137. Editorial Note

On August 10, 1970, Henry Kissinger sent a draft of the President’s message to Congress on foreign aid, scheduled for delivery before Congress adjourned on August 14, to the Secretaries of State, the Treasury, and Defense; the OMB Director; and the AID Administrator. Kissinger noted that the decisions indicated in the draft had already been communicated in NSDM 76 ( Document 136). He requested comments on the draft by August 13, but acknowledged that the timing of the message could slip past the House recess. (National Archives, RG 59, S/S Files: Lot 83 D 305, NSDM 76)

On August 12 AID Administrator Hannah sent his comments to Kissinger on the draft foreign aid message, noting that there was sharp [Page 358]disagreement about the future of bilateral assistance, of which the President should be aware, and he asked for reconsideration of decision 4a of NSDM 76. Hannah indicated that some continued bilateral involvement in development efforts was in the national interest and that Secretary of State Rogers joined in his recommendation. (Ibid.)

Council of Economic Advisers Chairman Paul McCracken, in an August 12 memorandum to Kissinger, commented that, after reviewing the draft message, the CEA believed additional interagency discussion of major substantive issues was required, which would almost certainly require postponing the message to Congress. (Ibid., Nixon Presidential Materials, NSC Files, Agency Files, Box 194, AID, Volume III 8/11/70-9/10/70)

On August 13 C. Fred Bergsten prepared a memorandum to Kissinger regarding that day’s 4 p.m. meeting on the foreign aid message, during which a revised draft was circulated. He argued that there were only a few substantive concerns, but noted that the State and Treasury Departments and AID had all expressed satisfaction with the draft and were prepared to go ahead that day. Bergsten continued: “You should know that there is an absolutely overriding bureaucratic aspect to all this. I understand the President has already approved the formation of a Foreign Economic Policy Committee to be chaired by Treasury. I have strong sympathy for the need for such a coordinating mechanism, as you know. But the economic types want to handle foreign aid, as well as monetary policy and trade, and thus lift the issue out of the NSC machinery. I believe this factor—not substance—lies at the root of the last minute in-house backfire on the aid message. To be sure, we gave them opportunity by not having an NSC meeting and by the long delay in getting the decisions on the message.” Bergsten urged Kissinger’s strong leadership to keep foreign aid policy within the NSC framework and his making clear that the NSDM 76 decisions were firm, although minor changes in the details were possible. (Ibid.) No record of the 4 p.m. meeting has been found.

On August 13 Executive Secretary of the Department of State Theodore Eliot sent a memorandum to various State Department offices with an interest in the aid message informing them that the White House had decided to delay the message to Congress until after Labor Day. Eliot requested that all copies of the draft message be returned and that the contents be closely held. He emphasized the importance that the contents not be leaked. (Ibid., RG 59, S/S Files: Lot 83 D 305, NSDM 76)

In an August 14 memorandum, Bergsten informed Kissinger that James Schlesinger was amending the aid message and a revised draft would be available early the following week. Bergsten suggested there would be changes in the substance of the message, including possible [Page 359]modifications in the decision on the Development Council. Bergsten continued that September 15 would be the ideal date for the message because the House would probably pass a $3.7 billion authorization bill on September 14, to which the President could refer. The IMF/IBRD annual meetings would begin in Copenhagen on September 20, and the message would provide momentum to the U.S. delegation. In addition, the high-level meeting of the OECD Development Assistance Committee was to convene in Tokyo on September 15 and delivery that day would maximize its impact “when all the top aid types are meeting together.” (Ibid., Nixon Presidential Materials, NSC Files, Agency Files, Box 194, AID, Volume III 8/11/70-9/10/70) Additional documentation on finalizing the text of the message, including significant differences between Bergsten and Schlesinger on a number of substantive points and Kissinger’s comments, is ibid.

In his special message to Congress on September 15, President Nixon proposed “a set of fundamental and sweeping reforms to overhaul completely our entire foreign assistance operation to make it fit a new foreign policy.” His message outlined six reform proposals: the creation of “separate organizational arrangements” for security assistance, humanitarian assistance, and development assistance; “a freshly conceived International Security Assistance Program” in support of the Nixon Doctrine unveiled at Guam in 1969, which had called for other countries to assume responsibility for their own defense; channeling “an increasing share of development assistance through the multilateral institutions as quickly as possible” with the remaining bilateral assistance “provided largely within a framework established by the international institutions;” the creation of two new and independent institutions, the U.S. International Development Corporation and the U.S. International Development Institute, to phase out the Agency for International Development and to reduce significantly the number of overseas U.S. Government personnel working on development programs; negotiation of a treaty with all nations that “would permit the utilization of the vast resources of the seabeds to promote economic development;” and the redirection of other policies bearing on development—the initiation of tariff preferences and in concert with other donor countries the complete untying of foreign aid, for example—“to assure that they reinforce the new approach.”

In his message the President referred to the March 1970 report by the Peterson Task Force, which provided the basis for the President’s proposals. He also indicated that the proposals in his message “in fact were foreshadowed by a number of policy changes and program innovations” already instituted in assistance programs for Latin America in response to the earlier Rockefeller Report. His message went on to provide additional details on the proposed reforms. For text of the message [Page 360]along with an accompanying Presidential statement, see Public Papers of the Presidents of the United States: Richard Nixon , 1970, pages 745-757.