Office of the Historian

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

Washington, May 6, 1968.

SUBJECT

  • National Interest Determination for Export-Import Bank Financing for Yugoslavia

At Tab A2 is Nick Katzenbach’s memo recommending that you determine it is in the national interest for the Export-Import Bank to extend credits, guarantees, and insurance for U.S. exports to Yugoslavia. If you make this finding, you should also sign the attached draft letters notifying the Congress./2/

Harold Linder concurs in this recommendation.

You have already made this determination for Yugoslavia for Export-Import Bank guarantees. This determination has been required since 1964 under the Foreign Aid and Related Agencies Appropriation Act. Since that time, the Export-Import Bank has extended guarantees on $66 million of U.S. exports to Yugoslavia.

A new determination is now needed because of the Tower-Hickenlooper amendment to the Export-Import Act of 1968. This amendment prohibits Export-Import Bank participation in transactions involving communist countries unless the President determines it is in the national interest.

Under the Tower-Hickenlooper amendment, your finding in favor of Yugoslavia would permit the Export-Import Bank to extend credits as well as guarantees. Under the Appropriations Act only guarantees are permitted. The legal question of which act takes precedence is open. If you make the national determination in favor of Yugoslavia, the Export-Import Bank would consult with the House Appropriations Committee before making a loan (rather than guaranteeing a loan) under the broader provisions of the Tower-Hickenlooper amendment.

Katzenbach has concluded that the Fino amendment—which prohibits Export-Import Bank financing on transactions with any country whose government supplies goods or services to North Vietnam—is not applicable to Yugoslavia. This conclusion is supported by the legislative history. Fino said on the House floor that his amendment would not affect Yugoslavia.

[Page 504]

Katzenbach’s memo reviews the arguments for continuing Export-Import Bank financing for Yugoslavia. In brief, it is good foreign policy and good business.

Bill Macomber said that he does not expect any significant fuss on the Hill. Neither does Linder.

I concur in the recommendation.

Walt

If you approve, you should sign the attached letter of notification to the Congress3

Disapprove

Call me

  1. Source: Johnson Library, National Security File, Country File, Yugoslavia, Cables. No classification marking.↩
  2. Not printed.↩
  3. This option is checked. A copy of the letter is in the Johnson Library, National Security File, Yugoslavia, Cables.↩