Reactions to the Proposal have been favorable both in the Executive Branch
and in Congress (see Tab A–I. Summary). Specifically, the Proposal met with the
endorsement (at times qualified as set forth in Tab A–II. Specific Reactions) of the
Secretary of the Treasury, the Bureau of the Budget, Mr. Hauge of the White House, and the Under
Secretaries of Labor3 and HEW.4 Among the
Congressional leaders, Senators Alexander
Smith, Wiley,
Mansfield and Humphrey warmly supported the Proposal. Senator Dirksen was ready “to go ahead” with
it.5 On the House side, Congressmen
Judd and Carnahan were most explicit in stating
their support. Congressmen Vorys,
Selden and Wigglesworth also accepted the Proposal, the latter stating his
support in strong terms. The only dissent was voiced by Congressman Passman,
who restated his opposition not only to the
[Page 432]
multilateral, but also the bilateral programs of
technical assistance.6 Ambassador Lodge personally is enthusiastic and the
entire U.S. Delegation to the Twelfth General Assembly conveyed their
expression of strong support to the Department in Delga 328 (Tab B).7
The original position paper, which was transmitted to you by my memorandum of
September 26,8 was revised in response to a request by Secretary
Anderson to make it clear that
the proposed Special Projects Fund within the United Nations Technical
Assistance Program should not be used for blueprinting or engineering
projects, which, for their implementation, would call for immediate large
capital investments and thus potentially increase pressures for the early
establishment of an International Development Fund (see Tab C).9
In light of these reactions, I hope that you will see your way to give final
approval to the Proposal. Since the SUNFED discussion in the General Assembly will begin within the
next week or ten days, early action is essential, in order to give the
Delegation in New York and the Department adequate time to engage in the
necessary consultations with other friendly governments.
It is recommended that you give final approval to the Counter-Proposal to
SUNFED.10
Tab A
UNITED STATES COUNTER-PROPOSAL TOSUNFED
Record of Consultations with Leaders in the Executive
Branch and in Congress
I. Summary
The consultations requested by the Secretary on October 1 were carried
on, orally and by letter, by Messrs. Herter, Dillon, Wilcox, Hanes and Claxton.
Both within the Executive Branch and in Congress the reception was
favorable. There was almost general agreement that the Technical
Assistance Program of the United Nations was useful and should be
increased and strengthened.
It was held that in contrast with SUNFED, the U.S. counter-proposal was economically sound in
centering on a limited number of projects designed to meet basic needs
of the under-developed countries (such as the promotion of broadly-based
technical training facilities; surveys of natural resources, including
water, power, and minerals, etc.). It was recognized that progress in
these fields, without eliminating the need for public financing, both
national and international, would facilitate the international flow of
private capital.
There was strong feeling that, apart from the economic merits of the
proposal, it was responsive to political necessity and helpful in
counteracting Soviet political and economic penetration of the
under-developed countries. These political considerations outweighed any
reluctance to provide additional U.S. funds to a multilateral program of
assistance. The hope was expressed that the need for additional U.S.
funds (from the present $15½ million to a maximum of $33⅓ million) would
develop slowly, and that the funds might be found in Fiscal 1959 and the
following years by a shift in existing U.S. aid programs, thus without
putting an additional burden on the U.S. taxpayer.
In the course of the consultations, the proposed position paper,11 transmitted to the Secretary by Mr.
Dillon on September 26, was revised and
clarified. Specifically, and in response to a request by Secretary
Anderson, it was made clear
that the Special Projects Fund within the United Nations Technical
Assistance Program should not be used for blueprinting or engineering
projects which, for their implementation, would call for immediate large
[Page 434]
capital investments and
thus potentially increase pressures for the early establishment of an
International Development Fund.
Misgivings were expressed, in a few instances, about the lack of adequate
U.N. machinery to develop and administer the special projects
contemplated in the U.S. proposal. Agreement was reached in the
Department and other parts of the Government that existing technical
assistance machinery in the U.N. would have to be improved, both in
terms of personnel and structure. Since the U.S. proposal provides for
the setting up of a General Assembly Committee this year to study these
and related problems before the General Assembly will be called upon to
give final approval at its 13th Session in 1958, there will be adequate
time to resolve this problem in consultation with other governments and
expert consultants.
II. Specific Reactions
1. Executive Branch
- (a)
- Ambassador Lodge, by
letter of October 912 to the Secretary expressed
enthusiastic support for the proposal. He expects a positive
reaction on the part of the General Assembly. On October 31, the
entire U.S. Delegation to the General Assembly warmly endorsed the
proposal and urged a target figure of $100 million to achieve the
desired impact (See Tab C).13
- (b)
-
Secretary Anderson met
with Mr. Dillon on several separate
occasions to review the proposal, which he found a perfectly
acceptable tactic to use to head off SUNFED. He urged the need for carefully defining
the kind of projects which would be eligible for support, to
avoid projects which would increase pressure for SUNFED, rather than decrease it,
at least for the time being. In response to this view, fully
shared by Mr. Dillon, a new paragraph was
inserted in the original position paper, to read as follows:
“The special projects fund would not do the job envisaged for
SUNFED. It would not
build bridges, dams, roads, power plants, or houses; the capital
required for that kind of job is completely out of line with the
resources countries are prepared to make available. Nor would
the fund be used for blueprinting or engineering projects to
prepare them for financing. The job it would do is the more
basic one of helping countries in a sustained and systematic way
to train their manpower and assess and use their resources more
productively. In less developed countries there is a shortage of
administrative, managerial and technical skills at every level.
There is little data on
[Page 435]
al resources, and little or no experimentation on new and
productive ways to use the resources that are known. The
enlarged technical assistance program would attack these
fundamental weaknesses.”
- (c)
- Mr. Gabriel Hauge was absent
from Washington until two days ago, and therefore was not able to
study the proposal in all its aspects. However, he told Mr.
Hanes that he had always
been strongly in favor of technical assistance in the United
Nations, and that in principle he was in favor of the type of
proposal put before him. It would not eliminate the pressure for
SUNFED, but should help “to
buy time.” He was particularly impressed by the need for some such
action for political reasons.
- (d)
- The proposal was discussed in detail with Mr. Robert M.
Macy, Chief, International Division, Bureau of the
Budget. Mr. Macy, who himself supports the
proposal, obtained the endorsement of Mr.
Merriam,14 Deputy Director of
the Budget. The Department was informed that there had not been time
to submit the proposal for final clearance to Mr. Brundage, but that his support was
“most likely.” The Bureau of the Budget hopes that the necessary
funds can be found in Fiscal 1959 and thereafter without increasing
total U.S. foreign aid funds.
- (e)
- Mr. John H. Ohly, Deputy
Director of Program and Planning, ICA, (acting on behalf of Mr. H. Smith, ICA Administrator who professes himself
not sufficiently conversant with the issue) believes that the U.S.
acted unwisely in opposing the establishment of SUNFED and doubts the wisdom of the
course of action now proposed. He is skeptical that it will long
postpone General Assembly’s decision favorable to the establishment
of SUNFED. In other words he
feels that the new U.S. proposal does not go far enough, but is
prepared to accept it.
- (f)
- Under-Secretary for Labor O’Connell and
Under-Secretary Perkins (HEW)
expressed strong support for the proposal, provided special emphasis
was given to broad technical training and general surveys of
resources, rather than engineering surveys of special
projects.
Reservations were expressed by Assistant Secretary Paarlberg and
Administrative Assistant Secretary Ralph Roberts,
of Agriculture, on the grounds that existing technical assistance
machinery in the United Nations was not fully adequate, and that the
wrong type of projects might increase, rather than decrease, the
pressure for the establishment of an International Development Fund.
They appreciated, however, the political problem with which we are
confronted.
[Page 436]
2. Congress.
Consultations with Congressional leaders proved difficult, due to the
absence of most members of Congress from Washington. Every effort was
made to contact leading members of Congress serving on the Foreign
Relations and Affairs Committees and the two Appropriations Committees,
both through personal approaches and by letter.
- (a)
-
Senators Alexander Smith,
Wiley,
Mansfield and Humphrey fully support the
proposed move. Senator Mansfield stated that he “would do anything
possible to help.” Senators Smith and
Humphrey responded in
much the same way. Senator Dirksen felt that if SUNFED were created, the U.S. sooner or later
“would have to be in it.” He was therefore willing to go ahead
with the substitute proposal.
No replies have been received to date to letter written by Mr.
Herter to Senators
Knowland and Hayden;15 nor to a letter written by
Mr. Wilcox to Senator
Hickenlooper16 who is out of the
country.
- (b)
- Congressmen Judd and
Carnahan, both serving
on the U.S. Delegation to the General Assembly, warmly supported the
proposal. This is particularly significant in the case of
Congressman Judd, who in the
past had considerable reservations about United Nations technical
assistance activities. He now not only feels that the Technical
Assistance Program should be enlarged and strengthened, but believes
that it is highly desirable to maintain our contribution at the
level of 40 to 45 percent. Both he and Ambassador Lodge agreed to talk the U.S.
proposal over with Congressman Taber.
Congressman Vorys, who was
reluctant to extend additional funds to U.N. technical assistance
activities, accepted the proposal as a political necessity. This holds
true also for Congressman Selden.
The only dissent was voiced by Congressman Passman, who, in reply to a
letter from Mr. Dillon, stated his opposition, not
only to the present Technical Assistance Program of the United Nations
and any increase in that program, but also to our Bilateral Technical
Assistance Program, including the Development Loan Fund voted by
Congress at its last session.
Congressman Wigglesworth, in reply to a letter from Mr. Herter, stated that he strongly favors,
in principle, the U.S. proposal as an alternative to SUNFED and sees no objection to the
suggested course of action.
[Page 437]
3. International Bank.
Mr. Black, of the International
Bank, who discussed the issue briefly with Mr.
Dillon, believes that the United States should
accept the SUNFED proposal and
participate in it. He showed no interest in the U.S. counter-proposal.
He was especially critical of the personnel associated with the U.N.
Technical Assistance machinery. By contrast, Mr.
Davidson Sommers (United States), Vice
President and General Counsel, as well as Mr. Richard H.
Demuth (United States), Director, Technical Assistance
and Liaison Staff, expressed considerable interest. They felt that the
U.S. plan might be of real assistance to the activities of the
International Bank. They, too, however, were concerned over the weakness
of the present technical assistance machinery in the U.N., and hoped
that before the General Assembly session in 1958, an expert group could
be convened which would study the best ways of using the technical
resources of the United Nations Secretariat and of the International
Bank to bring to bear upon the formulation and administration of
eligible special projects the best possible expert advice.
