SEAC Files1
Minutes of the First Meeting of the Southeast Asia Aid Policy Committee, Department of State, July 13, 1950
SEAC M–1
Present:
Members
Mr. Dean Rusk, Department of State
Maj. Gen. J. H. Burns, Department of Defense
Mr. Harlan Cleveland, Economic Cooperation Administration
Others
Mr. Kenneth Young, Department of Defense
Mr. Shannon McCune, Economic Cooperation Administration
Mr. Samuel T. Parelman, Department of State (Executive Secretary)
Mr. Rusk opened the meeting with a discussion of the purposes for which the Southeast Asia Aid Committee (hereinafter referred to as “the Committee”) had been organized. It was stated that the agencies had agreed that the Committee was to be responsible for the coordination of general policy for political-military-economic aid from the United States to Southeast Asia. It would be primarily a policy consultation group which would have no direct operational responsibility but would see that major policy directives with respect to Southeast Asian aid programs were being carried out. This would include policies of the President as well as policy decisions and agreements made at the highest levels in the agencies. One of its primary responsibilities would be to find out what major obstacles are preventing the successful accomplishment of the program objectives and to determine what steps should be taken to deal with these problems. It was emphasized that the Committee would use existing machinery in the agencies to accomplish its objectives, and its work would not interfere with the regular functioning of the executive agencies. The members of the Committee concurred in this description of the Committee’s responsibilities.
Mr. Cleveland raised a question as to the relationship with the FMACC. It was agreed that, within the general policy coordination of this Committee, the FMACC will continue to be the interdepartmental agency primarily concerned with and responsible for the development and implementation of military assistance programs for Southeast Asia. The Committee would have the responsibility for [Page 118] seeing that the FMACC operation was proceeding successfully and that as a result of their operations there were no major political repercussions. From time to time it would be necessary for the Committee to seek appropriate directives where shifts in program emphasis were necessary. Mr. Rusk pointed out that because of his relationship both to the Committee and to the problem area involved it would be his continuing responsibility to see that the military programs for this area being carried out by the FMACC proceeded at the required pace.
There was limited discussion as to the need for the country to enter upon a full industrial production program in order to successfully carry out our military program objectives. Mr. Rusk explained that the Department had no doubts whatsoever as to the imperialistic aggressive intentions of the Soviets, and the threat to the security of the United States. It was his opinion that there should be no question whatsoever of our Government having to eke out equipment on a priority basis because of the lack of industrial production. Increased industrial production was imperative to permit our military to go on a “force in being” basis, and to eliminate the current problems of priorities between areas and countries.
Mr. Cleveland inquired as to the availability of Section 303 funds for economic programs. ECA was particularly concerned because the Griffin program did not provide dollars to cover local currency costs. It had been anticipated that these costs would be provided either through counterpart funds or directly by the recipient governments. Such costs might be two or three times the direct dollar costs to the United States. Since there would be negligible counterpart resources there were afforded three alternatives, as illustrated in the case of Indochina, for obtaining local currencies, namely, (1) the printing of money for this purpose, (2) recourse to the French Treasury, or (3) bringing in supplies for the express purpose of generating counterpart funds. Mr. Cleveland thought one possible solution for obtaining additional funds to finance local needs was to include a transferability provision in the ECA Act similar to that in the MDA Act which would permit the transfer of funds between titles. The other members of the Committee indicated that this was a problem which they would have to discuss further, and the possible use of Section 303 funds might be considered in this connection. It was pointed out that the provision of military assistance without the provision of basic economic aid might be meaningless in achieving our political objectives in the area.
In further reference to the Griffin program Mr. Rusk stated that he would strongly urge the ECA to place a materially greater proportion of their activities in a stepped up program in the first half of the current fiscal year so the greatest possible immediate benefits could be obtained. Except for provision for the retention of staff for the latter six months, virtually all of the supply and equipment items might be [Page 119] programmed in the first half. He indicated a possible source of funds for filling the later needs.
General Burns initiated discussion as to the aid programs which were within the province of the Committee. These programs at the present time are primarily the Mutual Defense Assistance Program, the economic aid program (Griffin Program) being administered by the ECA and the contemplated Point IV Program2 which would incorporate the Public. Law 402 projects.
Mr. Cleveland inquired as to the availability of data setting forth the precise objectives under each program. He felt this was essential in some cases to permit planning and programming under other programs. For example, in order for ECA to intelligently determine whether they can send medical teams into certain portions of Indochina, it is necessary to know what the military objectives are in such areas. It was agreed that this matter should be taken up at a subsequent meeting.
The current status of the MDAP program with respect to Southeast Asia was briefly reviewed by Mr. Rusk. It was agreed that there would be presented at each regular meeting of the Committee a status report on each aid program. The Committee designated Mr. Parelman as Executive Secretary to be responsible for maintaining a continuing review on behalf of the Committee of the progress of the programs, report on such progress to the Committee members prior to each meeting, maintain appropriate liaison and records in connection with the activities of the Committee and perform such other pertinent duties as may be essential to the effective discharge of the responsibilities of the Committee. The next meeting of the Committee was scheduled for Monday, July 24, 1950.3
Executive Secretary