Foreign Relations of the United States, 1969–1976, Volume II, Organization and Management of U.S. Foreign Policy, 1969–1972

370. Memorandum for the President’s File¹

Washington, August 25, 1970.

SUBJECT

• Meeting with the President’s Advisory Council on Executive Organization (Ash
  Council),² 10:30 a.m., August 25, 1970

The President met with the following members of the President’s Advisory Council on Executive Organization (Ash Council) at the Western White House this date:

• Roy Ash
• Walter Thayer
• Fred Kappel
• John Connally
• Dick Paget
• George Baker
• Andrew Rouse

White House staff members attending the meeting were George Shultz, John Ehrlichman, Peter Flanigan, and Henry Kissinger.

The President pointed out the great contributions that the Council had made.

Shultz outlined his efforts with OMB to date. Among other things, he pointed out the problem of “coping” and making it meaningful.

The President said that bureaucracy has traditionally run governments rather than vice versa. This new structure should avoid that, particularly where the bureaucracy thinks, generally, differently from this Administration.

Ash said it was now time for the Council to retire, October 1 and 2, and for the OMB to take over its tasks. Nevertheless the President asked, and Ash agreed, to study the problem of the Civil Service.

Ash then stated the Council’s recommendations:

Foreign Economic Policy

Clearly foreign economic policy is of utmost importance to the nation. And in the area of foreign trade the nation is losing its lead. To handle this problem the President must have adequate “equipment” in the structure of his office to deal with the problem; there must be a central point. The problems, large as they are, will grow larger and the structure must be put in place now.

Two characteristics of foreign economic policy decisions are(1) they have almost equal domestic and foreign implications, and the decision involves trade-offs that must be made at the Presidential level. The Council considered the various alternatives (OMB, NSC, and others) and finally decided the best alternative was a restructured

STR, plus a Cabinet-level council on International Economic Policy. This would be “alongside” the NSC and the Domestic Council. The restructured office would continue to be responsible for the operation of trade negotiations.

Regarding the Peterson Task Force recommendations for new agencies for AID and a coordinating council, the Ash Council recommends that this be subsumed in the International Economic Policy. Peterson is concerned that foreign aid might be subordinated to other factors. Nevertheless, the Council feels that aid is an integral part of the larger responsibilities of the International Economic Policy Council.

The President pointed out that in 1957 Foster Dulles expressed the same desire to centralize foreign economic policy outside of State. He pointed out the bureaucratic infighting that has historically been carried on regarding this subject. He then said he agreed on the need for a strong central authority to deal with the problem. The President finally said he would very seriously consider their recommendation. He would also like to have an organization competent to look down the road 25 years on international economic problems. But in looking at these future problems, realizing the increasing importance of economic relations internationally, the President sees a problem in splitting this off from the NSC. Dr. Kissinger said he saw no problem in the new council working with the NSC.

The President feels that one requirement is that the Council remain small. The Domestic Council is perhaps too large, while the NSC is more effective because it is kept small.³

Re IRA

All agreed that the proposed publication of the Ash Council’s recommendations was a good idea.

However, Baker pointed out that in October or November Penn-Central might go under due to lack of cash flow. He urged that the Administration begin to prepare now for this possible development, perhaps by getting more strongly behind the bill currently before the Congress.

PMF
Assistant to the President

1. Source: National Archives, Nixon Presidential Materials, White House Special Files, President’s Office Files, Box 82, Memoranda for the President, Beginning Aug. 23, 1970. No classification marking. A copy was sent to Kissinger. According to the President’s Daily Diary, the meeting lasted from 10:42 a.m. to 12:16 p.m. (Ibid., White House Central Files)
2. The Ash Council was appointed by President Nixon on April 5, 1969, to review the organization of the Executive Branch. The Council proposed major changes in the organization of the Executive Office of the President, including the establishment of OMB, that were instituted in Reorganization Plan 2 of 1970, effective July 1, 1970. Documentation on the Council’s activities is ibid., White House Special Files, Staff Member and Office Files, Ehrlichman Files, Box 32, Executive Office Reorganization.
3. In his diary entry for August 25, Haldeman noted the following: “Long meeting with Ash Council was apparently productive. P[resident] had Shultz, E[hrlichman], and me in later and had decided to go Ash route on foreign economic policy organization. Will cause major problems with State and Rogers, but P told Shultz to go ahead and set it up as a White House function, look for a really good strong man to head it up, but don’t announce it as a big change, just ease into it to minimize impact on State.” (The Haldeman Diaries: Multimedia Edition) According to the President’s Daily Diary, Nixon’s meeting with Haldeman, Ehrlichman, and Shultz lasted from 1:10 to 2:20 p.m. (National Archives, Nixon Presidential Materials, White House Central Files)