Foreign Relations of the United States, 1961–1963, Volumes VII, VIII, IX, Arms Control; National Security Policy; Foreign Economic Policy, Microfiche Supplement

175. Memorandum for the Record, April 4¹

April 4, 1963

SUBJECT

• Meeting with the President—4:30 p.m.—4 April 1963

1. Reviewed with the President the Far East missions. Sought his approval of the 5412 recommendation of April 4 to which he agreed.

2. The President asked me my estimate of when the Chinese might explode a nuclear device. I told him that we had had a group of consultants study all possible intelligence and we were inclined to believe it might take place somewhat earlier than we had heretofore thought and, indeed, it was possible a device might be exploded late this year or some time early next year.

3. I reviewed all items in the three attached memoranda covering various discussions and observations on my Western trip. The President asked that I give him a statement on the cost of the supersonic plane and submit any ideas that I might have as to a proper and reasonable contracting procedure which would be fair and equitable and would get the job done before the British-French plane comes into being. He specifically asked that I give him a copy of paragraph 5 of my memorandum on discussions with others on my Western trip.

4. There followed a long, informal discussion on a number of matters including nuclear test ban. I told the President that Eisenhower had expressed opposition to the present treaty as he understood it because of inadequate verification, the threshold, etc. I told the President that I, too, was concerned about the treaty for these reasons and furthermore it did not accomplish the President’s own objectives as outlined in his recent press conference because the Russians could no longer handle the Chinese situation and we and the British could no longer handle the de Gaulle situation, and hence the proliferation problem. The President seemed to agree, and restated that he did not think we were going to get a treaty anyway.

5. We discussed in some detail the de Gaulle relationships. I reiterated my previous position, urging that we try to find a solution to the impasse with the French. The President read with considerable interest the debriefing report on Archduke Otto.

6. I showed the President photographs of the A–12.

7. Informally discussed problems of economic growth, tax reductions, Federal deficits and the debt structure. I told the President I had not gone into these matters in depth; however, I noted that our debt stood at about $260 billion 15 years ago when our Gross National Product was on the order of $250 billion to $350 billion and personal savings were at a minimum, whereas at the present time our debt is on the order of $300 billion against a Gross National Product of $375 billion and savings are $1.5 trillion, therefore the debt did not worry me but the constant deficit did, and the outflow of gold also worried me.

8. With respect to the outflow of gold, I indicated the opinion that the largest single item was in support of our overseas forces and their families which total a million Americans in Europe alone, and added to that were probably ½ million travelers annually who went to Europe primarily to see their sons and families who were deployed overseas. I then urged consideration of a more drastic plan than the Merchant plan and suggested placing total responsibility for the defense of Europe on the shoulders of Europeans through a Western European Alliance, and that we sell this Alliance missiles, nuclear warheads, etc., and concurrently withdraw from Europe. The President did not indicate approval of such a plan but did indicate that we might reduce our forces to two Divisions. I told the President that I felt the gold problem was our most serious one and that steps must be taken to curtail it. I said that I felt the non-competitive position of our labor in a great many industries was a contributing factor. I pointed out the frequency of situations where American manufacturers, contractors or those involved in service such as contractors, shippers, etc., were losing out to Europeans because of wage and salary differentials unfavorable to the United States.

9. The President mentioned a contingency plan for Cuba in the event a U–2 was shot down. I told him McNamara and I had discussed this and were to meet within a week with Secretary Rusk.

1. Readout of meeting with President: Chinese nuclear capability, supersonic plane issues, nuclear test ban concerns, French bilateral relations, economic issues, European security issues, and U–2 shoot down contingency plans. Secret. 2 pp. CIA Files, Job 80B01285A, McCone Files, Meetings with President, 4/1/63–6/30/63.