Foreign Relations of the United States, 1951, Asia and the Pacific, Volume VI, Part 2

896.00–R/5–2951: Telegram

The Secretary of State to the Embassy in the Philippines ¹

confidential

Washington, May 29, 1951—7 p. m.

2952. Joint ECA–State message. In order Phil Govt may be informed of progress being made in American aid program and of plans for coordinated ECA–Ex–Im Bank programming, you requested deliver fol note to Pres. Quirino. Suggested this note be personally delivered by Harrington accompanied by Checchi. Text follows:

• “1. Econ aid program launched by US Govt on Apr 6, 1951, was of interim character designed promote econ strengthening and betterment in Phil until US Cong cld be asked auth establish enlarged program of financial and technical aid. This program, for which $15 million has already been allocated, proceeded from substantial implementation by Phil Congress of Quirino–Foster Agreement of Nov. 1950, and from earlier recommendations of US Econ Survey Mission in Sept. 1950.
• 2. In further implementation of Quirino–Foster Agreement
  • a) Pres. of US in his msg to Congress of May 24, 1951, on foreign aid, has requested funds which wld make possible additional grants in FY 52, for purpose of substantially expanding initial program already started in Phil by ECA STEM; and
  • b) Ex–Im Bank of Wash prepared to enter into discussions with reps of Phil Govt looking toward estab of credits for productive projects in Phil.²
• 3. In extension of grant and loan assistance, ECA and Ex-Im Bank will be closely associated to end both loans and grants shall be utilized as part of single integrated and coordinated program of US aid and Phil Govt efforts designed to help build econ strength in Phil and assist in mtg needs and aspirations of Phil people.
• 4. These actions reflect confidence of Govt of US that contd progress will be made in carrying out recommendations of US Econ Survey Mission.”

For your info within $375 million proposed to Congress for Title III there is apportionment of $35.4 million for grant aid. Is not known this time when amt of Phil allocation will be made public by official action or in open comite mtgs. When this figure becomes publicly known by such declassification, wld be appropriate for publicity statement to be made to effect that grant aid proposed for FY 52 together with grant already made of $15 million which represents commitments at close of FY 51 but actual expenditures in 52 compose unified $50 million grant program for practically 12 months’ period, which you may interpret as really being in excess of reasonable expectations to be gained from Bell Report for spending of US aid. While extent of Ex–Im Bank prospective loans cannot be given before Ex–Im Bank in Wash has approved projects to be recommended from field, you may take position Bank fully coordinating its projects of loan aid with ECA and with thought of implementing those portions of Bell Report that indicate propriety of certain types loan projects. Your publicity can clearly indicate while neither Exec nor Cong are committed to $250 million program over period years, there has been no thought dividing that illustrative figure into five parts but rather take measures deemed most appropriate and effective in improving economy of Phil and in backing up Phil Govt its objectives carry out improvements and reforms indicated Bell Report for welfare of Phil people and stability of Phil society.³

Acheson

1. Telegram drafted by Mr. Griffin and cleared by the Department of State, the ECA, and (in draft) the Export–Import Bank.
2. In telegram 3143, to Manila, June 13, the Department in part informed the Embassy, for its information only, that the Bank was prepared to consider credits “up to $25 million. This does not preclude additional credits later and similarly does not guarantee estab credits $25 million within fixed period time. Action will depend on development projects suitable for loans and developing capacity Phils to service debt.” This telegram had been cleared with the Bank. (896.10/6–1351)
3. Documents in file 896.00(R) for June indicate that delivery of this note was delayed while consultations went on in Washington between Ambassador Cowen and officers of the Department, the ECA, and the Export–Import Bank. On June 15 the Department instructed the Embassy to deliver the note to President Quirino unchanged that same day, and to make it public the following day.