175. Memorandum From the President’s Special Assistant (Rostow) to President Johnson1
Mr. President:
I have been in touch this morning with Secretary Rusk, Secretary McNamara, and George Ball.
On the critical issue of the current offset agreement, they recommend the following for your talk with Erhard at 11:30.2
- 1.
- You recognize that his budgetary position does not permit him fully to offset, as promised, in military equipment.
- 2.
- It is, of course, impossible for the U.S. to carry the balance of payments effects of this situation.
- 3.
- Therefore, you are prepared to have his monetary experts and ours get to work immediately to find other means of offsetting U.S. balance of payments costs for the rest of the fiscal year.
- 4.
- The longer term solution must emerge from the tripartite military and financial review which you hope he will join. In this connection you hope he will appoint a man of the stature of John McCloy capable of dealing with both the military and financial aspects of the longer term problem in the spirit of the Alliance.
P.S. If he agrees, you can then come back to the Cabinet Room and instruct your experts to work hard this afternoon to establish: (a) an agreed formula for the communiqué; (b) an agreed arrangement for working out the details on the short-term agreement in the days ahead, in which Joe Fowler might be our negotiator.
- Source: Johnson Library, Bator Papers, Erhard Visit September 1966. Secret.↩
- See Foreign Relations, 1964–1968, vol. XIII, Document 207.↩