ECA Files1
The Acting Administrator of the Economic Cooperation Administration (Bissell) to the ECA Mission in France
secret
Washington, May 5,
1950—9 p. m.
Ecato 488. For Blum. Paris Toeca 500, 1524,2 rptd London unnbrd. Passed to Saigon. After full review of whole question of aid funds available and likely to be available for Indochina economic program, following is basis on which aid agreement negotiations can be begun, aid programmed, and operations commenced.
- 1.
- Dept and ECA agree that Griffin recommendations3 which total for economic aid $23.5 mil, represent adequate basis for making detailed plans and procuring and shipping supplies and technical services. You should negotiate with recipient countries and Fr with view to developing (a) immediate projects for rapid implementation, particularly in agricultural and health fields and (b) program for period until June 30, 1951, for amount not to exceed $23.5 mil. Insofar as necessary to guess at amount of assistance during negotiations, believe you should use this total target figure rather than any interim amount.
- 2.
- For period from now until June 30, 1950 (or until China funds are available if earlier) source of funds will be appropriations of Sec 303 of MDAP Act. Presidential approval in principle of economic aid program for Indochina, and fact that not all Sec 303 funds will be obligated by end of this fiscal year, makes it reasonably certain that we can cover out of Sec 303 funds approved programs recommended by you for immediate action requiring obligation of funds during next two months up to approx $5 mil. We are setting no firm limit on obligations for this period, since we believe programs which can in practice be developed to the point of obligating funds can be covered by available funds. Basic authority for the program is contained in the President’s statement, in May 1 letter to SecState, that “I approve in [Page 802] principle the provision of economic assistance to Indochina as justified by your memo of Apr. 17, 1950.” Text of SecState memo and President’s letter being cabled. Actual allocation of $750,000 for medical aid is available, but there is no reason to work against this figure or to limit the initial emergency program to medical supplies and services. For your information we are in fact optimistic that residual China funds will be available shortly.
- 3.
- For fiscal year 1951, we are counting on funds for general area of China as contained in ECA authorization bill passed by House and now on Senate floor.
- 4.
- Arrangements described above, keyed to the President’s approval of the provision of economic assistance to Indochina and the determination that the Griffin mission recommendations as to total amount of economic aid will be accepted as firm basis for planning, should provide adequate authority for negotiations regarding aid agreement and specific economic aid programs. Believe you should now proceed Saigon soonest.
- 5.
- Toeca 528 (relayed Saigon May 4)4 received, will reply soonest. Be para 10 Toeca 528 do not describe to Pignon situation re funds in Washington in terms other than those outlined in this cable. Repeated to Saigon as Ecato 13, to London as Ecato 623.
Bissell