893.50 Recovery/9–2848
Memorandum by Mr. Dallas W. Dort, Special Assistant to the Assistant Secretary of State for Economic Affairs ( Thorp ), to the Director of the Office of Financial and Development Policy ( Knapp )
I attended today a meeting with Labouisse,17 Butterworth and Harlan Cleveland (along with David Gordon, his assistant) in regard to Cleveland’s desire to get policy guidance in the preparation of a further aid program for presentation at the next Congress. Cleveland stated that the Economic Cooperation Administration in line with previous requests, needed guidance from the State Department before a program could be prepared. Mr. Butterworth stated that the Secretary had indicated his views to the effect that in the light of the unsettled conditions a further program should not cover more than a year’s period, that in general it should have the same objectives as the present program and that it should be based on the assumption that additional military assistance would not go beyond amounts necessary to utilize fully American equipment now in China or to be delivered under the present program. Cleveland stated that he thought the maximum economic aid which could effectively be distributed in China was in the neighborhood of $500,000,000. It was thought that alternative programs might be prepared, one in the neighborhood of the maximum figure mentioned by Cleveland and another for a lesser amount. Further, the probable effects of these programs could be assessed under various assumptions as to developments in China over the next eighteen months.
Mr. Cleveland asked whether the State Department could help in developing these programs. Mr. Butterworth stated he saw no reason why State Department personnel at the working level should not give all possible help. Any further problems requiring policy guidance which might arise in the course of preparing these programs could be discussed after they had arisen. The possibility of setting up an informal E. C. A.-State Department policy group to review such questions was left open.
Mr. Cleveland stated he would consult with E. C. A. and other U. S. representatives in China sending back such information or suggestions [Page 671] as might be helpful while Mr. Gordon would with the assistance of two or three persons in E. C. A. and the guidance and help of State Department officers develop tentative programs for consideration by the Bureau of the Budget in late November or December. Mr. Butterworth made it clear that Secretary Marshall wanted to be able to examine the proposed programs in the light of operations under the present one and conditions in China, near the end of the year. He also thought that should there be a new Secretary he would want to pass judgement on such proposals.
I assume that Mr. Gordon will consult with you or some of your staff in developing the alternative programs.
- Henry R. Labouisse, Coordinator for Foreign Aid and Assistance.↩