Foreign Relations of the United States, 1961–1963, Volume IX, Foreign Economic Policy

114. Memorandum for the Files⁰

Washington, August 26, 1961.

I had a talk today with Secretary Rusk. I covered the following points:

1. I said that I had become increasingly concerned over the tend-ency to extend our foreign aid commitments without adequate attention to the criteria of the President’s new program, the availability of funds, and the undertaking the Administration witnesses had made in the course of the Congressional presentations.¹ I referred to the circular telegram, No. 1066, which had expressly pointed out that it should not be assumed that U.S. aid would be given to every country,² and I mentioned the newspaper report about an alleged statement by Assistant Secretary Williams of possible aid to Malagasy.³ I referred also to the attitude of some of our Ambassadors who seem to feel that we should give aid to the countries to which they are accredited, largely on the ground that we are giving it to other countries.

I said that my principal concern, however, had to do with the emergency aid provision of the Punta del Este Charter (Chapter 3).⁴ I pointed out that this was an open offer to all the Latin American countries to come in within 60 days for dollar aid; that it was very unlikely that such aid could be provided for out of development lending; that the uncommitted portion of our development grant fund was earmarked mostly for Africa; and that, consequently, the emergency aid for Latin America would have to come from the contingency fund which was already very seriously depleted. The Secretary indicated agreement with my concern. I said that I had spoken to Mr. Woodward⁵ about this matter yesterday, emphasizing the importance of advising our Latin American missions not to encourage requests for emergency aid and, on the contrary, to discourage it.

2. I suggested to the Secretary that it was most important for him to caution all Department officers about making aid commitments and requested that he instruct that no commitments be made without my approval. I also suggested that he advise the President of the seriousness of controlling our aid commitments. The Secretary indicated that he would take appropriate action along the above lines.

3. I then discussed with the Secretary the matter of the Djakarta Bypass (see accompanying memorandum of today’s date).⁶

HL

0. Source: Washington National Records Center, RG 286, AID Administrator Files: FRC 65 A 481, Labouisse. Confidential. Drafted by Labouisse.
1. Regarding the congressional hearings on foreign assistance, see Document 116.
2. CG-1066 to all posts, June 23. (Department of State, Central Files, 700.5-MSP/6-2361)
3. Not further identified. G. Mennen Williams was Assistant Secretary of State for African Affairs.
4. The Charter of Punta del Este established the Alliance for Progress. For text of this Charter, signed by all members of the Organization of American States, except Cuba, in Montevideo, Uruguay, on August 17, 1961, see Department of State Bulletin, September 11, 1961, pp. 463-469.
5. Robert F. Woodward, Assistant Secretary of State for Inter-American Affairs.
6. Not found.