100. Memorandum From the Under Secretary of State (Herter) to the Secretary of State1
In recent weeks I have become more and more disturbed with regard to the implementation of the present P.L. 480 program.
In the Cabinet meeting when Secretary Benson outlined the program for Agriculture,2 he made the statement that, in his opinion, agricultural surpluses were being drawn down quite rapidly and that he had no further plans for asking Congress to extend the P.L. 480 program beyond fiscal 1958 or beyond the new $1,000,000,000 already requested of the Congress.
Last week I tried to get this statement checked with Under Secretary of Agriculture True Morse,3 and it was his impression that P.L. 480 would probably be continued, although in smaller amounts.
This program for the disposal of surplus agricultural commodities was instituted not primarily as an instrument of foreign policy but as a method of getting rid of unwieldy surpluses. However, the Department of Agriculture has felt obliged to push the disposal of these surpluses and, through its Agricultural Attachés abroad as well as through representations directly to embassies in Washington, has [Page 259] tried to increase the disposal of these surpluses through the medium of P.L. 480.
In the Executive Order allocating responsibility for making agreements with regard to the disposal, the State Department is given that task.4 In addition, we are given over-all responsibility for allocations. However, other responsibilities under the Act, such as the holding and disposal of local currencies, are allocated to other Departments and administration given to ICA. In addition, an interdepartmental committee chaired by Agriculture makes the actual allocations.
The new law should become effective any day. There have now accumulated requests for these surplus agricultural commodities totaling $3,600,000,000. We have made commitments to Poland and Pakistan totaling approximately $150,000,000. I have suggested that no further commitments be made until we know just where we are with regard to future policy.
The disposal of surplus agricultural commodities is now a tool of foreign policy of almost equal importance with the Mutual Security Act. For the underdeveloped countries, it is much the most effective medium whereby local capital formation for economic development can be obtained.
Recommendations:
I feel that, before further allocations are made, firm decisions, probably at Cabinet level, should be made on the following points:
- 1.
- Does the Administration plan to continue the program after July 1, 1958?
- 2.
- Since the demand now far exceeds the supply, should not primary responsibility for allocation be placed in the State Department by Executive Order?
- 3.
- Should not our talks with Canada, Australia, etc., with regard to disposals remain somewhat indefinite until No. 1, above, has been decided?
- Source: Department of State, Central Files, 411.0041/7–2357. Confidential.↩
- Presumably the Cabinet meeting of June 17; see Document 97.↩
- Herter and Dillon discussed the issue of further Public Law 480 authorizations with Morse on July 15. (Memorandum of conversation, July 15; Department of State, Central Files, 411.0041/7–1557)↩
- Reference is to Section 3(a) of Executive Order 10560, promulgated September 9, 1954; for text, see Department of State Bulletin, October 4, 1954, p. 501.↩
- Printed from a copy which bears this typed signature.↩