478. Telegram From the President’s Special Assistant (Rostow) to President Johnson in Texas1

CAP 671199. Subject: Wheat for Pakistan. We have some confusion in the ranks about your wishes on a new PL480 wheat agreement for Pakistan. I thought we had better check with you directly.

1.
In October you made two decisions on wheat for Pakistan.
  • —First, you authorized immediate negotiation on 500,000 tons of wheat plus oil and other commodities. It was the signing of this agreement that you saw on the ticker on Tuesday.2
  • —Second, you instructed Oehlert to try to work out a deal for another 250,000 tons of which we [they] would buy half and we would supply half through PL480.
2.
Just before we got to Pakistan last week Ayub’s people gave Oehlert their answer to the half-and-half proposition put to them in October. Their counter-offer is to buy 100,000 tons if it is part of a package containing 400,000 tons in PL480 wheat. In short, they have responded to our proposal of a 1–1 ratio between purchases and PL480 with a counter-offer of 4–1. It is this package, totaling 500,000 tons, that Ayub discussed with you.
3.

Oehlert recommends we accept Ayub’s counter-offer. Freeman and Gaud support that recommendation.

I support the recommendation that we accept Ayub’s proposal, but I want to be sure that we are following your wishes in accepting a somewhat less favorable proposition than you instructed us to put to the Pakistanis. Oehlert rightly points out that they are in a rough foreign exchange position, and that even this proposal is generous in a bumper crop year. I don’t think we will do any better by pushing, although we may be able to move some more PL480 wheat for buffer stocks in 1968. For now, I recommend you authorize us to accept the Ayub proposition.3

  1. Source: Johnson Library, National Security File, Country File, Pakistan, Vol. VIII, Memos, 8/67–4/68. Confidential.
  2. December 26.
  3. The President approved the recommendation.