Foreign Relations of the United States, 1969–1976, Volume IV, Foreign Assistance, International Development, Trade Policies, 1969–1972

128. Memorandum From President Nixon¹

Washington, March 5, 1970.

MEMORANDUM FOR

• The Secretary of State
• The Secretary of Treasury
• The Secretary of Defense
• The Secretary of Agriculture
• The Secretary of Commerce
• The Director, Bureau of the Budget
• The Chairman, Council of Economic Advisers
• The Administrator, Agency for International Development
• The President, Export-Import Bank
• The Special Representative for Trade Negotiations

SUBJECT

• Review of U.S. Foreign Assistance Program

I received today the Report of my Task Force on International Development chaired by Rudolph Peterson, and hereby transmit a copy of it to you.² The Report will be released publicly on Sunday.³

I regard the Peterson Report as an extremely creative and exciting document, and urge you to read it. The Report provides a sound foundation on which to base a new U.S. foreign assistance program, which I expect to be one of our major foreign policy initiatives in the years ahead. I am particularly intrigued by the Report’s proposals for clear separation of the different aspects of our assistance program, new institutions to implement these different aspects most effectively, and a coordinating mechanism to fuse all of our efforts which relate to international development.

I have directed the Under Secretaries Committee to staff the Peterson Report.⁴ The Committee should prepare a paper on the issues raised in the Report, and elsewhere, concerning the future of the U.S. foreign assistance program:

1. Our overall approach to foreign assistance in the 1970s

a. The objectives of our program

b. Its relationship to overall U.S. foreign policy

c. The mix between multilateral and bilateral channels for assistance

d. The basis for determining our levels of foreign assistance, including various proposals for specific targets

e. Staffing

2. Specific multilateral programs

a. U.S. contributions to the International Development Association, Inter-American Development Bank, and International Finance Corporation

b. Multilateral untying of bilateral assistance

c. Debt rescheduling policy

d. International insurance and guarantees of private investment

e. Family planning programs

3. The bilateral U.S. program

a. Separation of programs to pursue separate objectives

b. Proposed U.S. International Development Bank, including proposals for flexible lending terms and guarantee authority

c. Proposed U.S. International Development Institute, including its relationship to the (Fascell) Inter-American Social Development Institute

d. Proposed combination of military and supporting assistance and related programs

e. Proposed U.S. International Development Council

f. Increased administrative flexibility for all programs

g. Unilateral untying

h. Hickenlooper Amendment

i. Balance of payments controls on investment in LDCs

j. Trade issues, including generalized preferences proposal

The paper should be submitted to me by March 25, prior to consideration of the subject by the National Security Council.⁵

I plan to announce my proposals for reform of our assistance program in my response to the Javits Amendment to the Foreign Assistance Act of 1967, which requires me to reappraise the present program and propose changes for the future. Taking into account the discussion which will follow my announcement, particularly including close consultations with the Congress, I plan to submit legislation to implement my new proposals in January 1971. I would hope that our new program could become effective for FY 1972.

The Peterson Task Force, after its intensive examination of the role of the United States in providing assistance to the developing countries, concluded that “The United States has a profound national interest in cooperating with developing countries in their efforts to improve conditions of life in their society.” I agree wholeheartedly, and intend for this report to provide the basis for a new and viable U.S. assistance program for the future, to enable us to effectively pursue that profound national interest.

Richard Nixon

1. Source: National Archives, RG 59, S/S Files: Lot 80 D 212, NSSM 45. Confidential. Copies were sent to the Director of Central Intelligence, the Chairman of the Joint Chiefs of Staff, and the Chairman of the Board of Governors of the Federal Reserve System.
2. U.S. Foreign Assistance in the 1970s: A New Approach—Report to the President From the Task Force on International Development. See also Department of State Bulletin, April 6, 1970, pp. 447-467, for text of the report, dated March 4, 1970.
3. March 8. On March 3 Under Secretary of State Richardson had sent a memorandum to Kissinger requesting a short delay in the public release of the Peterson Report so that AID Administrator Hannah would have time to review it and inform his staff and overseas missions of its contents. (National Archives, Nixon Presidential Materials, NSC Files, Agency Files, Box 193, AID Task Forces on AID) Telegram 33825 to all posts, March 6, summarized the report’s main conclusions. (National Archives, RG 59, Central Files 1970-73, AID (US) 1) A Presidential statement announcing release of the report to the public was issued in Key Biscayne on Sunday, March 8. (Public Papers of the Presidents of the United States: Richard Nixon, 1970, pp. 253-254)
4. See Documents 129 and 130.
5. See Document 131. The NSC meeting, originally scheduled for April 1, was postponed several times and was never held.