FE files, lot 55 D 480
Memorandum by the Economic Coordinator in the Bureau of Far Eastern Affairs (Baldwin) to the Deputy Assistant Secretary of State for Far Eastern Affairs (Sebald)1
Subject:
- Asian Economic Aid Program Developments
Perusal of the attached material will give you a fairly good idea of the background of the Asian economic aid program developments. My memorandum of October 20 to the Under Secretary2 was designed for this purpose. The report of the Asian Economic Working Group was the first prepared material on the subject. The paper of October 25, entitled “Future United States Economic Assistance for Asia, Proposed State Department Position”3 reports the outcome of several interdepartmental meetings which were called to develop a Departmental position at the outset of the deliberations of the NSC ad hoc committee to be chaired by Mr. Hoover. (See attached NSC memorandum of October 25.)4 The first meeting of that committee has been postponed twice. The committee is expected to produce at least an interim report for a meeting of the NSC Planning Board scheduled for November 15 and for consideration by the NSC on the 18th or 20th.
I am not happy about the current status of this matter.
When, several months ago, I first organized a group to give careful consideration to means by which the U.S. might, by economic means, more effectively develop resistance to Communism in free Asia, we started our thinking on the basis of the following assumptions:
- (a)
- The U.S. and the rest of the free world could not afford to continue to suffer further reverses by the Communists in Asia.
- (b)
- In the near future the Communists could be expected to place great emphasis upon efforts to extend their influence and control by means short of open warfare; among these means would be exploitation of all elements of economic weakness and resultant political weakness.
- (c)
- Something more than we have already done in Asia will be necessary to prevent further Communist gains.
The results of the study which was based upon these premises are indicated in the somewhat lengthy report of my working group. All of us who participated in the preparation of this report were of the opinion that whatever the U.S. might do in the economic field [Page 960] should be big, well-conceived, effectively announced, and efficiently executed. While avoiding any suggestion that what we had in mind was a Marshall Plan for Asia, we did feel that an economic plan which would have a psychological effect somewhat similar to that of the Marshall Plan in Europe was needed—something which would really arouse the interest and enthusiasm of free Asians and constitute a set-back to the Communists.
As our idea has moved through the Department it has, I feel, been very considerably scaled down. This has, I think, been partly due to a tendency in some quarters to think of the program first in terms of what would be “acceptable” to the Congress and secondly in terms of what would best serve U.S. interests. I have personally felt and continue to feel that the latter point is the one which should guide the Department’s activities in the matter; that the question of selling any plan which might be developed to Congress should be left to the President and the Secretary. I cling to the belief that there are very few things which the American people would not be willing to undertake today if they and their representatives in Congress were convinced that the result would be effectively anti-Communist.
The most important immediate difficulty in the matter, however, is the fact that consideration has bogged down in the upper levels of the Department. The opening meeting of the official committee has been postponed twice and no date for the meeting is now set. As far as I am aware, Mr. Hoover has not been able to obtain the Secretary’s clearance of the paper dated October 25 (copy attached) which is supposed to contain the Department’s position—at least at the commencement of the ad hoc committee sessions. Presumably all of this is a result of pressures on the 5th floor but valuable time is passing.