775.5 MSP/7–854

Memorandum of Conversation, by the Director, Office of African Affairs (Utter)

confidential

Subject:

  • Ethiopian Requests

Participants:

  • Ato Aklilou, Ethiopian Foreign Minister
  • Henry A. Byroade, Assistant Secretary, NEA
  • John Spencer, Adviser to the Ethiopian Government
  • John E. Utter, AF

The Ethiopian Foreign Minister signified that he wished to discuss certain points arising out of the conversations which had been held on the previous day before reporting to the Emperor in New York.

Mr. Byroade explained to Ato Aklilou that we had gone as far as we could yesterday with regard to the various types of help which the Ethiopians were seeking. He added that we would like to have a better basis with which to work and mentioned especially the need for a study on the ports of Assab and Massawa. If a sufficiently good financial and economic case could be presented, these port projects could be handled by ordinary loans. Mr. Byroade had hoped that such a good case could be made for a loan. If, however, the ports are based on political and national necessity, some other approach might be necessary.

[Page 478]

Ato Aklilou thanked Mr. Byroade for the interest which he had shown and stated that he believed an impartial study would reveal that the port development was a necessity. Aklilou stated that he did not quite understand the paragraph referring to “support” and queried whether public funds meant those emanating from the Government and private funds those from banks. Aklilou said that he understood what Mr. Byroade wished was a study as to whether or not it was necessary to refit the ports for use. Mr. Byroade indicated that any loan with a good sound economic basis could be amortized by revenues. Aklilou remarked that receipts were not the all important thing with regard to these ports and a study should take into consideration the necessity and value to the Ethiopian economy as a whole. Mr. Byroade assured Ato Aklilou that he understood the political reasons for the ports but what we wanted now was to know something about the economic side.

With regard to the financing of the development of the ports, Mr. Byroade again referred to the difference between private loans and public loans through an agency of the United States Government. He pointed out that it was difficult to say exactly how the latter might be accomplished as there seem to be at present great differences between departments of the Government regarding the functions of the Export-Import Bank. At this juncture, Mr. Byroade mentioned parenthetically that he was referring to the International Bank for Reconstruction and Development and added that, of course, there was always a possibility of submitting such a project to this organization where the United States could support it. There might be, of course, he added, French opposition and naturally we would rather avoid this. Mr. Byroade continued that he could not tell today specifically what agency we might suggest after the survey had been made. The first thing to do was to get the survey done and then we would look into the financing. Aklilou appreciated the explanation of public funds and now said that it was clear to him that this meant American funds as contrasted to IBRD, and the agency referred to might be FOA, Export-Import Bank, etc. Mr. Byroade replied that we would not recommend Ethiopia applying to the IBRD unless we were convinced that this might be a constructive move and that Ethiopia might obtain what she was seeking. Mr. Byroade again mentioned the possibility of Ethiopia seeking loans from the IBRD for other projects which would allow them the possibility of spending their own money for the financing of the port development.

In conclusion, Mr. Byroade stated that he hoped that the Emperor can look upon the present series of conversations as a basis for the future. These talks may not have been satisfactory from the Ethiopian standpoint as they had been in no sense negotiations. Mr. Byroade emphasized, however, that the President, Secretary, and Mr. Stassen, to [Page 479]say nothing of himself, were most anxious to do what they could to help Ethiopia.

Aklilou repeated again how difficult it was for him to explain these questions to the Emperor, but he felt that now he had a good understanding of what our views and present capabilities were and he would try to give a faithful presentation to His Imperial Majesty.