251. Memorandum From the President’s Special Assistant (Rostow) to President Johnson1
SUBJECT
- PL-480 Agreement with the Republic of China
Agriculture (Secretary Freeman) and AID (Administrator Gaud) request your authorization to negotiate a two-year, local currency agreement with the Republic of China (GRC) under PL-480 (Title I).2 We would sell the GRC cotton, tobacco and tallow (all in surplus supply) for $37.5 million. Half the proceeds will be for our use and will help meet increasing costs in Taiwan related to our Vietnam effort. The other half would go to the GRC as a grant to be used in expanding its Project Vanguard (technical assistance to increase food production) in 23 less developed countries, mostly in Africa.
State (Acting Secretary Katzenbach) and Budget (Director Schultze) both strongly endorse this proposal (see attached memos).3 I concur.
GRC help to other countries in boosting food output is highly useful in:
- —impeding Peking’s efforts to gain political and economic footholds in Africa;
- —boosting GRC prestige and strengthening its position in the UN and with other nations;
- —providing a good example of success for our own foreign aid programs by dramatizing Taiwan’s progress;
- —increasing Taiwan’s involvement and interest in the rest of the world and thereby moving it away from preoccupation with the Mainland.
The proposal has clear benefits for us;
- —helps the War on Hunger;
- —helps our balance of payments through the use of local currency in Taiwan.
State and Agriculture have already taken soundings with Fulbright, Ellender, Morgan and Poage, none of whom raised any objection.
If you approve this proposal, Secretary Freeman will notify the two agriculture committees of the proposed agreement. It must then lie [Page 545] before them for 30 days before execution. We will also have to waive the statutory requirement that all foreign currency grants in non-excess currency countries be subject to appropriations.
We hope the 30-day waiting period will expire in time to announce the agreement when GRC Vice President Yen is in Washington (May 9–10).
Upon your approval, other key Congressional members will be consulted (leadership and Appropriations chairmen).
- Source: Johnson Library, National Security File, Country File, China, Vol. IX. Secret.↩
- The memorandum from Freeman and Gaud to Johnson, undated, is attached but not printed.↩
- Katzenbach’s April 7 memorandum to Johnson and Schultze’s April 8 memorandum are attached but not printed.↩
- This option is checked on the source text.↩