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

155. Letter From Paul G. Hoffman to the President¹

New York, December 17, 1956.

Dear Mr. President: The information that you are planning to devote a considerable part of your inaugural address to the subject, “The Price of Waging the Peace,”² is most encouraging, as is your continued interest in helping the under-developed countries of the world to achieve stability and rising living standards.

Your suggestion that we should stop talking about foreign aid and instead speak of “investment for peace” is a ten-strike. Semantics are important, and we could think of no two words that handicap a program more than foreign and aid.

We take issue with only one statement you made and that is that it would be more difficult to win the support of the public for a program for the under-developed countries than it was to win support for the Marshall Plan.³ You overlook, we believe, one significant fact,—the deep, abiding confidence the American public has in you. At the time the Marshall Plan was presented to the public confidence in former President Truman was at a low ebb and yet that plan won overwhelming support. An “investment for peace” in the form of help for the under-developed countries would, if proposed by you, not only win enthusiastic acceptance here, but throughout the free world. It is our fervent hope that you would be willing to let it become known as the Eisenhower Plan.

We have excellent bilateral programs with some under-developed countries. There is also the Colombo Plan.⁴ Further, the World Bank, the Export-Import Bank, and the International Finance Corporation are rendering vitally important services. But to the best of our knowledge no overall study has been made of the needs and resources of the under-developed countries in which some 900 million people live. As I stated to you in our conversation on Saturday, the gross national product of these countries in 1954 was approximately $85,000,000,000. In that same year the gross national product of the 380 million people living in the industrialized countries (those with a per capita income of $500. per person, or more) was $567,000,000,000.

Not only are we lacking this overall study, but there is not even presently available a comprehensive, regional plan for the economic development of the Middle East. There are bits and pieces, but no coordinated program. We may need this—and quickly.

We are not proposing that any effort be made at this time to embark upon a master plan for the development of all under-developed areas. We are not ready for that. There is a desperate need, however, for an inventory of the present resources and the short-term needs of the under-developed countries of the world, and most particularly of the nineteen new nations which have won their independence since the end of World War II. In using the phrase, short-term needs, we are thinking solely of the needs for increased productivity in agriculture and industry, and for the strengthening of their governments. We are not thinking of the bottomless needs for consumption goods. We are also thinking in terms of six years. We use “six years” merely to get away from the phrase, “five-year plan.”

This inventory of short-term needs and resources should, in our opinion, be carried out under the auspices of the United Nations, provided the United Nations secretariat is willing to set up a special group for this purpose. We are certain that this study can be made free from interference by the Soviets and their sympathizers.

This proposed inventory would not legally bind us to help any country with any goods or services. At the same time there would certainly be an implication of help which we would want to take into full account. However, there are numerous safeguards which could be included in the proposal. For example, we could point out that the United States was in a position to supply certain goods and services while other goods and services could be better supplied by other countries. The emphasis should always be on goods and services, not dollars or gold.

I told you the simple truth on Saturday when I said that second only to peace itself the interest of the delegates in this Eleventh General Assembly is in the development of the under-developed areas. The one specific proposal before the Assembly is SUNFED, which calls for all the nations to contribute proportionately to an investment fund of approximately $250,000,000. The amount of money is not enough, the methods of distributing it are subject to grave question, and, in fact, the whole proposal is dubious. However, it has widespread support not only from all the under-developed countries but also from many European countries and from Russia. Our guess is that Russia is for it because we are against it. Since SUNFED cannot be formed without our support, they feel safe in offering their proportionate share of the original capital. We are not overly concerned with the tactical situation that we are facing, even though it does present difficulties. What we are concerned about is getting underway with a program which will, as soon as possible, help these countries to help themselves toward stability and better living standards.

It is our deep conviction that the time is here and now for a specific proposal. Abstractions are not enough. Further, the climate is extremely favorable for the making of a specific proposal. The position which you took in the Middle East crisis brought the East and West much closer together. You proved that Kipling was wrong when he said, “Never the twain shall meet.” Another dramatic move by you and the free world will be united as it never has been before. What we would like to suggest is that you personally come to the United Nations and offer a package deal consisting of the following items:

1. An offer to recommend to the Congress appropriate participation by the United States of America in the financing of the inventory of needs and resources which we have been discussing.

2. A modest participation by the United States in the multilateral aid program under the United Nations and, particularly, such a program for the Middle East. (Ambassador Lodge has explained the need for such a program in detail in a separate memorandum.)

3. Continuing and slightly expanded support for the United Nations Technical Assistance Programs.

This package deal would electrify the United Nations with a response even greater than you received for your Atoms for Peace proposal. Further and finally, if out of the inventory of needs and resources a United States program for helping the under-developed countries did come about, the results, in our opinion, would be even more far-reaching than were the results from the Marshall Plan.⁵

Faithfully yours,

Paul G. Hoffman⁶

1. Source: Department of State, Central Files, 398.051/12–1956.
2. The text of the President’s address, delivered on January 21, 1957, is printed in Public Papers of the Presidents of the United States: Dwight D. Eisenhower, 1957, p. 60.
3. The European Recovery Program (ERP) was enacted into law, April 3, 1948, as Title I of the Foreign Assistance Act of 1948 (P.L. 472); for text, see 62 Stat. 137. From April 1948 until October 1950 Hoffman headed the Economic Cooperation Administration (ECA), which administered the Program.
4. The Colombo Plan for Cooperative Economic Development in Southeast Asia, inaugurated by the United Kingdom in 1950, included Ceylon, India, Pakistan, and the British territories of Malaya and Borneo. The program envisaged an investment of approximately $5.2 billion in the public sectors of the participating nations and territories, July 1, 1951–June 30, 1957.
5. On December 19, President Eisenhower wrote a letter to Secretary Dulles which reads in part as follows:

   “Attached hereto is a letter I have just received from Paul Hoffman. His ideas are based upon his experience as a member of our United Nations Delegation. I think you will find it interesting reading.

   “After the presentation he makes in the first two pages, I was rather astonished at the meagerness of the plan suggested in his three points on page three. Possibly he considers point number one a very important one at this moment.” (Department of State, Central Files, 398.051/12–1956)

6. Printed from a copy which bears this typed signature.