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

142. Letter From the Representative at the United Nations (Lodge) to the Secretary of the Treasury (Humphrey)¹

New York, March 19, 1956.

Dear George: This is in further reply to yours of March 5.²

Perhaps it should be pointed out at the outset that the statement in the copy of your letter to Foster Dulles “that we had a firm policy of spending our own money by ourselves” is not strictly accurate. We have been engaged for about five years now in United Nations Technical Assistance, which is a multilateral program (and which, incidentally, up to now has been run pretty much as we wanted it run). There is also the I.F.C., in which you played such a decisive part—not to mention the Specialized Agencies.

My basic contention is that the United States (preferably through the President at a great public occasion) should challenge the Soviet Union to match our contributions to an international fund for economic aid to underdeveloped countries. This offer should be limited in amount. The ratio of payments should be similar to that now contributed for support of the United Nations, which means that we would contribute the largest individual percentage—331/3 percent—thereby insuring our control of the program. Contributions to the fund should be largely in convertible currency. That percentage which is not in convertible currency we can use for expending our own surpluses.

For the President to make this offer would have an even greater impact than the “Atoms for Peace”³ and the “Open Sky”⁴ proposals, far-reaching as these were, because, like these two programs, they take the initiative and they challenge.

If we do not gain and hold the initiative in the field of economic aid, our position in the Middle East will be jeopardized because it will appear in those countries that the Soviets have us on the run and that our present programs are a rear-guard action. This would, of course, endanger our stake in the Middle East, with all that that implies, as regards petroleum, etc. There is reason to believe that to engage in a limited and carefully controlled multilateral program would actually be cheaper in dollars than to succumb to the type of blackmail which is now in prospect. In the base agreement for Wheelus Field in Libya, for example, there is no understanding prohibiting Soviet penetration of the area. You, yourself, have said many times in my presence, that you would never begrudge funds for vital national defense. If the integrity of this base were compromised as a result of these blackmail tactics, we would have to put up money to preserve our base and the amount would probably be far larger than would be required by generally taking the initiative through challenging the Soviets to enter a multilateral program.

There is no doubt that we could control such a program and that capable Americans could be placed at the top of its administration—unless we delay so long that we lose the initiative and an unattractive program is forced on us. I have assurance from Hammarskjold to this effect.

The program would be carried out by personnel who would be uniformed and labeled. The whole operation would have great publicity, which would protect the recipient nations from being subverted.

It could not possibly open any door to the Soviet Union which is not now open to it, but would instead mean that Soviet activity could be under some sort of supervision. It is the only method I can think of to avoid a US-USSR auction.

Every country which today tries to siphon money out of the U.S. Treasury could be very plainly told that all it had to do was to get the Soviet Union to put up its amount and that the United States would then come through. This would “put the monkey on their back” and give us the initiative.

Such a program would, of course, be used to help us get some of the things that we want abroad—such as security for our bases.

Much of the money would be spent in the United States to buy products of American industry and it would provide an outlet for our agricultural surpluses.

It should be done under the aegis of the United Nations in order to avoid having it look like a mere cold war debating tactic.

The main underlying purpose should be to build up those backward countries economically. That is why I think that you should be put in charge of it, because not only have you got extraordinary ability, but you understand what it is that makes for economic health.

We should act soon because probably the Soviets will think of making some offer like this themselves and then we would be put in the position of running along behind the bus picking up the pieces.

The friends of America and opponents of communism in those backward countries all speak of the need for a coordinated American policy which will give us the initiative. This proposal seeks to meet that need.

The Soviets are constantly pulling ahead and if they should win the contest the expense to us would make this scheme seem trifling.

Reading over the copy of your letter to Secretary Dulles makes it appear that you and I are very far apart on this question. Yet I do not really think so. I have found myself too often in agreement with you not to feel that we want essentially the same thing and I know how receptive your mind is to new ideas. My very close contact with world opinion here in the world forum convinces me that we cannot get away with a purely negative answer and that such an answer would hand over to the Soviet Union a propaganda advantage which would be worth many millions of dollars to them. A negative answer would also take them off a very embarrassing “spot” because there is good reason to believe that they fear any program which is either multilateral or which stipulates convertible currency.

I intend to attend the Cabinet meeting on Friday and would be glad to discuss this with you after the meeting if this is convenient to you.

Very sincerely yours,

Henry Cabot Lodge, Jr.⁵

1. Source: Department of State, E Files: Lot 60 D 68, International Development Fund, 1950–1957, W.J. Stibravy.
2. Not printed. (Ibid., Central Files, 398.051/3–556)
3. In an address before the United Nations, December 8, 1953, President Eisenhower proposed establishing an international atomic energy agency to promote the peaceful use of atomic energy in the world. For text of the address, see Department of State Bulletin, December 21, 1953, p. 847.
4. For text of President Eisenhower’s open skies proposal made on July 21, 1955, at the Heads of Government meeting at Geneva, July 18–23, which proposed that both the United States and the Soviet Union be allowed to take aerial photographs of each other’s countries, see ibid., August 1, 1955, p. 174.
5. Printed from a copy which bears this typed signature.