576. Letter From the Deputy Assistant Secretary of Defense for International Security Affairs (Sloan) to the Deputy Under Secretary of State for Political Affairs (Johnson)1

I–20675/64

Dear Alex:

As you recall, President Kennedy in September 1963, approved our plan for preliminary discussions with South African officials regarding the sale of submarines, provided that no commitment was made or implied that a decision to sell would be made prior to the end of 1963. Further, the President indicated at that time that the decision to sell submarines to South Africa would be forthcoming after the end of 1963 “in light of the circumstances at the time.”2

You may further recall that we sent a team to Pretoria in November 1963. In summary, the team concluded that the South African Government has a definite interest in the purchase of submarines and more specifically are impressed by a craft of small design which was discussed as an alternate to their interest in the Barbel class submarine. As to the financing, since the South African officials did not raise the question of credit, none was offered. Instead our team members indicated that either (1) cash transaction or (2) an arrangement whereby the manufacturer would accept a blocked bank deposit or line of credit, allowing a draw down of funds according to an assumed progress payment schedule (Incl. 1), would be possible.

At that time, South African Government officials expressed a desire to further explore the feasibility of desired changes to design and specification before making a final decision to purchase the small submarine. It was made clear that no decision could be made on the possible submarine sale before December 31, 1963, and that the visit of the team to Pretoria should not be interpreted as an approval in principle to sell submarines to South Africa.

The recent action by the South African Government in associating the potential submarine sale with the continuation of the U.S. tracking station in South Africa combined with our earlier indication that a U.S. decision would be made on the submarine sale after the end of 1963 prompts me to request:

a.
Final White House approval, in principle, to the sale of three conventional type submarines to South Africa, subject only to agreement between [Page 969]our respective defense establishments on specifications and price. Since credit has not been raised we assume that the transaction would be on a cash basis and that the sale including spares, technicians, etc., could range from $45 million, for three submarines of the smaller class proposed by the Electric Boat Company, to $90 million for the Barbel class in which the South African Government originally expressed interest.
b.
Assuming a favorable decision is made to consummate the sale, the Department of Defense will, with your concurrence, extend an invitation for South African Government officials to visit the U.S. at an early date for the purpose of beginning negotiations leading to the conclusion of a purchase arrangement.

Sincerely,

Frank
  1. Source: Department of State, Central Files, DEF 12–5 S AFR. Secret.
  2. See Foreign Relations, 1961–1963, vol. XXI, Document 409, for a conversation between South African Ambassador Naude and Secretary Rusk on arms sales to South Africa.