324. Memorandum From the Secretary of Defense (McNamara) to President Johnson1

SUBJECT

  • Your Meeting with Ambassador Lodge

I attach a longer draft memorandum2 of the results of the Honolulu conference. It was prepared by McGeorge Bundy and covers the highlights of the general discussion. Paragraphs 4 and 7 are the most [Page 628]important, and for your meeting with the Ambassador,3 I recommend the following points:

1.
Need for Teamwork. It is absolutely vital that the whole of the Country Team, but particularly Ambassador Lodge and General Harkins, work in close harmony and with full consultation back and forth. There must be no back-biting or sniping at low levels such as may have contributed to recent news stories about General Harkins being out of favor with the new regime. A key element in this is the selection of a new deputy to the Ambassador, to replace William Trueheart. (Trueheart has been there more than two years, and the Ambassador agrees that he should now be replaced.) This is for the Secretary of State to work out, but what is needed is a good chief-of-staff type, able to work with the military, economic, and information people, knowing the area, and tough in pulling people together and ironing out any signs of dissension. Two names suggested have been William Sullivan (he is now Governor Harriman’s assistant and the Governor may not want to let him go) and Norbert Anschuetz of the Paris Embassy. In any case, the Ambassador should know that he has your authority to select the best possible man that he and Secretary Rusk can find, and this matter should be worked out before he leaves Washington.
2.
Economic and Budget Problem. The Honolulu conference highlighted that the new Vietnamese government faces a really serious 1964 budget problem requiring some combination of increased taxes, drawing on foreign exchange reserves, and other austerity measures, perhaps some greater US aid input (though this is tough for AID in view of Congressional cuts), and a really tight budget. The first step, agreed at Honolulu, is for Mr. Bell to get the strongest possible US team out to discuss these problems with the new government, which is clearly very inexperienced and unsure of its ground. The Ambassador must really get into this problem, as the essence of it is political—whether the new government can take steps that may make sense from an economic standpoint without unduly weakening its political position and stability—which is vital to the war. With the new government just getting on its feet, long-term factors are secondary to the short-term problem of insuring its position.

We may well have to accept putting in more aid than we would theoretically like, to ensure the new government’s standing, and we should be prepared to direct the necessary funding at whatever cost to other programs in AID or in the Military Assistance Program. (Incidentally, the overall tightness of funds highlights the importance of holding any further cuts in the total foreign aid bill to an absolute minimum.)

Robert S. McNamara
  1. Source: Johnson Library, National Security File, Vietnam Country File, Vietnam Cables. Secret.
  2. Not found.
  3. See Document 330.