The United States Representative on the Inter-American Economic and Social Council (Bohan) to the United States Commissioner, Joint Brazil–United States Economic Development Commission (Knapp)


Subject: Relations with Export-Import Bank

Dear Burke: Leroy Stinebower1 and I spent two hours with Mr. Gaston and his associates on November 5. I gave them a brief résumé of the Commission’s work to date and, the atmosphere being propitious, then launched into a plea for close and understanding teamwork between the Bank and the Joint Commission. I told Mr. Gaston that the last thing in the world we wanted was a delegation of the Bank’s authority as a clearcut separation of authority was the main protection of the Commission against political and other pressures in Brazil. On the other hand, I felt that if we both knew currently what the other was doing and thinking that our jobs would be much simplified and the objectives of American foreign policy more effectively implemented.

I used the Vale do Rio Doce as a concrete example and pointed out that we had only received a squib through Leroy that the Bank was considering an operation with them aid yet we knew that there had been considerable correspondence back and forth ever since early in August. I pointed out that we can both work more efficiently if we were kept currently informed of the steps being taken by the Bank and if we also kept them currently informed of anything we might do in this field.

Mr. Gaston seemed to agree with these observations and he also came pretty close to accepting the idea that when technicians of the Bank [Page 1234] go to Brazil that they should work side by side with our own people. I took the liberty of stating that you would be delighted to have an Export-Import Bank official come down and spend some time with the Commission, getting to know the people connected with it and the problems confronting it. Bernie Bell broke in at this point to observe that the Bank had wanted to do this sometime ago but that its suggestion in this regard had been frowned upon. Mr. Gaston would not quite commit himself but I feel that if you cared to write a letter to Leroy showing enthusiasm for the idea that Mr. Gaston would probably approve of someone going down in the near future. Personally, I think that we should not let any grass grow under our feet because I think you can take the Export-Import Bank into camp if we can get some of its representatives down there and treat them in the same manner that we have dealt with Sidney Wheelock and other IBRD representatives.

Another thing that I think would be most helpful would be a letter from you to Leroy giving, in considerable detail, the work that Hassilev2 has done with respect to the Minas power project, his work on the Electric Bond and Share program, and Dale Barber’s conversations with the Vale do Rio Doce people. I really think it would go a long way towards getting the Bank to open up and work more closely with us.

Not to throw any flowers, but merely to keep you advised of the situation up here, I feel that your conversations with Mr. Gaston were more successful than you believe. On at least two occasions he mentioned you in a manner which indicated that he had revised some of his opinions regarding your dishonorable IBRD background, and I think that you should go out of your way to see that projects in which you know his Bank is interested are reported upon currently even though the information per se is not of any particular importance. Just the mere fact that he is hearing from you regarding such projects will go a long way towards getting him to respond to our overtures.

Assistant Secretary Thorp is giving a lot of thought to the question of what projects go to what banks and he has some ideas that may help to smooth out the rough path ahead of us. I won’t go into this matter but I did want you to know that it was being given attention at the highest level.

Sincerely yours,

Merwin L. Bohan
  1. Director, Office of Financial and Development Policy.
  2. Leonide Hassilev, Chairman of the Subcommittee on Power Development, United States Section, Joint Brazil–United States Economic Development Commission.