Foreign Relations of the United States, 1952–1954, The American Republics, Volume IV

824.00 TA/11–2354

The Deputy Under Secretary of State (Murphy) to the Director of the Foreign Operations Administration (Stassen)¹

confidential

[Washington,] November 23, 1954.

Dear Harold: As you know, the President personally considered and concurred in the decision to extend grant aid to Bolivia in September, 1953. At that time, it was recognized that additional grant aid would be necessary during the present fiscal year. In his confidential report to the President in January, 1954,² Dr. Milton Eisenhower expressed the opinion that a minimum of $15 million would be necessary. I understand that this was in harmony with the conclusions and recommendations of your Administration, as well as those of the Department. On the basis of recommendations from our Embassy in Bolivia and of studies in the Department, it is now felt that $16 million will be required, consisting of approximately $10 million in the form of agricultural commodities and $6 million of developmental equipment. The local currency arising from the sale in Bolivia of the agricultural commodities would be used in that country’s program for expanded agricultural production and economic diversification. I am told that this conclusion is concurred in by the United States Operations Mission in Bolivia and by your Administration. Officers of the Department have informed me that it appears possible to make the necessary funds available under the provisions of existing legislation, particularly the Mutual Security Act of 1954³ and the Agricultural Trade Development and Assistance Act of 1954.⁴

I therefore urge that you do whatever is necessary in order to assure that $16 million in grant aid will be available for Bolivia promptly.⁵ I am sure you agree that such action follows logically from our original decision concerning aid to that country, and reflects the Cabinet’s decision of March 5, 1954 when approving in principle, as indicative of the Administration’s determination to implement Dr. Milton Eisenhower’s report, a memorandum⁶ which included the statement to the Secretary by the President that “I am struck by the fact that in a number of cases, a very small loan or investment on our part might reap very definite and extensive advantages for us”.⁷

Sincerely yours,

Robert Murphy

1. Drafted by Mr. Topping; cleared with Mr. Holland.
2. Reference is to Dr. Eisenhower’s report, submitted to President Eisenhower under date of Jan. 11, 1954, containing an analysis of specific economic problems of the South American countries he had visited at the request of the President in the summer of 1953. For additional information concerning Dr. Eisenhower’s mission, his initial report to the President, dated Nov. 18, 1953, and his supplementary report of Jan. 11, see the editorial note, p. 196.
3. Public Law 665, approved Aug. 26, 1954; for text, see 68 Stat. 832.
4. Public Law 480, approved July 10, 1954; for text, see 68 Stat. 454.
5. In a memorandum to Secretary Dulles, dated Nov. 18, 1954, recommending that he sign the letter to Mr. Stassen and a similar one to Clarence Francis, Chairman of the Inter-Agency Committee on Agricultural Surplus Disposal, Mr. Holland stated in part that decisions concerning implementation of PL 665 and PL 480 “being taken by top officials of the Foreign Operations Administration and the Francis Committee, appear to be preventing the use of that legislation for grant aid to Bolivia, and unless corrected would make the availability of the necessary funds doubtful.” (824.00 TA/11–1854)
6. The referenced memorandum by President Eisenhower, dated Jan. 12, 1954, transmitting a copy of Dr. Eisenhower’s supplementary report to Secretary Dulles, is in file 120.220/1–1254.

7. For the actual text of the statement quoted from President Eisenhower’s memorandum, see footnote 3, p. 217.

   Under Secretary Murphy’s letter to Mr. Francis, also dated Nov. 23, 1954, reads in part as follows:

   “In your capacity as Chairman of the Advisory Committee on Agricultural Surplus Disposal, I hope that you will find it possible to provide $7 million at market value of agricultural commodities on a grant basis for aid to Bolivia during the present fiscal year, and should it appear to Mr. Stassen that it is desirable to utilize the Agricultural Trade Development and Assistance Act for that purpose.” (824.00 TA/11–2354)