158. Memorandum From the Secretary of State to the President1

I have read with interest Paul Hoffman’s letter of December 172 addressed to you regarding a package deal with the United Nations which Paul describes as an “investment for peace”. Since then we had a good talk last Thursday with Cabot Lodge and Paul at which we thoroughly explored the plan which Cabot had previously discussed with Ben Fairless’ Committee. George Humphrey, John Hollister, and Clarence Randall, among others, participated in this discussion. It developed that there were two reasons underscored by Cabot and Paul in favor of the plan: (1) The substantive merits of the good that could be accomplished in those instances where, due to suspicions and prejudices perhaps in less developed areas of the world, multilateral aid might be more acceptable than bilateral aid; and (2) according to Cabot, the Soviet Union would be on the spot. If the Soviet Union refused to participate, the plan would fail because it is based on matching of funds and we would have gained a propaganda victory. Cabot doubts that the Soviet Union would contribute.

George Humphrey, of course, is ardently opposed to this type of scheme. He feels that our international exchange position is such that we must seek ways of reducing our contributions abroad with their consequent drain on the dollar. He also emphasized that three important committees are now at work on a survey of our entire foreign aid system. Before having the benefit of their findings it would be unwise to embark on a new program. This would seem to be common sense.

Cabot, of course, was eager to take affirmative action during the present session of the General Assembly with the matter coming up in Committee II this week. It was agreed, however, that under the circumstances our Mission in New York would limit its discussion of this item to inquiries. These, we hope, would elicit from other delegations an indication of the degree of support other nations might be interested in giving a multilateral aid plan. Our representatives by questions would endeavor to obtain clarification regarding plans and ideas that other governments may have on this subject. During the interval we would be in possession of the views of the [Page 413]three U.S. committees. After that we would be in far better position to make a useful determination than we are now.

John Foster Dulles3
  1. Source: Department of State, Central Files, 398.051/12–1956. Drafted by Robert Murphy.
  2. Document 155.
  3. Printed from a copy which bears this stamped signature.