Office of the Historian

30. Memorandum From the Deputy Administrator of the Agency for International Development (Gaud) to Secretary of State Rusk1

Washington, March 9, 1965.

SUBJECT

  • Status of MAP Funds—FY 1965

As you know, military assistance costs for Vietnam have continued to rise during this year. After taking account of all possible adjustments in the MAP programs in Latin America, Africa, Europe, and Asia (apart from Vietnam and Laos)—and after allowing for a possible $50 million transfer from the A.I.D. Contingency Fund to the MAP—we are currently in my judgment about $40 million short, figuring in the currently approved level of $43.4 million for Laos and $278.8 million for Vietnam. [Page 91] (Those two country levels amount to $100.8 million higher than those included in our FY 1965 MAP request for $1,055 million, including the special augmentation for Vietnam.) Substantial cuts have already been made in programs for Greece, Turkey, Taiwan and Korea to accommodate the increased costs in Vietnam.

We are informed by the Department of Defense of additional firm costs of $31.9 million for Vietnam, beyond the $278.8 million currently approved for FY 1965 funding, which must soon be provided for, and still more to be expected.

Accordingly, it is believed we should plan on either a supplemental appropriation request for the present fiscal year, or a use of the authority to draw upon Defense stocks in the present fiscal year to be replaced by a supplemental appropriation for FY 1966. The latter course may be preferable since it would permit us to adjust more easily if, as it now seems probable, still further MAP requirements for Vietnam will need to be provided.

Secretary McNamara has not agreed with either of these courses of action. Thus far, he has proposed to meet the $40 million shortage cited above by making further cuts in the Greece, Turkey, Taiwan and Korea programs.2 The means of accommodating the additional $31.9 million firm costs for Vietnam is yet to be faced.

Our consultations with the Near Eastern and Far Eastern Regional Bureaus and the Deputy Undersecretary for Political Affairs have indicated that the political consequences of further reductions in the four key countries would be very serious, and therefore we feel it would be preferable to plan on some means of augmenting the current appropriation for FY 1965.

William S. Gaud
  1. Source: Washington National Records Center, RG 286, AID Administrator Files: FRC 68 A 2148, DEF 19 Military Assistance, February–June FY 1965. Secret.↩
  2. See Document 19.↩