ISAC Files, Lot 53 D 443

Minutes of the Fourth Meeting of the International Security Affairs Committee, Held in the Department of State, 11:00 a.m., February 16, 1951

top secret

[Here follow a list of those present (18) and a discussion of previous minutes.]

Grant Aid to Latin America

2. Mr. Cabot said that the Department of State is not prepared at this time to make a decision with respect to the proposed grant aid program for Latin America because it is felt that more information as to the nature of and justification for the program are needed in State before such an important policy decision can be made. Mr. Cabot [Page 1000] listed some of the considerations which enter into his own thinking on this question:

This is a very important question of policy and not merely a problem of the dollar amount involved. A decision to extend even the modest amount of grant aid proposed will subject us to persuasive pressures to increase the amount to unforeseeable proportions over the next few years.
According to the State Department estimates denial of this grant aid would make it unlikely that the UN could raise Latin American forces for foreign duty under the UN, whether in Korea or elsewhere.
The increasing shortage of war materials, and the low priority we have given Latin America as a claimant on available war materials, make it clear that the Latin American countries would not receive shipments of any consequence for 12 or 18 months, even under a grant aid program.
It is anticipated that the flow of dollars to Latin America will increase considerably during FY 1952 as a result of our stepped-up defense effort, so it is not clear why the Latinos should not buy what arms they require.
It is open to question whether the Congress would support such a grant aid program, and it is possible that its inclusion in the 1952 legislation might weaken our total case.

Mr. Cabot stated that it was not clear to him what we could reasonably expect to gain in terms of U.S. security through this proposed program, since we could only promise aid and would not be able to deliver within the next year or year and a half.

3. Mr. Cabot stated that it would be most helpful for the Department of State to have answers, even though not specific and not complete, to the questions raised by Mr. Ohly1 with respect to the proposed program (paragraph IV, page 5, of ISAC D–5).2 He concluded by saying that since the Department of State is not in a position to make a decision on this question at the present time he suggested that the Department of Defense undertake to provide him with as much of the needed information as possible so that the question could be decided in ISAC at a future meeting. He mentioned that Mr. Nitze is meeting with elements of the JCS early next week and that in these talks he might be able to get the kind of information which the Department of State requires for a decision on this matter.

4. General Burns stated that he had hoped that the information supplied by General Bolte at the previous meeting would answer most of the State Department’s questions. However, Defense will provide as much information as it can in reply to the questions in Paragraph IV of ISAC D–5. He pointed out that this grant aid proposal has only recently been approved in the Department of Defense and that there are no detailed plans developed in support of it. Mr. Gordon pointed [Page 1001] out that since an early decision on this question is required to meet the needs of the Foreign Ministers Meeting (March 26) and the Congressional Presentation (April 2) a firm decision should be reached by March 1. Mr. White stated that although Mr. Miller realized it was not possible for him to have this decision before leaving on his trip, he wants to be consulted before a final decision is taken, and if it is felt that a decision must be reached before Mr. Miller returns to Washington (between March 10 and 12) it will be necessary to consult him by cable.

5. Mr. Halaby pointed out that at this stage the grant aid question is largely between Defense and State, and that although ECA and the other member agencies have a less direct interest, it should be up to State and Defense to work out an agreed line and merely keep the other agencies informed of developments. While agreeing generally with Mr. Halaby, Mr. Gordon and Mr. Hebbard asked that they be kept up to date on ‘State-Defense discussions. Mr. Cabot stated that he would work this out with General Burns and would tentatively schedule the question for final decision at the ISAC meeting on February 23.

6. Mr. Gordon stated his understanding that a decision by State on the grant aid question is not conditioned upon full and complete answers by Defense to the formidable list of questions posed in paragraph IV of ISAC D–5. He pointed out that we should not expect that a new program such as the one proposed can be supported by as detailed a programming job as we can reasonably expect in connection with the European MDAP. Mr. Cabot agreed with this observation and emphasized that he only wants a clear picture of what this program is intended to achieve in order to decide whether it warrants the major policy decision required.

7. Mr. Halaby stated that there should be an estimate of the financial and economic capabilities of the Latin American countries to be affected by the proposed program in order that the economic impact may be assessed. Mr. Hebbard stated that he would undertake to get at least a rough estimate on the financial capabilities of these countries. He noted, however, that Treasury appreciates that a strong dollar position of a Latin American country is only one element which would affect a decision on the question of extending grant aid.

8. Mr. White, addressing the document ISAC D–5, said that ARA could not approve it because they did not think it possible adequately to set forth the pro’s and con’s on the question until there is more complete information available. Apart from this fact, he stated his reservations on the area approach taken by this paper, pointing out that each Latin American country presents a different problem and that a more selective approach is sounder. He stated that two of the questions listed in paragraph IV of the paper particularly interest him, namely, [Page 1002] for what purposes do we contemplate making Latin American troops available; and from what countries would they be drawn. In conclusion, Mr. White urged that the financial condition of a Latin American country not be taken as the controlling element in a decision on whether or not to extend grant aid, since psychological, political, and strategic factors are also major consideration.

[Here follows discussion of matters unrelated to the question of a military grant aid program for Latin America.]

  1. John H. Ohly, Acting Assistant Director, International Security Affairs.
  2. Dated February 15, p. 985.