Foreign Relations of the United States, 1955–1957, Foreign Economic Policy; Foreign Information Program, Volume IX

140. Telegram From the Mission at the United Nations to the Department of State¹

New York, February 2, 1956—11 a.m.

557. Re SUNFED—mytel 556, February 2.²

1. Presumably in effort to inject USSR-US competition into SUNFED, Yugoslav Mission has, we understand, been urging USSR to contribute. Yugoslavs now tell us Soviets are not inclined toward multilateral aid at this time. (This confirms Netherlands Mission report of similar statement by Poles.) According Yugoslav Mission, “other commitments” would in any event prevent USSR contributing more than $15 million in kind to SUNFED if established.

2. If the info in para 1 to the effect that the Soviets are (a) opposed to multilateral aid and (b) will not contribute more than $15,000,000 in kind is true, my recommendation for US policy is as follows:

a. We should, as a minimum, reject any policy whereby the United States would appear to be opposing multilateral aid. Such policy would hand the Soviet Union a propaganda advantage, the value of which could only be measured in millions of dollars. It would certainly be bad business to hand them this advantage unless we get a greater advantage in return. Those who say that opposition by the Soviet Union to multilateral aid gives US a chance to oppose multilateral aid also are looking through the wrong end of the telescope and are missing a wonderful opportunity.

b. The Soviets prefer bilateral aid because it means that they can use that aid for their own political purposes. The US, therefore, should make it clear that the Soviets oppose multilateral aid because they cannot manipulate it for political reasons, and that we are glad to join in multilateral programs of a type which do not threaten the independence of even the smallest country because we have no hidden plots for world domination.

c. We should therefore announce our readiness to contribute to SUNFED in the regular ratio in which we contribute to the UN and in an amount which would oblige the USSR to put up an amount greater than it is willing to contribute. All is subject to the proviso that we will pay our percentage contribution only if the USSR and the UK contribute in the same proportion as their contribution to the UN. These payments would not be made “in kind”, but in some international hard currency—Swiss francs, US dollars, Canadian dollars, etc. It should be stipulated that contributions must be completely convertible. Payment “in kind” to any fund such as envisaged is unfeasible.

d. This is not a situation where the US can remain stationary. We either go forward or backward. The course advocated herein will get us all the good that can be had out of economic aid without any of the drawbacks and probably without our having to spend a cent. It is by no stretch of the imagination an “entering wedge” for a blank check because (1) we have the safeguard afforded by the requirement of contributions by others and (2) of the over-all dollar limit. Conversely, if we oppose it, we take a very real loss. If the Soviet Union does as reported in para 1, we stand to gain an even greater advantage than we would otherwise.

3. I have already wired the Dept (mytel 498, Jan 13).³ It seems to me essential that we should have a clear position well before the meeting of the SUNFED ad hoc committee meeting on May 3.

Lodge

1. Source: Department of State, Central Files, 340.31/2–256. Confidential; Priority.
2. Not printed. (Ibid.)
3. Not printed. (Ibid., 340.31/1–1356)