I am enclosing also a memorandum on finance, the result of discussions
between the Department of State and the Treasury Department. I gave you the
gist of this on Tuesday.18 If
it meets with your general approval, I shall have appropriate legislation,
together with a message to Congress, drafted for your consideration.19
[Enclosure 1]
Memorandum on the Scope and Operations of UNRRA
A. Principles.
[Here follows seven-paragraph section substantially the same as section
“A. Principles” of the British memorandum of
October 5, printed on page 1015.]
B. Procedure.
UNRRA should be closely associated with the wartime machinery charged
with the allocation of supplies and shipping. This centers in the
Combined Boards and the various Supply Agencies in Washington and
London. UNRRA must be in constant touch with these Boards and Agencies,
and with the field staffs of the latter, to present the case for the
supplies needed in the territories for which it has responsibility on
comparable terms to the cases presented for other territories.
Before the occupied territories are actually liberated, it will greatly
assist both UNRRA and the national Supply Agencies to have reasonably
complete estimates of the requirements of those territories, both
individually and in a group. During this preinvasion period particular
supplies should not be earmarked for each territory to be liberated and
the Governments of these territories should not be able to take
unregulated action themselves to secure supplies. In formulating plans
it will be necessary, therefore, for UNRRA to act for all liberated
territories and to collaborate both with the U.S. and U.K. military and
supply authorities in the presentation of estimates of requirements and
in securing by the national agencies the necessary procurement
action.
Once a territory has been liberated, more accurate requirements programs
will have to take the place of the advance estimates. These may be
developed to some extent during military control. Once UNRRA’s
representatives are established in the territory, they will participate,
in collaboration with the local authorities and with the military or
civilian officers of the liberating powers, in the preparation of these
programs. Such collaboration will require the formation of some kind of
joint office or programming authority, the form of which will no doubt
vary from country to country according to local circumstances such as
the ability of the local government to formulate its own requirements
program, to distribute or control the distribution of supplies and to
pay for what it gets.
If there is no local government, or if the local government is not able
to prepare a program the responsibility for such preparation will fall
for the most part upon UNRRA’s representatives, with the
[Page 1026]
collaboration of national Supply
Agencies through their representatives attached to diplomatic missions
in the area. Where the local government has administrative services
sufficiently well established to do its own programming, UNRRA and the
Supply Agencies will require only a few representatives in the field. In
either event such a unit, consisting of representatives of UNRRA, the
Supply Agencies, and the local government, will be required if a fair
allocation of supplies is to be obtained, and if the allocating
authorities are to be satisfied that the supplies and shipping requested
are genuinely required and properly used.
Where a local government cannot pay for its imports, it will have to make
application to UNRRA for its needs, and its requirements program should
go to UNRRA for action. The overall supply authorities should be
simultaneously informed of the program although they would take no
action until authority was received from UNRRA. Where the local
government is able to pay for its imports it would still be necessary
for UNRRA to receive complete information about the import programs and
to have an opportunity to veto excessive demands to assure a fair
distribution of supplies between paying and non-paying countries.
It will be desirable for recognized local authorities to undertake as
much as possible the distribution of goods within liberated territories.
However, in some countries severe dislocation, epidemics or other
special conditions may make it essential for some outside authority to
provide technically trained personnel to assist or to handle completely
distribution of relief goods. The provision of such assistance after the
emergency military period would be for discussion between UNRRA and the
local government and/or the military authorities. UNRRA must be able to
supervise distribution of supplies which it has itself financed to make
certain that they are being properly used.
So far as they are able, and in so far as conditions permit, local
governments should likewise be encouraged to undertake as much of the
work of procurement and handling of goods as is possible without
disrupting existing machinery.
In cases in which UNRRA is providing the finance, it might be arranged,
where necessary, that the appropriate Agency of the supplying government
procure and handle the goods and be reimbursed through UNRRA from the
credit or fund opened in that country for UNRRA.
Similar considerations would apply as regards shipping, since the various
supplying Governments have established procedures for the handling and
loading of ships and for synchronizing the movement of goods to the
ports with the arrival of vessels for loading.
[Page 1027]
C. Finance.
The Treasury Department has submitted certain proposals with regard to
arrangements for the financing of UNRRA. A preliminary memorandum on
these proposals is attached, and a fuller report is being prepared.
[Enclosure 2]
Memorandum on a Tentative Plan for Financing
UNRRA
[Washington,] October 11, 1943.
The purpose of this plan is two-fold: First, to provide a yardstick which
can be used in discussions with member Governments to indicate the
extent of the relief contribution desired from them; second, to provide
credits in a large number of countries which can be used to pay for
goods or services purchased on behalf of UNRRA.
Wherever possible, liberated countries will pay in gold or foreign
exchange for supplies imported from abroad. Many liberated countries may
not have gold or foreign exchange with which to do this. They may be
asked to pay to some extent in their own currency for such supplies, but
this will obviously not provide the foreign exchange necessary to
purchase them abroad. It becomes necessary to obtain this foreign
exchange, and the following plan is provided to do this.
- 1.
- A “donor” country is considered to be a member of UNRRA which has
not been occupied by the enemy. Liberated countries will not be
asked to be donors, but of course they may donate if they so
desire.
- 2.
- The goal will be to have each donor country contribute as a
once-for-all relief contribution 1% of its national income for the
fiscal year 1942–3 (or for the most recent year for which figures
are available). At a later date, it may be necessary to reconsider
the necessity for further requests, but this proposal is based on
one contribution.
- 3.
- Each donor country will be asked to make the contribution in its
own currency with the expectation that the funds will be spent in
that country, except that where a country is able to do so it will
be asked to make available 10% of its contribution in gold or
foreign exchange for purchases outside of its territory.
- 4.
- With these contributions, UNRRA will pay for all supplies and
services it obtains in local currency up to the amount of the
contribution of the country involved, and when that contribution is
exhausted will make use of the gold or foreign exchange available to
UNRRA.
- 5.
- A country which prefers because of short supplies within its own
territory to pay more than 10% of its contribution in gold or
foreign exchange will be free to do so.
- 6.
- In terms of the request to be made of Congress, this would mean
that Congress would be asked to authorize or appropriate
approximately $1,400 millions. It would be explained to Congress
that this contribution would be handled through agencies of the
United States Government as follows: In respect of commodities which
are rationed or are in short supply in the United States, purchases
out of the United States contribution would be made abroad wherever
possible. In respect of other supplies or services, purchases would
be made in the United States. Such a proposal would be, in effect,
that, up to the amount indicated, a contribution would be made in
kind of American supplies and services, but where such contributions
would unduly impinge upon local consumption, they would be purchased
abroad.
It is contemplated that the United States’ share of the administrative
expenses will be contained within the above contribution.
