69. Memorandum From the Deputy Director for Operations (FitzGerald) to the Director of the International Cooperation Administration (Hollister)1
- Loan Program in Latin America—Mr. Holland’s memorandum of September 2
I am perfectly prepared to accept Henry Holland’s view that we should not make any “soft loans” in Latin America. I am not prepared, however, to agree that this inevitably requires that all of our assistance to Latin America be on a grant basis. The other alternative is to make some of our assistance available to Latin America on a “hard loan” basis. Our legislation does not require loans made thereunder to be “soft” and I am sure that the Congress would want us, insofar as practicable, to make our loans as “hard” as possible.
Henry Holland may argue that the U.S. policy requires that all “hard loans” to Latin America be made by either the International Bank for Reconstruction and Development or the Export-Import Bank. It would be perfectly satisfactory, as far as I am concerned, if either one of these agencies would make assistance available to any [Page 334] one or all of the three countries, Bolivia, Guatemala, Haiti, on a hard loan basis thereby permitting us to “save” a similar amount of our appropriation. However, I do not believe that either IBRD or EX-IM Bank will, because of the policies which they follow, find it possible to make hard loans to any of these three countries for the purposes for which the assistance is needed. But to argue that, because IBRD and EX-IM under their rules cannot make the necessary assistance available, ICA should make a grant of $10 million seems to me to be wholly illogical. If one or more of the Latin American countries concerned can reasonably be expected to pay off a “hard” loan, and I believe Guatemala can, then ICA should make such a loan to that country. To provide money on a grant basis when a hard loan can be fully justified does not seem to me to be sound use of the American taxpayers’ money.2
- Source: Washington National Records Center, ICA Director’s File, FRC 61 A 32, Box 309, Latin America. Transmitted to Hoover under cover of a memorandum dated September 12 from DeWitt L. Sage, Assistant to Hollister, at the latter’s request.↩
- Following this paragraph on the source text appears the following handwritten notation addressed to Hoover and initialed by Hollister: “This makes a lot of sense. What do you think?”↩