37. Memorandum for the Record0


  • Meeting on Defense proposals for further reductions in balance of payments drain, September 19, 1963, 4 PM


  • The President, Secretaries Rusk, McNamara, Ball and Gilpatric, Mr. Bundy

The President approved the Defense Department’s proposals stated in the Secretary of Defense’s draft memorandum of September 19,1 but with the exception of those items which were disapproved by the Secretary of State, and with the restoration of $20 million in foreign exchange petroleum costs which the Secretary of Defense undertook to save in another area than that of Venezuela. The reductions approved therefore total $190 million and include items 1, 2d, 5 and 6 in the Secretary of Defense’s memorandum.

It was agreed that the Department of Defense would develop specific, detailed, country proposals for these reductions and that they would be submitted to the Department of State so that the timing and tactics of [Page 98] their implementation would be carefully coordinated between the two Departments.

The President also indicated his desire that a political base be established which would make it possible at some later stage to reconsider the disapproved actions, and he particularly indicated his desire to be in a position to approve actions 2a and 2c. He did not indicate that he would expect to approve item 3 at any time in the near future, but he agreed to further review of this matter.

Because of the sensitivity of this topic, only the most limited distribution of this memorandum is being made in a single copy to each officer present, but the Departments may use the first two paragraphs of this record in communicating necessary information to others as to present discussions.

Pending the development of a strong plan for the establishment of the necessary political base, knowledge of the President’s further desires should not be communicated except on the most urgent need-to-know basis, and in no case in writing.

McGeorge Bundy
  1. Source: Kennedy Library, National Security Files, Subjects Series, Balance of Payments and Gold, 8/63-9/63. Top Secret. Drafted by Bundy.
  2. Document 36.