivery systems for, 86, 106, 179–80, 138–39, 143–48, 156–57, 167, 169–71, 455–46 174–78, 185, 224–26, 417, 625 demonstrative use of, 325 in disarmament process, 106, 136–41, 150, design of, 80–81, 87, 89–91 161–63, 178–81, 207–8 in Europe, xxiv, xlviii, 142n, 204–8, 216–19, in domestic politics, 82, 96–97, 107, 112–15, 227, 265n, 311–13, 318, 320–21, 325–30 120–30, 133–36, 153, 157, 183–86, 625 first-strike doctrine of, 187, 325, 328–29 intelligence concerns in, 104–6, 116–18, MacArthur on, 455–56 135–36 massive retaliation doctrine of, 311, 318–21 on-site inspections in, 81–82, 84, 96–97, multilateral control of, 205, 207n, 216n, 227, 100–101, 106n, 107–13, 115, 120–23, 265n, 266n 129, 134–43, 148–57, 164, 173–75, proliferation of, xliv, 80, 86–88, 90, 96n, 184–86, 265, 417–18, 625 139–40, 161–63, 205–8, 265n press conference on, 130–31, 133n, 140, tactical use of, 321, 328–29 142n, 154, 159–60, 163, 166–67, terminology of, 80–81, 89n, 548 169–70, 183, 625 yield of, 89–91, 93, 138n, 146, 161, 548–49 seismic monitoring in, 81–82, 89–90, 98–106, Nuremberg trials, 581n 132–33, 144, 152–53, 157–61, 177, 417 technical development under, 83–84, 89–95, OAS, see Organization of American States 119, 139, 168 O’Brien, John P., 358–59 timetable for, 124–25, 136, 143–44, 171–74, O’Brien, Lawrence F., xxxvii, lii, 201, 361, 526, 178 566n, 587 world opinion on, xliv, 81, 96, 104, 106–8, at trade and textile policy meeting, 569–72, 116–17, 119–20, 123–25, 143, 146–49, 574, 576–79, 582–83, 586–89, 591–92 172, 553 Ocean’s Eleven, xli see also Geneva disarmament talks Oder-Neisse line, 269 nuclear test ban meeting (July 30, 1962), O’Donnell, Kenneth, xxxvii, lii, 4, 7n, 362n, 539, 80–130, 134n, 162n, 224n 543n, 652–53, 657 disagreements at, 85n, 91, 98–99, 105–6, in press leak investigation, 443–44, 462 108–11, 115–18, 121–22, 125–26, taping system known by, xviii, l 129–30, 144n OECD (Organization for Economic nuclear test ban meetings (August 1, 1962), Cooperation and Development), xxxvi, 130–86 405n 682 INDEX offset agreements, 388 Patman, Wright, 201, 208, 248, 257, 353, 357, Ohio, 232n 472, 476 Oil Depletion Allowance, 243 Patterson, Leoville, 50 oil politics, 166, 243 Patton, Thomas F., 372–73 Okun, Arthur, xxxvii, 52n, 53, 60, 364 Paul, Norman, 222 O’Meara, Andrew P., 21, 299–300, 306 Pay Bill (1962), 57n 101st Airborne Division, 218n payroll tax, 604 Operation Mongoose, 286n, 480–89, 600, PCC (Palestinian Conciliation Committee), 611, 607 619–23 oral histories, xxii, 289n, 296n, 298n, 444n PCEEO (President’s Committee on Equal Organization for Economic Cooperation and Employment Opportunity), xxxix, Development (OECD), xxxvi, 405n 541–44 Organization of American States (OAS), 5–6, Peace Corps, 25, 48, 334, 436, 565, 658 19, 23–24, 28–29, 288, 291–93, 303n peacekeeping forces, U.N., 282–82, 547, 552, elections observed by, 31–32, 35, 38, 43, 288, 642 290–93 Peace with Russia? (Harriman), lin noninterventionists in, 293 Pechman, Joseph A., 254–55 Ormsby-Gore, David, xxxvii, 169 Peiping (Beijing), 207 Oval Office, White House, 52, 79, 334, 417–18, Pendergast, Catherine, 131 527, 592, 603, 651, 653 Pennsylvania, 462 recording equipment in, xvii, xlv, xlvin, 4, Pentagon, see Defense Department, U.S. 226, 232, 546 People’s Progressive Party, British Guyana “Overseas Internal Defense Policy, U.S.” (PPP), 439, 442 (ODIP), 483, 487n Pérez Godoy, Ricardo Pío, xxxvii, 26, 34, 290 overseas investment, xlii, 13–15 peril point, of tariffs, 581n Owens-Corning Fiberglass Corporation, xxxii, Perón, Juan, 20 336, 378n personal income, 364, 380 Peru, xxxvi–xxxvii, xliv, 8, 17, 19, 26–43, 45, P2V aircraft, 278–79 130, 334 Packinghouse Workers union, 652n civil liberties in, 27–28, 31–34, 36, 38, 43, Padilla Nervo, Luis, 124–25, 171–73 288 Palestinian Conciliation Committee (PCC), 611, elections in, 26–27, 31–32, 35, 37, 40, 288 619–23 media coverage of, 27, 36, 39, 41, 290–94 Palestinians, 561n–62n, 611, 616–22 Peru recognition meeting (July 30, 1962), Palm Beach, Fla., xlix 26–43 Pan American airlines, 301 Peru recognition meeting (August 9, 1962), Pan American Union, 303 287–88, 290–94 paper industry, 378 peso, Philippine, 431 Papua New Guinea, 622n Pétain, Philippe Henri, 458 Paraguay, 30 PFIAB (President’s Foreign Intelligence Paris, 415–16, 422–23, 437, 585n Advisory Board), xxxiii, xxxv, lii, Paris Club, 386n, 390, 395–96, 400, 403, 405, 186–201, 595, 598n 439, 514–16, 525–26 philanthropies, 248, 353n Paris Summit (1960), 262–65 Philippines, 436, 437n, 461, 489, 527 Parliament, British, xxxvii Philippines War Damage Claim Bill (1962), parties, political, xi, 26, 28, 218, 554 527, 653 MacArthur on, 446–48 Phoumi Nosavan, General, 419, 427, 433, 438 see also specific parties piastres, Vietnamese, 431 Passchendaele, Battle of, 457 Pierre, S.Dak., 480, 485n passports and visas, 210–11, 215, 315, 327–28, Pinay, Antoine, 478 638 Pittman, Steuart, xxxvii Pastore, John, 133, 157, 183 PL480 sales program, 612n Pathet Lao, 419–20, 433, 437n, 438 Plain of Jars, Laos, 437n INDEX 683

Plans for Progress program, 542, 543–44 independence of, 197–99 Plaza Lasso, Galo, 24 leaks to, 118, 186–201, 319–20, 443–44, 462, plutonium, 87, 90, 548n 563–64, 578n, 595, 597–99, 626 Poland, 142, 557, 629 legislative initiatives reported in, 526–27 Polaris missiles, 197 MacArthur on, 445–46, 449, 455 Policy Coordination Office, 440n–41n nuclear test ban treaty reported in, 82, Policy Planning Council, xxxviii 112–13, 118, 120, 125, 140, 184–85 Politburo, Soviet, 263n nuclear tests reported in, 105 polls, xliv–xlv, 241, 528, 530–31 on Peru policy, 27, 39, 41, 290–94 polo, 456 staff changes reported in, 542–44 Pompeii, ruins at, xii–xiii see also journalists Poodle Blanket (National Security Action press conferences, xlii, 412–13, 539, 551, 598, Memorandum 109), 204–5, 228n, 231n, 606–7, 625–26 311–13 on economy, 68, 241n, 344–45, 386, 396n, Popovic, Koca, 560 467–68 Popovich, Pavel R., 536, 549n on Latin America, 31, 33–34, 36, 39, 130 population growth, 473 on test ban talks, 130–31, 133n, 140, 142n, Port-au-Prince, Haiti, 289, 296n, 297, 300, 302 154, 159–60, 163, 166–67, 169–70, 183, Port Authority, Haitian, 305 625 Portugal, 569 press releases, 213–14 Postal Service, U.S., 56–57, 340 price-fixing, 373n Poté Colé development project, 296–98 Princeton University, xxxii poultry industry, 527 prisoners of war, 437, 608 pound sterling, British, 464, 466, 477, 490n, procurement and contracting, government, 64, 501n, 508, 517 67–69, 341, 365, 368–70, 469n, 542–43, Powers, David, xviii–xix, lii, 418 644 Powers, Francis Gary, 262n–63n productivity, industrial, 355, 373–74, 377–79, PPP (People’s Progressive Party), British 382, 470–71 Guyana, 439, 442 in textiles, 584n, 586–90 Prado, Italy, milling complex at, 590 Profiles in Courage (J. Kennedy), xlix, 480 Prado y Ugarteche, Manuel, xxxvii, 17, 26–28, profits, corporate, xliii, 374–75, 397n 34, 36 remittance of, 7–8, 13–15 P.R.C., see China, People’s Republic of Prohibition, xli Prescott, Irwin, 46 pronouncement effect, of tax cuts, 379–80 Prescott, William, 239n propaganda, in Middle East, 618–19, 621 Presidential Recordings Project, xiii–xvii, xxii Proxmire, William, 474–75 presidents, U.S., xi, xix, xlvn, xlv PT-109, xli, xlixn, 453n President’s Committee on Equal Employment Public Works Acceleration Bill (1962), 56n, Opportunity (PCEEO), xxxix, 541–44 71–72, 604, 606 President’s Foreign Intelligence Advisory public works projects, 73–77, 236n, 239, 435, Board (PFIAB), xxxiii, xxxv, lii, 441, 444 186–201, 595, 598n publishing industry, 189, 197–201, 232, 418 Presidium, Soviet, 263, 266 Pueblo, Colo., 480 Press, Frank, 121 Puerto Rico, 303 press, xi, 284n, 301, 304, 528, 652 Punta del Este Conference, 5–6, 304 administration criticized in, 41, 52, 82, 112, 140, 222 QBAL (Quadripartite Berlin Airlift), 322 on Berlin, 187n, 202, 213–15, 216n, 222n, Quadripartite Group (the Four), 175–76, 182, 223, 318–20, 534, 626, 628n, 634 209, 313–18, 323, 326, 328, 632, on economy, xliii, 52, 62n, 76–79, 238–43, 638–39 258–59, 339, 361, 365, 399, 404, 406, Quadros, Jânio, 6, 17n 411, 415 Quemoy, 275, 452 foreign, 217, 242, 417, 578n, 634 Quetta, Pakistan, 454 684 INDEX

“quickie” tax cut proposal, 53–54, 233, 238n, Reuther, Walter, xxxvii, 241, 366–67, 651–65, 249–50, 351–52, 380 657 abandonment of, 258–59, 334, 339, 351n–52n, revenue bonds, 76n 361–62, 383–84 Revolutionary War, American, xliii Rhodesia, 282 radar, 279, 452, 595, 613n Riad, Mahmoud, 617n radiation, radiation weapons, 80–81, 90–91, Ribicoff, Abraham, 260 481, 548n–49n Richter scale, 158 “Radio and Television Report to the American Rio de Janeiro (city), Brazil, 19, 21n–22n People on the State of the National Rio de Janeiro (state), Brazil, 15n Economy,” 251n–52n, 383–84 Rio Grande del Norte, Brazil, 12 Railroad Brotherhood, 655–65 Rio Grande do Sul, Brazil, 6, 9n, 14–15 rail strike, 260 Rivers, L. Mendel, 462 Raine, Philip, 7n roadbuilding projects, 58n, 236n Rapacki, Adam, 142 foreign, 296–97, 300, 435, 441 Rat Pack, xli Robert Kennedy, His Life (Thomas), xlvin Rawalpindi, Pakistan, 454 Roberts, Chalmers M., 200 Rayburn, Sam, 353 Rockefeller, Nelson A., 448, 475 Reagan, Ronald, 507n Rome, 552, 559, 585n real estate values, 258, 473 Romney, Carl, 81n, 126, 132, 157 recession, xlii, 62n, 255, 258, 337, 367–68, 370, Romney, George W., 448 379n Roosa, Robert V., xxxvii, xlii, 77–79, 335n, projected, xliii, 53, 233, 238–40, 241n, 362n, 393n, 468n 243–51, 253, 256–58, 354, 383 debt management initiatives of, 472, 476 reciprocal currency (swap) arrangements, 386, on monetary policy, 51–52, 78, 336, 345–48, 388, 392–93, 395, 412, 498–508, 510n 381, 385n, 386–88, 392, 398–99, reconnaissance, aerial, 131, 204, 212–14, 402–11, 413–17, 477, 489n, 491, 493–94, 261–65, 593, 601–2, 608, 650 496, 500–520, 526n refugee camps, 616, 619 Roosa bonds, 510n refugees, 429–30, 434, 436, 484, 535, 592 Roosevelt, Franklin D., xii, xliii, xlv, xlvin, lin, Palestinian, 561n–62n, 611, 616–23 62n, 256, 472, 507n regular dollars, 501 Roosevelt and Hopkins, an Intimate History see also balance of payments (Sherwood), 281n Reierson, Roy L., 401, 406 Rosenthal, Jacob, xxxviii Reinhardt, G. Frederick, 49n, 626 Rostow, Walt W., xxxviii remittance of profits laws, 7–8, 13–15 Rountree, William M., 47–48 reparations payments, 424, 527, Rules Committee, House, 247n, 447n Reporter, 78n Ruml, Beardsley, 62 Report to JFK: the Skybolt Crisis in Perspective Rusk, Dean, xxxviii, 43–50, 78n, 80n, 131, 193, (Neustadt), xxxi 205, 281n, 288, 361, 418, 420, 602 Republican Party, Republicans, xxxiv, 253, in Berlin talks, 45, 202–17, 219–26, 269–70, 258–59, 530, 539 311–12, 318–23, 327–32, 480–81, liberal wing of, liii 533–35, 592, 594, 627–35, 637–40 MacArthur on, 446–48 at Congo meetings, 640–44, 647–48, 650 Republic Steel Corporation, 372–74, 396 covert actions planned by, 439–40, 188, 594, reserve currency, 385, 407–8, 470–71, 474n, 648–49 489, 491n, 495–98, 506, 508, 522 on Foreign Service qualifications, 48–50 see also monetary policy at Middle East meeting, 610n, 613, 617–22 reserves, mobilization of, 202–3, 222–24, in monetary policy talks, 387n, 399 228–29, 267, 332–33 in nondiffusion talks, 208, 265n, 266 Reston, James, 41, 76n–77n in Peru recognition debate, 26, 28–31, 40, retail sales, 364 290, 294 Reuss, Henry, 475 at test ban meetings, 82, 95–97, 106–9, 115, INDEX 685

118, 124–25, 132n, 133–34, 137, 141, Secretariat, U.N., 622 144, 152–56, 158, 162, 165, 167n, Secret Service, U.S., xvii–xviii, xxi–xxii, l, 3, 169–73, 175, 177–86 130n, 608 in trade talks, 568n, 578n, 591n Securities and Exchange Commission, U.S., 258 on U.N., 181, 208–10, 331–32, 546n, 550–51 security classification, xxi–xxii, xxiv, 86n, Russell, Richard B., xxxviii, 133–34, 157, 166, 104–6, 195, 220n, 416, 442–43, 444n, 184, 222–23, 333, 480–81, 537, 572 485–88, 498, 564 Russia, see Soviet Union Security Council, U.N., 180, 317, 551n Rutgers University, 235n seismic nuclear detection, 81–82, 89–90, Ruttenberg, Stanley, 241–42 98–106, 132–33, 144, 151–52, 157–61, Rwanda, 546 177 Semenov, Vladimir S., 206 SACEUR (Supreme Allied Commander, Semipalatinsk nuclear test, 105 Europe), 216, 227, 315, 324–26, 328 Senate, U.S., xviii, xxxiii, 244, 447, 526–33, 538, SACLANT (Supreme Allied Commander, 545–46, 551n, 604–6 Atlantic), 324, 328 Aeronautical and Space Committee of, 536n Sage, Mildred, 13 Agriculture and Forest Committee of, 528n, Sahara, nuclear testing in, 81, 114 532n St. Louis, Mo., 473 Antitrust and Monopoly Subcommittee of, St. Louis Cardinals, 54 374n St. Matthew’s Cathedral, Washington, D.C., 418 Armed Services Committee of, xxxviii, 113n, salaries and wages, 379, 471–72, 580, 583, 624 184, 333n, 417–18, 536n Salinger, Pierre E. G., xxxviii, 78n, 169–70, Atomic Energy Committee of, see Joint 231–32, 270, 412–13, 482n, 486–87 Committee on Atomic Energy Saltonstall, Leverett, xxxviii, liii, 184, 590 Democratic majority in, xlii, liii, 528 SAM (surface-to-air missile) sites, 314, 324, Finance Committee of, 62n, 244, 471n, 511n, 610–15, 626, 650 545, 605 Samuelson, Paul A., xxxviii, 243, 257, 336, Foreign Relations Committee of, xxxiii, 362–63, 368, 371–73, 375–84, 385n, 36–37, 113–15, 184, 304–5, 489n 409–10, 414, 494 Judiciary Committee of, xix, 545–46, 604, Sandys, Duncan, 441 606–7 Santa Monica, Calif., 528 Labor Rackets Subcommittee of, lii, 130 San Tiago Dantas, Francisco, 5–7, 9, 18, 20 Military Applications Subcommittee of, 82n, Santo Domingo, 303 183n Sarah Lawrence College, 256 nuclear test ban in, 112–15, 121–22, 124, Satellite Bill, see Communications Satellite Act 225n, 625 satellites, 187, 344, 396n, 444n, 467n, 481, 538 U.N. bond debated in, 547, 642, 648–49 Saudi Arabia, 226, 619 see also Congress, U.S. Saulnier, Raymond J., 236n, 259 seven-point trade program, 567–68, 575, savings bonds, 474, 479 578–79, 585 Schacht, Horace Greeley, 387n see also textile policy Schaetzel, J. Robert, xxxviii SHAPE (Supreme Headquarters, Allied Powers, Schlesinger, Arthur M., Jr., xxxviii, xlv, ln, 233, Europe), 219, 229 288, 417, 439–40, 444n Shepherd, Tazewell, 130n, 418 Schlesinger, Arthur M., Sr., xlvn, l, 32 Sherwood, E. Robert, 281 Schmidt, A. F., 23 ships, 272–75, 452–53, 600, 626 Schroeder, Gerhard, xxxviii Short-Term Cotton Textiles Arrangement, Schultze, Charles L., xxxviii 568–69, 580–81 scows, 452–53 Shoup, David M., xxxviii Scully, Vin, 54 Shriver, Eunice Kennedy, 565 Seaborg, Glenn T., xxxviii, 80n, 84, 88, 90n, 94, Shriver, Sargent, 25, 565 121, 132n, 167n, 171, 174, 548n Sialkot, Pakistan, 454 Seattle, Wash., 359 Siganov, P. V., 533 686 INDEX

Signal Corps, U.S. Army, xvii China policy of, 264, 266–67, 554–55 Sikes, Robert L. F., 462 as closed society, 140, 160, 554 Sinai Desert, 616 counterintelligence efforts of, 189–91, 197 Sinatra, Frank, xli Cuba policy of, xxiii–xxiv, 131, 286n–87n, Single-Integrated Operational Plan (SIOP), 189 593–94, 599–603, 607–8, 610, 626, 650 Six, the, see Common Market, European East German policy of, xlvii, 45, 202–5, Sloan, Frank K., xxxviii, 287n, 295, 298–300, 208–12, 215–16, 221–22, 263, 311, 306–7, 310 316–17, 328, 330–32, 417–18, 547, slum clearance, 256 555–57, 627–28, 636–37 Small Business Administration, 68–71 leadership of, 261–71, 554–55 Small Business Committee, House, 353n meeting on, 261–72, 280n small businesses, 69–71, 472n Middle East policy of, 610–15 Smathers, George A., xxxviiiI, 418 in nuclear arms race, xliv, 80, 89, 93–94, Smith, Howard W., 247 103–4, 162, 186–87, 607 Snyder, John, 463, 474 nuclear tests by, 81, 84–85, 87, 89, 104n, Social Democratic Party, FRG, 535n, 628n, 637 105–6, 114, 117, 123, 124–25, 139, 146, socialism, Arab, 619 173–74, 233, 267, 548–49 Social Security system, 58n, 343n, 367, 370n proposed blockade of, 324, 454–55 Solow, Robert M., xxxviii, 53n, 362n, 366, 381 secret diplomacy of, 131, 152n, 261 Sophia, Princess, 658 seismic events in, 101, 151n, 152–53, 155–61, Sorensen, Theodore C., xviii, xxxviii, xlvn, ln, 177–78, 265n 233, 234n, 362n, 526, 531–33, 566 space program of, 418, 535–36, 539, 610n as administration insider, lii surveillance flights protested by, 131, 204, at economy and budget meeting, 52n, 57, 66, 212–14, 262–65 68–71, 79 on test ban verification, 80–84, 96–103, at gold and dollar crisis meetings, 384, 385n, 106–25, 134–43, 148–57, 164, 173, 388–94, 409, 413, 417, 462n, 464, 469, 184–85, 224–25, 265–66, 417, 625 477, 489n–90n, 504, 506, 509–10, 512, Third World influence of, xliv, 282, 425, 432, 516, 522–24 438, 441 as JFK amanuensis, xlviii–xlix, lii, 163, 259 trade with, 72n, 166, 323–24 at trade and textile policy meeting, 566n, troop strength of, 182 571–78, 583–92 in U.N., 181, 268–69, 331, 547–51, 553 Souphanouvong, Prince, 419 as wartime ally, xlvi, lin South Africa, Union of, 87, 547 Soviet War Memorial, Berlin, 481, 533, 626, Southard, Frank, 400–401, 409 627, 629–32, 633n, 637–38 Southeast Asia, xliv, xlviiin, 205, 272–73 soybean supports, 528–29 communism in, 272, 419–21, 433 space, nuclear testing in, 80, 95n–96n, 98–99, foreign aid to, 419–38 148, 418 military intervention in, 407, 420, 454, 495 Space Council, 539n Southern Democrats, liii–liv, 447n, 480, 566, space exploration, xli, 481, 608–10 569, 581, 591n–92n, 604 in federal budget, 244, 340–41, 536–40, South Kasai, Congo, 284 609–10 South Korea (Republic of Korea), 431, 450–51, Soviet, 418, 535–36, 539, 610n 454, 597 space station proposal, 610n Souvanna Phouma, 419, 421, 423, 425, 428–29, Spain, 48n, 400, 458n, 464, 470, 552, 561, 658 431–32, 434, 438 Spandau Prison, Berlin, 629, 632–35, 637, 639 Soviet Union, xxxiii–xxxiv, xxxv, 43, 103, Spanish Civil War, 561 180–82, 437n, 526 Special Group (Augmented), National Security agriculture in, 267–68, 270, 454 Council, 8, 16n, 286, 308, 482–89 in Berlin crisis, xlvi–xlviii, 202–10, 214–16, Special Group (Counter Insurgency), 22n, 442, 221, 225, 228, 260–61, 263, 266–69, 483, 487–89 311–17, 322–25, 329–31, 533–35, 550, Special Resources Group, IMF, 514 552, 592, 626–29, 636–40 Sporn, Philip, 252 INDEX 687

Sproul, Alan, xxxviii, 237n, 335–39, 348–52, stock market, li, 70, 78–79, 246, 257–58, 352n, 356–57, 358–59, 378n 359–60, 384, 473, 477, 539, 604 Staats, Elmer B., xxxviii, 362n monetary policy and, 388, 396–97, 404, 406, Stalin, Joseph, li, 263n 465, 467 standstill (standby) arrangements, 390–92, in steel showdown aftermath, xliii, 257n, 363, 405–6, 409–12, 417, 439, 462, 468–69, 371–72, 379, 386, 396 479, 489, 501–2, 524, 508 in tax cut plan, 375, 383n, 404 long-term agreement vs., 387–88, 394–400, stockpiles, government, 644–45 405, 411–12, 463, 495–500, 509 Stoph, Willi, 417 weakness inferred from, 388, 395–96, 401, Straus, Jesse, 256n 464–66, 469, 491, 502–4 Straus, Robert, 256, 611 see also monetary policy Strauss, Franz Joseph, 216–20, 319–20, 330, Stanleyville (Kisangani), Congo, 282 634 Stans, Maurice, 62 strikes, 260, 259, 370–71, 557 STARFISH nuclear test, 481, 548–59 Strong, Benjamin, 414 State Department, U.S., xxxi–xl, 5n, 13–14, 27, Strong, Robert C., xxxix, 610n, 611–19, 621 32n, 51n, 287n, 423n, 546–47, 593 strontium 90, 162 on African affairs, 281–82, 286, 642–50 “Study of Employment, Growth, and Price African Bureau of, 282 Levels” (Joint Economic Committee), in Berlin planning, 204–5, 210–11, 222, 227, 382 228n, 231, 325, 632 submarine bases, 286–87 Bureau of Far Eastern Affairs of, 423n submarines, 187, 197, 199, 205, 279n, 333 Bureau of Inter-American Affairs of, 29n Sudan, 47 in covert actions, 16n, 38, 273–74, 289, Suez Canal, 616 439–42, 483, 486, 488, 564–65, 594, Suez Crisis (1956), 615 648–49 sugar trade, 293–94 in disarmament negotiations, 82, 95, 112, Sullivan, W. C., 187n, 444n 117, 165, 180, 418 Sullivan, William H., xxxviii, 423n Haiti support reconsidered by, 288–90, summit meetings, xliv, 262–67, 314, 556, 560 295–96, 307–9 Supreme Allied Commander, Atlantic on monetary policy, 384, 387–90, 395–400, (SACLANT), 324, 328 414–15, 489–91, 494–97, 519–26 Supreme Allied Commander, Europe in Peru recognition, 27, 38, 287–88, 290, 294 (SACEUR), 216, 227, 315, 324–26, press leaks from, 196, 199, 598 328 Russian specialists in, xxxii, lin, 261 Supreme Court, U.S., xxxiv, 604n, 623–25, 656 in trade negotiations, 568, 581–86 Supreme Headquarters, Allied Powers, Europe U.N. and, 181, 208–10, 331–32, 550–51 (SHAPE), 219, 229 see also Foreign Service corps surface-to-air missile (SAM) sites, 314, 324, “Statement by the President Announcing a 610–15, 626, 650 Program of Assistance to the Textile Surinam, 260 Industry,” see seven-point trade program surplus, budget, 237, 238n, 471, 479n, 509–12, steel exports, 421, 430 523 steel industry, 77–79, 337, 357, 371–75, 573n surplus, trade, 466, 471, 583 in Indiana dunes dispute, 73–77 swap (reciprocal currency) arrangements, 386, in price hike dispute, xlii–xliii, 74n, 77, 79, 388, 392–93, 395, 412, 498–508, 510n 257n, 334–35, 363, 371–73, 378–79, 386, Sweden, 50n, 87, 104, 106–8, 116, 121, 142–43, 624 148, 390, 564 steelworkers’ union, 379n, 624–25, 655 Sweeney, Walter C., xxxix Stephens, Robert G., 581, 583 Switzerland, 346, 386n, 390, 397–98, 403, 405n, Stevenson, Adlai, xxx, xxxix, l–li, 546n–47n, 413–14, 492, 501, 504–5, 515–16 549–65, 642, 651 Symington, Stuart, 113–14, 133, 143, 146 Stikker, Dirk, 24, 221n synthetic fibers industry, 568, 571, 584 Stimson, Henry L., xxxii Syria, 610, 619 688 INDEX

Taber, John, xxxix conventional force favored by, 217n, 219, 227 Tactical Air Command, xxxix covert actions analyzed by, 442–43, 482–89, Taft, Robert, 238n 596–97 Taiwan, see China, Republic of in leak suppression, 186n, 193–94, 196–97, Taiwan Straits, 453 201, 597–98 Talbot, Phillips A., xxxix, 610n, 614, 620–22 television, 9, 354n, 383–84, 396, 409, 462 Talmadge, Herman, 531–32 Telstar broadcast (July 23, 1962), 344–45, 386, tanks, 26, 203, 272, 458–60, 630–31 396, 467–68 Tariff Commission, 572–72, 575–76 Telstar satellite, 344n, 396n, 467n, 538 tariffs, 551n, 569, 573, 578, 581n Tennessee, 473–74 tax cut meetings: Tenth International Games for the Deaf, 653 of August 6, 1962, 67n, 77n, 233–59, 334–35, Texas, University of, 252 339, 366n, 384 Texas legislature, 248n of August 9, 1962, 252n, 259 Textile Committee, Inter-Agency, 567, 584 of August 10, 1962 (with advisers), 362–84 Textile Conference Group, 569n of August 10, 1962 (with business leaders), textile policy, 430, 531–33, 566–92 251, 335–61, 378n, 406n cotton supports in, 531–32, 568–84, 590–91 tax cut proposal, 66–67, 77n, 202, 233–59 international response to, 574n, 577–78 alternative forms of, 53–54, 233, 238n, 250, productivity rates in, 584n, 586–90 259, 334, 339, 351–53, 355, 361–62, Southern interests in, 531n–32n, 566, 380, 383 570–72, 581, 591n–92n deficits in, 67, 234, 244, 248–48, 335–38, wool supports in, 568, 578n, 583–91 343–44, 349, 363–64, 376, 380–83, Thailand, xxxv, 425, 445, 483 471–72, 475, 479 thalidomide, 233, 545 dollar strength and, 242–43, 259, 335–39, Thant, U, xxxix, 283, 563, 620, 622, 641–42, 344–51, 355–57 646–49 as economic stimulus, 52–54, 239–42, 249, think tanks, 62n 334–35, 337–38, 343–45, 349–51, Third Circuit Court of Appeals, 565n 354–57, 361, 376–77, 382–83 Third World policy, xliv, 418–19 in election year, 232, 247–48, 250, 256, 350–52 see also specific countries and regions employment goal of, 54, 238, 239, 248, 354 Thirteen Days (R. Kennedy), xviii–xix, xlvin labor movement in, 241, 255 Thompson, Jane, 270 political vulnerability of, 53, 241–45, Thompson, Llewellyn E. “Tommy,” Jr., xxxix, 247–49, 253–54, 256–58, 334, 339–40, 45, 48, 165n, 280–81 350–58, 371–72 on Berlin crisis, xlvii, 45n, 202–3, 206, 221, psychological effects of, 343, 352n, 379–80 260–61, 267, 269 “quickie,” see “quickie” tax cut proposal JFK’s meeting with, 260–72, 280n spending cuts with, 254, 338–43, 349, Thor missiles, 83, 164, 548n 352–53 Thousand Days, A (Schlesinger), xlvn, 439n timing of, 246–50, 343–44, 349–51, 356, 362, Thurston, Raymond L., 288–89, 296n, 366n, 375–81, 383, 623 298n–300n, 302n, 309, 310 taxes, xliii, liii, 241–43, 343n, 604 Time, 198, 234, 480n, 546n, 608–10 corporate, 60–61, 64–65, 244n, 252, 353n, Time-Life publications, 599n 370n, 645n Titan 3 rocket, 538–39 on U.S. assets abroad, 7–9 Tito (Josip Broz), 20, 268–69, 552, 559–60 tax reform, 243n–44n, 246, 257–59, 340n, 343n, tobacco tariffs, 578 356–57, 361n, 364, 374, 546 Tobin, James, xxxix, 53n, 362n, 363, 369, 374, as economic stimulus, 249–50, 351, 380 381, 384, 476, 479n Taylor, Hobart, Jr., 542–44 at gold and dollar crisis meetings, 384, 385n, Taylor, Maxwell D., xxxix, 188, 232, 311, 593, 388, 402–6, 408, 410, 490, 493, 501–2, 599–603, 658 510–13 at Berlin meetings, 217–19, 227, 627, 629, Ton Ton Macoutes (TTMs), 304–5 631, 634, 637–38, 655, 657 tourism, 509 INDEX 689 town hall meetings, 447 Truman administration, li–lii, 77n, 238n, 252n, trade and textile policy meeting, 566–93 256, 446, 570n Trade Expansion Act (1962), 244, 531–33, 551, trust funds, government, 58n–59n, 67n, 370 559–60, 565–67, 569–72, 574–83, Tshombe, Moise Kapenda, xxxix, 281–86, 590–92, 604, 606 563–64, 592–93, 641–43, 646–49 trade policy, xliv, 42, 237n, 430, 566–92 TTMs (Ton Ton Macoutes), 304–5 in Berlin contingency plans, 313, 315–16, TU-16 bombers, 614 318, 323–24 Tubby, Roger, 78n, 281n with Common Market countries, 44, 498, Tuchman, Barbara, xlvi, 457 566, 578n tuff, in nuclear tests, 100, 102, 104 with Communist bloc, 72n, 166, 323–24, 421, Tunisia, 550 559n, 560–61 Tunney, Gene, 417 compensatory payments in, 532, 568, Turkey, 607, 611, 619, 621–22 570–72, 574n, 577–78, 589–90 Turner, Robert C., xxxix, 52n, 56, 60–61, 72, in Congress, 244, 531–33, 551, 559–60, 362n 565–67, 569–72, 574–83 Turpin, W. N., 491n as election issue, 531, 563, 576–77 TYCHI nuclear test, 139 equalization fees in, 532n, 568, 571–77, 579–80 Tyler, William R., xxxix, 203n, 206, 209–11, 221 import duties in, 569, 584–85, 589 import quotas in, 384, 532n, 567–69, 575n, U-2 crisis, 262–65, 280 576, 578n, 580, 585 U-2 spy plane, 279–80, 601, 608, 650 penalties in, 574n, 577–78 UAW (United Automobile Workers), xxxvii, subsidies in, 531–33, 568–75 366n, 605, 651 trade surplus and, 466, 471, 583 Ulbricht, Walter, 215 see also textile policy Ullman, Al, 242, 259, 343 Trading with the Enemy Act (1917), 643–44 Ulmers, Warren, 41 transition task force, presidential, 336, 386 Uncertain Trumpet, The (Taylor), 217n, 219 transportation budget, 370 underground nuclear testing, xliv, 80–82, Treasury bills, 61, 348, 381, 463 88–89, 94, 96n, 99–105, 108, 110n, 114, Treasury Department, U.S., xxxiii, xxxvii, 51, 119, 139, 148, 160, 172–73, 625 166, 325, 342, 567–68, 605 underwater nuclear testing, 80, 95n–96n, 418 appointees to, xlii, li, 252n, 335–36, 350n, unemployment, xlii, 53–54, 233, 240, 246, 257, 469n, 474 354, 364–71 economic predictions of, 52–61, 64–65, 71, calculation of, 58, 66–67, 366–69 238–39, 255 money supply and, 472–73 Federal Reserve relations with, 463–64, 469, trade policy and, 566 474, 476, 502, 522–23 unemployment compensation, 56, 370n, 604, in monetary policy deliberations, 346, 606 348–49, 384, 388–89, 392–93, 399–402, UNGA, see General Assembly, U.N. 407, 409, 414–17, 464, 467, 469, Union Minière du Haut-Katanga, 282, 645n 489–91, 494–99, 503, 505–8, 510, United Arab Republic of Egypt and Syria 522–26 (U.A.R.), xxxvii, 148n, 268, 610–20 Treasury-Federal Reserve Accord, 463 weapons acquired by, 610–14 Tretick, Stanley, xxxix Western aggression against, 615–16 Triffin, Robert, 385, 474 United Automobile Workers (UAW), xxxvii, triggers, nuclear, 87, 89n, 90, 93 366n, 605, 651 Trinidad, 553, 565 United Nations (U.N.), xxxviii–xxxix, 437n, Tripartite Declaration (1950), 615 546–53, 563, 578n tripartite military planning, 324–26 African affairs in, 282–83, 285–86, 547, see also Berlin Task Force 563–64, 593, 641–42, 645–50 Troutman, Robert “Bobby,” xxxix, 541–44, 546 Berlin crisis in, 123n, 203, 208–10, 268–69, Truman, Harry S., xii, xxxii, xlv, xlvn, xlvin, 311, 314, 316–17, 326, 331–32, 547, 462–63, 556n 550, 639 690 INDEX

United Nations (continued) Vientiane, Laos, xxxix, 419, 421, 424, 433, Coffee Conference of, 578n 436–37 colonial issues in, 547, 549–50, 622n Vietnam, Democratic Republic of (North Committee of 17 of, 547, 549–50 Vietnam), xliv, 272, 600 funding of, liii, 57, 547, 551, 642, 648–49, Vietnam, Republic of (South Vietnam), xliv, 650n 280, 427–28, 450, 483 General Assembly of, 106–7, 116, 123, Vinson, Carl, xxxix, 333, 569n, 580, 591 142–43, 203, 208–10, 330–32, 547–48, Vinson, Fred, 252 551n, 552–54, 621 Virginia, University of, 250n, 440n Middle Eastern affairs in, 611, 617, 619–23 Miller Center of Public Affairs at, xiii, xxii nuclear disarmament in, 106–7, 116, 181, Virgin Islands, U.S., 585, 589 547–49 Voice of America, 36 peacekeeping missions of, 282–82, 547, 552, Vostok rockets, 536n 642 sanctions imposed by, 641–42, 645–50 wage and price guideposts, 235n–36n, 373n Secretariat of, 622 wages and salaries, 379, 471–72, 580, 583, 624 Security Council of, 180, 317, 551n Wagner, Aubrey, xxxix veto power in, 181 Wagner, Robert F., 238n, 256, 448n United Nations Development Decade, 552 Wallich, Henry, 51 United Press Intenational, 198n Wall Street Journal, 78n United Steelworkers Union, 379n, 624–25, 655 Walter Reed Hospital, 608 “United States Strategy at the 17th General Walters, Vernon, 21–22 Assembly,” 553n Waltham, Mass., records depository at, xviii university control stations, 103, 144 Wang Yun-wu, 452n UNRWA (U.N. Relief and Works Agency for war, xi, xxiv, xlvi, 217n, 469, 612 Palestine Refugees in the Near East), MacArthur on, 449–61 621 nuclear, 187, 311, 318–21, 325, 328–29, uranium, 546 455–56 urban programs, xli, 72n, 239n, 256, 480n warheads, nuclear, 89n–91n, 533 URRACA nuclear test, 481 War Labor Board, U.S., 651 USIA (U.S. Information Agency), xxxvii, xl, War of Independence, Israeli, 615 146n, 325, 442, 483n War Production Board, U.S., 341 U.S. Steel Corporation, xxxii, 79n, 335, 357, Warsaw Pact, 142n 371–75, 378n–79n, 386 Washington, D.C., 303, 440, 564 “U.S.–U.S.S.R. Military Balance, The,” 162n Washington Navy Yard, 418 U Thant, xxxix, 283, 563, 620, 622, 641–42, Washington Post, 12–13, 290n, 334 646–49 Watergate affair, xii–xiii, xix Watson, Albert, II, 204, 533–54 Van Allen, James, 481 Ways and Means Committee, House, xxxvii, Van Allen radiation belt, 481, 548 210n Vance, Cyrus R., xxxix economists’ testimony to, 235–37, 241–42, Vanocur, Sander, 593 251–59, 344–45, 366, 623 Vargas, Getúlio, 6 spending cuts presented to, 342–43 Velasco Ibarra, José María, 24n tax cuts considered by, 67n, 77n, 233–37, VELA test results, 81–82, 132–33, 147, 152n, 240–45, 248–49, 334–35, 354, 357–58, 156n, 158 361, 473–75 see also nuclear test ban tax reform considered by, 243, 244n, 249–51, Venezuela, 27–30, 38, 289, 292, 302–3, 307, 653 356–57 Veterans Administration, 67, 69 Webb, James E., xxxix, 539 Vidal, Gore, xli Wehrley, Roy, xxxix, 419n, 421, 438 videotapes, 291 Welfare bill (1962), 57, 340 Vienna, 467 Wellington, Duke of, 458 Vienna summit (1961), 266–67, 556 Western European Union (WEU), 218 INDEX 691

West Germany, see Germany, Federal wiretaps, 188, 443–44 Republic of Wirtz, W. Willard, xl, 651–58 West New Guinea, 547, 622, 645 Wisconsin, 530–31 Weygand, Maxime, 459 Wisner, Frank, 440–41 wheat allotments, 527–28 withholding tax rates, 250–51, 259, 605 Wheeler, Earle G., xxxix, 417–18 women workers, 367 White, Eric Wyndham, 578n won, South Korean, 431 White, Lee, 72–73, 76, 260 Woodward, Robert F., 48 White, Lincoln, xl wool industry, 568, 578n, 583–91 White House, xlvii, 4, 233, 334, 526 Woolner, Sidney H., 574 Cabinet Room of, xvii, xlv, 4, 79, 310, 334, Working Party 3, 405 361–62, 489, 546 World Bank, 252n, 414n, 468, 494n, 507n, 521, Fish Room of, 334, 462, 658 525–26 log at, xiv, 29n, 132n World Health Organization (WHO), 296 Oval Office of, see Oval Office, White House World Trade Conference, 553 Press Office of, 130 World War I, xlvi, 446, 456n, 457–58 residential area (Executive Mansion) of, xvii, World War II, xxxvi, xli, lin, 126n, 218, 252n, xlv, liii, 4, 232, 286, 527, 623 341, 445, 527, 637 Rose Garden of, 4, 260, 603 economy after, 370, 463, 470–71 taping systems at, xvii–xviii, xlv–xlvi, 3–4, MacArthur on, 446, 458–61 104n, 130, 202, 226, 232 Wrigley Field, 54n WHO (World Health Organization), 296 Why England Slept (J. Kennedy), xlv Yale University, 51n, 187n, 385, 387, 474n Wiesbaden, FRG, 326 JFK’s commencement address at, 363–64, Wiesner, Jerome B., xl, 80n, 85, 108, 116, 490n 119–22, 125–26, 167n, 180–81, 547n, Yalu River, 596 548–49 Yates, Sidney R., 609 on monitoring capability, 98–99, 101–3, Yosemite National Park, 480 105–6, 109, 111–12, 157, 174–76, 225 Yost, Charles, 551 on nuclear research and development, 88, Yugoslavia, 233, 268–69, 552, 560–61, 557, 90–91, 95, 172 559–61 Wiggins, Warren, 25 Wiley, Alexander, 489 Zelikow, Philip, xx Williams, Aubrey, 62n Zorin, Valerian A., xl, 182–83 Williams, G. Mennen, xl, 641n, 643–5 in test ban talks, 107, 111, 115, 118, 124, 141, Wilson, Donald M., xl 143, 148–49, 183, 417, 548 Windsor, Duke and Duchess of, 599n Zuckert, Eugene M., xl, 537, 539–40, 608–9