274. Memorandum From the President’s Special Assistant (Rostow) to President Johnson1
SUBJECT
- PL–480 for Ghana
Herewith Messrs. Freeman, Gaud and Zwick recommend a $7 million PL–480 sale to Ghana.2 The package is mainly cotton textiles and dry milk. State and Treasury are on board.
This sale would supplement the $12 million PL–480 deal for Ghana you approved in January. Their demand for textiles has been stronger than expected, and they need this cloth soon to keep the mills open. This agreement, however, will not add to our budgetary costs or total assistance to Ghana this year. As Zwick explains (Tab A), AID will simply hold back until next year the second tranche of the $15 million program loan you authorized in April.3 This balances out to an even trade of a PL–480 sale Ghana needs and can use readily in place of AID money, which we will have in figuring next year’s very lean loan proposal.
Whether PL–480 or a loan, the effect is to give General Ankrah crucial balance of payments help in rebuilding Ghana after the Nkrumah mess. The new government is doing a good job of self-help with reforms and devaluation; and our share in the Ghana aid group—ten other donors plus the IMF—is dropping. Last year we did 60%; this year less than half; and next year would have to be lower still.
There are no Conte-Long or Symington problems with Ghana, since Ankrah is keeping a tight rein on arms spending.
You may recall that Charlie Schultze had some misgivings about the relatively new use of textiles in PL–480 when you were deciding the first Ghana package in January. Charlie was concerned then about budgetary costs and inviting pressure from the textile industry. Your advisers agree now that those problems haven’t materialized. Our main textile customers (Indonesia and the Dominican Republic as well as Ghana) haven’t run up the cost of the total PL–480 program. In this sale to Ghana, for [Page 483] example, holding the AID money would make a simple budgetary swap. Moreover, the textile people have not been on us to inflate our shipments. The appeal comes straight from the Ghanaians, who badly need this temporary support to get back on their feet.
I vote you approve the sale.
- Source: Johnson Library, National Security File, Country File, Ghana, Vol. III, 3/66–10/68. Confidential.↩
- Copies of the October 4 memorandum from Freeman and Gaud to Johnson and the October 10 memorandum from Budget Director Charles J. Zwick are attached to another copy of Rostow’s memorandum. (Ibid., Saunders Files, Presidential Decisions, Africa, 4/1/66–1/19/69)↩
- In an April 10 memorandum for the President, Rostow seconded Zwick’s and Gaud’s recommendations for $15 million loan to Ghana. Johnson marked approval of this recommendation. (Ibid., Country File, Ghana, Vol. III, 3/66–10/68)↩
- This option is checked. Handwritten notations on the source text indicate that the Bureau of the Budget and Saunders’ office were informed on October 17.↩