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  4. Document 54

611.20/3–01254

Memorandum by the Deputy Assistant Secretary of State for Inter-American Affairs ( Woodward ) to the Acting Secretary of State 1

confidential
[ Washington ,] March 2, 1954.

Subject:

  • Presidential and Cabinet Support of Eisenhower Report Recommendations for Strengthening Latin American Relations.

In response to your request to Mr. Cabot, I believe the Secretary would be in a firmer position to state at Caracas that the Administration is taking steps to carry out Dr. Milton Eisenhower’s recommendations if the President were to request Cabinet cooperation now on the following points:

1.
That in considering projects in Latin American relations the Cabinet follow the general guidance of the President’s comment in a memorandum of January 12 (Tab A)2 concerning Dr. Eisenhower’s supplementary recommendations in which the President said “I am struck by the fact that a very small loan investment or grant on our part might reap very definite and extensive advantages to us.”3
2.
That the policy of the Export–Import Bank on economic development loans agreed on February 26 (Tab B)4 between the Secretary of State and Secretary Humphrey be carried out in a way that will yield the maximum benefit from the Eximbank as an instrument of national policy.
3.
That, on specific current items on which the State Department has just initiated action, the Bureau of the Budget
(a)
cooperate with State in requesting a 1955 supplemental appropriation of about $975,000 for “Exchange of Persons” and $40,000 for Aid to American Schools, and
(b)
cooperate with Commerce and State in requesting a 1955 supplemental appropriation of $7 million for the Inter-American Highway (to give more assistance to countries near Guatemala).
4.
Although Panama was not mentioned by Dr. Eisenhower, since he did not visit there, it should be very valuable if the President were to ask all agencies concerned (principally Defense) to redouble efforts to give as much satisfaction and assistance to Panama as possible in matters which do not affect our fundamental rights—e.g.
(a)
more equitable treatment of Panamanian employees by U.S. agencies in the Canal Zone,
(b)
reduction of non-essential commercial competition by U.S. agencies, and
(c)
obtaining legislation and appopriations to provide a $2 million annual economic development fund for 10 years in lieu of amending the annual Treaty stipend of $430,000.
5.
Several of the recommendations made by Dr. Eisenhower will require continued or increased appropriations in 1956 and it would be valuable to have even at this time a general assurance of Administration support for
(a)
a possible increase of $2 million or more in technical assistance by FOA (the present 1955 request of $23 million is considered ample for current expansion because of elasticity within the total appropriation;
(b)
$8 million for the Inter-American Highway (which could be completed in about 7 years from now at this rate);
(c)
$2 million for the Rama Road in Nicaragua (at this rate, this road given to Nicaragua because of our treaty option to build an inter-oceanic canal, could be finished in three or four years);
(d)
About $2 million additional for the USIA in Latin America (the 1955 request is about $2.8 million);
(e)
About $900,000 additional for U.S. contributions to Inter-American organizations (these have been cut down from 30 to 13 organizations in 6 years, and our contribution is about $3.6 million); and
(f)
Other smaller increases may be found necessary in carrying out the many recommendations of Dr. Eisenhower.

A schedule of comparative budget items from 1953 to 1956 is attached. (Tab C)5

[Page 219]

Attachment B

Table Prepared in the Bureau of Inter-American Affairs

Implementation of Milton Eisenhower Report

1953 1954 1955 1956
Actual Program Present Budget Additional Requested Total Proposed
1. Dept. of Commerce
Inter-American Highway
Appropriation 1,971,431 1,000,000 1,000,000 7,000,000 8,000,000 8,000,000
Plus Carry-over — 905,135 388,000 — 388,000 —
Rama Road — 1,000,000 1,000,000 — 1,000,000 2,000,000
Total 1,971,431 2,905,135 2,388,000 7,000,000 9,388,000 10,000,000
2. Foreign Operations Admin.
Bilateral Tech. Asst 17,625,100 22,145,400 22,500,000 — 22,500,000 24,500,000
Plus Carry-over — 200,000 — — — —
Bolivia-Special Tech. Asst — 2,000,000 — — — —
Bolivia-Economic Aid — 4,000,000 9,000,000 — 9,000,000 —
Bolivia-Famine Relief — 5,000,000 _ _ _ _
Dependent Territories 4,300 196,600 500,000 — 500,000 500,000
OAS Tech. Asst 955,957 1,000,000 1,500,000 — 1,500,000 2,000,000
Panama Development Fund — — — — — 2,000,000
Total 18,585,357 34,542,000 33,500,000 — 33,500,000 29,000,000
3. Mutual Security
Appropriation 8,642,464 15,000,000 15,000,000 — 15,000,000 10,000,000
Plus Carry-over — 50,723,170 — — — —
Total 8,642,464 65,723,170 15,000,000 — 15,000,000 10,000,000
4. U.S. Information Agency 6,107,109 4,115,580 5,905,567 — 5,905,567 8,000,000
5. Dept. of State
ARA and Foreign Service 9,008,978 7,573,048 7,571,848 400,000* 7,971,848 8,000,000
Int. Educational Exchange
Exchange of Persons 800,628 668,277 726,110 973,403 1,799,513 1,800,000
American Schools 171,000 128,250 135,000 40,000 175,000 175,000
International Organizations
Contributions 3,393,544 3,595,361 3,598,162 — 3,598,162 4,462,000
Missions 51,500 38,000 34,000 — 34,000 38,000
Total 13,425,650 12,002,936 12,065,120 1,413,403 13,578,523 14,475,000
  1. Drafted by Mr. Woodward, with the assistance of Christopher Van Hollen of the Executive Secretariat.↩
  2. The referenced memorandum, transmitting a copy of Dr. Eisenhower’s supplementary report to Secretary Dulles, was not found with the source text; however, a copy is in file 120.220/1–1254.↩
  3. The statement quoted from President Eisenhower’s memorandum actually reads as follows: “In reading over the specific problems pertaining respectively to the several countries, I am struck by the fact that, in a number of cases, a very small loan investment or grant on our part might reap very definite and extensive advantages for us.”↩
  4. The statement contained in the attachment (designated “Attachment A” on the source-text), not printed, appears as item 5 in Secretary Dulles’ address delivered to the Second Plenary Session of the Tenth Inter-American Conference on Mar. 4, 1954; for text of the address, see Tenth Inter-American Conference: Report of the Delegation of the United States of America With Related Documents (Department of State Publication 5692, Washington, 1955), pp. 43–51.↩
  5. Designated “Attachment B” on the source text.↩
  6. Certain economic and labor officer positions can be funded with FOA allotments for “support” in these fields. [Footnote in the source text.]↩