398.14/2–653
Memorandum by the Director of the Office of Financial and Development Policy (Corbett) to the Assistant Secretary of State for Economic Affairs (Linder)
As of possible use to you in your luncheon with Mr. Black on Monday, I am setting forth below a few points of mutual interest:
1. IBRD–Eximbank Relations. Mr. Black has recently written a memorandum to Mr. Humphrey concerning this matter.1 It may be subsequently distributed to the NAC and brought up for discussion there. I am told that there is very little new in this memorandum but it does express Mr. Black’s view that the respective areas of operation of the two Banks have not yet been adequately delineated. While I think we have made considerable progress in the last couple of years on this subject, certainly much remains to be done. How much of this remaining work can be done by drawing up agreements, I am not quite sure. More important, it seems to me, would be good working relations between the staffs of the two Banks and frequent consultations between Mr. Black and the Chairman of the Eximbank. Efforts have been made to develop this [Page 264] type of relationship but they have generally foundered on bureaucratic shoals.
The Department has had unwillingly to make certain decisions concerning the distribution of projects in Brazil, for example, between the two Banks. These decisions, we hope, were based upon the policy guidance we got from the NAC. It is not a role which we have enjoyed and one which we have felt is not essential if the two Banks would establish closer relations.
2. Current IBRD–Eximbank Problems.
- a.
- Turkey
- b.
- Brazil
- c.
- Japan
- d.
- Mexico (no longer current)
I believe you are fairly familiar with the essentials of these cases. I will not here elaborate upon them.2
3. Relations of the IBRD with Department. While it is quite clear that the official and formal channel between the U.S. Government and the IBRD is through the U.S. Executive Director, we have not had for a good many years a Director who has been able to devote sufficient time to this matter to constitute a thoroughly effective line of communication. Additionally, the importance of the Bank’s operations to our foreign policy is such that both the Bank and ourselves have found it necessary and desirable to communicate directly. In the E area it has always been our practice to keep the U.S. Director informed of these contacts but unfortunately many instances have occurred where parts of the Department have not fully appreciated the necessity of keeping the U.S. Director and yourself adequately briefed. While we think this is in large measure a departmental problem, to some extent Mr. Black’s willingness to have these contacts has prevented us from performing what I regard to be a useful function. There are instances which could be mentioned that would illustrate this point. I conclude from all of this that it would be highly desirable if Mr. Black could look to you as the primary point of contact in the Department on problems which he feels he needs some consultation with the Department. This does not mean, of course, that you yourself would have to be continuously concerned with these matters but it would certainly mean that you would be fully informed on difficulties and how they are being dealt with. This is all the more important by virtue of your representation of the Department on the Eximbank.
4. Private Investment. Mr. Black’s views on various aspects of this matter would be of interest.
[Page 265]5. Fuzzy Loans. You may wish to inform Mr. Black of some developments in this field and our attitude towards them.
6. Bank Operations. The Bank since its conception in 1946 has made 1.5 billions of dollars in loans to 27 member countries. The Bank’s operations have become increasingly successful under Mr. Black. Needless to say it is our feeling that further expansion of these activities is now even more important and a greater reliance is being placed upon the Bank’s operation in our thinking and planning on foreign economic policy.