94. Letter From Secretary of the Treasury Kennedy to the President’s Assistant for National Security Affairs (Kissinger)1

Dear Henry:

You will recall discussions with you, as well as discussions with the President, at which you were present, relating to the participation by the Treasury in national security matters. The President clearly stated that I should participate whenever financial and economic matters are involved. It was pointed out that this was true in most cases— not controlling, of course, but frequently of great importance. Examples of where the Treasury would not participate and I would not be expected to take time, would be those cases where technical discussions of weapon systems or internal operations were concerned.

A year now has passed and Treasury participation has been negligible. It seems to me it has been on a “hit and miss” basis. Occasionally, [Page 207] I have been invited. Usually it has been at the last minute and with briefing papers furnished just prior to the meeting and frequently without previous participation by Treasury staff. In fact, in some cases Treasury staff has been excluded completely or until positions have been finalized. Yet in a number of cases I could cite, Treasury participation has made a real contribution to the ultimate decision.

Let me give you a few glaring examples that have come to my attention in recent days of where Treasury has been by-passed in the national security process and where we have responsibility and could make a contribution to effective policy.

NSSM 26—U.S. Military Supply Policy for South Asia. Clearly, Treasury has responsibility in the Aid program including military assistance. In this paper, however, the omission of Treasury at the Review Committee level was even more obvious since the paper was completely rewritten as a result of Treasury recommendations. At the IG level the basic paper was discussed and the corrections which were largely incorporated in the final draft were a direct result of Treasury participation. Yet Treasury was omitted from the Review Committee Meeting as well as the NSC Meeting itself.
NSSM 51—Policy Toward Thailand (Program Analysis). Again, a major thrust of this paper was the Aid and military assistance program which Treasury participated in prior to the paper and has subsequently been asked to participate in the subject area. During the course of the NSC procedure we were not asked to take part.
NSSM 60—U.S. Policy Toward Post-de Gaulle France. During the early drafts of the NSC paper, Treasury made direct contributions. At the Review Committee level and also at the NSC Meeting Treasury was not invited.
Treasury has recently been asked to participate in a triumvirate task force (State, DOD, and Treasury) on Viet Nam’s economic and fiscal policy in which we certainly do have a responsibility. You are well aware of the serious economic and fiscal situation in Viet Nam and its implications upon our policy. Again, however, the various papers dealing with the subject have not included Treasury at any level in the NSC process.
NSSM 46—Spain. Considerable effort has been expended on this most important paper by Treasury. We have had to clarify our own thinking and position in Treasury which has taken some time but in the process we have helped both State and Defense with their views. Even with this background we were not invited to the NSC Review Committee Meeting and the indications are that we will not be invited to the NSC Meeting itself.

The above are merely current examples and a recent review of the titles of your NSC papers by one of my staff suggests that there are [Page 208] many policies in which Treasury has a responsibility that are being developed without Treasury participation.

I believe it is time to review the operating procedure of the NSC with respect to Treasury participation. Hopefully, a satisfactory arrangement can be worked out between you and me. If not, I feel that I must see the President on this important problem.2

With kind regards,

David M. Kennedy
  1. Source: National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files) Box H–300, NSC System, Institutional File General 1969 through 1974. Confidential. Kissinger wrote at the top of the first page: “Draft reply. This shouldn’t sit for a month. Make some excuse for delay.” See Document 14.
  2. Following his rejection of a draft reply that was “much too abject,” Kissinger responded to Kennedy in a March 12 letter in which he agreed that the record of Treasury’s participation in national security affairs provided by Kennedy “leaves much to be desired. While it was not intended to be on a ‘hit or miss’ basis, it is apparent that at times we have been overzealous in our efforts to comply with the President’s desire that NSC meetings be held to the absolute minimum of participants.” Kissinger stated further that he had instructed his staff “to carefully review each item on the NSC and Review Groups agendas to ensure that Treasury participation is provided for whenever its interests are involved.” (National Archives, Nixon Presidential Materials, NSC Files, NSC Institutional Files (H-Files) Box H–300, NSC System, Institutional File General 1969 through 1974)