146. Memorandum From the President’s Deputy Assistant for National Security Affairs (Haig) to the President’s Assistant for National Security Affairs (Kissinger)1


Attached are the NSSM’s and projects under NSC auspices which include economic facets.2 The first group has a specific economic component and the second group marginal economic facets. Each of the studies listed cannot be fragmented into its economic component without severely complicating the nature of the study and its overall processing. For this reason, I think it would be foolish to permit Peterson to have a free shot at this kind of essentially political and broadly based product.

I understand that Peterson’s real problem is in developing specific agenda items for the Economic Council and in preparing his own NSSM’s. In my view, we should invite his participation at the IG and working group level in the preparation of our studies, elicit his participation in the Review Group Meetings but under no circumstances jury-rig a special economic overview under his aegis which could seriously distort the development of broadly based policy studies.

[Page 305]

The development of appropriate study requirements for the Economic Council and for Peterson’s shop does not appear to be an insurmountable one to me. There are a host of purely or primarily economic issues which might well be considered within Peterson’s framework. These include the day-to-day actions of the type so frequently dealt with by Fred Bergsten— shoe imports, meat quotas, petroleum issues, etc. Our best bet here would be to join with Peterson, utilizing either Fred Bergsten or his successor to come up with an agreed target list of economic issues which should be considered by Peterson and the Economic Council. He should also develop a list of recommendations from the trade-oriented departments such as Treasury, Commerce and Agriculture. I think the quicker Peterson gets inundated in these kinds of issues, the more likely he is to avoid involvement in foreign policy-laden studies. If you agree, I will have Fred and Dick Kennedy meet with a member of Peterson’s staff to:

Review our ongoing studies from the attached paper, making it clear that a breakout of the economic issues is not feasible but inviting their participation and comment on the studies, dependent on their current state of production.3
Assure Peterson that his participation in the Review Group Meeting is welcome.4
Assist Peterson’s staff in developing a list of primarily economic issues for consideration within the Peterson framework.5
Suggest that Peterson solicit recommendations from Commerce, Treasury and Agriculture for future study limited to subject areas which are primarily economic in nature.6
Establish a formal system for regular coordination of NSC and economic related study efforts between Kennedy and Bergsten/his replacement and a designated member of Peterson’s staff. (This should be done without your involvement until knotty issues arise.) Kennedy and Bergsten are preparing a memorandum for you on this subject which will flesh out the details of the problem.7

In addition to the foregoing problems which, regardless of the efficiency of our coordination and liaison with Peterson, will pose us with difficult jurisdictional questions, there is a fundamental issue which needs sorting out not only between the NSC and Peterson’s staff but also within the NSC staff. I am speaking of responsibility for security assistance functions. The recently completed paper on Indonesia was done [Page 306] by Wayne Smith. In my view, it should have been done by John Holdridge, with assistance from Wayne’s staff. Wayne has interpreted his principal role on the Indonesian paper as a charter for staff supremacy on all future internal security issues. I believe this has built-in frictions which cannot but work to your disadvantage and result in the alienation of the substantive officers who have specific geographic responsibility. I have thought about this long and hard and, as you know, have discussed ongoing frictions with both Wayne and Dick Kennedy. It is clear to me that with a charter that includes internal security, Wayne’s staff will have primary responsibility for the large majority of policy issues which come to our attention. As you know, Wayne now carries the heaviest load on SALT, a large portion of the load on Vietnam and full shots at any issue which is primarily Defense-oriented. I know you are not interested in morale problems nor am I. However, I see no reason for carrying this one to the extreme by salting all the wounds among the operations staff. It seems to me in special cases you can use Wayne to do a job but as a full-time charter this is self-defeating. For this reason, I would recommend you let me promulgate to the staff that security assistance issues will normally be handled by the operators, that they will coordinate actions and obtain staff support from Wayne and that in special cases directed by you the Program Analysis staff will have primary responsibility for such action.8

  1. Source: Ford Library, National Security Adviser, Kissinger–Scowcroft West Wing Office Files, 1969–77, Box 40, Administrative Files, National Security Council Organization (6), 3/30/70–4/21/71. Secret; Sensitive.
  2. Attached but not printed.
  3. There is no indication of approval or disapproval of the recommendation.
  4. Kissinger initialed his approval.
  5. Kissinger initialed his disapproval and wrote: “That’s his problem.”
  6. Kissinger initialed his approval.
  7. Kissinger initialed his approval.
  8. Kissinger initialed his approval.