851G.00R/4–1750
Memorandum by the Secretary of State to the President
Memorandum for the President
Subject: Allocation of Section 303 Funds to Provide Economic Assistance for Indochina.
The Department of State and the Economic Cooperation Administration have agreed that a program of economic assistance for Indochina (the associated states of Vietnam, Laos and Cambodia) is needed to improve the welfare of the people and maintain economic stability and thus increase the ability of those countries to resist Communist encroachment. Annex A attached gives supporting background taken from the reports of the Mission sent by the Department of State to survey the needs for economic assistance in Southeast Asia (The Griffin Mission).1 The staffs of the Department and of the Economic Cooperation Administration estimate that $5,000,000 are initially required for this purpose. The Department of State believes that for urgent political considerations this assistance should be given as quickly as possible and proposes that these funds be made available under authority of Section 303 of the Mutual Defense Assistance Act of 1949, in addition to the $15,000,000 already reserved for military assistance to Indochina under this Act.
The Griffin Mission recommends a program consisting of rural rehabilitation, limited amounts of commodities and industrial equipment, and technical assistance aggregating $23.5 million through June 30, 1951. Although the main outlines of this program as recommended by the Griffin Mission have been jointly agreed upon between the Department of State and the Economic Cooperation Administration and are in line with earlier estimates of the Department, the exact content of the program has not yet been formulated by the staffs of the interested agencies.
It is contemplated that the greater part of Indochinese economic aid requirements would be financed out of residual China Aid funds; it is anticipated that a portion of these funds will be made available for the “general area of China” for the fiscal year 1951 under legislation [Page 786] now pending. The China Aid funds are not now available for this purpose; therefore, it is requested that the President at this time approve a general program of economic assistance to Indochina and that $5,000,000 be allocated for this purpose under Section 303 of the Mutual Defense Assistance Act.
The program of economic aid to Indochina to be instituted with the funds hereby requested is to be administered by the Administrator for Economic Cooperation in consultation with the Secretary of State.
The Department of Defense has stated its position with regard to this proposal as follows: “The Department of Defense will not object to the action proposed in the attached memorandum to the President from the Secretary of State but doubts that this fund should be so expended. It was not so intended when the Department of Defense originated the idea of this fund and supported it.”
The Department of State and the Economic Cooperation Administration strongly recommend that the program as specified above be approved.