820.2395/3–1354

The Director of the Foreign Operations Administration ( Stassen ) to the Assistant Secretary of State for Economic Affairs ( Waugh )

secret

Dear Mr. Waugh : Thank you very much for your letter of February 5, 1954.1 commenting on my memorandum of December 9, 1953, regarding the continuation of financial support by FOA of the Latin American rubber research project.

Our recommendation contained in that memorandum was based on conclusions arrived at from a survey of the facts—including the opinions of the Departments primarily concerned regarding the security importance to the United States of the continuation of the Latin American rubber research project. At that time, the opinion of the Departments primarily concerned ranged from State’s opinion that no appreciable security [Page 220] interest was at stake and Defense’s that the project could not be justified as a real security need to Office of Defense Mobilization’s that the project was necessary as a further precaution and would enhance our security interests. FOA concluded from this survey that the project was of marginal—not major—importance to the military security interests of the United States. Since then, the replies to my memorandum from the Departments mentioned have not conflicted with their previously stated opinions. However, Defense now states that while it agrees that the project is of marginal importance to present military security interests, it believes that a continuation would considerably enhance future security interests in the area of natural rubber.

FOA does not determine for the United States Government what the security interest of the United States is. If the Departments primarily concerned with United States security now conclude that this project is of major or significant security interest to the United States, FOA naturally would change its previous conclusion that it is of marginal security interest.

Security interest, while of central importance to a decision as to whether the project should be continued by the United States Government, was only one of the reasons why FOA concluded that FOA intended to discontinue financing the project after the fiscal year and after an orderly transition to another agency—private or public, foreign or domestic—had been attempted. Another important reason referred to was the fact that, thus far, no Latin American country has shown an interest in providing funds for the project. Unless such funds are provided by host governments and the program becomes a cooperative program, FOA would prefer not to continue to support such a research project. In effect, FOA believes that the project has been an extension of the work of our U.S. Department of Agriculture—not part of a cooperative program—and that, if it is to be continued, a suggestion would be that it might be taken over by the Department of Agriculture.

In pursuance of my December 9 memorandum, FOA has sent a dispatch to each USOM Director in the Latin American countries concerned requesting him to determine by March 15 whether his country is interested in making a financial contribution to this project. As yet, no replies have been received.

If the Departments primarily concerned with U.S. security interests are now of the opinion that the project must be continued because of its significant importance to U.S. security, and if the Latin American countries concerned indicate that they will contribute to a fair share of the cost, FOA will then consider continuing the financing of the project in FY 1955. At this time, however, FOA’s position remains that it does not intend to finance the project after June 30, 1954 and that, in the meantime, it will continue to seek for an orderly transition of its present [Page 221] responsibility—FOA’s view being that the Department of Agriculture’s interest—as in the past with this same project—is paramount.

Finally, I should like to note that FOA is continuing in FY 1955 to participate with other interested Latin American governments in rubber research and development on a cooperative basis. Such projects—provided they are sound from an economic and technical standpoint—will be continued in Peru, Brazil, Colombia, Bolivia, Haiti, and Guatemala.

Any further comment you care to make would be greatly appreciated.

Sincerely yours,

Harold E. Stassen
  1. Ante, p. 207.