Foreign Relations of the United States, 1955–1957, American Republics: Multilateral; Mexico; Caribbean, Volume VI

66. Memorandum From the President’s Special Assistant (Rockefeller) to the President¹

Washington, June 1, 1955.

SUBJECT

• Export-Import Bank Loans for Latin American Development

Recently Joe Dodge sent to me a memorandum which Henry Wallich prepared for Clarence Randall on the operations of the Export-Import Bank.² This seemed to me to present such a thoughtful appraisal of the Bank’s operations together with some thoroughly constructive suggestions for expanding its operations that I thought I should bring it to your attention.

In a number of respects, the suggestions offered by Mr. Wallich parallel those which were presented by Henry Holland at the White House dinner on March 29, which you arranged to discuss steps that might be taken to increase U.S. capital investment in Latin America. I am very much concerned that the impetus you provided on that occasion should not be allowed to lapse through inertia in the Federal establishment.

Recommendation:

That you send a follow-up memorandum along the lines of the attached to Secretaries Dulles, Humphrey and Weeks, with copies to General Edgerton of the Ex-Im Bank, Under Secretary Hoover and Assistant Secretary Holland.

Nelson A. Rockefeller³

[Attachment]

May 25, 1955.

Draft of Proposed Memorandum from the President to follow up on White House Dinner on U.S. Capital for Latin American Development

Memorandum For:________________

On March 29 at a White House dinner,⁴ a number of us discussed the relationship between the growth trend of the Latin American economies and the flow of United States investment and loan capital to that area.

From the data assembled as a background for that discussion it was indicated that, if United States capital were to continue to provide the same relative stimulus to Latin American growth as it had in the recent past, a progressive step up in combined private direct investment and public development loan disbursement from the 1947–54 annual average of $500 million, to a $700 million level by 1958 was called for.

In our discussion of the prospects, it was suggested that there was reasonable expectancy that U.S. direct private investment in Latin America, under the stimulus afforded by the current Administration program, would increase in the next few years from the $275 million level of 1954 to at least the $400 million of its annual average during the post-war period; there was the further expectancy that IBRD loan disbursements will average $100 million or more per year.

Thus, if Export-Import Bank disbursements in Latin America can be stepped up from their 1954 level of $110 million to about $200 million over the next few years, we would be in a position to demonstrate that the United States was continuing its capital support of a healthy growth economy in the twenty Republics. Since the Export-Import Bank operations are most directly amendable to our policy direction, I should [like] very much to have your opinion as to the practicality of setting up a $200 million annual rate as a target goal for Export-Import Bank loan disbursements in Latin America by 1958.

I am fully conscious of the limitations of translating such generalized target aims into sound and effective action, since the flow of private direct investments will necessarily be determined by judgments of the balance between earning opportunities and risks, and the volume of development loans by the merit of applications submitted from individual countries weighed against their respective capacities to service additional foreign debt. Nevertheless, I believe that economic progress in Latin America is sufficiently important to our national interest to warrant exceptional efforts to assure that all measures are taken that promise to increase U.S. capital flows to Latin America by at least the indicated dimension without departing from sound practice.

I shall be very appreciative if you will give this suggestion your attention, and let me have your reaction, first as to its feasibility, and second as to the measures that might be taken to give it effect.

I have been reminded of this by a memorandum upon the Export-Import Bank by Mr. Henry C. Wallich that has been brought to my attention, and a copy of which is enclosed.⁵ I was genuinely interested in Mr. Wallich’s suggestions as to how the operations of the Bank might be expanded and utilized to promote increased private foreign investment. In a number of respects his suggestions seemed to me to parallel closely those presented by Henry Holland at the March 29 White House dinner.

Again I should be very appreciative of your advice and comment upon the merit of the Wallich and Holland proposals and the degree to which you think it is practicable to put them to use.

1. Source: Department of State, E Files: Lot 60 D 136, Papers From Mr. Waugh. Confidential. Rockefeller sent a copy of this memorandum to Assistant Secretary Holland under cover of a letter dated June 1, in which he stated in part the following: “I would appreciate very much having your reactions to this as a useful course of action.”
2. Not found in Department of State files or at the Eisenhower Library.
3. Printed from a copy which bears this typed signature.
4. See Document 60.
5. Dated April 22, not printed.