398.14/12–1350

Memorandum by the Director of the Office of Financial and Development Policy (Stinebower) to the Assistant Secretary of State for Economic Affairs (Thorp)

secret

Subject: IBRD Bid for Monopolistic Lending Position

This file of papers1 is of course completely dated by the events that have occurred in the last six weeks. Nevertheless, I think that the last sentence on the top memorandum is still an urgent necessity—namely, that the Secretary should himself have a firm conversation with Mr. Black indicating that we expect the IBRD to continue to do a significant volume of business, to speed up its procedures, and at the same time, forget any nonsense about carving out a role as an exclusive chosen instrument.

Of course the situation has become somewhat more complicated in the intervening weeks by virtue of the fact that the Secretary and Mr. Snyder did agree at a meeting with the President2 to try to work something out along the lines of Mr. Black’s first memorandum on Brazil. Mr. Gaston’s strong reaction has changed the picture on that particular proposal,3 and I believe that you should now try to persuade the Secretary to begin de novo along the lines suggested above.

[Page 782]
  1. Attachments included a number of documents whose content is touched on in part in the editorial note, supra.
  2. No record of such a meeting has been found in Department of State files. Mr. Stinebower perhaps telescoped Secretary Acheson’s meeting of October 19 with the President (footnote 6, p. 778) with a talk between Messrs. Acheson, Snyder, Martin, and Miller recorded in the latter’s memorandum of November 3 to the Secretary, not printed. (398.14/11–350) Note the wording of the quotation in the following footnote.
  3. In a memorandum of January 24, 1951, to the Secretary, Mr. Miller said in part:

    “Some time ago you talked to the President about the problem of economic development in Brazil, and you and I later talked to Secretary Snyder and Bill Martin about the proposal of the International Bank to announce a $250,000,000 investment program in Brazil, provided that there be a limitation of the Export-Import Bank’s lending activities in Brazil. Nothing has come of this proposal because of (1) the failure within the government to resolve the jurisdictional problem between the two Banks, and (2) the feeling in Treasury that we should make no long-term commitments about development because of actual or pending shortages of materials in this country.” (832.10/1–2451)

    The proposals of the IBRD relative to Brazil are not mentioned in minutes of formal NAC meetings during 1950 or 1951. However, more generalized discussion regarding allocation of loans by the Export-Import Bank and the IBRD occurred at NAC meetings No. 172 and 173, April 17 and 20, 1951, respectively. At the latter meeting NAO Document No. 1125 was approved as a basis of U.S. policy with respect to the lending activities of the two banks. (Lot 60 D 137)