Foreign Relations of the United States, 1964–1968, Volume IX, International Development and Economic Defense Policy; Commodities

146. Memorandum From the President’s Special Assistant (Rostow) to President Johnson¹

Washington, November 1, 1968, 2:25 p.m.

SUBJECT

• Consideration of IDA in a Special Session of The Congress

Attached is Secretary Fowler’s memo recommending that, if you call the Senate into special session to consider the Non-Proliferation Treaty, you add IDA replenishment to the agenda and call the House in session as well.

Congressional inaction has brought IDA to a standstill.² If we moved, other donor countries who are waiting for us would quickly follow and IDA would be back in business. Fowler argues that we led the international negotiations for this package and are strongly obligated to follow it through. He points out that IDA has traditionally had bipartisan backing and that according to his soundings, it would be possible to get substantial Republican support for it in the House.

Barefoot Saunders sees serious problems with Fowler’s proposal.³ I am sending him a copy of Joe’s memo so he can give you his own views.

You know my views on the foreign policy importance of IDA. Joe is right in saying that we are the sole obstacle to its renewal. If there is a chance of getting it, I believe we should go after it—but you can judge better than I whether Barefoot is right.⁴

Walt

Attachment⁵

Washington, October 29, 1968.

Memorandum From Secretary of the Treasury Fowler to President Johnson

SUBJECT

• Critical Importance of U.S. Action on IDA

You have initiated two major international actions for moving toward an enduring world peace which are still unfinished legislative business but could be pushed over in a short resumed session in November or December:

• —the Treaty on the Non-Proliferation of Nuclear Weapons,⁶
• —an enlarged replenishment of the International Development Association.

If you call back the Senate to consider the Non-Proliferation Treaty, I think it equally important to move simultaneously to secure passage of IDA. I, therefore, recommend that you call back the House as well as the Senate, to secure the enactment into law of IDA.

You said in your September 30 address to the Governors of the World Bank and International Monetary Fund that they “are the custodians of the world’s economic welfare—and ultimately of its security.”⁷ You pointed out that “the new replenishment of IDA resources is a first priority development need.” It places a first call in the international community and on our own Congress.

The international community has responded to this call. The IDA Governors of 89 countries approved the resolution on the terms and conditions of a replenishment. Of all the developed countries, only the United States Governor has not voted—because Congress has not acted. Our failure to act places us in a position alongside Algeria, Congo, Costa Rica, Gabon, Guyana, Jordan, and a handful of others whose failure to act does not have the consequences of our failure because they are not contributing countries.

U.S. action on IDA is essential for the Agreement to go into effect. This is so because of the usual practice which is followed in this Agreement of stipulating ratification by a minimum in terms of both the number of countries and over-all contribution, before implementation can start. Because of the size of the U.S. contribution, the “trigger” amount cannot be reached without our participation. Eight of 17 other contributing countries which have voted the resolution but have not yet pledged resources will follow quickly after U.S. action. Without our action, $720 million pledged, or to be pledged by others, will be lost or delayed beyond repair.

Our failure to act thus far has caused a general belief throughout other nations that “IDA is dead.” In my opinion, the importance of our relations with the rest of the world (through the World Bank and IDA) warrants a special session of Congress. Although the IDA package is technically not a treaty, it has equal significance insofar as preserving the respect of other countries for the good will of the United States is concerned. Moreover, as with the Non-Proliferation Treaty, the United States was the moving force in achieving the negotiated IDA package. Win or lose in a special session, I believe that you should make every effort to cause the United States to live up to its moral commitment.

As I see it, the particular outcome of the election would not affect this recommendation.

From its inception IDA has received strong bipartisan support. In 1959, Republican Secretaries of State, Commerce and Treasury formally approved the project.⁸ The World Bank itself drew up the Articles of Agreement which were submitted by President Eisenhower to a Democratic Congress which, in turn, approved U.S. participation at the urging of a broad range of private American organizations, including the U.S. Chamber of Commerce, the American Farm Bureau Federation and the AFL-CIO.

President Eisenhower authorized the negotiation of IDA and requested Congress to give approval to U.S. participation. IDA has had continuing bipartisan support as the best way to achieve our development objectives. The current legislation has had bipartisan support in the House Banking and Currency Committee and the Senate Foreign Relations Committee.

If Humphrey and Muskie are elected our responsibility to go forward without delay seems clear in the light of your solid and continuing support of the proposed replenishment. If Nixon and Agnew are elected or the election is not decided in the electoral college, I believe, on the basis of lengthy conversations I had before Congress adjourned with Congressmen Ford, Widnall, Laird and Arends, that we could get some substantial Republican support in the House. The Senate should not present any problem.

Henry H. Fowler

1. Source: Johnson Library, National Security File, Subject File, International Bank for Reconstruction and Development, Box 20. Confidential. Another copy of the memorandum shows that Fried drafted it. (Ibid., Memos to the President, Rostow, Vol. 103)
2. An earlier status report on problems with the IDA replenishment in the Senate is in Joseph W. Barr’s July 3 memorandum to the President. (Washington National Records Center, RG 286, AID Administrator Files: FRC 73 A 518, BUD Budget (Oct.-Dec.) FY 1969) Joseph M. Bowman’s July 3 memorandum to the President, which provided a report on the same issue in the House, is ibid.
3. Saunders’ views have not been further identified.
4. The last phrase in this sentence, beginning with the word “but,” has been added by hand.
5. Confidential.
6. Documentation on the Nuclear Non-Proliferation Treaty is printed in Foreign Relations, 1964–1968, volume XI.
7. Text in Public Papers of the Presidents of the United States: Lyndon B. Johnson, 1968–69, Book II, pp. 987–989.
8. For documentation on the U.S. role in the creation of the International Development Association, see Foreign Relations, 1958–1960, volume IV.