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

Secretary’s Staff Meetings, lot 63 D 75

Minutes of the Secretary of State’s Staff Meeting, Held at the Department of State, 9:30 a.m., September 18, 1952¹

secret
SM N–68

September 18, 1952, 9:30 a.m.

[Here follow a list of those present (23) and discussion of matters relating to Korea, Iran, and Brazil.]

Investment Guarantees² in Latin America

7. Mr. Miller reported that he has had a long, and apparently losing, battle on the question of investment guarantees to Latin America. He pointed out that he is against such guarantees in Latin America, because it would give an opportunity for the Latin American governments to become involved in private investments. In addition, we would play along with Communist propaganda by affirming their claim that the U.S. Government is sponsoring private companies in Latin America. In addition, Mr. Miller pointed out that the timing for moving ahead on investments guarantees, if we must do this, is unfortunate. He said, however, that he is about to give up on this issue because others in the Department and in the Executive Branch appear to be against his position. The present issue with respect to Brazil is the convertibility of Brazilian currency. Mr. Miller felt that we should hold up the granting of investment guarantees until after the Brazilian congress acts on convertibility of its currency. We could apply the guarantees in Peru, but if this were done it would cause confusion within Brazil prior to action by the Brazilian congress. Mr. Miller urged that we ask Lafer what effect the granting of investment guarantees would have on Brazil with respect to the planned program with the congress.

8. Mr. Bruce explained that he is not an advocate of this program, but Mr. Ty Wood³ of MSA has felt very strongly that the problem should be settled by going ahead with what he interprets as a mandate from the Congress. Our next step in working with MSA is to consider the possibility of moving ahead on a country-by-country basis within Latin America. Mr. Miller pointed out that this could be done, but he felt that it was unwise in this case because of the present Brazilian situation. Mr. Bruce emphasized that MSA is pressuring the State Department to comply with the mandate of Congress on establishment of such a guarantees program in Latin America.

9. Mr. Tate⁴ explained that arguments for and against an investment guarantees program in Latin America were given before the last session of Congress. Congress approved this program, and members of the Congress have exercised considerable pressure for moving ahead on such a program. Mr. Tate felt that there were no legal difficulties on moving ahead on a country-by-country basis. Mr. Miller pointed out that the problem is not a legal one, but mainly one of Congressional relations. Mr. Thorp stated that the guarantees program applies only to new investments and thus would proceed slowly. Many in the Congress feel that such a program might ease the burden of public assistance to various areas of the world. Mr. Thorp felt that the Administration is in a spot not to comply, because we advocated such a program about two years ago but it was not granted by the Congress. In addition, we now operate such a program in other parts of the World, and it would appear inconsistent if such a program is not applied in Latin America.

10. Mr. Miller again explained his objections to the program itself and especially to the timing as it related to Brazil. He indicated, however, that he was prepared to move ahead on a country-by-country basis, but he would urge that we talk to Lafer before this is done. Mr. Bruce stated that he would tell Mr. Wood that we would be unable to give him our view on this matter until next week.⁵

[Here follows discussion of matters relating to Lebanon and publications by former government employees.]

1. The Secretary’s staff meetings, held twice a week during the years 1952–1960, were attended by the Under Secretary of State, the Assistant Secretary of State, certain members of the Executive Secretariat, and certain office directors. A broad range of policy matters was discussed at these meetings, and the Secretary normally presided.
2. Under the investment guaranty program, initiated in 1948, the U.S. Government provided, for a fee, insurance protection for American investors abroad against the risks of loss through confiscation or expropriation and currency inconvertibility. For documentation concerning the initiation of the program, see Foreign Relations, 1948, vol. i, Part 2, pp. 952 ff. For additional information, see Staff Papers Presented to the Commission on Foreign Economic Policy (Washington, 1954), pp. 126–134.
3. C. Tyler Wood, Deputy Associate Director, Mutual Security Administration.
4. Jack B. Tate, Deputy Legal Adviser.
5. No record of the Department’s view concerning extension of the investment guaranty program to Latin America as conveyed to Mr. Wood was found in the Department of State files. For documentation relating to the investment guaranty program, see volume i .