103 FOA/11–1954
Memorandum of Conversation, by the Secretary of State
Memorandum of Conversation With Mr. Stassen
We talked about the future organization of economic work. I said I thought that Mr. Dodge would recommend a sort of economic NSC1 to be presided over by an assistant to the President. There would be on this council the representatives of various agencies interested in economic policy with a view to securing coordination. Mr. Stassen said he was not familiar with this possible recommendation.
Mr. Stassen then asked my own views with reference to the future of FOA. I said that while I had no clear views, my thinking was running along the following lines:
- 1.
- The FOA to continue in being and to deal with (a) defense support programs where we gave budgetary aid to enable countries to maintain the size and character of military establishments we wanted and which they could not afford to do unaided, and (b) offshore procurement, where of course there would need to be close cooperation with the Defense Department.
- 2.
- I said that I thought that other matters on economic aid should be handled by a new investment corporation to be formed, presumably on a universal basis, although possibly there might be more than one on a regional basis with substantial capital of say two or three billion dollars. They would make loans which in some cases might for political reasons be “soft” loans in local currency, but the organization would also make development loans in capital improvements in South America, the Far East and Middle East and take over that type of work now being done by the EX-IM Bank so that that bank would limit itself primarily to the financing of United States exports and imports. I said I thought that this institution might very well be primarily under the guidance of the Treasury Department with representation of State, Commerce, etc., on the assumption that Treasury would recognize it as an instrument of national policy.
I said that I felt that Stassen had to come up with some new plan for trimming FOA if he was to ride through the next Congress.