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

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

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.]