870.00/8–2152
Memorandum of Conversation, by John W. McBride of the Office of African Affairs
Subject:
- African Economic Development
Participants:1
- Eximbank—Mr. Johnson
- MSA—Mr. Anderson
- Mr. Moran
- Mr. Gordon
- SRE—Mr. Bayne
- DMS—Mr. Gordon
- Mr. Ohly
- Mr. Hendricks
- Mr. Newman
- AF—Mr. Cyr
- Mr. McBride
Mr. Bayne led off the discussion with a detailed exposition of the need for the creation of an agency in the Federal Government to handle the problems of the Dependent Overseas Territories. He indicated that Africa is the focal point of this problem and stressed its importance both from the standpoint of strategic reserves and as a military bastion. He stated that it has been conceded that most of the areas adjacent to the Iron Curtain would be untenable in the event of a war, that North Africa might be lost, according to our military authorities, and that Africa south of the Sahara would possibly constitute one of the reserve areas for the Western Powers. Mr. Link Gordon observed parenthetically that our military authorities would hardly make such an estimate re North Africa now, if even they may have in the past.
Mr. Bayne indicated that Africa needs at least 2,000 miles of railroad, 10,000 miles of highway and many millions of dollars in improved port facilities to comply with the minimum supply needs. He stated that African needs could be summarized under three headings: (1) substantial technical assistance for developing a middle class of technically skilled workers who could support the industrial and commercial facilities required for African development; (2) working capital, particularly for public improvements such as railroads, highways, water supply and harbor facilities, etc.; and (3) private enterprise capital to build up small industrial and commercial enterprise throughout the area.
Mr. Bayne stated that our primary motivation would be keeping Africa within the orbit of the Free World. He was critical of the indeterminate policy which the United States had taken with respect to Africa in the past. The Foreign Economic Administration had a staff of more than one hundred technicians in Africa studying various phases of the economic problems. This staff was disbanded after the [Page 25] war and a limited number of experts have been recruited under the Marshall Plan to carry out the overseas development program. As in the past, it appears that this accumulated experience may be lost if some definite action is not taken to recognize the importance of African development.
Mr. Bayne urged that we give recognition to the needs of African development by creating an institution or agency which would give continuity to our efforts to develop the area. He suggested that the African needs could absorb at least one billion dollars over a 4-year period which he felt would be the minimum requirement for an acceptable program. He felt that neither the World Bank nor the Eximbank were adequate to meet the African needs. He felt that our efforts in recent years were so directed as to make the United States vulnerable to the charge that we were interested only in what we could get out of Africa in the way of strategic materials. He stated that the urgency of economic assistance varies from colony to colony. He felt that American aid was most needed in British territories where the British colonial policy has resulted in the creation of a small educated “leader” class with no provision for a middle class of semi-skilled workers. This he contrasted with the Belgian system which has provided a substantial number of technically trained workers in the Congo but with no natives having college education.
Mr. Bayne was somewhat critical of the British investment policy, mentioning the Owens Falls project as providing excess power for which no market would be available. He also criticized the slowness with which the British were moving forward on the Volta River project which they have been studying since 1939.2 He stated that during the past several years the ECA has contributed approximately one hundred million dollars to African development with no means of checking on the actual progress that has been made achieving the proposed goals.
While Mr. Bayne recommended an African development fund of approximately one billion dollars to be used primarily for loans to the various areas, he pointed out that it would be practically impossible to make such loans in terms of dollar repayments. It would, of necessity, be set up as a revolving fund in the soft-currency area with no immediate prospect of repayment other than interest in dollars. He had no specific suggestions regarding the agency to handle this fund but seemed to feel that it did not fit very well into the TCA picture.
In the subsequent discussion, an effort was made to clarify just what objectives would be set up for the proposed new agency. It was pointed out that the limitations on current financing for Africa were a result [Page 26] of the legislation accompanying the appropriations and would not necessarily reflect the wishes of the various agencies involved. It was suggested that Mr. Bayne draw up a proposal which might be submitted for budgetary consideration not later than September 15.3
- It has not been possible definitely to identify the participants in this meeting from outside the Department of State, exceptWilliam E. Moran, Jr., of MSA and John H. Ohly of DMS.↩
- For additional documentation on developments in the Gold Coast and Nigeria, including the projects under reference here, pp. 261 ff.↩
- A proposal of the sort referred to here has not been found in Department of State files.↩