Foreign Relations of the United States, 1947, The British Commonwealth; Europe, Volume III

800.51/4–1047

Memorandum by Mr. Sherman S. Sheppard of the Bureau of the Budget to the Director of the Bureau (Webb)¹

secret

[Washington,] April 7, 1947.

Subject: U. S. Program for Foreign Assistance

Current and Proposed Programs

1. At the present time there are pending before the Congress programs totalling $1.85 billion for foreign relief, rehabilitation and reconstruction: post-UNRRA relief ($350,000,000), proposed aid to Greece and Turkey ($400,000,000), a 1947 supplemental and 1948 appropriation for government and relief in occupied areas ($1,025,–000,000), and the International Refugee Organization ($75,000,000).

2. In addition, we have received informally a copy of a proposed three-year grant-in-aid program for Korea of $540 million. We have been informed that State is preparing a justification for a $40 million contribution to the International Children’s Fund. The Bureau has received for clearance a Navy program for additional aid to China in the form of ships and maritime services. There have been suggestions that additional aid to Austria in 1948, financial aid in connection with Palestine, and perhaps an additional loan to France are also contemplated.

Budgetary and Administrative Implications

3. There are increasing indications of Congressional desires to “see the whole picture at once”. Certainly from the standpoint of the President’s overall budgetary and international programs each succeeding proposal cannot be considered adequately unless total proposed commitments can be estimated. The implications for the Federal budget are obvious; in addition, these proposals will require either modifications in the administrative structure of existing departments, or the creation of new organizational units both here and abroad.

Needed Information

4. We need to obtain some idea of the overall pattern of U. S. foreign assistance, as well as the State Department’s best prediction of whether it does or does not anticipate that it will propose (a) U. S. participation in the Children’s Fund, (b) the use for China of funds earmarked for Export-Import Bank loans to it, (c) further aid for Austria in 1948, (d) financial requirements in connection with Palestine, and (e) further loans to France or other countries. It would likewise be helpful to know whether the Department contemplates any further extensions of existing aid programs beyond those thus far announced.

Priorities

5. The number and size of the foreign assistance proposals now before the Congress, plus those in contemplation, make it desirable to ascertain the Department’s judgment as to the legislative priority to be assigned to each item in the overall pattern; otherwise, legislative and budgetary “credit” may be exhausted by the President before highest priority needs are met.

6. There is attached a tabulation of the Government’s present and thus far proposed program of foreign assistance arranged according to the apparent foreign policy objectives to be attained.

[Attachment]

Present and Proposed U.S. Programs for Foreign Assistance

	Objective	Program	Authorized by Existing Legislation or Pending Before Congress	Probable Future Programs
1.	To provide relief to sustain life and prevent economic and physical retrogression (appears to apply world-wide)	Post-UNRRA	X	?
		Occupied Areas	X	X
		Other	—	?
2.	To rehabilitate national economies to the level of self-sufficiency for minimum needs. (Appears to be limited to countries U.S. has direct and major political interest)	Occupied Areas	X	X
		Greek Civilian Aid	X	?
		Korean Grant-in-Aid	—	?
		Additional Austrian Aid, 1948	—	?
		Other	—	?
3.	To assist in rehabilitation and further development of national economies above the level of self-sufficiency for minimum needs (appears to apply world-wide)	British Loan	X	?
		Export-Import Bank Loans	X	?
		International Bank Participation	X	—
		Surplus Property Transfers	X	—
		Maritime Ship Transfers	X	—
		Philippine Aid	X	?
		Other	—	?
4.	To achieve stable economic conditions (applies world-wide)	International Monetary Fund Participation	X	—
		Other	—	?
5.	To provide military assistance to enable governments to resist aggression	Greek-Turkish military aid	X	?
		Military surplus property transfers	X	—
		Other	—	?
6.	To provide aid to special categories of people without regard to nationality	Children’s Fund Participation	—	?
		International Refugee Organization Participation	X	?
		Financial requirements in connection with Palestine	—	?
		Other	—	?

1. Transmitted under cover of a letter from Mr. Webb to Under Secretary of State Acheson, April 10, not printed.