Office of the Historian

103 XMB/1–2154

Memorandum of Conversation, by the Assistant Secretary of State for Inter-American Affairs (Cabot)

secret
[Washington,] January 21, 1954.

Subject:

  • Summary of meeting at White House on January 21, 1954.
  • Participants:
  • The President, Dr. Milton Eisenhower
  • State:
    • General Smith
    • Mr. Waugh
    • Mr. Cabot
  • Treasury:
    • Secretary Humphrey
    • Assistant Secretary Overby
  • Commerce:
    • Secretary Weeks
    • Assistant Secretary Anderson
  • Eximbank:
    • General Edgerton

General Smith outlined the concern of State at the restrictions on the operations of the Eximbank. Mr. Waugh then followed this by a more detailed statement. Dr. Eisenhower mentioned the desirability of putting through the Toquepala project.1 Mr. Humphrey then explained his strong oppostion to loaning money to one American company to compete commercially against another. He was firmly opposed to Toquepala on this ground. He would, however, be glad to see the Eximbank used for short and intermediate-term export credits provided the exporters assumed a part of the risk.

Quite an argument followed regarding the quality of Eximbank loans. Secretary Humphrey pointed out that the Bank had loaned $1,200 million to France2 and that payment of this sum was doubtful. Mr. Waugh pointed out that the International Bank had loaned $250 million to France later. In answer to a question of Mr. Cabot, General Edgerton said that they did not anticipate any defaults on any of their Latin American loans now outstanding. Secretary Humphrey argued at considerable length against soft loans and it was difficult to divert him from this by pointing out that none of State’s representatives were recommending soft loans in the Latin American area in any case.

The President’s position, as shown by various comments in the course of the discussion, was clearly in favor of a more liberal loan policy toward Latin America. He also commented that when we were spending $36 billion a year on defense it did not seem a great risk to put an extra $17 million into Latin America in the interests of our security.

[Page 207]

The conversation was decidedly disjointed, with no clear decisions reached in the course of it other than that it would be further discussed at the NAC meeting the following day.3

  1. Reference is to the project for large-scale development of copper deposits in southern Peru; for pertinent documentation, see pp. 1491 ff.↩
  2. Reference is to Export–Import Bank Credit Nos. 382 and 404, authorized, respectively, Sept. 11, 1945 ($550,000,000) and June 19, 1946 ($650,000,000).↩
  3. At the 206th meeting of the National Advisory Council, held on Jan. 22, 1954, the Council approved a statement of principles relating to the coordination of the activities of the Export–Import Bank and the International Bank for Reconstruction and Development; the minutes of the meeting and the statement of principles are printed in volume i .↩