ARA/REA Files, Lot 57 D 5971

Memorandum by the Acting Administrator of the Technical Cooperation Administration ( Bingham ) to the Assistant to the Director of Mutual Security ( Ohly )2


Subject: Bureau of Budget Marking for Economic Aid for Latin America in Fiscal Year 1953

IIAA and ARA have recommended that the Bureau of the Budget marking for economic aid for Latin America for fiscal year 1953 be appealed. I concur, since I share their belief that the reduction made by the Bureau is too drastic and that the Bureau should be asked to agree to a figure of $30 million for the bilateral program and the United States contribution to the OAS technical cooperation program together.

The Bureau states that the amount approved by it would provide for an expansion in the bilateral program of approximately 85 per cent above present rate of obligation. The Bureau also makes the general comment relative to Titles II, III and IV that the “agency projection for 1952 took no account of July–October experience, but instead copied the estimates made last spring”. The present rate of obligation is, of course, the result of the lateness of the 1952 appropriation. The rate of obligation during the July–October period was determined not by the judgment of any of the agencies as to what was desirable but by a resolution of Congress limiting expenditures to the [Page 1076] rate of the previous year. The April–June rate, increased by a factor to permit the growth of existing programs and the addition of desirable new programs, would undoubtedly be a much fairer standard for judging the size of the 1953 program. The agencies which formulated the 1953 program considered it reasonable and feasible.

IIAA assures me that by the end of fiscal year 1952 it expects to have executed susbtantially all of the 1952 bilateral program and to have spent or obligated the entire $18 million authorized for the program. As you know, IIAA has recently requested the transfer of $2 million to the 1952 IIAA program from the amounts authorized for other areas.

The Bureau’s reduction appears to have been based to a considerable extent on its belief (1) that there will be a shortage of technicians for the 1953 technical cooperation program generally and (2) that the funds for Latin America should be curtailed in order that a larger number of technicians may be available for other areas. I believe that these views are subject to serious question on both counts. The problem of recruiting competent personnel is difficult but IIAA has found that an adequate number of competent technicians can be obtained through an active recruitment program. Furthermore, as you will recall, representatives of IIAA, the Department of Agriculture, and the Federal Security Agency expressed the view at the hearings before the Bureau that with an active recruitment program the technicians required for the program recommended for 1953 can be found.

The suggestion that the Latin American program be curtailed in order that more technicians may be provided for other areas overlooks the following considerations:

Some of the principal qualifications for a technician working in Latin America are familiarity with one or more of the languages spoken in Latin America and with customs and habits of the people. Because of such qualification some personnel would be willing to work in Latin America but not elsewhere.
Because of the well established nature of the Latin America program the number of new technicians required in relation to the number already employed is less than for other areas.
It is not safe to assume, under present international conditions, that there are any “non-crisis” areas. Latin America because of such factors as its proximity to the United States and its raw materials is of extreme importance to us. As Mr. Miller indicated during the hearings before the Bureau, placing Latin America in an inferior status in such matters as foreign aid has already made the task of obtaining Latin American support for United States objectives more difficult.3 The [Page 1077] extent of Communist influence in Guatemala and attempts now being made to extend that influence to such vital areas as Panama and several recent examples of Latin American non-support of the United States, such as the vote of a considerable number of the Latin American countries for Byelorussia, rather than Greece for a seat on the Security Council,4 indicate that we cannot continue to take Latin American support for granted.

The programs in the other American republics have demonstrated that these governments need the technical assistance of the United States and want to work with the United States on the solution of basic economic and social problems which confront them and which directly and indirectly affect the United States. They respond by channelling substantial sums of money into the cooperative programs and into related activities with the effect that programs are not only assisting in the improvement of economic conditions but the Latin American governments are assuming ever greater responsibility. The United States assistance has been so small in the past to permit only cooperative programs on a spotty basis. The proposed program will permit a more balanced activity and greatly stimulate the activities of the Latin American governments. A $30 million program is only one and half million average per country.

The amount requested for a United States contribution to the technical cooperation program of the Organization of American States was $1,500,000. The Bureau of the Budget, considering carry-over, has allowed $1,000,000 or the same contribution as in calendar years 1951 and 1952.

While the present payment record of the other American republics to the Program does not appear to warrant raising our contribution there are strong indications that when the United States contribution is actually offered in November or December 1952, an increased contribution would be justified. Our inability to offer an increased contribution at that time, if expectations as to the size of the total OAS program and the payment record of other countries prove correct, would have a more damaging effect on the program than our original offer of only $1,000,000 in 1950 to a program which we knew at the time would cost a total of over $3,000,000. The contribution to the OAS program should be a part of the total program for Latin America with the understanding that the amount to be used for the OAS would [Page 1078] probably not be less than $1,000,000 and if the payment record at the time warranted, it might go as high as $1,500,000. In any case the amount offered by the United States would be covered by a percentage proviso.

I believe that the $30 million program for Latin America is both realistic and desirable, especially when it is considered that our contribution to the OAS technical cooperation program will also come from this figure.

  1. Records relating to the mutual security program in Latin America for the period 1951–1956, as maintained by the Office of Inter-American Regional Affairs.
  2. Drafted by Mr. Edward G. Cale, Director, Office of Regional American Affairs.
  3. In a memorandum to Mr. John P. Hoover, of the Office of South American Affairs, and Mr. Sayre, dated July 26, 1951, Mr. Miller had stated in part the following:

    “In preparing our revised program for fiscal year 1953, I believe that we should review carefully our proposals in relation to the programs of other areas from the standpoint of assuring ourselves that Latin America is not being discriminated against. From indications that I have seen, I am increasingly concerned that we are applying one standard to Latin America and a different standard to all other areas of the world. While I do not necessarily at this stage wish to suggest any diversion from the policy which we have pursued of opposing grant aid to Latin America for capital investment projects, I nevertheless believe that the possibility of discrimination as between areas is sufficiently great so as to warrant a careful review of it by us in conjunction with Ambassador [Walter] Thurston [of the Policy Planning Staff].” (Miller Files, Lot 53 D 26)

  4. Documentation on this subject may be found on pp. 78 ff.