The Administration: Anchors Aweigh

Defense Secretary Robert McNamara recently advised President Kennedy to demand the resignation of Navy Secretary Fred Korth. At 7:30 o’clock on the morning of Oct. 1 1, Korth had breakfast withMcNamara, returned to his office, paced back and forth, told an aidehe was “mad enough to resign.” At 4:30 p.m., Korth was in the White House, resignation in hand. Last week the White House made it public—but did not reveal that Korth had, in fact, been fired.

No Regrets. Also released was the text of a brief note in which Kennedy thanked Korth for his services but pointedly omitted the usual “regrets” over his departure. A White House aide explained airily that Korth would “fit better” in private life than in government. In hopes of burying an embarrassing situation, most everyone seemed willing to pass the matter off as a dispute over policy in which Korth seemed to be protesting McNamara decisions adverse to the Navy.

Indeed, McNamara and Korth did have policy differences. But these were not why Korth was fired. The real reason was that he had written letters on his official Navy Department stationery concerning business for Fort Worth’s Continental National Bank, of which Korth was president before becoming Navy Secretary in 1961. Some of the letters are in possession of Senator John McClellan’s investigating committee, which has been probing Korth’s role in the controversial Defense Department award of the TFX fighter-aircraft contract to General Dynamics. Continental National was among 20 banks that had lent a total of $200 million to General Dynamics.

No one was yet claiming that the Korth letters were illegal or involved a conflict of interest. They were, however, described as “improper” and “awfully stupid.” At week’s end, Korth gave newsmen copies of more than 200 letters, admitted that some of them showed that he maintained “an interest in the welfare of the bank.” But he denied that any “of these instances in any way involved my official responsibilities.” Added Korth: “I deeply resent any insinuation that these few trivial incidents and communications raise a question concerning my character.” Korth, who spent last week in Bethesda Naval Medical Center for a long-delayed ear operation, insisted that his resignation was entirely voluntary, that he quit because of policy differences with McNamara and personal financial problems. Aides further explained that his salary of $22,500 was only a little more than half of his former salary as bank president. He maintained large homes in both Washington and Texas. The two Texas cattle ranches he operates with a brother were badly hurt by drought. A son and daughter in college added to his expenses. Korth had to sell 5,000 of his 5,200 shares of Continental National stock last June to meet his debts, even borrowed $10,000 from his mother-in-law.

On policy matters, Korth egged McNamara on in the dismissal of Admiral George Anderson as Chief of Naval Operations, supported the Secretary of Defense in the TFX controversy. But he opposed McNamara on the recent military pay raise and on McNamara’s requests for shipbuilding funds, seeking more money in both cases. He seemed particularly irked by McNamara’s tentative decision to block Navy plans to provide nuclear power for its newest carrier.

“Biggest Brain.” Under such pressures, Korth was known to be considering retirement—but not involuntarily. A hearty backslapper with a booming voice, Korth, 53, had political ambitions. He envied the success of fellow Texan John Connally, who preceded him as Navy Secretary before quitting to run successfully for Governor of Texas. An Assistant Secretary of the Army in 1952-53, Korth got the Navy job on the recommendation of Deputy Defense Secretary Roswell Gilpatric and with the approval of Vice President Lyndon Johnson, for whom Korth once served as a Fort Worth campaign manager in a Senate election.

Korth will be succeeded by Assistant Secretary of Defense Paul Nitze, 56, a handsome veteran of 15 years in Government jobs, including that of Director of Policy Planning for former Secretary of State Dean Acheson. Nitze is likely to find the Navy job about as rough as Korth did. Commented one unimpressed admiral last week: “The Navy is getting ready to receive one of the biggest brains in town—I suppose it will be a stimulating experience for both him and us.” But Nitze, it is assumed, is bright enough to use private stationery for private business correspondence.