Office of the Historian

384. Telegram From the Department of State to the Embassy in Tunisia1

Washington, March 13, 1958—4:16 p.m.

711. Ref: Deptel 557.2 Tunisian Ambassador Slim called on Department to introduce Economic Counselor el Goulli.3 Used occasion to review U.S. economic assistance to Tunisia and made following points:

1)
He understood level FY 58 aid now settled at $9 million and details being worked out Tunis. Emphasized need for rapid decisions and said this sum would prove insufficient in view Tunisian needs and total suspension French assistance.
2)
GOT therefore hoped obtain DLF loans. He would have further discussions with DLF regarding specific project requests and that ensemble these projects would shortly be presented here.
3)
He understood agreement between GOT and U.S. now reached as to need for 50,000 tons Title II wheat for unemployment relief projects.4
4)
Said he has now been instructed request U.S. help for serious position GOT treasury with respect projects already committed and for which no French payments forthcoming. Recalled that U.S. aid based on policy supplementing French assistance and that Bourguiba recognized this in discussions with U.S. officials here. GOT now forced face fact French assistance would probably be reduced to zero. No French payments received since 56–57 except for moratoria on debts. Equipment budget now in red in amount 13 billion francs. GOT needed U.S. help with this problem in some form.

In reply to four points raised by Slim Department officer answered as follows:

1)
Agreed Ambassador’s understanding regarding $9 million regular program was correct and further explained an additional amount of up to $1 million in technical assistance also under discussion.
2)
Regarding Development Loan Fund we would, as Dillon informed Hourani,5 be glad consider specific request and most urgent submit projects quickly because requests already received by Fund far in excess amount appropriated.
3)
Re emergency wheat program, progress being made and instructions shortly being sent Tunis to begin discussions.
4)
Before responding Ambassador’s last point Department officer recapitulated history U.S. policy furnishing aid to Tunisia. U.S. had hoped be able supplement French aid. U.S. aware Tunisia’s needs and anxious help but had followed supplementary policy because Tunisian economy so closely and naturally tied with French and because our own availabilities so limited we must look to others to share burdens. Continue believe it important work for situation which will permit France resume assistance and Tunisia accept it.

Ambassador Slim appreciated U.S. understanding and good will toward GOT which product of comprehension Tunisia’s needs as well as common political views. Said he understood our limitations and our desire tap all sources aid including France. GOT would like receive French assistance but it no longer reasonable count on it. Felt that even if climate better France will continue have financial troubles and recalled recent U.S. financial support to GOF and while this might redound to benefit of Tunisia it not acceptable GOT receive aid through third party arrangements. GOT could not be pressured into change policy because of treasury difficulties.

In order prevent embarrassment either party Ambassador indicated fourth request would not be presented formally until we had explored situation. He added entire problem agonizing for GOT and that credit worthiness of new Federal Bank of Issue gravely prejudiced if GOT unable honor financial engagements. Department officer agreed study matter but emphasized we must take into account limited availability U.S. funds and heavy demands on them.

Slim made brief reference police assistance and asked if survey team report6 completed. Department officer replied report now complete and matter under study.

Department would appreciate Embassy/USOM comments on Slim’s fourth point. Also your current judgment regarding appropriateness and timing of additional FY 1958 Special Assistance Funds now earmarked for Tunisia in context Deptel 557.

Herter
  1. Source: Department of State, Central Files, 772.5–MSP/3–1358. Confidential; Priority. Drafted by Dolgin; cleared by Porter, Buckle, Belcher, and Van Dyke; and approved and signed for Herter by Palmer. Repeated to Paris.↩
  2. Document 375.↩
  3. A memorandum of this March 5 conversation is in Department of State, Central Files, 772.5–MSP/3–558.↩
  4. The United States announced on April 10 that it was granting up to 20,000 tons of U.S. wheat to Tunisia for Tunisian relief projects. For text of the announcement, see Department of State Bulletin, April 28, 1958, p. 691.↩
  5. A memorandum of this January 24 conversation is in Department of State, Central Files, 772.5–MSP/1–2458.↩
  6. Not found.↩